The San Francisco Bay area is one of the most productive regions in the world, particularly the Silicon Valley area near San Jose. Unfortunately, many workers are priced out of moving there due to extremely high real estate prices. But what if we could build a brand new city from scratch, for a million people. The city would be near San Jose and would be much less dense than San Francisco. A developer could create sensible transit, bike paths, parks, etc. Sort of like Irvine, California, but much larger. The rolling countryside would allow for quite attractive residential neighborhoods:
You might say that it would be impossible to put together a piece of land near San Jose that is large enough to house more people than San Francisco, and at a much lower density. Where would one find the land?
Actually, this sort of parcel is currently for sale. And it is almost 70% larger than San Francisco, which is a city of 880,000 people:
That’s right, the N3 Cattle Company is currently for sale, and it is much larger than San Francisco.
But what developer could possibly afford such a vast piece of land in one of the most desirable spots on Earth?
Actually, the asking price is surprisingly low. Here’s the WSJ:
A working ranch larger than the city of San Francisco is asking $72 million. The property, just 40 miles from Oakland, is believed to be the largest piece of land for sale in the state of California, according to the listing agent.
At 50,500 acres, the property accommodates up to 1,500 cow and calf pairs. The right buyer is someone who “wants to relive the Old West,” said listing agent Todd Renfrew of California Outdoor Properties.
The N3 Cattle Company ranch has been in the same family for about 85 years and spans four counties, including Santa Clara County, Alameda County, San Joaquin County and Stanislaus County.
To put that number in perspective, it is 7% of the cost of a single new skyscraper in San Francisco, and less than 2% of the cost of the new $5 billion Apple headquarters in Silicon Valley. Indeed these 79 square miles are selling for less than half the cost of the land under the new Apple headquarters. In other words, this parcel capable of producing the most spectacular new city in the world, in an area with a vast need for new housing, is selling for a pittance.
I don’t know all of the reasons for the low price, but I suspect it reflects the fact that California will not allow the new owners to build the city I just described. If I am correct, then the regulation that prevents this from occurring (a regulation that likely did not exist in the 1970s when the Irvine Ranch was developed) has the effect of destroying hundreds of billions of dollars in potential wealth.
Does this regulation help the environment? Probably not, as California is quite energy efficient, indeed much more so than the US as a whole. While I can’t be certain given all of the indirect effects, it seems likely that people moving into this new city from elsewhere in America would be reducing their carbon footprint.
Of all the “low hanging fruit” actions we could take to “make America great again”, the lowest fruit of all is to reform our zoning laws.
Undoubtedly there’s a bit of hyperbole in this post; perhaps some of the land is too mountainous to develop. But the losses from regulation of land use are enormous, under any reasonable assumptions.
PS. Rather than having a buyer who “wants to relive the Old West” for him and his family, I’d prefer a buyer who wants to recreate the California dream of the 1970s for a million Americans stuck in cold, boring, unproductive rustbelt cities.
PPS: Thank God that the environmentalists didn’t have the upper hand when it was time to develop the lovely hills of Orange County, where I live. (Actually I live far inland from Laguna Beach, pictured below, but it’s still nice.)
READER COMMENTS
Phil H
Jul 9 2019 at 9:05pm
I struggle with a bit of cognitive dissonance when I see this kind of argument. On the one hand, the argument looks reasonable. On the other, there seems to be a glaring contradiction:
(1) Market prices usually reflect real demand
(2) California has lots of zoning regulations
(3) California (or parts thereof) land prices are very high
When you add those together, doesn’t that suggest that people like heavily-zoned land? I’m not sure I can quite get past the element of “markets are always right, except in the specific ways I think they’re wrong.”
But having said that, building new towns in California sounds like a really good idea, so I don’t disagree with the objective.
Kevin M
Jul 9 2019 at 9:28pm
Broadly speaking, the argument goes something like this.
In the beginning, there was Blockbuster. And Blockbuster paid $10-12/hour in any mid-sized city in America, so there was absolutely no reason to move cities (In practice, this overstates the case, but bear with me).
And then Netflix showed up. And Netflix ca. 2011 was 2,000 people in a room in Los Gatos, CA. So if you were in SF, you had access to 30 Million subs * $9/month… $3 BILLION in cashflow a year.
