Market adjusts future needs, why making land use plans?

| 54 Comments

Apparent order can emerge in systems without intentional directions.  Economists often argue that planned actions disrupt the behavior of a free-market system that would naturally arrive at a predictable, stable, and desirable equilibrium if just left alone. There is a famous quote from Bernard Siegan, which says "the least fallible of city planners is the free market." A recent article by Samuel Staley also suggests that Houston's non-zoning, market-driven land use approach helped housing weather the subprime mortgage storm.

You could also find heated discussion of land use regulations vs. libertarianism at the Cyburbia Forums - the oldest and most active English language urban planning message board on the Internet. See links below for more information on the debate.

 APA: not open to conservative planners?

What would be the role of urban planners in a libertarian society?

What is "conservative" urban planning?

So the questions are: If you are asked about the conflicts between urban planning and the free-market system, will you defend the planning profession? If yes, how? And if no, why? 

FYI: Response must be posted at least six hours prior to the next class (i.e., by Tuesday noon)

54 Comments

This might be a duplicate...

While I’m probably a bigger proponent for the free-market system than most, I definitely see its negative side and believe planners can play a role in providing a check to this system. This is such a broad topic, but in short, I believe a free-market approach only focuses on the economic side and pays little to no attention to externalities such as pollution, poverty, or sprawl. The free-market system also clearly gives an advantage to the wealthy. Urban planners, while working within a free-market system, can play a key role in minimizing the negative effects of purely economic-focused initiatives and give voice to the financially deprived.

I agree with Adam on this point. Proper planning and some regulation should be implemented to restrain reckless development. With the situation in Houston, I mostly picture such development out growing the capabilities of the local infrastructure (i.e. crowded schools, congested streets, adverse environmental impacts…etc.). Perhaps I am naïve and not observing the entire picture, but I cannot see passed the negative impacts associated with this form of free market development. Sure it may rejuvenate the local economy, but at what cost to the community?

In the example of Houston, one must remember that planning is still taking place—zoning is not the singular planning task; if it were, I can assure you that I would not be in this academic program. The Houston article clearly states that rules exist that regulate parking, setbacks, infrastructure requirements, and other issues that are fundamental planning concerns. Furthermore, issues discussed in previous postings, such as sprawl, pollution, transportation, and poverty are most certainly also being tackled by urban planners in free market Houston. Urban planning, in some form, is a crucial component in even the most unregulated, non-zoned, and supposedly unplanned free market cities.

The article about the lack of zoning in Houston does not address the visual effects of this situation on the community. Are green spaces provided for to screen parking lots? Sidewalks?

Is the owner of a new Comfort Inn in Houston happy that a car tuneup and car wash is in his parking lot instead of an amenity like a restaurant that would be useful to his/her patrons? Is the view outside the hotel window that of a large construction yard which could be located outside a retail zone?

Some of these questions may be impacted by zoning codes in certain parts of the country.

I think it’s pretty telling that Houston only excluded zoning. They realize that without any broad planning efforts externalities such as environmental impacts, insufficient infrastructure capacity, and sprawl (noted by Adam and Greg) would damage the city’s development. So the question I now have is:

How many aspects of planning and regulation need to be excluded before the process can be considered entirely market-based?

It's not as if Houston has done any better than anywhere else. They still suffer from the mortgage crisis, but the author's conjecture is that they MIGHT rebound more quickly. It's pure speculation. It may mean that landowners have more options of what is put on their property, some sectors rebound faster than others.

But what comes with that freedom, is high turnover. Redevelopment is often needed in areas, but there's a large portion of the City that would like consistency, stability, sustainablity. As a homeowner, would you like to see large format retail, strip malls, etc. spring up in blocks where many single family homes were foreclosed on? And, since that type of retail tends to consist of chain stores who are the first to leave when markets turn, what sort of redevelopment is to follow that? In many cases, people flock to gated communities to provide development controls that might be better organized at the city level.

I tend to agree with others that have mentioned the negative aspects of the free market system. Planning and regulation is needed in order to combat larger problems such as sprawl and pollution. The free market system can potentially breed both positive and negative results for a city. While Houston is a good example of a free market system, Portland, Oregon is often cited as a prime example of a city with strong land use planning controls. Portland's urban growth boundary has helped the growth and development of the inner city. While you can argue over how much regulation should be in place in order to control land use decisions, I do not believe a free market system is the best option for creating livable communities for the future.

I agree with the comments above and can only offer a specific example from my summer internship working with the Savannah Metropolitan Planning Commission in Georgia. The free-market and lack of planning left an area of Savannah entirely blighted when the industries servicing the port along the Savannah river left the area, resulting in a significant loss of jobs and segregation. This was certainly not a "predictable, stable, and desirable equilibrium." The area needs flexibility with the market so that developers have capabilities to invest in the area, but without any land use plan and investment by the city to improve the area, you would be hard pressed to find someone willing to stake their business' future in that part of Savannah.

