Amazonas CenterManaus, Brazil

Toward MoreProsperous Cities:Putting People FirstWendell Cox ● 28 October 2013

Shanghai

Large labor markets are the only raison d’être of large cities.

Alain Bertaud, World Bank

WHY CITIES EXIST

Principal Priorityof Government

ImprovingEconomicWell-Being

(Better standard of living, less

poverty)Misplacedpriorities

Athens

LABELS:Smart Growth

Growth ManagementCompact Cities

Urban Containment: Economic ThreatIMPERATIVE TO STOP THE SPREAD

6 4 2 1

500

900

1000

1100

1200

1300

1400

1500

1600

1700

1800

1850

1900

1950

2000

0

5

10

15

20

25

30

35

Popu

latio

n (M

illio

ns)

World’s Largest Cities (Urban Areas)650 BC TO PRESENT

Huge Swings:1000 to1500High 1.1MLow 0.25MExample

BELOWHangzhou , China(Largest Pre-19th

Century Urban Area (1300)

Manila Slum

CITIES, ECONOMICS & POVERTY

1500

1550

1600

1650

1700

1750

1800

1850

1900

1950

2000

$0$5,000

$10,000$15,000$20,000$25,000$30,000$35,000$40,000$45,000

GD

P/C

apita

: Ric

hest

Nat

ion:

200

0$

Walking Mass Transit

Highest National GDPs: 1500-2000650 BC TO PRESENT

AutoPRINCIPALMODE

Figure 7

FromMaddison(OECD)

1900 1920 1940 1960 1980 2000 2010$0

$5,000$10,000$15,000$20,000$25,000$30,000$35,000$40,000$45,000$50,000

Argentina

United States

Germany

Japan

Manila

Prosperity is not GuaranteedECONOMIC POLICIES MATTER

9Dhaka

Dhaka ShantytownUp to

2M/Square Mile

Economics: A History of Poverty CANNOT TAKE AFFLUENCE FOR GRANTED

Los Angeles

HOW CITIES GROW

Addis Ababa Urban Area: Evolution1972-2010

1972

2010

1971 1981 1990 2000 20100

5

10

15

20

25

30

Popu

latio

n in

Mill

ions

JAKARTA (CORE)

SUBURBS &EXURBS

Jakarta: Growth by Sector1971-2010

1901

1911

1921

1931

1941

1951

1961

1971

1981

1991

2001

2011

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

Population by District: 1901-2011MUMBAI METROPOLITAN REGION

OUTER MUMBAI

INNER MUMBAI

THANE

RAIGAHR

GrowingMegacitiesBecoming

Less Dense

0-2 Miles2-5 Miles

5-10 Miles10-15 Miles

15-20 Miles20+ Miles-1,000,000

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

9,000,000

206,000

-272,000

1,105,000

3,473,000 2,989,000

8,566,000

Popu

latio

n Gr

owth

No Move from Suburbs to CoreUS MAJOR METROPOLITAN AREAS: 2000-2010

Data fromCensus Bureau

Mumbai

CITIES & URBAN CONTAINMENT

OUTSIDE UGB$16,000Per AcreINSIDE UGB$180,000Per Acre

Urban Growth BoundariesDESTROYING THE COMPETITIVE LAND SUPPLY

Portland

Similar ResultsIn London &

and Auckland

Suburban Toronto (Newmarket)

Statistics Canada:High Density 6+ Miles

From DowntownRelies on Cars

Density & TransitTRAVEL PATTERNS NO DIFFERENT THAN LOW DENSITY

Preserving Agricultural Land AGRICULTURAL LAND TAKEN OUT OF PRODUCTION 1950-2000

c

Net newopen spaceequal to

Agricultural productivityhas doubled

CITIES & HOUSING AFFORDABILITY

Kansas City

Housing:Largest

HouseholdExpenditure

Urban Containment Raises House PricesURBAN CONTAINMENT LAND RATIONING

Nick BolesUK PlanningMinister

Kate BarkerBank of England

Specious Planning Claim:No Consensus

(Sun rises in the westeconomics)

Land Rationing is the Issue DESTROYS HOUSING AFFORDABILITY

Donald Brash, Governor, Reserve Bank of New Zealand

1988-2002Introduction to

4th Annual Demographia International Housing Affordability Survey

... the affordability of housing is overwhelmingly a function of just one thing, the extent to which governments place artificial restrictions on the supply of residential land.

Abandoning Urban Containment NEW ZEALAND, FLORIDA, SYDNEY

Bill English, Deputy Prime Minister

New ZealandIntroduction to

9th Annual Demographia International Housing Affordability Survey

Land has been made artificially scarce by regulation that locks up land for development. This regulation has made land supply unresponsive to demand.