So being in Detroit gave you 0 access to the magic room, and being in San Jose gave you some access to the magic room that prints $3 Billion/year, and second-order services to the people who were extracting $3 Billion/year out of Netflix, $50 Billion out of Facebook, $100 Billion out of Google…
So that’s Step #1. It’s not about “zoned land”, it’s about “Being near the magic room, which unfortunately requires being on zoned land”.
And then San Jose was really heavily zoned. So there’s only so many bedrooms/apartments with access to magic room that prints money. At which point, the rent went up because when you can make $60K in Detroit and $160K in Palo Alto, you can and should pay $5K in rent.
That’s Step #2. Rents reflected the wage premium minus taxes.
Now Step #3: Why Land Prices are so high.
Since there was no way to spend several billion building giant skyscrapers full of very expensive rooms (and of course, adding more people, thus bringing down rents and wages), you ended up with a 3 BR house whose rent cashflow was worth $2 Million that cost $300K to build.
TADA, the land underneath is the residual of “Cashflow minus construction costs” and you have a $1.7 Million lot.
Scott Sumner
Jul 9 2019 at 9:41pm
Phil, I’m not sure I follow your argument. I’m not arguing that markets are wrong, rather that regulations are wrong.
Michael Pettengill
Jul 12 2019 at 2:15am
What regulation prevents the new landowner going to the governor and legislature for authority to privately pay for $50-100 billion in infrastructure?
Some surface roads, but mostly either tunnels or elevated to quickly more people and cargo in/out of the development.
And water.
1500 head of cows on that much land means arid land so water will need to be brought in for city/industry. Even with local waste water recycling, a lot of new water will be required daily, just the waste water treatment plant will be in the billion range.
It would need a couple hundred miles of something like hyperloop radiating out to target job markets, running at speeds of 250mph from the development to each job center so the time to commute is less than half an hour.
Given existing surface development, tunneling at low cost is the only solution, smaller bore than rail. The same method can bring in water.
Kevin Erdmann
Jul 9 2019 at 9:58pm
Phil, maybe this will help. If you can buy beer for $5, then your state passes a regulation giving cronies a liquor distribution monopoly and now beer is $10, does that mean that people in your state prefer the monopoly beer?
Phil H
Jul 10 2019 at 2:52am
Thanks for those replies.
Kevin: Sure I understand your example. The question would be: do sales of beer go down? If the state jacks up the price of beer, and then sales go up, it would suggest that something is happening that is not quite explained by econ 101 rules. In California, the state jacked up the price of land with restrictive zoning, and then people flooded in and jacked it up a whole lot more. That’s not what the demand curve says is supposed to happen.
Scott: I’m suggesting that far from destroying value, the zoning rules could be what created the value in the first place. As in, attracted the kind of people who have the leisure and the intellect to do things like building Silicon Valley. I mean, I know Houston’s a boom town now, but how many people are taking their families and thinking: Hey, I’d really like to be raising my kids in the beautiful, bohemian, tolerant atmosphere of Houston…
Kevin Erdmann
Jul 10 2019 at 1:12pm
Phil, the quantity demanded has clearly gone down, not up.
As far as the demand curve itself goes, I dont think things like having an hour commute are drawing people to the state at all.
Phil H
Jul 12 2019 at 4:03am
Look, I’m not at all sure I understand this phenomenon… but when you say things like that, I’m very sure that you don’t!
“…the quantity demanded has clearly gone down…I dont think things like having an hour commute are drawing people to the state…”
San Francisco recently became the world’s most valuable patch of real estate, didn’t it? Clearly, people want to live there, and want it so much that they are willing to pay a vast premium for the privilege. Denying the reality of what market prices tell you is precisely the opposite of what an economist is supposed to do, isn’t it?
Anonymous
Aug 6 2019 at 12:26am
Many more people would want to live there if the cost was lower, so quantity demanded is lower with the higher price. You don’t think there are other factors that might influence how much someone wants to live in San Francisco besides zoning? If you do think so, then you shouldn’t think it is obvious that because prices continued to go up after zoning, zoning is responsible for increasing the number of people who want to move to San Francisco
AMW
Jul 10 2019 at 2:18pm
Phil H,
In a supply/demand curve context, the effect of zoning restrictions is to make the supply curve (especially the long-run supply curve) more inelastic. That might increase prices immediately, but probably not by much. The major effect will be over time. As demand for housing grows and the demand curve shifts right it will create a larger increase in price that it would have otherwise. Moreover, without the zoning the higher price would attract new firms into the market, pushing the price back down to its long-run equilibrium. But the zoning restrictions impede this process, keeping the prices higher.
