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Poor land use in the world’s greatest cities carries a huge cost (economist.com)
158 points by brendannee on April 1, 2015 | hide | past | favorite | 146 comments



I may live in the densest neighborhood of any HN participant: North Battery Park City [1] in Lower Manhattan. As an example, my son's 500 kid elementary school serves 9 buildings.

And I'm here to tell you, the future feels great. Specifically, living vertically has all sorts of wonderful aspects in terms of community (the kids can trick-or-treat without leaving the building), access to resources (my kids can ride the elevator barefoot to the waterpark out the back door in the summer) and environmentally (we live in the first LEED platinum residential building in the US).

The only problem is that it is expensive, and it doesn't need to be as expensive as it is. Building lots more residential skyscrapers, eliminating parking minimums [2], and reducing the incentive to warehouse vacant lots through land taxes or similar can all make New York City even more livable than it already is.

[1] http://en.wikipedia.org/wiki/Battery_Park_City [2] http://www.streetsblog.org/2012/03/21/report-details-how-one...


You don't even need to live in the future to have a very high density. Paris proper has a density of 50000/sqmi yet has simply and literally banned high rise buildings. There are 2 districts with a number of these (although low by manhattan standards, culminating at 100m) but they are relics of the 70s and none has been built since then.

What is probably the greatest advantage of very dense cities is that you can have a really great public transportation network. While the farther suburbs cruelly lack transportation, Paris proper is tightly covered, with the great majority of residents having less than 500m to walk to get to the subway (and some lines have stops every 200m).

In these conditions a post-car society truly is possible and we're slowly but steadily getting there, with streets being closed to cars one by one, and parking spots being removed by the hundreds month after month.


It should be noted that Manhattan is a lot denser than it is on paper. It's daytime population is more than double its residential population. Midtown Manhattan on a weekday probably has several hundred thousand people per square mile, rather than the 70,000 per square mile nominal density of the island.


Bingo. There are a ton of people who live in the other boroughs, New Jersey, etc. that commute into Manhattan for work every work day and even on the weekends for fun.


High density doesn't always equate to pleasantness though. It still has to be done right to be livable.

I spent last year living near Columbus Circle (the southwest corner of Central Park in Midtown Manhattan) which is probably equally dense as Battery Park, and didn't care for it much primarily due to its mixed use. The population density is quite high there, but it is mixed in with office buildings that suck the character out of the area. In particular, returning there at night didn't feel like "coming home" to a neighborhood. We've since moved to a neighborhood that is almost exclusively residential (but still dense) and the difference in character and livability is very noticeable.

High density if not done right also can have a negative psychological impact (tall buildings means less sun), constant crowds might mean less chance to destress, no greenery, etc.

The point is, density isn't the only requirement, it has be done right, so practicing a bit of restraint in allowing building might make sense.


And the density of someplace like Manhattan has inherent characteristics that aren't to everyone's taste. I enjoy visiting there (a lot) but I lived in Manhattan one summer. It was a while ago when aspects of Manhattan were admittedly less pleasant than today. And I was an intern while in school so I didn't have a lot of money to spend. And it was summer. But I remember that by August I was calling up friends in Greenwich and Princeton to inform them that I WAS coming to visit them for the weekend :-) I just have to get out of the city.


Interesting. Mixed use is often touted as a way to reduce dependence on cars and promote local economy.


Depends how you do it. I live in a mixed use neighborhood, with lots of shops and stores and it's great.

Likewise, downtown montreal is pretty interesting. As a pedestrian, there are plenty of things for you to do at street level, while people live and work above.

Versus downtown toronto, where there's little for pedestrians to do in much of downtown. You don't see nearly as many people walking around.


Indeed. If density is paramount, we can cram everyone in a 1km^3 box. http://waitbutwhy.com/2015/03/7-3-billion-people-one-buildin...


At least for Greenery, Singapore does a great job of this.


Yep. I landed in the Upper East Side in a small apartment with bad lighting - the main window faced a building. The way it was built, I saw into my next door neighbor's kitchen and bedroom. I was really depressed that whole first winter cause of how cavelike my apartment felt.


What's odd is that Manhattan's population density has on a long timescale been declining rather than growing, despite quite a bit of construction. In the 1900 census the population was 1.85 million (density ~80,000/sq mi), and it reached its peak of 2.33 million (~100,000/sq mi) in the 1910 census. Since then it's on the way down, with some bumps here and there: 1.96 million (~85,000/sq mi) in 1950, and all the way down to 1.54 million (~70,000/sq mi) by the 2000 census, having lost a full 1/3 of its population since 1910. The 2013 census estimate does put it at least on a growth trajectory again, to 1.63 million, but it'll be a while before it climbs up past 2 million again at that rate.

The main reasons, as far as I can gather, seem to be: 1) lower-class residential towers are being replaced by higher-end residential towers with larger units and fewer people per sq ft; 2) even given the same units, people are living fewer to a unit (fewer children, fewer multigeneration households); and 3) commercial real estate is crowding out residential real estate.


Here's a great illustration of the falling density in Manhattan from 1910 to today: http://www.vox.com/2014/9/23/6832975/manhattan-population-de...


Interesting...based on that illustration, it seems like #2 is the dominant factor. The areas of previously highest density are the Lower East Side and East Village, formerly working-class immigrant enclaves with more tenements than highrises.


I don't know that Manhattan, either in the geographic sense or real estate broker sense, is a great unit of measure for urban planning / comparison purposes.

There are parts of even Manhattan south of 14th street that have longer commutes to Wall Street than parts of Brooklyn or Jersey City.

Yes, Manhattan doesn't contain very many high density lower-middle-class immigrant neighborhoods anymore, but NYC still very much does. I'm not sure which side of the river they are on matters much.


I suspect that the actual density in terms of average people present per square km is increasing (as opposed to the number of people living there on paper). Especially during working hours.

Tons of people commute in. Competing with the businesses that use the space for commuters is expensive


In terms of #3, anywhere developers can build residential, they will. Rents & prices on residential are much higher. Unfortunately Manhattan zoning prevents residential in large parts of the city. I believe that is why there are so many hotels going up in the 20s/30s on the west side, when that is someday rezoned it will be easier to convert to residential than offices would have been.


The garment district (the 20s/30s on the West Side) is zoned industrial. Hotels are legal in industrial zones, but apartments aren't, so hotels get built.


That and overcrowded tenement buildings full of fire hazards going away helps push down density, but in this case for the better.


> And I'm here to tell you, the future feels great.

While the future may feel great to you, most New Yorkers would agree that Battery Park City does not feel like New York. That may be good or bad depending on your perspective.

And just in case, you think I'm here to knock you, I'll leave you with this Abraham Lincoln quote:

I like to see a man proud of the place in which he lives.


For single people moving to NYC, Battery Park City would be the last place I recommend (I would look at NoHo, North Williamsburg, and Bushwick). But if you have kids, it is a great option.


> Land taxes are efficient. They are difficult to dodge; you cannot stuff land into a bank-vault in Luxembourg. Whereas a high tax on property can discourage investment, a high tax on land creates an incentive to develop unused sites. Land-value taxes can also help cater for newcomers. New infrastructure raises the value of nearby land, automatically feeding through into revenues—which helps to pay for the improvements.

