Monday, March 19, 2012

Can Loosening Development Restrictions Restore Affordability?

It seems that market-based approaches to increasing housing affordability are at last getting widespread attention.  Between Ed Glaeser's Triumph of the City and Matt Yglesias' The Rent is Too Damn High, a long-overdue conversation about the impact of land use regulations on the cost of housing is finally happening.

As an ally of those calling for an end to such policies as rent control and overly restrictive zoning, I hesitate to throw a bucket of cold water on these affordability strategies.  They certainly would, over time, have a positive impact on housing supply.  Whether New York can build its way up to affordability, though, is a more debatable question.

A basic point I'd raise is that in almost all times and places, the solution for urban population growth has not been vertical densification, but outwards expansion into greenfield areas.  Historically, dramatic vertical growth was the product of exceptional circumstances, generally related to the presence of city walls paired with external military threats discouraging sub-urban construction, or the occasional imperial mega-city.  The development of skyscrapers in the late 19th century looked to have the potential alter this longstanding pattern, but for several reasons, greenfield development still remains today the overwhelming source of accommodation for urban population growth:
  • The naturally slow pace of incremental infill development in a built-up area. Even where demand is very high, the process of acquiring parcels from a multitude of private owners, demolishing structures, and rebuilding, is slow and arduous in the best of times.  The technological possibility of skyscrapers themselves may inflate land values, resulting in speculative holding that further deters redevelopment.
  • The opportunity cost of densification. Existing buildings, even of very low value, still represent a sunk cost now generating a reliable stream of income for a current or prospective owner.  The new building must not only justify itself on its own terms, but justify itself in relation to the profits being earned on the existing building, less the time lost to construction. 
  • Political opposition.  It may be condemned as unfair, inefficient or narrow-minded, but as long as there are people living in neighborhoods, there will be people willing to oppose new and denser development in those same neighborhoods.  That doesn't mean strategies to reduce neighborhood opposition to densification or to encourage infill shouldn't be pursued, but it does mean that, all else being equal, greenfield development will almost always present fewer political obstacles.
These factors help explain why New York City increased 2.1% in population from 2000 to 2010, while San Antonio increased by 16.2%, or Charlotte 32.2%.  The claim of Joel Kotkin and Wendell Cox that census figures show growth primarily in "the suburbs" is little more than a truism.  Growth simply occurs where there is room to grow on a clean slate, whether that growth is in high-density or low-density form.

San Antonio and Charlotte, as sprawling as they are, have distant greenfield margins. New York's dense core, by contrast, is surrounded by geographic boundaries and vast areas of very low-density residential spreading far north into Westchester and Fairfield Counties, and west into New Jersey.  Houston proper, even in the absence of zoning, only experienced a 7.5% population increase within its largely built-out limits, even as its MSA grew by over 26%. 

Were zoning abolished, rent control repealed, and developers given free rein in New York, could growth rates remotely comparable to sunbelt cities possibly be matched?  Not likely.  Even equaling Houston's growth rate – a city with abundant vacant land in and around its downtown – would probably be a challenge.  Affordability is an even more distant goal using supply-based strategies alone.  Relaxing development restrictions that worsen affordability and hinder supply is a crucial goal, but not one which is likely to lead to rapid population increases, or housing cost relief, in built-out and geographically-constrained cities.

Related posts:
Can New York Build Its Way Up to Affordability?


  1. "Growth simply occurs where there is room to grow on a clean slate, whether that growth is in high-density or low-density form."

    This is why I think the various criticisms leveled against some New Urbanists (building "new towns" on the very same greenfields that suburban developers liked so much) were a bit unfair. Why deal with the ridiculous NIMBYism and bureaucracy in built-up areas when you can realize your vision on a tabula rasa?

    I think the greatest problem of postwar development - urban, suburban exurban, doesn't matter - is that we've internalized a process for *designing for stasis.* We can no longer comprehend that our communities need to (physically as well as culturally) change and evolve over time, and all our social consensuses - over historic preservation, over new development - reflect this. We design new communities for rigid hotel-like occupation (God help you if you need to change something later on) and we want to preserve old ones in amber. Even in existing built-up areas, there's *huge* resistance to infill, and fatuous "traffic," "viewshed," and "displacement" excuses are used to lock the neighborhood in a don't-you-ever-change straitjacket.

