One of the charges leveled against New Urbanism and the idea of planned development in general is that it tries to sculpt cities in a way that the planners feel is appropriate, with little regard to what the people actually living in the cities might think. Ideally, perfectly informed people would express their preferences through a perfectly informed housing market, price signals would be sent and received, and the “correct” amount of “greenness” or sustainability or whatever would be determined by how much people were willing to pay for such things.

Of course, no such situation exists, in the housing or any other market. One part of the housing and development market that just screams “externality” is the issue of blight. Clusters of abandoned property are often seen as unrecoverable by the private sector, unless you’re Donald Trump and have a lot of money to sink into it. I was at a lecture earlier this spring with a speaker (can’t remember the name — he worked in Trenton, NJ) who said that on half the property in Trenton, if you put a $100,000 house on the lot the property is still worth less than than that, usually around $75,000. I don’t remember specifically that blight was the force at work there, but there are significant impacts on a lot when everything around it is abandoned; National Vacant Properties Campaign has some good statistics on the matter.

So, in a case of extreme blight we have a market failure on our hands. As long as government intervention is necessary anyway, why not let the “sculptors” go to town (!) and do some things that the free market doesn’t do that well on its own, like plan for the long term and make things renewable? (Besides the fact that it’s much, much easier said than done, that is.)

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