+1000

Living in West Oakland next to a vacant lot, I think there's a lot of merit to this idea. As it stands right now, there's no harm to the owner of that lot to just let it lay vacant for a decade. If it cost the owner some money, people might actually do something with these kinds of lots.


I should point out that a tax to promote efficient use of land surface area should not include the value of improvements to the property.

Most municipalities in the US tax property based upon assessed market value, which discourages more efficient use of land. If you knock down your single-family house and erect a multistory condo, the value of the improvement will swamp the value of the land, and you will be punished with much higher property tax.

Georgists (http://en.wikipedia.org/wiki/Georgism) explored the probable effects of land taxes extensively, though I don't agree with the premises of their reasoning.

For one, Henry George drew the supply curve for land as a vertical line, to reflect the idea that you can't make more land. But different areas of land have different suitability for any given purpose. It is true that you can't increase the surface area of the Earth, but you can still rank every hectare by how much effort it takes to reach it from the center of global trade. The economic projection of the world map is basically one huge ocean in the middle, a ring of port cities around it, roads and rivers spreading outward from there, and deserts and wilderness way out at the edges. Those peripheral lands are the ones that get used last, when land prices are highest, and that's why the supply curve for land is not vertical.

Besides that, it is difficult to separate the value of the land itself from the improvements on it, or even the improvements near it. Is it just for you to be taxed more when someone else builds a train station near your house? I think the way to levy a land tax that is least susceptible to abuse or political manipulation is to calculate it based purely upon surface area. A hectare in the furthest backwater of the jurisdiction is taxed at the same rate as one in the busiest urban center.


But a hectare in an isolated backwater has less value than a hectare in an urban area.

The land-value tax boils down to a tax on the site-value of land, which necessarily has to account things like proximity/distance to commercial centers.


That's why a land-value tax discourages inefficiency in land use to a lesser extent than a land-surface-area tax.

You generally want people to increase their density, because that makes it possible to provide more efficient services with a distance, area, or volume component less expensively.

Electrically-powered commuter trains are more efficient movers of people than automobiles, but the capital requirements are such that you need a minimum population density to run the train profitably. The commuter train increases the desirability of property near the stations. Taxing that value discourages use of the train.

A hectare in the country is the same area as a hectare in the city. Land value usually has an inverse relationship with population density. You could either tax based on area alone, or try to cancel the value effect of increased density by dividing the land value by the density of the census tract.


Maybe high taxes on land area would encourage densification if they were sufficiently high, but I suspect the prices necessary would cause problems in other areas. Like taking arable land out of agriculture because the land is taxed at the same level as a dense urban business district. If the land taxes are high enough to discourage suburban housing versus urban housing formats, the farms would be taxed at the same rate, which would be ruinous.

The problem with a flat tax on land is that it provides no incentive to allocate land to the most productive uses. A flat land tax sufficient to encourage low-density suburban areas to convert to medium-density urban areas might still be low enough to permit vacant lots in high-density areas.


> The problem with a flat tax on land is that it provides no incentive to allocate land to the most productive uses.

What?! It provides a direct incentive in the form of $/hectare-year. If your use of the land does not earn at least that amount, you lose money by owning it. If it does, the relative burden of the tax decreases as you make your use of the land more efficient.

A dense urban business district is incontestably a more efficient use of land than an agricultural field. If any land is removed from cultivation because the crop yields cannot support the tax, then the land with the lowest yields, and therefore least suited for agriculture, will be abandoned first. Those lands might be better suited for other purposes. In that sense, the tax is working exactly as expected.

And that farm-use consideration is vital for keeping the tax low. The government cannot use that tax to squeeze any particular type of person without devastating agriculture. If you try to use a tax as a sledgehammer rather than a speed bump, you end up with all sorts of nasty unintended consequences.

If you need a sledgehammer, you can simply write a zoning law that effectively abolishes new low-density residential neighborhoods. Or you could use eminent domain to take vacant urban lots. But those are going to cost a lot more money and public goodwill than a uniform tax on land surface area.


Out in the grassland, 50 miles from any existing center, a farmland is indeed a more productive use of the hectare than paving it over and building an uninhabited-but-dense urban center there.


You're making an invalid comparison.

The owners of the land will be considering alternative uses for their land by how much additional revenue they could produce.

If the owner of a hectare of remote farmland decides to do something else with it other than tilling it as a flat field, it is far more likely to be building greenhouses, or burying drainage tile, or installing center-pivot irrigation and planting windbreaks, or just changing to a higher-margin crop rather than something like erecting a mid-rise AAA office building. Even building a vertical farm is unlikely.

If the hectare is in the middle of the fastest-growing city in the state, selling out or converting to a different use is increasingly likely, as the marginal increase in revenue over the marginal cost of making the improvement rises.

Consider also that a hectare in the suburbs is likely not directly producing any revenue for the owner at all. Its worth is almost entirely derived from opportunity costs. The owner of that land might decide to grow a vegetable garden in response to a tax, or raise rabbits or chickens in the back yard. Or they might decide to lease their mother-in-law apartment in the basement or garage. or they might just work a little harder elsewhere to pay the cost of not improving their land.


I don't wish to be confrontational, but in my view, taking other people's property without their voluntary consent is wrong.

As I understand the last paragraph of your comment, you wish to see the owner of the vacant lot forced into a situation where he had to act in some way other than how he currently chooses to act.

In other words, you want to substitute your judgment for his, when it comes to the use of his property.

Again, I don't mean to be confrontational, but this is how I see the situation.

How do you see it?


That the value of land is substantially based on the environment around it, one that is largely driven by societal factors. 1 acre of land in Manhattan is extremely expensive. 1 acre of land 20 miles north of Manhattan is not expensive. The difference is everything surrounding the land.

If the people in a community have decided to spend a lot of their money to reduce crime, improve transit, improve schools, and improve the economy, every land owner benefits. Yet the way that we do taxes (based on the improved value of the land), means that those that sit on the sidelines and do nothing gain quite a bit of value by freeloading on those around them.

If we figured out the taxes based on the underlying value of the land, then the vacant lot owner would be paying as much as the person that just invested in building a new business next store. That seems fairer to me considering that the vacant lot is now worth more due to its proximity to a shiny new building.


I suggest that the underlying value of the land is zero, or so close to it as to be statistically insignificant. The market value of land is overwhelmingly dominated by proximity to improvements. If you subtract the value of improvements on the land itself from the market value, you are still left with the value of being near the improvements on all surrounding properties.

The true underlying value is the value it would have if you picked up the land with a god's hand and plopped it down in the middle of nowhere, in a land devoid of people and far from roads or rivers. Does it have valuable natural or mineral resources on or under it? Does it have energy production potential? Fresh water? Historical significance?

No? It's worth zero. People drive the economy. Land only has value to the extent that it does not present barriers between you and your trade partners. No one wants to live atop the mountain if the funicular is not built. No one wants to live across the lake if there are no boats, docks, and piers. No one wants to live deep in the forest if the road into it has not yet been cleared.

How then do you calculate a land tax fairly? Surface area alone? Population density data from the census?


Actually it isn't that hard. The land value is simply the property value minus the value of the depreciated physical capital (buildings etc.) on it (LV = PV - K). This calculation is already done in the market in order to determine the size of a home owners insurance policy. Property tax values aren't ideally precise, but are already common enough that replacing them with and land value tax wouldn't greatly impact tax code precision.