    Can you imagine what 1790s New York would look like under today's development schemes - all the wooden shacks and Dutch-style brick rowhouses could never be cleared for more intense development! I'm definitely not arguing that every city needs to freely develop into a hyperdense skyscraper forest (which wouldn't happen in most cases anyway), but that we do need to get over the neurotic aversion to redevelopment. Admittedly, bad contemporary architecture play a huge role in this aversion too - most people don't want to see lovable brownstones displaced by some soulless glass box, but they might accept the trade if a beautiful Art Deco apartment block was proposed instead. Grand Central was eagerly razed and replaced three times because people once understood that an even-more beautiful iteration was coming along. We can no longer expect this.

    1. Agreed with everything, Marc. We have imagined we are designing for stasis, certainly, but the United States has possibly had the least stable neighborhoods of any country on earth, and has normalized the wasteful process of residential filtering, as though it were some inexorable law of nature that old neighborhoods would be regularly abandoned for the new. With no positive vision for improvement the only direction a neighborhood can go is down, either in absolute terms or relative to newer areas.

    2. Great (and saddening) point! I think the downward-filtering process is just another symptom of 'designing for stasis': neighborhoods are seldom allowed to change as needs change, so they're gradually abandoned in favor of new construction on greenfields that can freely satisfy new needs. I don't see how this process could ever be "sustainable" in the long run.

      I think this behavior can be seen almost everywhere - from dying inner city single-family detached housing neighborhoods (I recall that this blog had an excellent discussion on how that process was unfolding in Detroit thanks to that city's antiquated, rigid zoning laws) to abandoned strip shopping centers passed over for new-construction big box clusters.

      Even "gentrification" - the opposite of slummification - has taken on a dirty meaning, almost as if people (who should know better) think it's normal for existing construction to decline in value until eventually it's suitable only for the poorest of the poor, and that any attempt to prevent this downward filtering is some kind of sinister class warfare.

    3. Yes, and even gentrification is a very mild form of improvement -- although it does represent a positive vision for an old neighborhood, the process is rarely accompanied by upzoning or the introduction of mixed uses. I think the opposite is true: gentrification appears highly correlated with the adoption of historic zoning overlays and the emergence of new impediments to incremental growth. The historic zoning overlays, in turn, can (in parts) be seen as yet another attempt to put the neighborhood in stasis.

  2. Charlie, I agree with your literal point -- NYC cannot build its way to affordability. That would require enough new construction to drive home prices down by 50% or more. Even assuming it were feasible to build enough supply to do that, the city government could not allow it, politically, because that would wipe out so many households financially.

    But a more realistic goal is to allow enough new construction to hold the rate of home price/rent appreciation roughly to the rate of inflation. Note my piece earlier today on Houston -- it will be difficult for the 9% year-over-year increase in Montrose/River Oaks rents to persist given the massive amount of new construction in the area. That's why Houston's so cheap: the market can supply lots of extra housing whenever demand rises. If the markets in Manhattan, San Francisco, & LA were more flexible, surges in demand would be met with surges in housing production. It wouldn't take a 20% increase in housing units to meet such demand; just bumping up the annual supply of new housing to 3-4% of existing housing stock would do wonders. While you're correct that infill development is more difficult than greenfield development, it wouldn't be hard to meet this rate of development. The only obstacle is regulatory.

    (Note that if you hold home price growth to the rate of inflation, then (hopefully) rising incomes will make homes more affordable over the long run.)

    So: I agree that NYC can't build its way to affordability, but I believe it can build its way out of greater unaffordability.

    1. Chris -- thanks for the comment. As for the point about affordability, I wasn't setting up a strawman here. Glaeser (a Harvard professor of economics no less, certainly no pro-suburban crank) does actually make the point (link below, p. 3) that if only New York builders were granted the unfettered right to construct residential high-rises, the price of a new unit would after time approach the cost of construction, falling by 50%. It was that sort of argument that I intended to address -- that somehow, a building boom could lower Manhattan prices substantially. Your point about keeping prices even with inflation sounds much more realistic to me, but the pro-affordability arguments rarely limit themselves in this way.

