Vancouver Olympics a Living Laboratory for Urbanism!

Brent Toderian's picture

Among the countless stories being written on the successes and challenges of these 2010 Olympic Winter Games, not surprisingly the most interesting stories to me are those that speak to the challenges of great urbanism. As a host city, Vancouver has become a massive urban laboratory, with so many opportunities to learn, and we're soaking it all up.

As we are coming to the end of the final week, a few examples of big experiments and learnings come to mind.

A New Global Community-Building Model?

During the first week of the Games, we announced that our Olympic and Para-lympic Athletes Village has been recognized as only the second LEED-ND™ Platinum neighbourhood in the world – and given that the US Green Building Council awarded us the highest number of LEED ND points so far, 83 points, they proclaimed the community "the greenest in North America!" My past post gave many of the details of the planning and design of the Olympic Village. The debate has already started on whether this recognition means the community could be the "greenest in the world"- Given the incredibly impressive green communities in parts of the world that don't use the LEED system, many of which continue to raise the bar for us in areas where we're still behind, I think I'll leave that to the healthy debate of the global green community.

Green is obviously one big definition of success for the Athletes Village, but in a city that takes its livability very seriously (in a bit of great timing, the Economist announced this years rankings on the day of the opening ceremonies, again naming Vancouver the world's most livable city), the quality-of-life and livability in the Village is a key indicator of success as well. It will be some time before the Village is operating as a "normal" community for such observations, but so far the first residents – the athletes themselves – seem to be giving it high marks. The media has even picked up on the athletes tweeting, commenting about the Village;

"Ohno gushed: 'The Olympic Village here in (Vancouver) is beautiful. Awesome facilities and the hospitality is amazing. Vancity is an incredible place.' Another U.S. speed skater, Chad Hedrick, told his Twitter followers: 'The athlete village here in Vancouver is incredible! I have a two-bedroom condo overlooking the city and water. Good times!'"

Vancouver sees livability and sustainability as fundamentally linked, so we strove to build this new community to be models of both. Although the planning and construction challenges were huge, the global financing challenges even bigger, the resulting community has given a lot of people much to be proud of in the past few weeks. The Olympic Village has fundamentally changed "business-as-usual" for us in Vancouver, and we hope it will be a living laboratory for high-performance communities across the world. If only the public could see it better during the games! Alas though, the Olympics security has meant that only the athletes get that treat for the moment.

North America's Largest "Traffic Trial" Ever?

Cities like Copenhagen, and more recently New York, have embraced the value of traffic trials or pilots, in demonstrating effects of mode changes, dispelling myths, or just learning what really happens to traffic when you make a change, despite what the models say. Vancouver has used many such trials as well, including this summer's very successful closing of a lane of traffic over our Burrard Bridge (one of three bridges connecting the downtown peninsula to the rest of the city) to give it to cyclists.

But has there ever been as huge an urban traffic trial as this in North America? The transformation of an entire mobility system in a large city and complex downtown? We know that Vancouver is the largest and most urban setting thus far for the Winter Games, and that many Summer Games have been concentrated in one area, often on the outskirts of the built environment. The highly dispersed nature of our Games across municipalities and across highly urban settings, has made this trial rare if not unique. Massive pedestrianization of countless streets, a necessary 30% drop in car trips in a city that has already shifted significant percentages of trips to walking, cycling and transit in the past few decades, the running of a new streetcar pilot, the aspects go on and on.

All of this, we believe, gives us a special snapshot picture of a potential future for our city as we continue to move rapidly to more sustainable modes of travel. As we work toward an updated transportation plan for the downtown and broader city, the massive amounts of data, and the general change in perception and attitudes from this temporary transformation, may end up being the most powerful legacy from these Olympics. I strongly believe nothing will ever be the same in how we perceive traffic and movement in our city after this.

Here are a few of the mobility successes so far:

  • Halfway through the 2010 Winter Games, every day Vancouver is continuing to see record numbers of people walking, cycling and taking transit. We are consistently meeting or exceeding our 30% target reduction in car trips.
  • More than 20,000 pedestrians a day walked across the Burrard and Cambie Bridges to and from Downtown Vancouver.
  • With the good weather in the past few days, cyclist volumes across the Burrard and Cambie Bridges are at high summertime levels with an average of 5,000 cyclists riding to and from Downtown Vancouver every day. The City of Vancouver is providing safe and convenient bike parking spaces near Olympic and Para-lympic venues, LiveCity celebration sites and at the Olympic Village station of the Olympic Line streetcar. Free bike valet services are also available at these locations to encourage cycling.
  • The new Canada Line subway line reached a peak of over 250,000 riders on Thursday February 18, far exceeding the expected numbers of around 100,000 and the SeaBus had 50,000 boardings on the same day, well over twice the normal numbers. The system is handling these numbers well.
  • The Olympic Line - Vancouver's 2010 Streetcar pilot - reached a milestone a few days ago of 300,000 trips since starting on January 21, 2010, and is now averaging 20,000-25,000 boardings each day, making it busier than Seattle and Portland's streetcar networks, even though it has only two stations.

This media report sums things up nicely:

"It helps, too, that Vancouver's excellent transit system is zipping people so efficiently from place to place. The star of the games is the new $2.1-billion Canada Line, which stretches from the airport through the length of the downtown. With 20 trains running at two to three minute intervals, the Canada Line is carrying 200,000 to 250,000 passengers a day -- more than double its usual ridership. (The two older Skytrain lines, the Expo and Millenium, running every 108 seconds, are together carrying about 320,000 a day, an increase of some 33 per cent, while bus ridership has gone from 750,000 a day to 900,000). Local commuters say they're actually finding it easier and faster to get to work than usual."

This remarkable achievement is a triumph for the Olympic Transportation Plan, and it's to the huge credit of our very clever transportation planners at the City, working with VANOC (The Vancouver Organizing Committee who work with the International Olympic Committee, the various host cities, etc), who have done a fantastic job!

Urbanism At Its Best - A Transformed Public Realm

Perhaps the best example of great urbanism on display is the way the streets, squares and former parking lots have all been transformed into LiveCity sites, international houses, and constant street celebrations! Everywhere you look the crowds are massive, among street buskers and bands, impromptu street hockey games, in-street network installations (CTV who has Canada's rights to the Games have been broadcasting since the start from the middle of Robson Street in front of huge crowds), and even foreign invaders set to "defeat the world" (as Stephen Colbert has been proclaiming to the delight of massive crowds during his taping from the middle of Creekside Park, between Sochi House and Canada Hockey Place).

I've heard our streets compared with "17 new years eves in a row in New York", or "the most European-like use of our squares and streets we've ever seen – beyond European!". Canadians and international visitors have come together to create a fantastically friendly and passionate street scene that never seems to stop. Olympic officials are saying that perhaps only the Sydney Summer Olympics is comparable in terms of the energizing of the city's public, and public realm. It is absolutely thrilling to see and experience and may very well permanently transform our mind-set as a city and citizenry about our streets and public spaces – another huge legacy of these Games. Already it has re-ignited the discussions on pedestrianizing our Granville Street and many others, sparked discussions on a much bigger sidewalk patio culture , and on and on.

Here are some quotes pulled from the media on this phenomenon:

"SHINING CITY IN THE SUN: The glorious warm weather is a curse in some ways, but an even bigger blessing in others. The city itself is bathed in sparkling sunlight, creating spectacular TV images and a sublime street party. Vancouver is the largest and most culturally diverse city ever to hold a Winter Olympics. It's increasingly being hailed as the most beautiful, too."

