Market urbanism

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Market Urbanism is an urban policy theory which advocates for the liberalization of urban planning and transportation policy. Market Urbanists support loosening urban land use and zoning regulations, implementing congestion pricing on public roads, and applying classical liberal theory to urban policy issues. [1] [2] [3]

Contents

Overview

Market Urbanism is a theory that is the cross between free-market policy and urban issues. Rooted from the classical liberal economic tradition, the theory calls for private-sector actions that create organic growth and voluntary exchange within cities, rather than ones enforced by government bureaucracy.

"Market Urbanists believe that were this model tried in cities, it would produce cheaper housing, faster transport, improved public services and better quality of life." [4]

Housing

Market Urbanism posits that the cause of high home prices is government regulation. Market Urbanists believe that the answer is to reduce the government's role, letting the market hinge upon private negotiation between developers & consumers. [5]

Zoning

According to a report from the United States Congress Joint Economic Committee, "high housing prices are primarily driven by restrictive land-use regulations that keep workers from moving to more productive labor markets, restrict economic growth, slow family formation, and worsen housing insecurity". [6]

Market Urbanists are very cautious when it comes to subsidies, and much prefer free market dynamics to play out. For example, in an article in the National Review (a conservative editorial magazine) in August 2018, Jibran Khan comments that "...[Kamala] Harris' bill [which would give tax subsidies to renters] could compound the problems facing renters, by reducing the political pressure — currently building from both left and right in California via the “Market Urbanism” movement — to tackle the lack of housing." [7]

Local governments have tried to address housing shortages, but often by tightening zoning regulations. It has been debated whether or not zoning is causing housing shortages rather than preventing them. Market Urbanists generally argue that zoning is causing housing shortages.

According to economist Robert F. Mulligan, "The greater the need for housing in particular cities, the more zoning constrains how housing shortages can be addressed, keeping housing needs from ever being satisfied. This results in low-income workers, who are often needed to perform essential service activities, having to pay exorbitant rents for substandard apartments, keeping their living standard low."

Parking Minimums

Market Urbanists strongly believe that parking reform is needed and that free market ideas should be applied to parking. Parking reform discourages the building of too much parking supply and encourage more equitable, efficient and sustainable management of existing parking supply (usually by pricing parking). [8]

A recent study by the Research Institute for Housing America closely examined the parking inventory of New York, Philadelphia, Seattle, Des Moines, and Jackson, Wyoming. Data from these satellite images, the U.S. Census, property tax assessment offices, city departments of transportation, parking authorities, and geospatial maps like Google Maps to generate inventories of parking for these five cities. [9] The study adds empirical evidence to the idea that American cities devote far too much space and far too many resources to parking. By presenting the first complete parking inventories for five U.S. cities, this research reveals an investment in parking that is out of balance with the current demand for parking in almost all cases, and even less in tune with what appears to be declining future demand.

Donald Shoup, an American engineer and professor in urban planning has been a voice in the parking reform movement. Shoup has extensively studied parking as a key link between transportation and land use, with important consequences for cities, the economy, and the environment. In a 2004 paper titled The Ideal Source of Local Public Revenue, Shoup argued for the application of Georgist tax theory to urban parking and transportation issues. [10]

Market Urbanists strongly advocate for abolishing parking minimums, arguing that these regulations are costly and they increase home prices plus consume valuable urban space that could go for other uses. While their perceived benefit is to reduce externalities linked with new development, like spillover traffic, Market Urbanists argue that parking minimums cause more issues than they solve. [11]

Urban Growth Boundaries

"Urban growth boundaries (UGBs) are invisible lines that are drawn around certain metros, and represent where urbanized development must stop" [12]

UGBs are generally enforced by regional bureaucracies, since they involve many municipalities working together and require periodic extension. Other localities have alternative forms of growth management that function like UGBs, and that are even less flexible.

Market urbanists believe that "regulations like urban growth boundaries and preservation reserves raise home costs and hinder urbanization. In some cases they even cause leapfrog sprawl, worsening the problem they aimed to stop." [13]

Transportation

Market Urbanists believe that a market-based mechanism for managing and delineating right-of-way should be created. One suggestion is open up space to transport companies, which can bid with each other for the right to use it.

Road pricing

Market Urbanists agree that a way to reduce congestion and car-dependence is to price roads. According to Scott Beyer, "Road pricing’s main benefit is to manage demand, i.e. disperse it. A dynamically-priced road system spreads demand across the day; creates revenue to maintain roads; and encourages ride-pooling, as multiple people can outbid one person for road use." [14]

Some market urbanists believe the solution is to build private roads.