There is no contradiction between Scott’s post and the supply/demand model.
Dylan
Jul 11 2019 at 11:08am
If I understand Phil correctly, he is saying that in addition to effecting the supply curve, zoning regulations can also increase demand for housing. To take one exaggerated example, buyers would likely pay more for a house where they know that the next door property can’t be developed into a toxic waste dump, than an otherwise identical house where a toxic waste dump is possible.
There’s a reason that zoning laws exist, and I think that the side effect of reducing housing supply and driving up prices is only a happy side-benefit for home owners, and that the real reason is that people generally like their neighborhood the way it is when they moved in, and don’t want it to change all that much. There’s a basic tension in figuring out where to live between being close to everything that’s important to you (job, stores, entertainment options)…and not having to live close to annoying neighbors. Zoning regulations are one attempt to try and square that circle.
Dan Q
Jul 11 2019 at 4:02pm
Phil, actually people are taking their families and moving to beautiful, tolerant, bohemian Houston; that’s what is making it a boom town. And although beauty is in the eye of the beholder, there is no doubt a strong tolerant (and bohemian) current running through the city. The current mayor is African American and the previous mayor, Annise Parker, was one of the first openly gay mayors of a major US city, in fact the largest US city at the time to elect an openly gay mayor. So presuming you mean tolerant of minorities, then yes, Houston qualifies. You should visit some time; I think you would find it more congenial than you seem to expect. Check out the Montrose area for your bohemian fix.
Mark Z
Jul 12 2019 at 10:56pm
Laws aren’t markets. Your argument seems to be a specific case of the argument that something ought to be illegal because it is illegal.
Paul Crowley
Jul 9 2019 at 10:04pm
Have a look at that area on satellite view. Building a city on such hostile, mountainous land would be at best extremely challenging.
I agree that zoning is a value-destroying disaster.
Scott Sumner
Jul 10 2019 at 12:38am
Paul, OK, but in the picture it looks more like hills than mountains. Given the value of that land, and the creativity of CA builders in putting houses in places like Malibu and Laguna Beach, I think they’d find a way.
Peter McCluskey
Jul 10 2019 at 2:37pm
There are plenty of places within that ranch look sort of nice for building houses, but the “direct” road from there to San Jose goes over a mountain that is nearly 4000 feet high. I drove that once, and it’s quite scenic in the spring, but I wouldn’t consider going there often unless they put a really big tunnel in.
Why would this area be any better than a city-sized seastead off of San Francisco’s coast?
Mark Brophy
Jul 10 2019 at 12:49pm
There people in California and all over the world living on hills. It’s easy to build there but it’s hard to overcome politicians who insist on stealing other peoples’ property.
Market Fiscalist
Jul 9 2019 at 10:48pm
‘ Rather than having a buyer who “wants to relive the Old West” for him and his family, I’d prefer a buyer who wants to recreate the California dream of the 1970s for a million Americans stuck in cold, boring, unproductive rustbelt cities’
For someone who move to California (from Europe) and always felt I arrived 40 years too late this would be epic !
MarkW
Jul 10 2019 at 7:24am
It’s not that I don’t think California should reform its development regulations — it should. But I still argue that it’s a bogus idea that people moving from ‘rust belt’ states to CA would make either them or society as a whole wealthier. It appears that everybody (from programmers to plumbers and nurses) makes more in CA and that, therefore, everybody is more productive. But that’s an illusion — they don’t earn more and are not more productive. In fact, they’re poorer. Once you adjust for cost of living, California’s poverty rates is the nation’s highest and its median income is in the bottom 10, while the Midwestern states of Minnesota, Iowa, Ohio, Wisconsin, Indiana, and Michigan are all in or near the top 10.
Ah, but if California adopted Texas’s housing policies then it would have low housing prices to go with its high incomes! No, it wouldn’t. If housing prices moderated, so would California salaries. The only reason plumbers and nurses have higher (non-cost-of-living-adjusted) incomes in CA is that’s what it takes to bribe them to live there and put up with the insane housing prices. If housing prices fell, so would salaries and the apparent high-productivity would vanish.