"The streets here in Vancouver are teeming with people. Think of what 161st Street and River Avenue looks like before a Yankees playoff game, and you'll have an idea. But it's 24/7. And everywhere. The SkyTrain here is packed like the A train at rush hour all hours of the day."

"Team Vancouver" includes thousands of residents of this scenic city.
Rarely have I seen a host city so passionate and so ready to embrace the Games."

"Everywhere I wander in the city, people are in the streets. They're draped in Canadian flags, children have Canadian flag tattoos on their cheeks, people proudly wearing their "Canada" hoodies and their red mittens – the must-have item of 2010 (2.6 million pairs sold to date!) and spontaneous choruses of "O Canada" are breaking out whenever their national heroes win a medal."

"Most of the partiers don't seem to be foreign tourists, but rather locals who have flooded out of their homes and onto the streets, thousands of Vancouverites -- and suburbanites -- enthusiastically rediscovering their own downtown."

"The reason that downtown Vancouver has come to such vibrant life isn't because of the Olympics per se. It's because thousands of local residents have reclaimed their city centre as public social space."

"I walked out on to my friend's balcony in Yaletown Tuesday after Canada [defeated Norway] and yelled out, 'Go, Canada, go!'" said Brian MacNeil, "and the streets just erupted with cheers back. It's so much fun."

"We'll also point out the greatest event of the games might have occurred last Tuesday night when a ball-hockey game broke out on Granville (street) with about a thousand people watching. The video is actually up on Youtube where you can see the game, the fans and, if you look closely, a group of Canadian media types criticizing the line combinations and another fighting over who's going to do the sidebar on the winning goalie."

"It is, without putting too fine a point on it, freaking insane. It's also unprecedented in Olympic history and the evidence of this feel-good story smacks you in the face virtually every time you turn around."

When I have more time, I'll write more about the observations and effects on the urban realm, the way public art and "urban happenings" have been igniting the city, and other big learning – as it stands, I'm still taking it all in, day by day. I'll also find the time to download the thousands of pictures I've been taking and include some of the best in a next post. One item I'll likely write about are my own observations on the early controversy around VANOC's decision to put the fence around the Olympic cauldron, and why it particularly felt wrong in a city that takes its public realm design, and public access to public space, so seriously. The design improvements put in place around the cauldron since, though, have gone a long way in turning a negative into a positive.

Not everything has gone perfectly thus far with these Olympics, despite the incredible hard work of the countless organizers and volunteers. We've had challenges, and we've had tragedy. But I would like to thank and congratulate VANOC for their remarkable work, not because of the absence of problems, but because of how they've addressed them. I'd like to thank and congratulate the thousands of blue-coated volunteers who have been the biggest heroes of these Games. And I'd especially like to thank the people who made this the best celebration the City, the Country, and perhaps the Olympic movement has ever seen – if we end up being held up as one of the best Olympic experiences, it will be because of the public who made it so every minute.

From the host city's perspective though, and from my city-planner's perspective, we've already had remarkable successes and learning's in city-building. Like Expo 86, the City will never be the same again, because of this amazing laboratory of urbanism. To sum up, I'll steal some words from the Canadian "slam poet" Shane Koyczan who stole the show at the Opening Ceremonies – "we're an experiment going right for a change."

Brent Toderian is an international consultant on advanced urbanism with TODERIAN UrbanWORKS, Vancouver’s former Director of City Planning, and the President of the Council for Canadian Urbanism. Follow him on Twitter @BrentToderian



Re homelessness etc. in Vancouver

I think our thoughts need to be on resolving problems of homelessness in towns like Vancouver via addressing cost of living and creating new shelters. The fact that there are thousands of homeless people living on the streets and in tents because shelters are at capacity is very urgent-more urgent than design right now.

More urgent than design

You said it, HR Planner.

Not a word so far on here about Vancouver topping the Demographia survey for unaffordability of its housing - median multiplier prices of more than 9 times income.

I was not aware before now of the tent city phenomenon in Vancouver, but it figures. The other most unaffordable areas identified by Demographia in earlier surveys, centered in California, have had a tent city phenomenon for a while too.

Hugh Pavletich of "Performance Urban Planning" has just done a very illuminating analysis of the difference between California and Texas. It is unfortunately not on line yet, but sites like Planetizen need to get links to it as soon as it is.

California is "short" of approximately 1 million homes by per capita comparison with Texas. But the difference in terms of underwater mortgages is immense. The whole financial crisis literally would not have happened without California's housing development constraints.

The "AudaCity" organisation in Britain is now openly attempting to start a movement to establish "illegal settlements" on legally purchased farmland, to highlight the consequences of stringent town planning. As a house "lot" on farmland would cost each buyer around 20 thousand pounds rather than half a million pounds (which is the planning-enabled racket price), it is easy to see where the unaffordability problem stems from. A particular irony is that the advocated settlements will be "sustainable" by necessity.

Apparently the British now have edged out the Japanese at the bottom of the scale for home space per person, and the average age of a first home buyer in Britain is now 38 years. I expect to get 2 types of argument in response to this: those who deny that planning has anything to do with land prices; and those who candidly admit that this is just another useful means of constraining human reproduction. I forget who described unaffordable house prices and huge mortgages as "the new contraceptive"; but I stand by the truth of that observation.

Thanks, Wodehouse

Planetizen ran an article about Vancouver's tent city. You can search on it.

NYC's rents are pretty outrageous also. Check out Craig's list- it can be pretty humorous to look at the various rates for nightly, weekly and monthly rents.

I think the large corporate builders bear a lot of responsibility for escalting housing costs. The proliferation of high end housing drives up the cost of housing around it.

Corporate Builders are not to blame

HRPlanner, I think you have missed the point that urban limits affect land prices.

Raw fringe land used to bear a direct relationship to the price of farmland, and still does in "free" jurisdictions. Tighter urban limits, under modern planning fashion, however, have resulted in RAW fringe land prices being ten, twenty, or thirty times that of the farmland. This has altered the relationship between land and dwelling values; fringe house prices now consist of 60% land value and 40% house value instead of 10% / 90%.

The price of land closer to the urban centers, being ten times that of the urban fringe land, becomes unaffordable for virtually ANY use other than for luxury condos for the wealthy. Consider some figures: $30,000 fringe lots = $300,000 lots closer to the urban center; a developer can still do something practical with this. But when you have $300,000 fringe lots and $3,000,000 lots closer to the urban center?

The irony is, and I believe that this would stand scrutiny under study; is that in freedom-lovin' Texas, you get the students and artists and strugglers living at quite high density closer to the urban centers, (because they can afford it) and thus "proving" the thesis about superior sustainability. The planning ideologues are looking in the wrong place for the results they want. They will not find it in places where they have driven the proletariat out with high land prices, and where the only people living in the inner city are wealthy people with a big carbon footprint. (And the only "affordable" option anywhere in the whole urban area is a tent).

I believe time will tell, if we have the honesty to admit it, (and not for the first time in human history, either), that planning often has the opposite effect to what is intended. World Bank economist Alain Bertaud seems to me to be the lonely giant of urban economics today, I haven't yet found anyone else identifying these effects like he is. But it is visible to me in every city I visit.

"Planetizen" should be among the first discussion forums where this is realised.

Supply and demand is only part of it.

"Planetizen" should be among the first discussion forums where this is realised.

