Out of Control

As many people have heard, a 7.8 magnitude eqarthquake rumbled through Chengdu, China yesterday, killing more than 9,000 people. Full coverage from the New York Times can be found here.

Chengdu is a city of 10 million people--larger than New York City--and a logistical hub for the interior of China. It is also a center of development for the entire nation (and the "gateway" to Tibet). Fortunately, Chengdu is likely to recover faster because the Chinese government has embraced an outward approach to economic development. If this had happened 20 years ago, the death toll would likely have been much higher and the recover much longer.

Adrian Moore and I had the distinct pleasure of visiting Chengdu when we visited China last year to study transportatin and infrastructure issues. Chengdu is also a tourist destinatin in its own right as the capital of the Sichuan Province (and home of the Panda), a haven for amazing food, and the home of an incredibly friendly and open people.

You will be able to read more about Chengdu and its transportation challenges in our forthcoming book (October 2008) from Rowman & Littlefiled, "Mobiltiy First: A New Vision for Transportation in a Globally Competitive Economy"

My most recent blog post at Planetizen.com explores how architecture and planning intermix with human relationships in the Oscar winning comedy "Juno."

The movie uses the urban landscape in clever ways to highlight the emotional journies of its key characters and relationships:

Many viewers may not fully appreciate movies as a visual story-telling medium, but that fact came home to me dramatically the other night while watching “Juno,” the off beat, smart and funny film that just snagged a best screenplay Oscar. The deliberate use of architecture and public spaces, in particular, was quite effective although you probably won’t find these references in plot summaries or synopses.

An enduring question in urban planning is the degree "place" influences our human interactions. While not social science, I believe "Juno" comes our firmly in favor of people over place.

At the end of the day, what is the relationship between people and place? The message, I think, is simple and relevant: People make places; places do not make people.

In a column for the Los Angeles Business Journal, Reason’s Sam Staley writes, “Limited supply was the biggest factor driving up home prices in California, but many investors were also playing the L.A. real estate game in the same way they'd play the stock market or blackjack tables in Las Vegas. They bet that they could take an interest-only loan, flip the house, and win big. Well, some lost that bet. The government shouldn't be in the business of bailing these gamblers out. After years of skyrocketing housing prices, many first-time homebuyers and middle-class families could actually benefit from this market correction if it brings L.A.'s housing prices back in line with the region's incomes. Then the working families long priced out of the Los Angeles housing market may finally get a shot at owning a home.”

Anyone interested in a good overview of how economist's view cities should peruse Ed Glaeser's new working paper from Harvard. It's an excellent, relatively accessible summary of the state of economic thinking on cities from the 20,000 foot level.

Here's the abstract:

The economic approach to cities relies on a spatial equilibrium for workers, employers and builders. The worker's equilibrium implies that positive attributes in one location, like access to downtown or high wages, are offset by negative attributes, like high housing prices. The employer's equilibrium requires that high wages be offset by a high level of productivity, perhaps due to easy access to customers or suppliers. The search for the sources of productivity differences that can justify high wages is the basis for the study of agglomeration economies which has been a significant branch of urban economics in the past 20 years. The builder's equilibrium condition pushes us to understand the causes of supply differences across space that can explain why some places have abundant construction and low prices while others have little construction and high prices. Since the economic theory of cities emphasizes a search for exogenous causes of endogenous outcomes like local wages, housing prices and city growth, it is unsurprising that the economic empirics on cities have increasingly focused on the quest for exogenous sources of variation. The economic approach to urban policy emphasizes the need to focus on people, rather than places, as the ultimate objects of policy concern and the need for policy to anticipate the mobility of people and firms.

Glaeser has dozens of pithy, up-to-date, one and two paragraph summaries of what economic research has to say about urban growth.

You can find Ed's other working papers here.

Our colleague Joel Schwartz called our attention to a forthcoming article in the Journal of Urban Economics that fnds strong, robust empirical evidence that sprawl promotes social interaction.

Jan Brueckner and Ann Largey examine metropolitan level data to determine whether people living in lower density urban areas interact less with neighbors, have fewer friends, participate in fewer activities, etc. They drew on the survey responses from 29,000 people in the Social Capital Benchmark Survey at Harvard University's Kennedy School of Government. What is remarkable is that their results are robust and consistent, regardless of how they specified their empirical model.

The paper’s maintained hypothesis, that social interaction is stronger in denser areas, arose from the conjecture that high densities facilitate interaction by putting people in close proximity. The results, however, show the opposite effect, and a key question is why. One possibility is that the crowding associated with a dense environment might instead spur a need for privacy, causing people to draw inward. Such behavior could reflect the old saying: “good fences make good neighbors.” Alternatively, higher interaction in low-density suburbs could be a consequence of the spatial layout of residences. Outdoor activities like gardening and mowing the lawn could provide opportunities for relaxed, unplanned encounters with neighbors involved in similar activities. By contrast, neighbor contact for apartment dwellers must rely on fleeting encounters in building hallways or elevators, which may be less fruitful. Another possibility is that dense environments offer residents more sources of entertainment (museums, theaters, etc.), lessening the need to interact with others in the pursuit of stimulation.28 Finally, even though the overall MSA murder rate is included as a covariate, high densities at the individual tract level may be associated with higher-than-average criminal activity, making people suspicious of one another and more reluctant to interact.

The paper is well worth a read, although it's technical so be warned!

Most of the debate over the subprime lending mess has focused on homeownership and foreclosure. Yet, the real estate bust is providing some hard-knock accountability as Fortune magazine recently highlighted.

In an article posted earlier this month, appropriately title "Reckoningn for a real estate mogul," reporters outline the career of NYC developer Harry Macklowe.

In February 2007 the developer bought seven Manhattan skyscrapers for $6.8 billion from the Blackstone Group. It was the peak of the market. There was plenty of easy money available. Macklowe put up only $50 million of his own cash, financing the rest of the acquisition with $7 billion in loans, due in February, from Deutsche Bank and Fortress Investments, a publicly traded hedge fund. That's a huge amount of short-term, high-risk debt. Once the subprime crisis unfolded, Macklowe couldn't refinance. Now he is handing the keys to those buildings back to Deutsche Bank and other lenders to which the bank has sold some of the debt. He is also trying to sell his precious General Motors Building to repay a $1.2 billion bridge loan that is controlled by Fortress.

The article is a good read about the highs and lows of one of New York's most industrious and ambitious real estate entrepreneurs as well as an insightful examination of how the commerical real estate industry works in the real world.

Subprime lending serves an important and valuable purpose in a dynamic market. It also comes with risks. Those playing in the subprime sand box know the potential for boom and bust, and its not for the light hearted.

Just in case you were worried the private housing market might have a chance at coming back, LA's mayor has proposed an inclusionary zoning ordinance that would target "affordable housing" for lower income and middle income households. Apparently, housing costs have skyrocketed to the point only the rich can buy a home, so the goverment is coming to the rescue.

Villaraigosa said the proposal was necessary to address a housing crisis that has made it difficult for even middle-income families to afford a home, chipping away at the very workforce that stabilizes the local economy.

Of course, no one's asking the real question--if the demand for affordable housing is so great, why isn't the private sector responding? One obvious barrier is regulation. Now, to provide incentives to the private sector, Mayor Villaraigosa is willing to selectively deregulate the housing market for privileged developers:

Acknowledging that his plan could scare off some developers, Villaraigosa said he would try to help projects stay cost-effective by offering incentives, such as giving builders the right to construct more units or to set aside less space for parking. Villaraigosa's aides said they were still debating whether the plan would apply citywide or just along mass transit corridors.

What is striking about this approach is how closely it resembles fascism. Not the genocidal kind of Hitler, but the Moussolini kind that strived to get the "trains to run on time". Essentially, the housing market remains technically in private hands but is regulated to achieve collective goals and values. Apparently, this is okay with some LA developers:

"It's time," said Greg Vilkin, president of MacFarlane Partners, a prominent development firm that helped organize the summit. "We have to put the public's good in front of everyone's gain. It's time for everybody to take a little pain."

