Over time, FEE has published and republished several articles about something called “market urbanism.” Before I began writing for FEE, I hadn’t heard about it, but my initial response to the term was skepticism.
Personally, I’m a giant fan of markets, but I’m not much of a city guy. So I’m already 50-50 on the term. I’ve lived in urban areas before, and to me the advantages just don’t outweigh the fee of the hustle and bustle. Call me provincial.
But after researching market urbanism, I can say I’m a supporter.
Broadly speaking, market urbanism is about applying free-market ideas to urban issues. Common policy beliefs include an opposition to restrictive zoning laws and central urban planning, support for the creation of dense housing (similar to apartment towers), and a general opposition to NIMBY (Not in my backyard!) pondering.
In brief, market urbanists want property owners to have the option to construct what they need after they want without meddlesome and nosy regulators interfering.
Market urbanists, in supporting the repeal of zoning laws, often tout the advantages of dense housing (similar to lower costs and “walkable” cities), and are inclined to argue there are probably more suburbs than there can be absent zoning laws.
This support for dense housing draws criticism from some, nonetheless. Critics claim market urbanists and YIMBY (Yes in my backyard) advocates wish to get rid of all spacious living and pack everyone into apartment towers.
The goal of the YIMBY movement is to completely demolish your neighborhood and rebuilt it at at the very least 4x the density. They wish to eliminate all single family districts within the country. It is a radical, anti-communitarian ideology.
— Aaron M. Renn 🇺🇸 (@aaron_renn) September 29, 2022
While I empathize with the above concern as someone who hates living in dense housing, the actual fact of the matter is market urbanist and YIMBY policies actually allow for more spacious living for individuals who wish to live in rural and suburban areas. This realization is why I finished worrying and learned to like market urbanism.
To see why, let’s consider the economic resource generally known as land.
Constructing More Space
In my introductory economics course, one among the primary things I tell my students is in regards to the resources utilized in the strategy of production: land, labor, capital, and entrepreneurship.
These 4 sorts of resources are generally known as the aspects of production. All goods and services are constituted of some combination of those aspects.
Oftentimes the factor of land is treated as a hard and fast resource. This logic follows the old—but mostly improper—saying in the actual estate market that land is all the time an excellent investment because “they’ll never make more of it.”
The phrase is generally improper for a straightforward reason: the services people want that are provided by land are decidedly not fixed. For instance, one reason people need land is that they need living or working space. You would possibly think, Definitely we are able to’t create extra space to exist in.
But we are able to.
Land reclamation (creating latest land out of seas or other bodies of water) is a whole bunch of years old. Land reclamation has been so successful with the Netherlands that a well-liked saying arose that goes, “God created the world, however the Dutch made the Netherlands.”
But this isn’t the one way we construct more living space. How many individuals could work and live in Latest York City, for instance, if not for multi-story buildings? Not nearly as many as do now. Constructing vertically is one other way we are able to create extra space.
Economists may quibble here, arguing skyscrapers aren’t latest land—they’d call them capital as a substitute. But the purpose is that the actual services consumers demand from land are producible quite than fixed.
And when dense housing is added in cities, which means there may be less density outside of the cities.
More Dense Housing Means Less Dense Housing
It is a matter of basic math. Holding geography and population constant, as one area becomes more densely populated, one other area will develop into less densely populated.
In case you’re still struggling to see why, consider a visible example.
Imagine a square piece of land. We will pretend it’s a city, county, state, country, or whatever you want. Let’s say that on the land there are 16 people. Of the 16, 13 would favor to live in a dense, walkable area. The remaining three are like me, and would favor to must drive to see their nearest neighbors.
Given so many individuals live in cities, I believe it’s reasonable to assume more people like living in denser places, but even when only two of the sixteen desired to live in a denser area this instance would still work.
Let’s start by imagining the persons are perfectly spaced in the realm with no dense housing. The figure below shows their living situation. Circles represent people, the squares represent their property:
It’s an urban planner’s paradise! But now let’s let consumers have their very own way. We will calm down zoning rules and permit private corporations to construct an apartment complex that matches the 13 individuals who would favor dense city life. Now the realm looks like this:
Notice, the three individuals who prefer a more rural life with a whole lot of land and space are capable of have extra space now!
So not only does dense housing provide advantages to those that decide to live in it, it effectively creates more land for individuals who enjoy living in unfolded rural areas.
Some may balk on the image and say it seems unfair. Why should those three people get a lot land?
But remember, in real life many individuals just don’t want a whole lot of land to continue to exist. I spend hours every month maintaining my property. That kind of thing isn’t universally enjoyed. Many individuals prefer to live in apartments without worries of maintenance, driving long distances to town, or coping with more complicated utilities situations. I don’t share that feeling, but I can accept it.
So dense housing actually provides the chance for a win-win. As individuals who benefit from the upsides of dense housing adopt it, there may be more land available for individuals who don’t.
So don’t fret. By removing zoning restrictions, we won’t naturally arrive at a dystopia where everyone seems to be crammed in tiny studio apartments like sardines.
Market solutions allow for individuals with different preferences to benefit from the variety of property they most prefer.
