I recently listened to the Strong Towns podcast with Chuck Marohn and Scott Beyer (https://www.strongtowns.org/journal/2017/8/30/podcast-a-conversation-about-market-urbanism) two of the most influential urban policy advocates/bloggers. In it, the principals “take on a contentious conversation about government regulations, zoning and housing—and how incremental development may or may not work in American cities.”
I was struck that each takes a fundamentally conservative view on urban development. Strong Towns: fiscal insolvency from federal and state subsidies that create unsustainable future maintenance liabilities. Market Urbanism: dramatically reduce zoning to allow market to flourish.
These are both important areas for focus, but what I think can be added to the mix is the idea of ensuring a market place where users pay the full cost for their housing and transportation choices. A Market Urbanism plus Pigouvian Taxes.
Current development patterns have been distorted by regulations such as height limits and zoning and explicitly subsidized (e.g. federal cost sharing). These are the issues with which Market Urbanism and Strong Towns seem to be most concerned.
However, there are also the negative externalities for which users do not currently pay for the costs and damages that they foist upon others (and the implicit subsidies e.g. FHA loans didn’t cover urban core or renovation, which I won’t address now). Not compelling users to pay for the costs they impose on others leads to land use and transportation decisions that are unsustainable.
For example, residents pay for the cost to extract, transport and supply fossil fuels for the generation of electricity to air condition every indoor space, but they do not pay for the pollution and climate change that result. They likewise don’t pay the full cost of their water supply, automobile fuel, roads, congestion, trash disposal etc and neither does anyone else except collectively.
If we want housing and transportation markets, these markets should be level playing fields which reveal user preference while also limiting users’ ability to do uncompensated harm to others.