It just goes to show you that Atlas Shrugged is as relevant today as it was in the Cold War.

Rebulding has gone a lot smoother and faster in the areas the depend on private money compared to the ones relying on government funds according to an article in today's USA Today. The article, aptly titled "2 years after Katrina, pace of rebuilding depends on who pays," notes:

Two years after the devastating floods that followed Hurricane Katrina, the rebuilding of New Orleans, and much of the Gulf Coast, has largely taken two paths: communities that have rebuilt themselves using private funds, insurance money and sheer will — and publicly funded efforts that have moved much more slowly.

Federal, state and local governments have struggled to speed up the release of funds and restore infrastructure. None of the 115 "critical priority projects" identified by city officials has been completed: For example, New Orleans' police superintendent still works out of a trailer, as do most of the city's firefighters. And analysts at the city's crime lab don't have a laboratory to match DNA samples.

Who pays the biggest burden from government ineptitude?

The delays have affected the poor the most — those dependent on government assistance to rebuild their lives. While middle- and upper-class neighborhoods have rebuilt using private insurance and contacts, residents of low-income areas such as the Lower 9th Ward and Holy Cross — roughly 20,000 of them — for the most part remain scattered throughout the region, their return uncertain.

Of course, that's not a surprise to the regular readers of this blog.

Affordable housing programs are often supported because proponents believe they will help minority and low income families. Of course, most minority households are not poor, but even middle-income households can be poor in many cities like San Francisco which rank among the most expensive housing markets in the nation.

USA Today recently had an interesting article on "black flight"--the tendency for African Americans to move away from the central city. San Francisco, it seems, is struggling to retain its ethnic and racial minority families as high housing costs, high crime rates and an inhospitable political environment drive them out.

Interestingly, near the end of the article, the reporter points out that many African American households avoid the city's "progressive" affordable housing programs because rent and mortgage restrictions limit their ability to build equity:

Many blacks here shun buying affordable housing because those homes have "equity restrictions" to keep them affordable, which means they can't be resold at market rates.

"They see homeownership as a chance to gain assets that will grow. So they'll go outside the city," says Ed Donaldson, counseling director for the San Francisco Housing Development Corp.

Hmm, so African Americans actually respond to incentives just like everyone else? As any economist would say: "duh". Fortunately, San Francisco's officlal policy is beginnig to recognize this:

[Mayor Gavin] Newsom says he's focusing on "asset creation" — strategies to help blacks, Latinos and others create wealth by owning homes and businesses. That will be a priority of the task force, he says.

Of course, Reason has published extensive research on the folly of affordable housing and inclusionary zoning. The summary of the general study can be found here. A study on Los Angeles and Orange County can be found here. Market oriented alternatives to government mandates can be found here.

As usual, Randal O'Toole continues to do yeoman's work in deconstructing the Portland myth. From TCS Daily:

The mayor of Milwaukee, Wisconsin, and a cadre of other top officials recently flew to Portland, Oregon, my hometown, to learn the wonders of the region's rail transit system. Portland's Mayor Tom Potter no doubt told them light rail was "a cornerstone of the city's success." Potter or former Portland city Commissioner Charles Hales probably bragged that the city's streetcar line "has sparked more than $2 billion in new developments."

Unless they had gone out of their way on their junket, the visiting dignitaries were unlikely to hear the other side of the story: Portland's public transit has done nothing to relieve the region's growing congestion; its high cost has sparked a taxpayer revolt; the developments along the rail lines were themselves heavily subsidized; and those subsidies led a crafty cabal of ex-politicians and developers to milk the system for their own gain.

Read the gory details here. And these are just the high points--be sure to also check out his recent study that explores these issues in depth, debunking the agitprop regarding the city's vaunted land use and transportation planning. He hits the nail on the head when he concludes:

These problems are all the predictable result of a process that gives a few people enormous power over an entire urban area. Portland should dismantle its planning programs, and other cities that want to maintain their livability would do well to study Portland as an example of how not to plan.

The unjustified hype about Portland's planning has even spawned a website, www.debunkingportland.com, with lots of facts and figures.

Looking at the bigger picture, one has to wonder, "why exactly are planners still trying to replicate the Portland model?" When will the planning profession wake up and realize that planning, like any other realm of public policy, needs to be performance-based? Noble intentions aren't going to cut it.

Planning needs to be driven by, and continually adjusted based on, clear goals tied to concrete performance measurables. The achievement of goals--or success--is then determined through a rigorous, regular evaluation of outcomes, not processes or inputs. "Did we have good intentions" or "did we set up a process to do X, Y, or Z" or "how much did we spend on X" are a ridiculous way to measure the effectiveness of programs, but that's business as usual in planning. Imagine if you measured your fitness goals by adding up how much you spent on your annual gym membership, as opposed to the number of times you actually went to the gym or the number of pounds lost. We'd mock someone doing that, but we continue to allow planners to do the same thing, despite the fact that our tax dollars, mobility, economic opportunity, and quality of life are at stake.

A recent article in the Arizona Republic on the impact of Proposition 207 (see my recent post here) is chock full of misinformation and is a not-so-subtle attempt to undermine the eight-month-old property rights law. Space and time don't permit a thorough fisking of the piece, so I'll focus on a few key spots.

The first three paragraphs offer a clue to the direction of the piece right off the bat:

A new state law billed as a property rights safeguard has dealt a blow to residents and city leaders who want to save old neighborhoods, create shopping districts or influence what is built in their communities.

Hardly. Prop 207 hasn't done anything to restrict cities' ability to plan, create special districts, and the like; rather, it merely holds them accountable for the impacts of these planning decisions on the property rights of affected landowners. Citizens now have a form of relief if cities and counties adopt zoning changes and land use regulations that devalue private property. Nothing in the measure precludes or prevents governments from regulating land use; it simply offers aggrieved landowners a remedy, either via compensation for property devaluation or exemption from the regulation at hand.

Little in Proposition 207 dealt with eminent domain: the power cities have to force property owners to sell.

This is pathetically false. In fact, the Institute for Justice played a key role in helping craft the eminent domain provisions of the bill, and according to their recent state report card on eminent domain reform (in which Arizona got a B+), they write that:

The Private Property Rights Protection Act [Proposition 207] accomplished many necessary eminent domain reforms. Most importantly, the initiative significantly limited the scope of activities that could qualify as a public use. [...] The next step is to include these protections in the state constitution.

Here are what I've found to be the most significant changes to Arizona eminent domain law under Prop 207:

• Prohibiting the use of eminent domain for economic development purposes;
• Narrowly defining the term “public use” to include only (1) use by the general public or by public agencies; (2) uses involving the creation or functioning of utilities; (3) acquisition to eliminate direct threats to public health or safety; and (4) acquisition of abandoned property.
• Requiring determinations of “blight’ to occur on a parcel-specific (i.e., property-by-property) basis;
• Requiring that local governments must offer to locate and purchase a comparable home for landowners whose primary residences are taken through eminent domain, though landowners may instead choose to receive monetary compensation.

Not exactly "little to do with" eminent domain, eh?

Back to the AZ Republic article...

So says Roger Snoble, head honcho of LA transit.

He's referring to the jazzy mixed use development that's broken ground on Hollywood & Vine. Sure the city strapped on the eminent domain boot and kicked out dozens of business owners, but at least the new residents will be liberated from auto-oppression, right?

It's a vision expressed frequently by local government officials, who see building large mixed-use developments next to mass transit lines as a key solution for not just the region's traffic congestion but also its spread-out geography and reputation for being unfriendly to pedestrians.

In Los Angeles alone, billions of public and private dollars have been lavished on transit-oriented projects such as Hollywood & Vine, with more than 20,000 residential units approved within a quarter mile of transit stations between 2001 and 2005.