      About Houston, I do wonder about induced residential demand for quality housing in a location close to the downtown. Houston's rate of population growth is so rapid that, I'd suspect, even a slight diversion of the flow of newcomers to Montrose could easily outstrip the ability of developers to supply sufficient new dwellings. As the neighborhood densifies and urbanizes, it will become more appealing, as well, which will further increase demand. The gentrification feedback loop can be rapid and intense.

      My point as to NYC (and SF, LA)is not that these cities are hostile to development -- I'm not sure they are, really, any more so than heavily SFDR-zoned Phoenix or Denver. They simply have no empty land onto which new housing may go. LA is hemmed by the sea and high mountains; SF is a narrow peninsula; NYC is surrounded by rivers and is blocked in by suburban development north and west. Notably, supposedly anti-growth Portland, with its urban boundary, still managed a very respectable rate of increase in 2000-2010, which, I'd argue, has less with policy than with the fact that it has empty land to put people on.

  3. Your instincts are correct. New York had a higher density 100+ years ago before the subway. Back when it was just Manhattan. The city expanded its geographic footprint and annexed Brooklyn. It built the subways so that workers could get into downtown. A bigger question for New York isn't zoning and density. It is why the city doesn't continue to grow? Why doesn't it annex Yonkers and build a subway out there?

  4. James, Yonkers wouldn't stand for it. Northern cities don't really have the power to annex their suburbs and satellite communities anymore, whereas some southern cities still do (as can be seen in their irregular, meandering, ever-shifting municipal boundaries), which accounts for a lot of the perceived "growth" of southern municipalities.

  5. I think many Spanish cities such as Barcelona have and continue to grow through intensification of existing residential neighbourhoods.

    I would be interested in knowing how things happened in Barcelona, Valencia and other cities in that area. Looking around suburbs and outer neighbourhoods of Barcelona, the oldest looking buildings are 1-2 storey rowhouses about 15-20 feet wide. Then you have newer looking buildings that are taller, up to 7 stories and either the width of one or two of these 1-2 storey houses. My guess is that these suburbs/towns started out by being basically entirely 1-2 storey rowhouses and the rowhouses were gradually redeveloped with taller and taller apartments.

    The lot sizes in the Barcelona area are smaller than those of most American cities (certainly not larger). I don't think it would be difficult for American cities to have single family home lots replaced by small apartment buildings if regulations didn't make it exceedingly difficult. Neighbourhoods of small 4-7 apartments like those of parts of Barcelona can be very dense too, easily upwards of 100,000 ppsm.

    Since combining lots isn't really necessary for this kind of intensification, you don't really need to take much time for acquisition. Most homes in any given neighbourhood will go for sale within 15-20 years. In only 10 years many neighbourhoods in Toronto and some suburbs have been radically transformed with bungalows being almost entirely replaced by bigger 2-3 storey houses.

    Small bungalows in a town outside Barcelona:
    Taller apartments on same width of lot in inner suburb:
    More advanced stages with mostly midrise apartments in another inner suburb:

    There's a proposal for a small apartment building in Toronto that would be similar to those buildings in Barcelona on a lot of about 1/12 acre:

    There are also several condo projects of hundred units on lots of only about 1/6-1/3 of an acre. You could also build single family homes on less than 1/50 of an acre Tokyo-style.

    This house in Toronto was built about 100 years ago in the gap between two houses:
    That's a bit extreme, but many neighbourhoods would have larger gaps between houses. The point is, buildings can be built in unexpected places.

    1. Thanks Nicolas for all these wonderful examples. Barcelona never ceases to impress. It is interesting to me that even the lowest density example you link to still is entirely urban in form -- the bungalows are attached with no setback on a narrow street. The transect such as exists is solely one of height.

