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An argument that operational urban planning can be improved by the application of the tools of urban economics to the design of regulations and infrastructure. Urban planning is a craft learned through practice. Planners make rapid decisions that have an immediate impact on the ground—the width of streets, the minimum size of land parcels, the heights of buildings. The language they use to describe their objectives is qualitative—“sustainable,” “livable,” “resilient”—often with no link to measurable outcomes. Urban economics, on the other hand, is a quantitative science, based on theories, models, and empirical evidence largely developed in academic settings. In this book, the eminent urban planner Alain Bertaud argues that applying the theories of urban economics to the practice of urban planning would greatly improve both the productivity of cities and the welfare of urban citizens. Bertaud explains that markets provide the indispensable mechanism for cities' development. He cites the experience of cities without markets for land or labor in pre-reform China and Russia; this “urban planners' dream” created inefficiencies and waste. Drawing on five decades of urban planning experience in forty cities around the world, Bertaud links cities' productivity to the size of their labor markets; argues that the design of infrastructure and markets can complement each other; examines the spatial distribution of land prices and densities; stresses the importance of mobility and affordability; and critiques the land use regulations in a number of cities that aim at redesigning existing cities instead of just trying to alleviate clear negative externalities. Bertaud concludes by describing the new role that joint teams of urban planners and economists could play to improve the way cities are managed.

432 pages, Hardcover

First published January 1, 2018

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Alain Bertaud

4 books19 followers

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5 stars
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Displaying 1 - 30 of 53 reviews
Profile Image for Connor Stack.
207 reviews6 followers
July 17, 2019
It's pretty long winded so I started skimming after the first two chapters.

Basic ideas:
- Cities are primarily labor markets. People move there for jobs and companies move there for specialized workers.
- Large cities / large labor markets are more productive. Fast face-to-face communication between specialists. Fast sharing of knowledge. Good for knowledge work, bad for space-hungry industry.
- Mobility (cheap, fast commute) make for more efficient allocation of labor (each person can choose between more jobs, and each job can recruit from more people)
- Land prices are signals that allocate land efficiently. Urban center can be reached by many workers --> land is valuable/expensive --> people build denser offices and apartments to consume less land.
- Land is expensive in places where you can be very productive. Places where you can earn high salaries or hire skilled labor.
- Urban planners should learn from economists: don't regulate too much (e.g. don't regulate maximum density)
- Urban planners *should* regulate public goods like parks, roads. Ensure mobility with public transit, roads, bridges.
- Welfare should generally be in the form of cash subsidies so people can make trade-offs themselves between location and quality of housing. (Don't give the poor housing that's far from jobs)

I've always been generally interested in cities, but I guess I wasn't interested enough to slog through the entirety this textbook.
Profile Image for Gevorg.
20 reviews3 followers
November 11, 2019
This is a must read for all urban planners and anyone interested in how cities actually work. Written in an extremely accessible, concise and sometimes even entertaining style, this book offers the very basics of what determines cities' size, real estate prices, welfare, and attractiveness.
Arguing for the importance of including economics as domain knowledge in urban planning through an abundance of examples from first hand experience, this book should decisively serve as an "elimination of illiteracy" among urban planning practitioners.
Profile Image for Michael.
272 reviews5 followers
March 15, 2020
I gave this book 5 stars because it was surprisingly readable for someone not well versed in the literature, it was fascinating, I learned a ton and it was enjoyable. But I have some critiques which boil down to "this guy is uber libertarian and only thinks about efficiency of labor markets and not equality of opportunity, outcome or socioeconomic mobility". I can easily see why some of his policy prescriptions would be hugely beneficial to wide swaths of people, but it's easy to imagine that cities could fine a local equalibrium that is not socially desirable.

