BUILD, BUILD, BUILD!
Urban Planning: A Solution
Housing affordability is a politically stubborn policy issue; it just won’t budge. This is especially true for places like London, whose hustle, bustle and unaffordable housing make the prospect of finding ‘digs’ in the capital as likely as Boris Johnson is to brush his hair. Policymakers charged with making decisions are haggled by commentators and young citizens to introduce top-down solutions to address the housing affordability issue. But what if we turn that on its head?
Elinor Ostrom, the Nobel-prize winning economist (and the first woman to win the Nobel prize for economics, by the way, so, an absolute queen in her own right) championed self-governance and polycentricity when approaching collective action dilemmas, in particular, the management of shared, or, pooled, resources [1]. Ostrom’s work, part of the resurgence of political economy, challenged the widely-held belief in the profession that resources that were collectively used by their users would deplete or be destroyed in the long term. Her work showed how ‘local property can be successfully managed by local commons without any regulation by central authorities or privatization’[2].
She believed that when users are directly involved in the decision-making and management of their resources, the likelihood of following rules and monitoring others, to prevent individuals from ‘freeriding’ the resource, is much more likely than when a central authority imposes governance on them. Some of this belief was due, in part, because of the knowledge that local actors possess which central planners do not have access to, but largely because of the poor results of top-down solutions.
John Myers, in applying Ostrom’s work to housing affordability and urban planning, proposes a solution to make places like London more affordable with better development and governance [3]. Advocates for housing reform seldom depart from the traditional arguments of state or market paradigms. That is, perhaps, the key issue with housing policy: who gets a say in what happens here? Or, to be more technical, should governance for urban land use be handled by locals or by public authorities?
An obvious solution to make housing more affordable in bustling urban centres, returning to London for our example, would be to build more houses (hear that?... BUILD, BUILD, BUILD). Young citizens looking to get on the property ladder, but priced out of the market due to supply restrictions, have little political power when it comes to shouting about housing. The political clout that politicians would have if they gave in to the noise of young people is obvious, and surely affordable housing is on every nation’s to-do list, right? But homeowners are reluctant to see more traffic, crowding or changes to where they live, and the potential devaluation of their property, will restrict the construction of new houses in their area, and Myers recognised this…
He argued that polycentricity enhancement is the answer. The pro-construction residents, who need permission from majority-homeowner controlled governance, will not achieve their ambitions unless they could appeal to a much more like-minded people. As such, London YIMBY (an opposition movement to the ‘not in my back yard’ phenomenon, creatively named the ‘yes in my back yard’ movement – economists are an imaginative bunch) [4] proposes residents of city streets should have voting rights on how to govern their streets. With a two-thirds majority, residents could sell such rights to developers, and with public entrepreneurs observing the freedom to innovate, could place downward pressure on the prices of homes.
This seemingly pleases two camps, providing public entrepreneurs and pro-construction residents the opportunity and the voting rights to make housing more affordable and to suit their ideals, whilst other streets could retain their rights in favour of preventing, or limiting, the devaluation of their homes.
If we take to the skies and look down on what we’ve created, we will see a network of communities confined to their own streets, over which they have governance. A blissful harmony of pro-construction and construction-restricting residents.
This reduces the housing problem – there’s no doubt about it, it’s a problem – to a street-level dilemma, as opposed to a city-wide problem. This allows communities to make decisions regarding their own local environment without imposing them on others, who can take the opposite course of action if they wished.
London YIMBY and John Myers say that this could make large, bustling and vibrant urban centres, places of affordable housing for all people, and a policy field where self-governance and polycentricity pave the way for limited government and the reduction of central planning. This obviously has positive spill over effects. For example, with attractive urban centre housing, students may be drawn to large cities for their university experience, furthering places like London’s firm hold on the nation’s students.
With an environment of self-governance – an environment where public entrepreneurship can thrive, that is – streets and local communities may become green havens for those who wish to make their living areas sustainable, encouraging innovation and free-market environmentalism, to an extent that will solve many issues surrounding the climate crisis. However, this remains to be seen, is the issue of environmental change and sustainability only solved through central efforts? Who knows.
So Ostrom’s work on self-governance and the ability of local communities to effectively manage resources whilst keeping each other satisfied can perhaps be applied to the question of housing and urban planning in huge, modern urban centres. Whilst housing has traditionally been seen as a responsibility of the government or central authority, perhaps it’s time to flip it around. After all, there’s only one thing that will solve the problem: BUILD, BUILD, BUILD!
Edited and Reviewed by Tanish Bagga.
References/ Further Reading:
[1] https://www.nobelprize.org/prizes/economic-sciences/2009/ostrom/facts/
[2] https://www.econlib.org/library/Enc/bios/Ostrom.html
[3] https://www.mercatus.org/system/files/myers_-_mercatus_research__fixing_urban_planning_with_ostrom_-_v1.pdf
[4] https://www.londonyimby.org/blog/creatingcommunities