MeasuringHousing

Affordability:MedianMultiple

Median House Price/Median Household

Income(Used by UN, OECD and

others)

Historic Median Multiple: 3.0 or Less

Median House Price/Median Household Income

1950

1960

1970

1980

1985

1990

1995

2000

2005

2010

0

1

2

3

4

5

6

7

8

9

10Less Restrictive MarketsMore Restrictive Markets: Outside CaliforniaMore Restrictive Markets: California

Med

ian

Mul

tiple

Housing Affordability 1950-2012MAJOR US METROPOLITAN AREAS: MEDIAN MULTIPLE

Median Multiple: Median House Price divided by Median Household Income

Figure 26

Greater PriceVolatility

0%

10%

20%

30%

40%

50%

60%

70%

60.5%

34.6%

20.6%

7.5%

Rented Housing (Gross Rent)Owned Housing (Median Multiple)

Chan

gePortland: Cost of Housing

HIGH POVERTY AREAS (1.5+ POVERTY RATE): 1999-2009

Zip Code data fromAmerican Community

Survey 2007-11 & 2000 Census

Figure 27

Urban containment: incompatible with housing affordability (Cheshire, London School of Economics)_______________________________________________________________

“Indeed, it is difficult to imagine another plausible cause of the 2008–2009 financial crisis..

In the absence of excessive controls, housing construction would quickly deflate a speculative housing price bubble.” (Jansen & Mills, Northwestern University)

Consequences of Urban ContainmentECONOMIC RESEARCH

London

Reduced employment in Amsterdam/Rotterdam

-Vermuelen & OmmerenNetherlands Bureau of Econ. Rsch.

Strong Land Regulation: Less GrowthINTERNATIONAL RESEARCH

Higher unemploymentin the UK

-Mayo & AngelWorld Bank

20% less job growththan expected in

metropolitan areaswith strongest

land use regulation-Raven Saks

US Federal Reserve Board

Higher commercialDevelopment costs

-Cheshire & HilburLondon School of Economics

CITIES & TRANSPORTATION

Buenos Aires16-Lane Freeway

Don Valley Parkway& GO Transit Train

Why are All These People on the Parkway?TRANSIT IS ABOUT DOWNTOWN

WashingtonSt. Louis

San FranciscoSan Antonio

Riverside-San BernardinoPittsburgh

PhiladelphiaNew York

MiamiKansas City

DetroitDallas-Fort Worth

CincinnatiBostonAtlanta

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Transit: 45 Minute Job AccessMETROPOLITAN AREAS OVER 2,000,000: 2008

AverageTransit Job

Access: 5.6%(NYC: 9.8%)

Under $10K

$10K-$15K

$15K-$25K

$25K-$35K

$35K-$50K

$50K-$65K

$65K-$75K

$75K & Over

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Work at HomeOtherWalkTransitCar

Employee Earnings

Work Trip Market Share by IncomeUS MAJOR METROPOLITAN AREAS: 2006-2010 (ACS)

Democratization of ProsperityASSOCIATION BETWEEN MOBILITY & AFFLUENCE

Chicago

Reduced MinorityUnemployment

With CarsU. of California

PRUD’HOMMEMobility Improves

ProductivityU. Of Paris

HARTGEN-FIELDSMobility Improves

Productivity

“Time is Money”

United States Western Europe

Canada Australia East Asia0

5

10

15

20

25

30

35

40

45

Acce

ss in

Squ

are

Mile

sOne Way Work Trip Travel Time

HIGH INCOME METROPOLITAN AREAS > 1,000,000

Southern Greenland

CITIES & SUSTAINABILITY

Perth, Australia

Urban Containment: Ineffective & ExpensiveCOSTS PER TON MANY TIMES THE IPCC STANDARD

$20 to $50 per ton

2010

2040

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

GHG EmissionsDriving

Driving Up GHGs Down: 2010-2040US LIGHT DUTY VEHICLES (NEW FUEL STANDARDS)

Source:US Department

Of Energy

GHG Emissions

Driving (VMT)

Urban Containment (Uncon-tested)

Fuel Economy

-40%

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0% -3%

-38%

Chan

ge From: EPA, DOE, TRB

Urban Containment: IneffectiveGROSS EMISSIONS: REDUCTION FROM 2030 BASE

Dubaii

TOWARD MORE PROSPEROUS CITIES

Atlanta Dallas-Fort Worth

Charlotte San Diego San Francisco0

1

2

3

4

5

6

7

8

Med

ian

Mul

tiple

201

2Standard of Living at Stake

IN AN ALREADY CHALLENGING ENVIRONMENT

DemographicsPensions

Public Debt

The issue is not….Urban sprawlUrban designTransit versus cars

The issue is PEOPLEStandard of livingReducing poverty

Putting People FirstTHE NEED FOR RATIONAL PRIORITIES

Chicago