14 ms·

The paradox of soil: Land has returned as a constraint on growth

79 points by bootload 11y ago

jseliger 11y ago
The issue is not overall scarcity, but scarcity in specific places—the cities responsible for a disproportionate amount of the world’s output. The high price of land in these places is in part an unavoidable concomitant of success. But it is also the product of distortions that cost the world dear The article is good but the title isn't great; the real story isn't about land per se, but about land-use regulation: the topics are related but quite distinct (and indeed the article says, "The spread of land-use regulation is not hard to understand"). As Matt Yglesias is fond of pointing out, steel-framed construction and elevators are well-understood, century-old technologies (http://www.slate.com/blogs/moneybox/2013/05/03/silicon_valley_housing_boom_there_s_no_such_thing.html http://www.slate.com/blogs/moneybox/2013/05/03/silicon_valle...). But laws against deploying them have become important constraints on growth. The problems are really legal and political. The solutions will be (or won't be) as well.
- creshal 11y ago
  Both land-use regulations, and land owners (ab-)using their oligopoly to drive up rents to insane levels, which combined cripple the rest of the economy by preventing growth.
  - deelowe 11y ago
    Where has rent control ever worked favorably for the cities that have implemented it? It's simple economics, as value is derived from a city, the city itself becomes more valuable. A more valuable city has more valuable real estate. More valuable real estate costs more to purchase and develop. "Location, location, location" isn't just some cliche realtors like to use. In the majority of cases, there's no conspiracy. Rent goes up, because the real value has gone up. It really is that simple.
    - srtjstjsj 11y ago
      Define "real value". Prices are driven my many-to-many auctions, and each market (housing) interacts with its supplements (transportation, food, energy, finance,...). The value varies from person to person, and much of the value is parasitic: I derive value from getting paid by my job, and my home, transport, etc enable me to do that job. If I make $100K/yr, is my home providing $10k/yr of value? Or $40k/yr? If I get a raise, is my home more valuable because it supports my higher income? Or is my transportation more valuable? Or is my food more valuable, as it keeps me healthy?
      - deelowe 11y ago
        Did you skip macro economics? None of this really makes much sense when talking about rent prices in a market driven economy.
rm_-rf_slash 11y ago
Shockingly absent from this essay was a consideration of the effects of climate change. In a hundred years or so, Miami will be a fairy tale. Where is the factorization of costs associated with high value land that's here today and gone tomorrow?
- ommunist 11y ago
  Well, climate always changes. And so does the soil.
- prodmerc 11y ago
  I assume there is none - Miami and other coastal cities will exist forever and ever (in the minds of those who own its land and properties) :-) I doubt the people of those Greek cities that sunk thought it would ever happen... or they just turned their heads, plugged their ears and said "everything is fine".
- Symmetry 11y ago
  Interestingly denser growth is one of the most effective means we have of reducing the carbon footprint of our cities. Shorter commutes mean less driving. Shared walls mean less heating and cooling energy use.
- 13thLetter 11y ago
  The estimated sea level rise, assuming current theories and models are correct, is 17-34 centimeters over the next one hundred years. That would make Miami more vulnerable to damage from typical storm surges and hurricanes than it is now, but it is not going to make the city go away.
graeme 11y ago
Are there any examples of new, dense construction in North America that aren't ugly or dispiriting to live in? Serious question. I live in a very dense neighborhood by North American standards. About 32,000 people per square mile, and it's self contained: people don't have to travel elsewhere to go out, shop, relax, etc. Some leave for work, but a high proportion are here during the day too. It was built around 1900, and lots of people visit just for the atmosphere. If we could clone this neighborhood and built it elsewhere, it would be a good thing. But we don't seem to be able to build neighborhoods in this style anymore. Are there any new developments that are both dense and nice?
- marvin 11y ago
  Low density of motorized transport (or even "fast" unpowered transport such as bikes) helps with the atmosphere. In some medieval towns which are still inhabited and thriving, the streets are mostly too rough for driving. Having everything you need within walking distance has a huge impact on the quality of life. You get to see more people, there is less noise and life feels less rushed.
  - graeme 11y ago
    You might find this interesting, it was posted here a while back: http://www.andrewalexanderprice.com/blog20131204.php#.VehYvrxViko http://www.andrewalexanderprice.com/blog20131204.php#.VehYvr... He had an article on Tokyo, but I can't find it. Apparently Tokyo meets many of these criteria and is pleasant to be in, despite being new construction. Which is why I'm wondering if we have any North American examples.
- eli_gottlieb 11y ago
  >If we could clone this neighborhood and built it elsewhere, it would be a good thing. But we don't seem to be able to build neighborhoods in this style anymore. It's not that we're unable, it's that North Americans have chosen not to. Nice dense developments are bad for cars, and car-lifestyles are what North Americans have culturally designated as the marker of success. Therefore you see a false correlation: dense developments are only built to house those too poor to participate in car culture.
cryoshon 11y ago
