Example:
More city planning isn't the answer
By Peter Gordon
Land-use planning in L.A. has become highly politicized. We know that the city's expensive process for approving new construction has crimped housing supply and pushed up home prices. The "housing affordability crisis" has been the result. Recent research by the U.S. Department of Housing and Urban Development shows that the average cost of excessive regulation on one new dwelling was $11,910, or 4.8% of the average cost of a new home in the U.S. in 2004.
And there has been little to show for it. Policymakers have not succeeded in "getting people out of their cars," nor have they had much effect on how we live. People have a better sense than politicians of the trade-offs that work for them. More than 90% of post-2000 population growth in the U.S. has been in the suburbs. For the most part, it is a story of jobs moving to where people want to live rather than the other way around. That is the way the market keeps traffic from getting worse than it already is. It is the safety net in a world where pricing of highway access is still seen as exotic, sinister or both.
"Sprawl" is a vague and pejorative label, and most commuting is in fact suburb-to-suburb, which is a lot better than suburb-to-central city -- an outdated idea to which some still cling. Equally unfounded are other "visions" paraded by planners and politicians. Do any of them really know what the "best" densities ought to be at the myriad locations throughout Los Angeles? How can they know this? Where is the science?
People think there are some principles of land-use planning that should be followed. But neither you, me nor any number of commentators know the details. Only the market can manage such countless details; there is no known alternative.
Lifestyle choices and the demographic composition of our population are ever-changing. It is the job of builders to figure out how to respond, and those who get it right make sales and money. Those who get it wrong suffer losses and end up in another line of work. The only thing that stands in the way is politics. When politicians get involved, as they increasingly want to do, the process favors large and well-connected developers. Politicians get campaign contributions and developers get approvals. Competition, consumer choice and economic efficiency are reduced. Local communities often turn to NIMBYism because they do not trust the deals that are made in City Hall.
On an almost daily basis, we hear an unbelievably naive discussion that presumes politicization of development is benign and that such politicization has something positive to contribute. Central planning always fails because neither is true.
Innovation occurs when and where it is allowed to occur. The idea that fine-tuning by politicians can be helpful is far-fetched. Once our leaders fix the potholes, we can realistically discuss whether they are ready and able to move up to grander tasks.
Peter Gordon is a professor of real estate economics and public policy at USC.
More city planning isn't the answer
By Peter Gordon
Land-use planning in L.A. has become highly politicized. We know that the city's expensive process for approving new construction has crimped housing supply and pushed up home prices. The "housing affordability crisis" has been the result. Recent research by the U.S. Department of Housing and Urban Development shows that the average cost of excessive regulation on one new dwelling was $11,910, or 4.8% of the average cost of a new home in the U.S. in 2004.
And there has been little to show for it. Policymakers have not succeeded in "getting people out of their cars," nor have they had much effect on how we live. People have a better sense than politicians of the trade-offs that work for them. More than 90% of post-2000 population growth in the U.S. has been in the suburbs. For the most part, it is a story of jobs moving to where people want to live rather than the other way around. That is the way the market keeps traffic from getting worse than it already is. It is the safety net in a world where pricing of highway access is still seen as exotic, sinister or both.
"Sprawl" is a vague and pejorative label, and most commuting is in fact suburb-to-suburb, which is a lot better than suburb-to-central city -- an outdated idea to which some still cling. Equally unfounded are other "visions" paraded by planners and politicians. Do any of them really know what the "best" densities ought to be at the myriad locations throughout Los Angeles? How can they know this? Where is the science?
People think there are some principles of land-use planning that should be followed. But neither you, me nor any number of commentators know the details. Only the market can manage such countless details; there is no known alternative.
Lifestyle choices and the demographic composition of our population are ever-changing. It is the job of builders to figure out how to respond, and those who get it right make sales and money. Those who get it wrong suffer losses and end up in another line of work. The only thing that stands in the way is politics. When politicians get involved, as they increasingly want to do, the process favors large and well-connected developers. Politicians get campaign contributions and developers get approvals. Competition, consumer choice and economic efficiency are reduced. Local communities often turn to NIMBYism because they do not trust the deals that are made in City Hall.
On an almost daily basis, we hear an unbelievably naive discussion that presumes politicization of development is benign and that such politicization has something positive to contribute. Central planning always fails because neither is true.
Innovation occurs when and where it is allowed to occur. The idea that fine-tuning by politicians can be helpful is far-fetched. Once our leaders fix the potholes, we can realistically discuss whether they are ready and able to move up to grander tasks.
Peter Gordon is a professor of real estate economics and public policy at USC.