But there is little research to back up the rosy predictions. Among the few academic studies of the subject, one that looked at buildings in the Los Angeles area showed that transit-based development successfully weaned relatively few residents from their cars. It also found that, over time, no more people in the buildings studied were taking transit 10 years after a project opened than when it was first built.

How nice that the LA Times reporters didn't get light headed from all the bubbly and rosy rhetoric that was a-flowing at the highly publicized pep rally for the W Hotel complex.

The Times decided to examine driving habits at four apartment and condominium complexes that have already been built at or near transit stations in South Pasadena, North Hollywood, Pasadena and Hollywood.

Reporters spent two months interviewing residents, counting cars going out of and into the buildings and counting pedestrians walking from the projects to the nearby train stations.

The reporting showed that only a small fraction of residents shunned their cars during morning rush hour. Most people said that even though they lived close to transit stations, the trains weren't convenient enough, taking too long to arrive at destinations and lacking stops near their workplaces. Many complained that they didn't feel comfortable riding the MTA's crowded, often slow-moving buses from transit terminals to their jobs.

Moreover, the attraction of shops and cafes that are often built into developments at transit stations can actually draw more cars to neighborhoods, putting an additional traffic burden on areas that had been promised relief.

LAT article here.

The reporters might have also cited Travel by Design, by Marlon Boarnet and Randall Crane:

Surprisingly, there is little credible knowledge about how urban form influences travel patterns . . . Given the enormous support for using land use and urban design to address traffic problems, it was somewhat surprising…to find the empirical support for these transportation benefits to be inconclusive and their behavioral foundations obscure. Prior evidence on the link between design and travel is difficult to interpret and tells us relatively little about the behavioral nature of the problem and thus provides a weak foundation for policy advice.

If anyone needed proof of the harm done by the Kelo decision 2 years ago, all they need to do is read Myth #4 in the International Economic Development Council's "Eminent Domain Resource Kit".

Myth 4: The use of eminent domain violates private property rights.

Reality: Local and state authorities have the constituitonal power to acquire porperty through eminent domain on the condition of just compensation.

The real 5th Amendment to the U.S. Constitution (emphasis added) says:

No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

Economic development professionals no longer think its necessary to even mention that takings should be subjec to "public use" constraint. Apparently, we were correct in our analysis of the Kelo decision in June 2005 when we said the U.S. Supreme Court's decision effectively negats any practical application of "public use" scrutiny to local government decision to take private property.

The IEDC is perhaps the world's foremost trade association of economic development professionals.

Sam and I had an op-ed in Sunday's North County Times on the proposed conversion of a 70+ acre public golf course in Oceanside, CA to a new, mixed use development that would include a new football stadium for the San Diego Chargers. Our bottom line: taxpayers should be skeptical.

If the coin toss goes Oceanside's way, voters may be faced with the difficult decision on whether or not to welcome a new San Diego Chargers stadium on the 70-plus-acre site of the Center City Golf Course. While the Chargers' pitch for a privately financed stadium and office development may sound seductive, the devil is always in the details, and taxpayers need to ask some important questions before signing off.

Even if the stadium proposal would not involve direct public expenditures, tax hikes or bond issues, taxpayers need to be on the lookout for other sneaky subsidies. Would the golf course land be sold to the stadium developer at fair market value, or would the city sell it at a discount as an incentive? Would the private sector also finance the major road, water and other urban services needed to support the stadium development, or would these costs be subsidized by taxpayers? So far, the Chargers have indicated they and a private partner will pony up the capital to make it happen and they should be held to those commitments.

But this is only one element of the deal, particularly in an area of the county experiencing sky-high housing prices and economic growth. Public officials owe it to taxpayers to make clear the big-picture trade-offs involved with a stadium deal. What potential uses of that land would the city be giving up in exchange for the Chargers stadium, and what's the best use for the city's longer-term economic development?

At first glance, a sports stadium seems like an economic boon. In truth, they are, at best, minor economic players in a city's economic health. More than 20 years of academic research has failed to find a significant relationship between an investment in a sports stadium and significant job or income growth. In a 2000 article in the Journal of Economic Perspectives, researchers from Smith College and Vanderbilt University found that "independent work on the economic impact of stadiums and arenas has uniformly found that there is no correlation between sports facility construction and economic development."

In fact, stadiums can actually divert spending away from local businesses and increase expenditures on public safety and other city services. Other research has shown that stadiums inject very little new money into a city's economy; rather, they reshuffle the jobs and money already there.

Perhaps a more important issue concerns alternative uses for the land. A large tract of prime urban land a mile from the ocean represents a tremendous development opportunity. Housing, office and retail uses may be a much better long-term investment for the city since they are better integrated into the existing urban fabric. Housing and office space has a much longer economic "shelf life," and is easier to renovate than sports stadiums.

Even though the Chargers' proposal may sound appealing today, the track record of fickle sports teams hungry for newer, more modern facilities isn't something to bank on. Pro sports teams have gotten particularly adept at holding cities hostage if projected stadium revenues don't pan out, threatening to set up shop elsewhere unless they receive public subsidies. It's entirely possible that Oceanside could face this five or 10 years down the road when another city, like Los Angeles, for example, offers a better deal. Worse, if the Chargers were to leave in a decade or two, Oceanside would be left with an urban dinosaur that would be costly and difficult to redevelop. Oceanside should consider carefully the economic impact of the soon-to-be-empty Qualcomm stadium.

Mark Fabiani, the Chargers' special counsel and lead negotiator, has said the team wants to "put responsibility on the private sector for the stadium, infrastructure and everything else that is needed to make the stadium work." Oceanside and San Diego County should take him on his word, and help make it happen, without public subsidy.

Economist Daniel K. Benjamin reports on a new study from the Quarterly Journal of Economics that shows squatters who experience the benefits of property rights protections positively influences their beliefs about markets. The study is the February 2007 issue of the QJE and was authored by Rafael Di Tella, Sebastian Galiani, and Ernesto Schargrodsky, and Bejamine writes about it in his tangents column for PERC Reports, a publicatin of the Property and Envrionment Research Center (PERC) in Bozeman, MT.

The authors studied the formation of squatter settlements outside of Buenes Aires, comparing families that received secure property rights with those that did not. The authors surveyed about 400 squatter families and found, as reported by Bejamin: "The squatters who received secure property rights are 20 percent more positive toward the market system than are the unlucky squatters. Indeed, the attitudes of the squatters with secure property rights are just as positive toward the market system as the attitudes of much more affluent Argentinians who are much better educated and have much higher incomes."

Benjamin concludes:

The importance of this study is that it suggests that changes in attitudes are no accident, and that it may be possible, on a broader scale, to overcome the widespread hostility toward market systems. The aphorism that “seeing is believing” is rarely more applicable, for it appears that the creation of private property rights has the potential to fundamentally change how people perceive the world, and thus, perhaps, the institutions and policies they are willing to adopt. For those who believe that environmental quality, individual choice, and personal freedom are important, this is good news indeed.

The article by Benjamin is in the most recent issue of PERC Reports and can be found here.

The full study in the QJE can be found here.

As he so often does, Joel Kotkin offers some great thoughts on an urban issue. His latest commentary "Trust market to shape the new Houston" in the Houston Chronicle, is subtitled Planners' nightmare is a dream come true in creating an exuberant, workable hodgepodge.

It opens:

When speaking on urban issues, one reliable way to draw derisive comments is to mention Houston. Perhaps no major city in America has a worse reputation among planners, urban aesthetes and smart growth advocates.

Yet, to a remarkable extent, Houston may well defy its critics — not only by continuing to expand, but by constructing a new and dynamic model of American urbanism that transcends all the worn clichés about ''sprawl'' and the burgeoning city's inability to attract educated workers.

