Posted by surprisetalk 4 days ago
Those big spikes you see in the center? They cost very little for the city to maintain, and generate oodles of tax money.
Those big, wide areas out towards the fringes? They generate next to no tax income and cost a lot to maintain.
The urban subsidizes the sub-urban. The sub-urban lifestyle would be completely impossible without the ultra-dense urban centers. If planners and citizens don't keep that in mind, you can easily end up with an insolvent city budget that is bleeding from maintaining all the utilities and roads stretching out to the exterior.
I also have no idea why you think city dwellers are the primary contributors per capita to the Highway Trust Fund which is funded via a tax on fuel (i.e. miles driven).
I’ve had this hypotheses for a long time that the car is, at least economically, only incidentally about mobility. In reality it’s a tool for obtaining leverage in the real estate market.
Without sprawl urban landlords would have a captive audience and would extract all surplus. See: the law of rent.
I have a related hypothesis that the car drove the mid century middle class explosion in the US and some other countries, not by providing car jobs or any of the other conventional mechanisms but by allowing people to escape the law of rent.
Telework does this today for those who can use it, allowing people to leave high cost cities where good jobs are concentrated. The car did that until we reached the scaling limits of sprawl.
Also why I am a huge fan of Georgist taxation. Unfortunately we are moving in the opposite direction, taxing productivity and investment and wealth instead of taxing land and rent.
But I'm not a fan of these particular maps because the use of 3d makes them harder to read. The isometric view and rotation away from north at the top break conventions that people use to orient themselves in the map and connect it to their lived experiences on the ground. I'm reasonably familiar with NYC geography, and I could not immediately recognize the landscape I was looking at in these maps. Ironically, it was only because I already knew the answer to the question that I could do so: "oh that huge green spike must be Manhattan".
I think a 2d choropleth map with a diverging color scale centered on the mean value would work better.
Someone should probably tell the homeowners with a high ratio of land to house who like to see their property values increase.
The value of land in an urban area is obviously going to be higher than it is in a rural area just as a matter of scarcity, but it's not at all obvious that the reason it's currently so much more expensive in Manhattan than in the places directly adjacent to it isn't primarily a result of zoning just because that might not have been the reason in 1890.
In a formal sense you can call this exponential. It's twice as much in Manhattan as the Bronx and twice as much in the Bronx as in some location even further out. But if you're trying to explain the >100x difference in the price of land between the Bronx and Manhattan, the ~2x difference in how much people value living there because of agglomeration effects is not the dominant effect.
And you would expect the densest places like Manhattan to have the strongest agglomeration effects. You can ratchet up permissively zoned land costs through zoning just by increasing the level of restrictions elsewhere, e.g. ban >2 story buildings instead of banning >5 story buildings, but the willingness of people to pay more in order to live near things is proportional to the number of things they would be paying more to live near.
On top of that, the zoning restrictions exacerbate the agglomeration effects. If you could build taller buildings in the places you currently can't then the premium commanded by housing in a dense area would go down by increasing the supply of it.
Suppose you have three neighborhoods. A has 10 story buildings and a median rent of $2000, B and C both have 2 story buildings and a median rent of $1000. You then rezone B with the result that new construction happens and it now has 5 story buildings. Local housing supply just increased by more than 20%. Rents are now $1700 in A, $1300 in B and $900 in C, because supply increased and some people moved from both A and C to B, which became more desirable. People then say "look, you've increased rents in B by $300" and blame agglomeration effects and try to argue against doing it. But the average rent in the city went from ~$1700 to ~$1500 and >20% more people now have housing.
Fwiw this sort of land value gradient has been studied in economics for ages. See papers on monocentric city model, going back to Alonso (1964), Muth (1969), and Mills (1967). Or even further back, von Thünen was talking back in 1826 about how land values spike as you get closer to the marketplace.
It seems kind of dubious to me that "everyday" people don't understand that land in cities is worth more than land in suburbs. It seems very transparent that you get a smaller lot size for the same price.
If you are into land value tax discourse maybe, but from my experience at least there is a big lack of awareness of the impact of economic activities on land values as they are not reflected by anything that people get in contact with. That's especially true because neither rents nor property taxes (the one thing people might have exposure to) fully capture it.
> Let’s play a guessing game. How much more valuable is land in Manhattan than in the Bronx? Take a guess, then scroll down for the answer.
As someone who has never been in New York and doesn't live in the US, I knew beforehand that I would fail this test very hard, haha.
Municipal costs per resident are effectively the inverse of these maps because the more spread out people are the more roads, pipes, etc are required to reach them.
They also underestimate what this means. In many cities you can have 50%+ of land value concentrated in a rather small portion of area, and this has huge implications for what would happen is you, say, changed property tax policy to shift the tax burden towards land and away from buildings. Most people assume it would kill the suburbs, but in many of our models single family homes come out slightly ahead, or stay neutral.
Notoriously, the maintenance cost for suburbs and their infrastructure is significantly lower than the tax they bring. Shouldn't that be a major point un tax decisions?
Single buildings can cost as much as my entire "city" - one World Trade Center alone cost $4 billion.
An example of how you can bucket things is do you look at property tax, income tax (and if you do, is it where the "nexus of generation" is done, where the worker lives, where he works, where she's headquartered, etc). Around here basically none of what we would call "support" is paid for by property tax except schools (95% or so) and sewer (which is billed as a property "tax" though it's actually per connection/size).