To address your more general critique, it might be better said that you are paying a location tax as opposed to a land tax. Specific locations have particular value and until we develop hand of god technology, putting multiple units of land in a given location will be impossible. So land vs. location is really just a semantic difference.


You either didn't read my entire comment or chose to talk past it. I said that the result of your calculation (LV = PV - K) actually still includes the value of improvements adjacent to or near the property. The value of some improvements bleed across property lines.

As such, that result still represents the improved value of land.

Roads increase the value of lands adjacent to the road, even if they are not on the land itself. Parks and greenways increase the value of land within a certain distance. Schools increase value. Shopping centers increase value. Police stations, fire protection stations, restaurants, theaters, museums, public transportation, and other improvements all affect the value of living near those improvements. There is even some value in living next door to an expensive-looking house rather than a shabby one, or an abandoned, empty lot.

I contend that if you factor out all those improvements-by-proximity--if you erect a magical barrier that prevents all human influence from passing it--the inherent value of a hectare in a city or suburb is about the same, or perhaps less, than a hectare in the middle of a cornfield--a field without an irrigation system, and far from any roads.

For the most part, the inherent value in land is as a place to put the improvements.

A location tax does not encourage efficient land use (by discouraging inefficient use). It discourages living closer to other people, which itself is a more efficient use of land. When home is where you hang your hat, people gather around the hatracks. As long as you are taxing desirable location rather than land area, you are addressing the movement of the people rather than the use of the limited resource.

If high-density housing is a more efficient use of land than low-density housing (a rhetorical conditional), then it is counterproductive to tax people for being closer together in more efficient cities, rather than less-efficient suburbs.


Thank you for your comment, and for obviously being concerned with issues of fairness.

If a person makes an investment, and that investment goes up in value, even substantially, and even with no additional effort on the part of the investor, does that justify others taking some or all of the resulting value?

If I bought stock in Apple years ago, because I thought it was a smart thing to do, and I simply held the stock, should other people get a cut of my gains when I sell?

What if the stock goes down? Am I then entitled to someone else's gains?


Stock is different. Your stock certificates in Apple don't increase or reduce the value of other stock certificates you own just by their proximity and configuration.

To put it another way, if you own common stock, and later develop some of it into preferred stock, does the value of your remaining common stock also go up? If you have shares of Microsoft also, and those certificates are next to the Apple stock in your safe, does your Microsoft stock benefit from its proximity to Apple stock certificates rather than, say, Hewlett Packard? Suppose someone else places some of their Facebook stock in a safe next to your own. Do they benefit from their proximity to existing Apple stock? Do safes full of penny stock drag the value of your Apple stock down?

The fact that something is real property means that it has a direct impact on other peoples' property around it, especially in how it is developed(or not). I would say that there is an argument to be made for deincentivizing sitting on land as a "real estate investment" without using it to benefit the neighborhood it sits in.


Thank you.

You write that there is an argument to be made for discouraging sitting on land as a real estate investment, without using it to benefit the neighborhood that it sits in.

Let's say that you are right, that there is such an argument to be made. In other words, the neighborhood in which the property resides would benefit from some improvements to the property in question.

In this case, why should the affected parties not try to work together to accomplish it?

For example, if I own a vacant lot in the middle of a neighborhood, and my neighbors want to use the land for a park, I'd be happy to discuss selling some or all of it to a neighborhood association.

On the other hand, if the neighbors are going to get together and petition the local city council to confiscate my property, say through eminent domain, that seems like an unreasonable intrusion on property rights.

I understand that people want things. However, I think we'd all be better off it we sought to work things out through voluntary cooperation and free trade – in an environment where individual rights are respected – rather than empowering politicians to pass laws that grant special favors to certain groups.


You're basically arguing against property taxes or capital gain taxes entirely. Our existing property taxes are measured against the improved (built-up) value of the land. An alternative would be property taxes against the unimproved value of the land. The latter are often called "land taxes".

I personally think land taxes are better than as-built property taxes because they encourage investment. If you assume that lower taxes are an incentive, we currently are giving land owners an incentive not to invest in their property. Society as large actually wants land owners to invest in their properties.

If you want to argue that land owners shouldn't be taxed at all, fine, but they are currently being taxed.


Yes, I am arguing against taxes. I'm against taking things by force from other people, which is what taxation appears to be, as I understand it.

You are correct, of course, that land owners are taxed.

I don't expect to live to see the day when most people realize that initiating force against others is counterproductive. But I do think it's helpful to look into the essentials of things.

Thank you for a good discussion. It has helped me to clarify my own thinking.


Your argument conveniently overlooks the role of force in the establishment and maintenance of property rights.

Without the state (or society, if you prefer) exercising, or threatening, the use of force against people who would otherwise infringe on your property rights, your 'ownership' of your land is worthless.

So it follows the state (or society) expects something in return, as your exclusive use of your land is necessarily a cost to the rest of society.


Thank you for your reply.

Yes, I understand that people look to the state to protect property rights.

Unfortunately, it seems like we have not yet avoided the situation where the state itself becomes a frequent and massive violator of property rights, and people's individual rights in general.

Perhaps we will someday discover other ways in which the protection of individual rights can be accomplished.


I went into a Burger King and asked for a Burger. They generously provided said burger, but then asked that I provide them with money. I told them that I appreciated their burger, but that I would not be providing them with any money at this time. When they told me that I didn't have a choice, I was outraged and offended! How dare they try to take something from me unwillingly! I immediately called the police and informed them of the harassment that I was undergoing. But the police also demanded that I give up my money! This is why the government is corrupt! It should be _MY CHOICE_ as to when and how I give out my money!


If I buy something from a criminal gang that took it from another person by force, do I have a natural right to own it? What if I buy it from a shopkeeper who got it from such a criminal gang?

Does my right to it outweigh society's interest in using a portion of its' value to repair the effects of the gang's activities?


1. Yes, that's what capital gains taxes are

2. No, but you can use the losses to offset future gains without paying tax (you aren't penalized for an asset depreciating then re-appreciating)


> If I bought stock in Apple years ago, because I thought it was a smart thing to do, and I simply held the stock, should other people get a cut of my gains when I sell?

They already do, indirectly, through cap gains taxes


I think land has probably the least defensible claim to inalienable property. You didn't create it, it'll be here long after you're dead. You have it because the government stole it from a bunch of Indians by force, and it's only the government's continued threat of force that allows you to preserve your claim on it.


To expand on your post:

I've noticed that anti-tax and anti-government folks tend to focus on rights that are "natural", yet it seems to me that, if we accept the notion that the "naturalness" of certain rights is both real and a measure of their value, the right to broad access to most land currently held as private is more "natural" than the right to buy far more land than one can personally use while preventing all others from using it in any way, unless (maybe) they pay you for the privilege.

The fact that money changed hands and some papers were signed seems irrelevant to the "naturalness" of exclusive access to land, to me—then again, I consider concerns over and arguments revolving around "naturalness" to mostly be a distraction when it comes to figuring out which freedoms I'd prefer to preserve over which others, so maybe I'm a bad judge of these things.


Where did the land owner get the land? In a great many places (such as North America), it was stolen in the not so distance past and a great deal more rudely than taxation.

If that act is justified as taking under utilized resources then we are certainly justified in using the more mild pressure of taxation to fix an obviously broken system.

Maybe the best idea rather than the impossible task of finding the true owner to create policies that make the world a less effective place, we should tweak land ownership patterns in the interests of efficiency and maximization of net wealth or quality of life.