Overall I think this is a good article, but there were two things which caught my attention. Isn't this article just taking a roundabout way of commenting that landowners in highly productive areas are choking growth and more productivity by siphoning too much money off of the non-landowners for use of the land? I understand that they're the Economist so they can't outright say that the rich are hurting the economy by hurting the poor, but come on, at least be a little more clear. Also, a fallacy: "Where workers can be put to use at high levels of productivity labour scarcity will lead to fast growing pay packets. Those pay packets will attract workers from other cities. When they migrate and find new, high-paying work, the whole economy benefits." This is a theoretical economic concept which doesn't really apply to the macroeconomic reality of today, in which worker productivity and time commitment increases but wages stagnate and later decrease, all as a result of a race to the bottom. The exception is probably the software industry, but I'd argue that in light of the anticompetitive no-poaching agreements from the likes of Google and Apple, software industry wages are still actually much lower than they should be, despite the "labor shortage" and "high levels of productivity". Then there's the bit where they claim that the whole economy will benefit from this sort of behavior, which may be true. Keep in mind that from another perspective, this same action is highly destructive brain drain, leaving destitute cities bleeding their talent to more prosperous ones.
- creshal 11y ago
  > Isn't this article just taking a roundabout way of commenting that landowners in highly productive areas are choking growth and more productivity by siphoning too much money off of the non-landowners for use of the land? I understand that they're the Economist so they can't outright say that the rich are hurting the economy by hurting the poor, but come on, at least be a little more clear. I don't know, the article seems to be rather clear on the matter: > If regulatory limits on building heights and density were relaxed, fewer plots of land would be needed to satisfy a given level of demand. That would reduce the rents collected by landowners, since any uptick in demand could quickly be met by new development. Just as soaring agricultural productivity led to a decline in the relative economic power of rural landowners in the 19th and 20th centuries, the relaxation of strict limits on development would lead to a decline in property wealth relative to the economy as a whole. More of the gains of economic activity would flow to workers and investors.
roymurdock 11y ago
Summary: Building & land-use regulations are creating an artificial scarcity of land in large cities, driving prices up and creating an artificial "shadow tax" that distorts labor markets. According to a recent study, if the Bay Area got rid of its building/density regulations, the local economy would be able to support 5x the area's current population, which would boost the US' yearly GDP by $2tn. In 2009, the US GDP was 13.5% lower than it otherwise could have been if land-use regulation had been abolished in 1964. [1] The solution? Dissolve land-use regulation, pay residents to allow developers to build new structures, and distort the market in favor of the renters by levying a land-value tax. Theoretically, this would allow for an increased supply of housing while penalizing the owners of the least-productive parcels of land, such as those who squat on empty plots in New York. The author hints at the political problem of adopting a land tax near the end: But there are practical problems with a land tax — perhaps the largest of which is that by its very nature it hits the well-connected rich hardest. So we may very well never see this regulation brought up or passed given the current, money-greased machinations of the political machine. I was disappointed that the author of an otherwise well-researched and informative article did not get to the heart of the issue: who owns the land? Yes, it is obvious that urban landlords are making a killing in this market, but who exactly are these landlords? What percent of real estate in London, SF, NY is owned by actual residents vs. holding companies vs. foreign interests vs. the government? Is it a small, concentrated number of buyers in each city? Is collusion possible? Also, how are we going to induce growth in sectors other than tech, consulting, and finance? Or do we not care if young talent continues to accrete in these fields, driving the (currently extortionate) growth of the city? Is this the best plan for long-term growth and prosperity? [1] Perhaps this paper assumes that there is an infinite supply of highly-skilled tech workers who have taken jobs elsewhere due to high costs of rent? Seems a bit far-fetched to me.
- rs232 11y ago
  >Dissolve land-use regulation, pay residents to allow developers to build new structures, and distort the market in favor of the renters by levying a land-value tax. Is The Economist starting to support Georgism? https://en.wikipedia.org/wiki/Georgism https://en.wikipedia.org/wiki/Georgism
_red 11y ago
So laws which create artificial scarcity lead to an increase in prices. Wow, color me surprised.
ommunist 11y ago
Fertile soil was always a limited resource. I assume this is one of the reasons of the current civil war in Ukraine. Someone wants that soil.
massysett 11y ago
> But for the tight limits on construction in California’s Bay Area, they reckon, employment there would be about five times larger than it is. This is farcical. One reason people flock to the Bay Area is precisely because of the tight limits on construction. People like sprawled-out, low-density development. They like to have yards. They like spacious homes. They like to see the sky and the mountain vistas and the water. You could lift the limits on land use and densify the area like Manhattan. But there are only so many workers who will flock to a Manhattan-like locale...and those workers are already flocking to Manhattan itself. Many American workers simply do not want to live in dense environments like Manhattan. Like an earlier Economist article I think this one misses the possibility that tight controls on land use can make those places more desirable while driving some jobs elsewhere. Maybe some jobs simply do not exist due to tight Silicon Valley land controls. But other jobs simply move elsewhere, just as all finance jobs are not in NYC and London.
- ejdyksen 11y ago
  > They like to have yards. They like spacious homes. They like to see the sky and the mountain vistas and the water. People flock to the Bay Area to have a yard and a spacious home? The lack of those things is the reason I left! Maybe the very wealthy have yards and large houses in the Bay Area, but most everybody else is living in Manhattan-sized apartments without the benefits of living in a high density area like Manhattan (more walkability, public transit, etc).
