Saturday, January 14, 2006

Industrial policies

The U.S. economy has been growing nicely in spite of our very own industrial policy. Europeans and others like to scoff at our "cowboy capitalism" but they have no clue. Nearly half of U.S. GDP (including mandates) is subject to politics.

And politicization favors "the rich" and suggests anything but some progressive wonderland.

We have regressive plus inefficient -- rather than the equity-efficiency trade-offs that are still textbook staples.

Contra cowboy, there is widespread agreement that cities are too complex to be deprived of industrial policies. Joel Kotkin summarizes all of this in today's WSJ and is well worth quoting.

"The War Against Suburbia"
By JOEL KOTKINJanuary 14, 2006; Page A8

"Suburbia, the preferred way of life across the advanced capitalist world, is under an unprecedented attack -- one that seeks to replace single-family residences and shopping centers with an "anti-sprawl" model beloved of planners and environmental activists. The latest battleground is Los Angeles, which gave birth to the suburban metropolis. Many in the political, planning and media elites are itching to use the regulatory process to turn L.A. from a sprawling collection of low-rise communities into a dense, multistory metropolis on the order of New York or Chicago. Mayor Antonio Villaraigosa has outlined this vision, and it does not conform to the way that most Angelenos prefer to live: 'This old concept that all of us are going to live in a three-bedroom home, you know this 2,500 square feet, with a big frontyard and a big backyard -- well, that's an old concept.'

"This kind of imposed 'vision' is proliferating in major metropolitan regions around the world. From Australia to Great Britain (and points in between), there is a drive to use the public purse to expand often underused train systems, downtown condominiums, hotels, convention centers, sports stadia and 'star-chitect'-designed art museums, often at the expense of smaller business, single-family neighborhoods and local shopping areas. All this reflects a widespread prejudice endemic at planning departments in universities, within city bureaucracies, and in much of the media. Across a broad spectrum of planning schools and practitioners, suburbs and single-family neighborhoods are linked to everything from obesity, rampant consumerism, environmental degradation, the current energy crisis -- and even the predominance of conservative political tendencies.

"Acolytes of such worldviews in our City Halls are now working overtime to find ways to snuff out "sprawl" in favor of high-density living. Portland's 'urban growth boundary' and the 'smart growth' policies promoted by former Maryland Governor Parris Glendening, for example, epitomize the preference of planners to cram populations into ever denser, expensive housing by choking off new land to development. More recently, this notion even has spread to areas where single family homes and suburbs are de rigueur. Planners in Albuquerque have suggested banning backyards -- despised as wasteful and 'anti-social' by new urbanists and environmentalists, although it is near-impossible to find a family that doesn't want one. Even the mayor of Boise, Idaho, advocates tilting city development away from private homes, which now dominate the market, toward apartments.

"Perhaps the best-known case of anti-sprawl legislation has been the 'urban growth boundary,' adopted in the late '70s to restrict development to areas closer to established urban areas. To slow the spread of suburban, single-family-home growth, the Portland region adopted a "grow up, not out" planning regime, which stressed dense, multistory development. Mass transit was given priority over road construction, which was deemed to be sprawl-inducing.

"Experts differ on the impact of these regulations, but it certainly has not created the new urbanist nirvana widely promoted by Portland's boosters. Strict growth limits have driven population and job growth further out, in part by raising the price of land within the growth boundary, to communities across the Columbia River in Washington state and to distant places in Oregon. Suburbia has not been crushed, but simply pushed farther away. Portland's dispersing trend appears to have intensified since 2000: The city's population growth has slowed considerably, and 95% of regional population increase has taken place outside the city limits.

"This experience may soon be repeated elsewhere as planners and self-proclaimed visionaries run up against people's aspirations for a single-family home and low-to-moderate-density environment. Such desires may constitute, as late Robert Moses once noted, 'details too intimate' to merit the attention of the university-trained. Even around cities like Paris, London, Toronto and Tokyo -- all places with a strong tradition of central planning -- growth continues to follow the preference of citizens to look for lower-density communities. High energy prices and convenient transit have not stopped most of these cities from continuing to lose population to their ever-expanding suburban rings.

"But nowhere is this commitment to low-density living greater than in the U.S. Roughly 51% of Americans, according to recent polls, prefer to live in the suburbs, while only 13% opt for life in a dense urban place. A third would go for an even more low-density existence in the countryside. The preference for suburban-style living continues to be particularly strong among younger families. Market trends parallel these opinions. Despite widespread media exposure about a massive 'return to the city,' demographic data suggest that the tide continues to go out toward suburbia, which now accounts for two-thirds of the population in our large metropolitan areas. Since 2000, suburbs have accounted for 85% of all growth in these areas. And much of the growth credited to 'cities' has actually taken place in the totally suburb-like fringes of places like Phoenix, Orlando and Las Vegas.

"These facts do not seem to penetrate the consciousness of the great metropolitan newspapers anymore than the minds of their favored interlocutors in the planning profession and academia. Newspapers from Boston and San Francisco to Los Angeles are routinely filled with anecdotal accounts of former suburbanites streaking into hip lofts and high-rises in the central core. Typical was a risible story that ran in last Sunday's New York Times, titled 'Goodbye, Suburbia.' The piece tracked the hegira back to the city by sophisticated urbanites who left their McMansions to return to Tribeca (rhymes with 'Mecca'). Suburbia, one returnee sniffed, is 'just a giant echoing space.'

"Such reports confirm the cognoscente's notion that the cure for the single-family house lies in the requisite lifting of consciousness, not to mention a couple of spare million in the bank. Yet demographic data suggest the vast majority of all growth in greater New York comes not from migration from the suburbs, but from abroad. Among domestic migrants, far more leave for the 'giant echoing spaces' than come back to the city. As a whole, greater New York -- easily the most alluring traditional urban center -- is steadily becoming more, not less, suburban. Since 2000, notes analyst Wendell Cox, New York City has gained less than 95,000 people while the suburban rings have added over 270,000. Growth in 'deathlike' places like Suffolk County, in Long Island, Orange County, N.Y., and Morris County, N.J., has been well over three times faster than the city.

"So as he unfolds the details of his new urban 'vision,' Mr. Villaraigosa might do well to consider such sobering statistics. Californians, too, like single-family homes. According to a 2002 poll, 84% prefer them to apartments. Instead of dismissing the suburban single-family neighborhood as 'an old concept,' L.A.'s mayor might look to how to capitalize on the success of such sections of his city as the San Fernando Valley, where a large percentage of the housing stock is made up of owner-occupied houses and low-rise condominiums. The increasingly multi-ethnic valley already boasts both the city's largest base of homeowners, as well as its strongest economy, including roughly two-thirds of the employment in the critical entertainment industry.
It is time politicians recognized how their constituents actually want to live. If not, they will only hurt their communities, and force aspiring middle-class families to migrate ever further out to the periphery for the privacy, personal space and ownership that constitutes the basis of their common dreams."