Thus Vice nurs’d Ingenuity,
Which join’d with Time and Industry,
Had carry’d Life’s Conveniencies,
It’s real Pleasures, Comforts, Ease,
To such a Height, the very Poor
Liv’d better than the Rich before,
And nothing could be added more.

–From Mandeville’s ‘Fable of the Bees’

A frequently cited rationale for proposed zoning changes in Seattle’s South Lake Union is economic; the rezones will allow for an economic boom that will create much needed jobs for the city and region. We can argue about the numbers, but what about the idea that new land use policy will spark improvements in our economy?

South Lake Union: The Rails to Recovery?

A recent article in City Journal, a quarterly online journal of a libertarian bent, published an interesting and compelling article on the Road to Recovery by John Taylor, which was adapted from his Friedrich Hayek Lecture given as part of Manhattan Institute’s Hayek Prize. It got me thinking about whether Seattle overregulates the use of land and how that could be limiting the economic upsides of growth that could lead to recovery, especially job creation.

Hayek is not so popular around here because he is the economist who is the opposite of John Maynard Keynes, a favorite of liberals and progressives. Simply put, Hayek is remembered for limited, if any, government intervention to affect the economy, and Keynes was the classic interventionist, arguing for government’s role in increasing demand for goods and services, especially during downturns (for more and Hayek and Keynes you’d better watch this then this.)

I have been criticized for what one commenter called “Hayekian reveries” about deregulating land use around transit stations. However, I think Hayekian lenses are what we should wear when we consider how and when government regulates what gets built in Seattle, especially around transit.

Hayek draws a distinction in Constitution of Liberty, between the law and legislation. Hayek argued that spontaneous order—a state of order that is the product of the free market, not planning—in an economy is possible only when there are predictable laws, general in nature, that establish the few things people cannot do, rather than commands about what they must do.

When Hayek talks about the law he is referring in large part to English Common Law that undergirds our entire legal system in the United States, and provides the basis for adjudicating disputes and carrying out justice. The Common Law paves the road to the future with precedents from the past; it is essentially a system of rules based on trial and error.

However, Seattle’s rulebook, the land use code, isn’t about building the future but protecting the past; the code isn’t about experimentation but about preventing “bad things” from happening. Our land use code is a monument to 20th century land use principles that pushed different uses apart, a strategy that resulted in sprawl in the years following World War II.

As I’ve argued before, the only limits at South Lake Union or anywhere in Seattle, especially around transit, should be the limits set by supply and demand, engineering, and health and safety. Oddly this is not a libertarian idea at all, but rather an interventionist one. Taylor notes that sometimes a government can intervene by doing nothing. Seattle government should actually do less so private developers can do more to accommodate growth and crate the jobs that will come with it.

The profit motive and the desire to improve the lot of our fellow people drive innovation and creativity. Deregulating the use of land can be profitable and beneficial for everyone. We need lots of innovation and creativity right now, so why not get out of the way and allow architects, planners, engineers, and yes, even neighborhoods create spontaneous order in South Lake Union and elsewhere. Let’s get rid of height limits—and all limits there—and see what happens.

Zero Based Zoning, for example, would allow increases in housing supply, support innovation, and help boost the economy. What our city needs now is jobs and housing, and that won’t happen because of more rules and more conditions to avoid bad things, but through encouraging more investment and risk taking for the future. Local government can set the table for the feast, and then let people eat it without fretting over every bite.

I do depart with classical liberals when they suggest that we don’t make laws we only discover them. We can make and unmake laws because we decide we need to in order to support smart growth. Good law is not out there somewhere; we make it up based on what others have learned before us and it’s a communal, not individual, exercise.

Yes, there will be trials and errors—an ugly building here and there—but that’s how we learn to improve the law. And when we grow we also build better communities, something government can’t mandate or plan. When it comes to land use I have to agree with the classical liberals, less planning and government regulation leads to more freedom and recovery. Allowing more spontaneity can also be the road to sustainability.

40 Replies to “South Lake Union: More Spontaneity Can Mean More Jobs”

  1. I’m for taller buildings too but when you talk like this you just sound like a crazy person.

    Guess who wrote this:

    We need only turn to the problems which arise in connection with land, particularly with regard to urban land in modern large towns, in order to realize that a conception of property which is based on the assumption that the use of a particular item of property affects only the interests of its owner breaks down. There can be no doubt that a good many, at least, of the problems with which the modern town planner is concerned are genuine problems with which governments or local authorities are bound to concern themselves. Unless we can provide some guidance in fields like this about what are legitimate or necessary government activities and what are its limits, we must not complain if our views are not taken seriously

      1. Chrismealy,

        It’s not about taller buildings. And this sentence isn’t inconsistent with anything I have written or what I believe:

        “Unless we can provide some guidance in fields like this about what are legitimate or necessary government activities and what are its limits, we must not complain if our views are not taken seriously”

        As I mentioned in another comment, the idea is to create broadly construed laws not nitpicking legislation and let things work themselves out. I’ve never said end the system of granting entitlements to build or permit anything that shows up.