While I tend to agree with others and am critical of the free-market system as creating anything just and therefore healthy and livable in terms of land use, I think the market is something that cannot be simply chosen or not chosen - Here I think land use planning can work with or play a role in shaping the market. The article about California's demographic future, showed how planners can *and it could be argued, must* take into consideration what we know about certain demographic patterns to anticipate the future and accommodate that. But plans can also affect the future and change how those new populations will be accommodated. The politics, the zoning, the types of development - these a products to be sold in and that will affect the shape and activities of the market. We cannot create an economic demand (in terms of rising prices and changes in supply) for New Urban design unless it exists and it is an option for consumers. I think this is where I become disappointed the most - how do we sell public transportation, when there is no example of a "product" out there that is both feasible and desirable enough for a public community to demand it and funnel its resources towards it. I guess in some ways, I am asking that the free-market forces of diversification and improvement of product take over to some degree, but none of this can happen without planners to give them the capacity to do so. (I realize this may be unclear, and I'd be more than happy to clarify in class.)

I am also critical of a strict free market system with no regulation. While I do believe there is an important role for the market to play, my concern would be that in the planning field in particular, lack of regulation would lead the system to be dominated by those with the most resources and that various stakeholders with smaller voices or a lack of resources would be drowned out. That said, I also agree with Jason’s comment that although there is a lack of regulation by way of zoning in Houston, there are still other forms of regulation at play. Another interesting thing to take into account and learn more about would be the aspects of public participation in Houston’s planning processes.
(Sasha Bergman)

We should not forget that one of the original (and ongoing) roles of zoning is to protect property values and prevent encroachment of low income housing into exclusive areas. In this respect, Mr. Staley makes a good theoretical point about the inclusiveness of the system. However, the practice inevitably does not follow this pattern. As has been pointed out by several others on this board, organized capital has the ability to make a much bigger impact on the city and can also find other ways to torpedo development which might jeopardize their investments. Grassroots movements can be marginalized if they do not have a legal basis for complaint or the organizational capacity to propose a more desirable kind of development. Zoning regulations have a stabilizing effect, eliminating the worst nuisances, but often end up standing in the way of progressive ideas.
(Samuel Geer)

First of all, what free-market system? The USA is a mixed-economy with significant government regulation at all levels. We have a long history of the government interfering with the alleged free-market system. So, its hard to say there is a conflict between planning and the free-market system as no such thing exists in the USA.

Next, I'm not so sure conservatism and libertarianism are the same thing. Today's conservatives may align with libertarians to stay "Stop regulating my property because it hurts business" while libertarians may be inclined to side with liberals in saying "Stop regulating what goes on in my bedroom!"

Planners should not fear libertarians by default (for that matter, not even conservatives.) The planning profession shouldn't be a liberals-only club (although it often feels that way). We should be looking toward being passionate, reasonable, and empathic directors of conversation/ideas in our respective interests. Sure, sure, we may not agree with the people we're talking to but they have the right to say what they think and we have the right to try to change their minds -- or our own.

(Chris Kline - just in case it doesn't say it)

I take the middle road that planning cannot be easily viewed on a political spectrum, it has always been about resolving conflicts from all extremes. Finding the most viable solution out of a problem results from many rounds of negotiation. The planner at the end of the day cannot simply go with A if B is actually the better solution.

But backing up, in going through Cyburbia, one issue seemed to crop up often was that people were not sure what kind of "planning" was being discussed. A land use planner or zoning administrator approaches different problems from a physical planner or urban designer. Yet they certainly both operate within the scope of "urban planning." The arguments seemed to categorize whether the planner was doing long-term mandated change as opposed to short-term market solutions.

So in response to the question, a defense I would give in favor of planning, is that it planners and the free market are not exclusive. Planners guide and respond to market forces, weighing in a tremendous load of other factors. Planning stops when real estate softens and it is no surprise that many of my friends in the field were laid off these past few years. Long-term zoning changes only carry if the political will is strong enough -- and at the local level this is not to be taken granted for.

I would defend the profession of planning. As Drew pointed out, the absence of land use planning may result in unstable and unsustainable neighborhoods. Similar to Michelle, I spent my summering interning outside of Minnesota in Anchorage, Alaska. With city roots as a tent city (1915) Anchorage is currently facing the aftermath of a series of free market booms. These booms, directed and funded by natural resource extraction corporations, cobbled together a city that residents describe as “sorely lacking identity”. Incentives to remain in the city are minimal as residential neighborhoods are intermingled with industrial areas, offer little amenities and are separated by high-speed highways and roads. Today the city is attempting to re-identify its neighborhoods however, planning after development is proving difficult and not ideal.

