How to rebuild New Orleans: legalize shantytowns

by on April 18, 2006 at 2:13 pm in Economics | Permalink

This is me, from Slate.com:

Many economists have suggested it is not worth rebuilding New Orleans
at all. But they belie their own discipline by not asking, "At what
price?" Hurricanes or no hurricanes, the devastated areas in New
Orleans remain more valuable than most parts of the world, if only
because they lie in a famous U.S. city. At some price, people will want
to work and live there. City planners simply need to acknowledge that
this price is lower than it used to be…

What is the advantage of turning wrecked wards into shantytowns? The
choice is between cheap real estate or abandonment. The land will not
sustain high-rent, high-quality real estate. Given the level of risk,
much of it will not even support bland middle-income housing. Imagine
that the government took a spot suitable for a McDonald’s but mandated
that subsequent restaurants should have fancy décor and $30 steaks. The
result would not be a superb or even middling bistro but rather an
empty spot. No one would set up shop because the market could not be
made profitable at that quality and price. A similar principle applies
to New Orleans real estate. If various levels of government try to
mandate higher values than the land will support, the private sector
will simply withdraw its participation, leaving nothing behind.

Read the whole thing, as they say, and look out for further Slate.com installments on Louisiana each day this week.

Ian April 18, 2006 at 10:28 pm

Is this intended as a modest proposal?

As an alternative, wouldn’t improved levies and reestablished wetlands reduce the risk of future flooding and thus raise land values? It would be expensive to do so, granted, but wouldn’t that be wiser than cramming people into flood-prone sub-code shacks?

Shantytowns? Are you serious?

Alex Freeburg April 18, 2006 at 10:58 pm

Tyler:

I like you. I like economics (I was an econ major). But this is ridiculous. Quit giving us a bad name. Shanty towns? The best music in Brazil comes from favelas, so build favelas in the US? This is stupid. I like to bait people too. I like to make dumb arguments with enough truth in them to frusturate my ex-girlfriend. That’s why she’s my EX girlfriend.

Anyway, the point of all this is that you could have made the same point (government regs can be counter-productive!!) without advocating deliberate ghettos. Of course accelerating re-constuction by reducing burdens on construction is a good idea. And of course lowering expected construction quality is a good idea. People can always remodel, extend, whatever…

But if you’re complaining about counter-productive officials in a counter-productive way, no one is producing anything.

Jeff Brown April 19, 2006 at 1:01 am

My fellow commenters, I believe you are losing sight of the rationality of potential migrants.

We have framed a choice between the following two options: (1) By letting people build whatever crummy houses they want, Louisiana brings some number of people back to New Orleans. (2) By instead implementing a bunch of restrictive building codes, Louisiana brings back a much lower number of people. Let’s consider each:

Anyone who would have chosen to move to New Orleans under (1), the crummy-housing-allowed scenario, would do so if and only if the crummy housing (and whatever job opportunities etc. went along with it) represented something better than the potential migrant’s current situation. In scenario (2), many of the people who would have moved if crummy housing were allowed will instead stay where they are. How would that make them better off?

This argument is not unique to housing regulation in New Orleans; I think it applies to all building codes except the ones that attempt to correct for externalities. That is, building codes meant to protect neighbors can be justified, but the ones meant to protect a building’s own inhabitants are always bad.

Christopher April 19, 2006 at 8:22 am

Great job as usual Tyler. In addition to the question of “should we rebuild N.O.?”, I think the next required question is, “one whose dime?”.

Should those of us in other parts of the country be required to foot the bill for those that want to rebuild in dangerous areas and not bear the burden of the risk?

David Tufte April 19, 2006 at 11:34 am

Sorry folks – gave the URL of my blog not the permalink of the post. Here it is.

Will Wilkinson April 19, 2006 at 1:58 pm

I think “shanytown” is provocative and perhaps misleading, but Tyler’s idea is spot on. Misleading: this simply could not not turn into an American version of a Brazilian favela because the poor Americans who would move there are far, far too rich. The “shacks” that Mexican construction workers, say, would build if not tied down by onerous regulation might be pretty amazing. And if I was still a 22 year old art major, and had the opportunity to build something on the cheap in the middle of a major historic cultural center, I would really consider it. I’m sure a communal house built by a bunch of young American art school grads would be something wonderful to behold, and far far from a favela.

With good policing, and decent basic infrastructure, such a New Orleans “shantytown” could quickly become one of the most exciting places in US.

Joseph April 19, 2006 at 2:58 pm

“and decent basic infrastructure”

That’s exactly why the ‘shantytown’ approach wouldn’t work: there would be no way of ensuring a basic infrastructure if building codes are thrown out the proverbial window. And so what would result is, indeed, a highly undesirable shantytown.

Noah Yetter April 19, 2006 at 4:35 pm

“We all footed the bill to screw the place up, let’s all foot the bill to put it to rights.”

Someone is unfamiliar with the concept of sunk costs.

BillWallace April 19, 2006 at 5:54 pm

“As for those of you who feel you are personally footing the bill for risky reconstruction, GROW UP!”

Excellent argument…. you changed my mind.

