The Human Cost of Zoning in Indian Cities

scep1_corporatetower_1Read my article “The Human Cost Of Zoning” on FEE.org. I hope zoning in the third-world gets more attention with essays like this. I am glad that Financial Times, Bryan CaplanTyler Cowen, Alex Tabarrok, ACI Scholarly Blog IndexOrange County Register, FreakonometricsUrbanomics and economist Ajay Shah blogged about this article. Government Of South AustraliaQuartz shared it, and NYU Stern School Of Business’ Urbanization Project, Marron Institute,  and Brandon Fuller tweeted it.  Continue reading “The Human Cost of Zoning in Indian Cities”

You Still Think I Do Not Have Empathy

I am an Aspie. I have a near-photographic memory, a razor-sharp mind, and the ability to focus on a problem for an unbelievably long period of time. If you know me, you know that I tell you exactly what I think—on your face. You feel bad. But, I don’t see why you should. I think you shouldn’t. In nine out of ten cases, if you had gone along with me, you would have done a lot better. A lot, lot better. Now, I am being modest. Deep down, you know this. You have even told me this, not always in so many words. But, you still betray yourself—and me—for the momentary pleasure of being petty.

You made a torture rack for me, and yourself, with your poor self-esteem. But, you still think I do not have empathy.

Now, you are probably thinking that this is about you. I know that this is exactly how you think. Common people—They always think that it is about them. Now, you are mad that I called you a “common person”. If you are so convinced, this is probably the truth you do not want to admit about yourself. But, this doesn’t occur to you.

That’s how common people are.

Tell them that Facebook is good for kids, and they will say, “Don’t ever tell me how to raise my child.” Tell them intelligence is genetic, and they will think you just called them stupid. Tell them that there is no trade-off between inflation and growth, and they will think that you don’t like them. If you write that half the people in Mumbai live in one-room houses, they will remove you from their friend lists. Tell them that their parents are “bad”, and they will faint. But, they will still admit, “I know that you are right, but this makes me so weary….so weary…”

But, I believe in Eugene Gendlin’s words, “What is true is already so. Owning up to it doesn’t make it worse. Not being open about it doesn’t make it go away. And because it’s true, it is what is there to be interacted with. Anything untrue isn’t there to be lived. People can stand what is true, for they are already enduring it.” This doesn’t mean that I am honest. All this means is that I tend to do this. If people were not so weak and pathetic, I would have been happy to do this all the time. Now, that doesn’t seem to be a tempting prospect to you, does it?

Reading me so far, what you have noticed is the arrogance, the self-righteousness, the condescension, the many “I’s”. You would not have noticed that all this is so true. But, that is exactly how you think. I know it.

What If Mumbai Were Taller?

To borrow an invaluable metaphor from Voltaire, if Alain Bertaud did not exist, it would have been necessary to invent him. When I read about Indian real estate, I almost never come across anything that is good. Alain Bertaud’s work is a rare, honorable exception. If Mumbai were a beautiful, livable city,  many great minds would have lived in Mumbai. They would’ve written about Mumbai. Even in such a dense city, there isn’t anyone who can write intelligently about housing and urban policy.

But, I find Alain Bertaud’s position that raising the floor area ratio (FAR) will not raise Mumbai’s population density strange. For beginners, Floor Area Ratio is the ratio between the floor space constructed on a plot to the area of the plot. For example, if the FAR is 2, a 2000 square feet building can be built on a 1000 square feet plot. If the FAR is 3, a 3000 square feet building can be constructed on a 1000 square feet plot. The higher the FAR, taller buildings can be. In Mumbai, the FAR is 1.33, while in some cities, FAR in the city core can be as high as 25. In Hong Kong’s city core, for example, a 100 storey building can be constructed on the plot on which a 4 storey building can be built in much of South Mumbai. In fact, this is the major reason why space is so congested in Mumbai. This is the single biggest reason why housing is so expensive in Mumbai.

To put it shortly, this is Bertaud’s argument, as best as I understand it.

Density=Population/Built-up Area.

So, density would change only if the amount of land developed changes or if the number of people in the city changes. For reasons unknown to me, Alain Bertaud maintains that changing the FAR does not change either the population in the city or the land developed. Bertaud thinks that if FAR is lowered, people will deal with it by consuming less floor space. Similarly, if FAR is raised, people will, at best, consume more floor space. Bertaud claims that this will not change Mumbai’s population.

But, I suspect people are more likely to move to a city where floor space is abundant, and rents are low. Wouldn’t that happen if FAR is raised in Indian cities? Better amenities attract more people. Spacious houses will have the same effect, right? How on earth can someone believe that this wouldn’t happen? Wouldn’t Mumbai attract more people if it were a more livable city? I have never lived in Mumbai. I would love to live in India’s most cosmopolitan city. But, I have never considered moving there. Why? Having lived in large houses much of my formative years, I won’t be able to adapt to such congested spaces. Delhi is bad enough. I can’t be the only guy who thinks along these lines. Remember: I am a misanthrope who loves density.

When there is more floor space, there will be more job opportunities too. This would, again, have the same effect.  I am willing to believe that this is an empirical problem. I am willing to believe that the number of people who wish to migrate to Mumbai has nothing to do with how spacious Mumbai’s houses are. But, I would like to hear why.

Post Script: Tyler cowen thinks that Indian cities are under-crowded. And if they are in fact, under-crowded, wouldn’t more people migrate cities when it is easy to build tall? (Alain Bertaud would say that density and crowding are not the same.) Robin Hanson thinks the same, though I am not sure in what sense he used the word density:

“City density, and hence city size, is mainly limited by the abilities of the conflicting elements that influence local governments to coordinate to enable taller buildings. Remember those futurist images of dense tall cities scraping the skies? The engineers have done their job to make it possible. It is politics that isn’t yet up to the task.”