We realize that Ricardian Rents are much more than supply and demand. Equilibrium rents are a big deal in Vancouver because of the high demand. That's how it works. And we also know we only have so much power and those who think planners drive up land rents need to do some learnin'.




Who needs to do some learnin'?

"......those who think planners drive up land rents need to do some learnin'......"

As I said in my initial comment:

".......I expect to get 2 types of argument in response to this: those who deny that planning has anything to do with land prices; and those who candidly admit that this is just another useful means of constraining human reproduction......"

Dano is either a type 1, or a type 2 who understands that it would not go down well with the general public to admit this candidly.

Binary argumentation with false premises - we have a winner.

Take some micro and urban econ classes and get back to us with your apology for arguing from ignorance, which is rarely compelling, if ever.




New evidence equals mind change equals progress

That's rich, assuming I am arguing from ignorance. Is it not possible that a profession and its related academia might have to take a fresh look at its paradigms in the light of new evidence from time to time? It might be a question just who is Galileo and who is the church hierarchy, on these questions.

New evidence was refuted a decade ago.

The initial thing I quoted, ...should be among the first discussion forums...wasn't a new paradigm at all. And has been debunked and rebunked and prebunked literally hundreds of times. The rest is just flailing about, trying to have play, the false binary being merely the biggest clue.




And what would you say, Dano, if AudaCity in the UK achieves their stated wish of establishing a "illegal settlement" on legally bought farmland; which would cost each lot buyer 5 thousand pounds instead of 300,000 pounds for legally zoned lots? What is that evidence of? Greedy land speculators?

So how come greedy land speculators can't do this in Texas?

Contrary to your belief, this question has not been rebutted at all; it has been answered many times with premises that are now known, on the available evidence, to be false. I am grateful that contributors to this discussion display such a healthy curiosity about these questions.

Hasty generalization fallacy.

Thanks for the nice example of the hasty generalization fallacy.



Dear Casual reader

Dear Casual reader, I trust your intelligence. Make up your own mind about this thread. I regret diverting into this puerile exchange.

Dear Casual reader: please believe my poor rhetoric.

Ideologues with nothing and no rhetorical skills often use such rhetoric as a last resort. You got bupkis, son. Take some econ classes and put down the Rand.



Econ Classes

You don't help by assuming I haven't done econ classes, pal. I may well have learnt the same stuff as you did. But the conventional wisdom failed dismally to anticipate the effects of urban limits on property prices; surprisingly seeing supply and demand is the first thing we all learnt about in those econ classes.

Question for you: there is centuries of "supply" of diamonds available. Are they overpriced, and why? Hint: someone has "cornered" the supply. What happens to urban land when it is restricted to a "cornerable" amount? Your answer will reveal whether you are a failed conventional wisdom man, or on the leading edge of the discussion about the way forward from here.

If you want to know where I stand on Ayn Rand, I couldn't put it better than THIS guy did:


UGBs and th' learnin'.

...the effects of urban limits on property prices...

The literature is clear on your blanket denigration of urban growth boundaries and a blind look at supply only: it disagrees with you.

Ah, well.

One understands this failure when one takes the appropriate econ classes to be able to speak to the issue. Tim Egan has an interesting perspective from the dysfunctional Gullyvornia as well, disagreeing with you. Is there anyone outside of small minorities who agrees with the erroneous assertion?



Ahhh, demand

Glad to begin to address this concrete argument, Dano.

Ah, demand is important too. Now, could I have forgotten that lesson in the econ class?

The article you link to discusses San Francisco, Portland, Seattle and San Diego as examples of "controlled" growth that have allegedly had relatively stable house prices, and Las Vegas, the Phoenix metro area, South Florida, "this valley", as '"the developers’ favorite role models, the laissez faire free-for-alls".

Yet the fastest-growing large metros in the USA, Dano, which your author Timothy Egan does not mention, have had the most stable house prices of all, far more stable than San Fran, Portland, Seattle and San Diego. He is comparing the worst cases with some not-so-bad cases; all of which have strictly planned rates of land release which enable that new land supply to be "cornered" by developers.

I would like to know what Mr Egan thinks of Houston, Dallas, and Atlanta if he thinks the above are "Laissez-Faire free-for alls". I could repeat a lot of my earlier arguments here, but I presume you have already made up your to read them or not to read them.

Las Vegas' land supply limitations are a special case, as this is not the result of planning, but of Federally-owned land boxing the region in.

Mr Egan also allows his own personal distaste for the style of typical suburban homes to affect his judgement; obscuring the role of demand by the majority for the type of home he detests, in these issues. It is plain that the real Laissez-Faire (or closer to it) jurisdictions, have simply got on with letting developers build these homes on $30,000 sections, for $120,000 each; and the people have flocked there.

Mr Egan says:

"......Through immigration and high birth rates, the United States is expected to add another 100 million people by 2050. If you don’t believe me, consider that we’ve added 105 million people since 1970. This is more than the population of France. More than Italy. More than Germany. Currently, we have a net gain of one person every 13 seconds....."

And where is the biggest population growth (and by extension, "demand") occurring, California or Texas?

It is also apparent to me that Mr Egan has population control at the center of his thinking, speaking approvingly as he does, of European countries with static populations. Public reaction would surely result if urban planning policy makers were candid that it was their intention to help this birth-control process along.

Lurker learnin'.

For those lurkers finding this thread via search in the future, note the type of rhetoric used in the above reply.

I can't remember which ideological rubber-stamp rhetoric names the cobbled-together phrases are called, but they occur so often in these contexts, and have become so trite and predictable, that surely there is some paint round here that I can go watch dry. Surely preferable to the standard, graphable replies in this thread.



Economics 101

I just found THIS little Economics 101 lesson from a guy in Portland I had never heard of before; it is heartening to find that there are other curious and intelligent minds out there who can see past the received wisdom of the extremely young discipline of urban planning. And heartening, too, to have had so many courteous and illuminating exchanges with almost everyone on this thread.

My point 101.

Thank you for making my point. You apparently think that all growth control is the same. This is the same type of ideological argument we see all the time. Based in ignorance. It is debunked, rebunked, and long ago prebunked. The literature is clear on this issue, and you should visit a decent library to get up to speed. That is: arguments from ignorance are rarely compelling, even on The Internets.

Thanks for trying! I see some paint over there, drying in a fascinating way!



Tell me, tell me, please

What are these urban growth containment strategies that are so successful, that I have missed in my years of research? I genuinely want to know, because I want to advocate alternatives to the unsuccessful ones.

Thanking you in anticipation.

Michael Lewyn's picture

regulation is not an on/off switch

It seems to me that no matter what their viewpoint, a lot of the commenters seem to think of regulation as a kind of "on and off" switch: either a city is "laissez-faire" or "heavily regulated." This seems to me to be pretty flawed - partially because every city in the U.S. is much more heavily regulated than it was a century ago, and partially because there isn't any very obvious (at least to me) way of quantifying land use regulation or its impact.

Of course, this sort of "on/off" thinking is very useful in ideologically-based arguments: we can say "city X is heavily regulated and therefore it has high prices" or "city Y is heavily regulated and yet its a wonderful place to live" but given the difficulties of quantifying regulation I wonder if it makes sense.

Quantifiable, no, but the best evidence is:

Michael, I appreciate the courteous and intelligent exchanges with the most on this thread. You are absolutely right about the difficulty of quantifying the regulatory regime that applies to each area.

