Market Urbanism

Liberalizing cities | From the bottom up

“Market Urbanism” refers to the synthesis of classical liberal economics and ethics (market), with an appreciation of the urban way of life and its benefits to society (urbanism). We advocate for the emergence of bottom up solutions to urban issues, as opposed to ones imposed from the top down.

Development as preservation

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I don’t think it’s a secret that we here at Market Urbanism are skeptical of mandatory historical preservation of private property, but until recently I hadn’t realized how utterly counterproductive some of these efforts really are. I’m talking specifically about cases where historical preservation statutes forbid additions from being added to the tops of buildings – structures that increase a building’s value and floor space without detracting much from the history, facade, or even interior of the building.

Because really, who'd want to live in Brooklyn anyway?

New York City, with its rapacious developers and entrenched preservationists, seems to be a hotbed of addition-induced turmoil. The enormous pent-up demand occasionally surges through the legal barriers, with unapproved additions and penthouses popping up throughout the city, and developers sometimes being forced to tear them down. A relatively innocuous penthouse on top of a hotel in TriBeCa that’s partly owned by Robert De Niro narrowly avoided this fate a few days ago, but a one-story addition atop a townhouse in Chelsea wasn’t so lucky – apparently slaves used the rooftop to flee when it was a part of the Underground Railroad, so the addition is being taken down and the roof is being restored in all its slave-fleeing glory. A few months ago a building in Dumbo lost six stories that were almost five years old because the owners never got a zoning variance to add residential space to the commercially-zoned property. Developers like Ramy Issac and Ben Shaoul have become infamous as “tenement toppers,” and while their tactics are sometimes unsavory and illegal, the fact that anyone is willing to take such a risk is indicative of the extraordinary unmet demand for density in the city.

And with the city’s real estate market already heating back up, this demand is only going to become stronger. Even if the preservationists win today’s battle and stave off redevelopment for a few more decades, densification will need to occur some day. And when it does happen, these small buildings are going to be the first to go. While just a few extra stories would raise their value and protect them against future redevelopment through the price mechanism, these short properties with only a few tenants will only become more attractive targets for developers. And unlike today, when developers want to work with the existing structure and add on to it in an incremental fashion, the redevelopment of the future will likely involve razing the building entirely.

Beijing is currently facing such a dilemma with its traditional hutong neighborhoods, albeit one caused by decades of redevelopment-strangling Maoism rather than the redevelopment-strangling Greenwich Village Society for Historic Preservation. Robbed of the opportunity to densify gradually over the course of the 20th century, the only practical option now is total demolition. The alternative – museumification – is not practical in a rapidly-urbanizing China, and I don’t think that New York is quite ready to accept its fate as a New World Venice either.

So while historical preservation may have its place, it is very shortsighted to use it against developers who want to retain the facade and vast majority of the original structure of a pre-war building. If preservationists in the East Village and Dumbo, for example, succeed in blocking these eminently reasonable proposed additions, they’ll have only themselves to blame when, fifty or a hundred years hence, the buildings are torn down completely because developers see no value in their small size and low revenues. Additions add value to buildings, and this market value is the best way to ensure preservation in a profit-driven society. In its dogmatic opposition to even non-destructive redevelopment, this form of total preservationism is sowing the seeds of its own destruction.

  • I am a supporter of historical preservation, but what happens here in NYC sometimes goes beyond that into “historical time-freezing.” We should have policies that support maintaining great looking neighborhoods and buildings while allowing for expansion. Ways:

    – A regulation that forced large (new) buildings to fit in (in terms of external look) would go a long way here. UWS and the West Village have great examples. Some of these buildings are absolutely enormous, and are still beautiful.

    – Support for increasing the height of historical buildings without changing the facade or causing the building to become unstable, etc. Why anyone would oppose this sort of development just boggles the mind.

    – Finally, we could set aside a few neighborhoods (this would work especially well for new developments in currently undesirable areas) as “charter zones.” A long running problem has been the “artist push out” problem. A neighborhood may start out full of crime, with few amenities. However, it’s very cheap, with lots of space and tolerant neighbors (hard to complain about the drums at 2AM when there’s gunshots accompanying them.), so artists move in by the vanload. Later, aficionados and cool-chasers move in, and rents go up. Artists move out, and what’s left can be less interesting to many. If instead we said “OK, this area is for artists, so only people who can prove they make art on a regular basis can live here” and indexed the rents, put in place ordinances which allowed more noise, etc. and treated these areas like public parks in that they may not bring in revenue directly, but due to second order effects (money made by the vendors around Central Park, for example) we keep them, then we could go a long way towards solving the dilemma of the ever-pushed-to-the-edges artist. To head off any objections about “bequeathment gaming”, there would be periodic audits to prove that an actual artist still lives in any given residence; even those who try to “fake it” would be creating a kind of art, and thus complying with the rules. If nothing else, it could be a fascinating experiment.