Scott Sumner
Jul 10 2019 at 12:21pm
Mark, That’s simply wrong. Regulations that cause high housing prices don’t explain the high productivity of workers in the Bay Area, they simply reduce living standards. If you relax those counterproductive regulations then real wages will rise.
Why would companies even locate in Silicon Valley if the productivity of workers was not higher?
I agree that California has a lot of poverty, much of which is caused by high housing prices, the result of bad regulations.
MarkW
Jul 10 2019 at 2:21pm
“Regulations that cause high housing prices don’t explain the high productivity of workers in the Bay Area”
I think they do for everybody who isn’t a tech worker (and tech workers are a minority). Imagine Silicon Valley had grown up in an area with loose regulations like Houston’s and housing prices that tracked the national average. In such a scenario, would you have to pay a plumber, nurse, cop, etc MORE to recruit them to live in work in such an alternate reality Bay Area with an average cost of living? I’d say the answer is clearly, “No”. In fact, given the climate, I’d expect you could get any of those folks to work cheaper there than in, say, Minnesota. If the price of SV housing declined, the supply of plumbers willing to live and work there would go up, and the prices of plumbers would go down.
“Why would companies even locate in Silicon Valley if the productivity of workers was not higher?”
Path dependency. That’s where they were founded and that’s where the entrepreneurs and venture capitalists want to live (and housing costs are not an issue for them). But even for run-of-the mill tech-workers, Silicon Valley is a pretty lousy deal. The pay doesn’t make up for the cost of living. The difficulty of attracting American tech-workers to Silicon Valley has resulted in a huge percentage of the work-force being made of up of H1-B employees who are there only for a year or two and are willing to live in cramped conditions while they save money, gain experience, and then they get the hell out.
And California isn’t even in the top of the ranks when it comes to the percentage of the workforce in tech:
“Massachusetts has the highest concentration of tech workers within its workforce (11.3 percent). Virginia (10.7 percent), Washington (10.6 percent), Colorado (10.3 percent), the District of Columbia (10.3 percent) and Maryland (10.2 percent) are next on the list.”
Why do you suppose all those tech workers from the ‘hinterlands’ aren’t pouring into SV?
“I agree that California has a lot of poverty”
But it’s not just the poverty rate. The median wage in California doesn’t go very far. After adjusting for cost-of-living, California has one of the lowest median incomes in the country.
LK Beland
Jul 11 2019 at 10:18am
I agree with Scott Sumner’s general sentiment about zoning and regulations in this area.
To push the idea further: what role should government take in transportation in such a new development? Options:
1-The government mandates the private sector to provide transportation, fully paid for by the users, and lets the corporations decide what to build (trains, bike lanes, small roads, highways, etc.), while requiring that there be a sufficient amount of right-of-ways to ensure efficient flow of people and upgradability.
2- The government goes with the “traditional” publicly-financed car/truck-centric infrastructure that dominates the 20th and early 21st centuries.
3- The government designs the layout and builds infrastructures such that 70-90% of people use an efficient form of active commuting or transit, making sure to design in a way that it can be upgraded as the area develops.
I think that option 1 is better, at least in theory. In practice, option 3 would be interesting, as it could help bring progressives and environmentalists on board, as well as serving as an interesting urban experiment. To me, going with option 2 would seem like a missed opportunity; on one hand, we know that it works, on the other, there is mounting evidence that this model is unsustainable along many dimensions and inefficient.
LK Beland
Jul 11 2019 at 10:23am
Dang, I posted this at the wrong spot.
C.F. the “is California productive” debate: if California and the East Coast aren’t that much more productive than other states and if their residents are not doing as well as other states, isn’t it strange that so much of their income is being redistributed to these other states via Federal taxation and spending?
Scott Sumner
Jul 11 2019 at 11:11am
People would not move to that new California city unless they felt it made them better off.
MarkW
Jul 11 2019 at 11:53am
Right. But how much of a raise would it take for them to feel they’d be better off? With current California housing costs, it’d have to be a pretty big raise. But if housing regulations were as loose as Houston’s and home prices dropped to around the national average, perhaps no raise at all would be required — don’t you think some would move just for the weather?
