Great cities and free markets work from the bottom up, driven by the individual actions of the people who live in them. Consequently, they respond in similar ways to large-scale, top-down planning: very unpredictably.
Rulers have attempted to impress their vision onto the living flesh of cities since at least ancient Rome. But large-scale urban planning came into its own in the 20th century, and the negative unintended consequences – cycling through an endless process of government intervention – have never been more apparent. Brooklyn, one of the five boroughs that make up New York City, is a perfect case study.
Brooklyn became “America’s first suburb” not long after New Amsterdam was founded by the Dutch and conquered by the British in 1664. New Yorkers really began moving there in large numbers after entrepreneurs such as Robert Fulton established regular ferry service across the East River in 1814; by 1834, Brooklyn was incorporated as a city. Until the City of New York financed the Brooklyn Bridge in 1869, few large-scale public works took place there, even though the population by that time was well over a quarter-million. By the time Brooklyn became part of New York City in 1899, the population had reached almost one million, but for many years after, most major projects, including the subway system, were still financed privately.
Not until the construction of the Brooklyn-Queens Expressway in the mid-20th century (the brainchild of notorious city planner and “master builder” Robert Moses), did large-scale urban planning hit Brooklyn. But when it did, it hit hard.
In 1949, armed with federal tax money, Moses planned to cut a straight line with the BQE through the heart of the historic, tree-lined neighborhood of Brooklyn Heights. A group of its affluent and influential residents organized to successfully fight this gross intervention, leading the expressway to be diverted around the district. Their victory against the BQE (combined with public outcry over the demolition of New York’s old Penn Station) led in 1965 to the passage of New York state’s first Landmarks Preservation regulations, which were intended to protect “New York City’s architecturally, historically, and culturally significant buildings and sites by granting them landmark or historic district status.”
Brooklyn Heights, where my family and I have lived for over 20 years, became the first such district. The consequence of landmarking, however, has been to seriously constrain how owners could use and shape their property, practically eliminating high-rise construction in the neighborhood and making new construction much more costly.
So the response to Moses’s intervention was a demand for further intervention in the form of landmarking, not only of buildings but of entire neighborhoods: at last count, 139 districts in New York are now designated for preservation. In recent years, housing prices across New York City have skyrocketed, owing not only to increasing demand but also to zoning regulations, building codes, and high construction costs that constrain the supply of new housing. In Brooklyn Heights, as well as in almost 25 percent of the borough of Manhattan, landmarking has only added to those costs, and this, in turn, has generated at least two unintended consequences.
The first has been a slew of high-rise development just to the east of the Brooklyn Heights district, where pent-up demand and residential development has been shunted. The near absence of further development in Brooklyn Heights itself has reduced residential space overall or led to the conversion of non-residential buildings into housing, creating a kind of residential monoculture. It has also made surrounding areas even less affordable for those trying to live on lower incomes.
Second, although public housing and housing subsidies existed before landmarking, landmarking has contributed to the demand for subsidies by boosting housing prices. Indeed, subsidized housing for the middle class, under the Mitchell-Lama Housing Program, was established within Brooklyn Heights during this era.
Like most regulations, of course, there are beneficiaries who lobby for these restrictions. Those lucky enough to live in Brooklyn Heights already, as I do, enjoy the quiet and charm of a place nearly frozen in time – we basically live in a museum with restaurants. But that hardly makes up for the costs imposed on the large number of less fortunate people.
It’s important to recognize that both market restrictions and land use regulations – for all the benefit they may confer on some – still have considerable downsides. They tend to distort or thwart the spontaneous adaptations ordinarily created by entrepreneurs to help us deal with changing conditions and desires. While the underlying mechanics of market processes and urban processes differ, the role of coordinating social institutions – prices in the case of markets and social networks in the case of cities – are indeed similar. And it’s those complex and intricate processes, largely unnoticed by central planners trying to impose “order” on the “chaos” of experimentation, that will frustrate even the best intentions of the best laid urban plans.