There are a few things I intuitively think feel wrong:
1- it takes a long time to see results for certain programs, and sometimes cities can't actually float that time. For example, building more high end housing located centrally might cause high income people to move closer to the center thus lowering prices elsewhere but that could take decades. A suboptimal and long-term detrimental program may be more realistic than a long term optimal program
2- the opposite is also true. A present-value or short term equalibrium driven exclusively by market forces and supply-side actors may create long term negative effects (eg adaptability in climate change scenarios)
3- politics is not only the process of a body making decisions of policy and preference. It requires activation energy to mobilize a group of people. Saying that a mayor should not have / articulate a vision and then saying that some questions are best left up to the politicians run at direct odds to each other.
4- in a book about dismantling land use restrictions, why not look at some cities that have few such restrictions (like Houston)
5- the idea of resiliency and adaptability to non-economic and non-population factors is not addressed. As I read this were dealing with the COVID19 lockdown. A city that depends primarily on public transport may be less resilient in such a situation. Similarly, a city with lots of building towards the periphery may be ok when built but also may be exposed to increased issues due to climate change. See e.g. Outskirts of LA during fires or Houston growing out towards the Gulf
6- NIMBYism isn't addressed at all but is a major factor at least in large US cities. And it's not just about not wanting poor people around. Witness the recent issue with Manhattanites not wanting tall buildings because it blocks sunlight

One specific part I liked and will be taking into non-city related things is the idea of Objective->Impact->Outcome->Output->Inputs

Objective is your actual objective. Impact is the measurable part of you Objective (eg % unemployment). Outcome is the measurable indicator for your strategy (eg if the plan is to reduce unemployment by improving public transportation then you measure the ridership numbers). Output is the specific things you're building (eg number of new busses) and Input is the costs of the Output (eg dollars, hours).

This framework feels super useful.

I'm sure there are more. For some of the positive things and some more critiques see my highlights and notes

Profile Image for Paavo Karlin.
16 reviews1 follower
August 10, 2019
There are books that have the ability to change your mind. This is one of those. For everyone even remotely interested about urban design, real estate markets or even urban history this is one of those books that are hard to put down.
Profile Image for Joni Baboci.
Author 1 book48 followers
July 17, 2020
This is a fantastic book trying to bridge the past of qualitative and instinctual planning to the still non-existing future of a science driven by data. Bertaud makes sensible points about transportation, density, and housing. The approach of the book is that bottom-up development driven by free-markets is most often hindered by artificial planning which is grounded neither in reality, nor able to adapt to change.

In the foreword to Weber's Protestant Ethic, R. H. Tawney states that "All revolutions are declared to be natural and inevitable, once they are successful, and capitalism, as the type of economic system prevailing in Western Europe and America, is clothed today with the unquestioned respectability of the triumphant fact." I think there is a slight ideological bias in the book towards putting almost everything on the shoulders of the free market and the invisible hand. Of course planners should re-evaluate how they work, and there is no point in planning in the 21st century without technology and a strong background in economics but, as the market shows, that is not enough. The belief that developer speculation or inadequate housing will be fixed by the market is far-fetched. Markets aren't perfect, and often temporarily irrational. Markets are even more imperfect in high-latency inelastic sectors like real estate. There needs to be regulation, which as per Bertaud's belief, needs to be driven by reality and grounded in economics. Ultimately because of this perceived bias the second to last chapter critiquing compactness and serving as an apology to sprawl was weak and lacked the depth and decisiveness of argument of the whole book - the book still gets 5 starts for providing a much-lacking economics backbone to the planning profession.
Profile Image for Ben.
227 reviews10 followers
May 25, 2020
I wish all nonfiction books were at this level. Great overview, clear conceptual framework, specific and significant examples, helpful graphics actually in line with the text, concrete recommendations. Even gets into the challenges of mapping input to impacts, which is near and dear to me.

Dave, you'll like this one.
Profile Image for Jim Milway.
292 reviews2 followers
November 29, 2019
I had a bias in starting this book - unimpeded market dynamics, except where necessary, are the best forces to solve problems in our day-to-day life here on earth. In fact, many problems simply go away when supply and demand are allowed to interact to set prices and allocate resources. So, I was not disappointed with Bertaud's book. Through his years in urban planning, much of which was in the developing world, he has concluded that most urban planning exercises are about vision and dogma rather than on facilitating market-driven development.

He begins with the assertion that cities are labour markets - people live there to find jobs and employers locate there to find workers. His most questionable assertion (to be honest I can't remember if he proves this) is that workers will not travel more than one hour to get to work. If it's not proved, it's a pretty good approximation to reality, I think. As in every other market, people trade off many variables - square footage of living space, cost, commuting time, commuting comfort, amenities, etc. - in choosing where to live. One of the net effects of these trade offs is high density and tall buildings in city centres. Residences are typically smaller in the city core - the combination of high demand and limited land supply.

