NewGeography.com blogs

Today, there are about 30 megacities in the world, where more than 10 million residents live. The largest is Tokyo, at about 38 million. Recent announcements by the government of China could lead to the worlds' first gigacity (for want of a better term, used here to denote a city of more than 100,000,000 population, see note). According to the Nanfang Insider, the economic integration of megacity Beijing, megacity Tianjin and eight cities (prefectures) in the province of Hebei would result in a city of 130 million. China Daily is a bit more circumspect, indicating that the Beijing supercity would have only 85 million.

The giga/super city would be tied together by new rapid transit lines and highways and surrounded by the 7th Ring Road, adding to the six that have already been built. The 7th Ring Road would consist of two roads, circling most of the area, and extending to a combined 850 miles (2,200 kilometers). By comparison, London's M-25 is 117 miles long (188 kilometers), the Moscow MKAD 68 miles long (109 kilometers) and the Washington beltway is 64 miles long (103 kilometers)

The giga or super city is not likely to really be a city, because it would be much larger than a labor market (this is why the near continuous urbanization from Boston to Washington or Tokyo to Osaka-Kobe-Kyoto is not a city). The estimated land area is 67,000 square miles (175,000 square kilometers). This is nearly as large as Cambodia or the state of Oklahoma. Providing the point to point daily commuting in such a large area is well beyond the capability of any affordable transportation system. Star Trek like teleportation could do the trick. Meanwhile, however, there is plenty to be gained from the economic integration of this large area.

Graphic of the new 7th ring road from nanfang.com:

Note: Technically, a gigacity would need 1 billion people (10 to the 9th power). However, megacities, with their 10 million minimum are also wrongly named. A city with a mega city would have 1,000,000 people (10 to the 6th power). Artistic license justifies the gigacity term under the circumstances. Besides, with the slowing growth of world population, it seems unlikely than any city will achieve a population of 1 trillion.

It seems that Destination LI, “a nonprofit community building and educational organization dedicated to helping people create and sustain vibrant centers” on Long Island, has been quietly busy in recent months.

Recently, the group released a survey, which, to nobody’s surprise, shows that millennials are not exactly thrilled with Long Island’s housing options.

The solution? Those “vibrant” walkable communities that have been pitched so many times before. The survey also touched upon Long Island’s need for jobs that match millennial skillsets and salary expectations, two critical issues that policymakers must address.

In a nutshell, “the survey, conducted on social media web forums between Feb. 27 and March 24, drew 413 respondents.” To solicit responses, the group used sites such as Facebook, Twitter, LinkedIn, Reddit and others. Seventy-five percent of those who participated said that they either “agree” or “strongly agree” that Long Island’s housing options limit their ability to stay, with 58.7 percent saying they currently live with parents or relatives.

For perspective, consider this: According to U.S. Census data from 2010, there were 478,988 millennials in the Nassau-Suffolk region. Destination LI’s survey of 413 represents 0.08 percent of the sample size – far from a representative sample of that segment of population. Given the large gap between population and those surveyed online (which, by surveying standards, is a poor solicitation method), it’s important to take the results for what they are – anecdotal, but still an important commentary. Long Island clearly has issues with providing housing, but we’re going about it the wrong way.

The survey brings to light significant questions concerning Long Island. Is regional housing availability holding millennials back, or is it Long Island’s stagnant economy? The survey infers that walkable apartments keep millennials here, but what about affordable single-family homes? Are apartments the only housing option for this age group? Is more development the answer to our regional woes? Are the survey’s findings legitimate given the methodology?

Finally, the big question remains: Should developers be driving the regional conversation on housing needs?

The answer to any of these questions is up for debate, but the last one should resonate. Have Long Islanders become so apathetic that they now are reliant upon stakeholders to conduct surveys that not only get ample press coverage, but are sure to influence policy decisions on the regional level? Shouldn’t planners be conducting these studies, with their recommendations being based off appropriate methodology and professionalism?

Our policy solutions are only as good as the data that informs them. With land-use, the cost of failure is too expensive and repercussions too severe and far reaching to rely on stakeholder-driven solutions. We all are leaders in that we have the power to collectively shape our community. Let’s take back the reins and give our problems the thoughtful analysis they deserve.

Christine Lagarde, the Managing Director of the International Monetary Fund cited the need for housing market reform at the conclusion of discussions with the government of the United Kingdom on Friday, June 6.

The housing market in the United Kingdom has experienced a long and continuing escalation in prices relative to incomes, largely due to the nation's strict urban containment policies that date from the 1947 Town and Country Planning Act, and significant further restrictions put in place during the Blair government.

