A NIMBY- i.e. one who says 'not in my backyard'- wants higher economic growth for the economy but doesn't want the negative 'external effects' associated with higher growth to show their ugly face in his own neighbourhood. This isn't irrational. It is an example of rational self-interest.
If everybody is a NIMBY, then, in a large enough, democratic, market economy with good factor mobility, there will be something like 'Tiebout sorting'. Some areas will have a regulatory environment/local authority fiscal mix, and level of economic activity (this is called a 'Tiebout model') which appeals to wealthy enough, or non-materialistic enough, NIMBYs and everybody else puts up with growth in the hope of getting rich enough to retire to NIMBY-land.
Tyler Cowan invites us to consider the case of the YIMBY- i.e. someone who says 'Yes in my backyard! I want higher population density/ hostels for paroled paedophiles/Nuclear reactors etc. in my neighbourhood.'
Such people don't exist. It is a different matter that we may trade off greater congestion or other nuisances in return for money or sex or some ideological or moral gratification. But, ceteris paribus, everybody is NIMBY, not YIMBY just as everybody is for sending bad guys to jail unless that bad guy happens to be their own beloved son.
Cowan writes on his blog-
Ask a YIMBY person: “What about the extra traffic from all those new people moving in?
New people moving in, as opposed to commuting in, would reduce road congestion. Property taxes would rise as would revenues for Club Good providers which would mean more investment and thus quality improvement over the medium to long term. If people are moving out, rather than moving in, infrastructure provision is bound to decline sooner or later.
Won’t the ambulance arrival times be slower?
They would be slower if more were passing through rather than moving in. It might be less if those moving in are more productive than average which means more ambulance crews paid for through higher property taxes.
Won’t the air pollution be worse?
Not necessarily. Places which get richer by doing smarter things have the resources to improve air quality.
Won’t….?” and you will get a reassuring answer that a) yes there will be some problems but they can be managed by other means,
a locality which is good at 'managing by other means' is one which will attract better quality migrants which means more tax revenue.
and b) the external benefits of new arrivals will outweigh those problems.
A locality with some control over regulations and fiscal-mix is a Tiebout model. People moving in are buying a set of services from the Local Authority. Thus, no Cost or Benefit is being received outside the market. Thus no 'externality' is involved.
Fair enough.
But then ask that same YIMBY person: “What about the extra traffic coming from all these out-of-NYC visitors?” …and you will get a very different answer. “Tax them!”
Because they don't pay local taxes. They are free-riders. Also, a tax is a screening device such that those gaining little 'consumer surplus' are deterred. High value adding transactions don't fall because the tax is trifling relative to the consumer or producer 'surplus'. Also there is a 'signalling' aspect. Putting in congestion charges suggests that the locality is serious about improving quality of life. At the margin, this can affect quality of 'entry'.
So the basic view, at current margins, is “residents good, visitors bad.”
No. The view is 'paying customers are good. Free-riders are bad.'
Maybe! But, to follow up on the recent debate, that differential treatment is never justified.
Paying customers should be treated better than free-riders.
What if a guy starts visiting a girlfriend in the East Village — by car — for one night every two weeks?
Charge him by all means. If he values the girl he will pay otherwise he'll choose a slut in a cheaper neighbourhood. This may actually be good for the girl.
Then he is a visitor to be taxed. Say the relationship goes well, he is there 2/3 of the time, and he rents a space for his car
in which case, some of that rental expense goes to the local authority. This is not an externality. The thing is reflected in a market transaction.
in her apartment building garage and uses it periodically. Is he then “a resident”? Are his per hour externalities for the world then suddenly so much more positive? (Does he stop spitting on the sidewalk?)
If he is paying rent, he is contributing, albeit indirectly, to the property tax take. Some of that money may be used to curb nuisances.
Again, maybe, but you can see the a priorism embedded in the standard “YIMBY plus congestion tax” mix of proposals. Somehow the differential views on residents and visitors do not need to be justified.
