Joel Kotkin Wrong on the Internet

A blog about business and economics.
April 30 2013 9:21 AM

Nobody Likes Dense Urban Areas Anymore—They're Too Expensive

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If Logan Circle is so terrible, why's it so expensive?

Photo by Win McNamee/Getty Images

No writer on urban issues annoys me more than Joel Kotkin, who every six months writes some version of this exact same article in which he says media hipsters keep overhyping dense cities and downtowns while population growth evidence shows that most people move to sprawling sunbelt suburbs.

Since he's written this article so many times and so many people have written the rebuttal to it, I'm sure he already knows what the rebuttal is and for some reasons doesn't care. But here goes. If people hate dense urban areas so much, why isn't Manhattan one of the cheapest places in America to buy a house? Why isn't San Francisco cheap? If people are voting with their feet for spraw, why is land in Georgetown so much more expensive than land in Georgia? And look to be clear it's not impossible for this to happen. Detroit really has suffered massive population flight and a total collapse in the value of land and structures. In some Detroit neighborhoods you can buy an existing house for less than the construction costs of a new house in rural areas. But note that despite the fact that buildings depreciate in value over time, this is an unusual fact about Detroit. It is not, in general, cheaper to acquire 2,000 square feet of housing in a dense urban area than to build a 2,000 square foot house in the far exurbs.

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America is a big country so there are a lot of things happening, but the following stylized facts hold true in most places:

— In most metro areas, land is more expensive downtown than in the suburbs and land is cheapest in the exurban fringe.
— Across metro area, land is more expensive in the Boston-D.C. corridor and the Pacific Coast than in the sunbelt.
— Everywhere in America (yes even in Texas) building codes (not always "zoning" but parking rules, setback rules, FAR rules, height rules) restrain people's ability to turn expensive land into densely built land.
— Population growth is fastest in cheap land areas.

The fourth fact really is important. If you want to tell an analytically correct story about the future of America, the story is that more and more people will be living in suburbs of large and medium-sized cities in Texas. But to focus on the fourth fact without noting the other three is missing the boat. It's like saying nobody wants to buy a Lexus, or gorgeous Caribbean beach resorts in February suck. Luxury goods aren't unpopular, they're just expensive. San Francisco is expensive. Manhattan is expensive. Logan Circle, where I live, is expensive. But the difference is that policymakers actually have the ability to make it possible for many more people to live in these expensive places, they simply choose not to do so.

And the very strangest thing about Joel Kotkin is that he knows this perfectly well, since when Los Angeles (wisely) chose to roll back its anti-density regulations he wrote a long article whining about it. But if Kotkin were correct and nobody wanted to live in a dense urban area, then there'd be no harm in upzoning—nobody would come.

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