  - massysett 11y ago
    You are making my point. If you left to get more space, why would the Economist think that the place could have five times more workers if they lifted building restrictions? The Bay Area with no building restrictions would be even less desirable.
    - ejdyksen 11y ago
      The Bay Area with no building restrictions turns into Manhattan. I'd rather live in Manhattan than the Bay Area. If I'm not going to have much space, I'd rather the city be designed for that kind of life.
exabrial 11y ago
Visit Kansas!!!
jcfrei 11y ago
I feel like land is such a good example of the destructive powers of a good with a heavily deflationary value (deflationary due to policies and not by nature). It just leads to hoarding and benefits the early buyers, while at the same time hindering innovation because people who can make better use of the land cannot afford it. Land use regulations are probably one of the biggest blunders in modern capitalist economies. And the worst of it: The problem is not even visible to a lot of people: Very restrictive building codes in European city centers are rarely ever questioned - this wouldn't be of much concern if we talked about single digits km^2, but usually they affect huge districts. Incidentally land ownership was for many historically despised "capitalists" the goto way of acquiring wealth: If you have an emerging company which requires lots of labour, the best investment you can make is building company housing for your employees, that way a part of the salary you pay ends up right back in your pocket. All you have to do then is lobby for restrictive building regulations and your family's wealth and estate is secured for centuries to come.
milspec 11y ago
The really sad thing is that we build on our best farmland. If you want to grow apricots, the best place is San Jose. That whole area in fact is mighty good for farming. People need to eat! Californians ought to be living in the foothills of the Sierra mountains. This puts them close to water and saves the more farmable land for farming. Good farmland is flat, is not full of annoying boulders, and has nice weather. We thus pour slab foundations for giant 1-story McMansions and dig holes for giant swimming pools. Doing that in the foothills would be a short-term expense, so instead we'll destroy our best farmland forever.
- 13thLetter 11y ago
  Well, farmland exists to support the population, not the other way around. If farmland exists in adequate and sustainable quantities now, which it does, there's no need to push people to live in less pleasant locations to make room for more of it.
legulere 11y ago
I wonder why cars don't come up in this debate. A typical car space is 20 m². Usually the amount of parking spaces needed is greater than one (parking at several shopping locations, at work, ...). Parking often uses vertical space just once. So with a multi-storey house these 20 m² become enough for a flat housing a few people. And this still ignores public and non-public (like driveways) roads.
hyperion2010 11y ago
The only way out is up. Don't forget that urbanizing populations is also the most effective way to lower their carbon footprint!
tiatia 11y ago
Buy land. They've stopped making it. - Mark Twain
- nwah1 11y ago
  Yep, land has a vertical supply curve. Although, valuable land is what is truly in high demand. There's lots of land, but not a lot of valuable land. But the lack of a commons of any quality is quite concerning. One cannot just exist without owning land or paying rent. We pay the biggest chunks of our income to the gatekeepers over that valuable land, which you need access to in order to get a job or do business. Let us just be thankful that these landowners worked so hard to produce this land, ex nihilo.
falcor84 11y ago
The final paragraph mentions "Virtual reality and social networking" as something that might eventually abolish the problem, and this rings true to me. Several years ago, it seemed that perhaps Second Life would accomplish this, but I suppose it wasn't immersive enough. Perhaps next year's commercial launches of the Oculus Rift and Vive would finally allow for sufficient presence to begin making daily VR telecommuting a reasonable option.
huherto 11y ago
Oh yes. A big mystery to me is why New Hampshire (and I suppose the rest of New England) is so expensive. We are in a rural setting, and there is plenty of land, we are an hour from Boston, but even if you go farther a way, the house prices are very high. The problem are the lot sizes. Houses are around 1,200 square feet, but the lot sizes are 20,000 square feet. Compare that to cities like Austin where the lot sizes are around 3,000 square feet. The land is clearly underutilized; many houses are old; and people just keep going farther and farther away. The high house prices also drive up the rest of prices. It is a lose, lose for every body, and the problem has existed for generations. It even destroys the forests, because big areas are cut down to build just one house.
- douche 11y ago
  New England is more forested now than it has been in at least 100 years, possibly since before the Civil War. Between the industrial revolution and the shift of agriculture westward to the Mississippi and beyond, due to railroads, industrial food processing and refrigeration, the vast majority of the land that used to be cleared for farming has grown back up as woods.
  - huherto 11y ago
    That is a good point. Still, If we used the land more effectively we could have more trees.
gizi 11y ago
Why do innovators like to congregate in Silicon Valley? Because other innovators like to congregate there. VCs and other people feeding off the phenomenon end up there because they can find innovators there. In other words, there is no resource whatsoever that attracts anybody there. They are only attracted by each other. The inclination of congregating there costs a lot of money. Housing prices and rents are very high in the area. In other words, these innovators are forking over way too much money to other people for no good reason at all. At the same time, they are not stupid either. My take is that at some point they will start moving elsewhere.