> In other words, you want to substitute your judgment for his, when it comes to the use of his property.

It is not unambiguously his property and when there is grotesque under or mis-utilization, yes another judgment is desperately needed such as taxing the owner to compensate for the loss the rest of us are carrying until that loss stops.


Everybody who owns property does so in a specific legal context, including taxation. The long-term value of that property certainly depends on the stability of that context.

But taxation policy is something that people talk about all the time, to nudge people to do one thing or another, whether it be to save for retirement or whatever. Taxes on externalities are certainly a better way of handling things than explicit regulations, for example.


All laws govern our actions in one way or another. No law is totally free from imposing or preventing a specific action.

As for "taking other people's property without their voluntary consent," yes, from one private citizen to another, that is true, stealing is wrong.

Extending that idea to cover taxation is also wrong; taxation isn't stealing. Taxation is paying the bill you incur by living in a place with a government that provides you with a wide variety of services.


Well yeah of course I want the owner to be forced to act in a way other than what he chooses because the way he chooses to act affects me negatively. That's why we have laws.

There are any of a number of things the owner could be doing with the property. For instance, he could build an urban farm and help provide the area with more food. There are property tax incentives for doing as such, but when you're paying less than $1000 a year for property taxes why would you go to the effort? So instead of using the land for something useful, it's blocked off with a chain link fence and laying unused.


Do you think force should be used whenever someone else's actions affect us negatively?

I agree, there are many things the owner could be doing with his property. I see that as entirely his choice, as long as he is not violating the rights of others.

Could you perhaps try talking to the owner of the vacant lot? Maybe you and he (or her) could find a good solution to the problem you perceive.


>taking other people's property without their voluntary consent is wrong.

Knock! knock! Oh Hi Mexico...

Toc! Toc! Hola Ohlone Native Americans...

Possession is nine-tenths of the law. The law is man-made.


I agree, the law is man-made. Seemingly, it is made by men and women who do not care much, if at all, about what is actually right or wrong, what is to the interest of the citizens and what is not.

What is actually right and wrong, in my view, is based on the nature and requirements of human life.


If you are looking for sincerity and fair-mindedness few people would advise you to look first among politicians.

All human government is an attempt to manage human wickedness. If we were not wicked we would need no laws.


The harm for the owner in leaving the lot vacant for a decade is opportunity cost. If he is in a valuable spot, it would be advantageous to sell and just do something else with the money.

Imagine high land taxes in the middle of the desert. Is it an incentive to build? Quite the contrary.


This is the point of land-value taxes rather than simple land taxes. https://en.wikipedia.org/wiki/Land_value_tax

The site-value of unoccupied desert is pretty low, so the land-value taxes on it would be low, which gives incentive to build there rather than elsewhere. Whereas an empty lot on valuable real estate in the city would face not merely the opportunity cost but also a high land-value tax.

A lot of tax policy in John Locke and Henry George's day was about getting "unused" land into "productive" uses.


But the point was that the vacant lot was somehow "free" to the owner. It's not, he is sacrificing any value he might get by selling it.

If someone sees a better potential use of the land (able to get more value out of it), he can propose to buy it at a higher price.

A land-value taxes is just a multiplier of the opportunity cost, but without any real economic foundation (no one is proposing to buy the land at a higher price).


It's correcting the common market failure of humans undervaluing opportunity costs. The economic foundation is behavioral economics, or maybe a more advanced model of rational actor economics which takes into account the often high cost of measuring opportunity costs.


All value is determined by humans; you can't say that humans undervalue something. That simply doesn't make sense.

What you can say, however, is that humans prefer the statu quo. (Or as you would say, the cost of measuring opportunity costs.)

Any transaction need to provide at least some additional benefit to be considered worthwhile.

For example, I won't sell you my car for only 5% over the market value because it's not worth it for me.

You coming every day and breaking a mirror, a whipper, or steeling a wheel would not correct any economic calculation 'error'.


I think the parallel to draw here is inflation. The Fed sets interest rates low to encourage people to invest or spend their dollars instead of sitting on them. If you have cash in a savings account it loses about 3% of its value year over year.

I see land-value tax as the same economic mechanism applied to vacant lots. There should be some penalty to sitting on land and simply watching its value accrue. Why aren't we treating the land crisis like a deflationary spiral currency crisis?


Maybe that's a good idea: multiplying the opportunity cost ends up punishing the people who hold valuable land and don't develop it. The more valuable the land, the greater the punishment. That seems exactly what you'd want to do to encourage that West Oakland lot to get developed.


But why do you even want to punish? There's already a cost associated with doing nothing with the land! Why do you consider it's not enough?

Imagine a world where if you take a day off (or just slack off). You not only don't get paid, but also receive a negative salary because 'punishment'. The punishment would also be proportional to the salary of comparable individual (not you, other people). The more they work, the more you must pay for not working in addition of not getting paid.

All this in the name of maximizing your contribution to society... How would you feel about that? Wouldn't you say that 'not getting paid' is plenty already?


^ I agree.

In general I dont understand why people think that government must act (that too via taxation) when they are not getting what they think they are entitled for. None of us are entitled for any cheap land. If someone is spending his own money and hoarding it I have no business complaining about it either.

Hoarding of natural resources is actually well studied and theorized concept in economics and is best explained by using the example of Oil. We all know that as time passes by Oil supply will only go down. But does that necessarily imply that prices of Oil will shoot through the roof ? Not necessarily. Any Oil producer will reduce the supply today if he thinks it can fetch him more value tomorrow. But more he hoards, the future availability goes up and hence the expected prices of Oil in future go down. This is a fine balance that all the people in this business understand and play accordingly. Not to mention the other sources of energy compete for the price too.

Same if true for land. The reason why people keep the land unused is because they think they can get much higher value in future when the land is even more scarce. But the very fact they keep the land vacant ensures supply of land in future and/or at sufficiently high price. If somehow the person if forced to sell of his land today, whatever reduction in land prices we get today, we will have to pay it back in future by even higher real estate prices.


Whether you work or not doesn't cost me anything. But if you're hoarding a natural resource and playing games with the supply then you're costing me in increased rents; not just for me but for everyone around me. Your actions are creating a negative economic externality that I am not being compensated for. Extracting rents is a form of theft from society; a diffuse and difficult to trace theft but real, damaging and if allowed to continue unchecked a threat to the stability of society.


Well, it operates in a different way from opportunity costs, which could counteract a "pushing on a string" effect.

And perhaps for many properties in the mid-range of site value, the opportunity cost is masked by high information costs, which a land-value tax could make more clear.


Land is leverage-able, at low interest rates (think mortagage at 1-2%).

So, if he believes that the value of a certain area will increase by 50-100% over the next decade, and he can borrow against it for cheap, it actually wouldn't be advantageous to sell it.

If land taxes would be higher, he would probably sell it.


>Imagine high land taxes in the middle of the desert.

Can't build something more profitable then the land taxes? Then sell it, or give it back to the state.


There's actually weird disincentives to building built right into the tax code:

http://www.forbes.com/sites/anthonynitti/2013/12/31/tax-geek...

It's about capital-gains tax vs income tax. Because the rates are dramatically different and the case law is so convoluted, people who hold land as an investment don't touch it.

If they touch it in the wrong way, the sale of that land is taxed as regular income instead of capital-gains. In America, regular income tax is DOUBLE capital-gains tax.


