Paul Romer’s Alternative Narratives about Chinese Urbanization

Paul Romer does a much better job than I could of discussing the NYT piece on Chinese urbanization. Here’s my favorite quote:

Alternative Narratives about Chinese Urbanization | Urbanization Project:

The narrative about forced migration — with its charged language about “top down” approaches (not once but twice,) its reference to the “disastrous Maoist campaign to industrialize overnight” — has an obvious emotional appeal for a popular audience that is comfortable with narratives about good guys and bad guys.

The alternative narrative — one about governments all over the world that are trying to cope with the billions of people who want to move to urban opportunity — better captures the deepest and most important undercurrent in the global economy the we and our children will face.


In which both Joel Kotkin and Matthew Iglesias have points, but their points aren’t as good as mine

Attention conservation notice: Density advocates love density–and free markets–as long as those free markets supply density. The rest of us are less sanguine for reasons less easily discounted than Slate writers would have us believe.

Matt Iglesias uses his spot in Slate to criticize Joel Kotkin’s piece in City Journal. Kotkin says we need to let LA be LA; Iglesias, not for the first time, notes that allowing more density and rolling back zoning codes is actually pro-market, not central planning. Iglesias’ piece is called “When Conservatives Love Central Planning.”

Kotkin has some points. Like this one:

Demographics also make a mockery of the densification argument. With the exception of downtown, most of the central parts of Los Angeles have either stagnated or lost population over the last 20 years. Hollywood, for example, shrank from 213,000 residents in 1990 to 198,000 today. Within the last decade, Los Angeles County’s growth slowed to barely 3 percent—roughly one-fifth the rate that it enjoyed during the go-go 1980s, a period of extraordinary prosperity in the region. Yet Garcetti, Villaraigosa, and their allies continue to base their grands projets, as the French would call them, on outmoded assumptions of exploding economic and population growth. Particularly revealing is the experience of the Residences at W Hollywood, a luxury-condo project located a stone’s throw from the proposed new high-rise towers in Hollywood. According to recent reports, only 29 out of 143 units have sold since the project opened in May 2010, despite prices that have been slashed by more than half. The market, in short, is unwilling to embrace density here, “elegant” or otherwise.

There is something to be said for letting markets rather than zoning sort this through. If enough projects like Residences sit empty long enough, that’s a signal to developers to knock it off without having zoning involved. We don’t necessarily need to stop them from building high density projects; they will figure it out. And it’s possible with restructuring that you could allocate smaller numbers of people into fewer buildings and use the rest for green space or other uses. Nonetheless, I do think Kotkin has a point: California’s growth isn’t what it was was 7 years ago, and yet our political leaders are still acting like Los Angeles is spiraling outward like a supernova. It is, simply, not. Not anymore. And sprawl isn’t arguably the most important issue facing the region anymore.

Iglesias responds in kind:

This is not a devious plot to force people to engage in high density urban living. It’s a plot to reduce the extent to which people are currently forced to engage in low density suburban-style living. But it’s one form of deregulation that conservatives all-too-frequently can’t countenance, often for reasons they have trouble explaining.

Iglesias is, like Kotkin, arguably both wrong and right. It’s a favorite trope among density advocates that they are “freeing” the market from the shackles of restrictive zoning. Nevermind that the new development forms usually have a bundle of their own restrictions like parking maximums and whatnot: the density advocates think they are unleashing market forces.

But market forces have already worked to some degree. Iglesias is somewhat dated in his characterization of Hollywood: Hollywood isn’t the down-and-out place it was 10 years ago. It gentrified like crazy during the bubble, which explains the population loss Kotkin cites; rich people take up more room per person than poor people. People like the activists Kotkin describes bought their houses and decided to live in Hollywood based at least in part on what it is now, and they are understandably concerned about our ambitious mayor and his desire to cut ribbons and see large transformations made in his name. Tiebout really did have a good hypothesis for explaining how people decide where to live. Changing the neighborhood on them isn’t pain free, and it’s not a simple matter of letting markets work. They bought in the neighborhood thinking it was one thing, and now our Mayor and Hollywood elite want to tell them that they have to have another thing. Sounds a bit like a bait-and-switch to me, and I can’t vilify people for being worried about that, particularly when their school is probably already over-crowded and underfunded and adding more families, in condos or otherwise, won’t help any.

