The Value of the Immeasurable

You do bring up a number of interesting points, which I will study further. But in some areas it really feels like we occupy completely different planets.

I began writing a rather long reply but after I wrote it, I realized the whole thing could be condenses a lot more, because everything really centered around the same idea. Basically you approach these issues a lot in how an cool headed economist would look at it. You analyze and compare cities and solutions based on metrics which can easily be turned into numbers and put in a spreadsheet.

However I find that in life, the things you can easily measure are often the least important. It is what I view as profoundly wrong with New Public Management style of thinking. One direct all development towards improving some measurable metric. Yet you end up optimizing the entirely wrong thing, because don’t pursue what you care about but what you can actually measure.

E.g. you turn the issue entirely into simple numbers such as what is the average travel time without e.g. any consideration of the quality of that travel. Are there frustrations while stuck in traffick jam of a souless 12 lane highway? Or are you biking down a beautiful canal street watching ducks in the water while you get physical excercise and fresh air? Or like you could be sitting in a comfortable train with a smooth ride while working on your laptop. Completing work which you can subract from your total workday and hence go home earlier.

Travel for Pleasure in a Walking-City vs a Sprawl-City

Then there is the question of secondary travel, such as to movies, shops, restaurants etc. I can take a 30 minute subway ride to get to downtown. There I can walk into a book store and browse some books, before I walk down to get a Gelato icecream. Maybe I meet some friends on a parallel street to eat dinner. Afterwards we walk over to movie theatre. All while we watch the bustling life of a summer day. Maybe we walk past a fountain, or a street artist. Who knows.

I have tried these American urban sprawl cities and find them rather unappealing. Particular a place like Houston, where you take a car to a restaurant in a restaurant district. It is dead outside. Just a massive parking lot, where you can park alongside some crazy number of other cars and walk inside. There is no life, besides the people walking to their cars. Maybe you decide you want to go to the movie theatre afterwards. There is no spontaneity. You cannot just walk past one. You got to decide, get in your car and drive to the entertainment district and park in another enormous parkinglot.

The Need for Coordinated and Collective Decisions Making

It is like the outcome of the famout prisoners dilemma in game theory. There is a choice that would be optimal for both prisoners interogated, but it can only happen if they make a collective coordinated decision. When decisions are made in an individualistic manner, you easily end up with suboptimal choices. Yet you have no other choice, but what you really crave requires the coordination of many people.

Deregulation and letting everyone do whatever they want in the housing market really only leads people down to the choices they can make as individual, when in fact they may have wanted choices requiring coordination of many people. Chosing the size and location of your house is an individual choice you can make. But if you leave this purely up to the market, then you are unable to balance that choice against other desires such as living in a bike friendly city. You cannot buy a bike lane as separate product the way you can buy a house or a car. Nor can you as an individual buy railroad track for trains you may want to travel to work in.

The same goes for a green belt around a city. It is a bit like preserving fishing resources. Everybody may agree that we should preserve a certain population of fish in the sea so everybody can fish. But if you make the choice of fishing an individual decision, you will quickly end up depleting all the fish. Yes I know you would want to price the externalities, but that is easier said than done. You can e.g. quotas which can be sold. That still requires some kind of regulation and central decision making. Preserving a green area is much harder to price. How to you compare the value of that green area to all citizens using it and compare it to the value of an individual who wants to take a piece of it and build a house there?

What I mean by Evils of Centralization

We discussed centralization, but I think we both had something quite different in mind. Let me give an example. Earlier most decent sized Norwegian towns used to have a hospital. You could bike or walk quite easily to it if you wanted. Then politicians decided that bigger hospitals where more “efficient”. Thus smaller hospitals get closed down and now you have to drive to a hospital far out in some farmfield. Biking and walking is no longer an option. Same goes with things like police stations. You may have had a smaller location station where you could say process your passport. Now it has been centralized so only a particular station would do it. All in the name of efficiency. But all it does is force everybody to use a car. Which is ironic because they have been building bike lanes and removing car parking all over the place. Yet by making larger units of everything, you cannot have stuff in close proximity.

Focusing on mass transit helps in my opinion. It makes it easier to avoid having to use a car. You also create more natural centers. Every mass transit point becomes somewhere with stores, denser housing etc. I live in the suburbs. But the subway station creates a sense of having a little town centre. A square with stores, dental offices, doctors, gym etc creates a meeting spot for people. During elections politicians may come to the square to hold a speech.

I don’t think there is any empirical evidence that suggest a car and sprawl oriented city increase scope for walking and cycling. I don’t see how that is supposed to work even in theory. The American cities I have lived was quite car and sprawl oriented with no focus on public transportation. Walking and biking was quite useless in both cities.

Oslo where I live now is not perfect but walking and biking is a lot better here. If somewhere is too far, you could always simply take your bike on the bus or the subway train. In the Netherlands where public transportation is really great, biking is massive. And it works really well with the public transport. It is very common in the Netherlands to bring bikes onto busses and trains. Train stations have massive bike parking. So you can bike to a train station and park you bike there before taking the train.

Both for public transport, biking and walking to be effective you need a certain density. Sprawl cities are too low density to make biking and walking feasable. I can just compare Norway to the Netherlands. Norway has a far more spread out population and both biking and public transportation is less effective and practical here than the Netherlands.

I think it is exceptionally rare to find cities which are good for biking and which also car oriented and have little public transportion. So that you should suggest this is somehow natural is quite puzzling.

How to Keep House Prices Down and Should We?

As for how do we keep housing prices down. You raised some good points. But as I have elaborated on above, I would not prioritze low house prices above all else. Tradeoffs have to be made. While you bring up some interesting example of Korea and Australia, Germany is still a counter example that does not fit your narrative. Planning regulation and incentives are in large part responsible for keeping prices down. Through price controls, taxation on profits from property sales, housing cooperatives etc. You only need to find one model that works without sprawl to reduce prices to prove that sprawl is not a necessity to keep house prices low.

Finally I think it is worth keeping in mind that increasing house prices isn’t destroying value, it merely shift wealth around the population. The population as a whole don’t get poorer. A wealth shift can be handled with some form of progressive taxation.