That is very shallow logic. If there is a land tax, any product or service that uses land will become more expensive for everyone. Whatever gain in productivity we might get by making vacant lands usable will be simply negated by the loss in productivity due to the land tax.

Also, taxation is meant for government to run to do its primary duties and not affect the market forces.


>Also, taxation is meant for government to run to do its primary duties and not affect the market forces.

I don't think this is the case for every tax. Look at the different carbon tax systems. This is a tax to try to drive the market towards greener solutions/products.

I guess an argument could be made that the tax is a way to quantify damage to the environment done and the money it's going to take to repair it, but I don't think that's the way most people see it.


I dont agree with any logic behind the carbon taxes however, there is good case for taxation in case of pollution. The key problem with pollution is that no single person owns the air or water bodies and hence no one minds degrading it even thought everyone loses collectively.

This is a very hard problem to solve and taxation may not be one of those. If US government puts stronger restriction on US companies, they lose the competitive edge against Chinese and Indian who do not have to pay any such tax.


> Lifting all the barriers to urban growth in America could raise the country’s GDP by between 6.5% and 13.5%, or by about $1 trillion-2 trillion. It is difficult to think of many other policies that would yield anything like that.

And it would also reduce the real but unaccounted-for environmental and social externalities of our sprawling homogenous suburbs. Someone living in New York has half the energy footprint of the average American. And while the city is pretty segregated, the New York subway is a unique setting of rich and poor people of all races utilizing a public service together.


Yes. Per-capital carbon production is lowest in dense urban environments. Suburbia and low density rural areas are the real carbon pigs on a per-capita basis.

We need to change the wrong headed notion that dense urbanity is somehow bad for the environment. On the contrary, it's how we need to build in order to save the earth.


> We need to change the wrong headed notion that dense urbanity is somehow bad for the environment.

Dense urbanity is bad for the local environment and, particularly, for human health in it. That's the cost of the lower per-capita impact on the global environment that it provides. We need to learn from what works (and what doesn't) in both dense and sparse environments to build lower-global-impact environments that remain high quality environments for human health and quality of life.


> for human health in it.

In the US, life expectancy is higher for people in urban areas than rural areas. Urban areas have less obesity, lower rates of suicide, lower rates of accidental death, higher quality of life for the elderly, and higher rates of healthy exercise.

It's true that some studies have shown higher rates of asthma and allergies in cities, but there are also contradictory studies saying that those things are just identified and treated more aggressively in cities -- because they tend to have much better access to healthcare services.


> We need to change the wrong headed notion that dense urbanity is somehow bad for the environment. On the contrary, it's how we need to build in order to save the earth.

I'd like to see the capital/environmental costs of heavy urban development compared to electric cars in the suburbs and rural areas.

I'll drive a Nissan Leaf ($199/month) if it means I don't have to live in an urban area (I work from home).


I think a lot more goes into making urban life better for the environment than just cars. Off the top of my head I would expect the following to contribute:

Suburban heating and cooling involves larger spaces for less people (houses being bigger in the suburbs),

In an urban environment, there is a lower environmental cost for transportation and processing of food/water/other goods (fewer locations to deliver to).

In an urban environment, I would expect fewer materials are needed to maintain infrastructure (power lines, water pipes, roads, etc). Manufacturing all of these parts involves an environmental cost.

Suburban living currently almost certainly means a big lawn. Traditional green lawns are bad for the environment.

Urban communities can also centralize waste disposal and (I suspect) more easily implement recycling programs.

Finally, don't forget that an electric car is only actually better for the environment if the electricity is produced sustainably (this is mostly not the case in the US). I suspect that electric cars may actually be worse for the environment if powered by most US power plants.


> Suburban heating and cooling involves larger spaces for less people (houses being bigger in the suburbs),

Shouldn't matter as long as your dwelling is properly insulated.

> In an urban environment, there is a lower environmental cost for transportation and processing of food/water/other goods (fewer locations to deliver to).

I concede this point, although moving trucks to cleaner fuels will resolve this.

> In an urban environment, I would expect fewer materials are needed to maintain infrastructure (power lines, water pipes, roads, etc). Manufacturing all of these parts involves an environmental cost.

This is mostly a sunk cost with existing suburban and rural infrastructure.

> Suburban living currently almost certainly means a big lawn. Traditional green lawns are bad for the environment.

No disagreement, although you're not required to have a lawn. You can cover the whole area with rock or a garden (I know several people who do either).

> Urban communities can also centralize waste disposal and (I suspect) more easily implement recycling programs.

My local suburban trash service uses methane from the local landfill to power its vehicles, and in due time will switch to electric vehicles.

> Finally, don't forget that an electric car is only actually better for the environment if the electricity is produced sustainably (this is mostly not the case in the US). I suspect that electric cars may actually be worse for the environment if powered by most US power plants.

This was the point I was most interested in responding to. In all cases, electric vehicles are better than petroleum vehicles, even if powered by fossil fuel generation sources. Its much simpler to maintain emissions controls on one coal plant than 100K cars. Also, your fleet gets "cleaner" as renewables and other clean energies come online, whereas your petroleum-powered vehicles will always burn petrol for the life of the vehicle.


> Shouldn't matter as long as your dwelling is properly insulated.

I realize that neither of us are citing sources, but I'm pretty sure you are wrong about this. I don't want to spend too much more time on this response (I wrote the other bits first). So I'll leave it at that.

> I concede this point, although moving trucks to cleaner fuels will resolve this.

It could mitigate some of this, but definitely not all of it. Resources will still be spent on replacing worn parts or entire trucks in the fleet. Expending resources will always have some negative effect on the environment.

> This is mostly a sunk cost with existing suburban and rural infrastructure.

I said maintenance not construction. Infrastructure decays incredibly quickly. We are constantly replacing and upgrading our infrastructure. Power lines go down in storms. Water pipes get broken as the earth settles. Roads are repaved or rebuilt constantly.

> No disagreement, although you're not required to have a lawn. You can cover the whole area with rock or a garden (I know several people who do either).

Fair enough.

> My local suburban trash service uses methane from the local landfill to power its vehicles, and in due time will switch to electric vehicles.

Ok, but that doesn't mean it wouldn't be easier (cheaper and less resource intensive) to ramp up such services for the same number of people if those people are living at a higher population density.

> This was the point I was most interested in responding to. In all cases, electric vehicles are better than petroleum vehicles, even if powered by fossil fuel generation sources. Its much simpler to maintain emissions controls on one coal plant than 100K cars. Also, your fleet gets "cleaner" as renewables and other clean energies come online, whereas your petroleum-powered vehicles will always burn petrol for the life of the vehicle.

I seem to be thinking about completely different sources of environmental damage from you. My understanding is that 1) the majority of the environmental costs from cars actually comes from new car production, not from fuel consumption. 2) Electricity distribution is inefficient enough that it requires a disproportionately large amount of coal to power a car when compared to the petrol used to drive the car the same distance. 3) Electric car batteries are composed of materials that must be mined, which carries its own environmental costs.

For the record, I didn't downvote you. I don't downvote people just because they disagree with me. I also don't have downvote privileges on this site anyway. I'm enjoying the discussion and I hope that you are too!


You also have to consider transportation of goods/services. It's more energy intensive to get produce to 10,000 suburban residents than 10,00 NYC residents, for obvious reasons. And, don't forget utilities, runoff, water use, and simple pavement.


