Marron Institute of Urban Management

URPL-GP 2619 001

Markets, Design, and the City

Markets, Design and the City.

Alain Bertaud with Adam Gleicher

and

Spring 2018, Wednesday: 6:45PM – 9:35 PM

Marron Institute,

60 Fifth Avenue, 2nd Floor

Course description

Cities today drive the world economy: they contain just over half of the world's population but generate over 80% of the world's GDP. Cities create this value by being dynamic environments where people and ideas can come together and mix in unplanned, spontaneous ways. Despite the critical role for city leaders in supporting this dynamism, those leaders too often do not understand the role of the market in urban areas. Instead, urban planning often remains one of the last vestiges of the of 20th century Soviet-style central planning, imposing untold costs on cities and their residents. Planners too often try to micromanage land use while neglecting the design and development of infrastructure, which markets alone cannot provide.

This class, based on Alain Bertaud's forthcoming book, Order Without Design, will examine the critical role of the market in cities, show how the popular urban planning and policy approach usually ignores the market, harming cities, and explore how a proper understanding of the market can be incorporated into city planning, management, and policy to improve the success of cities. Subject areas will include urban labor markets, urban spatial structures, land prices, population densities, mobility and transport, and housing affordability. The course is open to graduate students and advanced undergraduates from all disciplines.

Course objectives

By the end of the course the students should be able to:

  1. Understandthe upsides and downsides of markets forces and of planners designs in shaping cities
  2. Analyze how mobility and housing affordability impact the urban labor market in specific cities;
  3. Develop affordability, mobility and other indicators adapted to specific cities depending on the data available, eventually using proxy data;
  4. Predicthow markets are likely to react to regulations and infrastructure investments designed by planners. Select specific projects where the reaction of markets will be consistent with projects initial objectives.

Requirements

This is a seminar-style, discussion heavy course. Your participation and substantial contribution to class discussion is a critical component of your learning as well as that of your fellow students (and instructors!). You will need to come to class having completed the reading and ready to discuss it in depth. There will also be short writing assignments due the evening at 6:00 pm the day before the start of each class. The quality, not the quantity, of your participation will contribute to your participation and professionalism score. Listening intently and not attempting to dominate discussions are important components of this quality score. Electronics should not be used during class, unless otherwise noted. This includes computers, tablets, and phones.

Students will also be required to write a course paper on a topic of their own choosing. This will be due at the end of the semester. Additionally, status assignments (such as topic ideas, a list of references and data sources, and a detailed outline) will be due throughout the course.

Academic Integrity

Academic integrity is a vital component of Wagner and NYU. Each student is required to sign and abide by Wagner’s Academic Code. Plagiarism of any form will not be tolerated since you have all signed an Academic Oath and are bound by the academic code of the school. Every student is expected to maintain academic integrity and is expected to report violations to me. If you are unsure about what is expected of you should ask.

Henry and Lucy Moses Center for Students with Disabilities at NYU

Academic accommodations are available for students with disabilities. Please visit the Moses Center for Students with Disabilities (CSD) website at and click on the Reasonable Accommodations and How to Register tab or call or e-mail CSD at (212-998-4980 or ) for information. Students who are requesting academic accommodations are strongly advised to reach out to the Moses Center as early as possible in the semester for assistance.

NYU’s Calendar Policy on Religious Holidays

NYU’s Calendar Policy on Religious Holidays states that members of any religious group may, without penalty, absent themselves from classes when required in compliance with their religious obligations. Please notify me in advance of religious holidays that might coincide with exams to schedule mutually acceptable alternatives.

Assignments and Evaluation

Course grades will be determined according to the elements below. Some standards for grading are indicated, though others may also apply (e.g., assignments must be turned in on time).

10%: Class Participation andProfessionalism

Do you come to class attentive and engaged? Do you ask questions that indicate that you have carefully read assigned texts?

25%: Weekly Reading Assignments

  • These assignments will mostly open-ended discussion questions. They will be due before the class each week so that they can be reviewed prior to class.
  • The 25% grade portion will be equally divided among the 12 reading assignments.

Do your responses indicate that you are thinking deeply about the assigned texts?

25%: Assignments Contributing to Final Course Paper

  • 3 ideas for a course paper: ideas should be applications of course concepts to a real-world planning issue that can be successfully analyzed in the available time. The topics should be sufficiently novel that their successful completion would increase societal knowledge, not be a rote repetition of existing knowledge.
  • References for the course paper: references should convince that enough information already exists on your chosen topic such that the project can be successfully completed
  • Outline for the course paper: should present an organized and compelling approach to presenting your course paper
  • Alain will provide feedback after assignments, including some meeting sessions, to comment on progress and suggest direction and next steps for the paper.
  • The 25% grade portion will be equally divided among the 3 assignments.