Urban planners typically bring rules of thumb and dogma to this. We shouldn't allow people to live in residences smaller than a certain norm. We want wide streets and space between buildings. We want to preserve agriculture near the city centre so that we can feed our people. We want sustainability, livability, etc. Master plans typically don't include a review of prices, for example. This is a critical measure in any area that requires tradeoffs.

Many of their imposed solutions work the opposite way they expect. For example,

greenbelts to achieve urban containment will lead to higher residential prices in the core and this freezes out lower income people
housing subsidies for lower income people without increasing the supply of housing (through relaxed regulation, for example) simply raise the prices of housing
providing housing to lower income people typically requires a lottery as not enough is provided and the winners often find ways to sell or rent their property to higher income people.

He has a fantastic case study of two different approaches to helping the poor in urban settings. In South Africa, after apartheid the government built pleasant housing with lots of space and amenities for the poor - but far away from the city centre. The residents simply could not get to the jobs and poverty continued. In Shenzhen China, the region underwent spectacular economic growth and many of the city's original farmers and fisherman lost their livelihood. But they had their houses which were in great demand from the influx of new workers. The local neighbourhoods got together and decided to allow building of four-story buildings jammed really close together (it was called a handshake building because you could reach out your window and shake hands with your neighbour in the building next door. Streets were narrow. But the housing was close to the jobs.

His prescribed role for urban planners? Monitor the various measures (poverty, rents and prices, commuting times, etc.) in city neighbourhoods closely and be ready to address points of friction to alleviate problems. Don't impose a vision - but be there with technical tools to help markets function.

A great book.
Profile Image for Frank Stein.
991 reviews135 followers
February 11, 2019
The famed urban planner Alain Bertaud, of New York University's Marron Institute for Urban Management, tries in this book to make a mea culpa for his profession, and explain how it can be rescued. Bertaud shows that urban planners have systematically ignored or denigrated the work of urban economists, and have futilely tried to plan cities without taking markets or prices into account. The result have been stymied cities unfit for anything except a planner's notepad, where the real needs of people are sacrificed to unmeasurable notions of "livability" or "sustainability."

Bertaud starts out with the convincing case that a city is really just a collective labor market, one where, in all times and all places, most people refuse to commute more than about 1 hour to a job. This means cities should focus on maximizing job accessibility to all residents, which also means that most developed cities should focus on cars and motorbikes and not public transit, which takes almost twice as long and rarely offers more than 1/5 of the job accessibility as individualized transportation (and usually is not any more environmentally friendly or space efficient).

Besides planning public roads and parks, therefore, he thinks urban planners should largely keep out of city designs and zoning. He reviews a host of ridiculous urban planning rules that have only sabotaged the benefits of cities, such as the greenbelts around Hanoi, where "villagers" rent out there houses for migrating workers instead of farming like the "plan" says they should be doing. In fact, he shows that most of the informal "slums" that surround developing cities are due to excessive housing requirements that most poor people can't afford, which thus force them to live in even less sanitary and illegal housing to access city jobs.

There are lots of informative details in this book, about the square meters taken up by buses versus cars when "dwell times" and "headways" for buses are taken into account, or the relationship between land consumption per capita and floor area per unit of land when regulations are relaxed. Some of it goes into well-trodden urban economics 101, but on the whole it shows that benefits of synthesizing two disciplines. Bertaud makes his case for combining the two by showing how it can be done.
2 reviews5 followers
May 27, 2020
we did make a video summary of 3 parts for anyone interested in purchasing that book : https://bit.ly/2M0HLJk

this book is a must read for architects, urban architects and urban planners.

these are some of the general ideas that this book cover:

In the previous century the cities were heavily populated due to the lack of proper transportation, but once the metro and the cars where introduced, people gained the ability to allocate themselves where they can tolerate the cost of transportation.

in free markets , prices affect density and density shape the city.
places with high land price will have higher density and businesses will build skyscrapers. In the country side where the land prices are cheaper , factories move

Cities without a properly functioning jobs opportunities are doomed to fail.

