the social dimension of housing -...
TRANSCRIPT
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The Social Dimension of
Housing
by Dr Edward CY Yiu Associate Professor
Dept of Geography and Resource Management, Chinese University of Hong Kong
Housing Issues and Policy, Urban Studies Programme, CUHK
URSP3100
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Introduction • Land uses are inter-related • Positive and negative externalities exist • Social dimensions refer to
– Social lives – Social values – Heritage and culture – History and icons – Edges and patterns – Social communities and networks
• Achieved by urban planning?
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UP is Path Dependent
• urban planning CANNOT be really a new plan from
scrap,
• but is highly path dependent,
• i.e. affected strongly by history. This is exactly the
meaning of the word LOCATION.
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What is Location? • Location does not mean a place, but the icons indicating why
the place is unique:
• "City-building is an accumulation of wealth and mistakes,
shaped not only by present, but also by past land rents.
Existing spatial structures do not intimidate new users,
but are more attractive than the featureless plain.
Existing spatial structures offer opportunities. These
opportunities, combined with other factors, sum up to
what is called location." (Davy, 2012, p.45)
• Where a city centre would form? Why?
• Where a household would choose to live? Why?
• See my PPT on Spatial Portfolio Theory (8a)
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City Branding
• urban planning is to sharpen the uniqueness of a location, not to impose coercively a new one to a place.
• Sometimes, even a mistake in the past can become valuable and make a location unique.
• Take the high density development with countryparks in HK as an example, it was a historical decision which might be wrong in someone's minds, but it has evolved to become an icon of HK.
• It would be unwise to overturn the situation, and convert HK into a low-rise low-density no-countrypark city.
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Multi-Dimensions of Land Value
Dimensions Barriers Gateways
Topography mountains rivers, harbors
Territory boundaries free movement
Security war, crime, unclear legal rights
rule of law, property rights
Regulation red tape incentives
Economy little demand strong demand
Labor high wages low wages
Culture social exclusion social inclusion
Urban design restricted areas flexible spatial structures
Traffic blocking crossover connecting
Demography decrease increase
Environment brownfields high env quality
From Davy (2012)
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Housing Exclusions - Terms
• LULU - Locally unwanted land use
• NIMBY - Not in my backyard!
• NAMBY - Not all in my backyard!
• NIABY - Not in anybody's backyard!
• BANANA - Build absolutely nothing anywhere near
anyone!
• NOPE - Not on planet Earth!
• NIMTOO - Not in my terms of office!
• YIMBY - Yes in my backyard!
• YIMBY-FAP - Yes in my backyard - for a price!
Davy (1997)
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Housing Inclusions • Mixed Developments (MD) in HK
• Inclusionary Zoning (IZ), or Affordable Housing Mandates (AHM) in the US.
• Holcombe and Powell (2009) explain IZ as follows:
– "IZ provisions require developers to reserve a
certain no. of units for low-income families and
households, ...
– IZ is an attempt by local governments to force
the private sector to build housing targeted
toward low-income households.
– Local governments accomplish this typically by
requiring developers to set aside a certain no. of
housing units, often 10, 15 or 20% of the total
production. ..." (p.16)
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Housing Inclusions • Porter (2004) praised IZ as a good way to provide
affordable housing.
• But another studies found that IZ policies led to a reduction in affordable housing supply and higher housing price.
• For example, Holcombe and Powell (2009) cite Powell and Edward (2004a, 2004b, 2009) and concluded that – "IZ is a failed public policy...[because there is no wealth
creation,] families remain in the price-controlled units even after their incomes rise...resale restrictions...[make it] less likely to improve their homes."
– Sum up, they contend that subsidized housing is stagnant 流轉不足.
– This contention is similar to Prof Richard Yu of HKU in his recent book 港人港地。
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Should Planning be Used to Provide Affordable Housing?
• Is it reasonable to make farmers responsible for feeding the hungry?
• Is it reasonable to make developers responsible for housing the homeless? (The Joseph Rowntree Fdn’s, 1994, Inquiry into Planning for Housing)
• Developer would bid less for the land, if the developer knows that affordable housing is required to be built. (Oxley, 2004: 153)
• How about imposing the affordable housing requirement only after the land price is paid?
• Is it a deceit!