Arizona's 7-month old property rights law, Proposition 207--the combined eminent domain and regulatory takings reform measure passed overwhelmingly by Arizonans last November--may end up forming the basis for a legal challenge to a new historic overlay district passed in Flagstaff this week. Here's the skinny from PLF:

The Pacific Legal Foundation today filed a demand letter with the City of Flagstaff, Ariz., which starts the clock ticking toward filing a lawsuit under Proposition 207, the Arizona Private Property Rights Act. This will be the first case invoking the protections of the Act.

The case challenges the new city ordinance adopted last night, which imposes a "historic district overlay" on a portion of the city. Essentially a new layer of zoning, this overlay imposes severe height and width restrictions on properties in the area and creates a new bureaucracy with power to deny property owners the right to renovate their homes.

PLF represents Jon Regner, a Flagstaff firefighter who purchased his property with the intention of renovating it and living in one house while renting out the other. The new ordinance prohibits him from doing this. PLF also represents several other landowners whose property rights are being trampled upon. Fortunately, with Arizona's powerful new property rights protection law, these property owners have a legal tool with which to defend themselves.

In just the first seven months of implementation, there have already been several indications that Prop 207 is changing the way Arizona communities approach regulation and growth management issues. For example, in April 2007 the Phoenix City Council voted to repeal a historic designation it had placed on an area in central Phoenix after being threatened with a Prop 207 challenge from an aggrieved landowner. Also, the Tuscon City Council recently delayed the adoption of a neighborhood preservation overlay district to study the potential Prop 207 ramifications after a group of property owners opposed it on Prop 207 grounds, arguing that it would restrict the use of their property and decreased its potential value.

In other words, Prop 207 is working.

I've just written a piece on Prop 207 that will be featured in Reason's upcoming Annual Privatization Report (slated for a July release) that talks about these events and more, and I've got a policy brief in the works that will provide more details on Prop 207 and articulate the case for it as the best current model for state-level property rights protections.

For more on Prop 207, check out Big Rattler's Prop 207 blog.

In Part 2 of the Dust-Up (see my previous post for Part 1), Bruegmann and Ohland take on smart growth. Bruegmann asks the question: "If smart growth is the answer, what is the question?"

To get any significant number of people out of their cars and into transit it would be necessary for transit to be faster and more efficient than cars. Except in the case of rush-hour commuting trips to the very center of a few large cities in the United States, this not now the case. Without some dramatic changes in the type of transit we use, transit is very unlikely to be able to compete anytime in the near future.

It would take massive increases in density to boost significantly the present, extremely small market share of transit use in Los Angeles. And even if the market share of transit gained, the number of automobile users would increase more quickly than transit users for the foreseeable future. Without some dramatic increase in road capacity, this would guarantee worse traffic and longer trips for motorists and bus passengers alike. In fact this is what has been happening in L.A. for some years now. Most of the nostrums promoted by "smart growth" advocates are likely to make matters even worse.

. . . .

In fact if we didn't have the polarizing debate about sprawl and smart growth, it would probably be easier to tackle our transportation problems.

Read the whole thing.

• Bruegmann on the Future of American Cities, Pt. 1

University of Illinois at Chicago prof, author, and urban realist Bob Bruegmann is going toe-to-toe this week with transit advocate Gloria Ohland in the LA Times' Dust-Up on the future of urban growth. In Part 1 they present two sharply contrasting views on urban sprawl. According to Bruegmann:

After doing a considerable amount of research on this subject for my book I concluded that very little of what was said about sprawl was either accurate or useful. The accepted wisdom today is that sprawl is recent, peculiarly American and caused by increasing automobile ownership and use. In fact, if we define sprawl in the most basic way as the decentralization of cities at constantly lower population densities and without any over-arching plan, it is fair to say that it has been going on since the beginning of urban history. Whether in imperial Rome or 19th century London, whenever a new group of people could afford to escape the congestion, noise and unsanitary conditions of city centers, they did so. In fact the exodus from central London in the 19th century, made possible by the newly invented railroad and public transportation, was at least as great as anything seen in the United States after World War II.

And every time a new group moved out there was an intellectual and artistic elite that was affronted and wished to stop it. In 19th century London, for example, "right-minded" individuals condemned the miles of brick row houses then being constructed for middle class families as ugly boxes erected by greedy developers. They considered these new neighborhoods a blight on the countryside and were sure that they would become a slum in a generation. Of course, within a generation, this same class of people had decided that these very row houses were the essence of central London, the antithesis of the new sprawl they saw at the urban fringe.

And so it has gone over the centuries. Today we are told that sprawl is economically inefficient, socially inequitable, environmentally damaging and aesthetically ugly. The current lead argument is often environmental, based on the notion that high-density compact settlements are more energy-efficient and less polluting than lower density, more scattered ones. However, there is little evidence that this is the case. The old 19th century cities were environmental horrors and only worked as well as they did because they were so much smaller than today's cities and most people were so poor that they had few choices in where they lived or worked. The most likely scenario to solve our energy problems and avert global warming is not to remake our cities at 19th century densities so that they can sustain 19th century technologies like the internal combustion engine, but instead to find new fuel sources and more efficient ways of using them at whatever densities people choose to live.

In any event, even if I am completely wrong and sprawl is a terrible thing, the record of attempts to stop it are not promising. In London, for example, where planners instituted a green belt and some of the toughest restrictions in the world immediately following World War II, they were unsuccessful. Indeed, the urban population of London has now scattered across much of the South of England. Throughout Europe, people are buying and using cars at a much faster rate than in the US and their dense, old cities are now sprawling outward faster than most American cities, particularly places like Los Angeles. In fact, the L.A. region has become so much denser over the last 50 years that it is currently the densest urbanized area in the United States. It is this increase in density and not density-lowering sprawl that lies at the root of many of the woes experienced by L.A. today.

Ohland's response offers a concise distillation of the main pro-transit, pro-smart growth (and in my estimation, misguided) arguments. It can be summed up in two sentences:

"[R]educing the amount of driving should be our number-one public policy goal"

"We've got to build more compact communities near transit instead of more sprawl."

These sentiments are almost taken as an article of faith among like-minded urban planners and smart growth advocates, but as my colleagues Sam and Ted point out here, here, and in their recent book, The Road More Traveled, conventional wisdom among urban planners is chock full of transportation myths (pardon the pun) that need to be reconsidered. Also be sure to check out Sam's earlier post about the myth of the transit-oriented city.

A new study from the Institute for Justice in Wahsington, D.C. provides empirical support for what most of us already now: the poor and minorities are the ones most victimized when eminent domain is used for so-called economic development puproses. After examining 184 projects across the nation, the IJ report concluded that:

58 percent of those targeted with the threat of eminent domain were minority residents (compared to only 45 percent in surrounding neighborhoods that were not targeted with takings), and those targeted had an annual median income of less than $19,000 (compared to $23,000 in surrounding neighborhoods). Moreover, a greater percentage of people living in areas targeted for eminent domain for private development have less than a high school diploma and smaller percentages have various levels of college education compared to surrounding communities.

The full report can be found here.

Today's Houston Chronicle ran a fantastic op-ed by Houston Strategies blogger Tory Gattis articulating the case for Houston as a model of the 21st century, dynamic city of opportunity. There's a widespread perception of Houston as a sprawling free-for-all and epitome of market-driven urban chaos, but having lived there the last several years, it's clear to me that the national perception of Houston doesn't jive with reality. Tory breaks it down:

Houston is at a turning point. With a boost from noted urbanist Joel Kotkin, our city has begun recasting its national reputation from "that ugly, sprawling, weird city without zoning" to the exemplar city for "Opportunity Urbanism," a compelling new paradigm for cities in the 21st century. This paradigm asserts that the fundamental (but recently forgotten) core mission of cities is to accelerate the upward social and economic mobility of its inhabitants.

