Converting Land into Affordable Housing Floor Space
Cities emerge from the spatial concentration of people and economic activities. But spatial concentration is not enough; the economic viability of cities depends on people, ideas, and goods to move rapidly across the urban area. This constant movement within dense cities creates wealth but also various degrees of unpleasantness and misery that economists call negative externalities, such as congestion, pollution, and environmental degradation. In addition, the poorest inhabitants of many cities are often unable to afford a minimum-size dwelling with safe water and sanitation, as if the wealth created by cities was part of a zero-sum game where the poor will be at the losing end. The main challenge for urban planners and economists is reducing cities' negative externalities without destroying the wealth created by spatial concentration. To do that, they must plan and design infrastructure and regulations while leaving intact the self-organizing created by land and labor markets. The balance between letting markets work and correcting market externalities through infrastructure investment and regulation is difficult to achieve. Too often, planners play sorcerer's apprentice when dealing with markets whose functioning they poorly understand. The role of the urban planner is then, first, to better understand the complex interaction between market forces and government interventions, infrastructure investment and regulation, and second, to design these interventions based on precise quantitative objectives. Each city's priorities would depend on its history, circumstances, and political environment. But maintaining mobility and keeping land affordable remains the main urban planning objective common to all cities.
| Summary: | Cities emerge from the spatial
concentration of people and economic activities. But spatial
concentration is not enough; the economic viability of
cities depends on people, ideas, and goods to move rapidly
across the urban area. This constant movement within dense
cities creates wealth but also various degrees of
unpleasantness and misery that economists call negative
externalities, such as congestion, pollution, and
environmental degradation. In addition, the poorest
inhabitants of many cities are often unable to afford a
minimum-size dwelling with safe water and sanitation, as if
the wealth created by cities was part of a zero-sum game
where the poor will be at the losing end. The main challenge
for urban planners and economists is reducing cities'
negative externalities without destroying the wealth created
by spatial concentration. To do that, they must plan and
design infrastructure and regulations while leaving intact
the self-organizing created by land and labor markets. The
balance between letting markets work and correcting market
externalities through infrastructure investment and
regulation is difficult to achieve. Too often, planners play
sorcerer's apprentice when dealing with markets whose
functioning they poorly understand. The role of the urban
planner is then, first, to better understand the complex
interaction between market forces and government
interventions, infrastructure investment and regulation, and
second, to design these interventions based on precise
quantitative objectives. Each city's priorities would
depend on its history, circumstances, and political
environment. But maintaining mobility and keeping land
affordable remains the main urban planning objective common
to all cities. |
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