Zoning and trade

I've been reading Don't Call It Sprawl: Metropolitan Structure in the 21st Century by economist William Bogart.  Despite its title, it's not really another ideological entry in the sprawl debate.  He uses techniques from trade theory to analyze zoning's impacts.

His basic point is this:  A city's neighborhoods trade with one another just like countries do.  The typical downtown imports labor and buildings, and exports, say, financial and legal services.  A bedroom community exports labor and imports services.

One of the effects of open trade is to encourage specialization by creating larger markets for services.  The larger markets make it feasible to offer more diverse services.  This is why big cities offer lots of diversity and small towns don't.  It's also why you find furniture stores clumped with other furniture stores:  an area that specializes in furniture "exports" can support a bunch of specialized niche stores. 

"Binding" zoning acts like a tariff on the import of labor and the factors of production -- mainly buildings.  (Zoning is binding when  (1) someone wants to build something that the zoning won't allow; and (2) the city won't change the zoning to allow it.)   By limiting the import of people and buildings, zoning limits a neighborhood's exports of goods and services.  In many ways, binding zoning acts like a tariff on exports.

Restricting exports from one neighborhood to the rest of the city is not costless.  Trade is inevitably shifted elsewhere -- perhaps to a place with fewer natural advantages.  And it stunts the economies of scale that  permit a rich offering of goods and services.

Another way of thinking about it is this:  Unless we want the city to be merely a collection of small towns, we need neighborhood commercial centers that serve the entire city.  This is the only way to get the specialization that makes a city more attractive (to some) than living in a small town.

Reading this book of course made me think of Northcross.  Despite RG4N's claims, the Northcross area is not "neighborhood" retail.  One day while waiting on a delayed flight, I totaled up the commercial and retail square footage in the Anderson/Burnet/Steck area.  I got nearly 2 million square feet without even counting all the little stuff.  This area is one of the city's main commercial and retail centers.

It is also the principle "exporter" of furniture to the rest of the city.  There are lots of small, specialty furniture stores in the area that would not exist without the Northcross area's agglomeration of furniture stores and other retail.  RG4N is effectively asking the City to impose export restrictions on this important trading center.  (What distinguishes this from most zoning cases is that RG4N is asking to impose new trade restrictions; usually, the neighbors are fighting the relaxation of existing trade restrictions.)

The trade perspective points up the conflict inherent in most zoning disputes.  If we consistently give in whenever local residents demand restrictions on trade, we cripple the diversity that makes the city a real city. 

Comments

[el_longhorn]

The problem with this entire debate has been the fact that Anderson at Burnet is a MAJOR commercial/retail center and everyone in Austin knows this. RG4N refuses to acknowledge this. The reality is that Lincoln's plan is perfectly suited for the area and will mesh very well with the businesses in the area. I shop around there all the time and am looking forward to see what happens.

[Mark]

Interesting way to look at zoning - but it leads me to an even broader question: if zoning is even a mildly effective tool to use for land use and planning, why does Houston with no zoning, and Dallas with zoning have so many parts of each city that look interchangeable?

[M1EK]

Mark, because Houston has land-use controls which are most like the parts of zoning which encourage sprawl (they have parking requirements and block length rules and minimum lot size regulations which are actually more strict than average).

[M1EK]

Oh, and don't forget the fact that if you're Walgreens and dealing with 9998 municipalities which all have the same zoning code, 1 that has 'none' although mandates parking and lot size and block length, and 1 that's "new urban", what design are you going to have ready to pull off the shelf, even for the latter two cities?

[AC]

Mark, neighborhood specialization and urban form are really two different issues. Zoning and other land use controls can dictate a uniform urban form. That has a lot to do with why Houston and Dallas look alike -- plus the fact that they're centered on the automobile.

But "form" regulations don't necessarily dictate neighborhood specialization. I'm not as familiar with Dallas, but Houston has several extremely specialized centers. The med center, oil and retail in the Galleria area, Greenway Plaza, the oil corridor, arts in Montrose, and a bunch of regional retail centers.

Take the med center area. It didn't start out employing 100,000 or whatever it employs today. It grew over time, eventually the growth snowballed. Binding zoning that dictated uses and maximum density -- which Houston really doesn't have, at least not on commercial corridors -- would probably have prevented the med center from ever developing.

I don't know Dallas as well, but I suspect that it's got pretty specialized centers too, which would reflect the fact that it is relatively easy to get a zoning change there.

By the way, M1EK, I looked up Houston's SF minimum lot size requirements recently. They changed in 1998 (the author of the article you pointed me to cites the pre-1998 code). For "urban" neighborhoods (inside 610), there's no real minimum lot size, only a minimum amount of open space per subdivision. That still limits density, but I think the minimum amount of land per house worked out to 3500 square feet or something like that. (I'll look it up.) That's a lot smaller than austin's minimum. It essentially permits the "urban home" developments without any action by the city. Those take an act of God around here.

Houston's still got neighborhoods with covenants, but most neighborhoods don't have them, particularly those east of downtown where urban homes are probably most sorely needed.

Prediction: In 30 years, Houston will have a much more urban form than Austin.

[bittergradstudent]

Isn't part of the point that a Wal-Mart would pretty directly harm a lot of the small scale furniture shops and terra toys and things like that? That the neighborhood has specialized over the years, and the development of a Wal-Mart will de-specialize the businesses in the area and turn it into something far more similar to cedar park or round rock?

[AC]

No, Wal-Mart will not destroy specialty stores.

The specialty furniture stores don't compete with Wal-Mart. If they did, they couldn't survive among all the large furniture stores on Anderson/Burnet. They serve niche markets. If anything, they will benefit from the extra traffic Wal-Mart draws, just like they benefit from the traffic drawn by the large furniture stores.

Wal-Mart does sell a bunch of toys, but I find it hard to believe that it is a real competitor for Terra Toys. Terra Toys is exactly the kind of store that can flourish despite the existence of mass discounters. No one goes to TT for low prices; they go for the experience and variety. TT has a metro-wide brand, which is why it could move 6 miles north from South Congress without skipping a beat.

[bittergradstudent]

That is not what has happened anytime that I have seen a Wal-Mart go in in the past. Granted, none of these examples was in Austin, but every time I have lived somewhere where the local retail started adding big box stores, the result was a local retail environment that gets completely de-diversified.

[M1EK]

I have to agree with BGS in one sense - in small towns or rural areas, Wal-Mart does in fact de-diversify things. I doubt that will happen in Austin; more likely is that some half-hearted grocers will be forced to compete or close.

[AC]

Wal-Mart does not compete with Louis Shanks. Or Ethan Allen. Or even Furniture in the Raw. Or any of the two dozen other furniture/rug galleries up there, big or small. Really, who's going to drive up to Burnet to shop at Primitives and say "Oh look, a Wal-Mart! I'll just buy my coffee table there."?

Terra Toys is a closer call, I admit. My guess is it will do fine, since people who are interested in the mass market, low-cost stuff already have plenty of Toys-R-Us's, Wal-Marts & Targets elsewhere.

My experience, growing up in a small town in Mississippi, was that Wal-Mart reduced the number of stores but increased rather than reduced the diversity of stuff for sale. We had pretty slim pickings before WM arrived. The places that got hammered were places like Fred's and local electronics retailers, that couldn't compete on either price or selection.