There is one "blunt instrument" of prima facie evidence. The difference between the price of land inside the urban boundary and the price outside of it. Obviously, where there is no boundary there is no difference. I do not know of much analysis of this phenomenon, except that a difference of around 10 times has been identified for Portland and a difference of around 200 times for London, UK.

Obviously there are other factors that would affect exactly what this difference comes to, but many of those other factors, such as popular demand, should be taken into account by planners, not excluded. One effect of preventing people from settling in coastal California, for example, is that many of them end up living in areas where they need to consume more energy for air conditioning. In fact, the extent of this phenomenon in the whole USA and internationally is probably considerable as most of the price-bubble highly regulated regions ARE the most temperate regions. New Zealand, for example, could take tens of millions of population from less temperate regions and the net effect on the planet would be beneficial.

It is a question what difference is of damaging proportions to the regional urban economy, too.

I honestly did not know of THIS article before now, I find it very confirming of my own conclusions:

(Is this Gerard Mildner guy already known on Planetizen?)

Edward Glaeser

Wodehouse, I think you would find the work of Edward Glaeser interesting. He has reached similiar conclusions about what is really driving up the costs of housing in the "unafordbale" US metropolitan areas (simple: too many development regulations), which is quite logical once one steps back and realizes that centrally planned land use is simply failing in the same manner as all centrally planned economic systems. Here is a link to his online papers:

Check out "The Impact of Zoning on Housing Affordability" down at the bottom (note the 2002 date as well).



I am familiar with the papers of Glaeser and his colleagues Gyourko and Saiz. If I could reciprocate with my top tip, it would be Alain Bertaud's papers if you are not familiar with them.

If I may say so, I have looked at items on Planetizen on and off for years without contributing, and remember that on more than one occasion, you were making the most enlightening contributions to the discussion.


Thanks for the recommendation, I will check him out.

Glaeser and Regulation.

One of Glaeser's main point isn't strictly regulation per se. It is a certain type of regulation.

What is this certain type of regulation, you ask?

This certain type of regulation is large-lot zoning.



Glaeser's regulation advocacy

I may disagree with Glaeser but I think this would be almost academic. I do not recall that Glaeser advocates large-lot zoning in inner suburb areas where a normal free market would tend to densification. I say "tend" because the costs of upgrading infrastructure for the higher densities can be considerable. I think that the numbers of urban experts who realise and admit this, should be a lot higher than it is. (And all sorts of inequities result from making inner suburb infrastructure redevelopment a "public" cost while insisting that fringe development carries all costs upfront by way of levies and fees and "contributions").

I thought Glaeser advocated, or merely "supported", the perfectly natural market demand driven trend for large lot sizes in urban fringe development.

One of the consequences of urban limits that Alain Bertaud has identified, and I can see this effect at work everywhere I look for it; is that as land is driven up in price tenfold or more, there is pent-up demand for the cheapest possible accomodation. There are logical market reasons for the existence of affordable homes close to the urban center; this is because the house itself is frequently worth nothing; and the lot, although several times the cost of an urban fringe lot, does not add enough to the total to bring the price up to unaffordable levels.

All the people who no longer have such options after urban limit driven price rises, end up forcing small-lot and higher density redevelopment closer to the urban fringes. The ironic consequence is more people commuting further to work and other inner area destinations.

Unintended Consequences of Land use Regs

I think it's perfectly fair to examine the unintended consequences of land use regulations and I think Glaeser would agree. One might over-simplify some of his work and others by stating that housing prices increased by more than construction costs or inflation, so there is an outside force which Glaser deems regulation/zoning.

It is somewhat unfair to hold planners accountable for such regulations. After all, we don't blame 23 year old Congressional staffers when Congress does something stupid. Lawmakers (elected officials) ultimately have to be accountable despite any recommendations from planners. The planning profession, like any government intiative, does not understand the extent their decisions affect the market and its processes. Some planners may, but as a whole, the profession gives little credence to unintended consequences and instead, is constantly trying to reinvent itself to solve the ills of its previous thought advocacy. Traditional zoning was once, and still is in many places, considered a GOOD thing. Now, NIMBYs are blamed for hanging on to a status quo reality they had little business in creating. The planning and environmental community, likewise, should accept that many of the policies they have advocated have only fostered what they have tried to prevent, as you have indicated. What you find in many urban areas is seemingly an overlay of good intentions that don't mix well and have combinations that produce unintended consequences. You have a great transit system in DC, yet infrastructure nor externalities were never effectively priced, local development was subsidized, and zoning was in place, thus you have people living in West Virginia and commuting. Surely the exact opposite of what was intended with a far suburban reaching transit system. A similar situation can be found in the SF Bay area.

Good point about the blame game

That is a very good point about just who is actually responsible for these situations developing. Mostly, intentions were good, but as HRPlanner says above, there are big developers who have aimed to benefit from planning ordinances.

It seems to me that the planning profession is in a similar position today to the economics profession. Both of them have largely missed the role of urban economics in the broader economy, and the flow-on effects when new forms of regulation like urban limits are experimented with.

I would add that Britain gives us a model of 6 decades of urban limits since their Town and Country Planning Act of 1947, and it is not an encouraging model. They have had severer pricing bubbles and busts than anyone else ever since that time, as well as a whole host of social ill effects from straight-out housing shortages. Yet even in the "free market" Thatcher era, urban planning remained outside the scope of reforms.

Your point about people commuting into DC from West Virginia, is mirrored all over England.

Zoning and Permitting

Well, it's "zoning" in general and the permitting process. But, in general, I would agree that there are different levels of effect that each individual regulation has on housing prices... i.e. some affect prices more than others. Zoning is just another type of regulation, but a particularly harmful one in terms of housing affordability in areas where zoning is stringently enforced and rarely altered. The continued layering of further hurdles/regulations on top of centrally planned zoning regulations just makes the prices higher (i.e. the 5-10-year building permit process in SF, or Petaluma's UGB).

Planning/development realities are region specific

The causes of the problems we are discussing are varied. Personally, in my region, the large builders, their lobbying, and their repeated practice of taking municipalities to court to force their projects into communities IS a major cause of bad development policy, including almost all new housing being high end and driving up cost of housing around it.

I agree that planning doesn't always create positive outcomes.

Planners are sometimes used to help large builders place undesirable projects in a community- such as helping a large commercial builder thrust a 350,000 square foot chain shopping center into a community that doesn't want it by designing it to look like a "village."

Planning should come from the bottom up and entail businesses and housing that really benefit residents, while also protecting our environment.

Bottom up planning

"Bottom up" planning is better described as "demand". Assessing demand is what developers are obliged to do. But regulations and planning do two things. They introduce distortions to supply, that shifts supply and demand equilibriums to entirely different points. And worse, they enable collusion between developers and citizens with wealth and power; and politicians and planninf departments.

The old saying about Baptists and Bootleggers applies here. The "Baptists" in government and bureaucracy and advocacy groups today, are out to save the planet and the environment. But there are bootleggers who are making a killing under the guise of the Baptists regulations.

You and I are 100% agreed in our observation about "most new housing being high end". Yes, developers and well-off existing communities are culpable of resisting planners best intentions for densification. But planners need to realise that the effect of urban limits on all land markets is acting powerfully in tandem with these vested interests. Of course developers want to do high end housing or condos on land that cost them $3,000,000, rather than $300,000 as it would have cost them in Houston or Dallas or Atlanta or in most Southern and Central cities.

