Tuesday, February 17, 2004
Writers Joel Kotkin and David Friedman list their "Top 25 Cities for Doing Business in America" in the March issue of INC. Magazine. The top three are Atlanta, Riverside-San Bernardino and Las Vegas. Many such rankings are published each year but this one acknowledges where labor and capital are actually choosing to go. Of course, these places are not the darlings of planners and elites who prefer Portland and Boston. Once again, bottom-up messages and top-down plans conflict. Whereas the winners of the calculation debate are widely acknowledged to be the side that argued for markets and local knowledge, land markets are still thought to be best managed top-down. Why this exception?
Economists have argued that Americans (prompted by tax codes) have overinvested in housing and, therefore, have a demand for tough property rules that they get from local governments.
Economist William Fischel has elaborated the "homevoter hypothesis" and the appeal of small cities and their governemts as a source of property rules. The rise of private communities offers another chance for homewoners to get the rules they want. New developments with market-pleasing rules of governance thrive in the places that make the Kotkin-Friedman list of top cities. Bottom-up rules of property are on the rise. It is still unclear whether this means that top-down rule-making will recede. It has fostered an expensive "approvals process" -- and housing shortages and "afforadability crises" along the way. The resulting approvals lobby and top-down real property rules now have a considerable constituency.