      For an example from Mexico, here are some locations I posted over on the Walking Bostonian blog, showing developer-built townhouses in different stages of upgrading (in the first, if you "drive" down the street, you can actually see several guys in the process of building additions into the front setback):

      Here, shortly after construction:

      Another neighborhood, built in the same style, after I would guess 10-15 years:

      Now, I think that most of the Eixample was built up at once with multistory apartments, as were the 19th century extensions of several other European cities (e.g. Vienna). When population growth is intense, the intervening steps are often skipped entirely. Your point about creative infill is a great one, though.

  6. Development restrictions certainly increase housing prices. They do so two ways: 1) directly adding to construction costs by requiring things or methods that the open market would otherwise not pay for, and 2) reducing supply causing artificial scarcity.

    The first category includes things like minimum dwelling sizes, required balconies, patios, open space, recreation, etc. It also includes requirements to use local or union labor, green building practices, design review, etc. Many of these things may be desirable to some buyers, but cutting off choices for those that would prefer saving over consuming, they drive up prices. It's often the case that these requirements are in-artfully drawn (aka made up by planners or politicians) without any understanding of the costs imposed. For example, many jurisdictions that I have worked in (mostly Southern California) require "private open space" (aka balcony or patio) for every unit in multi-family projects. This may not be much of a cost add for most of the units, but for a couple odd units in the corner or otherwise it may be nearly impossible. Often it's cheaper to cut out a unit or two and add the space to the remaining units.

    The other category is typified by density limits, height limits and the like. Simple density limits especially drive up house prices because they not only have the effect of spreading land costs over fewer units, but also tend to result in bigger units. The most pernicious regulation of all is required parking. It falls under both categories. It drives up construction costs, especially for covered or underground parking. It also reduces the amount of land available for actually housing, thereby artificially increasing scarcity. To make matters even worse, in the residential setting it is often applied one-size-fits-all -- typically two parking spaces per unit. This leads to larger unit sizes as a McMansion can support the cost of parking much more easily than a small two bedroom apartment. Even Euclidian-zoning free Houston has minimum parking requirements that increase housing prices and promote car-dependant development.

    Even if all development regulations were lifted, there would still be natural (such as Manhattan is an island) and technical (high rises cost much more per square foot than shorter buildings) constraints to development that would result in land scarcity and increased housing prices. I doubt NYC achieves affordable housing in any event, but loosening or at least rationalizing development standards could certainly put a dent in housing prices.

  7. As for the greenfield issues, I agree that urban land scarcity, whether naturally occurring or artificially induced, spawns a demand for greenfield development. On the other hand, I don't think your first two stated reasons don't really add much to this demand. While it's true that lot assemblage is a bitch, most urban lots are big enough to accommodate plenty of development except perhaps in the most dense American cities. And other than very new cities there should be plenty of buildings nearing the end of their useful lives that the could be redeveloped.

    Your third reason is the one that really drives things in my opinion. Political opposition to development isn't just the rantings of crack pot nimby's that can be easily dismissed or paid off by developers. It is the rational (albeit selfish) action of numerous homeowners. And it is the basis of much of the cost-inducing development regulation. Protection of environment, minimizing negative externalities, mitigating impacts, forcing development to be a "good neighbor", etc. are basically cover stories for homeowners (who, btw make up the vast majority of voters in most cities) to push regulation that drives up housing prices and therefore protects and enhances their main investment.

    Cows and trees don't vote, and farmers can be paid off, so it's much easier to head out to the country to find a place to develop. So urban greenery requirements meant to be environmentally sensitive lead to the paving of prime farmland and natural areas. Parking requirements meant to lessen traffic congestion result in sprawl that only lengthens commute times. From a regional or nationwide perspective this is perverse, but from the homeowner or locality's point of view it is a success. The value of the homeowner's main investment is improved, as is the locality's tax base per resident.

