I've Got a Little List
By Bryan Caplan
This is truly a remarkable list. One thing to note is that Caplan doesn’t seem to grasp that criticisms of pro-suburban policies are largely about the forms that are encouraged rather than the
locations. To the extent that regulations against developing empty land and government land ownership are actually major issues constraining metropolitan growth, they’re barriers to development of any kind — “urban” or “suburban” in form…
Legally, that’s true. But as a practical matter, there’s a lot more empty and government land in suburbia (or potential suburbia) than there is in major cities. This is the mirror image of, say, a law capping buildings at ten stories: While the law applies equally to cities and suburbs, it matters a lot more for cities, because that’s where people are eager to build tall buildings.
I must admit that my mind is a little blown by Caplan’s citation of “regulations against mixed use” as an anti-suburban policy. It’s like saying that government is anti-suburb, because it forces people in suburbs to build using suburban development forms which are inconvenient and unpleasant.
Maybe my use of language is idiosyncratic. But to me, the essence of suburbia is low-to-moderate density and widespread use of cars, not rigid separation of residential and commercial buildings. Replacing one of the houses on my block with a small shopping center wouldn’t make it any less suburban. In fact, a lot of the suburbs in the San Fernando Valley where I grew up have such shopping corners.
And then Caplan says that gas taxes in congested areas, which means most of metropolitan America, should actually maybe be increased.
For the record, I only said that taxes in congested areas might make suburbia “more desirable,” not that they “should actually maybe be increased.”
He seems unwilling to wrestle with the fact that increasing gas taxes to reduce congestion would make suburbia more desirable and more efficient, and also (and necessarily) more expensive and smaller. That is, if you used higher gas taxes to get rid of the negative externalities produced by suburban growth, you’d probably wind up with less of it (so long as demand curves slope downward).
This is more complicated than it seems. If a tax genuinely corrects for a negative congestion externality, it reduces driving (especially during peak times), but could actually on net increase demand to live in the area with congestion taxes. Think about it this way: Suppose I-66 got so congested that it took 4 hours to get into DC from Fairfax. Real estate prices in Fairfax would probably be pretty low due to the incredible inconvenience of getting into the city. If you imposed a gas tax – or better yet, peak-load pricing – fewer people would drive. But demand for Fairfax real estate could easily go up, increasing both the price and quantity of homes in this newly convenient location.
Or consider this hypothetical: Suppose a firm built a private highway from Winchester to DC. The speed limit is 90 mph, and the tolls vary electronically to keep traffic moving at the speed limit throughout the day. How would real estate development respond? Consider: On my hypothetical road, commuters could cover the 74 miles from Winchester to DC in 49 minutes. I predict a lot of McMansions shooting up around Winchester, even if the monthly toll were $600/month. Am I wrong?
I admit that urban economics isn’t my specialty. If someone like Ed Glaeser told me that the government policies on my
list weren’t empirically important, he’d have my attention. But for now, I’ll stick to my guns.