Monday, February 08, 2016

An oil tax that would draw Republican support and re-energize Houston

First, a quick announcement: my Center for Opportunity Urbanism is having a free luncheon event near Uptown Friday Feb 19th on America's Housing Crisis.  Details and RSVP here - hope to see you there!

You may have read about President Obama's "dead on arrival" budget proposal of a $10/barrel oil tax.  How could it be modified for bipartisan support? Change it to an import tariff, just as the Chronicle recently proposed:
"Ed Hirs, a University of Houston energy economist, has pointed to an oil import tariff or quota as a way for the United States to stabilize prices and avoid the economic hit that comes with global price swings. A healthy price floor for domestic oil, or even a price agreement with Canada and Mexico, would ensure steady business for oil producers without hurting downstream refiners or your routine gas station fill-up. 
"It is protectionist," Hirs told the Houston Chronicle editorial board. "But it is a net gain for us." 
Politicians who have a gut instinct for free markets need to check that feeling when it comes to oil. Global prices are literally controlled by a cartel, and right now it looks like OPEC nations are dumping their product below cost in a fight for market share. That's not a free market, that's a trade war. 
Thanks to the fracking revolution, the United States is producing oil at rates not seen since the 1970s. Changing facts led Congress to change the law about oil exports at the end of last year. The next step logical step would reinstate oil import regulations. After all, import restrictions successfully bolstered the domestic oil industry from 1959 until 1974 and the Arab Oil Crisis.
It is clearly true that Saudi Arabia is dumping oil to destroy the U.S. oil industry, just as China did with steel at one time.  Why are we ok with this?!  An import tariff would support a higher oil price for increased domestic production.

Here's what the Democrats get:
  • Increased cost of oil which reduces usage and carbon emissions to meet the new Paris climate treaty goals
  • A funding source for alternative clean-energy research (btw, here's one that would save Houston's oil industry too: a new technology to pull the carbon off of fossil fuels)
  • Domestic jobs
  • Stick it to OPEC
Here's what the Republicans get:
  • Domestic jobs in red states (Texas, North Dakota, and others)
  • A revitalized domestic oil and gas industry (major funders of the Republican party)
  • Domestic energy security and self-sufficiency (which is also a military priority)
  • Stick it to OPEC in general and the Middle East in particular
Oh, and if there are WTO or other restrictions that limit tariffs, then call it an oil unloading fee or whatever creative designation it needs (hat tip to Cary).  Or make it a general oil tax with offsetting credits for domestic production.  As far as branding, call it an OPEC Tax - that will be popular!

It's hard to imagine there's an issue that both the left and the right might agree on in these days of polarized politics, but this definitely seems like one of them.  Maybe a few congressmen from both parties in Houston could get together to sponsor a bill through Congress?  As always, please forward this post along if you know the right people (or even just to your congressman).

Sunday, January 31, 2016

Opportunity over inequality, Vision Zero, policing for mental health, peak transit, and more

Several items to get to this week, but first I'd like to highlight this excellent piece (alternate link) by fellow, uh, Fellow at the Center for Opportunity Urbanism, Anne Snyder.  Fantastic and emotionally powerful story that Harris County and the City of Houston can definitely learn from (please pass it along if you know any relevant people).

Policing With Velvet Gloves
This is the story of how San Antonio’s police department helped divert 100,000 people away from jail and ERs, and moved them into mental-health treatment—one 911 call at a time.

Moving on to this week's items:
"If you have a population increase and you don’t increase housing, people will get pushed out," says Beyer. “If Miami decides to get tight on its land use regulations like New York, then Miami will have the same problems. Right now, regulatory burdens and the process of getting new buildings in New York approved is so lengthy that it doubles the cost of a unit. Consider Houston. Houston has a faster growing population than New York City and San Francisco, but it’s affordable because they have rapid construction rates.”
I finally got to read the new Vision Zero plan, and here are my thoughts: Do I support improved safety and think there's a lot of room for improvement? Absolutely. Do I want a city of 25mph speed limits, road humps everywhere, and police pulled from real crime to writing streams of traffic tickets? Absolutely not.  The problem lies where the safety goals gets mixed up with the anti-car vision of many urbanists - "if we can just make driving a car painful enough, people will be forced into density and transit" - as articulated here.  Improved safety is great, but we can’t co-opt peoples’ real mobility and economic productivity.