Alan Goldhammer
Jul 10 2019 at 8:38am
The topography of this land makes development into a city somewhat difficult and there would be a significant cost to the state for building the necessary roads and and infrastructure to connect it to both Silicon Valley and the East Bay. It’s also in a major fire area.
There is a state statute, the Williamson Act, that has provided a property tax abatement in return for keeping the property as farmland. My understanding is this prevents commercial development.
I won’t be surprised if an organization such as the Nature Conservancy purchases the land provided they get a donor. There was a large coastal land parcel they bought with a $150M gift from the Dangermond family (he was the founder of ESRI).
robc
Jul 10 2019 at 9:02am
Where is a certain regular commentor to complain about how Scott never writes anti-zoning articles?
chris
Jul 10 2019 at 10:06am
Scott,
You don’t mention what the specific regulation is that is keeping this land from being developed, but I would guess there are fairly compelling reasons for whatever the regulation is. Without knowing what you are referring to, it’s not really a constructive discussion, as it may be protecting a form of wealth that you may not personally find as much value in.
On a general note, if this property was free of zoning, it’s much more likely that it would be turned into a sprawling, low density suburb, similar to many of the other communities around the bay area. Low density sprawling suburbs are extremely unsustainable, unable to easily take advantage of the mass transit that would be required to make this community a feeder for SF as you intend, and require huge infrastructure investment per capita due to the low density. In the end, the current property owner could make more money from the sale, and a developer would probably make out well, however, the contribution in housing stock to the area wouldn’t be as valuable as you seem to believe and the contribution to suburban sprawl in the area has significant downsides.
You should be arguing for more upzoning in the already developed bay area, as that is the most valuable, in demand, sustainable housing. From another perspective: if SF had the loose zoning you would like, this whole discussion would be moot and this remote land would be no more valuable than today.
Alan Goldhammer
Jul 10 2019 at 11:16am
As I noted in my post above, it’s the Williamson Act. I don’t know all the details but that is what the Sacremento Bee reported in it’s article on this topic. I presume the current owners received property tax abatements over the years in return for keeping the the property as a ‘working farm.’ Thus, the property contractually cannot be developed for another use. This is not a zoning issue.
chris
Jul 10 2019 at 12:09pm
Alan,
Thanks for the information. I somehow missed that part of your previous comment.
Looking at the description for the Williamson Act, it seems to be a very well developed, voluntary financial incentive to maintain open space with the goal of preventing California from losing all of its famland and natural areas to sprawl and to encourage density in already developed areas.
Scott, what is your take knowing more information now? It feels like the basis of your argument (zoning bad) isn’t necessarily applicable here since it’s a voluntary incentive, and a few of us have pointed out the logistical issues with building a new city here anyway.
Scott Sumner
Jul 10 2019 at 12:29pm
I doubt that the Williamson Act is what prevents turning that region into a new city. I suspect it is environmental impact statements, which I oppose. Nothing in this comment section in any way changes my views as expressed in the post. If some parts are too hilly to develop, that’s fine. You could say the same thing about some areas of Orange County, which has higher mountains than anything on this ranch. OC has 3.2 million people, and still has vast areas of wilderness to go hiking.
California is a huge state, and will always have lots of open space. This ranch is a drop in the bucket, in terms of area. Environmental activists should favor California development, as a way to reduce global warming. (Just as they should favor nuclear power.)
chris
Jul 10 2019 at 1:22pm
Scott,
Environmental impact statements are merely a finding of what the impact of development will be, usually pertaining to federal land or large scale industrial projects. It’s how we prevent housing and farmland from being built on contaminated land, prevent historic sites from being carelessly demolished, and prevent development from unknowingly polluting or otherwise impacting local waterways. I have personally seen all of these issues come up in NEPA reviews of land you wouldn’t think twice about and we don’t have another system that would catch these issues with equal effectiveness.
I can possibly see taking issue with how we deal with the information found through a NEPA review, but a blanket statement that these are a bad idea seems to be missing the necessity.
Scott Sumner
Jul 11 2019 at 11:15am
Chris, Environmental impact statements are (mis)used in ways that have nothing to do with the environment, basically a tool of NIMBYism. They actually prevent the construction of infrastructure and dense housing that would improve the environment.