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Why Planning? • Market failure (eg externalities, such as pollution, public
goods)
• Efficiency versus equity (eg unaffordable housing)
• Unsustainable (biocapacity market price = 0)
• For leasehold interests, lease terms are not statutory, and cannot be changed by the government without the agreement of the other party.
• Tragedy of Commons: difficult to make collective decision to redevelop or to carry out a comprehensive new town development.
• Coase Theorem: transaction costs are too high to negotiate by market force. (tr. Costs > benefits)
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What and Why Planning for a Liberal Interventionist
• “Planning is to stop development where there are excessive negative externalities and facilitating development where there are beneficial positive externalities.” (Oxley, 2004: 71)
• “Planning, as part of a wider system of government activity, has the potential to make people better-off by compensating for the inefficiencies and inequities of a market-determined system of land use” (Oxley, 2004: 111)
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Planning Theories • Separation Theory:
– Where land uses are incompatible, the users of land impose external costs on one another. So they shall be separated.
– urban sprawl (single-use zoning) becomes an environmental concern.
– Are residential and industrial uses incompatible? • Before the 1970s, they were compatible (R/I)
• After the 1970s, they are incompatible.
• Since the 2000s, they may be compatible because traveling increases carbon footprint.
• Which one is correct?
• Self-Containment Theory: – Where a community is self-contained with all the required
facilities and different uses of buildings, to make the community self-sufficient, without traveling.
– CDA and OU(B) are examples.
– How to deal with incompatibility? • See http://ecyyiu.wordpress.com/2013/03/20/town-planning-principles-separation-principle-v-
self-containment-principle/
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Why NOT Planning?
• Market fails does not necessarily imply government would succeed.
• Foldvary (2009), “any governmental planning is subject to three principal defects: perverse incentives, the absence of relevant knowledge, and value imposition.” (p.332)
• Thus, a governmental planning is destined to fail.
• “there is no consensus among planners regarding optimal plans. …If there is no clear theory of planning, how can planners presume to know better than market participants?” (p.335)
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Why NOT Planning from a Public Choice Analyst
• Public choice theory (Positive Theory of Planning):
– Planners do not have the information to make choices that will compensate appropriately for market failures (government failures)
– Planners would follow their narrower self-interest objectives
– Transaction costs of planning controls can even be larger
• “government officials may believe that they have a greater control of their plans, because they can use coercion to compel people to act within the constraints of their plan. But this imagined planning power is illusory, even a conceit, to use Hayek’s (1988) term, because the complete information needed to implement the plan is unknowable. The greater the scope of the plan, the less the planners are able to take advantages of economic calculations that reflect scarcity and social welfare, so the actual outcome will be far from optimal. If the aim of the governmental plan is the maximization of overall social well-being, centrally imposed plans necessarily fail.” (p.324)
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Planning causes Inequity
• “once government has the power to control rights, then groups with concentrated potential benefits will use the political market for legislation to transfer wealth and privilege to themselves. In effect, zoning creates a territorial cartel. Among other pathologies, ‘zoning was a powerful instrument of income and class segregation.’” (Nelson, 2005: 145)
• George Stigler’s (1971) public-choice analysis of regulation has already accurately predicted the situations of town planning in HK nowadays. When the senior government officials bought agricultural lands at NENT in advance waiting for government’s new town planning to implement so as to earn a fortune.
• http://ecyyiu.wordpress.com/2013/09/23/a-bottom-up-urban-
planning-system-the-luen-wo-hui-case/
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Planning makes a Sorrow City
• Tin Shui Wai becomes a sorrow city, why?
• Town planning is a top-down approach, and a town planner is expected to
design a new town by knowing how to accommodate how many
people, where they want to work, and what they want to do. It is almost an
impossible task.
• Furthermore, when public housing estates and subsidized housing are
provided in the new town, then mismatches can almost be certain because
many households are "forced" to move into the new town to enjoy
the subsidy. When the location of living is tied-in with a huge
subsidy, a large number of households with very similar characteristics,
especially on working preference and working experience / qualifications.
Such a huge supply of similar working force into a small district, it can be
reasonably expected to result in a substantial drop in wages for a certain
types of working opportunities in the district, or a surge in unemployment
rate.
• http://ecyyiu.wordpress.com/2013/07/14/new-town-development-planning-
is-intrinsically-flawed-the-problems-of-tung-chung-extension-study/
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Market Planning
• A market planning system, on the contrary, is a bottom-up approach to urban planning. It allows choices by the stakeholders, rather than a rigid government plan, which can only be changed via a political means (of extremely high transaction costs). It lets the private entrepreneur to bear the gain/loss, rather than the taxpayers (who have no control on the decisions of the planners).
