Urban planning, please meet urban economics

Estimates put the HDC waiting list at more than 176,000. Our public finances are strained. Economic growth is less than desirable. Economic diversification is long overdue.

Yet, our urban planning system seemingly operates in isolation from economic realities. Regulations unduly strangle the overall supply of housing and drive up costs, forcing many into the informal (unauthorised) housing market. Regulations create a land development pattern that is difficult to maintain financially, harms national productivity, harms the prospects of many of the innovative human-capital driven sectors that we have identified as growth industries, and is not a model of resilience or sustainability.

According to Alain Bertaud, “we are facing a strangely paradoxical situation in the way cities are managed: the professionals in charge of modifying market outcomes through regulations (planners) know very little about markets, and the professionals who understand markets (urban economists) are seldom involved in the design of regulations aimed at restraining these markets.”

Bertaud is a senior research scholar at New York University, a former principal urban planner at the World Bank, and has experience working as a resident planner in El Salvador, Haiti, Yemen, Algeria, India, and other countries. Some of his specific views may be debatable, but his basic premise hits the nail on the head.

That disconnect between land use planning and urban economics is being written about and discussed ad nauseum. But here, is the conversation even happening?

We are still proudly touting population decentralisation, despite the known benefits of agglomeration economies that derive from larger and more densely-populated cities.

We are still overly restricting residential development in urban job centres, despite the fact that expensive land must be used efficiently, and that accessibility to jobs by more people increases the size of the labour market, and by extension its productivity.

We are still mostly pursuing a “drive until you qualify” approach to housing provision, where we imagine that affordability demands use of cheap virgin, peripheral land, despite the fact that space for housing can be gained by building smaller, taller, and more compactly. Of course we typically forget to factor in the transportation costs associated with long commutes.

A better appreciation of markets would lead us to use land more efficiently as a start. We’d see that without having to provide parking on-site (alternative parking arrangements were discussed in last week’s column), an average 5000 square foot lot could accommodate eight apartments units, in a mere three-storey structure.

In one configuration, this could include four 2-bedroom apartments, two 1-bedroom apartments, and two studio units; as was done by Miami Developer, Tecela, at 761 NW 1st Street in Little Havana. You can easily view the cute building on Google Earth Street View.

Given our shrinking average household size, we could house 176,000 households in a similar or slightly modified arrangement, with only 22,000 lots. That equates to 0.2 per cent of the total land space of the country.

A small three-storey structure on one average sized lot is an investment that is possible for a far wider range of developers than the large-scale projects that we have placed our hopes in.

Bringing this and other issues to light is leading to fundamental reform—and not simply tinkering—of regulations in the relevant agencies of many urban areas. This reform is a low-hanging fruit; a miniscule investment in comparison to the socio-economic and environmental benefits.

Well, at least in those places that grasp the magnitude of their problems, and act accordingly and with urgency. Not so much in places that stack their agencies with those who won’t tackle a failed status quo, just to receive an ever-increasing pay cheque, an ever-fancier job title, and if lucky a hefty post-retirement contract for their expertise. In other words, in the places that we say, couldn’t possibly be real places; right?

The affordable housing to fulfill today’s needs should have been built decades ago. Even if we undertake a massive construction push now, we will have to grapple with the fact that new construction is expensive, and not a feasible option for low and even some middle-income buyers and renters, without massive subsidies. But, the ramifications of delay and inaction grow by the day.

Still a planning student? Enrol in at least one urban economics course. Locally, it seems that UWI St Augustine has a course, ECON 3074, on Urban and Regional Economics.

Already a working professional? Pick up a book, read an article, or talk to someone who can acquaint you with the basics.

Simply a concerned member of the public? Read as much as you can on the ways that urban planning affects housing provision, the economy, the environment, and your everyday life. Arm yourself with knowledge and demand action today, not tomorrow.

* Ryan Darmanie is an urban planning and design consultant with a master’s degree in city and regional planning from Rutgers University, New Jersey, and a keen interest in urban revitalisation. You can connect with him at darmanieplanningdesign.com or email him at ryan@darmanieplanningdesign.com