I support Justin's skepticism of Houston's immunity to the mortgage crisis. I also question both the sustainability and motives of a "revolving door" of redevelopment in a metropolitan area. While a free-market may have the capacity to function efficiently in a place such as Houston, I am not convinced that this system of winners and losers has the potential to always, if ever, work in the public interest. Although some planners may disagree, I feel that one of the principal functions of planning can be to support a locale in ways where the market may fail in distributing resources in the form of goods and services evenly. All in all, the evidence presented in the Houston case is insufficient to say that planning efforts are unnecessary and irrelevant elsewhere. Just as communist models cannot be taken from one circumstance and haphazardly applied to cases, neither can capitalist ones.

This is Noel. We tried the free market approach to urban planning in the late 19th and early 20th century. It gave us tenements and the some of the most deplorable housing conditions in history. Such conditions continue to persist today in the slums of Mumbai and other cities in developing countries. The free market allows for these inhumane settlement patterns. While free market advocates would say that those living in ramshackle housing have the freedom to rebel with their wallets, behavioral economists might be quick to remind us that people make imperfect and often irrational decisions with incomplete information. It is through planning that the body politic can counter these failures of the free market and mitigate the effects of externalities such as sub-standard housing, wanton pollution, and unsustainable sprawl.

I agree with Matt that planning has a role in supporting areas that the private sector will not invest in. This can be done with non-profits or through direct planning initiatives. At its smallest, these interventions are spurring the private sector through funds to build projects that are beneficial in the city's view. Mainly, this role for planning is trying to achieve equity which is an area which the free market doesn't really concern itself as Noel's point also has made clear.

Hmmm, having re-read the Houston article, I guess I would say that I think regulation can be a double-edged sword. Regulation is often used as tool to perpetuate the tyranny of the majority some communities by maintaining low density and keeping out the "undesirables" who live in higher density rental housing. At the same time, without some regulation you wind up with the wretched excesses that I mentioned above. Regardless of the author's point, I can't shake the image of suburban wastelands with endless tracts of low density residential housing. Such is the product of permissive zoning. From what I am told, suburban Houston is actually quite sprawled and vehicle dependent. Am I right?

The idea of property rights seems to be at the core of many people's aversion to planning, and ran through the Cyburbia postings. There's a focus in some arenas on reducing government regulation of property. But property rights cut both ways.

It has seemed to me that well written plans and zoning ordinances actually provide a framework of rules that can provide reasonable safeguards for real estate investment, thereby enhancing the investment marketplace. If I own a house on a quiet residential street, I want some assurance that a developer won't come in and tear down the houses on the other side of the street and put up a major store with a big parking lot and lights that shine in my front window, or a parking lot exit that adds lots of cars a day to my residential street.

By the same token, if planning can give me confidence complementary uses will be built around my property, that may enhance my property's value. Zoning laws can be a means to protect my investment in my property, protect the basic character of my neighborhood, give others the confidence to invest in other properties, and make sure my city develops in an orderly way. Planning can enhance, rather than detract from, the marketplace for private investment.

Planning and the free-market system should work to compliment one another. Planning and the use of public investment should not replace what the market will already produce. The purpose of the urban planning is to aid where the market fails. For instance, in the case of zoning-like Bob said- property values and property rights can be protected by zoning. Also, public investment can help to revive a failing neighborhood- a risk that may not be taken by private agencies alone.

Michelle, I believe a way to properly sell large-scale transportation projects in such areas is to broaden the scope of the economic consequences that come with such an opportunistic approach that Houston has developed. Emerging studies are showing an increasingly significant correlation between market-driven, auto-dependent communities and rises in obesity, heart disease and mental illness. How do the costs of providing health care for an increasingly inactive community compare with the relative benefit that Houston saw during the economic downturn? Bring in public health officials, low-income community leaders and school boards to provide a perspective on how land use, when evaluated and developed with only economic prosperity in mind, can create a myriad of distributive costs that are infrequently considered.

In addition, in the Houston article, I find it amusing to consider the successful "market-based" approach as having the greatest effect on the intersections of the beltway surrounding the city - the highway system being one of the greatest federal investments ever to have been created in the history of the U.S. Where would this market be without the initial infrastructure investment?

