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Sunday reading 17 January 2016

Sunday reading! I wanted to lead off the week with two important articles on migration. But first, here’s an amusing comment about technological progress:

Back on topic, Michal Ignatieff wrote a great article in the New York Review of Books on “the refugees and the new war“. It’s written for an American audience, but its message is highly relevant for New Zealand as well:

Americans may still feel the refugee crisis is none of their business, but Europeans increasingly feel otherwise—and so do the refugees. The human flight from Syria is a mass plebiscite on the failure of US and Western policy in the Levant. Syrians have reached the conclusion that the US–Saudi–Gulf State proxy war to upend Assad has failed; that their country will burn down to the waterline before Assad ever leaves; that peace will not return before their children are grown up; and that even if peace does come there will be nothing to return to in Homs, Kobanî, or Aleppo.

Syrians are now leaving refugee camps in Jordan and Lebanon where the World Food Program e-card ration is down to 50 cents a day, and where the UNHCR Syria appeal is 50 percent underfunded; their cell phones told them instantly in late August that Germany was waiving visa requirements and so they are heading for the north. It is not madness but political despair that leads mothers and fathers to risk the drowning of their children in a bid for safety and a new life.

They are flooding into a Germany torn between wanting to demonstrate, in the warmth of its welcome, that it has overcome its tormented past, and wondering how to cope with the unstoppable flow. The US cannot afford to let the gap with Germany widen still further. Germans have good reason to believe that while they are bearing the consequences of the collapse of Syria, it is America that bears responsibility for its causes.

In a slightly different vein, Stephen Dubner investigates whether migration is a human right in the Freakonomics podcast. He presents a few points of view on a complex policy issue. I was particularly struck by this argument by economist Michael Clemens:

It might be helpful, Clemens says, to think about a different infusion of labor into the U.S. economy, which didn’t have anything to do with migration.

CLEMENS:  So think about women entering the labor force after the 1940s — millions of women entering the labor force working who were not working before outside the home. That had a tremendously positive effect on the U.S. economy, even though economists have shown that some of those women competed, to some degree, with men who were already in the workforce. That is, some women entering the workforce may have exerted modest downward pressure on the wages of some men, particularly low-skilled men. Why do the benefits of that massively exceed the costs? Because the economy is very complex. Women entering the labor force are not exactly identical to men so they often complement men in the workplace rather than substitute for them. Migrants are just like that. Women start businesses that employ men. Migrants do too. Women take the money that they earn in the labor market and spend it on stuff that’s often made by men. Migrants do that as well. That’s why, even though there might have been wage-competition between men and women in the ’50s and ’60s, nobody would say now we would make the U.S. richer by banning women from working, to any degree.

And speaking of economic efficiency and equity, one of our readers directed me towards this excellent article on congestion pricing by Crikey blogger Alan Davies. He points out, rightly in my view, that the criticisms that people make against congestion pricing could equally well be levied against any part of our economy. As a result, it’s important to consider the equity impacts of the entire system, including taxes and transfer policy, and other policies that raise costs of living in cities:

It’s bizarre that we have a flat charging structure for trains and electricity with concessions for eligible users, yet many oppose charging motorists for the use of road space on the same basis. On that logic they must’ve opposed the Gillard Government’s carbon tax!

Policy can’t be made on the basis of evaluating the equity effects of specific taxes in isolation. That’s what happened with restoration of indexation on the fuel excise; it led to the ridiculous situation where the Greens and Labor were effectively arguing for a reduction in the real price of petrol.

The sensible approach is to evaluate equity outcomes at the level of the entire tax and transfer system. Politicians don’t care about that of course so it’s imperative progressives take a more reasoned approach to congestion charging.

Let’s get off economics for a moment, and on to geology. Here’s a brilliant illustration of the persistent effects of geology – rock formations – on human society, from the University of Georgia Geology Department:

US east coast fall lines UGA

The Fall Line is the boundary between the hilly Piedmont and the flat Coastal Plain [marked as a black line in the middle image]. It’s called the Fall Line because the first falls or rapids in rivers that one encounters as one comes inland from the ocean are usally found at this boundary, as the streams drop off the Piedmont and onto the Coastal Plain.