    One final point on the crazy American impetus to sprawl: if you build it they will come. Not just homebuyers, but the infrastructure to support them. Infrastructure costs money -- lots of it. Especially in dense urban places. These costs are often reflected in higher taxes, bond indebtedness, development fees, etc. in urban areas. Cows on the other hand don't require so much infrastructure (except in CAFOs, but that's another rant), and rural municipalities often are not as sophisticated as their urban counterparts in the ways of exacting fees from developers. Greenfield development springs up, developer moves on to the next green patch to despoil, and infrastruture-underserved suburbanizing rural municipality is left to clean up the mess. So it learns how to take a pound of flesh from the next developer to fund infrastructure needs. Then the municipality figures out it likes the taste of blood, and gouges the next developer, thereby driving up housing prices to the joy of its relatively new homeowning voters. Sprawl begets homebuyer's remorse, begets oppressive development regulation and fees, begets more sprawl.

    1. John -- thanks for these great comments. I take it you have experience in real estate development? In any event, I'm very grateful for your perspective.

      The opposition to infill and densification is untimately rational, I agree, but there are strong irrational strains within it, such as the idea that the arrival of multifamily housing somehow signals a decline in property values (a misconception of long standing which appears rooted in a particularly American urban experience and in projected notions of desirable living conditions).

    2. Yes, I'm a real estate attorney and developer in Souther California. Although I went to undergrad in upstate NY, my real estate experience is mostly on the West Coast and at much lower densities than NYC.

      My point about opponents of development was that they often have ulterior motives besides those publicly voiced. In addition to the rational (albeit selfish) motives such as propping up house values, I agree that these ulterior motives can be irrational, perhaps the worst being racism.

      I'm not sure what you can do from a policy perspective to deal with people's irrationalities and prejudices, at least on the land use planning front (perhaps the answer lies in better education). But the issue I raised -- the locals adding regulations to purposefully drive up housing prices -- seems to call for some form of regional/statewide involvement.

      The problem is this is easier said than done, and such programs are often heavy-handed and poorly implemented (I'm thinking particularly of New Jersey's statewide affordability programs and California's greenhouse gas/fair share programs). A much more likely method to encourage locals to allow more housing is to realign municipal funding. While NYC and a hand few of other cities have income taxes, most local governments are funded primarily by property taxes (I'll bet a goodly share of NYC's budget is funded by property taxes as well, but that's just a guess). This encourages local governments to maximize house prices to increase revenue per resident without having to raise tax rates. If property taxes rates were set on a state/regional level, and all (or at least a share of) tax revenue pooled and distributed to localities per capita, there would be less incentive for localities to drive up the price of housing.

  8. Not sufficient isn't the same thing as not necessary.

  9. I think it (should) be less about increasing Manhattan's density than about increasing the density of the boros, where there's lots of detached-single-family housing. (Even Queens has half the density of Brooklyn, which has half the density of Manhattan.)

    1. I agree completely! People need to look beyond Manhattan and to the greater NYC!

  10. A few thoughts:

    1. I see Charlie concedes in the comments that New York could halve real estate prices if it abolished impediments to construction, but says that politically impossible. I'd actually say Glaeser has a good idea to make it possible (it's in several of his papers, if not his book): A federal policy that gives all municipalities a set period of time (15 years?) to make housing sales prices equal construction costs or no federal aid, not to schools, roads, nothing. And, of course, demonstration of progress each year. That's pretty motivating and, while not an easy sell in Washington, it would be less impossible than at the local level. In Washington you could make a very convincing affordable housing plea to Democrats and a convincing deregulation plea to Republicans (who doubtless know they dominate election in places where housing is affordable.)

    2. "the solution for urban population growth has not been vertical densification" Maybe I'm reading too much into this, but are you arguing that you need height to achieve real density? Paris is a six story city and packs in 50k people per square mile. And I don't even think that most visitors perceive it as particularly crowded.

    3. "the process of acquiring parcels from a multitude of private owners, demolishing structures, and rebuilding, is slow and arduous in the best of times" If you remove impediments to construction, you don't need to acquire multiple parcels to build profitably. This may be one of the biggest missed points in why this matters. Before NYC had zoning laws and tenement laws you could make a profit buying one lot 25x100 and building a tenement. Lots of people could afford to do it though, which meant the building industry was very competitive, profits didn't get to high and housing in NYC was quite cheap, per square foot, by national averages. Building regulations meant that the only way to build profitable was massive buildings. Much fewer people had access to the capital. Competition fell. Prices rose. (This also raised the price of land. The need to acquire lots of parcels all together puts sellers in a strong position. When the buyer only needs one lot and can choose between several hundred thousand as good as yours, you're not in a great position.)