What would my #1 solution to traffic safety be? It would be at the federal level: require all new cars to require a breathalyzer test to start after 10pm at night, when the vast majority of drunk driving accidents happen (these sensors can be very low cost at scale).  But it's also probably less than 1-2% of total trips, so most people most of the time would not have to use it.  And I know this is unpopular and politically impossible, but I'd also support bringing the red light cameras back to reduce intersection collisions, which are some of the most dangerous (but only to enforce intersection crossings, not right turns on red where there is a lot more room for judgement on turning safely).

My final item is a response to Chris Tomlinson's column in the Chronicle questioning Houston's reputation as a city of opportunity:  I think a few things are getting mixed up here.  Houston has high inequality because we have high-paying industry clusters like energy and medical, as opposed to a more average big city like Phoenix or Tampa.  That's most definitely a good thing - if we lost those industries, that would certainly be a bad thing, but inequality would drop.  We also haven't driven out the poor by making housing unaffordable - like the coastal cities - so our inequality stats will look relatively worse.

What makes Houston a city of opportunity is not low inequality, but 1) having a ladder of middle class and working class jobs, including industrial and manufacturing ones - as opposed to coastal cities that tend to be a barbel between high paying jobs and low paying service jobs with nothing in the middle, and 2) having affordable housing, so a middle and working class family can afford a home and build equity, as opposed to being lifetime renters (like, again, the expensive coastal cities).  The question is not "does Houston have a lot of poor people?" - we absolutely do, because opportunity cities attract the poor who want to move up, especially immigrant populations - but "do they do well and move up once they're here?"  Based on Klinberg's Houston Area Survey's consistently high scoring optimism around working hard and doing well in Houston, I'd say we do well on that score - the residents certainly seem to think so.

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Monday, January 25, 2016

Vote for mobility solns, defending the Katy expansion, H-GAC cool tools, and more

A few quick small items this week followed by my response on debate about the Katy Freeway expansion:
  • The Mobility Houston traffic solution forum was launched this month (background here) to crowdsource solutions to Houston's mobility problems, and I'd like to request up-votes for my proposal on MaX Lanes as well as this proposal for intersection improvements.  I know it's a slight hassle to register to up-vote, but there's not that many votes on the site, so yours can really make a difference and help good ideas get in front of public officials.  Thanks in advance for your support.
  • Today I attended an impressive H-GAC presentation by Jeff Taebel on new mapping tools for figuring out which parts of the city are the best for investing to create dense mixed-use neighborhoods.  One tool makes it easy to identify neighborhoods that have the right density and street connectivity, and the other has impressive data on commuting patterns.  They are extremely slick tools, and wide open to the public, so try them out - I'm pretty sure you'll be impressed.  I really like and support their approach, which acknowledges the car-centric spread-out nature of our region, but rather than trying a prescriptive, one-size-fits-all, top-down approach to planning, they figure out targeted neighborhoods to prioritize investments (like bike and pedestrian amenities) where they'll have the most impact and do the most good.  An interesting data tidbit that came out of the presentation: average commute times have actually dropped in Houston since 2000, and at ~28 mins are only the 11th-worst in the country - not bad for the 5th largest metro area.  I'm guessing you're incredulous at that stat, but there's a good reason: as we added more than a million jobs, all of those newcomers tried to pick housing near their new jobs (including all of those recent college grads inside the Loop), thus lowering the overall average commute times for the region.  
  • How much salary do you need to live comfortably in Houston? Not much is the short answer: around $50k, vs. well into six figures for cities like SF, San Jose, NYC, LA, San Diego, and Seattle.
  • Joel Kotkin in Forbes on America's Next Boomtowns.  Houston is #6, although that's dependent on oil coming back to a more reasonable price.  Really nice picture of the Chevron buildings and circular skywalk downtown.
Joe Cortright responded to my post a couple weeks ago defending the Katy freeway expansion, but strangely chooses not to address the core points of not getting proper before and after congestion data (the expansion opened in 2009, not 2011 or later, so his data just shows the added congestion of the oil boom after it had already opened) or that more employers would have given up on the core city for the suburbs.  He does make a point about properly valuing external impacts like pollution, but that's not the role of transportation planners - that's the role of gas tax policy, CAFE mileage standards, and pollution control regulations (set those and then let people make choices).  He raises the alternative of investing in denser housing (the private free market does this, not government - and they're free to build as much as they like wherever they like, and they do wherever there's demand) or transit - but by any measure an equivalent spend on transit would have moved far, far fewer people for the tax dollars invested.  His data chart is actually a fantastic argument for Houston's freeway-heavy transportation spending: peoples' commute time tolerance is pretty much the same all over the world (roughly a half-hour), but in Houston (and DFW) they're able to go 12.2 miles during that time vs. much shorter distances in other cities.  That means they were able to access a better value house in a better neighborhood with better schools while still staying within a reasonable commute of their work.