79 points by bootload 11y ago

The issue is not overall scarcity, but scarcity in specific places—the cities responsible for a disproportionate amount of the world’s output. The high price of land in these places is in part an unavoidable concomitant of success. But it is also the product of distortions that cost the world dear The article is good but the title isn't great; the real story isn't about land per se, but about land-use regulation: the topics are related but quite distinct (and indeed the article says, "The spread of land-use regulation is not hard to understand"). As Matt Yglesias is fond of pointing out, steel-framed construction and elevators are well-understood, century-old technologies (http://www.slate.com/blogs/moneybox/2013/05/03/silicon_valley_housing_boom_there_s_no_such_thing.html http://www.slate.com/blogs/moneybox/2013/05/03/silicon_valle...). But laws against deploying them have become important constraints on growth. The problems are really legal and political. The solutions will be (or won't be) as well.

creshal 11y ago
Both land-use regulations, and land owners (ab-)using their oligopoly to drive up rents to insane levels, which combined cripple the rest of the economy by preventing growth.
- deelowe 11y ago
  Where has rent control ever worked favorably for the cities that have implemented it? It's simple economics, as value is derived from a city, the city itself becomes more valuable. A more valuable city has more valuable real estate. More valuable real estate costs more to purchase and develop. "Location, location, location" isn't just some cliche realtors like to use. In the majority of cases, there's no conspiracy. Rent goes up, because the real value has gone up. It really is that simple.
  - srtjstjsj 11y ago
    Define "real value". Prices are driven my many-to-many auctions, and each market (housing) interacts with its supplements (transportation, food, energy, finance,...). The value varies from person to person, and much of the value is parasitic: I derive value from getting paid by my job, and my home, transport, etc enable me to do that job. If I make $100K/yr, is my home providing $10k/yr of value? Or $40k/yr? If I get a raise, is my home more valuable because it supports my higher income? Or is my transportation more valuable? Or is my food more valuable, as it keeps me healthy?
    - deelowe 11y ago
      Did you skip macro economics? None of this really makes much sense when talking about rent prices in a market driven economy.