This may sound obvious to the average person, but in the wonkish world of urban policy and planning, the themes of the past decade have been environmentalism (smart growth), pedestrian aesthetics (new urbanism), and meeting the desires of the educated elites (the "creative class"). Each of these movements raised important points— the need for urban core renewal and infill, a lack of quality pedestrian spaces and neighborhoods, and talent as the new basis of global competition, respectively. But they also went a step too far — denying suburban homeownership to those who desire it, demonizing the car and excessively focusing on attracting a narrow class of outside talent by being "hip and cool" instead of developing skills broadly in the existing population. Improving life for the typical resident got lost in the clamor.

What do we mean by "improving life" and "upward social and economic mobility?" Kotkin's research team, of which I was a part, identified four enablers: additional education for self or children; affordable homeownership; entrepreneurship; and getting a superior job, better matched to the jobholder's skills with improved productivity and pay. Urban policies and planning can have a direct effect on each of these drivers.

How can a city make more of these positive changes happen for more people? Our prescription — and Houston's great strength — revolves around the theme of maximizing residents' "opportunity zone."

What constitutes a rich environment for these four enablers to do their positive work? The more education, job, start-up, or affordable home options they have within their personal travel-time/cost tolerance, the more likely most people are to take advantage of them. That's their opportunity zone, and Houston has managed to maximize it in four key ways.

You'd be missing out if you didn't read the rest here.

And be sure to check out Tory's related blog posts here and here for more, as well as this piece he and I co-authored for the Chronicle warning of the perils of planning for Houston.

Companies can set up shop in all sorts of locations. Why do they cluster in some places more than others?

Do they want to ...

1. get close to suppliers and customers to keep transport costs low?
2. be near a big labor pool?
3. benefit from intellectual spillovers?

In this HIER discussion paper Glenn Ellison, Edward Glaeser, and William Kerr find evidence that supports all three, with one and two being most important.

Planetizen.com, the most active portal for the professional planning community, has created a blog called Planetizen Interchange. Sam Staley is regular contributor, and his first post is on moblity and planning:

After reading through dozens of long range transportation plans, I have to wonder if the planning profession is serious about improving mobility. By mobility, I mean improving the ability, speed, and efficiency of getting from point A to point B.

Read the entire post here.

Heritage Foundation's Ron Utt is urging Virginia Gov. Tom Kaine to rethink his campaign promise to give local governments more power over planning decisions. Why? Well, just look at the results of what they've been doing with the power they already have:

In an effort to deter growth and upgrade community demographics, in the late 1990s Virginia counties began to adopt a series of restrictive land use regulations to limit the availability and affordability of building lots (down zoning and limited rezonings) and/or impose a substantial implicit tax on all new houses (called a proffer).

These higher fees and artificial land shortages caused home prices to soar, forcing families of moderate means into the rental market, or pushing them to the distant fringe of the metropolitan area--where lower land costs and less onerous land regulations provide affordable housing.

Forced to move farther away from their jobs, the time they spend on the road lengthens, and traffic congestion worsens.

Take for example Prince William County (approx. 30 miles south of D.C., home of Manassas, southern neighbor of Fairfax & Loudoun Counties), which recently adopted a building moratorium:

Data published each year by the U.S. Census Bureau reveals the adverse impact that Prince William's extant abusive land use practices have caused. In 2000, the median value of a home in the county was $149,600--25 percent greater than the national average.

But by 2005, the census reports that the median home value in the county rose to $391,500, 133 percent greater than the national average.

Reflecting the county's use of high home prices to upgrade its demographic characteristics, over the 2000-2005 period, the median income for households in the county rose 24 percent--from $65,960 to $81,904--while incomes nationally rose by just 10 percent.

Nonetheless, because home price escalation substantially outpaced income growth, Prince William County homes are unaffordable even by the distorted income standards of the region.

And with its new moratorium on home building, affordability will only worsen.

Utt goes on to suggest that Gov. Kaine, who ran on promises of "doing something" to address land use and transportation issues, should reconsider the wisdom of jumping on the regulatory bandwagon:

So what to do? In the center of it all is Gov. Kaine, who has yet to advance beyond campaign promises to give counties more control over growth. In fact, Virginia counties have tremendous control over growth, as Prince William has demonstrated by invoking a moratorium on it.

If such an extreme act of property rights abuse reflects limited control, then the logical enhancement of such existing powers must be to allow them a policy of "ungrowth" whereby existing subdivisions are bulldozed into rubble.

. . . .

Under the circumstances, the governor might want to reconsider his role in this debate, and a good place to start is to remember that he is a Democrat, and that his party has traditionally stood for the rights of the little guy over those of the privileged elites who have often abused their influence to enhance their lifestyles and bank accounts.

Thanks to more than a decade of land rights abuses implemented by local officials, Virginia has managed to achieve the ignominious distinction of experiencing the sharpest decline in homeownership of any state between 2001 and 2005--a period in which the nation's homeownership rate continued to increase.

So in essence, the same unintended consequences are playing out in Northern Virginia that play out time and time again in regulation-happy places like California and Oregon. Local governments adopt strong growth management regulations aimed at curbing "sprawl," housing supply is choked off and prices naturally skyrocket, traffic problems are exacerbated as people commute longer distances in search of affordable housing, and then policymakers scratch their heads and misdiagnose the problem. Instead of cutting regulation and red tape to target the self-imposed problem, the tendency is to prescribe even more regulation and to adopt policies and programs that at best have no discernible effect (i.e., light rail transit) and at worst compound the problem even further (i.e., inclusionary zoning policies). Simply brilliant thinking, eh?

A new blog "dedicated to the goal of repealing all federal and state planning laws and closing all state and local planning offices" here.

California has long lured folks from across the nation. Many still come to the Golden State, but now more are flowin’ out than are flowin’ in:

Between 2004 and 2005, the migration flow into California from the other 49 states started flowing the other way. Data from the state Department of Finance shows that, for the first time this decade, more people left California in 2005 for another state than the number who moved in. Mary Heim, a finance department demographer, says this particular kind of outflow will continue for the foreseeable future.

Unlike the tens of thousands who left Silicon Valley following the tech bust earlier this decade, the new migration is about the quest for something besides a job: a better quality of life at a lower cost of living.

Consider Wayne Brown. He took a $40,000 pay cut and moved from the Bay Area to Kansas:

It got to be too much last year for the college information-technology officer: the commute to downtown San Francisco that sometimes took two hours, the housing-price spiral and the high-wire borrowing that paid for it.

``I would find myself sitting in traffic,'' Brown recalled, ``screaming at people.''

When the Kansas job came up in early 2005, Brown and his wife, Teresa, sold two Bay Area homes and happily settled in a suburb of Kansas City. They have never looked back.
…
Brown, who lived in Dublin before he moved to Kansas, believes he did well in spite of his pay cut because the cost of living is so much lower in the Kansas City suburb of Overland Park. He and his wife were able to cash out the equity in real estate they owned and get a jump on saving for retirement.

Brown loved the Bay Area's weather, but much of the time he had to enjoy it stuck inside his car. On weekends, he and his wife were often too tired from work and commuting to take advantage of the Bay Area's cultural and recreational riches.

``During the week, it was no life,'' Brown said. ``And really there was no way to relieve stress from work; it just continued on in my life.''

Note that the MN article says that 2004-2005 was the California’s first out-migration year this decade. In 2003, I pointed to a Census report that revealed that the Golden State was out-flowin’ from 1995 to 2000.

(Somewhat) related: A 2005 LA Daily News piece by me

Metropolitan types who think expensive oil will drive people into cities face a rude awakening. Burbs will be the big winners.

So argues Joel Kotkin in Newsweek, "Hail to The Suburban Oasis."

For evidence, look at the experience of the 1970s. In that decade, Americans, Europeans and Japanese faced an even steeper price rise than the one we face today. Worse, we were hopelessly unprepared for it, and far more jobs, particularly high-paying ones, were located in the urban core.

