Tag Archives: Cities

Mark Hogan on San Francisco’s housing shortage: “Living in a Fool’s Paradise”

“… the current state of permitting regulations for building and the glacial pace of infrastructure projects in San Francisco benefit very few people and risk turning it into a caricature of its former self for tourists and residents rich enough to live in a fantasy, not a living city. If there was ever a time when San Francisco needed to embrace a dynamic, expansive policy for building housing, offices and transportation, it is now.”

San Francisco architect Mark Hogan wrote a very smart and well-informed essay Living in a Fool’s Paradise for the Summer 2014 issue of Boom A Journal of California. In this essay Mark tackled the very prickly issue of how San Francisco became “the most-expensive large city in the United States”.

If you have seen any of the media reporting on San Francisco housing prices you have probably been reading about how city residents want to evict the “rich Google and Apple techies” who are thought to be responsible for making their neighborhood unaffordable. That favored media meme converts the real supply/demand economics into a human-interest story about evicted single mothers and Google-bus protests.

The true story is more complex. Mark moved to San Francisco in 2003, when it was feasible for a young architect to rent an apartment in Lower Nob Hill. Specializing in urban housing, Mark has experienced the inevitable price impacts of extremely restricted housing supply. In this essay he recounts the story of anti-growth Bay Area housing policies and some pragmatic solutions.

San Francisco has had a very strong tendency to try to stave off change through regulation and legislation. Limiting growth artificially usually has many unintended effects, however, as there is no way to prevent people from moving in, and we probably wouldn’t want to if we could. For individuals who want to live in walkable neighborhoods with reliable access to public transportation, there are not that many places in the Bay Area that are as attractive as San Francisco. The city is at or near the top of this list regionally, nationally, and even globally. The demand for such beautiful city living is not going away. It’s only going to increase.

Mark’s analysis reminds us of Ed Glaeser’s Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier, and Happier. Harvard’s Glaeser has made a deep study of urbanization including supply/demand for space of all types. Mark Hogan offers his first-hand perspective – informed in part by his current position as Chair of the Housing Committee at the AIA San Francisco. You can follow Mark’s thinking at http://www.markasaurus.com and on Twitter @markasaurus.

Image credit america.aljazeera.com

 

The importance of being urban

Don't miss the latest from Ryan Avent at the Economist Free Exchange:

WHILE Europe's austerity-minded governments and inflation-averse central bank must take much of the credit for the euro area's current economic problems, the crisis has been fanned by failures of regulatory reform and integration that have made adjustment much harder than it needs to be. Those failures also operated prior to the crisis, contributing to growth in imbalances, and without much more in the way of structural reform they will continue to be an economic albatross when the crisis is finally put to rest.

This week's Free exchange column looks at an underappreciated way in which regulatory burdens and incomplete integration have prevented the euro area from taking full advantage of the size of its market and growing richer: by constraining the growth of its cities:

Although America and the euro zone have similar total populations, America’s 50 largest metropolitan areas are home to 164m people, compared with just 102m in the euro area. This striking disparity has big consequences.

Differences in metropolitan populations may help explain gaps in productivity and incomes. Western Europe’s per-person GDP is 72% of America’s, on a purchasing-power-parity basis. A recent study by the McKinsey Global Institute, the consultancy’s research arm, reckons that some three-quarters of this gap can be chalked up to Europe’s relatively diminutive cities. More Americans than Europeans live in big cities: there is a particular divergence in the size each region’s “middleweight” cities, those that teem just a little less than the likes of New York and Paris (see chart). And the premium earned by Americans in large cities relative to those in the countryside is larger than that earned by urban Europeans.

In highly skilled societies, bigger cities are associated with higher levels of productivity and income, the column explains. This seems to be due to the ways in which cities facilitate innovation in an age of rapidly increasing economic and technological complexity. Prosperity now requires lots of skilled individuals in reasonably close proximity to each other, to learn from and occasionally partner with as part of the process of coming up with and spreading new ideas. America appears to be better able than Europe to accomplish this across a wide range of places.

But why? The piece explains:

Regulatory barriers to growth may be to blame. Tight zoning rules limit housing supply and raise prices by driving a wedge between construction costs and market prices. This “regulatory tax” amounts to over 300% in the office markets in Frankfurt, Paris and Milan, according to a 2008 study by Paul Cheshire and Christian Hilber of the London School of Economics, but is just 50% in Manhattan and, in effect, zero in fast-growing places like Houston. Taxes that add to transaction costs also help explain low European mobility.

(… Snip…)

Kent Larson: Responsive Cities

Architect Kent Larson is the director of Changing Places at the MIT Media Lab. Larson, postdocs and students are innovating a large number of ideas of how the urban future can be happier, less stressful, wealthier and low-carbon. Some of these concepts like the City Car, or self-driving cars, we’ve written about before.