Because residents are not visitors. Residents either pay property tax or local income tax or 'rates' or 'community charge' or something of that sort or else their landlord does. Some visitors may be contributing to property taxes levied on local retail and other such enterprises dependent on the tourist trade. But, ceteris paribus, it is better to get high value adding residents rather than scraping the bottom of the tourist barrel.
If you wish, think of the cars issue in terms of quantity allocation. There is only so much space for cars in lower Manhattan. How much of that space do you wish to allocate to residents with cars or to visitors with cars? (This question can hold whether you are doing the allocating with prices, with planning, or by some other method.)
Residents want to park close to home. The market for resident parking permits has a political component. Residents have votes. The profit maximizing solution is pre-empted. Local authority parking meter market faces competition from private car-parks. There is also the cost of collection to be factored in. A congestion charge is a different matter. The monopolist can do price discrimination to a greater degree and thus extract more surplus. The actual allocation between residents and visitors will change but, what's important, is that the revenue will be predictable. That's what matters for the Local Authority. More stable, predictable, revenue means better budgeting.
If you favor YIMBY plus a congestion tax, in essence you think resident car use is better than visitor car use.
Which is rational. If you are a resident, you favour residents. If you are a visitor, you feel that residents should lick your boots and offer you the virginity of their nubile daughters.
But how do you know that? Repeating to me on Twitter that pollution is bad, traffic in NYC is too slow, externalities are present, and so on is a non sequitur that does not address the question.
There is an uncorrelated asymmetry here. If you are a Resident, your 'bourgeois strategy' is to favour Residents. If only residents have votes in local elections, sooner or later. they will prevail.
Alternatively, you might think visitor car use is better at the margin.
If you are a fucking tourist trap incessantly lowering standards, sure.
Then you might place bigger taxes on cars garaged in lower Manhattan,
because Wall Street isn't generating tax revenue. It's the out-of-towners who keep the City solvent by buying hot-dogs and pretzels
and lower the tolls on the George Washington Bridge.
Why not pay visitors to come buy a hotdog in your fair city?
I don’t see a good a priori case against the visitors. Maybe there are diminishing returns to being exposed to the genius of NYC,
There is a 'Pareto Law' at work here. A congestion charge or a change in transport policy won't destroy the advantage of the biggest City. However, if the City goes off a fiscal cliff, it may experience self-segregation and fewer of its people will be exposed to 'genius' as opposed to muggers.
and at the margin we want to encourage the dad who drives from Westchester County with his 15 year old son to see a concert at the Village Vanguard, to get the kid excited about the saxophone.
Why not get him excited about fentanyl?
Or maybe there are increasing returns to being exposed to the genius of NYC (you have to soak up book wisdom at the Strand for twenty years running), which would then cut the other way.
People who excel at the saxophone or in 'book wisdom' are bound to end up in NYC or some other such great City.
We do observe a lot of people living in NYC for a few years when they are younger, and then leaving for saner pastures.
We also see a lot of young people working in second tier Cities before finally getting the big promotion to Head Office in NYC.
But they move there to be moved and inspired for a while.
Or they move there after they have become famous but their inspiration has run out.
That suggests there is some temporary nature to the net benefits from the exposure to NYC.
Individuals get old and die. Everything is temporary for them. But, centres of excellence may remain so from generation to generation. What matters is fiscal solvency and military security.
We also see more generally, for political economy reasons, that status quo urban policies tend to favor residents and punish visitors to an undue degree.
Not necessarily. It depends on what those urban policies were to start off with. It is possible they favoured visitors and so 'residents' tended to move out only to be replaced by a transient population.
And, if we stick with the pro-YIMBY intuitions and reallocate more road resources toward residents, do we not have to worry about the traffic, noise, and congestion from the required extra construction?
YIMBYs may like 'extra construction' because it confirms them in their belief that they will be richer by and by. But traffic and noise can certainly be curbed.
These arguments don’t prove any conclusion, but they do suggest there should not be an a priori bias against reallocating some traffic space away from residents and toward visitors.
It is perfectly proper for people to be biased in their own favour. Milking visitors is what townsfolk have done since the time of Hammurabi.
The point here is to have consistent views across YIMBY and a congestion tax.