According to Adam Hengels, there is an opportunity cost for roads only being public. "On top of lost revenue from tax-exempt bond issuance and property taxes, the fact that roads are not private means governments forgoes taxing a private operator of the roads as it would tax other private enterprises. Instead of being a source of corporate tax revenue, roads themselves drain government resources." [15]

Public transit reform

Market Urbanists don't oppose public transit, but believe it needs structural reform.

Private transit

Market Urbanists favor allowing private companies to compete with the government. For example, government should not restrict the creation of private buses or private roads.

In addition, Market Urbanists propose that governments should allow private “micro-mobility” such as electronic bikes and scooters.

City Administration

Startup cities

The concept of startup cities has been gathering momentum over the past decade. It is the concept that startups can build new neighborhoods and cities.

Zach Caceres coined the term “Startup Cities” to describe neighborhoods and cities built by startup companies. From 2012 to 2016, he co-founded and led the Startup Cities Institute, an interdisciplinary research group, at Universidad Francisco Marroquín in Guatemala City. [16]

Related Research Articles

<span class="mw-page-title-main">Smart growth</span> Urban planning philosophy

Smart growth is an urban planning and transportation theory that concentrates growth in compact walkable urban centers to avoid sprawl. It also advocates compact, transit-oriented, walkable, bicycle-friendly land use, including neighborhood schools, complete streets, and mixed-use development with a range of housing choices. The term "smart growth" is particularly used in North America. In Europe and particularly the UK, the terms "compact city", "urban densification" or "urban intensification" have often been used to describe similar concepts, which have influenced government planning policies in the UK, the Netherlands and several other European countries.

An urban growth boundary, or UGB, is a regional boundary, set in an attempt to control urban sprawl by, in its simplest form, mandating that the area inside the boundary be used for urban development and the area outside be preserved in its natural state or used for agriculture. Legislating for an "urban growth boundary" is one way, among many others, of managing the major challenges posed by unplanned urban growth and the encroachment of cities upon agricultural and rural land.

<span class="mw-page-title-main">Zoning</span> Government policy allowing certain uses of land in different places

Zoning is a method of urban planning in which a municipality or other tier of government divides land into areas called zones, each of which has a set of regulations for new development that differs from other zones. Zones may be defined for a single use, they may combine several compatible activities by use, or in the case of form-based zoning, the differing regulations may govern the density, size and shape of allowed buildings whatever their use. The planning rules for each zone determine whether planning permission for a given development may be granted. Zoning may specify a variety of outright and conditional uses of land. It may indicate the size and dimensions of lots that land may be subdivided into, or the form and scale of buildings. These guidelines are set in order to guide urban growth and development.

<span class="mw-page-title-main">Parking</span> Act of stopping and disengaging a vehicle and usually leaving it unoccupied

Parking is the act of stopping and disengaging a vehicle and leaving it unoccupied. Parking on one or both sides of a road is often permitted, though sometimes with restrictions. Some buildings have parking facilities for use of the buildings' users. Countries and local governments have rules for design and use of parking spaces.

<span class="mw-page-title-main">Affordability of housing in the United Kingdom</span> Housing affordability in the UK

The affordability of housing in the UK reflects the ability to rent or buy property. There are various ways to determine or estimate housing affordability. One commonly used metric is the median housing affordability ratio; this compares the median price paid for residential property to the median gross annual earnings for full-time workers. According to official government statistics, housing affordability worsened between 2020 and 2021, and since 1997 housing affordability has worsened overall, especially in London. The most affordable local authorities in 2021 were in the North West, Wales, Yorkshire and The Humber, West Midlands and North East.

<span class="mw-page-title-main">Edward Glaeser</span> American economist

Edward Ludwig Glaeser is an American economist and Fred and Eleanor Glimp Professor of Economics at Harvard University. He is also Director for the Cities Research Programme at the International Growth Centre.

The YIMBY movement is a pro-housing movement in contrast and opposition to the NIMBY phenomenon. The YIMBY position supports increasing the supply of housing within cities where housing costs have escalated to unaffordable levels. YIMBYs often seek rezoning that would allow denser housing to be produced or the repurposing of obsolete buildings, such as shopping malls, into housing. Some YIMBYs have also supported public-interest projects like clean energy or alternative transport.