        Try and build something almost anywhere, and you’ll quickly find that the code is usually set up to prevent things from happening rather than promote creativity.

  2. This is a really messy piece; it’s all over the place.

    When Hayek wrote about the English Common Law system, he was comparing it to the civil law system common outside of the Anglophone world. The main distinction between Common Law and Civil Law is that Common law builds upon previous decisions’ precedents. Civil Law comes largely through legislation and regulations.

    In this way Civil Law requires an activist government, because every law has to be written by the government in some way. Common Law does not, because judges can write new rule on the fly, so you don’t need a law for each rule.

    That much is consistent, because in your argument our zoning code is more like Civil Law and thus not Hayekian.

    But what does zero based zoning have to do with that? And how do you think judges are going to decide our zoning? In this case wouldn’t the judges be the design review boards? And I thought you might be favour of limiting their power?

    1. Our current zoning stems from Ambler v Euclid (1926). And what do people do when they don’t like a land use decision? Sue of course. So I’d argue our current zoning is every bit an example of common law.

    2. Recipe for corruption as a judge, unqualified in the intricacies of land use issues, could make a decision and be influenced by money.

      Look, I agree that there can be too much regulation and to the degree that there is some push back that is fine, but the rule of law is the singular distinguishing feature of our Republic that has provided maximal opportunity and freedom.

    3. Andrew, I very much appreciate this distinction.

      I did not bring up the Common and Civil law distincition. I could have said law versus legislation, which I think is a more generic distinction that Common versus Civil Law.

      Nevertheless, if you follow the link the article by Singer (http://isites.harvard.edu/fs/docs/icb.topic150416.files/player.pdf) that is an excellent discussion of how Common law doesn’t depend on the ontological assumption of truth. This is a far more interesting discussion, I think, because if we accept Singer’s proposition we can have Common Law without the idea that we have God Given Rights.

      Part of what frustrates the conversation about land is the idea that people have all these “inalienable rights,” none of which they actually have. If you have an entitlement to land it’s through social contract and precedent in the Common Law, both of which can be changed to your disadvantage for the common good.

    4. As for “what this has to do with Zero Based Zoning” and how judges make decisions, there isn’t any reason to think the Common Law wouldn’t form the basis for those decisions, or just common sense.

      I don’t dislike the idea of Design Review Boards haveing more power as long as the power comes with accountability and a clear set of outcomes.

      In the end, what we’re looking for here is a system of land use this is like the rules of the NFL or FIFA: you make them, let the players play by them for awhile, then make changes after a few years.

      Our problem is that we pass very specific legislation about one block of the city rather than broad laws that facilitate lots of action on the field, to mix my metaphors.

      I want to see Council pass a broadly construed law and resist the urge to “fine tune” it for every project that gets a permit. As I said, some projects will suck. Some will be awesome. But if they all provide housing and jobs, then we all win.

      1. Our problem is that we pass very specific legislation about one block of the city rather than broad laws that facilitate lots of action on the field, to mix my metaphors.

        Yes, the way we do this is silly. I agree with you about the fear of “bad things” making sure we never get anything really good.

  3. Oh, and Keynes argued for intervention only in fiscal crisis, not “especially”. Only. That’s a marked difference.

    I think Marx is the interventionalist you describe.

    1. Well, most people consider it a fiscal crises when year after year they find themselves deeper and deeper in debt. Given that the last time the national debt decreased was under Eisenhower we’re in a constant state of fiscal crisis. Just sometimes it’s “especially” bad.

      1. Sure our debt has dropped since then, in relation to GDP which is what matters.

        Actually, it has dropped under every president since Truman except under Regan, Bush Sr., Bush Jr., and so far under Obama.

      2. GDP is like a batting average, interesting but it doesn’t pay the rent. If it was based on tangible goods instead of goods and serivces it would be more meaningful. Earned runs are money in the bank. In the end it’s people that have to pay the bill so consider debt as a percentage of per capita income . But wait, it’s worse. Entitlements coupled with demographics that point to a shrinking percentage of worker bees to drones means that servicing the debt will be the next generations largest liability.

