It would be an interesting experiment, but I predict that YIMByism, or any form of “redevelopment”, is unlikely to “compete land rents down” in the absence of other crucial factors. It is an experiment that I don’t think there are any precedents for — where “redevelopment” has occurred and correlates with systemic affordability, there are always other dependent factors.

For example, in New York during most of the 20th century, and in Houston today, and Bangkok today, impressive “redevelopment” has occurred under conditions where the floor space provided is systemically affordable (I mean a median multiple of around 3 — “affordable housing” is often a highly relative term, when the median multiple in the city as a whole is 7+, it is hard for policy makers to artificially force “affordable housing” that is even a match for the market average in a median-multiple-3 city). The conditions I refer to in New York (pre 1990), and Houston and Bangkok, is that the city is sprawling outwards very rapidly at the same time. This “disciplines” the price of all land within the same functioning urban economy.

It has been noted by urban economists, and the evidence is incontrovertible, that “site value is highly elastic to allowed density” under the commonly-existing conditions where central planning disallows competitive sprawl. So YIMBY-ists need to understand that their nobility is pointless unless “sprawl” is being allowed at the same time; especially if the costs of that sprawl are being fairly financed and charged to the new residents (which suppresses land rent even further than competitive land supply on its own). YIMBY-based redevelopment may cause increases in density and it may cause a further reduction in average housing unit size, but the average unit will not be cheaper.

There are conditions other than “allowed sprawl” which may ameliorate the “site value elastic to allowed density” effect. Of course in Singapore, all land is owned by the government anyway and they have total rights over it to redevelop as they wish; the “housing market” relates to “capital” structures; perennial leases are charged for the land underneath the buildings.

In most of Europe, there is not the emphasis on private property rights that there is in Anglo markets, and compulsory acquisitions are non-controversial and the threat of them disciplines site owners price expectations.

Japan is a unique and brilliant example where mass transit is provided by multiple competing enterprises who also own all the sites serviced by their network. Therefore, they are competing with each other for tenants and “trip attractors” as well as “riders” — in fact it is all the same thing. In the rest of the world, sadly, mass transit is a monopoly enterprise, heavily subsidised, but sites serviced by the mass transit are owned by private-sector owners who reap the capitalised benefit of these subsidies regardless of what they do. It is a tragedy that there is no understanding of how the Japanese system works, and no advocacy for its adoption elsewhere (except see Seitu Coleman, 2015, “Alternative Institutional Arrangement for Urban Transit and Intercity Railway Operations”).

Researcher and writer on urban economic and planning issues

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