Prosperity is good!
Connecting recent ideas
I’m working on my next “real” post, but in the mean time I had a few thoughts that are a bit too long for a note.
Today
linked back to my last two posts, about the Geometry Problem and the Missing Middle of Transportation, and extended the idea as follows:The phrase “time is money” captures its essence: delayed value is diminished value. Likewise, space in cities has a time-sensitive value. Urban land that sits underutilized—because it is locked up in car infrastructure or restricted by zoning—delays higher and better uses, diminishing both its present value and the city’s overall economic productivity. Conversely, cities that enable higher-density, transit-oriented development unlock agglomeration effects: more economic activity per square mile, shorter commutes, and better access to jobs, services, and customers.
Urban economic output can be seen as a function of the “space-time value of money”: land that is underutilized delays higher returns, while efficiently used land accelerates value creation. Density, then, is one measure of how well a city maximizes its land's economic potential. This potential—realized through cashflows from rents, business activity, and tax revenues—is shaped by planning decisions, including zoning and transportation policy. Restrictive zoning and car-centric planning waste both time and money, preventing dense cities from unlocking their full economic potential.
This is such a great explanation. Underutilized land in our cities is unrealized opportunity.
If we turned that into a lot more housing, it would mean lower rent. Lower rent means it’s easier to be a teacher, a firefighter, or an artist. It means it’s more likely that you and your friends could move and live close to each other. And lest you think this isn’t important if you’re in the market to buy a home,
reminds us that:Really all of the variance in prices is just from rents that rise and push home prices up that steep gradient associated with inflated land value.
If we turned underutilized land into a lot more commercial space, that means lower commercial rent, which makes it easier to run an art gallery, or open a custom millwork shop, or a small office space, etc. This makes entrepreneurship easier and creates opportunity for more ownership and more upward mobility.
We’re all tuned into the housing shortage, but the importance of entry-level commercial space might be under appreciated in light of the age of AI we’re entering into.
pointed out this morning that “white collar clerical work is poised to get hammered,” but Jason Crawford helps us imagine why this kind of change could actually unleash a huge wave of business formation, as the entry level cost of operating a small business will drop.All of these thoughts tie together in service of a general “abundance” or “prosperity” mindset, that’s especially needed in our major cities, where the “space-time” value of people being able to live and work within convenient proximity creates art, culture and opportunity.
One question I think pro-housing or pro-urban advocates don’t think seriously enough about is why are there NIMBYs? Not the crazy bigots who show up and scream at public meetings, but the quiet skeptics on every street who aren’t really anti-growth but don’t want new development happening too close to them. My last two posts have explained what I think is the biggest reason — our transportation system creates this dip in quality of life as cities grow, and that’s been hard to cross. I think we need to think more about this.
As
put it:America doesn’t lack cities. What we lack is an urban mindset, a way of properly understanding urban governance and urban growth. The problem for urbanism is not architectural or even political, as much as it is conceptual. It is a deficit of imagination; a deficit of discernment for what we already have and what it truly is.
Cities are engines of prosperity, and we’ve shackled them and turned the engine off because traffic sucks when economic growth pushes density above 5,000 people per square mile. We actually can fix this and make places that continue to function as they grow! But the mindset, the lack of understanding of what our cities are and why they matter, and the associated quiet skepticism, is a problem.
In the end, what will overcome the quiet skepticism is excitement about the future. I think the Suburban experiment was tragic because it was not designed to be scalable, repeatable, or sustainable. But for the people who lived through it, the massive wave of affordable space that the first wave of suburbanization delivered was perhaps the biggest infusion of upward mobility and broadly shared prosperity that the world has ever seen. That’s why people look back families with one car, one bathroom, and black and white television as a kind of “Golden Age.”
We could unlock that kind of prosperity again. And if we would talk about it that way, we could build excitement and broad support for reform.
And if we did that, then maybe, just maybe, our kids could afford to live in the neighborhood they grew up in… if they wanted to :)
(PS. I’m short on time today so this post is a little quick and rough — I’ll come back to clean up typos and other errors when I get a chance. Thanks for humoring me!)