People should be free to build on the land they own. If it’s truly of major environmental importance, have the government buy it and turn it into a park.
Scott Sumner
Jul 10 2019 at 12:35pm
Those low density suburbs were built before Bay area prices were so high. With no zoning and high prices in the Bay area, there’d be lots of very dense areas in the new city, albeit some low density areas as well, for rich people.
chris
Jul 10 2019 at 12:46pm
While I agree with you that, zoning and NIMBYism aside, the bay area would generally be a higher density, I don’t think that would hold for this distant exurb. I don’t know of an existing example of a suburb this far away from a core that maintains a high density. At best, you’ll get a new urbanist style medium density core surrounded by low density residential. Either way, it’s going to have all of the issues noted above
Scott Sumner
Jul 11 2019 at 11:16am
Land in most distant exurbs is far cheaper than this land would be, given its proximity to San Jose, if there were no building restrictions.
IVV
Jul 10 2019 at 10:31am
The Diablo Range is not quite as easy to build in as you might think. The land is extremely hilly. No, you don’t have high sawtooth mountains or anything like that, but most of it isn’t level and the average elevation is higher than the average elevation of the Appalachians. Also, there’s not a lot of water. It’ll have to be transported up into the mountains to see how that would go.
There are two things one can do to learn more about the challenges in the area. First, start in San Jose and drive to the Lick Observatory at the top of Mt. Hamilton. It takes longer than it looks. After that, you can finish the drive across the range through the Del Puerto Canyon until you arrive in Patterson. (If you go around Memorial Day, check out the Apricot Fiesta. At the very least, eat some actual fresh apricots.)
Then, second, check out the path south in the range leading to Diablo Grande. There was an attempt to create a high-end bedroom community out here, complete with golf courses, but it suffered greatly and yes, had huge water problems when there weren’t enough people who would move out there. Despite the geographic closeness, it’s still around three hours by car away from the Bay Area.
The fact is, if building a city in the Diablo Range was easy, we all would have done it already. I agree, on a flat map, the location is fantastic. The fact that the Bay Area’s spillover population has gone past Pleasanton into Tracy and areas further east while much closer land remains both extremely undeveloped and not protected as a wildlife preserve is an indication of the actual economics involved.
Mark
Jul 10 2019 at 11:13am
How’s the weather there? I’ve taken a few trips to California, both Bay Area and Southern, and it always got very hot as soon as I ventured even a short distance from the coast. Perhaps that’s a big part of why the population in California is crammed along the small coastal strip and the interior is much less developed or expensive?
Alan Goldhammer
Jul 10 2019 at 11:20am
In areas that are not directly on the coast temperatures can get quite warm. I grew up in San Diego right near the ocean. We did not have air conditioning as there was no need for it even during the summer. Ten miles inland from our house temperatures can be 10-12 degrees higher. The same applies to most of the other areas as well. California does not have the stifling humidity that we have in the metro DC area.
Scott Sumner
Jul 10 2019 at 12:33pm
California is too cool for my taste, I wish it were hotter. In mid-July the average temperature in Mission Viejo (10 miles inland) is a high of 80 degrees (26 C) with low humidity. It’s perfect in the summer, and a bit too cool for most of the year. In the winter the average high is 67, and it’s a bit rainy.
The Inland Empire (Riverside area) is hotter, but still better than 90% of America.
IVV
Jul 10 2019 at 3:18pm
Pleasanton has an average July temperature of 89 (32 C). It’s 93 in Tracy (34 C).
Mission Viejo’s nothing.
Scott Sumner
Jul 11 2019 at 11:19am
This area is at a higher elevation, and would be cooler.
AMT
Jul 10 2019 at 1:31pm
Google maps tells me that San Jose is over an hour drive from San Francisco, and this looks like it would add about 20-30 minutes to that. I suppose some people might do that, and it in any case developing the area would increase the supply for the whole region and reduce prices. But I think the more important restrictions are those that make increasing density very difficult.
And if the land is too hilly to build on easily, perhaps the best solution is just to repurpose some of the farmland to the north, between Brentwood, Tracy, and Stockton. Perhaps any regulations that make developing that area difficult are a bigger problem than those for this hilly ranching area.
