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.

Could a Private Street Look Like This?

By


photo at Brooklyn Paper was attributed to Montague Street Business Improvement District

Stephen at rationalitate occasionally brings up that truly privatized streets could be converted to other uses. I think it would be inevitable that on streets with many shops and cafes, such as Montague Street in Brooklyn, the shops may get together to form some sort of association to own the street. Perhaps on weekdays, the association who own the street would allow commercial traffic which benefits their businesses, and on nights and weekends close off the street for seating and pedestrians. I guess we’ll never know until some city is bold enough to try it.

Brooklyn Paper – Montague on grass!

The grassy plazas would not cut off traffic on the busy side streets. As such, the bike advocacy group Transportation Alternatives said that the plan would not wreck havoc on car traffic. In fact, it would bring more people to the street, mostly by subway, foot or bike.

“It will also encourage Sunday sales for our merchants,” said BID Executive Director Chelsea Mauldin. “People can come out, pick up a coffee, read the paper, and enjoy the sunshine.”

  • Bill Nelson

    In the early 1980s, the urban “planning” “experts” tried to emulate the success of shopping malls by converting downtown streets all over the country into pedestrian malls. Of course, that was a failure, and the malls have been ripped out. (I wonder if any still exist?)

    The problem was that the public servants attributed the success of malls entirely to its most visible attribute — and had nothing at stake in case their ideas failed. (As we know, even shopping malls are long gone, and the idea of the mall being the “new downtown” is rather quaint. They’re either dead, or converted to “lifestyle centers”, “power centers”, or have had their tenant mix replaced with women’s clothing and accessory stores.)

    As you correctly point out, we don’t know what private streets would look like. Could anyone in 1970 predict what 2008 shopping centers would look like? (To say nothing of someone in 1950 or 1910…)

    Through research, trial-and-error, people risking their own money, and lots of failures, private streets would evolve (and continue to evolve) just as computers, medicine, shoes, etc. have changed to meet the needs of their users.

    For all we know, the very idea of “streets” might not even exist in a private market. They could be replaced by something much better than anything that you or I can imagine.

  • Bill Nelson

    In the early 1980s, the urban “planning” “experts” tried to emulate the success of shopping malls by converting downtown streets all over the country into pedestrian malls. Of course, that was a failure, and the malls have been ripped out. (I wonder if any still exist?)

    The problem was that the public servants attributed the success of malls entirely to its most visible attribute — and had nothing at stake in case their ideas failed. (As we know, even shopping malls are long gone, and the idea of the mall being the “new downtown” is rather quaint. They’re either dead, or converted to “lifestyle centers”, “power centers”, or have had their tenant mix replaced with women’s clothing and accessory stores.)

    As you correctly point out, we don’t know what private streets would look like. Could anyone in 1970 predict what 2008 shopping centers would look like? (To say nothing of someone in 1950 or 1910…)

    Through research, trial-and-error, people risking their own money, and lots of failures, private streets would evolve (and continue to evolve) just as computers, medicine, shoes, etc. have changed to meet the needs of their users.

    For all we know, the very idea of “streets” might not even exist in a private market. They could be replaced by something much better than anything that you or I can imagine.

  • GU

    BUT IF YOU PRIVATIZE THE STREETS, ONLY RICH PEOPLE WILL BE ABLE TO AFFORD TO USE THEM!!!!111

    /sarcasm

  • GU

    BUT IF YOU PRIVATIZE THE STREETS, ONLY RICH PEOPLE WILL BE ABLE TO AFFORD TO USE THEM!!!!111

    /sarcasm

  • JAH

    I can see the benefits to this type of ownership- private owners generally care better for land then public ones do. It could be a great idea for the community as a whole. But, what happens to minority opinions in this scenario? What if the small, low-profit laundromat can’t afford to pay it’s share of the maintenance?

    I’m sure the answer is that the laundromat would have to be moved to a block where the market suits it. But in this scenario, the private ownership is coming and taking away rights that previously existed. Is it fair to make a business owner or resident who has been there many years leave? Isn’t this equivalent to a government taking- only worse, because there would be no just compensation for his losses?

