Tag Archives: urban economics

equality vs. equal opportunity

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Continuing to think about European socialism-style equality vs. the U.S. narrative of equal opportunity and the pursuit of happiness. Our version makes more sense in some ways – everyone starts out equal, but then people who work the hardest, have the best ideas, or are willing to take risks get rewarded. This makes sense as an ideal – combine it with a safety net for those who don’t succeed through no fault of their own, and it could be a nice, practical vision. The main problem is that it is a narrative that can be twisted and co-opted by the rich and powerful to write the rules unfairly in their favor, ultimately creating the opposite of equal opportunity. Even darker, it can lead to a narrative where people who benefit from the rules being unfairly in their favor find ways to rationalize their success, convincing first others and then themselves that they had superior talents to being with. Here’s an article from Shelterforce that makes some of these arguments:

Upon closer scrutiny, however, the meritocratic ideal turns out to be quite pernicious.  Summarizing the conclusion of my recent article on the subject, I find that, while this ideal is highly unlikely to achieve its core objectives (except maybe on the margins), its pursuit nonetheless creates “a competitive individualist ‘rat race’ of a society, fundamentally anti-communal and anti-familial, where group solidarity is uncommon and compassion muted.” And, worst of all, it ends up legitimizing—and thus reinforcing—the very social and economic inequality it purports to rectify…

In particular, much of liberal urban policy focuses on what liberals see as a kind of “unholy trinity” of barriers, as I have labeled it, that stem from inadequate schooling, troubled families, and poverty-impacted neighborhoods. Yet there is a great body of evidence showing that efforts to break down these barriers yield only marginal results in promoting meritocratic social mobility for the urban poor, while at the same time imposing significant costs on the most vulnerable.

Mostly notably, we see various school reforms fail over and over, and even enhanced higher education produces surprisingly limited impacts. As a result, we end up blaming the educational system for the failures of the rest of society, which in turn opens the door to corporate-oriented policies designed to privatize and monetize public schools. At the same time, programs that intervene into family life, unless highly intensive, also produce only minimal results, and when such interventions are intensive, they tend to violate the liberty of poor parents to autonomously direct the development of their children. Likewise, efforts to reduce barriers arising from the effects of poor neighborhoods via housing dispersal policies or the creation of mixed-income communities also have been generally disappointing, while often disconnecting the vulnerable from crucial familial and communal bonds.

I still think we should talk about how to make equal opportunity, with an appropriate safety net, a reality in this country, as an alternative to the European socialist model, which is the main alternative. These are really the only two humane options. What could true equal opportunity look like? For the sake of argument, let’s say we had a 100% inheritance tax, with the proceeds distributed equally to all newborn babies. Universal tax-funded education, up to and including the highest level of education and/or practical skills training needed to succeed in the economy, including continuing education for adults to adapt as technology and economic conditions change. Universal and equal access to health care. Excellent public infrastructure serving and connecting all urban areas. Low barriers to changing jobs or starting a business. Now you have a platform where people can compete and cooperate to build wealth. Some will work harder, innovate more, take more chances and earn more financial rewards. Others will choose to play it safer, devote more time to family and leisure, or just enjoy life’s experiences with less material wealth. You would still need unemployment and disability insurance for those who fall through the cracks through no fault of their own.

Jane Jacobs

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This article about Jane Jacobs is most useful because it mentions all of her major works. It talks quite a bit about Dark Age Ahead. I read Dark Age Ahead, and yet it doesn’t stick in my mind. I am ashamed to admit that I have only read the first chapter of The Death and Life of Great American Cities, and yet that first chapter sticks in my mind. I am lucky enough to live in one of the great American cities, and in fact a neighborhood that she visited and commented on. I had to spend a few years away from it to really come to understand how great a walkable street grid with a mix of homes, businesses, workplaces and green spaces really is, and how rare it unfortunately is. One day I’ll sit down on a bench in one of those green spaces and finish Death and Life.

Remaking Economic Development

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This is a new Brookings study on a vision for economic development at the metro scale. Here’s an excerpt, but the rest is worth reading.

As Michael Porter, the Harvard authority on competitiveness, describes it, the anchor firms, supply chains, supporting entities and organizations, research centers and specialized knowledge assets that make up industry clusters arise from a “highly localized process” that creates differentiated competitive advantages tailored for particular industry clusters.

Those assets are sometimes called “market drivers,” “factors of production,” or the “industrial commons”— because they benefit a wide array of firms. They include applied research and technical expertise, supports for entrepreneurial activity, robust pipelines of skilled labor, deep benches of suppliers and related firms, globally connected infrastructure, and responsive, predictable governance to maintain them all. It is the productive mix and synergy among these distinctive drivers—innovation, traded sectors, human capital, infrastructure, and governance—that create the conditions in which industries thrive, create value, and generate growth and income.

Globalization and technology have not dispersed these market assets but instead have further concentrated them in cities and metropolitan regions, with leading centers of knowledge and production capturing an increasingly greater share of specific market opportunities.

That is in part because innovation today reinforces the power of place. The rapid pace of competition requires solutions often developed through collaborations among firms, research institutions, national labs, competitors, customers, venture capitalists, and entrepreneurs—collaborations that are most readily forged through the networks formed within metropolitan regions.