Someone living in New York has half the energy footprint of the average American

This is absolutely true and some of the daughter comments are missing the point; see Edward Glaeser's The Triumph of the City (http://www.amazon.com/Triumph-City-Greatest-Invention-Health...) for more details, but people in urban environments tend to drive less and drive shorter distances; they're less likely to own cars in general and more likely to take mass transportation or bike; and their overall energy usage for heating and cooling is much lower because they share those costs (and walls) with neighbors.

Everyone has to live somewhere, and every time a five to fifty story building gets blocked in a city, dozens or hundreds of high-energy-cost, detached single-family houses get built in Phoenix, Houston, Dallas, and Atlanta.


I can only find stats on carbon footprints. Somewhat surprisingly, California does very well on this statistic, despite its suburbs: it's just behind New York.

So at least for carbon footprints, those don't necessarily seem to be linked to density.

I couldn't find anything on energy footprint though.


Are you sure you're looking at New York versus California, not New York State versus California? Look up the Berkeley cool climate carbon footprint map. Most of SV is 50-90 metric tons per household per year. Manhattan is 25-40. My parents zip code, in suburban DC is 92. My zip code, in downtown Baltimore is 34. My old zip code in downtown Chicago is 37.

And unlike California, those cities require winter heat and simmer cooling. Manhattanites spend about 1/6 carbon budget on transportation as someone in say San Jose.


Maybe it's because in California you don't need as much heat/conditioning as in other places?

We humans use land extremelly inefficiently, we mostly live in places outside of our temperature optimum despite no longer being busy in agriculture.


The NY Times suggests that inefficient boilers in old buildings could be the culprit [1].

[1] http://www.nytimes.com/2007/07/15/realestate/15cov.html


(Coastal) California suburbs and small towns tend to be much denser than suburbs in most of the rest of the country. Most of LA city proper is considered suburban, but it also averages out to something like 8K people/sq mile. Even somewhere more suburban like Anaheim clocks in at 6.6K. Compare that with Dallas (3.6).

I would've expected those density gains to be somewhat more offset by the worse fuel efficiency of sitting in LA traffic, though... but on the other hand, much of the LA area has far lower heating/cooling costs than almost anywhere else in the country.


Kind of interesting, the first link [1] that I found ranked Honolulu, Portland OR, and LA above the Tri-state area (which came in forth), in terms of per-capita carbon footprint.

[1] http://www.brookings.edu/~/media/Research/Files/Reports/2008...


The tri-state area includes a LOT of suburbs. Carbon footprint in NYC proper is far lower.


> So at least for carbon footprints, those don't necessarily seem to be linked to density.

Every study I have seen shows the opposite, that carbon footprints are strongly linked to density and urban-suburban divisions. In 2012, for example, climate researchers at Berkeley put together a map for the entire United States showing average household carbon footprint by zip code [0]. They found that suburban emissions are markedly higher than emissions in their respective central cities almost everywhere, confirming a result that Edward Glaeser and other urban economists had already established [1].

The FAQ [2] for the Berkeley researchers' paper [3] summarizes the headline finding like this:

There is an inverted-U relationship between population density and HCF [household carbon footprint]; HCF increases ... from low to medium population densities, and decreases from medium to high population densities. The turning point is about 3,000 persons per square mile, which is very close to medium population density of all locations, and a little higher than the population density of larger suburbs (which have densities of 2,700 persons per square mile).

In other words, low- and high-density places (rural areas and cities) have low household carbon footprints and middle-density places (suburbs) have high footprints. Controlling for income, the authors found that the inverted U goes away and the relationship becomes more monotonic: population density is negatively correlated with carbon emissions across the spectrum of density levels. The upswing of the inverted U-curve that you see before controlling for income happens because, as American communities are actually arranged, middle-density areas (which are relatively dense suburbs) tend to be wealthy, and emissions are also strongly correlated with consumption; the consumption effect dominates the efficiency gains due to higher densities as you go from rural areas to suburbs, and it's not until you get to city-level densities (and poorer urban populations) that the efficiency gains due to density win out over consumption-driven emissions.

So part of the reason that suburbs have high emissions is that the people who live there are relatively rich, and the richer you are the more stuff you consume. But no matter how rich or poor you are, the study suggests, you will likely have a noticeably lower carbon footprint if you live in a city and pursue a lifestyle typical of your income class there rather than doing the likewise in a suburb.

The authors also found, by the way, that suburban sprawl around the central cities of large metropolises effectively offsets the carbon-efficiency of the dense cities themselves [4]; the larger the central city, the greater the sprawl surrounding it, and the number of inefficient suburban households tends roughly to balance out the carbon efficiency of households in the central city.

0. http://coolclimate.berkeley.edu/maps

1. See, e.g., http://www.city-journal.org/2009/19_1_green-cities.html

2. http://coolclimate.berkeley.edu/files/coolclimate/Jones-Kamm... [PDF]

3. http://pubs.acs.org/doi/abs/10.1021/es4034364 [PDF]

4. http://newscenter.berkeley.edu/2014/01/06/suburban-sprawl-ca...


It is also the entire cause of the "gentrification" problem many are so pissed off about. Nobody wants to move into a poor area, they are forced into it because you can't build skyscraper high rises in the good areas.


Woah there nelly.

"Lifting the barriers" to development doesn't mean that a 50 story residential tower will be built in Central Park West. You are the barrier. Lifting them means that as a citizen, you lose control of your surroundings.

So when a big company, say Pfizer, works with the city to raze your neighborhood through an eminent domain process, you're fucked. (http://en.m.wikipedia.org/wiki/Kelo_v._City_of_New_London)

It doesn't eliminate gentrification, it industrialized the process.


Somewhat OT, but I worked in the building constructed due to that eminent domain process, it was really nice.

Pfizer later sold the whole thing for pennies on the dollar to a defense contractor after pulling out of that town, all that after never actually building on all of the land that was leveled.


I wouldn't call giving free reign to eminent domain "lifting barriers."

I don't think Manhattan is a good example of a place with too restrictive laws. But SF and DC certainly are. In DC for example, you wouldn't see 80 story apartment buildings in Georgetown, but you would see them in Chinatown, NOMA, NavyYard, and other places.

Instead lower middle class black neighborhoods are converting to overpriced condos as fast as house-flippers can do it.


No, they are forced to move to these areas because they want to have a bearable commute. Your solution is to jam everyone into a more confined area.

Another solution is to make commuting from a "long distance" (e.g. 60-120 miles) more bearable. In NYC, for instance, subways could be built to NJ.

Faster trains (low-speed maglevs) could be built like what's being done in China (http://en.wikipedia.org/wiki/Line_S1,_BCR).

Mountain View to San Francisco is 40 miles. Is there some reason that isn't a 40 minute commute?


The train part itself is 46 minutes if you take a bullet (red columns): http://www.caltrain.com/schedules/weekdaytimetable.html

That would only be your full commute, though, if you were doing deep SoMa to downtown Mountain View.


Yes, this seems to be very successful.

http://www.mercurynews.com/scott-herhold/ci_26809055/herhold...

We need more of this. I don't know where the low-hanging fruit is in mass transit, but a lot more could be done.


The Caltrain electrification project will further speed this trip since electric trains can accelerate and decelerate more rapidly. The full San Jose to SoMa trip should be roughly 16 minutes quicker based on impact studies.


