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by api 21 days ago
I like to put it this way:

The automobile, at least insofar as it impacts the urban landscape, is only incidentally about transportation. It's really about leverage in real estate markets.

I think there's a tie-in between suburban sprawl and the explosion of the middle class. It allowed middle earners to escape the urban "law of rent."

https://en.wikipedia.org/wiki/Law_of_rent

This is really what led me to stop being an unreserved advocate for urbanism. The dark side of urbanism is that nobody but the property owners can accumulate wealth.

Tangent but: I also see a hidden legacy of racism here that probably still impacts black net worth in the USA. Early suburbs, before the civil rights act (which the right still hates) and similar laws, were often red-lined. This probably did a double whammy. On one hand, blacks were prohibited from participating in the automobile-driven escape to affordable home ownership, and the exodus from the cities probably tanked that home equity some of them might have had there.

I'm not at all the first person to point this out, but it's something people forget about.

Of course now the suburbs are getting unaffordable, so now everyone's on the Titanic arguing about deck chairs. In the long term the automobile can't keep driving sprawl forever. The law of rent catches up.

2 comments

> It allowed middle earners to escape the urban "law of rent."

Suburbs not only aren't required for this, requiring them to be suburbs actually makes it worse.

Suppose you have 1000 parcels of land and you need 3000 housing units. Obviously you need an average of three units per parcel. If 950 of the parcels are zoned to allow only one unit, the remaining 50 parcels then need to have an average of 41 units each.

Those parcels then become dramatically more expensive because they're the only place additional units can be added. Rents then have to rise to reflect the higher costs. Worse, some of those parcels already have e.g. 30 units but the cost of demolishing a perfectly good 30-unit building to build a slightly larger one is prohibitive, so now there is a shortfall and even the one-unit-per-parcel land ends up with higher rents.

> I think there's a tie-in between suburban sprawl and the explosion of the middle class. It allowed middle earners to escape the urban "law of rent." […] This is really what led me to stop being an unreserved advocate for urbanism. The dark side of urbanism is that nobody but the property owners can accumulate wealth.

I do not understand: why did you stop being pro-urbanist? How does urbanism stop the middle class from accumulating wealth?

My reading is that in the suburbs you typically buy, while in urban environments you typically rent because all the land is already owned by someone who is making a killing off it; they aren't going to sell because that would be slaughtering the golden goose. And that prevents almost everyone who isn't a landowner from getting ahead, because as soon as you figure out a way to make a surplus, poof the rents go up and absorb it. Oh sure, individuals who perform better than average might be able to press their advantage; but class movement is impossible because it is always "priced in".

I am not sure that this phenomenon is unique to cities, in fact, but rather an inevitable endgame to the idea of owning land in perpetuity. It creates a permanent class divide.

I think the idea is that it locks them out of owning real estate.

Of course that opens the question: why should real estate be a continually appreciating asset? There are other countries where it isn't.

> Of course that opens the question: why should real estate be a continually appreciating asset? There are other countries where it isn't.

Over time, real estate just is inflation - if it's more than inflation it eventually ends up infinitely expensive and unaffordable, if it's less than inflation it leads to cheap-as-free.

Arguably the second is more desirable from a human standpoint - but the first is where financialization leads us.

> I think the idea is that it locks them out of owning real estate.

How does urbanism lock people out of owning real estate?

City land owners use their political power to block new construction to force real estate to appreciate in value.

This can be overridden but it's hard. Most cities with good economies have unaffordable real estate.

It doesn't have to, but at least where I live, urban means apartments, and the great majority of apartments are rentals, not for sale.