Building A Better City: Why Markets Are Our Best Architect

What if the key to solving our urban crises, such as housing shortages, traffic congestion, and wealth inequality, lies not in more government intervention, but in the principles of free-market economics? Market urbanism offers a bold vision for our cities, one that harnesses competition and individual choice to create livable, thriving environments. As traditional planning methods falter, it’s time to utilize market-driven solutions to reshape our urban landscapes for the better.

At its core, market urbanism posits that cities work best through bottom-up, private sector activity rather than centralized government planning.

This concept, rooted in classical liberal economic principles, offers a compelling alternative to the status quo of urban development.

One of the most pressing urban issues today is the shortage of affordable housing. Conventional wisdom often blames developers and market forces for rising home prices. However, a closer examination reveals that government regulations, particularly restrictive zoning laws, are the primary culprits behind housing unaffordability. These regulations limit housing supply, driving up costs and exacerbating inequality.

Market urbanism calls for a significant relaxation or even abolition of these restrictive zoning laws. By allowing developers to build more densely and flexibly, cities can increase housing supply and naturally bring down prices. This isn’t just theory – real-world data supports this approach. Metros known for their more permissive building regulations consistently show lower median home prices compared to heavily regulated markets.

For instance, Houston, known for its relatively lax zoning laws, issued 88.3 building permits per 10,000 residents in 2019. In contrast, New York City issued only 30.4 permits per 10,000 residents. Unsurprisingly, Houston’s median home price remains far more affordable than New York’s. This pattern holds true across multiple metro areas, demonstrating a clear correlation between building freedom and housing affordability.

Transportation is another area in dire need of overhaul. Instead of relying solely on government-planned and operated transit systems, market urbanists advocate for a more diverse, competitive transportation landscape. This could include private bus services, ride-sharing platforms, and market-priced road usage to reduce congestion.

The success of such approaches is evident in areas that have embraced market-oriented transportation policies. Cities that have implemented congestion pricing, such as London and Singapore, have seen reduced traffic and improved air quality.

Opponents of market urbanism typically raise concerns about equity and displacement. They argue that market-driven development could lead to gentrification and the displacement of low-income residents. However, the root cause of these issues is the artificial scarcity created by restrictive regulations. By allowing more housing to be built across all neighborhoods, cities can relieve pressure on existing affordable areas and provide more options for residents at all income levels.

Market urbanism doesn’t call for a complete absence of government involvement in urban development. Rather, it advocates for a shift in the role of government from top-down planner to a simple facilitator of market processes. Governing bodies should ensure the system runs smoothly through external controls, instead of inefficiently dictating every minute internal detail.

As we look to the future, the need for new approaches to urban development becomes more apparent. The United Nations projects that by 2050, 68% of the world’s population will live in urban areas. This urban growth will require cities to adapt quickly and efficiently to meet the needs of their residents.

Market urbanism offers a promising path forward. By harnessing the power of markets and individual choice, cities can become more responsive to the needs and preferences of their residents. This approach has the potential to create more affordable housing, efficient transportation systems, and better overall urban spaces.

As we grapple with the urban challenges of the 21st century, it’s clear that the old ways of centralized planning and restrictive regulations are no longer sufficient. However, implementing market urbanist policies will require overcoming entrenched interests and long-held beliefs about urban development. It will take politicians cutting long-held ties to companies and lobbyists in favor of seeing their cities thrive. By embracing this approach, we can create urban environments that truly serve the needs of all residents and form cities with a prosperous future.

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Originally Posted at; https://www.zerohedge.com//

zerohedge
Economics , News , Politics , Science
November 22, 2024
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Utility Companies Are Not On Our Side

Authored by Linnea Leuken & H. Sterlin Burnett via RealClearPolitics,

When electric power was a novel idea and just beginning to be adopted in urban centers, the industry had a Wild West feel to it as multiple companies strung wires, opened power plants, and sold electricity on an unregulated market. Competition was fierce, but state and local governments concluded that the inefficiencies and redundancies endangered the public and imposed higher costs.

So states set up service territories with monopolistic or oligopolistic service providers, who were entrusted with providing reliable power and sufficient reserve for peak periods in return for being guaranteed a profit on rates proposed by the utilities but approved or set by newly established state public utility commissions (PUCs). These commissions were charged with ensuring public utilities served the general public universally within their territory, providing reliable service at reasonable rates.