YIMBYism is only consistent with utility maximization if the expected value of the gain in Wealth compensates for present disutility. A person m-otivated by ideology or other non-economic considerations is unlikely to display consistent behaviour. Indeed, the fellow may be a hypocrite or virtue signaler. It doesn't matter what nonsense we utter when we are lying or talking merely for the sake of creating an effect.
And if you think we should reallocate vehicle space more toward residents and away from visitors, please make a comparative argument to that effect.
Residents have the advantage in filling up local 'vehicle space'. Parking meters and pricey 'resident parking permits' (which charge more for a second or environmentally less friendly car) constrain the amount of 'vehicle space' residents can take up. Venues frequented by visitors are welcome to pay for parking for their customers. Mass transit systems can increase profits by providing underground or other such parking facilities at specific 'loop' locations. The fact that there are two types of customer militates for price or product differentiation.
Repeating observations about crowding and externalities is not an argument on either of these questions.
Arguments don't matter. Money talks. Bullshit walks. There is a 'bourgeois strategy' here. It favours high value adding residents. It takes a dim view of 'trippers'. On the other hand, great Cities have always been associated with 'Zip Code' segregation. The servant class can't be too far away from the Bosses' mansions. The aspirational and the criminal and the refugee will get stitched into this patchwork. But, fucking over the out-of-towners one way or another is what the City has always been about.
Addendum: For an extra point, “throughput” and “demand” are not the same.
Effective demand can find a way to sway the decision making process such that uncorrelated asymmetries and bourgeois strategies prevail. Sadly, academic economists and other such shitheads can prevent this happening and thus do much to reduce our quality of life.
I’ve been seeing this error frequently. Congestion pricing may well increase throughput, which is how many users get through a road or some other chokepoint in a discrete period of time, say an hour.
But effective demand is a function of expected journey time which is a function of throughput. It is obvious that the big selling point of congestion charges for voters is that some of them will get lower opportunity cost of daily travel.
It is much harder for congestion pricing to increase overall demand.
No. Poorer people will take cross-town buses to get to jobs which previously they could not take because traffic congestion meant round-trip travel time of three or four hours. The same is true for salesmen and entrepreneurs who have to factor in travel time. Less traffic means a delivery service can cater to a wider area.
For instance, at a zero explicit price the ride takes much longer but overall more people will travel through than if you charge them $20 to do the trip.
We don't know that. If you get paid to sit in traffic, fuck you care about throughput? The guys who pay for people to sit in traffic, however, have an incentive to increase throughput. But this means that more people who don't get paid to sit in traffic are zipping along the roads the way God, or Henry Ford, intended.
Currently, bus users in Karnataka are facing much longer journey times because women, who have recently been granted free travel, are filling up the buses and going sight-seeing. But this means the number of people using buses will decline because women with nothing else to do are spending their day hopping from bus to bus.
That said, the $20 price may well increase throughput, but if it decreases demand there is still an opportunity cost from the policy.
There is an opportunity cost to everything that costs money to somebody or other. In Karnataka, the opportunity cost of gangs of elderly women sightseeing on buses is the fact that some workers may well quit commuting and return to subsistence farming.
Don’t use the possibility of higher throughput to argue the congestion toll does not have costs for many of the visitors (of course some visitors will gain due to heterogeneity effects).
Visitors are heterogenous. Where there is a social cost of a journey higher than the price paid, it is perfectly rational to impose a Pigouvian tax. This does not mean that meritorious travel can't be separately subsidized.
NYC does indeed have wonderful galleries and concerts and so forth. Why not make them free so that homeless people can spend their days there? True, this may deter connoisseurs of the Arts. Fathers may not be too keen to take their 15 year olds to such places so that they can experience the delights of being stabbed or sodomized.
On the other hand, wonderful Artistic and Intellectual venues, which charge money to deter people with little interest in what they purvey, can subsidize access for those who have the ability to appreciate their product but who currently lack the means to pay.
Local businesses which benefit from serving wealthy connoisseurs pay taxes to the City. Some of that money can be spent on the homeless and others who lack recreational opportunities more suited to their needs.
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