The white that marks the Fall Line in this image is the string of major cities that lie on the Fall Line (see the image on the right). Where rivers cross the Fall Line, cities commonly develop because ships reach the inland limit of navigation and must surrender their loads to land-based carriers. Philadelphia, Baltimore, and Richmond developed this way without any planning. Washington was cited on the Potomac River deliberately at the Fall Line for the same navigational reasons.

In short, we make our own cities, but in doing so we unconsciously follow the contours laid out by millions of years of geology. On that note, CityLab’s Tanvi Misra reports on a new effort to map “65 years of explosive urban growth”:

In 1950, only 30 percent of the world’s population lived in cities, compared with 54 percent in 2015. A new map by urban geographer Duncan Smith tracks the bursts in city populations that contributed to this growth…

In its 2014 World Urbanization Prospects report, the UN tracked the populations of major cities from 1950 to 2014, then predicted how these populations would grow (or shrink) up to the year 2030. Using these data, Smith represented each city on his map with a dark blue core, the size of which is proportional to the city’s 1950 population. The concentric circles around that core, in lighter blue, vary according to the city’s population in 1990, 2015, and 2030.

citylab mapping urban growth visualisation

Don’t worry, you can click through to the full map to see how New Zealand looks. We haven’t been forgotten!

Even at a very high level, this map shows where cities have matured and stopped growing, and which are still growing rapidly. Europe, Japan, and some parts of the US seemed to have reached peak urbanisation, while Africa and Asia are still in an upswing of growth.

At a micro scale, the Guardian provides us with “a history of cities in 50 buildings“. You will have to browse through their gallery for the full effect. There were two “buildings” that were actually transport facilities:

Guardian 50 buildings four level interchange

Guardian 50 buildings Curitiba BRT

Speaking of buildings, this article on midrise apartment construction in Charlotte, North Carolina had me wondering why we don’t do more of this here, given our abundant supplies of lumber and serious issues with construction costs:

It’s hard to miss the raw material forming the skeletons of new apartment buildings going up around Charlotte: wood.

Lightweight construction materials – beams formed of wood fibers and wooden floor assemblies built in factories – allow for faster, easier construction, advocates say.

But there’s a potential downside: Some experts say these materials burn faster than traditional lumber and can collapse more quickly in a fire, endangering firefighters….

There’s a simple reason wood is popular with apartment developers: It costs less than steel and concrete.

And there’s a reason most of Charlotte’s new apartments are roughly the same height: For fire safety purposes, the state building code limits wood-framed apartments to four floors, unless they’re atop a parking garage. Apartments built of steel and other noncombustible materials can go much higher.

Some of Charlotte’s biggest apartment developers said wood is more cost-effective to build with, and the inclusion of sprinkler systems and other safety measures such as smoke alarms ensures the buildings are safe.

That’s a good jumping-off point for the last article of the week. Charlie Gardner (at Old Urbanist) examines what happened when the market built housing for people on low incomes. Gardner argues that the “informal economy”, consisting mainly of people building for themselves or squatting on unused land, played a key role in supplying housing to people on lower incomes. However, informal housing tends to get pushed to the margins by proliferation of planning regulations and building code requirements:

Beyond housing for the very poorest of the poor, American cities through at least the 1920s built in bulk for the lower end of the income scale.  This housing took several forms:

  • As noted above, shanty housing built by those with little or no experience in construction.
  • Small, temporary and/or transient housing, such as flophouses, boarding houses and other manner of SRO rentals.
  • Small multifamily housing wherein a person of some means would build a home with one or two attached apartments which could be let out at low cost.  Often these apartments would be sub-let to boarders who might occupy a single bedroom.
  • Self-built housing of a higher quality, which might be built from a Sears housing kit, or by a person with some background in construction.  One study estimates as many as 1 in 5 American homes were self-built in the 1920s.
  • As noted in the comments, company towns and other housing built by large businesses for their workers to inhabit.

The first, second and third of these options were virtually outlawed starting in the 1920s and in the decades following.  What changed during and after the 1920s was not the market’s willingness or ability to continue constructing such housing, but society’s tolerance for housing of perceived low quality or of profitable use.