  • As a proponent of densification as well as historic preservation, I will admit the two regularly come into conflict.

    I look with dismay at what historic preservation has become in many areas, especially in New England, where it’s just another example of extremely restrictive zoning and NIMBY protectionism. Like strict zoning, it’s used as a way to prevent any an all change in a neighborhood, thus eliminating growth and further encouraging sprawl elsewhere. All it really does is prevent any new building (whether an addition or infill) from making the neighborhood worse, but it has no capacity to really let it improve and grow.

    An important point to note is that historic preservation concerns came about not as much because of the loss of so many great historic properties and neighborhoods, but more so because what we put in their place was almost universally worse. Whole neighborhoods were demolished for highways, iconic public landmarks were razed for a glass and steel skyscraper, or an idyllic rural farmstead was flattened for a strip mall. It’s no wonder so many resist growth and development by imposing zoning or historic preservation when this is the kind of development we’re faced with.

    Historically, our cities lost lots of magnificent buildings to the wrecking ball, but it was OK because the replacement was almost universally better. The over-the-top Victorian apartment block was replaced with a flawlessly executed neoclassical hotel, or the wooden tenement was replaced by a series of brick townhouses. The increased density meant more shops close by and improved transit service. Unfortunately, now it only means more traffic, noise, pollution, and parking hassles when improving transit or requiring mixed uses isn’t factored into the equation.

    So something that would greatly help the situation is not to try to freeze neighborhoods through historic preservation ordinances, but to use them to ensure that what does get built is an improvement over the old. I think the image from the main article is actually a terrible addition to that building. I’ve seen one or two similar things happen here in Cincinnati too, so it’s not a surprise that the neighborhood would get up in arms over such contrarian and unsympathetic moves.

    I won’t pretend to have a solution for how such a thing could be achieved, but I don’t believe piling more regulations on top of what we already have is a good idea. I’d rather see a retraction of many zoning and even some preservation ordinances, while retooling what’s left into something a bit more form-based, with more emphasis on materiality and aesthetics in general in the more historically sensitive areas.

  • Alon Levy

    SoHo already has rules of the form you propose. In principle, lofts may only be occupied by working artists. In practice, the requirement is mostly ignored; the fact that it’s on the books has slightly reduced housing prices there, but not nearly enough to make the neighborhood affordable for artists who are not brand names.

  • Alon Levy

    I think that the issues in American and third-world cities are dramatically different. In the US today, we really are talking about densification. The West Village plans add more density where it is required. In contrast, in China and India, as well as in 1950s’ America, the neighborhoods demolished are almost as dense as those that replace them, and sometimes denser; the main rationale for the demolitions is not densification but slum clearance, i.e. moving the poor away from where tourists might see them.

    In the US the experience of urban renewal has actually been less density: although the projects are usually denser than the neighborhoods they replaced, they have caused so much blight that people have fled surrounding blocks, causing net reduction in density. Not coincidentally, the two major cities that resisted urban renewal the most, New York and San Francisco, had the smallest net reductions in population among major Rust Belt cities by 1980, and are the only two that have rebounded to exceed their 1950 population peaks.

    The market-urban solution should be to encourage more redevelopment of the type seen in the US today and less of the type seen in the 1950s. This means, no handouts to big developers – densification should be doable even by landlords owning small apartment buildings. It also means that adding floors to buildings should be preferable to demolitions, which end up dispersing communities. The government’s insatiable appetite for more power should translate to global reforms to the zoning code allowing more density, rather than an onerous approval process that ensures only politically connected developers can build.

  • This is interesting, but is it really as uniform as you suggest? The example in the article is a pretty key one, the Beijing hutongs. These aren’t really slum areas, definitely not in the most central and pricey parts. Just for a real market urbanist connection, redevelopment is being pushed together with heavy use of eminent domain / compulsory acquisition to force out unwilling sellers. Most of those traditional buildings are rarely higher than one or two storeys either, though I’m sure they can be crowded.

    I’m sure there are areas where essentially slum clearance is going on, rough parts of central Shanghai near the textile markets come to mind.

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