At TEDx Boston 2012 Kent gave an 18 minute presentation. I’m confident you’ll be thinking of more ideas that will  contribute to better city life for the hundreds of millions of rural people who will be migrating to cities over the next two decades (300+ million in China alone).

Kedrosky: Conversation with Paul Romer

Paul Kedrosky interviews Paul Romer for his Kaufman Foundation Infectious Talk podcast (33 minutes). There is also a transcript. The topic is how Charter Cities can exploit the “startup dynamic”:

In this episode, Paul talks with Paul Romer, Senior Fellow at the Stanford Center for International Development and the Stanford Institute for Economic Policy Research. They discussed Romer’s path as an academic turned entrepreneur, who returned to Stanford to explore how the startup dynamic could potentially be applied at the level of developing countries.

Charter Cities: The Politically Incorrect Guide to Ending Poverty

Image credit: Mark Ostow

Sebastian Mallaby launches his Atlantic article on Paul Romer by recounting the success of the Baltic coastal city of Lübeck, a 12th century Charter City founded by the Germanic prince Henry the Lion.

(…) Henry the Lion’s would-be heir is Paul Romer, a gentle economist at Stanford University. Elegant, bespectacled, geekishly curious in a boyish way, Romer is not the kind of person you might picture armed with a two-handed flanged mace, cutting down Slavic marauders. But he is bent on cutting down an adversary almost as resistant: the conventional approach to development in poor countries. Rather than betting that aid dollars can beat poverty, Romer is peddling a radical vision: that dysfunctional nations can kick-start their own development by creating new cities with new rules—Lübeck-style centers of progress that Romer calls “charter cities.” By building urban oases of technocratic sanity, struggling nations could attract investment and jobs; private capital would flood in and foreign aid would not be needed. And since Henry the Lion is not on hand to establish these new cities, Romer looks to the chief source of legitimate coercion that exists today—the governments that preside over the world’s more successful countries. To launch new charter cities, he says, poor countries should lease chunks of territory to enlightened foreign powers, which would take charge as though presiding over some imperial protectorate. Romer’s prescription is not merely neo-medieval, in other words. It is also neo-colonial.

I strongly object to Mallaby casually peppering this piece with terms like neo-medieval and neo-colonial. Especially using the term “colonial” in this context is going to cause Paul trouble because this is exactly the sort of fears that are being nurtured by status quo defenders attempting to block the Charter CIty initiative.

Anyhow, read the whole article, see what you think. My bottom line is that the publicity value outweighs the writing slips. And Mallaby offers useful summaries of the political problems that will continue to harry Romer’s effort. E.g. it looked like Madagascar would be the first test of charter cities, until the president was overthrown:

Even as Romer was meeting with Ravalomanana, the president’s main political opponent was sniping at the proposed lease of farmland to Daewoo, and the idea of giving up vast swaths of territory to foreigners was growing increasingly unpopular. The arrangement was denounced as treason, and public protests gathered momentum, eventually turning violent. In late January 2009, protesters tossed homemade grenades at radio and TV stations that Ravalomanana owned; looters ransacked his chain of supermarkets. In February, guards opened fire on marchers in front of the presidential palace, killing 28 civilians. At this, units of the army mutinied. Soon, Ravalomanana was forced out of office.

The first action of the new government was to cancel the Daewoo project, and Romer’s plans in Madagascar were put on hold indefinitely. But the larger question was what, if anything, this disappointment signified for Romer’s whole approach. The riots appeared to demonstrate the explosive sensitivities surrounding sovereignty and land—sensitivities that are not confined to Madagascar. Indeed, versions of the Daewoo story have played out elsewhere. In the late 1990s, for example, Fiji’s government decided to bring in a British nonprofit to manage its mahogany forests, and an indigenous leader launched a revolt under the slogan “Fiji for the Fijians.” The rebellion was hypocritical: as the Oxford economist Paul Collier recounts in his book The Bottom Billion, the indigenous leader had himself backed a rival foreign bid to manage the mahogany. But the venality of the rebels’ motivation didn’t change the fact that a demagogue could easily attract support by railing against territorial concessions to foreigners.

(…) But the largest obstacle Romer faces, by his own admission, still remains: he has to find countries willing to play the role of Britain in Hong Kong. Despite the good arguments that Romer makes for his vision, the responsibilities entailed in Empire 2.0 are not popular. How would a rich government contend with the shantytowns that might spring up around the borders of a charter city? Would it deport the inhabitants, and be accused of human-rights abuses? Or tolerate them and allow its oasis to be overrun with people who don’t respect its city charter? And what would the foreign trustee do if its host tried to nullify the lease? Would it defend its development experiment with an expeditionary army, as Margaret Thatcher defended the Falklands? A top official at one of Europe’s aid agencies told me, “Since we are responsible for our remaining overseas territories, I can tell you there is much grief in running these things. I would be surprised if Romer gets any takers.”

Please read the whole thing. Paul Romer has a few comments on the article here.