    It is one thing to build a new community from scratch and invite new businesses. But privatizing an existing block sounds like it would wipe out minority views in favor of the majority desire.

  • JAH

    I can see the benefits to this type of ownership- private owners generally care better for land then public ones do. It could be a great idea for the community as a whole. But, what happens to minority opinions in this scenario? What if the small, low-profit laundromat can’t afford to pay it’s share of the maintenance?

    I’m sure the answer is that the laundromat would have to be moved to a block where the market suits it. But in this scenario, the private ownership is coming and taking away rights that previously existed. Is it fair to make a business owner or resident who has been there many years leave? Isn’t this equivalent to a government taking- only worse, because there would be no just compensation for his losses?

    It is one thing to build a new community from scratch and invite new businesses. But privatizing an existing block sounds like it would wipe out minority views in favor of the majority desire.

  • Bill Nelson

    JAH –

    You are assuming a confiscatory mechanism to establish privatization. That’s pretty much what happened in Russia, and it is not really privatization as much as it is a patronage system.

    Your laundromat would still exist, as its property rights would be respected, but an independent private entity would own the street. Perhaps that private entity would include some or all property owners, but contractual obligations would prohibit the eviction of the laundromat.

    Of course, if the laundromat owner/landlord thought that the land could be put to better use, then the property could be sold — but that is what happens now anyway.

  • Bill Nelson

    JAH –

    You are assuming a confiscatory mechanism to establish privatization. That’s pretty much what happened in Russia, and it is not really privatization as much as it is a patronage system.

    Your laundromat would still exist, as its property rights would be respected, but an independent private entity would own the street. Perhaps that private entity would include some or all property owners, but contractual obligations would prohibit the eviction of the laundromat.

    Of course, if the laundromat owner/landlord thought that the land could be put to better use, then the property could be sold — but that is what happens now anyway.

  • JAH,

    There’s a few different ways it could go. But, most importantly, as Bill mentioned, if the privatization was coercive, and the laundromat was forced to join an association or pay against it’s will, it would be a violation of free-market principles. Any action would have to be completely voluntary to be justified.

    If the laundromat were renting, it would be up to the property owner to decide whether to join the association at his own expense. If the proposed association truly creates value, then the property owner has financial incentive to join, and benefit from the association, or sell the property at a gain to someone who will benefit. However, just like the current system, the laundromat as a renter is at the mercy of the marketplace, and anything could happen.

    If the laundromat owns the property, he will have the same choices available to him. If it weren’t beneficial for his business to join the association, but the association creates value, then the laundromat may consider selling the property (for a gain) and relocating the business (or retiring).

    Regardless, if some sort of voluntary private association were to form and truly created value, it would benefit all property owners on that street. Either by directly benefitting the business, or indirectly by increasing the property value and enabling a gain at sale.

    However, you bring up a very interesting point. Could the laundromat lose access to his property if the owner of the street did something to block the laundromat? Would some form of regulation be necessary to prevent the street owner from bullying the laundromat into joining the association by building a wall, preventing access to the laundromat?

  • JAH,

    There’s a few different ways it could go. But, most importantly, as Bill mentioned, if the privatization was coercive, and the laundromat was forced to join an association or pay against it’s will, it would be a violation of free-market principles. Any action would have to be completely voluntary to be justified.

    If the laundromat were renting, it would be up to the property owner to decide whether to join the association at his own expense. If the proposed association truly creates value, then the property owner has financial incentive to join, and benefit from the association, or sell the property at a gain to someone who will benefit. However, just like the current system, the laundromat as a renter is at the mercy of the marketplace, and anything could happen.

    If the laundromat owns the property, he will have the same choices available to him. If it weren’t beneficial for his business to join the association, but the association creates value, then the laundromat may consider selling the property (for a gain) and relocating the business (or retiring).

    Regardless, if some sort of voluntary private association were to form and truly created value, it would benefit all property owners on that street. Either by directly benefitting the business, or indirectly by increasing the property value and enabling a gain at sale.

    However, you bring up a very interesting point. Could the laundromat lose access to his property if the owner of the street did something to block the laundromat? Would some form of regulation be necessary to prevent the street owner from bullying the laundromat into joining the association by building a wall, preventing access to the laundromat?

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