This Digest is also attached as a pdf file.

Items.
Item 1: Mr Singer's Great Inventions.
Item 2: Good Sense on Air Pollution – Lessons from London and Beijing.
Item 3: Linkage Zoning – More Information.
Item 4: More on the Future Shape of Cities.
Item 5: What do we do about Development Contributions?
Item 6: Thought for the Day: Funding the Zealots.

The Next Digest.
Entertainment:  The March of the Zealots.
Fundraising.

NOTE: The most common request to "Unsubscribe" comes from "planners"  
who are obviously offended by my attacks on central planners.
This is a pity because I know many "planners" who are actively working  
to promote resource management as set out in the Resource Management  
Act but are labelled as "planners" possibly because that is the name  
of their Institute and their Journal.
I have been around economists for so long that I tend to share their  
use of the term "planner" to refer to "central planners", those who  
believe they have superior wisdom to ordinary people and have some  
moral authority to direct where we should live, work and play. In  
these Digests, I do my best to use the term "Central Planners" when  
attacking their Soviet-style interventions, but occasionally my  
economist's terminology creeps through – and another resource manager  
"unsubscribes". Sorry about that.

Item One: Mr Singer's Great Inventions

Mr Singer is famous for inventing the domestic sewing machine. He  
should be more famous for inventing hire purchase. He realised that  
the sewing machine would allow working class women to make their own  
clothes – but he also understood that they could not afford to buy the  
sewing machine. So he invented hire purchase which meant they could  
buy the sewing machine and pay for it out of the cash surplus from  
making their own clothes and furnishings.

So it was OK for working class women to borrow for a sewing machine  
because it increased their productivity.
It is still unwise to borrow to buy  a dress.

The same applies to government borrowing.

Item Two: Good Sense on Air Pollution – lessons from London and Beijing.

Viv Forbes, Chairman of the Australian "Carbon Sense Coalition" opens  
this thought provoking essay
 Clearing the Smog of Beijing with "Coal by Wire"  with:

As the TV turns nightly to Beijing, we can expect chilling pictures
and doomsday comments about the “Asian Pollution” and the “Beijing
Smog”. This will induce media and political scaremongers to use these
images to sell dud products like the “Carbon Pollution Reduction
Scheme”. It is not carbon dioxide from burning coal that pollutes the
skies of Asia and Africa. Carbon dioxide (CO2) is a naturally
occurring, clean, invisible, beneficial gas. CO2 is an essential part
of the natural world but a very minor trace constituent of our
atmosphere.

Now whether you agree with this argument or not, keep reading on to  
where Viv reminds us how recently these conditions applied in cities  
like London and Manchester, as in:

England’s last and worst ever pollution event, “The Black Fog” of
1952, was triggered by a temperature inversion over London. Visibility
was reduced to less than one foot and 4,000 Londoners died from SO2
poisoning (50 in one small London park alone).

Viv Forbes is reminding us that we have improved our environments  
dramatically, since we set our minds to it, and can continue to do so,  
without having to retreat into tents and basket-weaving.

Item Three: Linkage Zones – More Information.

In case "Linkage Zoning" – the latest expression of the Smart Growth  
meme – comes to a town near you, you need to be forewarned to be  
forearmed.

LInkage Zoning  can appear under different names – like Smart Growth  
itself – so you need to be able to recognise it when it first appears.
The working paper by Hill Young and Cooper, in conjunction with Tricia  
Austin, of Auckland University, which set the process in motion in  
Queenstown, is titled Proposed Plan Change 24: Community Housing –  
Policy Plan Change Working paper one.

Tricia Austin has also summarised some United States implementation of  
Linkage Zoning titled Linkage Zoning: North American Case Studies.

The Town of Vail's ordinance sets out the general idea:

The purpose of the amended Commercial Linkage Zoning (Ordinance No. 7)
is to ensure that
commercial development and redevelopment provide for a reasonable
amount of employee housing to
mitigate the impact on employee housing caused by the (re)development.

The 2007 Nexus Study
determines employee generation rates, per sq. foot of different types  
of commercial use.

“Each commercial development or redevelopment shall mitigate its
impact on employee
housing by providing employee housing units for 20% of the employees
generated …”

  (Town of Vail, 2007)

Minimum size and development standards requirements for the employee  
housing are established in he ordinances, as are occupancy and deed restrictions. 

The mitigation may be accomplished by providing on-site units or land, off-site units or land, 
or fees in lieu. There is no priority given between
these mitigation provisions.

The Centre is still seeking reports on the effects of these linkage  
zoning schemes in the United States. (Linkage zoning is a sub-set of  
inclusionary zoning (which the Government is considering implementing  
in its Affordable Housing Bill) and so comment is often buried in  
reports on the overall concept of Inclusionary zoning.)
However, there can be no doubt that these "linkage zoning exactions"  
are a tax on developments which generate employment. When I was  
studying urban planning the conventional wisdom was that we should all  
be subsidising employment, especially in the regions. That was  
yesterday's fad.