• There have been some market planning cases in Hong Kong: – Garden City, Kowloon Tong
– Luen Wo Hui, Fanling
– Kai Tak Bun, Kowloon City
• http://ecyyiu.wordpress.com/2013/09/23/a-bottom-up-urban-planning-system-the-luen-wo-hui-case/
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Conflicts betw. Lease and Plans
• Easements and covenants are examples of voluntary negotiations: – Right of way – DMC
• “The ownership of land confers the right to develop, provided that there are
no adverse effects on the property rights of others; • the right is limited by the law of nuisance and by easements and restrictive
covenants.” (Oxley, 2004: p.117)
• In a leasehold interests situation: • Government sells the land to the highest bidder, promising the highest
developable gfa, and other land use rights, etc. • Then after soliciting the land premium, the planners impose new
restrictions such as building height, building gap, and no-building area, disabling the achievement of the maximum gfa.
• Shall the government compensate the land buyer?
• http://ecyyiu.wordpress.com/2011/09/24/planning-shall-land-value-be-compensated-when-restrictions-are-imposed-by-ozp/
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Planning becomes a Political Process
• A political fight for benefits, because planning involves benefit transfers and aims to achieve equity by the knowledge of planners.
• Nigel’s (2007) definition of Urban Planning from “Urban Planning Theory” as a technical and political process concerned with the use of land and design of the urban environment, including transportation networks, to guide and ensure the orderly development of settlements and communities.
• Germany defines “the goals of regulatory planning include sustainable urban development, an equitable distribution of land uses, the increase of the land ownership rate, the expedient use of building land, soil protection and land thrift, the restriction of urban sprawl, the creation of jobs and promotion of the local economy, or the effective, efficient, and equitable implementation of land use plans (examples adopted from Section 1 BauGB).”
• Gans (1991) even argued that planning is an instrument for social change, redressing inequalities and working for the benefit of disadvantaged groups.
• http://ecyyiu.wordpress.com/2013/10/03/what-is-urban-planning/
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Planning v. Distributional Justice
• Planning made a very limited contribution to a reduction in urban poverty (Oxley, 2004 cites Cullingworth and Nadin, 2002: 24-6)
• Poor housing (dilapidation, sub-divided flats, unaffordable housing,… are worsened although urban planning has been imposed for decades)
• When agricultural land is rezoned to residential land, its value increases. But whose agri land should be rezoned?
• It is a redistribution of wealth? (see Oxley, 2004: 133) • Why planning rather than taxation is used for a
redistribution of wealth? Which one is better?
• But for leasehold interests, land premium has to be paid for the change of land use?
• There is no private redistribution of wealth, but to the government? • How about PPP of the NENT NDA project?
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References • Essential Readings:
– Oxley, M. (2004) Economics, Planning and Housing, UK: Palgrave.
– Davy, B. (2012) Land Policy: Planning and the Spatial Consequences of Property,
ASHGATE.
– Holcombe, Randall G. and Powell, Benjamin (2009) Housing America: Building Out of a
Crisis, New Brunswick: Transaction Publishing.
• Supplementary Readings:
– Davy, Benjamin (1997) Essential injustice. When legal institutions cannot resolve
environmental and land use disputes, Wien and New York: Springer.
– Porter, D.R. (2004) The Promise and Practice of Inclusionary Zoning in Growth Management
and Housing Affordability: Do they Conflict?, ed. Anthony Downs, pp. 212-248.
– Powell, B. and Edward, S. (2004a) Housing Supply and Affordability : Do Affordable Housing
Mandates Work? Policy Study No. 318, Los Angeles: Reason Foundation.
– Powell, B. and Edward, S. (2004b) Do Affordable Housing Mandates Work? Evidence from
Los Angeles County and Orange County, Policy Study No. 320, Los Angeles: Reason
Foundation.
– Powell, B. and Edward, S. (2009) Inclusionary Zoning, in Ch. 6 of Holcombe, R.G. and
Powell, B. eds, Housing America.
– Gans, H.J. (1991) People, Plans and Policies: Essays on Poverty, Racism and Other National Urban Problems, NY: Colombia University Press.
