The Triumph of the City

Prof Ed Glaeser spoke about his new book at the LSE last Monday. The podcast and video are both now available for download.

Enterprise Zones

At this point, I don't have much to add on the public debate about Enterprise Zones. I share the concerns of the Centre for Cities and Work Foundation reports. As I said in my briefing for the election last year - at best the evidence on the effectiveness of Enterprise Zones is mixed.

A few thoughts on the debate. First, comparisons to other policies such as the Future Jobs Fund do not seem that appropriate when you see that those policies have different objectives and are spread across the country rather than focusing purely on very deprived areas. Second, and related, the appropriate cost effectiveness question is whether these are cheaper tools for shuffling jobs across locations relative to, say, Regional Development Agencies. Third, the fundamental question is whether spending large amounts of money to get firms to relocate to less productive areas is truly a growth policy.

Transport and the economy

The transport select committee has published its report in to transport and the economy.

The report pushes the idea that transport needs to be integrated in to a "fully integrated economic development strategy" and that stronger focus needs to be placed on how schemes will achieve regeneration and rebalancing. I am not fully convinced. Good transport policy needs government to state clear and credible objectives and assess schemes against their ability to meet these objectives. If that is what is meant by strategy, then the government does need more of it. But I suspect that many people pushing this agenda want more detailed economic development plans that specify how the government sees the economy developing and how transport fits in with their vision. Unfortunately, such "planning" is quite capable of pushing government to do some pretty silly things in the hope of transforming local economies.

With the strategy in place, we can step back and ask how policy will achieve the objectives. The funny thing about the transport select committee report is that they have already decided transport will help meet these objectives, but they insist that the government must explain how it will do so: "We welcome the Secretary of State’s focus on using transport to support and stimulate the UK economy and to reduce the economic disparities between different parts of the country and we call on him to explain how his policy will achieve that end." I would usually expect the logic to flow in the opposite direction (i.e. from explanation to conclusion). But that's academics for you ...

Promoting Home Ownership

Earlier in the week Robert Pozen wrote in the FT about reforming US mortgage interest relief.

In the UK, we have tended to promote home ownership by actions on the supply side (large building programmes after the war, right to buy legislation and now affordable housing targets). In the US, mortgage interest deduction addresses the demand side (through reducing the cost to the homeowner). Drawing on SERC research by my colleague Christian Hilber, the article argues that not only is MID costly, but it is also ineffective because the link between mortgage interest deduction and home ownership is pretty weak.

Pozen's article summarises the main findings, but you can download Christian's SERC DP if you would like the details.

The Triumph of the City

Ed Glaeser has a new book out "The Triumph of the City" which should make interesting reading for those of us who are fascinated by cities.

The NY times has a book review which will give you a flavour of the arguments.

You can also see him on the Daily Show (although, unfortunately, I can't find a legal link so you'll have to wait for your next trip to the US or ...)

If you are in London, and interested in seeing Ed talk about his book in person, he'll deliver a public lecture at LSE on 14th March.

Margate and the Turner Contemporary

Margate is the latest place to try the "art-gallery-as-urban-regeneration-project"

I wouldn't like to comment on the aesthetics, so let's focus instead on the strategy. One possibility is that this will boost tourism. At some point in the future we should be able to assess this on the basis of visitor numbers.

Another possibility is that it will attract "Bohemians" (artists and the like) a regeneration strategy closely associated with Richard Florida. It would be fair to say that the "cultural class" strategy is not without it's critics. I confess myself to be deeply sceptical. I am even more sceptical about the ability of signature buildings to attract the creative class to struggling areas.

Still, when the opening of one high profile project generates such a huge amount of coverage, you understand why local politicians are so attracted to to such grands projets. Unfortunately, I know of no systematic evidence that they have any of the effects claimed for them.

CLASH

A colleague points me to the website of CLASH [That's the Campaign by Locals Against Sewell Housing, not "the Clash"]

I don't know anything about the local politics of housing in St Albans. But (high) price signals indicated that this is the kind of place where new housing would benefit wider society. Will the New Home Bonus deflect this local opposition? While it might address some of the concerns about congestion, ease the council's funding problems etc, it is hard to see it addressing the fundamental problem - that local people, quite rationally, don't like new development near their homes.