 

This sounds right to me. Policies like minimum wage and affordable housing have their place, but ultimately I feel like they are treating the symptom and not the disease. The pie has to be growing.

economics of parking and commuting

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The economics of commuting and parking are gradually shifting.

What tenants want in an office building is changing, and the old model of the isolated suburban office park is going the way of the fax machine. That’s according to a new report from Newmark, Grubb, Knight and Frank [PDF], one of the largest commercial real estate firms in the world.

The old-school office park does “not offer the experience most of today’s tenants are seeking,” according to NGKF. As a result, the suburban office market is confronting “obsolescence” on a “massive scale.” More than 1,150 U.S. office properties — or 95 million square feet — may no longer pencil out, the authors estimate, though a number of those can be salvaged with some changes.

“Walkability and activated environments are at the top of many tenants’ list of must haves,” the report states. Office parks in isolated pockets without a mix of uses around them must have “in-building amenities” –including a conference center, a fitness center, and food service — to remain competitive, according to NGKF: “If tenants are not going to be able to walk to nearby retail or a nearby office property to get lunch, they had better be able to get it at their own building.”

Meanwhile the economics of city center parking is also shifting, but city politics are often holding back the changes.

The idea that building more parking capacity will only increase the number of cars in a neighborhood, or conversely, that removing parking spaces can reduce the number of cars often gets short shrift at neighborhood zoning meetings, but the evidence here suggests this is basically how things work.

When parking lots go away, parking conditions tighten, driving becomes more unpleasant, and some people respond to this by ditching their cars. Rather than enduring permanent traffic jam conditions, neighborhoods simply level down to a new equilibrium with fewer parking spaces, fewer cars, and higher “alternative” mode share as parking gets tighter…

Because [Philadelphia] City Council and the PPA set the prices for curb meters and residential permits so much lower than the rates for off-street parking, drivers have a strong incentive to seek out free or cheap curb parking first, before ultimately relenting and parking in a garage when things get desperate. The George Costanza parking strategy is a great example of a “smart for one, dumb for all” practice that makes sense in terms of individual incentives, but in the aggregate just adds up to a lot of unnecessary traffic congestion.

So Philadelphia, a first step would be to get rid of mandatory parking minimums in private development and just let the market decide. A second would be to let the market decide prices for on-street parking too. The politics of this can be difficult in residential neighborhoods, because that is where the voters are, whereas the office workers are a mix of voters and suburban commuters. But many of Philadelphia’s residential neighborhoods are pretty close to employment centers, making walking a very viable option. Most of the others are very well served by public transportation (that is, public transportation is pretty frequent and goes pretty much everywhere, which is not to say it is always fast or clean or the people running it all have a fantastic attitude). Protected bike lanes and secure bike parking might help people make those trips that are a bit long to walk, and also help people access public transit stops better. There is also the phenomenon of reverse commuting, where service industry jobs in the suburbs can pay better than those in the city, so city residents have an economic incentive to make the trip, but these commutes can be tough and are much easier by car. Boosting the minimum wage and promoting tourism in the city might help a little here, but the service industry is probably not the employment growth industry of the future, The long-term solution here is the thorny one that has alluded our country for decades – educate our children, provide them with the mental tools and marketable job skills they need to make an income, and help them build assets.

you’re stupid, Joel Kotkin

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Seriously, I take no pleasure in pointing out that Joel Kotkin is stupid. If he ever says something that is not stupid, I will take great pleasure in proclaiming it to the masses. In this article he again claims that only rich, young, childless couples live in cities.

As H.G. Wells predicted well over a century ago, cities now depend in large part on affluent, childless people, living what Wells labeled a life of “luxurious extinction.” Jacobs’s contemporary, the great sociologist Herbert Gans, already identified a vast chasm between suburbanites and those who favor urban core living who he identified as “the rich, the poor, the non-white as well as the unmarried and childless middle class.”

He is sitting in the suburbs making up lies about me. I know this because I am sitting in a single family home in a major U.S. city right now, with my middle class family and a young child. I walk to work and to buy 99% of the things I need. And I have thousands of neighbors doing exactly the same thing and planning to raise our children here. It’s a great lifestyle, but the problem is there are very few neighborhoods in American cities that are as great as mine. And things that are great but in short supply tend to be more expensive than things that are mediocre and in great supply, like the endless suburbs. Joel Kotkin, for whatever weird ideological reason, doesn’t want Americans to have a variety of great neighborhoods to choose from. Don’t listen to him.

21st Century Cosmopolis

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This guy, Steven Colatrella, has drafted a new constitution for the world that abolishes nation-states in favor of city-states. It also abolishes debt, credit, wages, and big business. In short, it sounds like a return to the original concepts of idealized socialism or communism. I don’t know about all that, but there might be a few ideas worth pulling out. I do like the idea of treating metropolitan areas as our society’s core economic and social units – clearly that is what they already are, and our political system is not consistent with that. Another idea that is somewhat interesting is that each city has its local currency, with a universal currency available but used only in transactions between cities.