      3. That ain’t workin’ that’s the way you do it
        Money for nothin’ and chicks for free

        Yeah, the old inflate your way out of debt. Problem is it drives up interest rates. Take it to the extreme and you end up with a Grexit. Lots of games but in the end when you spend more than you have it ultimately ends badly. If a household is upping spending by running up credit card debt is that a good thing? If you believe national debt as a percentage of GDP is valid then you have to answer yes because GDP includes government spending even though it’s financed by onerous debt. It also includes spending on imports but doesn’t debit the trade imbalance. Oh well, most of you will be financing my retirement. I heard a quip today that really rings true; “there are those that work for a living and those that vote for a living.” In the next 10-20 years the retirement population will join the vote for a living group and… well, sorry sucker!

      4. Greece can’t print Euros, which is the whole problem. If Greece could print euros, they wouldn’t have to exit the euro…

        You get inflation, but whatever, it’s happened before and we all survived.

        Glad you got the DIRE reference!

      5. Greece can’t print Euros, which is the whole problem.

        The California Republic can’t print dollars. Would it be a “solution” for them to switch to printing their own Pesos?

        You get inflation, but whatever, it’s happened before and we all survived.

        In some cases thrived. I bought my first house when interest rates on 30 year fixed mortgages were hitting 14%. Of course nobody bought 30 year mortages back then but the steep interest rates drove down the price of homes. When Volker took charge and harnessed inflation the benefits of low capital cost combined with falling interest rates combined to make the mortgage payment half of what I would have been paying in rent and developed equity. It really was money for nothing.

        Glad you got the DIRE reference!

        Not only got the reference, got the album… in real angora vinyl. Here’s some more-a… The US has a “problem” every other country would love to have. That is, we’re the currency of last resort. Dictators, cartels, etc. hord huge amounts of dollars in their “mattresses” which amounts to an interest free loan. We crank up the printing press and all of that starts to get swapped for Swiss Francs or Pounds Sterling or Yuan. Then there’s the fact that about 20% of our debt is denominated in foreign currency. Devalue the dollar and US citizens holding Treasury debt are big losers but foreign governments gain leverage. Tack that on to the fact that inflation (boarding on hyper-inflation) is the biggest killer of economic growth it’s really not an option. We are in Dire Straits.

  4. Hayek on Hayek

    “At about the same time [viz., 1946], I discredited myself with most of my fellow economists by writing The Road to Serfdom, which is disliked so much. So not only did my theoretical influence decline, most of the departments came to dislike me, so much so that I can feel it to the present day. Economists very largely tend to treat me as an outsider, somebody who has discredited himself by writing a book like The Road to Serfdom, which has now become political science altogether. Recently—and Hicks is probably the most outstanding symptom—there has been a revival of interest in my sort of problems, but I had a period of twenty years in which I bitterly regretted having once mentioned to my wife after Keynes’s death that now Keynes was dead, I was probably the best-known economist living. But ten days later it was probably no longer true. At that very moment, Keynes became the great figure, and I was gradually forgotten as an economist” (Kresge and Wenar 1994: 127).”

    I don’t think it’s wise to promote Hayek as the panacea and rational for why we should embark on a path on matters of “collective” importance when he has admitted himself it’s just not all there.

    Further, you misrepresent Keynesian principles. Keynes was concerned about full employment and moderating business cycles. The period of time when Keynesian policies were in full effect in this country corresponds to the period of the greatest economic prosperity for more people without the effects of catastrophic business cycles because tax and monetary policy moderated those. It was the change of tax policies, deficit spending and monetary policy after the fiat monetary system came into place, that we saw a return to massive inequality of income and the resulting misery concurrent with catastrophic and disruptive business cycles.

    Is that what we as a society want?

  5. OK all you Econ 101 professors. This isn’t a graduate level thesis on economics. It’s not even a paper for a community college course. Take a breath for a second, it’s a blog.

    There’s no way one is going to be able to cover the finer points of complex thinkers like Hayek and Keynes in a 750 blog post. My purpose is to spark conversation about the ideas. Skip past the “you know nothing of my work” stuff and tell us what you think about the general idea about whether we get jobs AND sustainability through more regulation of land use or less.

    You’re more than welcome to give me a C+ when I sign up for your class.

  6. It shouldn’t take a graduate degree in economics to recognize the danger to our society that Hayek’s ideas have wrought.

    As for what I think of the ideas you suggested, I think it stinks. Sorry, I perhaps hold a minority view here, but land use planning is a necessary function in society. You influence it through the political process so that there is at least the potential for fairness. e.g. our council can make a policy decision about parking minimums based on an objective they and their constituents want to achieve. the land use professionals formulate those recommendations about policy and do the work of applying the approved policy fairly. So, perhaps your idea of a new party is perhaps your best avenue to achieving your goals.