Restricting freeways has three obvious consequences: 1) housing gets much more expensive, since there's less of it within commuting range of employers, 2) employers give up on the city and move to the suburbs with better value houses, neighborhoods, and schools for their employees (reducing the tax base), and 3) a city/metro becomes less of a unified economy and more of a series of fragmented, disconnected islands where people have limited employment options without moving.  I have no problem with dense or transit-oriented neighborhoods (see H-GAC bullet point above), and we have those options that people are welcome to choose.  But the fact that we build freeways and they fill up mean that the majority of people are making different choices based on weighing up their own values.  Since we live in a democracy, it seems reasonable for our elected representatives and their transportation planners to respond to those market choices rather than trying to force some socially-engineered alternative.  I stand by my original point: the government invested in a piece of infrastructure that has proven extremely popular and highly utilized - isn't that what we want from government investments of tax dollars?

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Sunday, January 17, 2016

METRO improvements, MaX Lines, UT vs. UH, Houston > Toronto, regulation trying to solve over-regulation

This week I got to attend a blogger lunch meeting at METRO (pic here) to get an update on things over there, which are definitely on a strong upswing (note to the new Turner administration: please be careful not to screw it up with bad board changes).  The good news:
  • Ridership is already up 10% since the redesigned bus network started a few months ago. Transit agencies all over the country are asking how they can do it too.  Nice to see Houston a real innovative leader here rather than a follower.
  • Low-demand neighborhoods like the new "flex routes" once they get used to them.
  • They are continuing to tweak routes to improve service, including a new set of changes this week.
  • They're simplifying transfers with unlimited transfers in any direction for 3 hours, which will even allow people to do short errands round trip with one ticket.
  • They now offer a Park-and-Ride lot at Space Center Houston as I suggested long ago, allowing tourists downtown (or connecting from elsewhere) to use transit to visit our most popular tourist attraction.
  • Better technology options, including texting for next-bus timing, service alerts, and a better phone app.  Ticketing on your mobile phone is coming soon.
The not-so-good news:
  • They still struggle with inter-agency coordination, especially road construction/closures (although improving) and getting popular transit destinations like new health, education, and government facilities located along major arterial routes instead of far back on side streets.
  • The ongoing "squeaky wheel" problem where a vocal few push the board to make changes that are better for them but make service worse for the majority across the broader transit network.  This "death by a thousand cuts" is part of how the old bus network got so out of whack.
I also had a good conversation with Christof Spieler of the METRO board about a vision for expanding a more comprehensive MaX (Managed eXpress) lane network across region in collaboration with TXDoT, HCTRA, and H-GAC, and then unifying the branding for different commuter services (like METRO's P&R express buses, Woodlands Express, etc.) under something like "MaX Lines" with unified ticketing, service maps, coordination, etc.  I think it would be a huge asset and benefit for the region to have such MaX service connecting all parts of our metro area to our multiple job centers.  If you know someone with any of those agencies, please pass it along...

