I used to sit on the 21st floor. Now I am retired

Sunday, April 09, 2006

Urban Economics for South Mumbai

Home Economics in NYT made me think of Bombay, especially South Bombay. It's about Edward Glaeser, Urban economist.

"....Glaeser decided that the housing crisis was man-made. The region's zoning regulations — which were enacted by locales in the first half of the 20th century to separate residential land from commercial and industrial land and which generally promoted the orderly growth of suburbs — had become so various and complex in the second half of the 20th century that they were limiting growth. Land-use rules of the 1920's were meant to assure homeowners that their neighbors wouldn't raise hogs in their backyards, throw up a shack on a sliver of land nearby or build a factory next door, but the zoning rules of the 1970's and 1980's were different in nature and effect. Regulations in Glaeser's new hometown of Weston, for instance, made extremely large lot sizes mandatory in some neighborhoods and placed high environmental hurdles (some reasonable, others not, in Glaeser's view) in front of developers. Other towns passed ordinances governing sidewalks, street widths, the shape of lots, septic lines and so on — all with the result, in Glaeser's analysis, of curtailing the supply of housing. The same phenomenon, he says, has inflated prices in metro areas all along the East and West Coasts."

Must read stuff, albeit a tad long. Glaeser goes on,
"There's some small core of the city that should be there," he says, "but the city itself has been in relative decline for years to the __ population as a whole. It's not a great spot to have a city; it's incredibly expensive to build the infrastructure to keep it there. You can't possibly argue that ____ has been doing a good job of taking care of its poor residents, either economically or socially. And surely some of the residents are better off by being given checks and being allowed to move elsewhere."

Is he talking about South Mumbai, crumbling houses and expensive infrastructure? No, actually New Orleans after the Katrina. Glaeser argued that the city should not be rebuilt as it was dying anyway. Can we make a similar argument about infrastructure spending in South Mumbai? Worth a look.


Blogger maverick said...

get bk comin weekend. will u be in mumbai next sunday? will be there for the day most probably.

Sunday, April 09, 2006 11:22:00 AM

Anonymous SloganMuruganh said...

I think so. Mumbai should invest money where future growth is expected to happen.

It was excessive, unwanted, investement in South Mumbai and Nariman Pt. that has led to our infrastructure problems in the first place.

Sunday, April 09, 2006 10:34:00 PM

Blogger dhoomketu said...

Maverick, call me. Can be here.

Sloganmuruganh, in fact Glaeser also examines why cities exist. Cities have moved away from serving as markets for commodities (and thus, being near ports, between farmlands, mines etc.) to becoming agglomeration of human capital. In this light, it's interesting how the Maharashtra government actually didn't incentivise an IIM and ISB to be set up there.

Sunday, April 09, 2006 10:40:00 PM


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