Much has changed since then. Politicians began to supplant engineers to decide, based on self-interested calculations, what types of power should be favored and disfavored, and what types of appliances and modes of transportation Americans could use. As the 21st century dawned, a new consideration entered the picture: Climate change.

Under the banner of combatting global warming, utilities were at first encouraged and then coerced into adopting plans and policies aimed at achieving net zero emissions of carbon dioxide. The aim of providing reliable, affordable power – the rationale for the electric utilities’ monopolies in the first place – was supplanted by a controversial and partisan political goal. Initially, as states began to push renewable energy mandates, utilities fought back, arguing that prematurely closing reliable power plants, primarily coal-fueled, would increase energy costs, compromise grid reliability, and leave them with millions of dollars in stranded assets.

Politicians addressed those concerns with subsidies and tax credits for renewable power. In addition, they passed on the costs of the expanded grid to ratepayers and taxpayers. Effectively, elected officials and the PUCs, with a wink and a nod, indemnified utilities for power supply failures, allowing utilities to claim that aging grid infrastructure and climate change were to blame for failures rather than the increased percentage of intermittent power added to the grid at their direction.

Today, utilities have enthusiastically embraced the push for renewable (but less reliable) resources, primarily wind and solar. PUCs guarantee a high rate of return for all new power source (wind, solar, and battery) installations, which has resulted in the construction of ever more and bigger wind, solar, and battery facilities. The costlier, the more profitable – regardless of their compromised ability to provide reliable power or the cost impact on residential, commercial, and industrial ratepayers.

A new report from The Heartland Institute demonstrates the significant financial incentives from government and financiers for utilities to turn away from affordable energy sources like natural gas and coal, and even nuclear, and instead aggressively pursue wind and solar in particular. All of this is done in the name of pursuing net zero emissions, which every single major utility company in the country boasts about on their corporate reports and websites. Reliability and affordability come secondary to the decarbonization agenda.

Dominion Energy is a good example, as they are one of the most aggressive movers on climate-focused policy. Dominion CEO Robert Blue speaks excitedly about government-forced transitions to a wind- and solar-dominated grid in interviews. During one interview with a renewable energy podcast, he said:

“[S]ometimes the government needs to focus on outcomes. We’re trying to address a climate crisis, and we are going to need to move quickly to do that.” In the same interview, he expressed enthusiasm about federal policy that would achieve a government-directed transition.

And why wouldn’t he? Dominion, like most utilities, is granted government tax credits and guarantees on returns for investing in large, expensive projects like offshore wind, the most expensive source of electric power. The bigger the project, the bigger the profit with guaranteed returns.

Also, onshore wind companies have received special “take limits” from the Fish and Wildlife Service to kill protected bald eagles and golden eagles, while prosecuting oil companies if birds are injured or killed on their sites.

Net zero policies are not the environmental panacea that climate change activists proclaim. Industrial-scale wind and solar use substantially more land than conventional energy resources, disrupting ecosystems and destroying wildlife habitats in the process.

And despite recent technological advances, wind and solar are still not dispatchable resources, meaning they cannot provide consistent power at all times needed. Refuting claims made by environmentalists and utilities that wind and solar are the cheapest sources of electric power, costs have risen steeply as the use of wind and solar has increased. Customers of Duke Energy in Kentucky, for example, are paying 78% higher rates in the wake of coal-fired plant closings.

Politicians and utilities are pushing for even more electrification for appliances and vehicles despite the fact that Federal Energy Regulatory Commission officials have repeatedly warned in recent years that adding more demand for electric power while replacing reliable power sources with intermittent renewables is destabilizing the power system.

It appears that the utilities prioritize short-term profits over grid reliability or keeping costs reasonable – and the government officials who are supposed to keep them in check are only encouraging them. It doesn’t need to be this way. The U.S. grid was not always this way. Only in recent years, with the obsessive pursuit of net zero, have rolling black and brownouts become so common.

Today, utility companies are sending lobbyists to conservative policymakers in order to convince them that the utilities have our best interests in mind. Their track record tells another story. Meanwhile, Americans have less reliable electricity at higher costs.

Linnea Lueken (llueken@heartland.org, X: @LinneaLueken) is a research fellow with the Arthur B. Robinson Center on Climate and Environmental Policy at The Heartland Institute.

Tyler Durden
Fri, 11/22/2024 – 06:30