Poor land use in the world’s greatest cities carries a huge cost

I may live in the densest neighborhood of any HN participant: North Battery Park City [1] in Lower Manhattan. As an example, my son&#x27;s 500 kid elementary school serves <i>9</i> buildings.<p>And I&#x27;m here to tell you, the future feels great. Specifically, living vertically has all sorts of wonderful aspects in terms of community (the kids can trick-or-treat without leaving the building), access to resources (my kids can ride the elevator barefoot to the waterpark out the back door in the summer) and environmentally (we live in the first LEED platinum residential building in the US).<p>The only problem is that it is expensive, and it doesn&#x27;t need to be as expensive as it is. Building lots more residential skyscrapers, eliminating parking minimums [2], and reducing the incentive to warehouse vacant lots through land taxes or similar can all make New York City even more livable than it already is.<p>[1] <a href="http:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Battery_Park_City" rel="nofollow">http:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Battery_Park_City</a> [2] <a href="http:&#x2F;&#x2F;www.streetsblog.org&#x2F;2012&#x2F;03&#x2F;21&#x2F;report-details-how-onerous-nycs-parking-regressive-minimums-really-are&#x2F;" rel="nofollow">http:&#x2F;&#x2F;www.streetsblog.org&#x2F;2012&#x2F;03&#x2F;21&#x2F;report-details-how-one...</a>

&gt; Land taxes are efficient. They are difficult to dodge; you cannot stuff land into a bank-vault in Luxembourg. Whereas a high tax on property can discourage investment, a high tax on land creates an incentive to develop unused sites. Land-value taxes can also help cater for newcomers. New infrastructure raises the value of nearby land, automatically feeding through into revenues—which helps to pay for the improvements.<p>+1000<p>Living in West Oakland next to a vacant lot, I think there&#x27;s a lot of merit to this idea. As it stands right now, there&#x27;s no harm to the owner of that lot to just let it lay vacant for a decade. If it cost the owner some money, people might actually do something with these kinds of lots.

&gt; Lifting all the barriers to urban growth in America could raise the country’s GDP by between 6.5% and 13.5%, or by about $1 trillion-2 trillion. It is difficult to think of many other policies that would yield anything like that.<p>And it would also reduce the real but unaccounted-for environmental and social externalities of our sprawling homogenous suburbs. Someone living in New York has half the energy footprint of the average American. And while the city is pretty segregated, the New York subway is a unique setting of rich and poor people of all races utilizing a public service together.

Something that annoys me about these articles is that they&#x27;re basically saying &quot;the world&#x27;s densest cities should make themselves denser&quot;<p>Maybe we should just copy what those cities did. Imagine what america&#x27;s GDP would be like if it had ten cities like the current NYC.<p>I live in one of the densest neighborhoods in north America, the plateau in Montreal. It achieves this density with low rise buildings, and it&#x27;s a very pleasant area.<p>People say we should build taller buildings here. But I say we should build more plateaus elsewhere.<p>The problem is that our current regulatory environment makes it very difficult to build new versions of the world&#x27;s most popular neighborhoods. So instead the call is to modify existing, successful neighborhoods.

&quot;land-use regulations in the West End of London inflate the price of office space by about 800%; Milan and Paris the rules push up prices by around 300%.&quot;<p>I live in Milan so I think I&#x27;m qualified to write about this. The office space one wants is close to home or to metro or train stations, unless one lives outside the city. In that case the best office space is close to the highways on the same side of the city you&#x27;re from. I used to work at 10 minutes by feet from office, then exactly at the other side of the city. It took one hour to get to office, by car or public transport. I preferred public transport because of the free time for reading. I work mostly from home now with customers within 30 minutes (walking of cycling), which is even better.<p>I can understand that zoning rules limit the number of offices and houses that can be build close to the best areas but as a city dweller do I really want to see buildings built everywhere, in every single space between existing buildings or replacing smaller ones? Call me selfish because I don&#x27;t care about raising the country GDP but I don&#x27;t think so. Maybe it&#x27;s because I&#x27;m European but my ideal of a city is not a large archaeology. It&#x27;s more like this <a href="http:&#x2F;&#x2F;goitaly.about.com&#x2F;od&#x2F;moreitaliancities&#x2F;tp&#x2F;small-italian-cities.htm" rel="nofollow">http:&#x2F;&#x2F;goitaly.about.com&#x2F;od&#x2F;moreitaliancities&#x2F;tp&#x2F;small-itali...</a> and Milan is a reasonable compromise between access to fast Internet, customers and quality of life. People born in those other cities won&#x27;t agree but they still come here to work :-)