I also have a problem with the way that Iglesias assumes that people are being forced to live a suburban lifestyle. In Hollywood? Club center of the universe? The view from Manhattan is steep, and for them, Brooklyn is hopelessly suburban. However, the reality is that Hollywood already has quite a bit of density, and moreover, there are entirely empty buildings–ENTIRELY EMPTY–buildings and lots just south of 9th street and just east of Main Street downtown. If this region is a juggernaut of growth and absolutely every square inch of infill the region has to be developed, isn’t advocating for density in Hollywood rather than downtown counter to the point of good urban form?

I get it. The real estate developers want density in tony Hollywood instead of in places that are truly down-at-their-heels, like along the blue line or like the empty buildings south of 9th street. What developers are saying is that we need to squeeze more development into places that, using generous definitions, might still be part of the super-affluent west side land market. That’s understandable from their perspective. So call the spade a spade and quit bugging the rest of us with blather about how redevelopment there (rather than downtown) will save the planet and just explain to people that you’re siding with developers over current residents because there is money to be made here. It’s not a plot to free people from suburbia. It’s a plot, like most plots, to make some money, which isn’t really a crime in America, but also isn’t the all-that-a-bag-of-chips promised by density boosters, either.

Urban farmers in Africa

NPR ran a story last week on urban farmers in Africa, based on this report from the United Nations.

The survey — which is the first of its kind — looked at city farming in 31 countries, more than half of Africa’s urban population lives. The authors say that governments need to integrate urban farming into city planning, or else the cities may lose one of their best sources of food.

For inspiration, Africa can look to China and many countries in Latin America, which have incorporated horticulture into their urban planning since the 1960s. Now more than half of Beijing’s vegetable supply comes from the city’s own market gardens, the report notes.

Go listen and read.

Columbia’s David King on Chinese Cities in a Box

Getting from here to there: City in a box? More adventures in Chinese urbanization

David’s entertaining take is spot on. What I don’t understand is how any of these developers get the projects up and going, or why they do so, given that property rights are nonexistent. Where does the money come from? Somebody has to explain this to me; I know little about China.

Growth restrictions: green or mean? Joel Kotkin isn’t quite so sure

Over at the New Geography, Joel Kotkin has an essay up on how the UK’s neglect of white poverty, and the lessons it may entail for the US. Particularly haunting:

Rising housing prices, driven in part by “green” restrictions on new suburban developments, have further depressed the prospects for upward mobility. The gap between the average London house and the ability of a Londoner to afford it now stands among the highest in the advanced world. Indeed, according to the most recent survey by, it takes nearly 7.1 years at the median income to afford a median family home in greater London. Prices in the inner-ring communities often are even higher. According to estimates by the Centre for Social Justice, unaffordability for first-time London home buyers doubled between 1997 and 2007. This has led to a surge in waiting lists for “social housing”; soon there are expected by to be some 2 million households–5 million people–on the waiting list for such housing.

link: The Future Of America’s Working Class |

American Smart Growth researchers tell me that restrictions on the suburbs do not reduce the supply of housing, and thus do not raise house prices. Instead, housing gets supplied through more density and smaller units; the land consumption goes down, the housing supply goes up nonetheless; creative financing and better mortgage instruments enable home ownership among those whose finances would be strained by having a car or a house.

This is hard for me to believe past a certain level of metropolitan population.

First off, if banks or anybody else with money to lend actually believed in the location efficient mortgage, why haven’t they been all over LEMs by now? Every other riff on mortgage innovations that promised profits–no matter how ill-advised– took off like wildfire over the past 10 years. In an LEM-thriving world, people would be trying to cook their “I’m so close to transit score” the way they’d like to cook their credit scores. Yet for the most part, people with cars have more money than people who don’t. I have yet to see research that really convinces me that, expensive though cars are, they really aren’t better at enabling higher long-term returns to wealth for individuals than transit is, cheaper though it is. Saving yourself the on-average $8000 a year cost by not having car is financially dumb (for individuals) if the car would add more than $8000 to your productivity, including the marginal increase in the number of consumption and production possibilities you get and can trade against each other.

The endogeneity problems here are daunting. Do people have cars because as they get wealthy they buy more expensive things, or do people with cars see real returns in wealth from the spatial expansion of consumption and production opportunities made possible, unfortunately, with cars? Chances are, both, and it’s hard to suss those relationships out empirically.

Looking at the price differentials between cities, it seems pretty clear that high land values prompt densities through markets and politics, along with a political impulse to place restrictions on growth. Once some level of population gets surpassed, it has to put upward pressures on prices in a way that outpaces wage growth; island city-states are a good example.

How do we break open the cycle between affordability and growth controls once you reach 10 million in population, give all that entails for the land needed for both housing and economic production?