rm_-rf_slash 11y ago

Shockingly absent from this essay was a consideration of the effects of climate change. In a hundred years or so, Miami will be a fairy tale. Where is the factorization of costs associated with high value land that's here today and gone tomorrow?

ommunist 11y ago
Well, climate always changes. And so does the soil.
prodmerc 11y ago
I assume there is none - Miami and other coastal cities will exist forever and ever (in the minds of those who own its land and properties) :-) I doubt the people of those Greek cities that sunk thought it would ever happen... or they just turned their heads, plugged their ears and said "everything is fine".
Symmetry 11y ago
Interestingly denser growth is one of the most effective means we have of reducing the carbon footprint of our cities. Shorter commutes mean less driving. Shared walls mean less heating and cooling energy use.
13thLetter 11y ago
The estimated sea level rise, assuming current theories and models are correct, is 17-34 centimeters over the next one hundred years. That would make Miami more vulnerable to damage from typical storm surges and hurricanes than it is now, but it is not going to make the city go away.

graeme 11y ago

Are there any examples of new, dense construction in North America that aren't ugly or dispiriting to live in? Serious question. I live in a very dense neighborhood by North American standards. About 32,000 people per square mile, and it's self contained: people don't have to travel elsewhere to go out, shop, relax, etc. Some leave for work, but a high proportion are here during the day too. It was built around 1900, and lots of people visit just for the atmosphere. If we could clone this neighborhood and built it elsewhere, it would be a good thing. But we don't seem to be able to build neighborhoods in this style anymore. Are there any new developments that are both dense and nice?

marvin 11y ago
Low density of motorized transport (or even "fast" unpowered transport such as bikes) helps with the atmosphere. In some medieval towns which are still inhabited and thriving, the streets are mostly too rough for driving. Having everything you need within walking distance has a huge impact on the quality of life. You get to see more people, there is less noise and life feels less rushed.
- graeme 11y ago
  You might find this interesting, it was posted here a while back: http://www.andrewalexanderprice.com/blog20131204.php#.VehYvrxViko http://www.andrewalexanderprice.com/blog20131204.php#.VehYvr... He had an article on Tokyo, but I can't find it. Apparently Tokyo meets many of these criteria and is pleasant to be in, despite being new construction. Which is why I'm wondering if we have any North American examples.
eli_gottlieb 11y ago
>If we could clone this neighborhood and built it elsewhere, it would be a good thing. But we don't seem to be able to build neighborhoods in this style anymore. It's not that we're unable, it's that North Americans have chosen not to. Nice dense developments are bad for cars, and car-lifestyles are what North Americans have culturally designated as the marker of success. Therefore you see a false correlation: dense developments are only built to house those too poor to participate in car culture.

cryoshon 11y ago

Overall I think this is a good article, but there were two things which caught my attention. Isn't this article just taking a roundabout way of commenting that landowners in highly productive areas are choking growth and more productivity by siphoning too much money off of the non-landowners for use of the land? I understand that they're the Economist so they can't outright say that the rich are hurting the economy by hurting the poor, but come on, at least be a little more clear. Also, a fallacy: "Where workers can be put to use at high levels of productivity labour scarcity will lead to fast growing pay packets. Those pay packets will attract workers from other cities. When they migrate and find new, high-paying work, the whole economy benefits." This is a theoretical economic concept which doesn't really apply to the macroeconomic reality of today, in which worker productivity and time commitment increases but wages stagnate and later decrease, all as a result of a race to the bottom. The exception is probably the software industry, but I'd argue that in light of the anticompetitive no-poaching agreements from the likes of Google and Apple, software industry wages are still actually much lower than they should be, despite the "labor shortage" and "high levels of productivity". Then there's the bit where they claim that the whole economy will benefit from this sort of behavior, which may be true. Keep in mind that from another perspective, this same action is highly destructive brain drain, leaving destitute cities bleeding their talent to more prosperous ones.

creshal 11y ago
> Isn't this article just taking a roundabout way of commenting that landowners in highly productive areas are choking growth and more productivity by siphoning too much money off of the non-landowners for use of the land? I understand that they're the Economist so they can't outright say that the rich are hurting the economy by hurting the poor, but come on, at least be a little more clear. I don't know, the article seems to be rather clear on the matter: > If regulatory limits on building heights and density were relaxed, fewer plots of land would be needed to satisfy a given level of demand. That would reduce the rents collected by landowners, since any uptick in demand could quickly be met by new development. Just as soaring agricultural productivity led to a decline in the relative economic power of rural landowners in the 19th and 20th centuries, the relaxation of strict limits on development would lead to a decline in property wealth relative to the economy as a whole. More of the gains of economic activity would flow to workers and investors.