<span class="mw-page-title-main">Affordable housing</span> Housing affordable to those with a median household income

Affordable housing is housing which is deemed affordable to those with a household income at or below the median as rated by the national government or a local government by a recognized housing affordability index. Most of the literature on affordable housing refers to mortgages and a number of forms that exist along a continuum – from emergency homeless shelters, to transitional housing, to non-market rental, to formal and informal rental, indigenous housing, and ending with affordable home ownership.

<span class="mw-page-title-main">Car dependency</span> Concept that city layouts favor automobiles over other modes of transportation

Car dependency is the concept that some city layouts cause cars to be favoured over alternate forms of transportation, such as bicycles, public transit, and walking.

<span class="mw-page-title-main">Zoning in the United States</span>

In the United States, zoning includes various land use laws falling under the police power rights of state governments and local governments to exercise authority over privately owned real property. Zoning laws in major cities originated with the Los Angeles zoning ordinances of 1904 and the New York City 1916 Zoning Resolution. Early zoning regulations were in some cases motivated by racism and classism, particularly with regard to those mandating single-family housing. Zoning ordinances did not allow African-Americans moving into or using residences that were occupied by majority whites due to the fact that their presence would decrease the value of home. The constitutionality of zoning ordinances was upheld by the Supreme Court of the United States in Village of Euclid, Ohio v. Ambler Realty Co. in 1926.

Exclusionary zoning is the use of zoning ordinances to exclude certain types of land uses from a given community, especially to regulate racial and economic diversity. In the United States, exclusionary zoning ordinances are standard in almost all communities. Exclusionary zoning was introduced in the early 1900s, typically to prevent racial and ethnic minorities from moving into middle- and upper-class neighborhoods. Municipalities use zoning to limit the supply of available housing units, such as by prohibiting multi-family residential dwellings or setting minimum lot size requirements. These ordinances raise costs, making it less likely that lower-income groups will move in. Development fees for variance, a building permit, a certificate of occupancy, a filing (legal) cost, special permits and planned-unit development applications for new housing also raise prices to levels inaccessible for lower income people.

<span class="mw-page-title-main">Donald Shoup</span> Professor of urban planning

Donald Curran Shoup is an American engineer and professor in urban planning. He is a research professor of urban planning at University of California, Los Angeles and a noted Georgist economist. His 2005 book The High Cost of Free Parking identifies the negative repercussions of off-street parking requirements and relies heavily on 'Georgist' insights about optimal land use and rent distribution. In 2015, the American Planning Association awarded Shoup the "National Planning Excellence Award for a Planning Pioneer."

<span class="mw-page-title-main">Real estate in Puerto Rico</span> Real estate industry in Puerto Rico

As of 2012, the real estate industry in Puerto Rico constituted about 14.8% of the gross domestic product of Puerto Rico, about 1% of all of the employee compensation on the island and, together with finance and insurance (FIRE), about 3.7% of all the employment on the jurisdiction.

Rent regulation is a system of laws, administered by a court or a public authority, which aims to ensure the affordability of housing and tenancies on the rental market for dwellings. Generally, a system of rent regulation involves:

<span class="mw-page-title-main">Missing middle housing</span>

Missing middle housing is a term which describes a range of multi-family or clustered housing types that are compatible in scale with single-family or transitional neighborhoods. It is usually used to describe a phenomenon in Canada and the United States, and those countries which have sought to replicate their style of urban planning, which lacks this type of medium-density housing due to car dependant suburban sprawl. Missing middle housing is intended to meet the demand for walkable neighborhoods, respond to changing demographics, and provide housing at different price points. The term "missing middle" is meant to describe housing types that were common in the pre-WWII United States such as duplexes, rowhouses, and courtyard apartments but are now less common and, therefore, "missing". Rather than focusing on the number of units in a structure, missing middle housing emphasizes building at a human scale and heights that are appropriate for single-family neighborhoods or transitional neighborhoods. After the introduction of the term in 2010, the concept has been applied in the United States, Canada, and Australia.

The property bubble in New Zealand is a major national economic and social issue. Since the early 1990s, house prices in New Zealand have risen considerably faster than incomes, putting increasing pressure on public housing providers as fewer households have access to housing on the private market. The property bubble has produced significant impacts on inequality in New Zealand, which now has one of the highest homelessness rate in the OECD and a record-high waiting list for public housing. Government policies have attempted to address the crisis since 2013, but have produced limited impacts to reduce prices or increase the supply of affordable housing. However, prices started falling in 2022 in response to tightening of mortgage availability and supply increasing. Some areas saw drops as high as around 9% - albeit from very high prices.