So what happened? People adapted, eschewing the long commutes into the central city for generally shorter ones to new office and industrial parks on the periphery. Worldwide, almost every country continued to suburbanize, from Orange County, California, to Grand-Couronne around Paris. In the United States, the ’70s proved to be the only decade in the 20th century in which overall urban population dropped in actual numbers.

. . .

There were other significant changes as well. American drivers abandoned gas guzzlers for fuel-efficient cars long favored by commuters in other countries, where the price of petrol runs two to three times higher. The 1970s also saw builders begin to adapt energy-saving methods, including a greater emphasis on better insulation, thicker windows and more-efficient appliances.

. . .

“The biggest jolt the Industrial Revolution administered to the Western family,” suggests historian Peter Stearns, “was the progressive removal of work from the home.” The Internet revolution now gives us the opportunity to reverse this historic trend, allowing the postindustrial community of the future to function something like its preindustrial counterpart.

Joel makes some good points. The modern history of reacting to oil price changes is chock full of things people didn't predict. I expect this to be true in the coming decades as well. Congress is gearing up to crank up the cost of energy with alternative energy mandates and greenhouse gas limits and they are not expecting the kind of things Joel is pointing out to result.

The “get ‘em in, get ‘em” out mentality is giving way to the "let them linger" approach. Virginia Postrel notes the Starbucksization of the shopping mall:

Over the last decade and a half, the once-monolithic mall has become more diversified, more aesthetically appealing and more porous. Outdoor "lifestyle centers," often without department stores, are reinventing the city street, while traditional malls revamp to provide more entertainment, more restaurants, more appealing public spaces and more reasons to linger. After five decades of experiment and evolution, the American shopping center is finally beginning to fulfill its inventor's dream: to re-create the human-scale European city "filled, morning and evening, day and night, weekdays and Sundays, with urban dynamism."

That dreamer's name was Victor Gruen, an architect in exile. In the mid-20th century, he lived in Beverly Hills but longed for Vienna, the city he'd been driven from by the Nazis.

More here.

Related: My take on other aspects of the Suburban Style Evolution:

Ease into the red Eames chair next to the fireplace, log onto a high-speed wireless connection and dine on your fruit and walnut salad. Where are you? You just might be at one of the new-look McDonald's that the company recently unveiled in certain markets. The kind of evolution Mickey D's has been going through has also reshaped many other suburban fixtures and the transformation may render many of the criticisms lobbed at suburbia outdated—that is, if they were ever accurate in the first place.

More on McDonald’s, subdivisions, SUVs and Wal-Mart here.

In a breakthrough study, the Partnership for New York City has identified more than $13 billion a year in losses to the New York Metropolitan Region’s economy that are a direct result of traffic congestion. The report issued by the Partnership today concludes that existing transportation and road systems are inadequate to accommodate the region's growing population and continued economic expansion, resulting in the loss of as many as 52,000 new jobs every year.

Some bits:

• Delays endured by commuters, workers and other travelers annually cost some $5 billion to $6.5 billion in lost time and productivity and up to $2 billion in wasted fuel and other vehicle operating costs.

• Traffic delays add to logistical, inventory and personnel costs that annually amount to an estimated $1.9 billion in additional costs of doing business and $4.6 billion in unrealized business revenue each year.

• There is a net loss in regional economic output of at least $3.2 to $4 billion annually due to loss of productivity, with the greatest losses concentrated in Manhattan, New Jersey and Long Island.

Press release here; study here.

Related: Congested Business—Silicon Valley Edition

Related: Congested Business--Austin Edition

Related: Congested Business—UK Edition

The [San Diego] City Council voted 5-3 to ban stores [i.e. Wal-Mart] with more than 90,000 square feet that use 10 percent of their space to sell groceries and other merchandise not subject to sales tax.

The promised mayoral veto won’t matter because the council has enough votes to override it. But hey, just because they banned it, it doesn’t mean councilmembers have anything against WM:

Councilwoman Toni Atkins, who supported the ban, emphasized that the city has nothing against Wal-Mart but wanted to limit how its stores affected neighborhoods and small businesses.

“This policy is not going to affect negatively people's ability to choose where they want to shop. If they want to shop at Wal-Mart, please do,” Atkins said.

Um, but you kinda just banned the grocery-selling variety of WM. I guess San Diegans are still free to travel 150 miles to the Supercenter in Rosemead.

And don’t talk to former Councilwoman Valerie Stallings about chipper employees in blue vests:

“It's true that the big boxes may be less expensive and they do offer affordable prices to many families, but they do not provide the kind of friendly and individual service that a smaller business can,” she said.

Art Castanares, who served as [Councilman] Hueso's election campaign manager, has long advocated for the ban.

“The issues haven't changed. It's still about visual blight of the large unattractive boxes,” he said. “It's still about the lack of landscaping and open space and acres of parking and the devastation of the local economy when you build these huge stores.”

Methinks this might have a little more to do with it:

A group of labor leaders and grocers proposed the ban three years ago …

Good ol’ competition-stifling incumbents strike again!

Article here.

Related: How civilized societies (e.g. South Korea and Germany) ban the box

A new study finds that:

Using data from 15,000 Americans living in various places across the country, researchers found that residents of sprawling suburban spaces actually have more friends, more contact with neighbors and greater involvement in community organizations than citydwellers who live in very close proximity to each other.

A short article about the study here. Full study here.

Just wanted to pass along an interesting statistic on Tuesday's election...in the 12 states that had property rights measures on the ballot (eminent domain reform, regulatory takings reform, or a combination thereof), over 14.2 million voters cast their ballot to support property rights, compared to just over 8 million against. That's a 64-46% margin.

When you take out the votes from California's Prop 90 and the Idaho and Washington measures that didn't pass, the combined totals for the 9 successful measures are 10.6 million (74%) for and 3.6 million (26%) against. Similarly, combining the totals for the 3 unsuccessful measures yields 3.7 million (45%) for and 4.4 million (55%) against...of course, that figure is weighted heavily by California.

I'd argue that the biggest victory for property rights last night goes to the 65-35% win of Prop 207 in Arizona -- a "Kelo-Plus" eminent domain and regulatory takings measure. Arizonans woke up today to what are probably the strongest property rights protections in the country, although Oregonians could justifiably make the same claim after passing their eminent domain measure yesterday (Measure 39) to complement their 2004 regulatory takings measure, Measure 37.

Clearly, the election confirms that property rights--and the need to protect them--is an issue many Americans still care very deeply about. That's the central point I made in my roundup of the election outcomes, available here.

A recent email exchange asked the question about whether growth pays for itself, and thought some people visiting the blog might be interested in some slightly edited thoughts and references on the isue.

Whether growth pays for itself is a highly localized question. Over the long run, and in a regional context, it does. In fact, it has to. I"m not aware of many cities (in fact I'm not aware of *any*) that went bankrupt because of growth. Several have gone bankrupt for lack of growth, but not because they had too much growth.

More to the point, the National Homebuilders Association has several pretty robust econometric models that show that over time growth pays for itself. The property tax and sales tax revenues generate surpluses after 2-5 years. So, there is an immediate cash outflow, but over time the revenues more than make up for it. A nice and sophisticated example of this effect is estimated in a report produced for the Home Builders Association of Greater Cincinnati by the NAHB. .

While growth pays for itself on a regional level, it may not pay for itself on the local level. A critique of the cost of growth literature can be found in the Reason Foundation's "Sprawling of America" report. While a bit dated, the conclusions are still relevant.

Most critics of the cost of growth rely on so-called "Cost of Community Service" reports. These are highly unreliable sources and inevitably show that residential development doesn't pay for its. Interestingly, the better studies show that residential development often pays for itself on basic infrastructure, but the balance sheet becomes "negative" when school costs are added. For more on whether schools costs should be included in this calculation, see my testimony on school impact fees.