According to Ms. Lagarde:

"But rising house prices fundamentally reflect demand that greatly exceeds supply. Addressing imbalances in the housing market by alleviating supply-side constraints will require further measures to increase the availability of land for development and to remove unnecessary constraints on land use."

The Daily Mail further reported that Ms. Lagarde "called for ‘unnecessary’ restrictions on building on greenfield sites to be lifted, so the supply of houses can be increased. This, she said, would help stabilise prices.

The United Kingdom's restrictive land use regulations have been a model for restrictive land use regimes from Sydney to Vancouver, Auckland, Portland and California. They have been responsible for driving up house prices relative to incomes, which reduces household discretionary incomes. The result is lower standards of living and higher rates of poverty. London School of Economics professor Paul Cheshire has concluded that urban containment policy is irreconcilable with housing affordability.

In a Wall Street Journal commentary entitled Turning the Twin Cities Into Sim City, Katherine Kersten of the Center of the American Experiment describes how "a handful of unelected bureaucrats are gearing up to impose their vision of the ideal society on the nearly three million residents of the Minneapolis-St. Paul metro region." She notes that the Metropolitan Council (the "handful of unelected bureaucrats") intend for "all future housing and economic development within "easy walking distance" (one-half mile) of major transit stops—primarily in the urban core and inner-ring suburbs.” This would lead to "tax dollars (mostly from people who live elsewhere) will be lavished on high-density housing, bike and pedestrian amenities and subsidized retail shops." She equates the plan with playing the computer game "Sim City with residents' lives."

Kersten also notes the all-too predictable distortion of future transportation funding to support transit, rather than highway congestion relief.  The ("Thrive 2040") "plan also will pour public funds into mass transit while virtually ignoring congestion relief on highways. The Twin Cities region is projected to have just $52 million available annually from 2014 to 2022 for highway congestion relief, according to the Minnesota Department of Transportation. Yet the Met Council intends to spend at least $1.7 billion on a single light-rail project, with more rail transit to follow."

This imbalance of funding is despite the fact that less than two percent of travel in the Twin Cities is by transit. In the longer run, Minneapolis-St. Paul, which has been by far the most successful metropolitan area in the Midwest since World War II, will become less competitive if it fails to take steps to improve traffic congestion (and it is nothing short of folly to expect that transit can substitute for driving in the modern metropolitan area, see The Transit-Density Disconnect).

Kersten also characterizes as the "most radical element," of the Metropolitan Council plan as its greenhouse gas emission reduction component, and for good reason. The urban containment policies of densification and transit are far more expensive than other strategies for reducing greenhouse gas emissions (see questioning the Messianic Conception of Smart Growth and Enough "Cowboy" Greenhouse Gas Emissions Reduction Policies). At the same time, there are a myriad of strategies that are more cost effective, such as improved fuel economy (see Obama Fuel Economy Rules Trump Smart Growth). Cost-effectiveness is important, because if more than necessary is spent to reach greenhouse gas emission goals, there will be an economic cost in fewer jobs created, a lower standard of living and greater poverty (see Toward More Prosperous Cities).

Economist Thomas Sowell, who has taught at Cornell University and UCLA and has worked at the Urban Institute and the Hoover Institution at Stanford University summarizes the economics of the housing market in a recent article:

"Anyone who has taken Economics 1 knows that preventing the supply from rising to meet the demand means that prices are going to rise. Housing is no exception."

Sowell's cites the high prices houses for sale in the San Francisco Bay area suburb of Palo Alto. Three catch his eye:

About the first house, he says: “The house is for sale at $1,498,000. It is a 1,010 square foot (94 square meters, added by author) bungalow with two bedrooms, one bath and a garage. Although the announcement does not mention it, this bungalow is located near a commuter railroad line, with trains passing regularly throughout the day."

The second house has 1,200 square feet (111 square meters) and was listed for $1.3 million. Intense competition for the house drove the sale price to $1.7 million.

The third, with 1,292 square feet (120 square meters) and built in 1895 is on the market for $2.3 million.

Sowell continues: "There are people who claim that astronomical housing prices in places like Palo Alto and San Francisco are due to a scarcity of land. But there is enough vacant land ("open space") on the other side of the 280 Freeway that goes past Palo Alto to build another Palo Alto or two -- except for laws and policies that make that impossible. As in San Francisco and other parts of the country where housing prices skyrocketed after building homes was prohibited or severely restricted, this began in Palo Alto in the 1970s."

As in Palo Alto, outrageous price increases began in the San Francisco Bay Area in the 1970s, and were the predictable outcome of urban containment policies (smart growth policies) that rationed land for development.

House prices are three times as high relative to incomes in the Bay Area than they were before urban containment regulation began in the early 1970s. Among New World (US, Canada, Australia and New Zealand) major metropolitan areas, only Vancouver has higher house prices relative to incomes.