A few smaller items I'd like to respond to this week:
  • UT closes on 100 acres in Houston, plans to buy 200 more.  UH is definitely not happy - HAIF debate here.  I think the simple answer from a Houston perspective is that more is better. That's certainly the case with the Texas Medical Center - why not other higher ed institutions? UT is going to deploy the resources from that $25 billion endowment somewhere in the state - why not try to maximize the amount coming to Houston?  UH should negotiate Big 12 entry and a no-faculty-poaching agreement (which should actually be policy between all Texas public schools - it just raises faculty costs for taxpayers with no added benefit to the state) and get back to focusing on their own improving trajectory rather than worrying about any potential competition.
  • This Chronicle op-ed calling for more prescriptive urban planning in Houston to be like Toronto. Ugh. Long-term readers know my feelings on this.  First, the million-dollar lifetime savings estimate for using transit is a joke once you consider how much more expensive housing is under such a regime (it also ignores the costs of actually riding the transit).  Second, there's nothing stopping anybody in Houston from living within easy walking or transit distance of any of our job centers - it's just that people are making value trade-offs and choosing not to.  The value equation in the suburbs (housing, neighborhoods, schools, crime) is just too compelling for most.  Third, our downtown is growing and developing just fine - why would we want to mess with success?
  • WSJ: Turning the Twin Cities Into Sim City (hat tip to George) As much as I sympathize with opportunity and the problems of zoning, I can see all sorts of ways this federal and regional regulatory hammer can go very, very wrong (like it already has in Portland and California).  More regulation isn't going to solve over-regulation.  It's sort of like a car that isn't going anywhere because you've got your foot on the brake plus the parking brake engaged, and thinking the answer is just to push down harder on the accelerator until the car moves, when a lot better answer is to just release the brakes - i.e. reduce regulations and let free choice and free markets solve the problem. 

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Sunday, January 10, 2016

Replacing firefighters, Astrodome "ruin porn", Katy expansion vs. wasteful rail, and more