To piggy back off Sasha's post, I am highly critical of a strict free market system with no regulation as well. If the system were entirely free with no regulation, those stakeholders with the most political power/connections and of course $$$ would essentially take over and have total control. If this were to happen, I believe that a sort of top down approach to development and planning would set in, inappropriately representing the best interests of communities and society as a whole. However, I think a free market system with the aid of professional planners and other forms of regulation would result in a healthy and stable economy and system. The free market system and planning should work with one another to compliment the sought out interests and goals of both. As Erin stated, the purpose of urban planning is to aid where the market fails. Another example of this would be in revitalizing blighted and struggling neighborhoods through transportation and infrastructure improvements, social programs, etc. Each neighborhood possesses its own unique set of issues and goals. Private agencies may or may not know the proper way to go about solving these issues, achieving these goals and reviving a struggling neighborhood. With the help and expertise of urban planners, however, both can work together to formulate an aggressive yet practical approach, increasing the chances of success.

My biggest issue with the free market approach is that the free market does not always choose what is best for the community but relies heavily on what is most profitable and what will provide the developer with the most return on his investment. My fear is that without zoning regulation, the number of units and height of some buildings would be up to the discretion of the developer cramming as many units as the developer thinks they can sell. The planning process is needed to bring a needed compromise between the free-market interest and the neighborhoods needs and interest. Also the market often doesn't know best for a neighborhood and community does. The planning process and zoning plans reflect the needs and wants of the community and are an important part not to be left up to a laissez-faire approach.

In principle I support both the plannning effort and the "pulls and pushes" of free-market system. One is to nuetralize the draconian face of the other. Given a free ride, in the absennce of other, its going to create lopsided development in the society leading to so many of nuisances and controversies. On their own, the free-market forces become callous to so many of communal requirements and feels unbriddled and least responsible to larger interests of the society, because it's pretty money-oriented and has short-term goals of maximum profit. On the other hand, if reins of development are in the ahands of planning instruments alone, they can not realize the development potential of the society and the area, as they get stuck up with the bureaucratic process and develop a notion baout themselves that "we know the best".

I agree with Daniel Schwartz comments that "...a free market system with the aid of professional planners and other forms of regulation would result in a healthy and stable economy and system. The free market system and planning should work with one another to compliment the sought out interests and goals of both."

The fancy dancy development of today's I-610 Loop attracts Staley and he is kind of obviating the need of planning; which I don't agree with. Owing to free-market Houston might be thriving today, but down the line in a couple of decades, or even early, the flop side of this development would emerge; either in the shape of housing fore-closure (mortgage crisis are already raising their heads) or quarrels between the market players themselves.

So Houston may have a stable and affordable housing market, but what about all of the other variables that make a livable city? How is traffic there? What about green spaces and a city that encourages pedestrians? It seems that with a bit more of deliberate direction in how a place will develop/redevelop--offered through land use planning or zoning, but missed in free-market approaches--that negative consequences of hodge-podge development would be averted. I certainly can see that letting the free-market do its job might mean less bureaucracy and perhaps a more efficient process. Yet, planning is important. It gives a unified sense of direction and a degree of knowing what to expect or what we are reaching for in the future, whereas a free-market approach is more individualistic visions and plans for the future.

A lot of great points already made, too!

--Andrea (Trabelsi)

I believe the free market is best left to do what it does which is exist in cycles. People are best off by following market trends and preparing for the future whether good or bad. In recent history foreclosures sky rocketed, the market turned bearish and the economy plummeted. That's part of the market. I think eventually the market would have countered, turned around and housing absorption rates would have returned. How long that would take I do not know.

Urban planners have great purpose and responsibility in providing a faster fix to the free market so that it can once again be bullish. Planning agencies like CDC's, CDA's, and HRA's are able to intervene in the market and use federal dollars to artificially absorb much of the vacant housing market. This sort of intervention provided a sooner date than the free market would have been able to provide. Most important are urban planners and their ability to have insight in the future market changes whether up or down and prepare communities for those changes. Without urban planners we leave too many vulnerable to the free market and its recent volatile nature. With or without urban planners one that pays attention to the market and its cycles will prosper more from the ups and lose less in the downs.

"It is through planning that the body politic can counter these failures of the free market and mitigate the effects of externalities such as sub-standard housing, wanton pollution, and unsustainable sprawl."

Noel, I agree, but would also note that planning and government regulation over the last 50 years has contributed to, rather than mitigated the growth of urban sprawl. In many communities today, large-lot, single-use development with tons of required parking (in other words, sprawl) is the only development allowed by the zoning code.

"It is through planning that the body politic can counter these failures of the free market and mitigate the effects of externalities such as sub-standard housing, wanton pollution, and unsustainable sprawl."

Noel, I agree, but would also note that planning and government regulation over the last 50 years has contributed to, rather than mitigated the growth of urban sprawl. In many communities today, large-lot, single-use development with tons of required parking (in other words, sprawl) is the only development allowed by the zoning code.

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