Some 5 to 10% of Caltrains are delayed though, and if that delay happens to be a fatality, expect that train to be really late. (2011)

http://www.caltrain.com/Assets/__Agendas+and+Minutes/JPB/Boa...


Commuter trains have to stop and let people on and off.

Cities like Chicago have long distance commuter trains, but the commutes are still long. You can take a train from the near west side of Chicago to HArvard, IL (where Motorola built a huge campus and then abandoned it) in about an hour and 45 minutes. But it would be a 70 mile drive. But that skips over a bunch of farmland.

Chicago to Cary, IL would like SF to Mountain view. Train ride is 1:15 minutes. But then you need to get from the train stations to each door on both ends. Realistically its more like 1:45 door to door. People do it.

But living in a high rise is much more preferable to me.

I don't get why'd you make an low speed maglev.


> In NYC, for instance, subways could be built to NJ.

http://en.wikipedia.org/wiki/PATH_%28rail_system%29


Yes? That's about 100 years old and not part of the NYC subway. It also requires you to leave and pay again on the NYC Subway. It's a great system, and about a 12 minute walk from my apartment, but not what I meant. Not sure where you're going with this?

Anyway, I was thinking more along the lines of extending the 7 to NJ.

http://www.nj.com/news/index.ssf/2015/03/could_the_new_port_...

Enter the train at Secaucus, for example, then be able to go to Grand Central Station. Part of the hassle of mass transit is that if you need to make 3 transfers, and have to wait 10 minutes at each one, your commute gets long fast. Extending the NYC Subway in NJ would have several benefits, including reducing the slow crawl through the Lincoln tunnel, where almost 7000 busses cram in daily.


Sounds like you would have liked the new tunnel that Christie single-handedly killed in 2010

"ARC would have cut passenger transfers by 97 percent and taken an average 23 minutes off each trip, according to the GAO. It also would have been financed at historically low rates."

http://www.bloomberg.com/news/articles/2015-01-06/christie-e...


You can in Manhattan. The tallest residential structure in the U.S. is going up within a few blocks of Central Park.

http://en.wikipedia.org/wiki/432_Park_Avenue


Though its owners may sometimes crash there, it's not really a "residential" structure, per se. The primary purpose it serves is as a sophisticated portfolio diversification instrument -- or (for offshore title holders), a convenient money laundering device:

http://nymag.com/news/features/foreigners-hiding-money-new-y...


But it's already unaffordable for the average NYer before it's even ready. If wealthy foreigners can park their money in manhattan, they will, without living there. That doesn't help scarcity for actual residents.


I don't see why that's an argument against. If they are going to plow their money into a city it's better if it's into 1 or 2 units in a dense skyscraper rather than buying entire mid and low rise buildings. Residential skyscrapers are strictly better at reducing price pressures.


I'd have no problem at all with those billionaire towers but for the nonsensical property tax breaks (421a, J51, etc). Throw in a small non-resident property tax differential and I become an enthusiastic booster.

If a bunch of billionaires want to pay property taxes while using barely any city services that sounds like a win to me. We can use that money to provide better services to the people that do live in the city year round.

In my observation the people who are most bitter about billionaires "buying up Manhattan" are the multimillionaires who want to be on the top of the heap.


Seriously cutting one's energy footprint is not free, it comes with serious cost increases elsewhere. The average American can't afford to live in NYC without curtailing much of what constitutes average living conditions.


A large part of that is that NYC is a world city and one of the globally most desirable places to live.

If other cities were built to similar density, you could have a similar (or even better) energy footprint compared to a New Yorker without the necessity of having to live in NYC itself. Now, there would be a change in lifestyle (fewer people owning cars, more people walking and using transit, fewer people owning detached houses) but most of those benefit quality of life anyway.


Not only that. Suburban has more emissions per person but the city has far more emissions per square foot, meaning air quality is far worse and consequent health problems.


Do any such studies address sequestration (or other suitable term) of emissions? I may produce more emissions, but I also maintain near an acre (and aspiring to much more) of CO2/etc-absorbing forest & other foliage. Not sure how it all actually balances out, but I never see reported studies addressing suburban/rural foliage conservation impact vs urban bulldozing & paving every square foot for miles.


If more people lived in cities, a lot of the rural/suburban land they live on would revert to wilderness, which would turn into CO2-absorbing forest and other foliage anyway. So it's disingenuous to try and claim credit for personally having title to any of it.


But if you were living in the city, wouldn't that acre be a forest anyway? Actually, it would be a little bit bigger forest because the land under your house, driveway, the road leading to it, and lawn/garden/whatever would also be forest.

Unless you are actively turning some non-productive land into productive land (eg, greening a desert), you're probably a negative on sequestration no matter what. It's just a question of how negative, and living in the city is probably less negative.


If you have 1+ acres of forest on your property, you aren't living in the suburbs; that's exurban or rural.

If anything taking sequestration into account would make suburbs look worse. 100 acres of dense urban development plus 400 acres of untouched forest is going to sequester much more carbon than 500 acres of suburbs with a few trees sprinkled throughout, yet they would hold the same number of people.


Something that annoys me about these articles is that they're basically saying "the world's densest cities should make themselves denser"

Maybe we should just copy what those cities did. Imagine what america's GDP would be like if it had ten cities like the current NYC.

I live in one of the densest neighborhoods in north America, the plateau in Montreal. It achieves this density with low rise buildings, and it's a very pleasant area.

People say we should build taller buildings here. But I say we should build more plateaus elsewhere.

The problem is that our current regulatory environment makes it very difficult to build new versions of the world's most popular neighborhoods. So instead the call is to modify existing, successful neighborhoods.


I think if you expand a low-rise city you end up with Washington DC or LA, meaning debilitating traffic. The density is not high enough to support mass transit effectively, but it's too high for effective roads.


As I said in response to another comment, you actually can. Paris has a density of 50000/sqmi (to compare with Manhattan's 70000) without high rise buildings.

What you can't have though, is large avenues and parking lots everywhere. Every inch of space than can be build has to be built.


Exactly. We don't necessarily need to build skyscrapers to achieve substantial density improvements. There are easier gains out there.

In Vancouver you have conflict over the height and density of new buildings, meanwhile South of the small downtown core there's 60 blocks of ultra low density detached single family houses. Even the small step of transitioning this to row houses or stacked townhouses would allow significant population increases.


"land-use regulations in the West End of London inflate the price of office space by about 800%; Milan and Paris the rules push up prices by around 300%."

I live in Milan so I think I'm qualified to write about this. The office space one wants is close to home or to metro or train stations, unless one lives outside the city. In that case the best office space is close to the highways on the same side of the city you're from. I used to work at 10 minutes by feet from office, then exactly at the other side of the city. It took one hour to get to office, by car or public transport. I preferred public transport because of the free time for reading. I work mostly from home now with customers within 30 minutes (walking of cycling), which is even better.

I can understand that zoning rules limit the number of offices and houses that can be build close to the best areas but as a city dweller do I really want to see buildings built everywhere, in every single space between existing buildings or replacing smaller ones? Call me selfish because I don't care about raising the country GDP but I don't think so. Maybe it's because I'm European but my ideal of a city is not a large archaeology. It's more like this http://goitaly.about.com/od/moreitaliancities/tp/small-itali... and Milan is a reasonable compromise between access to fast Internet, customers and quality of life. People born in those other cities won't agree but they still come here to work :-)


> my ideal of a city is not a large archaeology

You mean arcology: http://en.wikipedia.org/wiki/Arcology


Yes, thanks.