This week's items:
"Fire departments as people once knew them no longer exist. Most of a modern fire department's duties don't actually involve fighting fires. The number of fires across the nation was cut in half from 1980 to 2013, according to the National Fire Protection Association. New building codes, sprinkler systems, smoke detectors, flame-retardant materials and all sorts of laws and innovations have made our lives safer. Vehicle fires were cut by 64 percent and building fires declined 54 percent over that time. Yet while the number of fires have fallen, the number of people paid to fight them has grown by 50 percent
It isn't as if fire stations don't get calls anymore. In fact, the total number of calls tripled over that three-decade stretch. But people need help with problems that can't be solved by a ladder and hose. Medical emergency calls have quadrupled. About 85 percent of the Houston Fire Department's calls are for emergency medical services
Other cities have responded to these changing priorities by shifting resources where they're needed the most. Toronto has stopped sending firetrucks to medical emergencies and its budget writers have pushed for cutting fire stations while adding paramedics. That plan follows the advice of a 2013 study out of Portland State University's Center for Public Service, which identified replacing firetrucks with ambulances or other rapid response vehicles as a way to meet medical needs while cutting costs."
“This is the genius of this place. Houston will always be shambolic and stretched and not quite finished. We will never be the most beautiful city, or the most pedestrian-friendly city, or the most efficiently planned city: The heat and soul-sapping humidity, our adolescent fascination with cars and speed and shiny things, our perpetual craving for something new, all conspire against our best civic aspirations. Houston is a place to start over, and we do starting over better than any other city on the planet.”
"...there are serious equity issues with shifting resources from bus to rail – again, not because of anything inherent to those technologies, but simply because of who happens to use them in modern American cities. In most cases, shifting funding from bus to rail means shifting funding from services disproportionately used by lower-income people to ones with with a stronger middle- and upper-middle-class constituency. And while transit ought to be viewed as much more than just a service for the poor, we can’t ignore the equity impacts of transit policy. 
In light of all this, we have to stop talking about America’s bus woes as a ridership problem. All the evidence suggests that when service is strong, and buses are a reliable way to get to work, school, or the grocery store, people will take them. Instead, the problem is that fewer and fewer people have access to that kind of strong bus line. If we care about ridership, we need to restore and enhance the kind of transit services that people can rely on."
"No. 6 – Denver FasTracks, Denver, Colo.
How Much Has Been Spent: $5.5 billion
Why It's a Boondoggle: In 2004, voters approved the funding of 122 miles of commuter rail tracks and 57 new stations. It was supposed to be the largest rail expansion project in America, however enough funding to finish the project isn't available and might not be until 2040. Instead of asking for more money, the project was scaled back. 
No. 1 – California High-Speed Rail, Southern California
How Much Has Been Spent: $68 billion
Why It's a Boondoggle: A bullet train could greatly reduce Southern California's notoriously bad traffic. Construction on the first 29-mile segment began in early 2015, a full seven years after voters approved funding, but by then the projected $33 billion cost had more than doubled. Only a little more than a third of total funding has been accounted for and some opponents already are trying to get the project killed altogether."
Finally, I've gotta call BS on this assertion that the Katy freeway expansions was a mistake.  The project was finished in 2009, so the graph doesn't include pre-construction congestion.  And we just went through the biggest economic boom this city has ever seen - can you imagine what the traffic would look like *without* the widening?  It would be even more insane - like Austin on steroids.  On top of that, without that widening, I think many of the big oil and gas employers would have given up on the city and gone out to Sugar Land, Katy, and The Woodlands rather than the Energy Corridor, Uptown, or Downtown.  That freeway moves way, way more people than it did before as well as offering the congestion tolled lanes which didn't exist before.  Bottom line: the government invested in a piece of infrastructure that has proven extremely popular and highly utilized - isn't that what we want from government investments of tax dollars?  Let me ask you this: if we had a popular park, and expanded and upgraded it to make it even more popular, would we all complain that the expanded park "induced demand" and shouldn't have been expanded? Absolutely not - that would be absurd.  Transportation infrastructure is no different.

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Monday, January 04, 2016

Our food beats NYC, increasing METRO's P&R ridership, canal expansion impact, solving civic problems, Katrina refugees did better in Houston, and more