Do your contributing assignments (topic proposals, sources for one proposal, and paper outline) indicate that you are able to apply course concepts to a new problem? Do your assignments mark steady progress toward a successful course paper?

40%: Final Course Paper

  • Final paper will be reviewed and suggestions for revisions will be given.
  • 10% of the final paper grade will be for the first draft, 30% will be for the post-revision draft. Excellent first drafts that do not require revisions will account for the full 40% of the course paper grade.

How well have you analyzed your chosen topic? Do you correctly and completely apply course concepts? Does your paper explore its subject with depth and detail? Do you present a fully developed and supported conclusion to the subject?

Learning Assessment Table

Graded Assignment / Course Objective Covered
Participation / All
Reading assignment / 1 and 2
Assignment contributing to selection of final paper’s topic / 3
Final course paper / 3 and 4

Overview of the semester

Week / Date / Topic / Deliverable
Week 1 / January 24 /
  1. Planners and Economists

Week 2 / January 31 /
  1. Cities as labor markets
/ Reading assignment due Tuesday at 6pm
Week 3 / February 7 /
  1. The formation of urban spatial structures (part 1)
/ Reading assignment
Week 4 / February 14 /
  1. The formation of spatial structures (part 2)
/ Reading assignment
Week 5 / February 21 /
  1. The spatial distribution of land prices and densities (part 1)
/ Paper ideas due + reading assignment
Week 6 / February 28 /
  1. The spatial distribution of land prices and densities (part 2)
/ Reading assignment
Week 7 / March 7 /
  1. Mobility part 1: Mobility and labor markets
/ Paper data source due + reading assignment
March 14 and 21 / SPRING BREAK - NO CLASS
Week 8 / March 28 /
  1. Mobility part 2: Transport modes performance, speed and capacity
/ Paper outline due + reading assignment
Week 9 / April 4 /
  1. Affordability (1) Households income, regulations and land supply
/ Reading assignment
Week 10 / April 11 /
  1. Affordability (2) case studies-Gauteng, New York, Surabaya, Shenzhen
/ Draft final paper due + reading assignment
Week 11 / April 18 /
  1. Should planners attempt to change the shape of cities?
/ Reading assignment
Week 12 / April 25 /
  1. The role of urban planners
/ Final paper due at 6:30

Detailed Course Overview

Class 1 (1/24): Understanding and Managing Cities: 1- Economists Vs. Urban Planners

Readings

  1. Le Corbusier, City of tomorrow and its planning, 1929 (dover edition 1987) Part III: A concrete case, The Centre of Paris
  2. The Athens Charter,
  3. Friedrich A. Hayek, The Constitution of Liberty, Chapter 22 Housing and Town Planning
  4. Edward Glaeser, Economic Growth and Urban Density: A Review Essay, Working papers in Economics E-94-7 , Hoover Institution, 1994

No reading discussion for first class

Class 2 (01/31): Cities as Labor Markets

Readings

  1. Jan K. Brueckner, 2011, Lectures on Urban Economics, Chapter 1, “Why cities Exist”
  2. Rémy Prud’homme & Chang-Woon Lee -- Size, Sprawl, Speed And The Efficiency Of Cities, 1998, OEIL Observatoire de l'Économie et des Institutions Locales IUP — Université de Paris XII,

Discussion Questions

1. Commuting time and dwelling location

a) What is your average and range of commuting time (door to door) to get to NYU from your home and how do you travel? For range, estimate the shortest possible time (e.g., catching all the trains just right) and the longest it has ever taken (e.g., that time the train stalled and was stuck in the station).

b) If you suddenly decided to transfer to Colombia University, would you move next to Columbia? What about Rutgers University-Newark Campus? Why or why not? Would you still commute using your current mode of transportation?

2. You’re graduating, and you receive a job offer for a company and position in New York that perfectly matches your interests (assume you are single and have no debt but also no other wealth or source of income). The salary is only $45K, but the professional experience from this position is so valuable that you will be able to leave it with many other offers in 3 years. You decide to take it, despite the fact that you believe you could easily beat the salary at other New York employers. Your company then offers to let you move to Memphis, TN, with the same salary, where it will go much farther. Wouldyou move to Memphis?Why or whynot?

3. List 3 separate questions you have from the reading.

Class 3 (2/07): The Formation of Urban Spatial Structures: 1 – Markets vs. Design

Readings

  1. Alain Bertaud and Stephen Malpezzi , -- Measuring the Costs and Benefits of Urban Land Use Regulation: A Simple Model with an Application to Malaysia, Journal of Housing Economics 10, 393–418 (2001)

Discussion Questions

1.Think of the development of New York City and Washington, DC in the late 18th and early 19th century. Expansive road grids were laid out without a high degree of specification for what would exist on the land within the grid. Now think of the development of cities today, which restrict land use to specific activities and height, and which often attempt to contain the growth of cities. What factors do you think led to this shift in the way city growth is managed?