This seems like a very interesting subject but the analysis seems very one-handed. You can't just project like that, remove current regulations and expect the city to remain the same except for all the economical growth. Would people with money actually stay there or would those cities turn into a unbreathable bee-hives from which people would flee as soon as they had any money to do it?

It would be interesting to see comparison inside the same country of cities with harsher versus lighter regulations and how they actually evolve economically and socially. Maybe it's not even possible to remove certain regulations in western cities without committing political suicide and having them removed once the next major comes to power.


"Two long-run trends have led to this fractured market. One is the revival of the city as the central cog in the global economic machine (see article). In the 20th century, tumbling transport costs weakened the gravitational pull of the city; in the 21st, the digital revolution has restored it. Knowledge-intensive industries such as technology and finance thrive on the clustering of workers who share ideas and expertise. The economies and populations of metropolises like London, New York and San Francisco have rebounded as a result."

Is this really true?

seems like anyone with an internet connection can interface with someone from SF or NYC


Ah skip to the last paragraph. It's just the usual "things would be better if only we took away more of people's money by force" article.

Ignore it. It's just pro-tax stupidiy


Tokyo is a public-transport-centered city and has an interesting structure. The land value depends directly on the distance to the metro or train station and the importance of the line. The train station is the center of a self-contained community and most of the services like shops, restaurants, supermarkets, etc use to be next to the station. Also, the buildings tend to be taller the closer they are from the station. I find it a quite convenient way to organize a city.


"According to one study, employment in the Bay Area around San Francisco would be about five times larger than it is but for tight limits on construction."


Eventually the market would eliminate wasteful land use because whatever was occupying the land would be willing to sell to someone who could benefit from it more.

Bureaucracy and entrenchment get in the way of that though.


Knowledge-intensive industries such as technology and finance thrive on the clustering of workers who share ideas and expertise.

So allow people to cluster in high quality virtual environments.


Yeah, it surprises me, whenever I stop to think about it, that this isn't more common by now.

In the group I work in we make heavy use of email, of course, and we do have a few remote people who call in via VOIP to meetings, and sometimes we do screen sharing with them, but that's about as far as it goes. We rarely do video, though all our laptops have webcams. We do have a room with a fancy videoconferencing setup with cameras that focus on the person currently speaking -- it's very nice, but it can only connect to another setup of its kind, and the remote people on my team aren't in the one other location I know of that has such a setup; so it's not nearly as valuable as one would like.

The upshot is, I'm left agreeing with those who say that the most effective collaboration still requires being in the same place. Our remote people are certainly productive and part of the team, but we just don't have the same kind of impromptu conversations that I have with my podmates.

And I wonder what the solution might be. Double Robotics [0] certainly has an interesting take on that question; I don't know anyone who has tried it, though.

[0] http://www.doublerobotics.com/


I actually work in a completely remote team, in the sense that everyone works remotely (about 50 people). So there is no hierarchy of remote people being second-class team members, as you seem to be describing.

For minute-by-minute chats we use IRC, and that works well. For longer conversations, mailing lists. And we have twice weekly video conferences, and twice yearly physical meet ups.

This works well. I suspect it wouldn't work well if half the people were sitting in a room together and had conversations that were not accessible to the remote workers.


Do you think/feel this affects how close-knit a team can be in your company?

From what you say you don't seem to use video much (for one-on-one), so a lot of visual/non-verbal is lost (also there are no non-work regular meetups, e.g. lunches, which I think helps with nurturing a bit of informality).

Also when someone is sitting next to me the threshold for asking a question is rather low, and when working remote I tend to waste more time looking for answers on my own. So my guess is that would affect productivity also.

But still I wonder if there are many of these completely remote largish (> 15, say) companies. It's a very interesting model.


We're pinging each other on IRC all day, and yes it interrupts your flow just as much as asking someone next to you.

Most open source software development happens this way - IRC, email, git, patch review ... It's a very well-proven model.


Is there anyone preventing you from doing that?


there are no high-quality virtual environments (except for killing each other)?

you literally cannot even throw an idea up on a whiteboard and have it be there two weeks later: there is no such thing online. (virtual second-life collaborative spaces.)

online collaborative meetings are a joke compared to real life - as a piece of evidence, if they weren't you wouldn't have teams having to scramble to move to silicon valley, you would just have virtual incubators: in terms of its "manufacturing" output anything an online startup needs can be done over the wire. (phone and server costs are basically it.)


"there are no high-quality virtual environments"

But there are high-quality cities - tech hubs. That answers your question.


Re: whiteboard - Shouldn't Lync + OneNote solve this?


I use consumer video conferencing* a lot, but there are clearly huge leaps waiting to be made. It could be easier, larger, higher quality and fit more seamlessly into the environment.

My point is that fixing video conferencing is a lot cheaper than building skyscrapers in the centre of San Francisco, and certainly more politically acceptable.

If you mean, what stops me from fixing video conf, then largely it's because I have a much more interesting job already.

* So far: Skype, Hangouts, Webex, Bluejeans


We need to rethink our cities as commerce/life supporting machines instead of aggregate plots of land for private investment. Or are we not mega-scale engineers yet...?


The problem is not the poor land use, it's the inefficient capital use!


Also too much paved surface area.


I keep wondering when building over roads will become common. Traffic only needs a couple stories of vertical space; everything above that should be profitably/affordably usable (once ventilation is addressed).


Unless the road was built in a tunnel in the first place, there are structural issues as well. You can't just put some concrete structure over the top of a road and have it support multiple stories of building on top of it. Plus, streets work better as open-air outdoor spaces, especially for pedestrians.


I-290 in Chicago runs through the Old Chicago Main Post Office: http://cdn.abclocal.go.com/content/wls/images/cms/124812_128...


There are already buildings built over railways (as well as many railways tunnelled under things). But they're much safer (hardly any accidents, trained people who know evacuation routes etc) and the noise and smell isn't as bad as it would be for a road.

The examples I think I've seen are hard to verify on Google Maps, it's a brown-grey mush, and in any case they're all odd buildings rather than a 'tunnel' created out of buildings.


We need to do a few things. I agree on shutting down the NIMBYs. It's zero-sum activity that hurts young families and contributes to the generational screw-over that Generation X and Millennials have experienced.

We also need to block nonresident foreigners from buying real estate here. They can stay in hotels. Until housing is cheaper than 0.35% of the median annual income per SF (at that level, you can afford 1200-1500 SF on a median income) it is a crime to let these nonresident foreigners (often laundering dirty money) buy properties that will go uninhabited for 11 months each year.

Finally, there's a capital allocation problem. Look at Silicon Valley itself. It takes in passive capital from all over the country-- teachers' pension funds from Ohio, firefighter AD&D funds from Georgia-- and distributes the job-creation in a tiny geographic area: Silicon Valley. Jobs disappear in Ohio and Georgia, while NorCal booms. Now, the passive capitalists would be fine with this if that were a working investment strategy. It's not, though: VCs have been losing money for more than a decade. The concentration of funds into the Bay Area (which makes that area unaffordable, because housing creation is always slower than job creation) has more to do with feudalism than any sound investment policy.




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