Charles Mahon wrote this article in “Strong Towns” on July 12, 2017. The full text of the article can be found here.
The article “A Composition of Fallacy” is part of a series on incremental growth, focusing on the complexities of urban development and housing issues in rapidly growing cities. The author, Chuck Marohn, expresses his confusion regarding the simplistic narratives and solutions proposed by various experts concerning the housing emergencies in cities like Portland, San Francisco, and Austin. He argues that cities are complex, adaptive systems that cannot be reduced to linear cause-and-effect models, and anyone claiming to have a definitive solution to these issues is either misguided or deceptive.
Marohn likens the situation to a sick patient on multiple medications, where the interactions of various interventions are unclear. He references Nassim Taleb’s concept of “Via Negativa,” which suggests that understanding complex systems can be achieved by removing distortive interventions rather than adding more. Marohn’s focus on incrementalism and his writings on Portland’s housing crisis aim not to provide a single solution but to create a system that can produce solutions organically.
The article critiques the tendency of experts to attribute rising housing costs to singular factors, such as limited supply, zoning laws, NIMBYism, greedy landlords, bureaucratic red tape, and more. Marohn presents a list of common assertions about what causes housing to be expensive, emphasizing that he does not know which, if any, of these factors are the primary causes. He believes that each factor may hold some truth, but their impacts vary widely across different contexts and times.
Marohn highlights the importance of prices as signals in the housing market. When prices are allowed to reach equilibrium, they provide valuable feedback to buyers, sellers, and builders about market conditions. However, when prices are artificially inflated or deflated, it leads to misinformed decisions that can exacerbate housing problems. He illustrates this with an example of how speculative investments can drive up prices, leading to a cycle of increased construction costs and economic distortions.
The author argues against the boom-and-bust cycle that often characterizes housing markets, advocating instead for a system where prices can provide accurate signals to prevent extreme fluctuations. He proposes three central strategies to achieve this:
- Allow every property in the city to be improved to the next level of intensity, which he refers to as “upzoning.”
- In areas where significant increases in development intensity have been established, downzone to permit only the next level of intensity.
- Stop expanding infrastructure systems intended to support additional development until the tax base can adequately cover the maintenance of existing infrastructure.
Marohn uses the metaphor of a person adrift at sea to illustrate the need for stable ground in urban planning. Without accurate price signals and feedback, policies will likely contribute to unintended consequences. His suggestions aim to establish a stable equilibrium that allows for incremental building driven by reliable feedback.
He acknowledges the ideological diversity of the Strong Towns audience and clarifies that he does not advocate for a free-market ideology. Instead, he believes in the power of markets to empower individuals to make informed decisions that lead to just outcomes over time. Marohn calls for humility in recognizing the complexity of housing issues and urges a shift