I repeat what I said above, the less "limited" cities are the ones that DO have low-cost high density inner suburb development, and a vibrant atmosphere with the artists and students. But the "vibrancy" of Vancouver and the elites favourite cities, is the "vibrancy" of exclusive, high-end culture, enjoyed by the wealthy mingled with "posers" who are mortgaged and indebted to the hilt to live their dream.

Removing Limits On Development

Are you generally in favor of removing limits on development - density limits as well as urban limit lines?

Both of those drive up average housing prices in a region. In my opinion, height limits, lot-size limits, and other density limits have done much more to restrict the housing supply than urban limit lines.

A consistent market-based approach would eliminate both density limits and urban limit lines. (Note: this is not my approach, but I think there are consistent free-market advocates on the list who would agree.)

Charles Siegel

Agree completely about anti-density regs

Yes, I would definitely advocate the elimination of anti-density regulations. I will say more about this in my reply to the next comment.

What I wish, is that the planning profession would start talking about the way to counter the effect of urban limits on the prices of all land, instead of looking for other things to shift the blame onto. I take it we are agreed about the relationship between the prices of farmland, fringe land and inner suburb land? How do you propose to restore fringe land prices that actually relate to its value for agricultural uses; and/or restore inner suburb land prices that allows redevelopment for lower income groups to live at higher density? Can you do the one without the other? You can't have urban fringe lots of $300,000 and expect land owners closer to the urban center to sell for no more than that.

I cannot see that there is any solution that would not have further, undesirable effects. What level of capital gains tax, for example, would hold land prices down regardless of the urban limit constraint on supply? The Japanese found that they needed to go to 100% or greater, before their land bubble of the 1980's was halted; but all sorts of other things happened, not the least of which was a 20 year recession.

What about actual price controls on urban fringe land? Doubtless there are economists who could write studies on the distortions this would introduce.

The result of urban limits for developers, is that even though the amount of land within the urban limit might be "several years supply" for the loccal market, developers all need to secure their "share" of it "now" if they wish to remain in business; obviously their competitors might buy it all. You still have just as much of a classic case of a scarcity-induced bidding war, as if the supply was restricted to 6 months worth at a time. At least when the supply is restricted to next to nothing, the successful buyer of the land knows he can proceed immediately with development and sale of it. But where there is several years worth, the owners of the land know they cannot all develop and sell it at once; there needs to be gentlemens agreements and that kind of thing to avoid oversupply and bankruptcies. Therefore, they are obliged to finance quite substantial land holdings until development becomes rational.

There is obviously high risk involved, and this is borne out in real life, with many developers and land investors going broke. Those who remain standing obviously command a premium for their successful risk taking. Meanwhile, the existence of the urban limit prevents the values of the land from really collapsing, and banks and finance institutions who have taken the land as security from those who have gone bankrupt, will simply "hold" it until prices "stabilise".

In "free" jurisdictions, developers simply have to predict demand and watch for potential development sites, that they then buy at farmland prices. There is every incentive to proceed immediately with development, as there is plenty more land at similar low prices, that their competitors can develop.

Dependency on home purchasing part of the problem

The health of our economy should not be based on how well big builders are doing. Recessions should not result from people not buying enough tract homes.

Before large corporate builders were around to get "their share of land", there were small contractors who built one quality home and community at a time. Homes were built by skilled craftsmen, built to last, and communities were authentic.

A lot of urban limit restrictions were created to counter mass-produced building;indeed, for example, rural municipalities are adopting many restrictions in order to protect valuable natural resources, whether forest or farmland.

They enacted these restrictions because large builders aimed to buy up all of this land to build their 100-1000 unit housing subdivisions, office parks, or shopping centers. There would be nothing left besides a few parks if restrictions were not put in place.

We need a balance between making sure people have their basic needs met in our communities, and protecting enough natural resources so that our natural communities can function healthfully.

Here are some resources for people/orgs working to build an economy based on people mass consuming homes and stuff to fill them:


Agenda for a New Economy: From Phantom Wealth to Real Wealth
by David Korten

The Cost of Nothing
by Raj Patel

Yes, that is what I meant by

Yes, that is what I meant by likening this to the old Baptists and Bootleggers phenomenon. The cover provided by the conservation Baptists is enabling developer (and NIMBY) Bootleggers to make a killing.

But as ContrarianPlanner says below, it is too simplistic to blame "planners" for policies that were designed years before their time, and when the whole world is slow to grasp the consequences, including elected politicians who are ultimately responsible. By the same token, it is a bit simplistic to blame "big developers".

Many of these big developers have now been devoured by the monster that some of them helped to create; how many of these big developers are still in business now? A lot of the "land banks" are now in the hands of their banking and finance sector backers who have taken them as security.

"Big developers" in free jurisdictions like Texas, actually do a very good job of bringing the world's most affordable housing to their multitudes of customers. But even then, there is nothing stopping the little guy from doing something that suits himself or a select few clients.

You refer to " economy based on people mass consuming homes and stuff to fill them....". The very worst manifestation of this, is people paying for empty bubbles of inflated pricing; getting nothing for their years of effort saving in the past and paying off the mortgage in the future. In tandem with this, is people using inflating home prices as security for consumption spending.

At least in the freer jurisdictions, you do not get either of these effects. One of the arguments in favour of planning, is that there have been instances in the past, of "overbuilding", and building booms that have resulted in an oversupply and a slump. But the sums of money involved in these slumps is only a fraction of the sums of money involved in the recent inflating and collapsing price bubbles. This is because low cost urban fringe lots are a restriction on how high prices can go; that is, the price of ALL property, not just the newly-builts. In the "boom", prices measured in median multiplier terms, might go as high as 3.5 maximum.

But in the restricted markets of recent years, how high has the median multiplier gone? 6, 7, 8, 9? This is so stark, obvious, glaring; everybody should see this. The question in this situation is, what actually causes the final bust? In the "freer jurisdiction" case, the cause of the "bust", and the brake on price inflation, are the one and same thing - the cheap fringe land. But this is not the cause of the "bust" in restricted markets.

I hypothesise that the cause of the "bust" in restricted markets, is the massive diversion of investment away from productive capital, to the extent that income and employment growth are being constrained at the very time that property is becoming less and less affordable. Then there is the essential role that first home buyers must play in a healthy, sustainable market. When they drop right out of the market altogether, what happens to the homes left by dying and incapacitated elderly?

Another counter-intuitive factor, is that the lack of first home buyers is for a while, compensated for by investors buying properties expecting capital gains to continue; and of course the young who are not buying their first homes, provide prospective renters for these properties. But the situation can go so far that significant numbers of investment properties are bought and remain untenanted. Analysts will look at this and conclude that high house prices cannot be because of supply shortages, because we have so many empty houses....!

Of course we end up with the perfect set-up for a collossal bust. And the amounts of money wiped out in this bust are many, many times as much as the amounts wiped out in the "free market oversupply" situation.

More on the perfect set-up

Another point I omitted to mention, is that the excessive number of "investment" properties without tenants, acts to depress market rental rates. (The expected capital gains in some markets have been so high that some speculators have thought it not necessary to even seek tenants). Then the low rental rates are used as evidence that there is no shortage of property and land supply is not an issue.

There's more: many of these investment properties have been bought by people using the bubble value of their existing home as collateral for the purchase of one or more investment property(s). I suspect that under these conditions it might even be possible to have too many homes for the population, and property prices to be still many times too high. With all the statistics being thrown around by all the conflicting interests, who is responsible to cut through to the underlying problem?