    4. "The technological possibility of skyscrapers themselves may inflate land values, resulting in speculative holding that further deters redevelopment." You can solve the holdout problem, which drives prices up in Manhattan massively, by taxing land at whatever the tax would be if developers put up the most valuable possible use on it. People would not constrain supply by holding parking lots for decades if those parking lots were taxed like they were already skyscrapers.

    1. Andrew -- I'm not conceding anything to Glaeser regarding his projections for affordability. I think it's unlikely in the extreme that anything like a 50% drop in prices could occur no matter what the pace of construction, since demand does not sit still as development progresses. Glaeser's proposed policy, as you describe it, would penalize wealthy cities with international real estate markets, and favor provincial ones with localized demand.

      As to 2), no, you don't need height to achieve high densities, but that wasn't my point. It was only that, when open land is abundant, the lion's share of growth with generally be horizontal rather than vertical. That principle applies whether the city is dense, as with Paris, or sprawling like Houston, and regardless of whether skyscraper technology exists. The only difference will be the rate at which greenfield land is consumed.

      That is a good point on 3). Early on (1901), NYC effectively banned the 25' wide tenement, but I'm not sure that this slowed development. Much of Washington Heights and the Bronx were built up with 50' to 100' wide, mid-rise apartment blocks accommodating colossal densities. The more pertinent limitation may have been height restrictions on residential construction, which in many cases were not lifted until the 1961 zoning revisions. These restrictions made it economically unprofitable to replace the old tenements with "new law" designs, which didn't offer substantially greater densities.

      On 4), I'll join you in supporting a land value tax. But I don't think this necessarily resolves the skyscraper issue, since taxing all land as if it had a 40-story building on it could result in oppressive property tax burdens that impede, rather than stimulate, development. I'm not sure you can tax residential towers into existence. On the other hand, I think reasonable height limits have unexplored potential for stimulating development by setting limits on speculation.

  11. I don't think you can just dismiss Glaeser because you feel like it. He has a bunch of experiments generating a bunch of numbers that indicate that, in the absence of building regulations, NYC (and all places) will indeed see prices fall to construction costs (construction costs that would still be higher than in other places but still, $200-$300 a square foot, I believe).

    You can't just say "It's extremely unlikely." Show some of your own numbers or show how his misused his numbers or concede the point.

    Dismissing something that's supported by reams of evidence (he's been cranking out papers on this for more than a decade) just because it seems unlikely to you is like dismissing quantum physics because it seems far stranger still — the work of a crank.

    And, of course, if Glaeser is right that deregulation would work in all places, then stripping federal aid is not in any way penalizing rich cities unfairly by demanding something that cannot happen. Indeed, it would be most fair to hold them accountable because they are the places where non-rich residents would be in need of outside help that would allow them to live without housing costs destroying them.
    (And if they refused to play ball because they were so rich that they could, then it would also be fair to transfer federal largess for very rich places to somewhat poorer places.)

    If you want to dismiss the idea because it's not going to happen, politically — well, that's a matter of opinion (probably sound opinion) rather than a matter of fact, so you can say what you want. But just straightening up and sneering that the results of a decade of published work seem unlikely to the great calculating engine that resides inside your head is not worthy of much of what you write.

    1. Andrew -- I don't have reams of economic data in my back pocket to share, so dismiss my opinions as you wish. I offer them as opinions only. However, I would ask: if Glaeser is right, where is the wealthy, land-constrained city that has been able to keep up with international demand through a policy of intensive vertical construction? Hong Kong? Singapore? Vancouver? Dubai's real estate prices quadrupled during its epic building boom in the mid-2000s, and only fell after the economy went bust (and even then, not back to pre-2002 levels). For that matter, where is the urban market, anywhere, that has seen a 50% decline in housing prices resulting from a construction boom coupled with a strong economy? Declines of that severity are symptomatic of bursting bubbles and/or collapsing economies (e.g. Las Vegas, down 60% from the 2006 peak), not rapid supply increases in the face of equally intense demand. I do know that Glaeser has cited the example of Chicago, but that city has experienced 60 years of almost uninterrupted population decline, and has less residents now than at any time since the 1910s. New York, by contrast, has been growing for 30 years.