IVV
Jul 10 2019 at 3:11pm
The land between Brentwood, Tracy, and Stockton is more like wetland than farmland. It floods really easily. In fact, Tracy has been the latest bedroom community for the Bay Area and has seen a lot of growth, as has places further east, like Manteca and even Modesto and Turlock. That’s all in prime farmland, and it turns residential plenty fast.
No, the reason the Diablo Range isn’t built up more has less to do with regulation and more to do with physical constraints.
(and look up Diablo Grande for what happens when you try)
AMT
Jul 10 2019 at 3:56pm
Ok I’m not familiar with the area so I cannot say whether it is more wetland or farmland.
But according to the first thing I could find on Diablo Grande, it seems like you are wrong about physical constraints…
“Back in 1993, the proposal for the Diablo Grande planned community in Stanislaus County was huge. The 29,500-acre gated community and golf resort located south of Patterson was set to remake the region. Over the next few years, however, failed environmental reviews and a series of lawsuits derailed the project. Only the first phase, consisting of 2,300 acres and a few hundred homes, were completed.”
https://www.neighborhoods.com/blog/new-plans-for-diablo-grande-would-add-over-2000-homes
Scott Sumner
Jul 11 2019 at 11:20am
Bingo.
Peter
Jul 10 2019 at 1:57pm
“boring … rustbelt cities”
Which tells me you have never lived in them. They are boring like Germany is boring, for tourists and business travelers.
Scott Sumner
Jul 11 2019 at 11:21am
I’ve lived in Wisconsin, Illinois (Chicago) and upstate New York. So I know at least a little bit about the Rustbelt.
Benjamin Cole
Jul 11 2019 at 8:44am
Nice post. Even better, just unzone San Fran and San Jose. Develop the cattle land? Well maybe, but surely that is second-best to a lot more density in SF and SJ. The cattle land is pretty and maybe should be a park or greenbelt.
LK Beland
Jul 11 2019 at 10:19am
I agree with Scott Sumner’s general sentiment about zoning and regulations in this area.
To push the idea further: what role should government take in transportation in such a new development? Options:
1-The government mandates the private sector to provide transportation, fully paid for by the users, and lets the corporations decide what to build (trains, bike lanes, small roads, highways, etc.), while requiring that there be a sufficient amount of right-of-ways to ensure efficient flow of people and upgradability.
2- The government goes with the “traditional” publicly-financed car/truck-centric infrastructure that dominates the 20th and early 21st centuries.
3- The government designs the layout and builds infrastructures such that 70-90% of people use an efficient form of active commuting or transit, making sure to design in a way that it can be upgraded as the area develops.
I think that option 1 is better, at least in theory. In practice, option 3 would be interesting, as it could help bring progressives and environmentalists on board, as well as serving as an interesting urban experiment. To me, going with option 2 would seem like a missed opportunity; on one hand, we know that it works, on the other, there is mounting evidence that this model is unsustainable along many dimensions and inefficient.
nobody.really
Jul 11 2019 at 1:10pm
Mandates the private sector? As in commandeers? Let’s re-phrase:
Option 1A. Government solicits proposals for developing transpiration to the new region–considering efficiency, upgradeablity, and price–with the sole prize being government assistance in securing the necessary rights-of-way for the selected project. But government announces that it will not otherwise develop transportation infrastructure to the new region for the next XX years, thereby not interfering with a potential developer’s monopoly. The selected developer will be free to charge what the market will bear. If the expected cost will exceed the expected revenues, no project will be built.
Option 1B. Government solicits proposals to build transportation to the new region–considering efficiency, upgradeablity, and price–with the prize being that government will treat the winning bidder as a public utility. That is, the winning bidder will assume an obligation to serve, but also receive the power to condemn private land and assess fees on “subscribers” sufficient to recover the utility’s costs plus a fair return on the investment.
LK Beland
Jul 11 2019 at 2:03pm
Yes, these formulations of option 1 are much better than mine.
Mind you, it is possible, in some circumstances, to solicit proposals in a way that limits monopolies. E.g. bike lanes, subways, light rail and roads can compete.
robc
Jul 11 2019 at 2:50pm
Even better:
Government requires the developers to provide right-of-ways but otherwise is free to develop transportation as they see fit, with the requirement that the owners are responsible for future maintenance.
Future maintenance is the problem with your #2. Devoloper pays for initial costs and sticks the city with the long term maintenance.
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