Two Quick Friday Links-Real Estate Money And Regulation

From The Cuture Of Capitalism: ‘Bribery At The Buildings Dept.-Again

Regulatory capture so serious it’s rife with corruption:

‘The corruption is, along with the regulation, a contributing factor in New York City’s sky-high housing costs. Mayor de Blasio seems to want to deal with those costs by subsidizing or forcing developers to build “affordable” housing, but an alternative approach would be to eliminate the bureaucracy that makes the housing so expensive to construct.’

Related On This Site: Big cities, especially New York, tend to over-regulate business, you can hope for efficient corruption: Richard Epstein At Defining Ideas: ‘City Planners Run Amok’Richard Epstein At The Hoover Institution’s Defining Ideas: ‘California’s Kafkaesque Rent Control Laws’Josh Barro At Business Insider: ‘Dear New Yorkers: Here’s Why Your Rent Is So Ridiculously High’

Megan McArdle at Bloomberg:  ‘Up, Literally:’

In D.C, they stop many condo developers before they can start:

‘What is a pop-up, you ask? Well, in a city where lots are small and expensive, the idea is that you take a 100-year-old row house, rip off the roof and put another level on the house. Usually, this is followed by the developer dividing the place into condos, because putting on a pop-up costs well over $100,000, and developers are the folks with the ready cash to do it. Having done so, they want to make as much money as possible, so they split the house into two units that will each fetch more than a single large place.’

Repost-Megan McArdle At The Daily Beast: ‘America’s New Mandarins’Megan McArdle At Bloomberg: ‘Piketty’s Tax Hikes Won’t Help The Middle-Class’

From Youtube Via Reason: ‘Robert Zubrin: Radical Environmentalists And Other Merchants Of Despair’


How to separate reasonable environmentalism from the authoritarian impulses, the Malthusians and various other people who “know” how many people is enough?  Now that environmentalism is a primary focus in our schools, it’s probably worth thinking about.

Reason’s Hit & Run piece here.

Related On This Site:  Jonathan Adler At The Atlantic: ‘A Conservative’s Approach to Combating Climate Change’ Monbiot invokes Isaiah Berlin and attacks libertarians:  From George Monbiot: ‘How Freedom Became Tyranny’A Few Thoughts On Isaiah Berlin’s “Two Concepts Of Liberty”

Instead of global green governance, what about a World Leviathan…food for thought, and a little frightening…there are other sources rather than Hobbes: At Bloggingheads Steven Pinker Discusses War And Thomas Hobbes

Ronald Bailey At Reason: ‘Delusional in Durban’A Few Links On Environmentalism And Liberty

From Erica.Biz: ‘Dear California: I’m Leaving You. Here’s Why…’

Full post here.

It made the rounds a while back, but still worth a read.

‘California just isn’t worth it. My priorities have changed. I value income freedom and flexibility more than I value living near the beach. I value having a paid-off house I can call “home” more than I value having a half-million-dollar noose around my neck that declines in value by the day.’

The coast controls the legislature, and the public sector unions, greens, progressives and various lobbyists and activist groups have made living in California prohibitively expensive for many businesses, families, and the private sector.  In short, they’re hollowing out the tax base, and many people have chosen to leave.

Culturally, California has often been ahead of the curve, which would translate poorly for our nation’s fiscal health:  Environmentalism, multiculturalism and diversity, and the folks whom I call fiscally irresponsible egalitarians have been making cultural inroads across America.   They tend to define the public in Left-Of-Center fashion, heavy on the equality side of the equality/freedom equation for the sake of this discussion.

Thus, beneath such a definition of the public, public goods such as utilities, basic services, and education end up being controlled by those who can often end up free riding on the public good: public sector unions, a host of questionably important environmental regulators choking out businesses and jobs, and the worst kind of educrat who determines budgets and hiring.

The ideals guiding this definition of the public and public good clearly place impossible demands upon our institutions, which our institutions can’t practically live up to given the realities of human nature and economic scarcity.  Ironically, those who wanted more equality often end up with less equality.  Getting ahead for many people who end up in charge is still about who they know, luck, making political connections, and money, but now there are fewer people to know, more politicians and interest groups controlling the money supply while aiming for reelection, and less money all around because you’ve driven the productive people out.