Kevin B. April 19, 2006 at 7:07 pm

Who’s arguing? I was lobbing insults, which of course are ad hominem, not positing a crafted rebuttal. Naturally, my comments were non sequitur because I wasn’t making an argument! I found the Slate article to be interesting and thoughtful, but the case as it was framed at the top of this thread was obviously intended to get a rise out of people. I obliged!

speedwell April 21, 2006 at 12:42 pm

“…the case as it was framed at the top of this thread was obviously intended to get a rise out of people. I obliged!”

GROW UP!

That’s not an ad hominem, by the way. That’s pointing out the obvious fact that you’re being immature.

Betsy Markum May 8, 2006 at 11:52 pm

I can’t believe it, my co-worker just bought a car for $34355. Isn’t that crazy!

linda October 9, 2006 at 6:11 am
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huge boobs galore
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latin adultery
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milton twins
more gonzo
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my friends hot mom
my naughty latin maid
my sex tour
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her first lesbian sex
his first facial
his first gay sex
his first huge cock
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housewife bangers
huge boobs galore
insane cock brothas
just facials
latin adultery
little april
little summer
met art
milf seeker
milton twins
more gonzo
my first sex teacher
my friends hot mom
my naughty latin maid
my sex tour
my sisters hot friend
naughty allie
naughty america vip
naughty bookworms
naughty drive thru
naughty julie
naughty office
neighbor affair
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seduced by a cougar
she got pimped
simpson twins
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her first lesbian sex
his first facial
his first gay sex
his first huge cock
hot campus teens
housewife 1on1
housewife bangers
huge boobs galore
insane cock brothas
just facials
latin adultery
little april
little summer
met art
milf seeker
milton twins
more gonzo
my first sex teacher
my friends hot mom
my naughty latin maid
my sex tour
my sisters hot friend
naughty allie
naughty america vip
naughty bookworms
naughty drive thru
naughty julie
naughty office
neighbor affair
orgy sex parties
porn stud search
prime cups
rectal rooter
seduced by a cougar
she got pimped
simpson twins
so cal coeds
sperm swap
squirt hunter
tamed teens
teen brazil
teens for cash
teen topanga
texas twins
trixie teen
twinks for cash
virgin teen lesbians
wild fuck toys
backseat bangers
all internal
american daydreams
asian 1on1
asian parade
ass masterpiece
ass traffic
backseat bangers
bang boat
black cocks white sluts
boob exam scam
bookworm bitches
border bangers
bubble butts galore
college fuckfest
college wild parties
couples seduce teens
diary of a milf
dirty latina maids
fast times at nau
first time swallows
ftv girls
gangbang squad
gay blind date sex
gay college sex parties
give me pink
her first anal sex
her first big cock
her first dp
her first lesbian sex
his first facial
his first gay sex
his first huge cock
hot campus teens
housewife 1on1
housewife bangers
huge boobs galore
insane cock brothas
just facials
latin adultery
little april
little summer
met art
milf seeker
milton twins
more gonzo
my first sex teacher
my friends hot mom
my naughty latin maid
my sex tour
my sisters hot friend
naughty allie
naughty america vip
naughty bookworms
naughty drive thru
naughty julie
naughty office
neighbor affair
orgy sex parties
porn stud search
prime cups
rectal rooter
seduced by a cougar
she got pimped
simpson twins
so cal coeds
sperm swap
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tamed teens
teen brazil
teens for cash
teen topanga
texas twins
trixie teen
twinks for cash
virgin teen lesbians
wild fuck toys
bang boat
all internal
american daydreams
asian 1on1
asian parade
ass masterpiece
ass traffic
backseat bangers
bang boat
black cocks white sluts
boob exam scam
bookworm bitches
border bangers
bubble butts galore
college fuckfest
college wild parties
couples seduce teens
diary of a milf
dirty latina maids
fast times at nau
first time swallows
ftv girls
gangbang squad
gay blind date sex
gay college sex parties
give me pink
her first anal sex
her first big cock
her first dp
her first lesbian sex
his first facial
his first gay sex
his first huge cock
hot campus teens
housewife 1on1
housewife bangers
huge boobs galore
insane cock brothas
just facials
latin adultery
little april
little summer
met art
milf seeker
milton twins
more gonzo
my first sex teacher
my friends hot mom
my naughty latin maid
my sex tour
my sisters hot friend
naughty allie
naughty america vip
naughty bookworms
naughty drive thru
naughty julie
naughty office
neighbor affair
orgy sex parties
porn stud search
prime cups
rectal rooter
seduced by a cougar
she got pimped
simpson twins
so cal coeds
sperm swap
squirt hunter
tamed teens
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teens for cash
teen topanga
texas twins
trixie teen
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all internal
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bookworm bitches
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couples seduce teens
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gay blind date sex
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her first anal sex
her first big cock
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her first lesbian sex
his first facial
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his first huge cock
hot campus teens
housewife 1on1
housewife bangers
huge boobs galore
insane cock brothas
just facials
latin adultery
little april
little summer
met art
milf seeker
milton twins
more gonzo
my first sex teacher
my friends hot mom
my naughty latin maid
my sex tour
my sisters hot friend
naughty allie
naughty america vip
naughty bookworms
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