David Alpert complains that upzoning of lots in NoMa has led to lots of building and he calls the lack of planned parks the result of a government mistake that should be rectified. He concludes:
And in the future, all cities and towns should avoid making the same mistake. Libertarian-leaning urbanists like Market Urbanism have recommended fewer development restrictions and greater reliance on the free market. In many cases that makes a lot of sense, but the NoMA experience shows a need for at least some mechanism to reserve for public goods some of the value an upzoning generates. Is there a more free market way to handle this?
There is some confusion here over just what is meant by the term “public good”. “Public good” doesn’t mean “something that every neighborhood should have” or “something that should be provided at no cost”. Rather, a public good is something that the market will under-provide in a socially suboptimal way. National defense is a common example. Private actors couldn’t easily collect the value of national defense services; they can’t force everyone to pay for an army, and having fielded one they can’t protect the homes of everybody in the country except for the folks that didn’t pay up. As a result, most people won’t pay and the country will go undefended, which is a bad outcome for everyone. Government is therefore necessary to levy taxes to pay for a national armed forces.
Are neighborhood parks like defense? Not necessarily. It is relatively easy to build a private park — simply put up a fence around the park and sell keys to the lock on the gate. But if private actors aren’t rushing to build parks, then maybe people don’t actually care as much about parks as we think they do. One might respond that lots of people benefit from having the park there, as a visible green space, say, or from knowing that they could use it if they wanted to. Private actors can’t capture these benefits, and the market might then underprovide parks. But a government could tax everyone in a neighborhood and use the proceeds to buy land at market price to be turned into a park. We might guess that a neighborhood park would raise property values, and if this gain is captured in property tax revenues, then that money could go toward the purchase of the land.
If residents are willing to tax themselves to pay for the land for a park, then great. That essentially solves the public good problem. But what if they don’t want to tax themselves to pay for the park?
One obvious conclusion to draw from this is that parks are the kinds of thing people say they want but don’t actually care much about. Or rather, they’re happy to take parks when those parks are provided for them “free”, through government regulation, but not when they have to pay for the benefit they’d receive, which should tell us that the benefit is not all that great.
There is an alternative way of looking at this. We could conclude that the people who pay the most in taxes in a neighborhood don’t want a public park, in part because they have easy access to other kinds of recreational space — private gyms, golf courses, vacation homes, and so on — while the people who pay less in taxes (that is, the poor) lack easy access to such areas and would benefit significantly from a public park. It might then be politically difficult to tax a neighborhood like NoMa to pay for the land for a park, since the people paying the taxes and the people receiving the benefits are different folks.
In this case, it might well be a good idea for the government to create some public park space. But it does not follow that every neighborhood needs a park (as Jane Jacobs noted, scarcely used parks can be disamenities rather than amenities). And it does not follow that the government should provide these parks by regulating them into existence (in the same way that the government should not provide free school lunches for disadvantaged kids by passing a rule that whenever anyone in the city makes a sandwich they should make two, one of which can be sent to the local school).
Urban land is extremely valuable, and city governments are generally far too quick to limit development on it. Limited development hurts everyone, including the poor; it may well be the case that poor students would prefer to have extra tax revenues from more intensive development used on their behalf than to have land set aside for a park. Sometimes, government use of city land for one thing or another, including the occasional park, is justified, but the use of regulation to deliver these ends fuels the pernicious idea that land obtained in such ways is somehow “free” — there to be appropriated by the local government for whatever is deemed by city officials to be the highest and best use. It isn’t.