Wednesday, June 11, 2008

Commercial Neighborhoods, Part I

How do you manage a neighborhood? (I'm thinking especially of urban neighborhoods, but much of this applies just as well anywhere else.) How, for example, do you manage development so that it does not undermine community? How does a neighborhood get cleaned up without shipping out all the local culture that gives it character and community? How do you decide whether someone can build a twelve-story building in a two-story neighborhood?

How do you manage zoning? How do you decide whether someone can build a hair salon, or a cigar club, or a law firm where there used to be a house, or a vacant lot, or an old school, or just a different sort of business? How do you decide whether brick sidewalks are worth it, or street cleaning, or extra policing? How do you determine speed limits, and where to put stop signs and stop lights and cross walks? And how do you allocate taxes so that people are actually paying for what they get? How do you manage a neighborhood so that people want to live there?

I would like to make a perhaps surprising proposal: if you care about the long-term -- and because continuity is fundamental to neighborhood, neighborhoods are fundamentally long-term ventures -- the answer is private enterprise, not democratic government. I will make this argument in the next three posts.

Democracy is singularly ill-equipped to manage neighborhoods. In this post I will deal with the problem inherent to unitary government: the need for diversity.

Diversity is important for neighborhoods (as for just about everything) for at least three reasons. First, because people are different. Neighborhoods should vary wildly, because people vary wildly. Wall Street has to be different from Greenwich Village, or you lose both. Some people want a quieter family neighborhood, some want a wild young neighborhood; immigrants like different things from upper-class WASPS, and blacks, artists, Hispanics, Jews, working people, and retirees all just want different things. That does not mean these people should be totally separated. But it does mean that even in the best world, where everyone is maximally virtuous, people should be able to choose from very different kinds of neighborhoods so they can live very different lifestyles, because people, at their best, are very different. A unitary city government (and by unitary, I mean that they make decisions for the whole city, even if they are a council) will always tend to impose a singular vision on the wild diversity that is a city.

A second need for diversity is in problem-solving. In the 1990's, Rudy Giuliani was mayor of the biggest city in the US -- the whole city. He put through a series of reforms, including "broken windows" policing, tougher policing (including standing behind the police when they appeared brutal), pro-business taxes, a crackdown on public indecency, etc. His package worked: New York was a terrifying place when Giuliani took over, and now it is a glorious place, where people want to visit and live. But what worked? Any one part of his package could have been the silver bullet or counter-productive. Because one set of reforms covered the entire city, we cannot tell what each policy accomplished. We would have a much clearer picture, and much better data for the future, if different parts of New York had taken different courses: better control of the variables. Better to divide the city than to leave it to a single authority.

The third need for diversity in neighborhoods is for competition. To ask people to leave New York for Indianapolis -- or Philadelphia, or Washington, or anywhere else -- if they do not like New York's policies just is not fair. People have jobs, people have friends. But diversity of neighborhoods within a city considerably lowers that burden, so that people can vote with their feet, and go to the neighborhood that they think is working best. It is worth noting that this kind of movement benefits not only the rich. The poor too should have the option to choose a system that works better for them. When they do not have that option, the authorities do not have to take their needs seriously.

All of this comes to Hayek's standard objection to government "planning." The problem is not with planning, but with the limitation of planning: because government planning is at its heart the refusal to let other people plan. It means that one person, or one group of people, does all the planning, and everyone else's intelligence is ignored. Centralized planning means people cannot choose for themselves what kind of neighborhood best suits their needs, cannot argue among themselves about which policies are helpful and which harmful, and cannot choose for themselves which authorities they want to submit too. Centralized planning is bad because it prevents more broad-based planning. This is the problem with government planning in itself.

In the next post, I will explain why neighborhoods are especially hurt by government that is democratic. In a third, I will try to outline what a commercially managed neighborhood would look like.