Ryan Avent’s “The Gated City”

The sexiest political theory is undoubtedly at the national level.  Everyone cares who the president is, no one cares who the mayor is.  But despite the lack of interest, your local government will most likely have a lot more influence over your day to day life than the national government will.

Ryan Avent’s e-book “The Gated City” explores the economic benefits of high-density city life and the barriers that local governments put in the way of growing cities.  These barriers, he argues, have led to drastic increases in the cost of living for residents.  And those cost increases have kept people out of cities, where they would be most productive.

 

If you talk to most people about this kind of thing they’ll explain to you that people are payed more in big cities because the cost of living is higher there.  But anyone who understands the marginal revenue product theory of wages understands that this is not, usually, the case.  The real reason people are payed more to work in big cities is because they are more productive there.  And then, as a consequence of the higher wages, housing prices are bid up.  Ordinarily, this would signal builders to redevelop underused areas into higher density living quarters, but government restrictions stand in the way.  And so housing prices stay high in the city.   

Ryan Avent’s biggest gripe doesn’t actually seem to be with government, necessarily, but with the NIMBY’s (Not-In-My-Back-Yard types) that use the government to prevent construction projects that they don’t like.  He explains that the NIMBY’s actually have good reason for standing in the way of new construction:  Owning a property is an, often highly leveraged, undiversified bet on a hyper-local asset.  Any risk at all is probably not worth it for these people, even if there is a good chance that new development will increase the value of their property.   They are acting perfectly logically, and in their own self-interest, when they lobby their neighbors and their local government to preserve neighborhoods in their “historic” state, or to install restrictive zoning laws in order to keep out new developments.  Unfortunately, this keeps housing prices high and urban densities lower than they should be.  And, from a moral perspective, using government to prevent new construction in your area is like waving a gun at your neighbor and threatening to kidnap him (or worse!) if he tries to build on his property.  Except it’s legal…

I think Ryan Avent would probably be described by most as a libertarian, although that’s not entirely clear in this book, but he supports quite a few deviations from the minarchist ideal and he does not go into detail to show their necessity.  He seems to believe that government should plan and build transportation infrastructure to encourage urban living; that local governments should “invest” in urban rail and transit (despite the fact that the vast majority, perhaps even all, of the municipal rail lines being operated in this country are unprofitable) and that government is the only entity that can build subway systems (despite the fact that the New York City subway system was originally built with private money).  He also offended my personal tastes by quoting Paul Krugman in a positive way with regard to unionism.  But these faults, as I see them, will probably make the book more palatable to non-radicals, and they are not pervasive.  The book is a very quick read and only a couple bucks on Amazon so I highly recommend it.

The other book I’ve read on (sort of) this subject is Randal O’Toole’s “Gridlock.”  There’s also a pretty good blog I discovered that deals with this kind of thing at marketurbanism.com.  On my list to read is Edward Glaeser’s “Triumph of the City.”