Also all cities of the world follows a certain allocation simplified pattern

The Patterns that each city follows are :

-The Monocentric Model where most of the jobs are located at the center of the city
- The Dispersed Model , Or city that does not have a real job center
-The Composite Model, a mix for the 2 previous models and the model that every big city in the world follows

Profile Image for Jane Lyons-Raeder.
31 reviews10 followers
July 3, 2020
This book challenged my assumptions and offered a nice introduction to urban economics. Bertaud is right -- the field of urban planning has a lot to learn from urban economics, but I do disagree with many of his conclusions, which often ignore land use politics. Much of his scrutiny of smart growth or urban growth boundaries is rendered meaningless in the United States due to the country's restrictive, low-density zoning policies that so deeply distort the market. His conclusions also accept the "rational" housing consumption tradeoffs people are willing to make due to capitalism. But, I would still highly recommend this book professional planners. It's important to challenge assumptions and I strongly agree that a better understanding of cities as labor markets/urban economic in general would improve planning decisions.
Profile Image for Rohit Saxena.
10 reviews
December 26, 2020
Bertaud achieves that rare feat of blending reasonable academic detail with personalised storytelling to create a highly readable narrative. For anyone who loves the concept of cities, and wants to understand why some cities fail to be productive and liveable spaces despite the best intentions of governments and citizens alike, this is a must-read. The book is an instructive (and, almost canonical) commentary on why it is important to marry the disciplines of urban economics and urban planning, and how the mechanics of urban markets must be the central concern in city-building. As a budding urban governance specialist, this book left a deep impression on me, especially in terms of doing away with normative approaches to planning urban spaces and thinking of cities as "living, breathing economic entities".
Profile Image for    Jonathan Mckay.
607 reviews54 followers
January 24, 2022
First book on urban problems i’ve read that was worth reading. Theoretical frameworks that pass the sniff test, a free market version of Jane Jacobs, pairs well with seeing like a state.

Recommendations are exactly how o would run a product team but author seems not to understand politics. Not sure a typical reader would enjoy it, but as real estate interests grow this is very relevant to me.
Profile Image for Peter Gyongyosi.
38 reviews
July 12, 2020
This was the most interesting book I've ever read about urban planning & design.

None of its key points are particularly novel or unique, but they are presented well enough by someone with deep background on the field to make it a great read:

- The main advantage and attraction of cities is the large number of jobs and amenities its people can access and vica versa.
- Good urban planning, therefore, should maximize this advantage through increasing mobility and enabling growth while minimizing unwanted externalities such as pollution, unacceptable living conditions or unaffordable cost of housing.
- Monitoring market processes such as the real estate market, commercial activity or the job market provides a huge amount of important information for this planning. By ignoring them one blindfolds himself.
- Going directly against market forces through regulation or government interventaion can be desirable and it's oftentimes necessary, but one should be careful about the goals they want to achieve and monitor the results continously as it's all too easy to make changes that are best case inefficient, worst case counterproductive.
- The equivalent of OKRs (Objectives and Key Results) should be a must-have tool in urban planning, and, surprisingly for me, it absolutely is not.

The only thing that was getting a bit tiresome after the first few chapters is the repeated praise for the force of the markets and warnings against disrupting them with regulations. I guess it comes with the territory of writing a book the tries to emphasize the importance of urban economics in urban planning, but after a while it started to sound more and more like a libertarian pamphlet -- even though when you get through the first few chapters you can realize it's nothing like that.
February 22, 2021
Author's unique careers lends to unique insights, fascinating stories, and the shortcomings of central planning. Interesting read from a complex systems context, regardless of your interest in urban design. Bertaud presents and provides commentary on market forces, and design constraints on the less to more arbitrary scale. Experiences scales from underdeveloped, to the most developed parts of the world. Differences and similarities are presented in an easy to understand way.

Taking less than one half a star off, since author very delicately critiqued central planners. The very entertaining roast of planners was missing.
October 13, 2019
I am Rio from Jakarta-Indonesia in my facebook account Soemantri itz Rio Hassan you can see album named Charter Cities. Then I found Mr Romer discuss with the author Alian Bertaud.

