Is urban water distribution a natural monopoly?

 Arguably, for water, it's a natural monopoly. Public streets typically provide easements for both water and sewer. Both leak, especially with age. So there is a clear need to separate them, so cities put water lines on one side, and sewer lines on the other. Water lines have to be buried below the local frost line, so a second set would need to be even deeper, and provide structural support for the first set previously provided by undisturbed soil. The same is true of sewer, which must be low enough to drain into.

Doom Loop

So, let me posit an argument: As long as the accessibility supplied by highway outstrips the dis-accessibility of congestion, urban areas can keep expanding. As long as the supply of urban land keeps growing at the same rate as demand, land prices remain low. When this ceases, the price of existing urbanized land begins to rise. As those values rise, fewer and fewer people are able to buy, and the rents from that land ownership accrues to fewer and fewer people. This rents enable the purchase of more land, so there is a self-reinforcing feedback loop. Over time, fewer and fewer people own their houses.

Now, this cycle has two possible outcomes: Socialism or Communism. In the Communism case, you get violent revolution by a oppressed proletariat renter class. The US is largely immune, because we have a functional democracy, and can enact 'regime change' non-violently.*

In the socialism case, governments recognize housing has outstripped private ownership for the majority of the population, and start producing 'social housing', where the government owns/rents the land. This is basically where Europe went with post-war welfare states (Britain, Germany). Britain sold off all of it's social housing under Thatcher, permitting people to buy it. It created a one-off surge of Tory home-owners. But now the same problem has re-occurred: The population needs housing, the land is owned by rentier land-lands, and the rent is too damn high.

Fools (conservative and liberal) would like to believe that this dynamic can be fixed by making it easy to buy homes: downpayment assistance, subsidized mortgage rates, mortgage interest tax deductions, home owners property tax deductions. It's foolish because it ignores the underlying dynamic: A fixed supply of land driving increasing land rents.

It's also grossly inegalitarian; it disproportionately benefits the wealthy. Having money (enough to become a landowner) should not be reward by a government handout. Arguably, if it reaches enough people, it's re-distributive. But what share is that? And how shall it be measured? Using the home ownership rate is almost criminal in its duplicity: It reflect people who could buy homes in the last 50 years, not people who can buy houses now.

To my mind, the solution is Georgist: The value of land is not created by private action, but by public investment in transportation. Those outlays should be recouped, in proportion to the degree of value they have created.









*Assuming we have fair boundaries, rather than 'pocket burroughs' owned by one party through gerrymandering....

Is Uber causing car ownership to fall?

Car Ownership in by State

Hard to say with certainty. Car ownership is associated with a number of things, among them income and age. Utah has the largest Millenial population of all the states, and younger people tend to have lower incomes. Similarly, Utah has experienced housing price increases far beyond that supported by local wages (thanks California), making home ownership less affordable. Hypothetically, Millenials may be compensating by purchasing townhomes and condos (with limited parking) or by foregoing cars.

Density is not always a response to market forces

Density is a product of prior investment decisions, some made centuries ago. There have been a number of times when expansions in available land have caused land prices to drop

Sometimes, municipal boundaries are a joke

This is Lehi, Utah. It is a municipality, in Utah County. See all those little black holes in it? Those are county islands: Individual parcels of county land that aren't part of the city.

What a joke. None of them are rural, none of them will ever incorporate as their own cities: They are holdout landowners who didn't want to incorporate.

And then there are the 'cherry stems', with land on the edge of the city that is connected by a tiny corridor ('the cherry stem') to the city proper.

It's an administrative mess. To plan for a few islands in the middle, Lehi has to consult with someone elected to help govern county that is still substantially rural. For an island that shouldn't even fall under county jurisdiction.

There ought to be a law: If your parcel is completely enclosed (surrounded) by an incorporated municipality, it's annexation should be automatic.

On property taxes

I'm a big fan of property taxes. It's a stable, reliable source of funding, which are difficult to avoid. But I had someone present this argument to me: 

"a tax on land is a partial but cumulative confiscation of property".

So here is the counter-argument

"Property tax isa rent payment to the public for the privilege of claiming exclusive use of land; land is unique from labor and capital in that it's supply is fixed"

Car dependence

 I don't think most New Urbanists want to ban all cars. They just want to make cities Car Optional. - Christopher Young 

Public vs. Private Roads

Let's make an important distinction between roadways and highways. Roadways are common resources (rivalrous and non-excludable). Limited access highways are club goods (rivalrous and excludable).

Any network structure (data, telephone, water, electricity, sewerage, roads, highways) has increasing returns to scale, and tends to result in natural monopolies. We recognize that they aren't normal market goods, and regulate them accordingly. Sometimes we mandate competition (internet services), sometimes we socialize them (municipal water and sewer), and sometimes we create regulated monopolies (power and natural gas).

On SLC's wide streets

SLC has the widest streets (132'). It's a quirk resulting from our large blocks, and surveyors convention that the ratio of street width to block size be 5:1 (Our blocks are 660', so it's a 10:2 ratio). In a very limited number of cases, it's handy, as it permits us to do things like have a 24' LRT guideway with 6 lanes of traffic. But most of the time, it's just acres of asphalt. (132' ROW means each blockface represents two acres of asphalt). Some of that gets used for parking, some of it for bikelanes. In other places, we've expanded the 'parkstrip' between sidewalk and curb out 20'. In other places, we've added planted medians with trees.

Gentrification / NextCity

Reading this at NextCity

For the sake of argument, let us define gentrification as the replacement of low-income households by higher income households. (Race being associated with income, it is also associated with racial shift). Low income households are almost universally renters. Renters move far more often than owners. Hence, as an area becomes more desirable (for whatever reason) low income renter are replaced by higher income renters. Low income is also associated with youth--incomes tend to rise over time. So as the incomes of low income renters rise, they start buying houses, in the neighborhoods in which they rent. Homeowners typically outbid investors for houses, so owner occupied housing tends to rise. This further displaces renters, as new owners tend to buy the cheapest houses (which are the most run-down, and thus have the cheapest rents). Over time, the existing stock of depredicated (older, run down) housing available for purchase is exhausted. Only nicer, newer, more expensive houses are available for rent--at higher rental costs. The 'climax ecosystem' consists of expensive homes (either owned or rented). The only thing that prevents this dynamic (keeps rents/cost low) is the production of new housing. Initially, it serves to blunt the demand for expensive housing (rented and owned), and reduce the conversion of depreciated properties (for rent or purchase) to restored/new properties.

Retail, Malls and Amazon

What's the future of retail? Historically, researchers of retail tend to divide it into 'destination retail' and 'convenience retail'. The former is where you journey to visit one specific place, and the latter when you visit the closest place (Ikea vs. Quik-e-marts). Malls used to succeed by attacking the latter to the former: A couple of big anchor department stores, along with shoes/specialty apparrel, jewelers, toy stores, and a few dentists. In effect, malls were artificial 'central places', created through the low-cost transportation provided by freeways. So, thanks to traffic congestion, that 'surge' of accessibility provided by freeways is gone. It it that big of a surprise that many malls are having a hard time? Now, to get you to drive to a destination (given the increased time/difficulty of doing so), it's really got to be something special: higher quality destination retail, things you can only find in place...which is sort of where Amazon comes in--it provides more of the things you can only find in one place. And so all the malls have to provide something Amazon can't provide: An experience of place.