More liberty isn’t a bad first step to remedy the situation, but don’t expect too much of California politics in the near future.

So goes California, so goes the nation?


-A link for Michael Lewis’ article about California politics, public pensions and Schwarzenegger’s time in office.

-A map from Immodest Proposals on how to divide California.  Topographic crime map of San Francisco. 

-California’s anti-immigration, anti-union Democrat: Full video and background on Mickey Kaus here.

Related On This Site: Neo-conservatism partially came out of the increasingly liberal trends in our society, as folks get ‘mugged by reality,” and the response to those liberal trends.  There is always a sharp edge to people, their affairs, and the groups they form:  Victor Davis Hanson Via Youtube Via Uncommon Knowledge: ‘The New Old World Order’Victor Davis Hanson At The City Journal: ‘California, Here We Stay’

Dream big: Via Reason: ‘California’s Public Transportation Sinkhole’ A great city deserves great art extravaganzas…: L.A.’s New Public Art Piece ‘The Levitated Mass,’ Or As The American Interest Puts It: ‘A Moving Rock’

Richard Epstein At The Hoover Institution’s Defining Ideas: ‘California’s Kafkaesque Rent Control Laws’

California Dreamers From The Atlantic-A Brief Review Of Kevin Starr’s History Of California

The people who promise solutions to poverty and homlessness seem to be engaged in a utopian cost-shifting exercise which favors their interests and overlooks crime, violence and personal responsbility…hardly a way to balance the budget: Repost-Heather MacDonald At The City Journal: ‘The Sidewalks Of San Francisco’

Some concentrated wealth on top, a stalled legislature with members who know how to play the game…and a service sector beneath…that probably can’t go on forever: …From The WSJ: ‘Joel Kotkin: The Great California Exodus’

Virginia Postrel At Bloomberg: ‘How The Elites Built America’s Economic Wall’

Full piece here.

Postrel discusses the work of two Harvard economists and offers this:

‘As I have argued elsewhere, there are two competing models of successful American cities. One encourages a growing population, fosters a middle-class, family-centered lifestyle, and liberally permits new housing. It used to be the norm nationally, and it still predominates in the South and Southwest. The other favors long-term residents, attracts highly productive, work-driven people, focuses on aesthetic amenities, and makes it difficult to build. It prevails on the West Coast, in the Northeast and in picturesque cities such as Boulder, Colorado and Santa Fe, New Mexico. The first model spurs income convergence, the second spurs economic segregation. Both create cities that people find desirable to live in, but they attract different sorts of residents.’

On this analysis, income inequality (a lack of income convergence) is due in part to land use regulation in places like New York, California and Boulder.  Real estate has always been costlier in such places, but since 1980 there perhaps has been a set of legal changes that have made these places prohibitively expensive for a certain kind of mobile labor.  Walls are being built in and around these cities, due to the interests of many in them.  This steers a person, less well-educated (Postrel uses the example of a waiter from Ohio) from L.A. to say, Phoenix, where there is more money and more opportunity than Ohio, but who couldn’t afford California or New York.

This can close the door to a certain kind of “equality” that comes with less economic meddling and fewer land use regulations (and that used to be a possibility in California, if I recall from my early days): plumbers living next to lawyers next to insurance salesman next to retired Navy.  Kids’ schools, sports leagues and activities, generally safer neighborhoods and a more suburban focus can be created in such an economic environment.

In fact, I share some of Postrel’s populist sentiment at the irony that some who claim “income-equality” in the abstract, or seek “diversity” through often burdensome laws and regulations are in fact rich and successful enough to do so.  Perhaps many are just keeping up with the slower, deeper currents of public sentiment that are leading to a more liberal political base in these areas.  But, what made these people rich and successful?  Likely,  it wasn’t the willingness to sacrifice their own hard work, time and money to abstract entities without their consent…and if you make these laws and these politics the norm, then successful people will just learn how to game the new system.

Are you convinced?

Any thoughts and comments are welcome.