<i>The High Cost of Free Parking</i> Book by Donald Shoup

The High Cost of Free Parking is an urban planning book by UCLA professor Donald Shoup dealing with the costs of free parking on society. It is structured as a criticism of the planning and regulation of parking and recommends that parking be built and allocated according to its fair market value. It incorporates elements of Shoup's Georgist philosophy.

<span class="mw-page-title-main">California housing shortage</span> Extended and increasing shortage since 1970

Since about 1970, California has been experiencing an extended and increasing housing shortage, such that by 2018, California ranked 49th among the states of the U.S. in terms of housing units per resident. This shortage has been estimated to be 3-4 million housing units as of 2017. Experts say that California needs to double its current rate of housing production to keep up with expected population growth and prevent prices from further increasing, and needs to quadruple the current rate of housing production over the next seven years in order for prices and rents to decline.

<span class="mw-page-title-main">Affordable housing by country</span>

Affordable housing is housing that is deemed affordable to those with a median household income as rated by the national government or a local government by a recognized housing affordability index. A general rule is no more than 30% of gross monthly income should be spent on housing, to be considered affordable for the challenges of promoting affordable housing varies by location.

China's Tax-Sharing Reform in 1994 was a fiscal and taxation system reform initiated by the Chinese government in 1992, prepared and promulgated in 1993, and finally implemented in 1994. The reform was a large-scale adjustment of the tax distribution system and tax structure between the central and local governments, which was regarded as a milestone in the transition of China's fiscal system from planned economy to market economy. The main purpose of the tax-sharing reform is to alleviate the budget deficit since the end of the 1980s. As the reform achieved indeed remarkable results, it yet evoked problems like heavier financial burden of local governments. In order to make ends meet, governments started to let lands which eventually pushed up the land and housing price. Therefore, the tax-sharing reform is considered to be the reason of China's severe land finance.

References

  1. Amateur Economist: Zoning Hurts Housing Affordability
  2. How Pricing Tolls Right Eliminates Congestion
  3. Who Plans?: Jane Jacobs’ Hayekian critique of urban planning
  4. Beyer, Scott. "What is market urbanism?". Market Urbanism Report.
  5. "What is Market Urbanism?". marketurbanismreport.com. Retrieved 2022-11-12.
  6. Committee, United States Joint Economic. "The HOUSES Act: Addressing the National Housing Shortage by Building on Federal Land - The HOUSES Act: Addressing the National Housing Shortage by Building on Federal Land - United States Joint Economic Committee". www.jec.senate.gov. Retrieved 2022-11-12.
  7. Khan, Jibran (2018-08-01). "Kamala Harris's Rent Subsidy Would Help Landlords, Not Renters". National Review. Archived from the original on 2018-08-02. Retrieved 2018-08-23. Indeed, Harris's bill could compound the problems facing renters, by reducing the political pressure — currently building from both left and right in California via the "market urbanism" movement — to tackle the lack of housing. Defenders of the status quo will simply point to the Harris plan and insist that something has been done. ... If Harris is truly concerned about the plight of city renters, she ought to spend some time listening to the concerns of the market urbanists, and to use her influence to support attempts at housing reform in California.
  8. "What is Parking Reform?". Parking Reform Network. Retrieved 2022-12-30.
  9. Scharnhorst, Eric (2018). "Quantified Parking: Comprehensive Parking Inventories for Five U.S. Cities". Research Institute for Housing America (RIHA).
  10. Shoup, Donald C. (2004). "The Ideal Source of Local Public Revenue". Regional Science and Urban Economics. 34 (6): 753–84. doi:10.1016/j.regsciurbeco.2003.10.003. S2CID   154887775.
  11. "Why Cities Don't Need Parking Minimums". marketurbanismreport.com. Retrieved 2022-12-31.
  12. Beyer, Scott. "Growth Boundaries: Counterproductive, Expensive, and Anti-Urban". Market Urbanism Report.
  13. Beyer, Scott. "What is market urbanism?". Market Urbanism Report.
  14. Beyer, Scott. "The Case For Embracing Tolls". marketurbanismreport.com.
  15. Hengels, Adam (30 July 2008). "Urban[ism] Legend: Gas Taxes and Fees Cover All Costs of Road Use". Market Urbanism.
  16. Caceres, Zach. "What is Startup Cities?".