The City of Oakland has some useful – and pessimistic – reports on  
their inclusionary housing programmes prepared by two economic  
consulting firms.

Probably the most pithy points are made by the Affordable Housing  
institute. (These are illustrated on the web page)
Inclusionary zoning doesn’t work where there is no zoning, because  
without zoning government never gets to the closing table. Houston  
need not apply!

Nor does it work when metropoli can readily expand and vacant land is  
amply available. Hands up, Phoenix, forget it!

Nor does it work when the economy is stagnant or declining. Sorry  
Butch, no point in inclusionary zoning in the Hole in the Wall. [Or in  
New Zealand right now.]


Nor when the population is declining or dispersing.

But not coincidentally, places where inclusionary zoning doesn’t work  
tend to have plenty of conventionally affordable housing.


If you find all this somewhat confusing this comment by the Smart  
Growth advocates "Friends of Florida" confirms the last point above:

Linkage fees are a means for local governments to collect monies to
help support affordable housing construction. These fees, collected
from non-residential and market-rate residential development, are
placed in a trust fund for others to use in building the lower-cost
homes. Linkage fees are important as a recognition that the low-wage
workers building the commercial, industrial, and upper-end residential
construction need adequate housing within the community that they can
afford. Any smart growth legislation should recognize the need for
this balance between affordable housing and workers. Provision of such
housing further supports smart growth by helping to reduce the
economic and environmental costs of transportation where there is no
public transit available.

In other words, Smart Growth itself generates the demand for these  
downstream interventions. Get rid of the restraints of Smart Growth  
and the case for inclusionary and linkage zoning disappears. If Dave  
Henderson's Five Mile project in Queenstown had been up and running by  
now there would probably be no housing problem to solve. How come the  
Council fought that tooth and nail and yet is now promoting linkage  
zoning?

I suspect the problem will not be resolved until the Councillors of  
Queenstown (Population 30,000), and their advisers, take a trip to  
Geneva, take a long look at this City of population 185,000, on the  
side of a lake with a mountain range backdrop, and decide  "Maybe  
that's not too bad!"

Item Four: More on the Future Shape of Cities.

The Great Debate about the future shape of cities continues. While the  
"Catastrophists" continue to delight in the replacement of the suburbs  
with high density apartments and public transport, more and more  
commentators are arguing that other adaptations to higher oil prices  
will take place much more quickly, and with less disruption to current  
patterns of living.

Again we recommend a visit to Joel Kotkin's web page at http://www.newgeography.com/
Many explore the theme under ECONOMICS in the menu bar, and the  
Centre's recent paper is under URBAN ISSUES. The paper was also  
published in the Winnipeg Free Press, again as part of a series on the  
issue.
My last NBR column spelled out the choices in a shorter format.

Contrary to the central planners' conventional wisdom, we should make  
short-term, flexible plans.
We know next to nothing about the future. Past trends are no longer a  
guide to future outcomes. We cannot reliably forecast the growth and  
distribution of population, or the nature and distribution of  
employment, or the impact of new technology. The only useful plans are  
those which enable us to adapt to change. Long-term plans reflect  
Romantic yearnings for a stable past. Twenty-year plans are fantasies  
built on delusion. One of the most popular delusions is that people  
desperately want to live close to work – and work is assumed to be in  
the central city.

In real life, people do not crowd to live close to their jobs. Surveys  
show that proximity to the job ranks quite low in determining location.
This is because households usually have more than one member and they  
may work in different places – including at home, like me.

Also Randall Crane, an economist in California, has found that people  
are smarter than central planners think, and work on the assumption  
that their job is temporary (this may not apply to civil servants in  
Wellington) and hence they think about where they might want to be  
working in the future.
This means that multi-nodal cities are the most efficient form of city  
so that a household can locate in an area reasonably close to say five  
job centres rather than hard up against just one. Either way, transit  
oriented development (TOD) will not work, and indeed does not work.
However, the central planners always know best and will charge ahead,  
building the city of the past rather than letting people build the  
city for their own preferred future.

Item Five: Is Green Transit a Myth? And the Robocar Revolution.

"Is Green Public Transport a myth?" is the title of a fascinating  
report by Brad Templeton, a Green who decided to examine the "Green  
assumption" that switching from cars to public transport is a first  
step to "saving the planet"..

Go to: http://www.templetons.com/brad/transit-myth.html.

His analysis of the energy consumption of different transport modes is  
one of the most reasoned, and comprehensive I have read on the topic.  
He confirms the findings of a large number of similar reports but  
manages to bring so much together into one paper that it is a truly  
valuable resource.
HIs policy recommendations are excellent, if only because they do not  
attempt to reshape our cities overnight or demand massive changes in  
human behaviour.

Unlike most writers on this topic he also identifies the unknowns in  
his calculations and suggests where more work needs to be done.
Anyhow enjoy it. It is refreshing in its candour and cool-headed  
analysis.