In some cases, however, growth doesn't pay for itself. Whether the community should make growth pay for itself is a policy question. A strong argument can be made that forcing growth to pay for itself is contrary to sound public policy. Cross subsidization has always been part of the public good argument for providing public services. One reason property taxes for schools are so low is that commercial and industrial property pay for schools too. There are classic public good arguments for continuing this.

Policy wonks and property rights advocates have something to look forward to next summer: Begging for Billionaire$, a Limelight Cinemas Group documentary about eminent domain abuse in Kansas City. Here's a trailer:

See their website for additional clips and other info on the documentary.

(hat tip: PLF on Eminent Domain)

Remember when a man’s home was his castle?

Now we've got eminent domain abuse, regulatory takings, landscaping-related nanny-statism, anti-“McMansion” ordinances, and yet another frightening development:

MASSILLON, Ohio -- A man appearing naked in his own home was arrested Monday, Massillon police said.

The 43-year-old man was charged with two counts of public indecency.

Officers arrested the Charles Avenue S.E. resident when he was observed naked in an open window.

Funny, I thought indoor smoking would be outlawed before indoor nudity.

Massillon’s Puritanism could spell trouble for area telecommuters.

This evening I'm supposed to be on Life & Times discussing California’s Prop 90 (eminent domain and regulatory takings).

Tune in to KCET (LA). Show starts at 6:30pm and there’ll be some online chatting afterward. If you’re so moved, sound off here.

Forget "livable communities," "sustainability," and "quality of life"...it's only a matter of time before the time-tested "let's do it for the kids" argument comes full force to the land use planning realm. According to some Australian activists, modern development patterns are bad for the kids, and even though they don't explicity say so, it doesn't take a rocket scientists to conclude that the activists see sprawl as the problem and would like to see "smart growth" as a remedy:

Fast-forward to today, where the notion of city children playing unsupervised in an untamed public space, or even wandering up to the local shops, is often too frightening for parents to contemplate. Not that there is the available public land to run around in, given skyrocketing property values.

Just how much the urban planning decisions we are now taking will affect children is yet to be fully understood, but depression, criminal behaviour and even obesity were some of the possibilities canvassed yesterday at a Sydney conference on creating more child-friendly cities.

"Too often, the built environment works against healthy child development in terms of the design and positioning of housing, parkland and transport systems," child welfare advocate Fiona Stanley said.

"We need to put children at the centre of the (planning) process if we want to make an impact in reducing problems such as behavioural issues, rising rates of juvenile crime, domestic violence, child abuse and even the obesity epidemic."

So one might say that the activists didn't mention sprawl or smart growth, so why are my feathers ruffled? My response is that it's a simple leap of logic. Notice this comment:

She said money had to be urgently spent on recreating the child-friendly communities of the past.

I interpret this as a call for "neo-traditional development," a concept routinely promoted within the smart growth movement. Since "smart growth" is the political response to "urban sprawl," then you're left with sprawl=bad for kids/smart growth=good for kids.

Since we've already seen the bogus "sprawl causes obesity" claim go down in flames, the smart growth movement is probably just waiting for the next marketing gimmick, and here it is. As we all know from Politics 101, "let's do it for the kids" provides a great marketing scheme to inoculate yourself from the inevitable criticisms that will follow questionable policy ideas. I hope that I'm wrong, but I'd imagine we'll start seeing a flow of "research" in the future claiming that the problems ailing modern children are directly linked to the built environment, rather than the more logical sources--parenting, changing family structures, etc. We'll see...

Oakland's attempt to pass an inclusionary zoning ordinance--which would mandate that developers set aside a portion of their projects at below-market rates--was shot down by Mayor Jerry Brown last night. Given his strong comments, the Mayor deserves some kudos for his skeptical stance:

Mayor Jerry Brown Tuesday night called for a blue-ribbon commission to study whether developers should be required to set aside at least 15 percent of their projects for low income residents, dramatically casting a tie-breaking vote.

Brown's decision, which prompted howls of anger from the audience in the council chambers, ends any chance that supporters of inclusionary zoning will get the measure on the books before voters go to the polls and decide the fate of Proposition 90, which will severely curtail the council's authority to act.

Brown, who is running for state attorney general and has only two months left in office, said the inclusionary zoning measure would do little to help the 30,000 families living below the poverty line in Oakland, while driving developers — and private investment — out of the city.

"It will not make even a small dent," Brown said.

Brown said the measure would create what he called a "lottery" for the 100 affordable homes and apartments he estimated would be built in a single year, if the measure were implemented, while taxing market rate homes.

"There is no Santa Claus," Brown said. "Someone has to pay."

Sounds like Mayor Brown has been reading Reason's work on IZ in California, which found that IZ produces few affordable units relative to overall need, drives down local construction and pushes development to other communities, and contributes to increased local housing prices as consumers subsize the affordable units by paying higher prices on the market rate units. See our studies here, here, and here.

And a personal thanks to the Mayor, as I will probably be borrowing the "Santa Claus" line for future talks on IZ!

From a University of Toronto working paper:

We study the relationship between urban sprawl and obesity. Using data that tracks individuals over time, we find no evidence that urban sprawl causes obesity. We show that previous findings of a positive relationship most likely reflect a failure to properly control for the fact the individuals who are more likely to be obese choose to live in more sprawling neighborhoods. Our results indicate that current interest in changing the built environment to counter the rise in obesity is misguided.

More here; study here; via Peter Gordon.

Related: Same story from Oregon State University study

Related: Evidence for built environment-physical activity relationship “currently sparse”

Anyone in Southern California interested in eminent domain and Proposition 90 should consider attending tomorrow's debate at Chapman Law School, sponsored by the Pacific Legal Foundation. The details are below:
____________________
DEBATE ON PROP. 90/EMINENT DOMAIN TO BE HELD AT CHAPMAN LAW SCHOOL

Pacific Legal Foundation-sponsored event features Assemblyman Ray Haynes, Planning and Conservation League Director Gary Patton, Attorney Timothy Sandefur

October 20, 2006
1:00 p.m.
Chapman Law School, Room 237

What: Symposium on eminent domain issues and debate on Proposition 90. Free to general public. Attorneys may receive 3 CLE units for $15 ($10 for current Federalist Society members).

Where: Chapman Law School, Room 237, One University Drive, Orange, California 92866.

When: Friday, October 20
1:00 p.m. Panel One: History of Eminent Domain and Current Controversies.

3:30 p.m. Panel Two: DEBATE on Prop. 90, which, if passed, would restrict eminent domain and other regulation.

5:00 - 7:00 p.m. Reception.
____________________

More details here.

In case you missed it, a few weeks ago, the U.S. House passed a bill -- The Private Property Rights Implementation Act of 2006 -- that, if ultimately approved, would give private property owners increased protection from regulatory takings. Here's an excerpt from yesterday's Cincinnati Enquirer article on the bill:

A property-rights bill written by U.S. Rep. Steve Chabot - and recently passed by the U.S. House - would allow developers and other property owners to sue in federal court if local zoning regulations restrict the use of their property.

The bill expands the national debate over eminent domain - the principle that allows government to take private property for public use - into a related but more obscure area of the law known as "regulatory takings," in which the government doesn't take the property but decreases its value by restricting what the owner can do with it.

. . .

Chabot said citizens should be allowed to go to federal court when their rights guaranteed by the U.S. Constitution are violated. And the Fifth Amendment says "no person shall ... be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation."

"People deserve the same protections as they would any other constitutional protection, like freedom of speech, freedom of religion - and freedom from having your property taken from you," he said.

. . .

The decision to sue in state or federal court would be a case-by-case decision made by property owners and their lawyers, and there are many practical and legal reasons why zoning disputes would continue to stay in state courts. And Ohio tends to give more weight to property rights, as evidenced by the July decision that found Norwood had violated the constitutional rights of three owners by taking their properties by eminent domain for a shopping and office complex.