I suspect that self-built housing played an important role in New Zealand until relatively recently. For example, my grandparents and their siblings either built their own houses or significantly expanded them after buying a smaller dwelling. This would have had two benefits. First, it would let them save on hiring builders (and architects, etc). Second, they could build incrementally, in stages, which meant that they didn’t have to save up to afford all the materials at the outset.

That being said, here’s a graphic reminder that regulations have led to many valuable quality improvements over the last 50 years:

22 comments to Sunday reading 17 January 2016

  • Great collection, as ever Peter. But if anyone can find a sharper and more relevant short article than this today I’d be surprised. Everyone please read, is relevant to NZ too, the recent and ongoing double down on the highway-sprawl nexus is in the same category as Australian coal:

    http://www.canberratimes.com.au/comment/climate-change-and-confusing-economic-activity-with-economic-prosperity-20160114-gm6ess#ixzz3xJt3o6zk

    By the chief economist at the Australia Institute.

    • mfwic

      That is a great article. Too many projects are promoted based on the total cost as if that is a benefit to society. It is the return that matters.

    • john smith

      In Australia it’s very frustrating how ‘we need to invest more in public infrastructure’ is pretty much a motherhood statement, yet there is hardly any public discourse on what the *right* infrastructure is. Anything will do.

      If the government thinks voters will give them brownie points for promising a multi-billion dollar new train line, they’ll promise that. If they think there are brownie points in promising a multi-billion new motorway right beside it, they’ll promise that too. The fact that the goals of these projects, taken as a whole, are incoherent or contradictory doesn’t concern them in the slightest. (This is a reasonably accurate description of Melbourne’s current major transport projects: Metro Rail Tunnel vs western toll road)

      • NZ has generally been saved from the worst of Australian level stoopid simply by being poorer and more cautious. But the current gov has blown that away with the RoNS and fiscal innovations such as asset sales and PPPs for motorways. So now we are building more and more lower value roads. An asset class that in general we have a lot of, the new ones are almost all duplicates, so this is a double down on last century’s priorities, especially as it also helps creates last century’s urban form too. Also the Cullen fund has been stopped and gov contributions to KiwiSaver have been lowered. Two investments that have clearly improved the nation’s net position. So, sadly, it’s really just as bad here, on a smaller scale, yet similar pro rata.

        • James

          ‘last century’s priorities’ – if you are referring to the motor vehicle you are very wrong. With crude oil looking to crash below $30 a barrel there will continue to be record new car sales.

          • Chris R

            Climate change: still happening. This is the century it starts to bite. Doesn’t matter how cheap oil is; we can’t afford to keep burning it.

            Before anyone mentions electric cars, they still take fossil fuel to manufacture.

          • James

            I dont think the Chinese care about climate change. They want to drive cars and are increasingly doing so.

          • Sailor Boy

            That’s why they are implementing odd-even days in cities, stopping building coal fired power plants and signing major commitments to combat climate change with the US? We have very clearly reached driving saturation.

  • mfwic

    I can’t find a logical argument in the Clemens piece. Clemens seems to be trying to say if you don’t think mass immigration is good then you are sexist as well. That is a weak argument on several levels. Women lived and worked there already, there work didnt always show up on GDP statistics but they worked nonetheless. Moving to paid work outside the home for many women meant they had to do even more work but that point aside the paid work showed up in GDP so it was measured as economic growth. But here is the important difference- since they already lived there the former GDP/population was lower before women went out to work and it increased significantly when many women did choose outside paid employment. So overall the population was better off. (The women were also individually better off otherwise they wouldnt have made that choice.) Immigration adds to GDP but adds more to population so the GDP/person goes down. It is one of the stylised facts of development economics. So the secret is to let in people with lots of capital or with particular skills rather than mass immigration. The hope is you lift business activity by more than you lift population.

    • Peter Nunns

      You should read the entire piece. They interview people with a range of different views.

      As for Clemens’ argument, he points out that your “stylised fact” is not actually a fact. Most recent studies of the impact of immigration on domestic wages find little or no negative (or positive) effects. In this context, female labour force participation is being used as an analogy for mass immigration – although a lot of new people entered the labour market, it hasn’t resulted in mass immiseration of male workers.