However, Templeton is also chairman of the "Electronic Frontier  
Foundation" and he has put together an equally comprehensive package  
of information on the potential revolution underway resulting from a  
rapid increase in the computing power under the bonnet of the motor car.
Everyone involved in transport solutions should go to Where Robot Cars  
(Robocars) Will Really Take Us – Or how computer geeks can enable the  
electric car, save the planet and millions of lives using near-term  
A.I. to make taxis and trucks deliver, park, recharge and drive  
themselves.
He challenges us with statements about the rapid development of robot  
cars and illustrates them with startling videos. Our present aim to  
lead the world in electric cars suddenly looks a meagre vision and one  
hardly worth pursuing, when artificial intelligence seems to be where  
the future really lies. As Templeton says:

People have dreamed of cars that drive themselves for decades. Now,
thanks to a contest sponsored by the U.S. military, they are much
closer to becoming reality than many people realize. It now feels
possible to make the bold prediction that if we, as a society truly
will it, we can make them ubiquitous by around 2020. More and more
people are ready to declare that – technology-wise – it's a question
of when, not if.

And here is another challenge – especially for those considering  
investing billions of dollars in urban rail:

Efficiency and the End of Transit: The numbers about the efficiency of
U.S. transit systems will depress you. It's not hard to be greener
than U.S. transit, and lightweight single person electric vehicles can
be 5 to 10 times more efficient, in energy per passenger mile, than
anything else out there, including transit. We're talking as much as
400 miles per gallon equivalent. As such, I believe robocars will
combine all the advantages of private cars and all the advantages of
transit. As such, the role of urban mass transit will be seriously
curtailed. To learn more, read the end of transit which also contains
some hope for what it might become.

Item 6: Thought for the Day: Funding the Zealots

By any measure, New Zealanders are overtaxed. Hence, properly designed  
tax cuts will increase revenue.
If you don't believe it read this story in the Wall Street Journal.  
President Bush's tax cuts not only increased revenue but the rich paid  
even more tax.
As the Wall Street Journal says "The way to soak the rich is with low  
tax rates"!
The economy is not a zero sum game.
We are taxing entrepreneurs out of existence – at both local and  
national level. When did anyone last bother trying to build a timber  
processing plant in NZ? And why would they?
Lower taxes means more revenue which means more of the services we  
need from government – especially those which promote productivity.
Instead we are currently happy to overtax everyone to fund a bunch of  
zealots and their zealous ideas.  See below.

Entertainment: The March of the Zealots.

John Brignell, of Numbers Watch fame writes:

Every age has its dominant caste. This is the age of the zealot.
Twenty years ago they were dismissed as cranks and fanatics, but now
they are licensed to interfere in the every day lives of ordinary
people to an unprecedented degree. When Bernard Levin first identified
the new phenomenon of the SIFs (Single Issue Fanatics) many of us
thought it was a bit of a joke or at most an annoyance. Now the joke
is on us. In that short time they have progressed from being an
ignorable nuisance to what is effectively a branch of government. They
initiate legislation and prescribe taxation. They form a large and
amorphous collection of groups of overlapping membership, united and
defined by the objects of their hatred (industry, tobacco, alcohol,
adiposity, carbon, meat, salt, chemicals in general, radio waves,
field sports etc.) Their success in such a short time has been one of
the most remarkable phenomena in the whole of human history. This
quotation says it all:

Imagine telling somebody twenty years ago that by 2007, it would be
illegal to smoke in a pub or bus shelter or your own vehicle or that
there would be £80 fines for dropping cigarette butts, or that the
words "tequila slammer" would be illegal or the government would
mandate what angle a drinker's head in an advertisement may be tipped
at, or that it would be illegal to criticise religions or
homosexuality, or rewire your own house, or that having sex after a
few drinks would be classed as rape or that the State would be
confiscating children for being overweight. Imagine telling them the
government would be contemplating ration cards for fuel and even
foods, that every citizen would be required to carry an ID card filled
with private information which could be withdrawn at the state's whim.
They'd have thought you a paranoid loon.

Read the whole essay here – it's great entertainment, although it's  
not really funny.

The Next Digest:
The Centre will be reporting on:
                *        what is driving oil prices?
                *        whether we should seek self-sufficiency in energy,
                *        the contradiction between the benefit of short term plans and the  
				need to build roads which last 1000 years, and
                *        the new MfE guide on Climate Change and Coastal Development.

Any feedback and directions to useful commentary will be much  
appreciated.

Funding.
It's that time of year again. Never has the Centre been asked by so  
many to do so much. And we try to oblige. However, everything costs  
money and the Government is remorseless in its demands for provisional  
taxes and GST. Many of our normal sponsors are seriously hurting from  
the downturn in property and development. We really don't want to fold  
our tent and creep away so your donations are essential to our ongoing  
efforts. The Centre donation form is attached.
Remember – even a dollar helps!