What City Observatory did this week

1. Shrinking offices: What it means for cities. Its not just you’re imagination: offices are becoming less common and smaller, and a variety of space-sharing and space-saving practices are taking hold in businesses around the nation. The number of square feet of office space leased per new office employee has fallen from about 175 square feet in the late 1990s, to only about 50 square feet in the past six years. This greater space efficiency coincides with the growth of city focused industries like software and professional services, and suggests we can accommodate a good deal of job growth within the existing footprint of the nation’s cities.

2. What economists say about rent control. Rising rents around the country are bringing back demands for a long-discredited policy: rent control. While economists have been almost unanimously opposed to rent control schemes, some advocates have pointed to more nuanced analyses which concede that “temperate” or “second-generation,” rent controls have fewer adverse effects. A close reading of key studies by economists Tony Downs and Richard Arnott shows that actually neither author endorses these new age forms of rent control, and in fact the absence of negative effects from some schemes is mostly because they don’t actually limit rents much below market rates.

3. LaLaLand: The Triumph/Twilight of NIMBYism? Los Angeles voters resoundingly rejected Measure S, an initiative that would have imposed a two year moratorium on most plan changes, and which would have made it much harder to increase density in the city. The measure’s proponents campaigned on a range of issues, including traditional NIMBY-concerns about effects of new development and a city planning process seen as highly ad hoc and politicized. Nonetheless voters rejected the measure with 69 percent voting “No.” The election’s outcome is even more surprising given the proponents maneuver to have the measure voted on at this March local election, rather than at the November general election. Turnout in March was not only much lighter, but heavily skewed toward older voters and homeowners, much more of a NIMBY friendly demographic. One key to fighting NIMBYism seems to be to tackle planning issues at the broadest possible geographic scale, rather than development by development or neighborhood by neighborhood.

Must read

So much to read this week: There must be something in the water.

It’s the prices, stupid.  Land Use and Vehicle Miles Traveled.  The past week has been dominated by discussions of a usually arcane, chiefly academic topic: how does urban form, including density, influence how much people travel. The debate played out initially in a meta-analysis of studies by Mark Stevens showing the connection between urban form and driving was less strong than earlier claimed.

It was challenged by excellent commentaries by Chris Nelson, Susan Handy and Reid Ewing all pushing back on the thesis in one way or another.  All are well-argued and worth reading.  But to our way of thinking, Michael Manville‘s paper drops a scimitar through the Gordian knot here.  Manville points out that all of the guessing about how aspects of the built environment influence driving (density, design, mixed use, etc) ignore the central point, which he neatly summarizes in just a few words. It’s short enough to make a haiku or a plausible tattoo:

Governments give drivers free land; people as a result drive more than they otherwise would.

That’s it.

The rest is commentary.

We give away road space for free, both for travel and private car storage. We also require most new stores and houses to build and maintain free parking at private expense.These policies–which are routinely ignored in the land use/VMT studies–trump all of the other variations in policy and form in incentivizing driving. Manville’s observation squares with the evidence we printed earlier about the strong connection between parking prices and transit ridership. Build as dense and well-designed, as walk friendly and transit-served as city as you like, and so long as you subsidize road space and car storage, you’ll get lots of driving.

Tactics, strategy and vision: In a blog post neatly reviewing this whole contretemps at the Frontier Group, Tony Dutzik agrees with the logic of Manville, but raises doubts about the political feasibility of implementing road pricing–at least any time soon. The underlying problem, as Dutzik eloquently explains, too much of our thinking about planning and transportation is predicated on the unrealistic assumption that we can regain a largely fictional world of cheap (heavily subsidized) housing, short commutes and negligible traffic. Until we develop more realistic expectations of what’s possible, we’re just courting disappointment and increasing distrust, which will make political agreement about solutions even harder.

Exaggerating the economic benefits of highway projects. Our friend Chuck Marohn of StrongTowns takes out the trash on the inflated claims that are made about the economic benefits of building highways. Like every big highway project, Shreveport’s ‘s I-49 connector has an accompanying economic impact analysis which claims that the project will produce millions in benefits from time savings and greater productivity. The productivity claim is based on a very expansive reading of a French economic study called “Size, speed and sprawl.” Chuck shows how highway advocates have twisted and exaggerated this academic work to gin up big numbers to support their project.

Self-driving cars can’t cure congestion, but pricing roads can. The New York Times Upshot has a nice synthesis of the recent discussion of the impact of transportation network companies (and someday, maybe soon, autonomous vehicles) on urban traffic. They’ve presented to the mass audience several of the key points we’ve discussed here at City Observatory: notably, the recent Schaller study showing that Uber, Lyft and other ride-sharing services are responsible for growing traffic and slower travel times in New York. Conor Daugherty concludes that self-driving vehicles likely won’t solve this problem, but as many economists have argued, pricing the roads could.

Glaeser: Cities are the lifeblood of our nation’s economy. Jennifer Rubin interviews Ed Glaeser for the Washington Post. She gets Glaeser to dive deep into the critical role that cities play, not just in attracting and aggregating talent, but making us smarter. Cities are forges for human capital, and the longer workers spend in cities, the more productive and better paid they become, as the acquire more skills and find their way to the institutions and endeavors that best match their strengths. Its the dynamic, self reinforcing aspect of talent in cities that makes them especially important for national economic success.

New research

Economic development incentives. The Upjohn Institute’s Tim Bartik, perhaps the nation’s leading scholar on economic development, has new research and a publicly available database on the number and extent of state business incentives.  Over at CityLab, Richard Florida summarizes Bartik’s research in a short essay. Bottom line: in 2015 tax breaks cost more than $45 billion, and were overall, ineffective.  Given the variation in state tax systems, the complexity of different businesses and the arcane nature of tax breaks, this has been a prodigious undertaking. The full database, which covers 33 states, and two decades, is available through the Upjohn Institute.