Allowing that we have really entered unchartered waters in all this, is helpful in avoiding a finger-pointing blame game. I have only ever seen one example, a few paragraphs in an obscure report, of an early prediction of these problems surrounding the comparatively recent fashion for urban limits. (McShane, 1996).

Upsetting recent report

Here we go, big builders in action, just as you were saying....?

Baptists, Bootleggers, and Externalities

You seem to take a consistent free-market position, opposing limits on density as well as urban limit lines. You might consider making this clearer in your posts, which only talk about eliminating restrictions on suburban development, not on higher density development.

Now, the next question is whether you consider an obvious failure of the market: it does not take external costs into account. In the market, many people will choose automobile-dependent development because it gives them the best house for the price, but they are only considering the costs and benefits to themselves, not the environmental costs.

Do you think there should be any mechanism for dealing with those external costs? It seems to me that the real-estate crash we just had will look insignificant compared with the environmental crash that we will have soon if we keep consuming ever-more energy. Do you think these environmental issues are just a hoax, or do you have some way of dealing with them?

The analogy of Baptists and bootleggers is a good one. The baptists are sincerely dedicated to stopping what they consider a destructive habit, and the bootleggers take advantage of their idealism to make lots of money.

Likewise, many environmentalists are sincerely dedicated to controlling our destructive habit of burning fossil fuels and emitting CO2, and developers can sometimes take advantage of their idealism to make lots of money.

But the difference is that the overwhelming scientific consensus agrees that environmentalists are right to think we must control CO2 emissions to avoid environmental crisis.

What do you propose to do about that? Are you going to dismiss all the world's climate scientists and say they are just as misguided as the Baptists who supported prohibition? Or do you have some way of dealing with the environmental costs that all the scientists have identified?

I use global warming as just one prominent example of external costs. There are many others, including loss of farmland, loss of endangered species, depletion of non-renewable energy resources, and many others that are very well known.

One other externality that is relevant here is the effect of dense development on the character of suburban neighborhoods. If a developer buys a dozen suburban lots and builds a highrise there, that changes the character of the neighborhood. Generally, suburban neighborhoods have zoning to prevent that. As a consistent opponent of land-use regulations that drive up housing prices, you should oppose that suburban zoning and want the developer to build the highrise. Is that right, or do you want to deal with this external cost in some way?

Charles Siegel

Negatives and Positives

I am focusing on the urban limits because I think the limits on density are already well understood in their effects, and it is well understood just what are the vested interests behind them.

But I believe that the land price issue is far more significant; I have ceased to believe that developers would be so set on high-end redevelopment in the inner areas, if the land was not so expensive. I believe that this phenomenon deserves study, with comparisons made between "freer" jurisdications and low land prices; and restricted ones with high land prices; and the rate at which densification occurs. Alain Bertaud's studies have touched on this and suggested that densification starts to occur in the wrong places, closer to the urban limits, when the land prices are forced up. This is because of all the pent up demand from lower income people who simply cannot afford any home other than a small one on the lowest possible cost, smallest possible lot; this happens to be further away from the urban center.

There was a significant book in 1967, "Population Growth and Land Use" by Colin Clark. He analyses the growth of urban regions and concludes that densification proceeds in tandem with sprawl. He does not discuss or predict the phenomena we are discussing now; but had he been alive today I think he would have seen clearly what is happening.

On externalities, Colin Clark states that there are almost always positive externalities that more than compensate for negative ones. Effective transport connections and mobility are such a vital contributor to economic and social progress that the question has to be asked what are the negative externalities of reducing this mobility.

Julian Simon ranked effective transport connections as second only to "culture" among the factors leading to economic growth and prosperity.

Transportation And Externalities

"Julian Simon ranked effective transport connections as second only to "culture" among the factors leading to economic growth and prosperity."

Effective transportation connections are obviously very important, but like any other economic good, they are subject to the law of diminishing marginal utility.

In the developed nations, we already consume huge amounts of transportation, and there is little or no marginal benefit to traveling more miles. Americans drive twice as much as in the 1960s, but I do not think that we are any better off as a result.

As I remember, Todd Litman has found that we in the developed nations have reached a point where traveling longer distances no longer has any positive externalities - though it clearly has very large negative externalities.

Charles Siegel

Marginal Utility

Actually, Julian Simon and Donald Glover (1977, 1982) found a very high and elastic correlation between population density and the amount of roading. I doubt that it is possible to have the one without the other. The relationship is like one between exponential population amount and linear road amount, but it is there. William Eager showed that although car use falls with increased population density, it does not fall by much and roads are still so essential to such a proportion of people even in the highest densities, that they remain a precondition of densification.

Randal Pozdena has recently done a study directly contradicting the Litman one you refer to. I actually think that they are both right, under differing structures of urban development. I think the planned, urban-limited region causes distortions that change previously applicable market "laws" regarding cost and benefit. I strongly believe that Litman is right when the longer travel distances are the result of planning against the market, and that Pozdena is still right in freer jurisdictions.

Transportation And Externalities

"Julian Simon ranked effective transport connections as second only to "culture" among the factors leading to economic growth and prosperity."

Effective transportation connections are obviously very important, but like any other economic good, they are subject to the law of diminishing marginal utility.

In the developed nations, we already consume huge amounts of transportation, and there is little or no marginal benefit to traveling more miles. Americans drive twice as much as in the 1960s, but I do not think that we are any better off as a result.

As I remember, Todd Litman has found that we in the developed nations have reached a point where traveling longer distances no longer has any positive externalities - though it clearly has very large negative externalities.

Charles Siegel

Environmental externalities

I got called away from my computer before I had finished replying to your questions here, Charles.

Your example of a highrise in a neighbourhood is a very good one, one that I would have picked myself in what I am about to say.

I stated before, a principle that was illuminated to me by Colin Clark; negative externalities are almost always outweighed by positive externalities. This actually helps to explain the extraordinary success of free market economies in the face of many of the quite valid criticisms that are made of it. I take it there is no controversy on this site, about environmental "Kuznets curves"? That is, that even environmental indicators (an oft-used example of negative externals) have mostly steadily improved after a certain level of economic advancement is surpassed in a nation?

I believe that this is an example of an unaccounted-for positive externality. You might ask, "of what" is it a positive externality? I agree completely with the comment by someone above, that these things are all actually far too complicated for anyone to analyse exhaustively. But as a broad principle, I would say that most of the times someone has bought a new car; or a factory has installed new machinery; or anyone has moved to more modern, efficient use of resources through later technology, powerful "positive externalities" have been generated.

Every time someone has got a better job, or got a job at all, thanks to the mobility of a vehicle, positive externalities are generated. Parents spending more time with their children, taking them on outings, children growing up in a grassy backyard instead of in concrete gloom, children growing up in healthy suburbs far away from polluting industry; positive externalities everywhere you look.

I do not dismiss the role of regulation in achieving much of this, but the fact is that a society that is more worried about getting its next meal and surviving the next 24 hours, does not worry about getting environmental regulations in place.

But now we come to the question of global warming, which is probably the first ever hypothesis of a global negative externality that is argued to trump all other considerations. Even then, note that developing countries still rate development as their greatest priority. I do not wish to turn this discussion into one on all the pros and cons of global warming let's just say there are questions over the whole issue, and move on.