      All the evidence that I can see shows that more intensive development enhances desirability, and thus puts upward pressure on prices even as supply rises, while restrictions on development foster stagnation and decline. I agree with most of what Glaeser says in his book and his published papers except for this idea that a postulated wave of skyscraper building in Manhattan could cause prices there to plummet. I'm not sure my disagreement (whether I'm right or not -- I'm simply putting my view out there) really makes much difference, though. We'd both agree than allowing greater density is beneficial for a city, so whether that actually leads to lower prices or not is really more of a side issue. I simply don't think, on the basis of the evidence, that it's the strongest argument for densification.

    2. A. Do any of the cities you mentioned have no building restrictions? The three I know anything about -- HK, Singapore and Vancouver -- have intensive limitations on construction. And you really cannot prove what happens in the absence of building restrictions by citing experience in cities with building restrictions.

      B. I think rising living costs rank very high among the ills of modern American life, which makes it maddening to think they could easily be counteracted. There's a real feeling in the high-cost parts of the country that life is going to hell that simply isn't shared in places like Dallas where you can get really nice housing for $100 a square foot. And I think housing costs account for most of that difference. The lower cost of living lets people take more vacations and retire earlier and pay for their kids to go to college. It's a big deal.

      Also, I think it's very bad for innovation and social dynamism that it's getting hard to live in a world class city unless you're a member of the international elite establishment. To give a rather trivial example, the Manhattan restaurant scene, except at the very top end, is much worse now than it was a decade ago because ambitious but unproven people can no longer afford to open a restaurant now that average start up costs have topped $2 million. Who the hell is going to loan an unproven kid $2 million. No one. So we get yet another restaurant by JGV. That's a big deal because the ideas that were going to drive restaurants forward for the next decade were supposed to come from those ambitious kids in Manhattan an a handful of other world class cities that are equally unaffordable. Even the people who can get the money take no risks because when you're gambling millions, you can't take risks. Each menu will have one steak, two chocolate desserts, four pastas, etc.

  12. ^
    My problem with academics like Glaeser (and with the people on the other side - Cox, Kotkin, etc.) is that they rely too heavily on abstract econometrics to promote arguments that are infeasible in the real world. Real cities do not operate as neatly and flawlessly as computer models do. The computer model and the abstract academic equation does not neatly transfer to a real world with limits and understandable (and even desirable) human impediments. A real city is nothing like SimCity.

    We just discovered what happens when you swap out reality for abstract computer models in economics. Let's not make the same mistake with urbanism (actually we already made this mistake in urbanism before - it was called Modernism).

  13. Marc,

    I suppose that begs the question why? What changed that suburbs no longer wish to be part of the core city?

    1. James: Based on Robert Fogelson's book (Downtown), which I reference a lot, many of those suburbs did not willingly join the core city even at that time. Cities were annexed against their will in some cases. Even Brooklyn's merger with New York passed by a whisker and over strong opposition. Still, I think you are right that something has changed, at least in the Northeast and Midwest.

    2. What's the benefit? Up until Brookline rejected Boston, I think communities like Brighton and Roxbury wanted to join in order to gain access to city services and utilities. But nowadays, the suburbs get all that and more. Walking in Boston vs walking in Brookline, Cambridge, or even Somerville, you'd be hard pressed to tell the difference between city and suburb, and most people gloss over it anyway.

    3. I am not an expert on Boston so I can't exactly say. Do these places have subway lines? If there are no benefits to being a part of Boston are there downsides? Again I feel this is begging the question. These are answers I don't have.

    4. Brookline and further suburb Newton have surface running portions of the Green line (light-rail). MBTA and its predecessors have always operated in the Greater Boston area, and receiving trolley service has never depended upon being inside the city.

      These days I would suppose the benefits as well as the downsides are largely about politics, and what role your community wants to play in that game. Also, historical inertia probably weighs over all.