Thursday, January 15, 2015

Better than "smart"

Robin Hanson asks "Why not sell cities?"  You buy and own the city; you become the residual claimant (landlord) and can internalize all sorts of externalities. It could be a good deal.

I have often cited the shopping mall as an example of a single owner as the best possible land use planner (for that mall) because of the ability to internalize externalities.

The question always comes up about how scalable the mall example is.  Hanson alludes to some of the difficulties, especially with respect to governance and politics. Spencer MacCallum has famously suggested the hotel as a model for governance and public facilities and space use via contract. (The thing you sign when you check in or make the reservation.) Contracts respond to market forces and management has to choose, for example, who gets "free" wi-fi, gym access, bottled water, etc.

Bob Nelson has been writing about private communities -- and privatizing more of them -- for some years.  The privatizing part is not simple.

All three of the cited works deserve a hearing. Conventional city planning is stuck in a "smart" growth rut whereby growth controls and a bizarre approvals process have resulted in high costs and housing "affordability" problems. Connected crony developers get rich, as do lawyers and handlers who make a good living off the sorry mess.

At the same time, suburbanization trends continue. The promised "smart" benefits have not been realized but the costs have.


Arnold Kling on the same topics.