What I want to move on to, is the effectiveness of many of the measures we are discussing here, in addressing the claimed objectives of reducing resource consumption and reducing carbon emissions. The very point I am trying to make, is that there are unintended effects of much of the actions we are taking, that mean that we are not actually reducing emissions at all in spite of imposing considerable costs on society.

If we are already able to enact quite costly measures within the democratic context, presumably some quite low-cost and much more effective measures would not present any political problem. That brings me to the high-rise in the suburbs. Why not? I am talking here about an office block, not flats. Blocks of flats in the suburbs would be wrong from every point of view assuming that the jobs for the inhabitants remain distantly located. I am talking about allowing sources of employment to disperse to where the workforces actually are. Why is this not "measure number one" for combating global warming?

I believe that to a large extent, free urban economies would have developed much more decentralized sources of employment. Planning mostly developed initially to take society away from the Victorian squalor where people lived in soot and coal smoke and filth right amid the dirty industries of the time. Urban planning gradually brought about separation between these unhealthy areas and where people lived and raised children.

But now we have the consequences of this urban development taken to extreme for the sake of sheer "quality of life" on the part of extremely well-off populations. Questions of resource conservation did not come into it until too late, and even now the connection seems to have been largely missed, between this zoning and long commuting distances. Office blocks, which are comparatively "clean" operations, are much more numerous today and industries operate much more cleanly; therefore, there would be much lower social cost in allowing decentralisation of these things with the explicit aim of reducing commuting distances.

"Multi-nodal" development would be obviously the next best thing in the event that society simply does not accept mixed uses of land.

The next question I raise in tackling global warming cheaply and with clear efficiency gains; is the question of the efficiency with which "public transport" operates. Mostly, these are monopolies, subsidised, with entrenched workforce conditions and practices, and many of their services for much of the day, actually consume more resources and emit more carbon than private motor vehicles for the same number of people carried.

There are actually several times as many empty seats in private motor vehicles than there are available on public transit and buses, that would generate enormous positive externalities if they could be simply utilised to some extent. Exciting new technologies are already available to this end. Regulations regarding the carriage of paying passengers simply do not permit these extremely cheap and effective solutions. Why should such solutions be ignored if there is a crisis of the proportions that global warming is claimed to be?

But What Are Your Proposed Policies About Externalities?

This response doesn't make it clear what policies you propose to deal with externalities. For example, ContrarianPlanner says clearly that he wants to tax behavior that creates negative externalities; I think that is only a partial answer, but it is a real, concrete policy to deal with the issue. What are your concrete policies?

I can't accept your claim that negative externalities are almost always overwhelmed by positive externalities. As one example of positive externalities, you list: "children growing up in a grassy backyard instead of in concrete gloom." But what if a developer builds a highrise that blocks all the sunshine in their yard? Or what if a developer builds a factory that not only blocks their sunshine but also pollutes their air? Restrictive zoning is currently the policy that deals with these possible externalities, and because you are against restrictive zoning, I want to know what policy you recommend as a substitute.

(Incidentally, many believe that the environmental Kuznets curve applies only to local sources of pollution, such as urban air pollution, and does not necessarily apply to global issues, such as CO2 emissions. The environmental Kuznets curve says that wealthier nations have cleaner environments, but this is precisely because thee wealthier nations have stricter environmental regulations, so it cannot be used as an argument against stricter environmental regulations.)

(Incidentally, also, I have to object to your statement "I do not wish to turn this discussion into one on all the pros and cons of global warming let's just say there are questions over the whole issue." There are many questions from ideologues and politicians, but there is no question among climate scientists that global warming is happening, is human caused, and will have immensely harmful effects if not checked. There have been other very severe global economic threats, such as acid rain and depletion of the ozone layer. But we are not discussing these individual threats here; they are just more examples showing that you must have concrete policies to deal with negative externalities. You can't dismiss them by saying that there are also positive externalities.)

Charles Siegel

Positive Externalities do wonders

I still maintain that new office blocks in the suburbs, and new factories in the suburbs, would generate far greater positive externalities in enabling people living nearby to obtain employment that they can walk or cycle to (or yes, drive their car a much shorter distance) than the negative externalities they would generate in shade and pollution in the immediate neighbourhood. But I do agree that this is unreasonable to the smaller number of people negatively affected. This is why I say that multi-nodal development is probably the next best thing after outright mixed land use.

I also repeat that most modern industry and other sources of employment are not the threat to health and their immediate environment that they were decades ago. Intelligent siting of such development (planning, not "zoning") could also minimise the local impact. Each existing urban situation is different.

But I do ask again, why, if people accept that to save the planet, they will need to pay larger sums of money to use their cars and heat and cool their homes, and travel in less convenient and more time consuming ways, and pay more tax to subsidize all this; why would they not be prepared to sacrifice some local quality of life if it is indeed because the future of the whole planet is at stake (not to mention the gains to greater numbers of others in the local community thanks to nearby employment coming into existence)? Saving the planet and serving the greater good cannot be done without inconvenience to anybody. Compensation schemes might help, such schemes have been used for decades already, always attended by a lot of controversy.

The Kuznets curve thing can be a chicken or egg argument; it is certainly necessary to get the economic growth in the first place before there is any sort of social consensus about environmental regulations. One of the beauties of environmental Kuznets curves is that developing countries can rise up them a whole lot faster because the technology already exists.

BUT we get the possibility that environmental regulations introduced prematurely or inappropriately can actually delay or prevent the beneficial point of the Kuznets curve being reached. For example, the "de-carbonisation" of the global economy (ie unit of carbon emission per unit of economic production) has actually reversed in recent years after decades of clear positive trend, and it has been convincingly argued that the Kyoto Protocol is a factor in this by providing incentives for dirtier industries to relocate to developing countries, and thus delaying the rate at which the developing countries decarbonise their economies.

(Extreme statements on global warming, such as "there is no question among climate scientists", actually induces cynicism and fatigue on the subject among the general population you are trying to convince. This is not a totalitarian society, people can find things out for themselves. For example, some of the IPCC's own reviewers are sceptics who have made dissenting comments, sometimes quite extensively, on every report so far.)

The World Without Controls On Externalities

Imagine what the world would be like if everyone accepted your claim that we can do without any controls on negative externalities because "positive externalities do wonders."

For example, almost all electricity would be generated in plants that use coal and have no emission controls. That would mean high ghg emissions, it would mean such high levels of mercury emissions that it would be dangerous to eat fish, and it would mean killer smogs like London's smog of 1952 that killed 12,000 people and made 100,000 ill, and it would be easy to cite other environmental costs.

Maybe economic growth would let us deal with these problems by by building processing plants to remove the mercury from the fish, by living in air-purified homes, driving around in air-purified cars, and never going out into the open air, and so on. The best we can say about this vision of the future is that it is not economically efficient: it would be much cheaper to build clean power plants. The worst we can say is that it turns the world into something like what Dante wrote about in the Inferno.

If you want to have any credibility at all, you have to come up with some policy to deal with negative externalities. It is not at all plausible to say that we should simply ignore all negative externalities because they are outweighed by positive externalities.

Charles Siegel

PS: This is not a totalitarian society, and people can find things out by themselves - which is why I have a right to state what I have found out about global warming. It is very odd for you to brand my freedom of speech as a form of totalitarianism. I am stating a fact about the scientific consensus, and I hope that in a democratic society, the majority will make decisions that do not simply ignore science.

