Alain Bertaud: commitment

Transcript context

…Well, yes, rent control. Sometimes I compare markets to gravity. Gravity is always there. Sometimes you want to counter gravity. The outcome of gravity is not always . . . You want to break it. For instance, you invent airplane, or you invent helicopter or balloon. That means that you understand gravity very well in order to solve a problem. Some people will say, “Well, I don’t believe in gravity.” They invent a flying carpet. If flying carpet has advantage on the helicopter or a plane, that it doesn’t pollute, it’s more comfortable, it costs nothing. It lands in your backyard. [laughter] vity.” They invent a flying carpet. If flying carpet has advantage on the helicopter or a plane, that it doesn’t pollute, it’s more comfortable, it costs nothing. It lands in your backyard. [laughter] Rent control is a flying carpet. As soon as you try to find a solution to affordability, and you look outside the market — how the market works — immediately you end up . . . Somebody will say, “I want to invent an airplane, but I’m going to not take into account gravity.” You know, you don’t want to fly in this airplane. When there is a problem of affordability — and many cities now have this problem — you have some people who are very poor and cannot afford a standard of housing which is above what is, let’s say, the minimum socially acceptable in the city. You have to establish how many of those people are there, and usually, if it is more than 2 or 3 or 4 percent of the population, you’ll have to adjust what is minimum acceptable, socially acceptable standard. For the rest of the population, housing should be provided by the market. What do I mean by that? I mean that if you look for a house, and you have to be on the waiting list 10 years to go on public housing or to go on inclusive zoning — the houses provided in New York by inclusive zoning — or you have a lottery inclusive zoning. You have usually 120 units, and you have a lottery. You have 150,000 applicants. This is not serious. Waiting list is not serious. The market should provide. The market means that there are people moving in and moving out. When you are in a subsidized house, you don’t move. If you are in rent control house, you will never move because your subsidy is entirely linked. You have no market, so you have no mobility. The idea of housing is mobility. At different times of our life, we want to move from one type of house to another and to a different location. If we have a system which ties the subsidy to where we live, we lose this mobility, and it doesn’t benefit anybody else. My criteria for affordability is not to look at very poor people, which, indeed, if they have bad health or bad luck, the country should take care of them. I have no problem with that, if they have subsidized housing. But if you have, for instance, a schoolteacher — no job is more indispensable to the life of a city than a schoolteacher. If the schoolteacher cannot get a decent house within, I will say, 40 minutes’ commute from a school or their school, there’s something wrong in your system. It is not rent control and it is not inclusive zoning which will solve the problem, because for each of these solutions, they will have to be on a waiting list. For rent control, the schoolteacher will have to wait for somebody who is under rent control will die, even. Maybe not because rent control is usually narrated from . . . You see, we have to find a solution for this, and the solution is usually increased supply. Now increasing supply means increasing supply by removing absurd regulation. I’m not talking here, by the way, about fire regulation or sanitation regulation. I’m talking about regulation that the consumer can see: how large is a house, how large is the land it is using, and its location. ing here, by the way, about fire regulation or sanitation regulation. I’m talking about regulation that the consumer can see: how large is a house, how large is the land it is using, and its location. Users should be able to make tradeoffs between those three things, and they are able to make it visually. A user cannot make tradeoff between good fire regulation and bad fire regulation. We don’t know how to do that. It could be that some fire regulation . . . or maybe over design or something, but I have no opinion on that. But I don’t see that there is any purpose in limiting artificially the amount of floor space, the amount of land in a certain location. Most of fire regulation do that. They reduce floor ratio. That means that they force people to consume more land than they would otherwise. If not, there would be no reason . . . At the same time, they put a minimum floor space for apartment in New York. If I remember well, it’s something like 40 square meters or something like that times two metric here. They force people to consume more land and more floor space than they will want. At the same time, they reduce the supply of land by not developing enough infrastructure or transport. We have been talking about the deterioration of transport in New York City — that affected directly affordability. That means that our schoolteacher will have to live at maybe an hour and a half from the school, one way. That means three hours. The new proletariat now in cities are not the people who are starving or have no clothes, like during the Industrial Revolution. The new proletariat are the people who are commuting back and forth three hours or four hours a day. I have seen cases in South Africa, in Johannesburg, where a woman was fully employed at the subsidized house. So she was not poor by any standard, and she had the regular job above the minimum wage, but she was commuting five hours a day. Her life is ruin. This is the new proletariat. There is no possibility of having a family life. All the advantage of a city disappears if you commute five hours a day. I think that here, urban planners or managers of cities — sometime I use urban planners as scapegoats — I mean, in fact, anybody who is involved in managing cities. They have a responsibility for that. They should have indicators about these commuting times and standard of housing and affordability. When this thing deteriorates, they should take responsibility. The only action they can have, increase the speed of transport. Expand it and increase. Let the people decide where they want to live, how much they want in terms of land and floor space. This should not be regulated.…

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