ECON-201: Economic Thinking for Planners and Developers added to your shopping cart

ECON-201: Economic Thinking for Planners and Developers

15 June 2006 - 5:28pm

ECON-201: Economic Thinking for Planners and Developers

Course Access
6 months

Instructor
Peter Gordon, PhD

Registration
~~$99.00~~
Price Reduced! $66 during the month of November

AICP CM Credits
This course has been approved to provide 4 CM credits.

Please Note:
Course materials are accessible for 6 months from the day of registration. Enroll anytime!

November Sale: 33% off!

During the month of November, registration in ECON-201 has been discounted. For just $66, you'll receive six months of access to the course, available online 24/7.

Developers often complain that planners are taking away their ability to make a project “pencil out”. And in truth, most planners don’t have the economic background to understand what makes a complicated project financially viable. This course goes beyond supply and demand to give you a firm grounding in the economics of land use, including cost-benefit analysis, the economics of mortgages and lending, encouraging business incubators, and more.

By the end, you should be able to speak competently on the economic tradeoffs inherent in development, from real estate to transportation and health care. Developers taking the course will benefit from a greater understanding of property rights, housing bubbles, and local economies.

Economic thinking can provide the answers to many of these questions of interest to planners. This self-paced course will cover cities, regions, neighborhoods and how and why they prosper -- or not.

Course Instructor
Course Outline
Course Overview
What People Are Saying
What You'll Learn
AICP Certification Maintenance
Returning Student Discount
Purchasing Information
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Course Instructor

Peter Gordon is a Professor in the University of Southern California's School of Policy, Planning and Development. He is also attached to USC's Center for Risk and Economic Analysis of Terrorist Events. Professor Gordon's research interests are in applied urban economics. He has recently written on the problems of the "sprawl" debate. He is also the co-editor (with David Beito and Alexander Tabarrok) of The Voluntary City (The University of Michigan Press, 2002). Gordon and his colleagues have developed various economic impact models which they apply to the study of the effects of infrastructure investments or disruptions from natural events or terrorist attacks. Professor Gordon has published in most of the major urban planning, urban transportation and urban economics journals. His recent papers are at www-rcf.usc.edu/~pgordon. Gordon was elected a Fellow of the Regional Sciences Association International in 2009. He has consulted for local, state and federal agencies, the World Bank, the United Nations and many private groups. Professor Gordon received his Ph.D. from the University of Pennsylvania in 1971.

Course Outline

Topic 1: An Introduction To Economic Thinking (ET)
Topic 2: Scarcity Signals and Resource Allocation
Topic 3: Pricing and Markets
Topic 4: Basics of Capital and Labor Markets
Topic 5: Basics of Capital Markets -- ET and the Allocation of Capital
Topic 6: Money, The Role of the Federal Reserve and Business Cycles
Topic 7: Labor Markets and the Allocation and Migration of Labor
Topic 8: Cities and Neighborhoods and Property Rights
Topic 9: Land and Transportation Markets, the Role of Access, Congestion and Growth Prospects
Topic 10: Political Economy: Distribution and Redistribution
Topic 11: The Environment and Property Rights
Topic 12: The Federal System of Governance and Social Insurance
Topic 13: Cost-Benefit Analysis and Evaluation
Topic 14: Concluding Thoughts
End of Course Test

Course Overview

Many people report that they have passed through one or more economics classes in their lives. Unfortunately, few remember anything useful.

Many do recall graphs and/or formulas, which they barely know how to judge or apply. In contrast, the emphasis in this course is on applications. There is seemingly more and more such application of economic principles among economists and many other professionals these days (consider the best-seller success of Freakonomics). Planning is no exception.

This course explores the concept of Economic Thinking, rather than economic science. The latter preoccupies most academic economists and is an impressive body of literature but it offers little to the lay person trying to succeed in planning, development, business, or in daily life. What do we know about the performance of highways, schools, health care and all of the other sectors from which we consume? Economic Thinking has a lot to teach us about each of these.

Applied Economics for Planners is not a vanilla-flavored approach. Compared to other introductory courses and texts, much of what follows focuses on cities, regions, neighborhoods and how and why they prosper -- or not. That is our most important area of application.

The course is meant as an introduction. Each lesson in each topic is designed to be an eye-opener -- and to open doors for further exploratory studying and reading. Questions associated with each Topic offer a way to apply what you have learned. They are as important as the actual course reading.

What People Are Saying

"Thank you very much. This course was a great learning experience." -- Cecilia Bolognesi, AICP

"Thank you. I really got alot out of this course."-- Michelle Leftwich

"Thanks so much for the great course. I really enjoyed the course, and the way it was written. I have your blog bookmarked too, as I am interested in reading other articles that you write." -- Dave Ghiorso

What You'll Learn

These are a few examples of the types of analysis you will learn to apply through this course.