  • http://www.theguardian.com/uk-news/2016/jan/16/the-tube-at-a-standstill-why-tfl-stopped-people-walking-up-the-escalators

    The miracle of the underground railway:

    “On 4 December last year, the London Underground ingested 4,821,000 passengers and spat them out at their destinations, and in doing so set a new record for a single day. If you paused to contemplate this for a moment, you might think of all those Oyster cards tapping, all those doors sliding, all those people moving, consider whatever mad visionary first thought of demolishing houses to dig holes in the ground to put trains in, and conclude that a subterranean public transport network is a small miracle. Most of the time, though, commuters don’t pause, and don’t conclude anything of the sort. They have other things on their mind.”

    “London is growing faster than any other European city; its population of 8.6 million is expected to hit 10 million by 2030. The London Infrastructure Plan 2050 predicts demand on the system to rise by 60%. And so TfL has to extract every last ounce of capacity from its underground network, the oldest in the world.”

  • JimboJones

    I think the building code is failing on all accounts:
    Safety: Do we really need a building code to enforce safety for timber residential buildings? How many timber residential buildings in ChCh would be up to current building code standards – yet almost all earthquake fatalities were due to commercial brick buildings and brick chimneys.
    Health: So many people crammed into small houses because the building code makes simple extensions to houses too expensive
    Quality: Leaky buildings – need I say more? Were the cheap materials a response to other extra expenses imposed by the building code?

    A couple of examples:

    We have a brick chimney that I would like to get rid of, but as it is a structural element we need building consent to do so. We would need to employ an architect, engineer, the council and a licensed builder, probably costing 10k+. If there was no building consent required I would do it tomorrow for free. So the most dangerous part of our house is still remaining due to the building code.

    I replaced some Gib in a couple of bedrooms. I would have insulated the external walls, but I would need building consent to do so (again probably requiring an architect, council costs, etc). So our house has less insulation than it could have due to the building code. And if I had got consent to put the insulation in, I would need a licensed builder to put the Gib up as it is considered structural (I kid you not).

    • Sailor Boy

      The leaky housing crisis was a direct result of the 1990s National government ‘easing’ regulations on construction to allow untrained builders to use substandard techniques and materials.

      • Tony

        The leaky housing crisis was a direct result of the 1990s National government ‘changing’ regulations on construction to allow untrained builders to use substandard techniques and materials. All approved by a group of incompetents going by, and still going by, the name of BRANZS.

        Fixed that for you.

    • Sailor Boy

      Also, Gib board on a wind bracing wall is structural, probably saving you thousands on initial framing. You can buy specific bracing Gib for this exact purpose.

      Much bigger issue is Gib’s owner (think it’s Winstone’s Aggregates) lobbying furiously to exclude other suppliers to maintain their monopoly and price gouge.

      • JimboJones

        Do other countries require a licensed builder to put few sheets of Gib up?
        How many homes in the ChCh earthquake had owner replaced Gib? And how many of those fell down?

      • Tony

        Thousands huh? had to chuckle a bit.

        Also, Gib is owned by Winstone Wallboards. Which is owned by, dun dun dunnn,…Flecthers! What a surprise.

      • Tony

        Jimbo, it’s not strictly true that you need a licensed building contractor to carry out structural repairs to your home. There is provision for unlicensed DIY work, but…
        1, If you want to insulate your walls just bloody do it!
        2, Are you absolutely sure you walls contain bracing elements? Even if they do, refer to No1! Who the hell is going to know if they don’t already?

        The more we disregard these stupid bloody rules the quicker they’ll realise their efforts to enforce their stupid bloody rules are futile.

        within reason of course ha!

    • Max

      “We have a brick chimney that I would like to get rid of, but as it is a structural element we need building consent to do so”

      Uhm, yeah. There’s that part in your sentence saying that it’s a “structural element” which makes me suspect you should. DIY can only go so far. If I buy a house, I would like to be sure that they guy removing the brick chimney didn’t remove important stability features too.

    • Matthew W

      For gods sake why didnt you just stick some insulation in?

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