This seems like a very interesting subject but the analysis seems very one-handed. You can&#x27;t just project like that, remove current regulations and expect the city to remain the same except for all the economical growth. Would people with money actually stay there or would those cities turn into a unbreathable bee-hives from which people would flee as soon as they had any money to do it?<p>It would be interesting to see comparison inside the same country of cities with harsher versus lighter regulations and how they actually evolve economically and socially. Maybe it&#x27;s not even possible to remove certain regulations in western cities without committing political suicide and having them removed once the next major comes to power.

&quot;Two long-run trends have led to this fractured market. One is the revival of the city as the central cog in the global economic machine (see article). In the 20th century, tumbling transport costs weakened the gravitational pull of the city; in the 21st, the digital revolution has restored it. Knowledge-intensive industries such as technology and finance thrive on the clustering of workers who share ideas and expertise. The economies and populations of metropolises like London, New York and San Francisco have rebounded as a result.&quot;<p>Is this really true?<p>seems like anyone with an internet connection can interface with someone from SF or NYC

Ah skip to the last paragraph. It&#x27;s just the usual &quot;things would be better if only we took away more of people&#x27;s money by force&quot; article.<p>Ignore it. It&#x27;s just pro-tax stupidiy

Tokyo is a public-transport-centered city and has an interesting structure. The land value depends directly on the distance to the metro or train station and the importance of the line. The train station is the center of a self-contained community and most of the services like shops, restaurants, supermarkets, etc use to be next to the station. Also, the buildings tend to be taller the closer they are from the station. I find it a quite convenient way to organize a city.

&quot;According to one study, employment in the Bay Area around San Francisco would be about five times larger than it is but for tight limits on construction.&quot;

Eventually the market would eliminate wasteful land use because whatever was occupying the land would be willing to sell to someone who could benefit from it more.<p>Bureaucracy and entrenchment get in the way of that though.

<i>Knowledge-intensive industries such as technology and finance thrive on the clustering of workers who share ideas and expertise.</i><p>So allow people to cluster in high quality virtual environments.

We need to rethink our cities as commerce&#x2F;life supporting machines instead of aggregate plots of land for private investment. Or are we not mega-scale engineers yet...?

The problem is not the poor land use, it&#x27;s the inefficient capital use!

We need to do a few things. I agree on shutting down the NIMBYs. It&#x27;s zero-sum activity that hurts young families and contributes to the generational screw-over that Generation X and Millennials have experienced.<p>We also need to block nonresident foreigners from buying real estate here. They can stay in hotels. Until housing is cheaper than 0.35% of the median annual income per SF (at that level, you can afford 1200-1500 SF on a median income) it is a crime to let these nonresident foreigners (often laundering dirty money) buy properties that will go uninhabited for 11 months each year.<p>Finally, there&#x27;s a capital allocation problem. Look at Silicon Valley itself. It takes in passive capital from all over the country-- teachers&#x27; pension funds from Ohio, firefighter AD&amp;D funds from Georgia-- and distributes the job-creation in a tiny geographic area: Silicon Valley. Jobs disappear in Ohio and Georgia, while NorCal booms. Now, the passive capitalists would be fine with this if that were a working investment strategy. It&#x27;s not, though: VCs have been losing money for more than a decade. The concentration of funds into the Bay Area (which makes that area unaffordable, because housing creation is always slower than job creation) has more to do with feudalism than any sound investment policy.