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Density as a positive externality
Russell Degnan

Over at Marginal Revolution, Robin Hanson has an interesting post on how cities are too sparsely settled:

"This externality, however, mainly comes from the people on nearby land, and not from their gardens. So when we consider how much land to use for our homes or offices, we do not consider the gains to others from our using less land, and so allowing more people to be nearby.

I am not so sure it is being improperly valued, except, as Hanson notes at the end, where local governments restrict densities through the application of height controls and maximum density requirements, and others I'll mention directly.

"Nearby" is the defining word here. In cities of two centuries ago, nearby meant walkable, but that isn't the case with public transportation and automobiles to get people quickly from place to place. Most people have access, even at Melbourne's very low densities, to a substantial amount of the city, and the services it offers.

More importantly, there are diminishing returns for more services nearby that greater densities would provide. Against that diminishing value, there is the value placed on private open space, and quality of housing.

Therefore, while it is true that higher densities are more economically efficient, people are making (probably correct) choices between housing consumption and their economic vitality. The real inefficiencies are coming from mostly government based decisions. Ergo, planning restrictions that limit those choices and reduce densities (leaving aside potential reverse externalities from the impact of greater numbers of people on neighbourhood liveability); transport infrastructure subsidies, particularly for automobiles, but also in the form of public transport; and arbitrary service provision that favours central locations and attracts higher densities in those areas instead of pockets of higher density across a city.

Planning 6th November, 2005 13:05:52   [#] 

Comments

Density as a positive externality
Not quite related to the above post, but I should pass on a comment about civilpandemonium on Saturday by the Opposition Planning spokesman Ted Baillieu at the SOS/VLGA seminar at RMIT.

Ted said he reads this site, but reckons you guys live in a different world. Needless to say he opposes Melbourne 2030 (as does Paul Mees for different reasons). When asked about public transport, he changed the subject to stormwater drainage!
Peter  14th November, 2005 20:37:41  

Thanks Peter
I'm sorry I missed it, though I'd have probably fallen out of my chair laughing.

I am curious what the exact context of the quote was, because Ted is right, though possibly not for the reasons he thinks.

CvP is about 80% my writing, plus a few others and I am not really representative of anything (certainly not the planning profession, RMIT academia, or RMIT students). I am -- politically speaking -- a classical liberal/libertarian; in the planning world that puts me in a constituency of population one (1). I am not in the habit of advocating anything that contradicts that philosophy even if I have my personal preferences. Mostly I care about analysis (and refutation), which can, and does, lead you down some interesting pathways. But CvP is (mostly) not the place to search for statements of political intent, because as much as I love a stoush, if I wanted to play at politics I would actually get involved.

At a very broad level I think planning, both transport and land-use, is fundamentally broken because it has an ill-defined and changing set of property rights, that are subsequently argued over by politicians, advocates, bureaucrats and lawyers. That makes it an interesting problem. But it is a different sort of problem to an argument over public transport funding or urban sprawl or apartment complexes in the middle suburbs.
Russ  15th November, 2005 08:07:41  


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