Happy New Year everyone!  New year, new mayor, new 4-year term - it'll be interesting to see how the city addresses its challenges and goes forward from here.  Time for some fiscal new year's resolutions?  Lots of small items stacked up over the holidays:
"Houstonians know our city offers great food, and now the rest of the country is learning that, too. In an article published Monday, Washington Post critic Tom Sietsema ranked the Bayou City as the fifth best food city in America.
That puts Houston ahead of traditional powers like New York (eighth) and Chicago (seventh) and just behind New Orleans (fourth). Portland tops Sietsema's list.
And there were plenty of surprises on the journey. I can’t wait to eat in Houston again, but New York let me down, at least for the present.
Houston, where have you been all my (food) life? Your best Vietnamese cooking returns me to Saigon, and some of your Chinese menus rival those I’ve dipped into in Beijing. As for Mexican, the seafood-themed Caracol and Cuchara, staffed by female chefs from different regions of Mexico, set the pace. Meanwhile, locals of all persuasions gather around the city’s signature: not fajitas, but Asian-Cajun seafood boils. Few food scenes enjoy the easy, Texas-size camaraderie found in the country’s fourth-largest city; the chef of the popular Underbelly goes so far as to promote the competition by sharing a list of his favorite eats with his customers. As one discerning palate put it, “If L.A. and New Orleans had a baby, it might be Houston.
"Higher tax-free benefit for mass-transit commuters: One of the expiring tax breaks the huge new federal spending bill has made permanent is a gift to those who pay for mass-transit commuting costs. The bill raises the monthly amount allowed to be paid with pretax income to $255 starting in 2016. The current limit is $130, so this will be a big benefit. The same amount will also apply to the pretax monthly amount car commuters can use for parking costs (which was $250 per month)."
"The women weren’t going to Fayetteville but, rather, to places like Houston. “For low-income people in the South, Houston is a pretty darn great place,” Hendren said. “It’s not a beacon of phenomenal upward mobility like Salt Lake City. But it’s kind of the Salt Lake City of the South.” The odds of going from the bottom to the top in Houston are 9.3 per cent, which puts it fifteenth out of the top fifty U.S. metro areas.
Those who preferred Houston saw things very differently:
Better schools in Houston: 35%.
Found a better job in Houston: 35%.
Overall quality of life in Houston: 33%.
Lower crime in Houston: 31%.
Better housing in Houston: 27%.
Better access to health care in Houston: 21%."
Lots more where those came from, but that's enough for this week. More next week.  Good luck to everyone with their new year's resolutions!

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Sunday, December 27, 2015

2015 Highlights

Time for the annual hike down memory lane for 2015, wrapping up the 11th year of this blog (official anniversary coming up in March). These posts have been chosen with a particular focus on significant ideas I'd like to see kept alive for discussion and action, and they're mainly targeted at new readers who want to get caught up with a quick overview of the Houston Strategies landscape. I also like to track what I think of as "reference posts" that sum up a particular topic or argument; and, last but not least, they've also been invaluable for me to track down some of my best thinking for meetings or when requested by others (as is the ever-helpful Google search).

Don't forget we offer an email option for the roughly once/week posts - see the Google Groups subscription signup box in the right sidebar. An RSS feed link is also available in the right sidebar.

As always, thanks for your readership.
And don't forget the highlights from the first few years. For what it's worth, I think the best ideas are found there, often in the first year (I had a lot "stored up" before I started blogging) and most definitely in the 10th birthday retrospective and the best of the first 1,000.


Sunday, December 20, 2015

The emerging cross-ideological consensus on excessive zoning and land-use regulations