Addition: I should add that what makes, say New York and San Francisco, partially successful, are the museum-like quality world class or nearly world-class cities have:  the actual museums, tourist attractions and tourist dollars, the aesthetic appeal and the consistent operation of many different and important activities like immigration, trade, finance etc.   Manhattan isn’t a family draw, and never was (except for TGI Friday’s in Times Square, of course).

Related On This Site:  Cities should be magnets for creativity and culture? –From The Atlantic: Richard Florida On The Decline Of The Blue-Collar ManFrom Grist.Org Via The New Republic Via The A & L Daily: ‘Getting Past “Ruin Porn” In Detroit’… some people don’t want you to have the economic freedom to live in the suburbs: From Foreign Policy: ‘Urban Legends, Why Suburbs, Not Cities, Are The Answer’

You don’t get the progressive base without the restrictive laws…they are baby steps to paradise: Richard Epstein At Defining Ideas: ‘City Planners Run Amok’Richard Epstein At The Hoover Institution Journal: ‘Three Cheers for Income Inequality’Richard Epstein At The Hoover Institution’s Defining Ideas: ‘California’s Kafkaesque Rent Control Laws’

Look out Omaha…people are coming your way?: …Joel Kotkin Via Youtube: ‘Illinois Is In A Competition’From The WSJ: ‘Joel Kotkin: The Great California Exodus’

What if you’re economy’s already depressed?  Don’t make a maze of laws and build stadiums and museums on the public dime…get new industry: From Reason: ‘Reason Saves Cleveland With Drew Carey’…Reason also suggests that if such creative/entrepenurial spirit gets off the ground, it will have to get around the public sector in Detroit.  From Reason Via Youtube: ‘Is Harrisburg’s Nightmare America’s Future?’

Is the same definition of ‘community’ connected with one that can stifle economic growth through political means?: Roger Scruton In The City Journal: Cities For Living–Is Modernism Dead?
Martha Nussbaum and Amartya Sen have plans for America and India to address some of the corruption there, and it may involve much more state involvement here in America by extension.  Can you see life, liberty and property from here?:  Amartya Sen In The New York Review Of Books: Capitalism Beyond The Crisis
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Richard Epstein At Defining Ideas: ‘City Planners Run Amok’

Full piece here.

The Upper West Side wants to limit store frontage to prevent big commercial businesses from ruining the character of the neighborhood.  Epstein has focused particularly on land use in the past:

‘I begin with a cautionary note. It is too easy to treat “neighborhood character” as a loose and sentimental notion that should be excluded from urban planning deliberations. To do so would be to ignore what everyone knows: that the character of our surroundings makes a huge difference in how we live and organize our lives. The proper integration of public and private spaces is something people expect in deciding where to live and work. There is no question that private developers think about how to integrate aesthetics, access, and use into a harmonious whole; they know these amenities drive both the desirability and price of the units that they wish to sell. Ample evidence suggests that character also matters a great deal in public spaces.

But to stop there leaves the story incomplete, for it fails to address two questions: Will regulations, such as the ones discussed above, improve the “streetscape character,” as its supporters claim? If so, will it do so at an acceptable cost to all of the individuals and businesses that bear the brunt of the proposal?’

A pretty thorough analysis of likely consequences, especially for business owners and landlords and their limited legal recourse.

Related On This Site:  Covering the law and economics from a libertarian perspective: Richard Epstein At The Hoover Institution Journal: ‘Three Cheers for Income Inequality’Richard Epstein At The Hoover Institution: ‘Death By Wealth Tax’

Kay Hymowitz At The City Journal: ‘How Brooklyn Got Its Groove Back’…Is the same definition of ‘community’ connected with one that can stifle economic growth through political means?: Roger Scruton In The City Journal: Cities For Living–Is Modernism Dead?

Trade and commerce aren’t just vehicles for nanny statism, equality delivery services and racial harmony…they are well…trade and commerce:  Via Youtube: Ric Burns—New York: A Documentary Film – Episode One: The Country and The City (1609-1825)Joel Kotkin Via Youtube: ‘Illinois Is In A Competition’

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