I quote Joe Romm, who wrote today:

Let me end by quoting the Summary of the November statement by the Met Office (the UK’s National Weather Service [i.e. meteorological office], within the Ministry of Defence), the Natural Environment Research Council, and the UK’s Royal Society (the UK’s national academy of science, “the world’s oldest scientific academy in continuous existence,” founded in 1660):

The 2007 IPCC Assessment, the most comprehensive and respected analysis of climate change to date, states clearly that without substantial global reductions of greenhouse gas emissions we can likely expect a world of increasing droughts, floods and species loss, of rising seas and displaced human populations. However even since the 2007 IPCC Assessment the evidence for dangerous, long-term and potentially irreversible climate change has strengthened. The scientific evidence which underpins calls for action at Copenhagen is very strong. Without co-ordinated international action on greenhouse gas emissions, the impacts on climate and civilisation could be severe.

Please don't misunderstand me

Charles, I still believe we do not have to disgree so abruptly. The case you give, of coal smoke and soot and the famous London smogs, is an abundantly obvious case where negative externalities are so great as to justify regulation, once there is a socio-political consensus about it. People emerging from rural subsistence living do not have quite so much concern about coal smoke, after having been accustomed to lifelong peat and dung smoke in their hovels. (How did any humans anywhere ever heat or cook without smoke? "Back to nature" advocates kind of miss the ugly reality). Having any income at all is their first priority. This is why it took decades before action was taken, and even then it is a question whether regulations were as significant a point as technological advance. Of course the car was regarded as a health benefit after a century or two of urban streets covered in horse dung, which formed a slurry in wet weather and all-pervading dust in dry.

If you do not have technological options, then regulations will involve by necessity, a reduction in economic activity and quite possibly the ill effects of this will be greater than the effects of the externality being regulated.

You do not seem to realise the historical significance surrounding coal fired electricity generation and the London smogs of the 1950's and prior, and indeed every such "developing nation" urban area smog. These smogs are caused by local burning of coal, not by coal fired electricity generation. The British used to promote electricity as "Coal-By-Wire". The more people who used electricity for heating and cooking and lighting, and the more industries that used electricity to run their machinery and their furnaces, the cleaner the air got, especially locally but certainly in total.

Coal fired electricity generation even in the 1950's, represented a huge net reduction in pollution, as it is so much more efficient than multitudes of stand-alone fireplaces and steam engines, even given transmission line losses. Coal fired electricity generation has become so efficient since then, that even now, if it was not for the CO2 question, there would be no grounds for complaints about it.

The Chinese understand fully that coal fired electricity generation is the quick and cheap solution to their present day smog problem, the plume from which reaches halfway accross the Pacific Ocean at times. That is why they are building coal fired power stations at the rate of one per week. There is a considerable difference between CO2 and actual particulates of carbon; the former is only a recent concern, the latter always was understood to have significant negative effects on human health and still is a more significant issue than CO2.

What I am saying about negative externalities, is that we need to reintroduce into the legal framework, a recognition of positive externalities and that these need to be weighed into the equation. I believe that had olden-times governments legislated against negative externalities as soon as they started to occur, without taking positive externalities into account, they would have driven their whole economy back to rural subsistence living. They did not think in complicated terms of positive and negative externalities back then, but the simple broad consensus was that progress was beneficial, and local detriments were just "life", and still beat growing your own tunips to eat on an acre of land, and starving to death in the first severe winter. This consensus certainly lasted at least until the 1960's.

One of the problems with externalities, is the numbers of people affected on the "positive" and "negative" sides, and the extent to which each person is affected.

It is widely grasped that the immediate parties to a transaction gain a quantifiable benefit, and negative externalities of some unquantifiable amount, are imposed on some class of people who might not be compensated. We all understand about the new factory's neighbors. But what has been omitted from our reckoning, is the positive externalities that apply; the people who will be employed, the incomes they will earn and spend, the responsible lives they will lead, the provision they will make for their children, the export incomes earned, the industry not lost to Asia, and so on. Then there is the Kuznets curve issue, that prosperity itself will allow for further improvements in environmental indicators for all.

I think we are incurring serious losses of cumulative positive externalities in our economies today because identifiable negative externalities have been accorded sufficient legal status to allow those suffering them to prevent them occurring in the first place. The loss is a much wider one than the immediate loss of a new project and the jobs associated with it. The positive externalities lost are miniscule in their application to each person affected (throughout society as a whole, in fact), but apply to so many people that their loss is significant. It is like the straws being added one at a time to the camel's back.

It is the same old story, that a few people who have more to gain or lose, will always make a much more politically significant fight than the greater number of people who stand to gain or lose in much smaller quantities, even though the cumulative value of the gain or loss to the greater number is the much larger in total. In fact, most of the greater number remain completely unaware of the issues affecting them in this way.

The externalities you and I are discussing, such as shading a backyard, are trifles in comparison with those faced by our Victorian ancestors, or by the Chinese today. But I have already implied that the benefits I am advocating for can be attained in significant proportion without requiring such detriments, I just used the office block in the suburbs as an illustration of externalities that could be weighed against each other. But a zone of office blocks immediately adjacent to a suburb would achieve the desired objective of providing short commuting distances; and zones of office blocks and industries interspersed evenly among suburban zones is such a self-evident benefit to average commuting distances that I cannot understand why it is not top of the planning agenda.

Moving on to further assessment, market values of land always seem to result in development "from" industrial "to" residential, not the other way around. The question then is, why is it not a foregone conclusion that industry will locate predominantly at the urban fringes, and then in the fulness of time, relocate again to the new urban fringe while the land they had occupied is redeveloped for residential? And why wouldn't development along these lines, also result in shorter average commuting distances?

Office blocks have an advantage over industry in their ability to compete for space, in that their footprint is small compared to their rentable floor space. Even so, I suggest that government departments are major factors in sustaining "office block" zones that could well be more dispersed if driven by cost considerations. Increased costs in this situation are just passed on to the taxpayer year after year. California and New York especially should look carefully at the potential gains in taxpayer-funded rental costs and in reduced average commuting distances, were they to relocate their bureaucracies. This would also free up a lot of inner city space and reduce rental values enabling more people to be able to afford to live closer to their employment.

I do believe that relatively lightly regulated cities display in large measure, these beneficial features, without them having been planned for. But I agree with Colin Clark, in "Population Growth and Land Use", that this does not mean there is no role for the planner; rather, the planner should understand these naturally occurring beneficial developments and expedite them rather than oppose them in attempts to gain some ideal or other that has been granted primacy, and that ultimately is not realised anyway once the results of the planning experiment are "in".

(I will stay off the subject of the IPCC and the existence of contrarian reviewers in its own ranks, although I am grieved to think that simply mentioning such a reality by way of demurral over an unreasonable assertion, could be so taken offence against, even in this forum).

Michael Lewyn's picture

Not quite so simple

Wodehouse seems to be arguing: (1) California has foreclosures; (2) California is expensive; therefore (3) expensive land causes foreclosures.

But didn't the foreclosure crisis happen in some other places too?

And isn't it true that WITHIN California, the expensive core areas have lower foreclosure rates than the drive-to-qualify exurbs?


Perhaps Paul Krugman can help:

Within CA, those we would consider middle-class cannot even begin to think about buying a home in the expensive core areas... so they drive to qualify. The only people that buy in core areas are on the upper end of the income scale (who tend to be more immune from economic downturns, which lead to less foreclsoures). So once a recession/credit-bubble pop happens, those lower down on the income scale are hit harder, which equals more foreclosures in the hinterlands. It's still part of the same problem, it just manifests itself differently in different areas.


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