    1. I appreciate that Charles.

      I guess I am not sure what you mean about “the danger” represented by Hayek’s ideas, especially since his ideas have arguably not been fully embraced by any government. Government by its very nature is full of interventionists, people who want to “make a difference in the world” by passing laws and implementing policies.

      I don’t think that’s such a bad idea at all.

      But some other people want to “make a difference in the world” by building things and transforming the built environement for a profit. That’s a lot easier to do when there are fewer rules and costs to limit innovation.

      These two views can be at odds even when the antagonists are genuinely trying to do the right thing. We’re a little light in the Hayek around here and prone to see the ONLY option to fix problems as “let’s pass legislation” as opposed to “let’s repeal some legislation and allow people to produce what they think they can sell.”

      As I have said before, we achieve freedom through good government, not the absence of government.

      1. I don’t see Hayek’s ideas as particularly dangerous, since most land development has been driven by the pursuit of rent and/or profit, and I don’t see that likely to change. I think this was more effectively explained in the spatial context by von Thünen and Christaller, but Hayek will do in a pinch.

        Nor do I see zoning going away; as a commenter notes, the right of a city to regulate land use was established in the Euclid case.

        There’s no particular conflict between the two — heck, one’s a theory and the other is the law of the land. Zoning tends to fossilize existing land use patterns, but developers have somehow managed to build and make money anyways. Over the longer run, as demand changes and zoning doesn’t, current owners can profit very nicely from a zoning change, especially as new transportation facilities impact land values.

        This indicates to me a need for zoning to be flexible, though that hasn’t typically been the way that we do zoning in the U.S.

  7. Good Lord, more dribble again and the absurd notion of a non-existent concept of the flying zero-based zoning. Again: form-based coding and master planning. That is the answer.

      1. Well, they promised to tear it down after the Fair. Closer to home, how did the Space Needle slip through :-

      2. “how did the Space Needle slip through” No kidding! Imagine all of the views of rich people on the south slope of Queen Anne hill it must have interfered with! It probably ruined the value of their homes.

      3. It allows flexibility. No one said you couldn’t allow for signature, landmark buildings. Look up form-based coding. It’s growing in planning practice just because of its superiority to zoning.

      4. Yes, I’m a fan of form-based in theory, but am unaware of actual implementations of it*. I’d love to see you submit a post on this topic.

        * Not saying they don’t exist – I just haven’t been following this.

      5. Matt, take a look at this list. A fair number of jurisdictions have implemented. What you will note is Thr a large number (like Bothell) use them for city centres and important neighbourhoods. The Bothell document is very nice and a lot of their work is already coming to fruition with new infrastructure to support preferred development. http://smartcodecomplete.com/learn/code-study.html

        Thanks, Oran. :)

    1. Well said, Stephen! And the Eiffel Tower came out of a World Exposition. Not quite the same thing.

  8. Roger, you’re linking to a bunch of libertarian cranks. If you’re really going to go there then you’re going to have to explain how we keep public transit at all, along with public schools, public parks, etc.

  9. Yes, spontaneity is needed…the ability for stores and businesses to enter neighborhoods at low cost, experiment, succeed or fail and try again. This was how the great neighborhoods like Fremont were built.

    But no more…because of high real estate costs and the inflexibility of larger more expensive buildings, the process becomes only available to the high rollers. It is especially sad to see Seattle having taken this path, because the beauty of it were those hip shops that would pop up with names like Fritzy Ritz and attract scores of customers.

    If you want a taste of what those neighborhoods were like, I’d say that Georgetown is a a better model. The low, sparse buildings allow for cheaper rents. There is still free on street parking…which is critical for new businesses because their audience might come from miles away and quickly on impulse…something a car is good at.

      1. So will Federal Way, so Will 6th Avenue Tacoma and so on.

        In 40 years, Centralia and Tumwater.

        The point being we can build more “Seattle” anywhere…

  10. This statement resonates with me:

    However, I think Hayekian lenses are what we should wear when we consider how and when government regulates what gets built in Seattle, especially around transit.

    Seattle’s transit stops are on the complete opposite end of the spectrum from deregulation. Currently, absolutely no commercial activity happens anywhere near transit. Look at the tunnel stations. After you step out of a Link train, how far do you have to walk to get a newspaper? A stick of gum? A cup or can of coffee? In private transit systems of Japan, you get them in a few steps. I wonder if it’s a quarter mile or further here.

    I think we would benefit from simply regulating in commercial use, instead of regulating it out.

  11. The problem with Hayek is that he does not have *a single clue* about money, so that everything Hayek says about money is *utterly backwards and wrong*. This makes most of his economic advice wrong.

    The comment that you can only have spontaneity and markets within an agreed framework of fairly rigid laws — that comment is not original to Hayek and is perfectly true.

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