Jakarta as a sampling Mr Alain Bertaud in six Chapter is really interesting coz now preparing to move the Cities in East Kaimantan soon. I think Mr Alain Bertaud book must read our leader in Indonesia as I did. Good Job Mr Alain Bertaud.

Best Regards
Profile Image for Vipin Sharma.
21 reviews4 followers
July 8, 2019
Really great book with counter-intuitive insights (to begin with)about cities and urban planning which now seem so obvious to me after reading this book.
Definitely going in my "to be reread" list.
Highly Recommended.
Profile Image for adam z.
42 reviews6 followers
February 24, 2020
A thorough exploration of the how market distortions fundamental to conventional urban planning hurt the populace they’re intended to protect—and of what the roles our city planners should instead perform.
Profile Image for Gaetano Venezia.
323 reviews31 followers
December 12, 2022
Very cool book which combines Hayekian spontaneous orders, Glaeser's urban economic perspective, and novel and somewhat counterintuitive urban policy proposals (e.g. buses aren't as efficient as popular memes might make you think).
Profile Image for Ashley Clubb.
81 reviews
March 28, 2023
didn’t think that I could be convinced to care about urban economics the way Bertaud values, but I might be on the way to that appreciation 🧐this review goes out to Luke Juday for making us read this!🗣️
Profile Image for Kian Tajbakhsh.
42 reviews3 followers
April 17, 2020
IMO the most important book of urbanism currently available by perhaps the world's leading urbanist and urban planner.
Profile Image for Lim.
3 reviews1 follower
May 11, 2020
I wish this book was published 7 years earlier; it answered so many of the doubts I had when studying urban planning at university.
Profile Image for Harsha Varma.
99 reviews63 followers
July 12, 2020
Urban planning is a fascinating subject. Cities are the heart of civilisations. Often, we attribute great cities to great design, by prominent urban planners like Haussmann or Le Corbusier. Yet, cities are complex. And for everything complex, it is markets, not designers or planners, that lead to efficient spontaneous order. Markets, even when working imperfectly, can easily integrate the complexity of information required to shape cities.

Cities are primarily labour markets. A city’s main quality resides in its ability to evolve rapidly and to react to the outside world. The objective of the urban planner is to maximise the size of a city’s labor markets by increasing mobility and affordability.

I liked the humility of the author’s perspective on how urban planning is an evolving and ever-changing field. There are no models set in stone and every city is different in its own way. With the advent of self-driving technologies and ageing populations, cities are bound to change dramatically in the next fifty years. But it is important that we keep analyzing these changes through quantifiable indicators. These indicators can then help to tweak policies needed to improve urban life.

It was a thoroughly enjoyable read with insightful examples and helpful data points.

1. The need to do something tends to trump the need to understand what needs to be done. And without data, anyone who does anything is free to claim success. - Angus Deaton

2. The main objective of the planner should be to maintain mobility and housing affordability as a city’s population increases and it diversifies its activities.

3. Mobility is not defined by the ability to get to one’s current job quickly, but by the ability to choose among all jobs and amenities offered in a metropolitan area while spending less than 1 hour commuting.

4. Cities are like people—they all share a similar physiology but have very different personalities that have been formed by their history and their environment.

5. Urban land is a scarce resource and its price indicates how scarce it is in a specific location.

6. There is no optimum population density, as density which is a land consumption indicator, depends on several variables whose value changes over time even for the same location.

7. Markets shape cities through land prices.

8. Urban life can be improved by three things: a commute short enough to allow time for other leisure activities, an open job market that allows one to change jobs and a house from which access to social life or nature is quick and easy.

9. Cities are lifelines. And urban transport is the heartbeat of how a city operates. Mobility is extremely important and how a city is designed plays a crucial role in how the economy of the city develops.

10. Urban planners should be held responsible for unaffordable high price/income ratios in the same way that public health officials are held responsible for infectious disease epidemics, or police are held responsible for high crime.

11. The decision to build tall buildings or short ones is not a design choice left to a planner, an architect, or a developer. It is a financial decision based on the price of land, reflecting the demand for floor space in a particular location. Tall buildings are more expensive to build per unit of floor space than are shorter buildings, but the potential higher sale price by unit of floor space due to high demand compensates for the higher construction cost. The higher FAR values lower the cost of land per unit of floor space sold.