roymurdock 11y ago

Summary: Building & land-use regulations are creating an artificial scarcity of land in large cities, driving prices up and creating an artificial "shadow tax" that distorts labor markets. According to a recent study, if the Bay Area got rid of its building/density regulations, the local economy would be able to support 5x the area's current population, which would boost the US' yearly GDP by $2tn. In 2009, the US GDP was 13.5% lower than it otherwise could have been if land-use regulation had been abolished in 1964. [1] The solution? Dissolve land-use regulation, pay residents to allow developers to build new structures, and distort the market in favor of the renters by levying a land-value tax. Theoretically, this would allow for an increased supply of housing while penalizing the owners of the least-productive parcels of land, such as those who squat on empty plots in New York. The author hints at the political problem of adopting a land tax near the end: But there are practical problems with a land tax — perhaps the largest of which is that by its very nature it hits the well-connected rich hardest. So we may very well never see this regulation brought up or passed given the current, money-greased machinations of the political machine. I was disappointed that the author of an otherwise well-researched and informative article did not get to the heart of the issue: who owns the land? Yes, it is obvious that urban landlords are making a killing in this market, but who exactly are these landlords? What percent of real estate in London, SF, NY is owned by actual residents vs. holding companies vs. foreign interests vs. the government? Is it a small, concentrated number of buyers in each city? Is collusion possible? Also, how are we going to induce growth in sectors other than tech, consulting, and finance? Or do we not care if young talent continues to accrete in these fields, driving the (currently extortionate) growth of the city? Is this the best plan for long-term growth and prosperity? [1] Perhaps this paper assumes that there is an infinite supply of highly-skilled tech workers who have taken jobs elsewhere due to high costs of rent? Seems a bit far-fetched to me.

rs232 11y ago
>Dissolve land-use regulation, pay residents to allow developers to build new structures, and distort the market in favor of the renters by levying a land-value tax. Is The Economist starting to support Georgism? https://en.wikipedia.org/wiki/Georgism https://en.wikipedia.org/wiki/Georgism

_red 11y ago

So laws which create artificial scarcity lead to an increase in prices. Wow, color me surprised.

ommunist 11y ago

Fertile soil was always a limited resource. I assume this is one of the reasons of the current civil war in Ukraine. Someone wants that soil.

massysett 11y ago

> But for the tight limits on construction in California’s Bay Area, they reckon, employment there would be about five times larger than it is. This is farcical. One reason people flock to the Bay Area is precisely because of the tight limits on construction. People like sprawled-out, low-density development. They like to have yards. They like spacious homes. They like to see the sky and the mountain vistas and the water. You could lift the limits on land use and densify the area like Manhattan. But there are only so many workers who will flock to a Manhattan-like locale...and those workers are already flocking to Manhattan itself. Many American workers simply do not want to live in dense environments like Manhattan. Like an earlier Economist article I think this one misses the possibility that tight controls on land use can make those places more desirable while driving some jobs elsewhere. Maybe some jobs simply do not exist due to tight Silicon Valley land controls. But other jobs simply move elsewhere, just as all finance jobs are not in NYC and London.

ejdyksen 11y ago
> They like to have yards. They like spacious homes. They like to see the sky and the mountain vistas and the water. People flock to the Bay Area to have a yard and a spacious home? The lack of those things is the reason I left! Maybe the very wealthy have yards and large houses in the Bay Area, but most everybody else is living in Manhattan-sized apartments without the benefits of living in a high density area like Manhattan (more walkability, public transit, etc).
- massysett 11y ago
  You are making my point. If you left to get more space, why would the Economist think that the place could have five times more workers if they lifted building restrictions? The Bay Area with no building restrictions would be even less desirable.
  - ejdyksen 11y ago
    The Bay Area with no building restrictions turns into Manhattan. I'd rather live in Manhattan than the Bay Area. If I'm not going to have much space, I'd rather the city be designed for that kind of life.

exabrial 11y ago

Visit Kansas!!!