Bryan Caplan thinks that if real estate markets are deregulated in such cities that would lead to more affordable housing elsewhere. This is perhaps the most interesting view I have come across. But, I’m not sure how easily it can be reconciled with the fact that Mumbai has about the highest disparity between personal incomes and housing prices. 

Tyler Cowen has a very interesting post, on why migration to cities is unusually low in India, where financial returns from migration is high: 

Indian migration to the cities is much lower than for China or Indonesia. The explanation that we propose for India’s low mobility is based on a combination of well-functioning rural insurance networks and the absence of formal insurance, which includes government safety nets and private credit. In rural India, informal insurance networks are organized along caste lines. The basic marriage rule in India (which recent genetic evidence indicates has been binding for nearly two thousand years) is that no individual is permitted to marry outside the sub-caste or jati (for expositional convenience, we use the term caste interchangeably with sub-caste). Frequent social interactions and close ties within the caste, which consists of thousands of households clustered in widely dispersed villages, support very connected and exceptionally extensive insurance networks. Households with members who have migrated to the city will have reduced access to rural caste networks.”

Gun Control Is People Control

The Ministry of Home affairs, Government of India, is on the way to amend the Arms and ammunitions policy. The document issued by MHA says “Proliferation of arms and ammunition in the country disrupt the social order and development.” How true is it? As in many other issues, the conventional wisdom could be wrong. India has very strict gun control laws. In India, people were prevented from bearing arms by the British under Lord Lytton as Viceroy through the Arms act of 1878 after the mutiny of 1857. Though the Arms act, 1858 was repealed in 1959, Arms Act, 1959 was put in place, supplemented by the Arms Rules, 1962. As a result, there was improvement in several development indicators, after Independence, but crime rates in India have gone up several times, mostly in urban areas.

With all these gun control laws, we were not able to prevent the terrorist attacks in 2008, Mumbai. A reporter in the location was caught saying he wished he had a gun instead of a camera. Only people loyal to the British were allowed to possess arms. Many freedom fighters were opposed to this rule. Even Mahatma Gandhi opined in his Autobiography:”Among the many misdeeds of the British rule in India, history will look upon the act of depriving a whole nation of its arms as the blackest. “I do believe that when there is only a choice between cowardice and violence. I would rather have India resort to arms in order to defend her honor than that she should in a cowardly manner become or remain a helpless victim to her own dishonor.”

Proponents of gun control usually argue that gun rights will lead to high crime rates. Firstly, a criminal is a person who violates the law. Is it logical to assume that such a violator will obey gun control laws? A criminal planning to attempt a murder won’t think “Oh, I am sorry. I don’t have a gun. So, I am not going to do this!” In one way or the other, he will get hold of a gun or some other powerful weapon. Vikram Kona writes: “There are around 40 million illegal small arms in circulation in India. Most of them are either illegally smuggled in or manufactured in the illegal cottage industries. Criminals never apply for licenses, nor do they spend a fortune to buy illegal guns. They get them cheaply and easily on the black market, and use them against law abiding citizens with impunity.” Gun control would only disarm innocent, law abiding citizens. Secondly, there is no empirical evidence to prove that gun rights lead to severe crimes. Quite the contrary, in fact! Nations with the highest crime rates are the ones with the strictest gun control laws. The low crime rate of Switzerland is illuminating. Violent crime skyrocketed after gun measures were prohibited in Australia in the last 90’s. When Washington D.C. enacted a ban on handguns, homicide rate rose 200%, while the U.S. rate rose 12%. Often, it is argued that Gun controls are the reason for the low crime rate in UK. There are two points to be noted here. Crime rates were extremely low in UK, even before the hand gun ban. Crime rate rocketed after the ban. As it is said, “Your chances of being mugged in London are now six times greater than in New York.” A study by the US Department of Justice found that there were 40 percent more muggings in England, and burglary rates were almost 100 percent higher than in the United States.

It follows from the philosophy of self-ownership and the right to own property that people have the right to defend their lives and property- If necessary, by force. If so, people should have the right to bear arms. It goes without saying that people should be held accountable for their actions too. But, it makes no sense to punish a person before the criminal act is performed. It is absurd to prevent some people from being armed simply because there are people who use guns for wrong purposes. Why should ones rights be determined by the actions of others? Should a person be prevented from driving an automobile as others drive recklessly? (People killed by their own guns are an extremely rare minority) Charles Reese perceptively noted: “To believe that guns cause crime is as stupid as believing that hammers and saws cause houses. Cars and doctors kill a lot more people than firearms, but nobody wants to ban them.” There is even an NRA slogan: “Guns don’t kill people, people kill people.”

Not for a single moment am I saying that gun rights will prevent crimes. But, people will have a more chance of protecting themselves if they are free to defend themselves. Murderers, thieves and terrorists would think twice before attacking their victims if there is a chance that they are armed. Women and physically weak people could be made strong only through gun rights. It’s ridiculous to expect policemen to be omnipresent. Defending oneself is a skill which anyone can acquire.

It should also be said that a ban of guns won’t eliminate guns from the society. There will always be people who get hold of guns, just like people have access to drugs despite of strict penalty. Such laws can only be enforced selectively. Almost always, people who are not in good terms with the authorities will be punished. The real intention of the people in power is to increase their power through disarming people. Gun control is the greatest threat to individual liberty.