There seems to be a growing awareness of the downsides of zoning and excessive land regulation in cities, as evidenced by these five recent items.  Apologies for the long excerpts, but these articles are making important points I really want to convey the essence of.
"In recent years, and especially over the last few months, economists and other public policy experts across the political spectrum have come to realize that zoning rules are a major obstacle to affordable housing and economic opportunity for the poor and lower middle class. By artificially restricting new construction, zoning and other similar land-use restrictions greatly increase the price of housing, and prevents the market from adjusting to increasing demand.
[E]xcessive or unnecessary land use or zoning regulations have consequences that go beyond the housing market to impede mobility and thus contribute to rising inequality and declining productivity growth… 
[S]ome land use regulations can be beneficial… But in other cases, zoning regulations and other local barriers to housing development allow a small number of individuals to capture the economic benefits of living in a community, thus limiting diversity and mobility. The artificial upward pressure that zoning places on house prices — primarily by functioning as a supply constraint — also may undermine the market forces that would otherwise determine how much housing to build, where to build, and what type to build, leading to a mismatch between the types of housing that households want, what they can afford, and what is available to buy or rent…. 
Zoning and other land use regulations, by restricting the supply of housing and so increasing its cost,may make it difficult for individuals to move to areas with better-paying jobs and higher-quality schools.
Among those who support reform, there is disagreement between advocates of a more technocratic approach to limiting zoning, and those like Edward Glaeser and myself who would prefer to follow the excellent example of Houston, and abolish zoning altogether. In my view, the latter solution is preferable in a world of widespread voter ignorance, where the public is unlikely to be able to monitor the extremely complex details of zoning closely to ensure that it will not serve narrow interest groups at the expense of the general public. 
Despite its limitations, the growing cross-ideological agreement on zoning is a valuable development. Similar cross-ideological agreement among experts helped set the stage for airline deregulation in the late 1970s, creating enormous benefits for consumers. The potential benefits of zoning deregulation – greatly increased housing and job opportunities for millions of people – might be even greater.
UPDATE #2: This post responds to me by arguing that Houston, despite its lack of zoning, has a variety of other dysfunctional land-use restrictions. That is true. But Houston still has much less in the way of regulatory obstacles to development than other large cities, which do have restrictive zoning. That is one of the reasons why many people are “voting with their feet” for Houston and other cities with similar policies. The point is not that Houston is perfect (it is far from it), but that following its example would be a huge improvement for many other cities."
  • Aaron Renn (The Urbanophile) wrote on a similar theme in the City Journal last Spring (hat tip to Scott): "Libertarians of Convenience - Urban progressives favor deregulation—but only for things they like or want to do."
"In Texas’s cities, by contrast, progressives often share, to some degree, the state’s pro-freedom, pro-market ethos. That’s why Houston, though hardly without restrictions on building, has no zoning per se and a pro-market Democrat, Annise Parker, for mayor. Unsurprisingly, it remains an affordable place to live, as do other low-regulation cities, such as Indianapolis."
"Zoning has shaped American cities since 1916, when New York City adopted the first comprehensive ordinance. It has remained a popular and widely used institution, particularly for homeowners wishing to protect the value of their homes. As values have soared in recent years, however, this protection has accelerated to the degree that new housing development has become unreasonably difficult and costly. The widespread Not in My Backyard (NIMBY) syndrome is driven by voters’ excessive concern about their home values and creates barriers to growth that reach beyond individual communities. Those barriers contribute to suburban sprawl, entrench income and racial segregation, retard regional immigration to the most productive cities, add to national wealth inequality, and slow the growth of the American economy. Zoning Rules, an update of Fischel’s 1985 classic book The Economics of Zoning, examines this history while offering solutions to the unintended consequences of zoning."
"After many decades of essentially ignoring the role of land, economists are starting to reconsider. Some are worried that landlords are hurting growth by making it too expensive to live in highly productive cities. Now, some are starting to think about how land figures in the rise in inequality.  
The basic idea is that landlords use their local political power to stack the deck. Using their money and connections to sway local elections, they can influence politicians to enact land-use regulations that keep out other people and businesses. That gives them a so-called first mover advantage that shuts out the competition. At first, people who want to move to for work or to start a business can move to other, newer cities where local landlords are not as politically entrenched and regulation not yet as onerous. But eventually the country fills up with powerful landowners, and the options for cheap relocation become limited. Stuck in dying cities or far away from job opportunities, potential employees languish in poverty.
According to Furman, some of the change may be due to more zoning. Since the late 1970s, land-use regulation has skyrocketed in the U.S. That has caused housing prices to go up at a much faster rate than construction costs -- something sure to please existing homeowners, but which locks potential homeowners out of the market. The more zoned a city is, the less affordable it tends to be.
Lack of affordability doesn’t just create inequality among individuals, it creates inequality across regions. Furman shows that states with more constrained housing supply have seen much slower income convergence between different cities. That strongly implies that land-use restrictions are effectively keeping people penned up in bad locations.
If it turns out that zoning really is a major drain on the U.S. economy, it opens the possibility of a bipartisan coalition. Conservatives are interested in limiting regulation overall, while liberals would like to reduce inequality. Since this is one of the clearest cases where regulation is increasing inequality, politicians on both sides of the ideological divide should figure out a way to come together to work out reforms."
Merry Christmas everyone - be sure to ask Santa for reduced land-use regulations wherever you may live ;-)

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