For as long as I can remember, I have been fascinated with how cities work. My graduate work was in Interest Group Theory. This is a way to explain how the outcomes on the urban landscape, successes and failures, are a function of the way in which different groups of interests participate and interact. In urban development, there are three primary interest groups that simplistically agglomerate; residents, developers and government.
We’re always looking for simple answers, so the common perception is that we have three teams on the playing field with brightly colored uniforms. After many years, I might add a fourth group – the media. This last group tries to pretend that it’s off the playing field. Since perception is a large part the reality that we create, then the media has been successful in doing so, being able to manipulate perception in conjunction with whichever players it believes will suit its purposes. In fact, all of the groups are massively complex, with many sub-interests better or more poorly represented.
The more successful intertwinings of certain players with coincident interests have a disproportionate impact on what public services get provided, how much zoning regulations stifle creativity, and whether an urban area can maintain an adequate supply of building lots. This one set of actions, controlled by a few players with an interest in limiting change, has caused enormous damage to the potential of many of America’s cities over the last several decades. In my view, this has been perhaps the major contributor to boom and bust cycles in the price of single family homes across America. Limiting supply, especially when it has little potential benefit to the quality of life in neighborhoods, has created high elasticity which spikes prices unduly when times are good. This in turns makes the crash longer and harder when it comes.
Occasionally, I write analyses of urban issues, and you’ll find my last three reviews of impacts on Austin’s single family home market in this section. You’ll also find links to knowledgeable economists and commentators, as well as to good raw data for those who want to get a better grasp of the real answers underlying our perceptions. Have fun, and feel free to call or e-mail with questions or input.
-David Arscott, 2008