. . .

But Chabot said the legislation is less a reaction to Kelo and more in response to a 2004 case, San Remo Hotel v. City and County of San Francisco. The city had told the hotel it couldn't convert a residential hotel for use by tourists, and the ordinance was upheld in the California courts. The hotel took the case to federal court - but both the district court and an appeals court ruled that the federal courts couldn't even take up the issue because it had already been decided by the state courts.

This bill would address a serious issue related to regulatory takings, but not the one you might expect. Chabot's bill does not deal with the issue of just compensation for regulatory takings, a la Oregon's Measure 37 and the four measures on the ballot in Arizona, California, Idaho, and Washington this November.

Instead, it would address a serious procedural hurdle that regulatory takings victims face -- the denial of federal court review of their takings claims. In the SCOTUS decision in Williamson County Regional Planning Cammission v. Hamilton Bank, the Court ruled that federal takings claimants had to raise and lose their just compensation claims in state courts before their claims could be reviewed (i.e. were "ripe") in federal court. But this leads to several problems. First, state courts rarely rule in favor of regulatory takings victims. But even worse is that the Williamson County ruling conflicts with the provisions of the Full Faith and Credit Act that require federal courts to follow the decisions of state courts; this involves the legal concept of preclusion, which basically says that a court's final decision on an issue is final and will not be revisited.

So this conflict has trapped regulatory takings victims seeking just compensation through the courts. They can't go to federal court without exhausting the remedies through the state courts, but if the state courts ultimately rule against them, then the federal courts won't hear them, making the victim's only hope that SCOTUS will hear the case, which is unlikely given the limited number of cases they agree to hear in any given year.

Of course, this situation places victims of property rights infringement in a terrible spot. In fact, it singles them out -- others bringing suits based on the infringement of other Constitutional rights (speech, religion, etc.) have the option of pursuing remedies in state or federal courts.

This just provides another illustration of how far the erosion of property rights has gone. We'll defend vigourously our rights to free speech, religion, press, etc., but when it comes to defending THE foundational right underlying our constitutional republic and free market system, we as a society have sat back, turned a blind eye, and let the courts and elected officials run roughshod over them.

Kudos to Rep. Chabot for taking a step to push back against the erosion of property rights protections.

As cities spread into surrounding territories, roadways clog, pollution increases, social inequities expand, and the costs of municipal services like sewers and the police rise. Or do they? University of Toronto economist Matthew Turner and his colleagues decided to quantify one component of change: urban sprawl. They compared satellite images of the entire continental United States in 1976 and 1992, the most recent year complete data were available, and divided the country into 8.7 billion 98-foot squares to examine the question in unprecedented detail.

Predictably, the photo evidence revealed that America has grown: Nearly 2 percent of the country was paved by 1992, for example, a third more than in 1976. Not so predictably, the percentage of growth that is sprawl is not increasing. "Although there is more development, on average, that development isn't any more scattered," Turner says. In other words, modern American cities are really just bigger versions of older American cities.

Turner's observations of individual cities are also surprising. Miami, for example, is about a third more compact than either New York or San Francisco, while Pittsburgh sprawls more than even Atlanta or Washington.

Discover article here, including satellite images that show most new growth has been contiguous with old growth.

And how about reflecting on this bit from the article: Nearly 2 percent of the country was paved by 1992.

That’s even less than the 5 percent figure used by Ed Glaeser and Matthew Kahn in this study.

Related: LA Not Sprawl Poster Child, After All

For years his rallies and platitudes helped keep Wal-Mart outside Chicago, but now the biggest box has opened its first store inside city limits. And even though Rev. Pfleger has said that Wal-Mart jobs are “slave jobs” thousands of jobseekers showed up to be “oppressed.”

More than 15,000 people applied for the nearly 400 jobs at the store, said Ed Smith, the store's manager, adding that 98 percent of the employees live in the neighborhood. He said the lowest paid employees make $7.25 an hour, something only two workers earn.

(Another one for the “Don’t these people realize they’re being oppressed” file.)

A summary of the long saga that eventually led to opening day in Chicago:

Wal-Mart Stores Inc. started looking at Chicago five years ago and proposed two stores. Zoning changes were approved for the West Side store in May 2004, but plans for a South Side store were abandoned when aldermen refused zoning changes there.

In January, Wal-Mart instead opened a store literally across the street from the city limits.

Then in July, the City Council approved an ordinance that would have required the biggest retailers to pay employees at least $10 hourly _ plus $3 in fringe benefits _ by mid-2010. Mayor Richard Daley vetoed ordinance, and aldermen were unable to override his veto.

Article here.

Those gay-video-selling hippies from Bentonville are at it again. They're always forcing big companies to accept smaller profit margins and then passing on the savings on to their Average Joe customers.

Now the issue is prescription drugs:

Wal-Mart, the world's largest retailer, plans to slash the prices of almost 300 generic prescription drugs, offering a big lure for bargain-seeking customers and presenting a challenge to competing pharmacy chains and makers of generic drugs.

The drugs will be sold for as little as $4 for a month's supply and include some of the most commonly prescribed medicines such as Metformin, a popular generic drug used to treat diabetes, and the high blood pressure medicine Lisinopril.
…
Analysts said consumers will save an average of 20 percent and up to 90 percent in some cases.

Article here.

Related: Progressive Wal-Mart--"Brokeback" Edition

Related: Progressive Wal-Mart

Facing criticism that city building permit officials gave special treatment to politically connected applicants, the Los Angeles Building and Safety Department announced Tuesday that it is drafting new standards to ensure that all members of the public are treated the same.

Mayor Antonio Villaraigosa requested the action in response to a Times report that dozens of construction projects sought by political insiders had been assigned to a little-known "case management unit." The unit is designed to speed the permit process, saving applicants time, bureaucratic frustration and money.
…

The Times last month reported that the department had given special treatment to projects sought over the last year by dozens of insiders, including nine current and former city commissioners and donors to the mayor and City Council.

…

Building and Safety officials have repeatedly denied that department decisions are influenced by whether an applicant is a city commissioner or political donor. And at Tuesday's commission meeting, Adelman emphasized that he was acting only because of the mayor's request.

…

The Times report also raised concerns among City Hall watchdog groups.

Tracy Westen, chief executive of the Los Angeles-based Center for Governmental Studies, said it is not fair that the average resident has to navigate red tape to get a permit, while the politically connected are assigned a case manager who calls a meeting of representatives from all involved departments to expedite approval of projects.

Article here.

We don't often see the human toll subsidies take, but this article in the New York Times does a pretty good job. Suicide among farmers in India is at record highs, and a large portion of the despair comes from high debts incurred to keep farms going. One culprit is subisides to US agriculture that discourage importing lower cost products from nations such as India.

Though the crisis has been building for years, it presents an increasingly thorny political challenge for Prime Minister Manmohan Singh. High suicide rates and rural despair helped topple the previous government two years ago and put Mr. Singh in power.

Changes brought on by 15 years of economic reforms have opened Indian farmers to global competition and given them access to expensive and promising biotechnology, but not necessarily opened the way to higher prices, bank loans, irrigation or insurance against pests and rain.

Mr. Singh’s government, which has otherwise emerged as a strong ally of America, has become one of the loudest critics in the developing world of Washington’s $18 billion a year in subsidies to its own farmers, which have helped drive down the price of cotton for farmers like Mr. Shende.

After the 9/11 terrorist attacks in New York, many people wondered if the World Trade Center would be rebuilt. We discussed this and other issues in a short policy paper discussng the future of cities.

The Twin Towers comprised 9.5 million square feet of office space. The entire WTC complex consisted of about 30 million square feet, and about 13 million (40 percent) were destroyed in the attacks. At the time, we noted Manhattan already had a surplus of office space, and that the market would unlikely replace it all unless there were significant subsidies.

Well, the newest proposal for