Statement:
From Bjorn Lomborg’s The Skeptical Environmentalist (Cambridge University Press, 2001): “It is remarkable that the fall in the proportion of people starving in the world should have come at the same time as the population of developing countries doubled. What is more astounding is that the actual number of people starving in the Third World has fallen. While in 1971 almost 920 million people were starving, the total fell below 792 million in 1997 ... In 2010 it is expected to fall to 680 million.”

Analysis:
Human ingenuity is remarkably potent in alleviating scarcities -- when a system of clear property rights rewards it -- to get people to specialize in their comparative advantage, including innovation, production, marketing, etc. Technological change does not appear spontaneously. There is an extensive historical record that supports this analysis. Doomsday forecasts routinely leveled at economic development ignore both the argument and the record. Expanding, not reducing, property rights is the more promising approach.

Statement:
From the LA Times (August 31, 2008): “Brightly painted home prompts debate in earth-toned La Palma … City considers plan to have homeowners pick from approved palette.”

Analysis:
Homeowners care deeply about neighborhood quality and neighborhood transition. These are seen as a commons (as in “tragedy of the commons”). This is why there is a demand for rules. But collectively chosen rules (as in city government) are subject to political conflict.

Statement:
From Cityscape (by Prof. Michael H. Schill, 2005, vol 8, no. 1): “… many jurisdictions levy impact fees on the development of new housing. The purpose of these fees, at least in theory, is to promote efficient development by requiring developers or consumers of new housing to absorb the marginal cost of the development to the community. A second related purpose is to shift the financial burden of new development away from existing residents. Of course, as with zoning, land use regulations, and subdivision controls, impact fees also can intentionally be used to discourage new development by raising its cost.”

Analysis:
ET suggests that, contrary to the “scientific planning” idea, development rights will be transacted. If the marginal costs of the development were known then an equivalent impact fee is justified on efficiency grounds. Yet, the actual marginal costss are usually hard to determine. But there may also be marginal benefits conferred by the development but not captured by the developer. And as the quote mentions, impact fees are also assessed on other non-economic (political) grounds.

Statement:
From the LA Times: (March 6, 2006): “’Slow Growth’ Has Come at a Cost to Santa Barbara …Soaring housing prices … An exodus of big employers … Spill over growth. Seventy-five miles away, in northern Santa Barbara County, houses are engulfing farmland. … Many of these ripple effects could not have been foreseen 30 years ago.”

Analysis:
All actions have costs. Santa Barbara’s choices may be attractive to some but at what cost? The effects now causing some chagrin could have been foreseen by anyone with a modicum of economic thinking. Controls limit exchanges between willing buyers and willing sellers. They usually push up prices and reduce affordability. This is not an argument against the controls. It simply points out that they are not a free lunch. Nothing but trade-offs. This discussion is not about externalities. As supply shifts left, price rises as we move up along the demand curve.

Statement:
From the LA Times (March 13, 2006): “The shape of modern American cities may be changing as urban planners weigh the conflicting merits of housing versus industry …. OAKLAND – One after another, they stepped to the lectern, pleading. Don’t take the land, they told City Council members. Don’t put houses on it. If we lose, it’s gone forever. This wasn’t a scene from some Central Valley agricultural town with fecund acres being gobbled up at a rapid pace. This was a bustling urban enclave in late January, and the appeals came from anxious residents and business owners demanding that city officials protect factories, not farms. ‘Many businesses, even small businesses like mine on half an acre, give you 40 good jobs,’ Bob Tuck, owner of Atlas Air Conditioning Co., insisted at a packed hearing on Oakland’s land-use policies. ‘If you pave over our business land, it’s never going to give you another economic crop. Let’s make sure that it doesn’t become another residential zone.’ Large tracts of land are increasingly hard to find in California’s crowded cities. … Elected officials and environmentalists are clamoring for developers to build new houses within existing urban boundaries instead of fostering more traffic and urban sprawl. At the same time, California lost nearly 340,000 manufacturing jobs in the last five years …”

Analysis:
Space at any location is scarce and allocated to its highest and best use via competition in the market. This outcome can change from one period to the next. Many parcels, many uses and many time periods make this an intensely complex problem that is best left to markets to resolve. If there are externalities, then it is not clear that the process in the example will best resolve them. Developers are a key part of this market process. It is in their interest to be the first to identify highest and best uses for any site at any time. The politicized process described in the example requires developers to devote energies to politics and approvals. If there are externalities, it is in the interests of developers to create situations whereby these are internalized, including setting up homeowners’ associations.

AICP Certification Maintenance

This course has been approved to provide 4 credits for the American Institute of Certified Planners (AICP) Certification Maintenance program.

To claim your CM credits, review the Guide to Claiming AICP CM Credits for Planetizen Courses.

Returning Student Discount

Returning Planetizen Courses students can also take advantage of a 15% discount off the price of another Planetizen Course (PLAN-145, PLAN-310, PLAN-315, and all webinars exempted). To receive this discount, contact us at info@planetizen.com.

Purchasing Information

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Price: $66.00