jcfrei 11y ago

I feel like land is such a good example of the destructive powers of a good with a heavily deflationary value (deflationary due to policies and not by nature). It just leads to hoarding and benefits the early buyers, while at the same time hindering innovation because people who can make better use of the land cannot afford it. Land use regulations are probably one of the biggest blunders in modern capitalist economies. And the worst of it: The problem is not even visible to a lot of people: Very restrictive building codes in European city centers are rarely ever questioned - this wouldn't be of much concern if we talked about single digits km^2, but usually they affect huge districts. Incidentally land ownership was for many historically despised "capitalists" the goto way of acquiring wealth: If you have an emerging company which requires lots of labour, the best investment you can make is building company housing for your employees, that way a part of the salary you pay ends up right back in your pocket. All you have to do then is lobby for restrictive building regulations and your family's wealth and estate is secured for centuries to come.

milspec 11y ago

The really sad thing is that we build on our best farmland. If you want to grow apricots, the best place is San Jose. That whole area in fact is mighty good for farming. People need to eat! Californians ought to be living in the foothills of the Sierra mountains. This puts them close to water and saves the more farmable land for farming. Good farmland is flat, is not full of annoying boulders, and has nice weather. We thus pour slab foundations for giant 1-story McMansions and dig holes for giant swimming pools. Doing that in the foothills would be a short-term expense, so instead we'll destroy our best farmland forever.

13thLetter 11y ago
Well, farmland exists to support the population, not the other way around. If farmland exists in adequate and sustainable quantities now, which it does, there's no need to push people to live in less pleasant locations to make room for more of it.

legulere 11y ago

I wonder why cars don't come up in this debate. A typical car space is 20 m². Usually the amount of parking spaces needed is greater than one (parking at several shopping locations, at work, ...). Parking often uses vertical space just once. So with a multi-storey house these 20 m² become enough for a flat housing a few people. And this still ignores public and non-public (like driveways) roads.

hyperion2010 11y ago

The only way out is up. Don't forget that urbanizing populations is also the most effective way to lower their carbon footprint!

tiatia 11y ago

Buy land. They've stopped making it. - Mark Twain

nwah1 11y ago
Yep, land has a vertical supply curve. Although, valuable land is what is truly in high demand. There's lots of land, but not a lot of valuable land. But the lack of a commons of any quality is quite concerning. One cannot just exist without owning land or paying rent. We pay the biggest chunks of our income to the gatekeepers over that valuable land, which you need access to in order to get a job or do business. Let us just be thankful that these landowners worked so hard to produce this land, ex nihilo.

falcor84 11y ago

The final paragraph mentions "Virtual reality and social networking" as something that might eventually abolish the problem, and this rings true to me. Several years ago, it seemed that perhaps Second Life would accomplish this, but I suppose it wasn't immersive enough. Perhaps next year's commercial launches of the Oculus Rift and Vive would finally allow for sufficient presence to begin making daily VR telecommuting a reasonable option.

huherto 11y ago

Oh yes. A big mystery to me is why New Hampshire (and I suppose the rest of New England) is so expensive. We are in a rural setting, and there is plenty of land, we are an hour from Boston, but even if you go farther a way, the house prices are very high. The problem are the lot sizes. Houses are around 1,200 square feet, but the lot sizes are 20,000 square feet. Compare that to cities like Austin where the lot sizes are around 3,000 square feet. The land is clearly underutilized; many houses are old; and people just keep going farther and farther away. The high house prices also drive up the rest of prices. It is a lose, lose for every body, and the problem has existed for generations. It even destroys the forests, because big areas are cut down to build just one house.

douche 11y ago
New England is more forested now than it has been in at least 100 years, possibly since before the Civil War. Between the industrial revolution and the shift of agriculture westward to the Mississippi and beyond, due to railroads, industrial food processing and refrigeration, the vast majority of the land that used to be cleared for farming has grown back up as woods.
- huherto 11y ago
  That is a good point. Still, If we used the land more effectively we could have more trees.

gizi 11y ago

Why do innovators like to congregate in Silicon Valley? Because other innovators like to congregate there. VCs and other people feeding off the phenomenon end up there because they can find innovators there. In other words, there is no resource whatsoever that attracts anybody there. They are only attracted by each other. The inclination of congregating there costs a lot of money. Housing prices and rents are very high in the area. In other words, these innovators are forking over way too much money to other people for no good reason at all. At the same time, they are not stupid either. My take is that at some point they will start moving elsewhere.