12. A high or low FAR is therefore not a design parameter. The FAR captures the conversion from land to capital in providing floor space. It is purely an economic decision depending on the price of land in relation to the price of construction. If the price of land is much lower than the price of construction, there is not much reason to construct buildings taller than two or three floors.

13. The existence of tall buildings in Midtown New York does not reflect a design choice but an economic necessity imposed by markets and reflecting high consumers’ demand for this location.

14. Congestion is the mismatch between supply and demand for street space. Because increasing the supply of urban roads is expensive and difficult, the most efficient way to reduce congestion is to address the demand side. Charging commuters for the use of roads is the best way to adjust demand to supply and to reduce congestion.

15. Tolls are therefore a clumsy way to charge for the temporary use of a good in short supply. Considering that urban roads are not a public good but are part of the real estate market, municipalities should charge a rent for their use. The rent charged should vary with the time of day, the location, the area, and length of time the road is used. The rent charged for roads should be similar to the fares charged by airlines to passengers or the room rates charged by hotels, except that the rate would not be for a fixed 24 hours but for the number of minutes the roads are actually used.

16. A city’s income distribution curve is an indispensable tool for analyzing and quantifying housing affordability issues. In looking for a policy solution, we will have to know how many households currently live in a shelter below the minimum acceptable home quality. It is necessary to quantify the problem in terms of the proportion of households that fall below the socially acceptable minimum standard.

17. The objective of a housing policy is to increase the housing consumption of households who consume an unacceptably low standard of housing due to their low incomes.

18. Urban land prices decrease as distance from the city center increases, reflecting the decreasing utility of land to the consumer, whether firm or household, due to increasing transportation costs.
Profile Image for John Jennings.
59 reviews2 followers
February 26, 2023
Phenomenal book.

We are lucky to have an author as individually qualified as Bertaud to write a book on how urban economics shapes cities- he has both experienced urban planning without markets in the USSR and pre-market China; and he has served with urban economists in many other urban planning roles.

Many city planners and citizens could benefit from reading this book- especially the central argument that a city's primary benefit to its citizens is that it provides a large labor market for specialization; which produces outsized economic prosperity to the citizens.

He warns urban planners to be humble in trying to place their design ideas over the individual choices of the humans that live, buy, and rent in these cities; while still recognizing the crucial role that urban planners can play in providing a city with wide access to jobs, homes, and amenities.
Profile Image for Olivier.
20 reviews1 follower
December 24, 2020
Ce livre est un exercice nécessaire pour tous les professionnels de l’aménagement urbain. Plusieurs remises en question sont incontournables et un urbaniste compétent devrait savoir identifier lesquelles s’appliquent à sa ville: des indicateurs fournis par l’auteur peuvent par ailleurs contribuer à l’identification des dogmes à évacuer.
Il permet aussi d’avoir une vue d’ensemble sur l’impact des décisions prises par les administrations municipales et sur leur rôle à considérer avec une plus grande humilité.
Bref, un livre majeur dans le domaine.
Profile Image for Nadia Zhuk.
Author 1 book33 followers
December 20, 2021
This is an amazing read, marking it as did-not-finish for now since I don't have access to the physical copy of the book at the moment, but definitely want to finish it one day!
Recommended for anyone who is interested in urbanism and free markets and wants to understand cities better.
January 6, 2023
Incredibly convincing collection of empirical data that attributes good intentions to attempts to meticulously plan urban development while showing how those plans compound the issues that they attempt to fix.
Profile Image for Stephanie.
36 reviews
September 15, 2021
Must read for the urban planner and the urban economist. May we learn to communicate sooner rather than later
Profile Image for Helena Jackson.
6 reviews1 follower
July 3, 2023
The book encourages the reader to reconsider the fundamental principles of urban planning and explore innovative solutions for creating sustainable and inclusive cities. It highlights the unintended consequences of overly regulated planning systems and showcases the benefits of allowing cities to evolve organically. The argument is that cities are complex systems with their own logic and dynamics, and attempts to impose preconceived plans often leads to inefficiencies, inequality, and social exclusion.
Displaying 1 - 30 of 53 reviews

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