Highways Are Subsidies, Too

Like an article written by Paul Krugman or Tyler Cowen, I roll my eyes when I see Randal O’Toole’s name.

O’Toole is very pro-suburb, which is acceptable, but he has chosen to ignore or minimize all the government intervention in favor of suburbs, which is not. Nor does he seem cognizant of the regulations that support suburban living and discourage cities. 

John Stossel used O’Toole to write an anti-city screed a few days ago in Reason.

It turns out that government spent your billions on urban transit based on surveys that asked people if they want to live in “walkable communities.” Of course people said yes! Who doesn’t want to live in a neighborhood where you can “walk to shops”?

But if they’d asked, “Are you willing to spend about four times as much per square foot to live in a city instead of a spacious suburban home?” they’d get different answers. 

Firstly, no one ever said that you couldn’t have a walkable community that wasn’t the big city. In fact, since people have only had cars for about 100 years, the walkable community — or village, as people call them — has been a fundamental form.

A French village, courtesy of Wikipedia

That looks highly walkable. As does this English village:

There is a direct link between walkability and housing values, which has been known since 2009. The CEOs for Cities report entitled “Walking the Walk” found that a one point increase in a neighborhood’s walk score increased home values by up to $3000. Since the walk score algorithim is being refined with more data, it wouldn’t surprise me if this relationships has gotten stronger over the past five years.

Prices like that should be attracting developers in droves to build more housing in existing walkable communities and make unwalkable communities more walkable. But for the most part the only walkable construction in recent years has been subsidized New Urbanist developments.

But this shouldn’t be too surprising because, contra Messrs Stossel and O’Toole, government regulations discourage and hinder the satisfaction of market demand for affordable urban living spaces. 

According to Stephen J. Smith at Next City, builders in Tokyo’s 23 inner wards started work on 110,000 new houses and apartments in 2012, compared with 27,000 in the entire New York metropolitan area, or 115,000 new units for the whole of England (London’s housing prices are so high a commuter calculated that it would be cheaper to live in Barcelona and commute by air).

The reason? Per Smith, “Japanese cities have for centuries taken a much more laissez-faire approach to development than their counterparts in the West.”

In much of the United States, government regulations ranging from parking minimums to federal tax breaks have ensured that “spacious, suburban homes” are the only kinds of housing a developer does not need to seek special permision or subsidies to build. Moreover, strict zoning requirements frequently prevent homeowners from planting vegetable gardens, running home-based businesses (even lemonade stands) or make any sort of addition or alteration to their house without going through a humiliating process of kowtowing to the local authorities while giving the neighbors more say than the property owner. 

But the elephant in the room is the highways that connect these suburbs to cities. It’s not too far of a stretch to suggest that today’s suburbs only exist because of the highways, the way streetcar suburbs developed around streetcar networks back before the progressives killed them.

The fact is, they’re government highways. They were built by our billions and they are maintained by our billions weather we use them or not. And when you consider the parking minimums, the regulations favoring car-centered suburbia and the regulations that hinder mass transit, that prevent cities from satisfying market demand, then the idea that Americans are making a free choice to live in suburbs is totally absurd. Yes, they are choosing the suburbs, but only because every other alternative has been deliberately made non-viable. It’s a Hobson’s choice.

It should also be noted that Stossel is being disengenuous when he says that New York City is one of the most densely populated cities on the planet. New York City’s population density is less than 30,000 people per square mile. He’s also George Will-wrong (if not ouright George Will-lying) when he says that Communist planners liked density. They don’t, any more than American urban planners like it.

The Communist Manifesto called for population to be distributed evenly and Jane Jacobs pointed out in The Economy of Cities and Cities and the Wealth of Nations that Communist countries were worse with their cities than capitalist ones. Stossel specifically mentioned North Korea. Well, Pyongyang has a population density of 6,287 people per square mile — which, while twice that of Houston, is still not even close to the top 50 for the world. Communist Beijing has a density of 3300 people per square mile, while capitalist Hong Kong has 17,000 per square mile.

Nathan Lewis said somewhere that cities are the visible portion of the economy. In the 19th century, people like Charles Dickens and Karl Marx thought that cities created poverty and squalor. We know now that poverty and squalor was much worse in the rural communities the poor came from and living in cities that were allowed to function as cities enabled them and their children to rise out of poverty and become the middle class. So of course government is more visible in cities —  but that doesn’t mean it’s not in the suburbs.

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