2.Some sections of New York City, such as housing projects, look very much like Corbusier’s plan for Paris. Accepting some of the issues with this design of housing, what could now be done to mitigate those issues, short of tearing down the existing buildings?

3.Paris is sometimes described as a city-sized museum. Accept the notion that broad restrictions on land use in order to preserve a neighborhood (or city, such as Paris) can sometimes be warranted, but that residents of any particular neighborhood are too inclined to restrict land use to protect the existing neighborhood. Suggest at least one idea for how to legitimately balance these competing goals when determining whether to impose land use restrictions.

4.What is one question or disagreement you have with today’s reading?

Class 4 (2/14): The Formation of Urban Spatial Structures: 2 – A Simple Model Linking Markets and Design Indicators

Readings

  1. Jan K. Brueckner, The Economics of urban sprawl: Theory and Evidence on the Spatial Sizes of Cities, The review of Economics and Statistics, Volume 65, Issue 3 (Aug, 1983) 479-482
  2. Daniel T. McGrath, More evidence on the spatial scale of cities, Journal of Urban Economics 58 (2005) 1–10

Discussion Questions

  1. Submit three ideas for your course paper, in order of your preference, along with a few lines to describe each idea. These papers can be on any city planning or economics issue of your choice, but the default idea is to choose a policy issue in a given city (e.g., traffic congestion in Beijing) and to review the facts and development of that city and issue, possibly including policy responses (both tried and untried), costs and benefits of these policy responses, and recommended plans (leaving local politics aside).

Alain and Adam will review your three ideas and help you think through which idea will give you the best paper. This exercise is designed to get you to start thinking about topics, but you will not be limited to the topics that you list now when ultimately choosing your paper topic. The best papers will provide you with enough information to apply the course concepts in a context where a fellow classmate would learn something that she would not have otherwise known.

  1. In his paper “The economics of urban sprawl…”, Jan Brueckner conclusions are reproduced below:

“The results of this paper justify a dispassionate view of urban sprawl. By showing that urban spatial area is related to population, income, and agricultural rent in

the manner predicted by the model, the empirical results suggest that sprawl is the result of an orderly market process rather than a symptom of an economic system out of control.

In this context, it is interesting to note that by demonstrating the negative impact of agricultural rent on urban size, the empirical results undermine the sprawl critic’s claim that the transfer of farmland to urban uses represents the ‘'waste’’ of a valuable resource.

By showing that high-quality, high-priced farmland is more resistant to urban expansion than poor-quality land, the empirical results establish that the land market balances the gains and losses from urban sprawl, restricting spatial growth when the process consumes a valuable resource.”

Imagine conditions where the last two paragraphs could not be completely true.

  1. cases where cities would expand into farmland farther than optimum
  2. cases where cities would expand less than optimum
  1. What are the factors that would distort urban land consumptions?

Class 5 (2/21): The Spatial Distribution of Land Prices and Densities: Part 1 – The Models Developed By Economists

Readings

  1. Allan W. Evans, 2004, Economics and Land Use Planning, Chapter 7, Planning and the land market.
  2. Paul Cheshire, Max Nathan, and Henry G. Overman, “Urban Economics and Urban Policy” EE Publishing Limited, 2014, Chapter 6 “Planning: Reforms that might work and ones that won’t” p127 to 153

Discussion Questions

Paper Ideas Due

List 2 or 3 topics from which you will choose as subject of your final paper. Select concrete issuesfaced by a city that is familiar to you if possible. The topics should be issue oriented and result in an analytical paper. The resulting final paper should not be just descriptive.

Questions on reading assignment

  1. do you know any city where densities and price do not follow the spatial distribution predicted by the standard model? Can you explain why a cities like Moscow would have a reverse gradient, rather than just randomly distributed densities?
  1. The standard model often is assumed to define a symmetrical density development around a CBD. What could be the various reasons why the development would be asymmetrical?
  1. Since the beginning of the course, many of you have used the word ” sprawl” as a negative connotation for city expansion. Could you define in a quantitative manner the circumstances under which planners should try to curb” sprawl”, for instance density too low (what level?), distance from CBD too long (how far?) or any other quantitative indicator.
  1. In your opinion, should a planner takes concrete measures to stop sprawl as defined above? And if yes what could these measures be?
  1. What is one question or disagreement you have with today’s reading?

Class 6 (2/28): The Spatial Distribution of Land Prices and Densities: Part 2 – A Concrete Application of the Standard Urban Model: Hanoi’s Master Plan

Readings

  1. Hanoi Master Plan:
  2. Mumbai master plan 2010 : download plan itself from

Discussion Questions