Alain Bertaud on Cities, Planning, and Order Without Design
What this covers
Alain Bertaud and Russ Roberts discuss how cities function as labor markets and why prescriptive planning undermines the mechanisms that actually serve residents. Bertaud, an urbanist and author, argues that the efficiency of cities depends on mobility and affordable housing that lets workers match themselves to jobs. The conversation contrasts two worldviews: planners who think in terms of fixed norms—prescribed apartment sizes, density limits, building heights—and economists who think in terms of needs and tradeoffs that households negotiate for themselves. Bertaud illustrates this divide through examples ranging from his early career in Algeria, where French building codes made no sense for local climate and culture, to present-day New York, where zoning rules price out schoolteachers and other essential workers.
The discussion spans several distinct tensions. Bertaud explains how the price mechanism recycles land automatically—warehouses become apartments as central locations grow valuable—and how cities without functioning land markets (like Russia and China under central planning) lose this adaptive capacity. He argues that minimum-size and use-based zoning regulations create affordability crises by eliminating housing options for lower-income residents, a problem he tests against the schoolteacher affordability test: if essential workers cannot live within half an hour of their jobs, the system is broken. Roberts raises the Bootlegger and Baptist problem—where regulators invoke moral language while incumbent residents quietly benefit from restricted supply. Bertaud also draws on Hayek to argue that emergent market order outperforms deliberate design, and he forecasts that future productivity will depend on integrating megacities of 60–100 million people through transport systems that coordinate individual mobility with fast rail.
Bertaud argues that cities are fundamentally large, dense labor markets whose efficiency depends on mobility and affordability, and that prescriptive urban planning based on arbitrary consumption norms destroys the emergent, price-driven order that actually serves residents.
- Planners think in terms of norms while economists think in terms of needs and tradeoffs people make for themselves
- Minimum-size and density regulations price out workers like schoolteachers and force them into long commutes or informal housing
- Markets recycle land and match housing to demand using local information no planner possesses
Emergent unplanned market order outperforms deliberate design in organizing cities efficiently.
- Quoting Hayek's Fatal Conceit—'Order generated without design can far outstrip plans men consciously contrive'—Roberts and Bertaud argue that the emergent market order of cities outperforms deliberate planning, even though people find it unpleasant to accept that no designer is needed.
“'Order generated without design can far outstrip plans men consciously contrive.' That's from The Fatal Conceit. And, it's just hard for people to face that.”
Zoning laws disguise incumbent profit motives behind high-minded moral rhetoric about space and safety.
- Some housing regulations represent a Bootlegger-and-Baptist problem: regulators invoke high-minded moral reasons (ensuring people have enough room and space) while the same laws benefit incumbent residents and building owners who profit from restricted supply and keep that interest quiet.
“It's a classic, what we call Bootlegger and Baptist problem, where the regulator invokes a high-intentioned, wonderful moral reason for the law. But it also benefits, makes other people richer; and those are the Bootleggers”
Housing restrictions reduce geographic mobility and prevent people from following opportunity as they historically did.
- Historically Americans facing economic decline in places like West Virginia or Kentucky moved to vibrant cities, but physical mobility in America is now down partly because zoning and land-use restrictions make it harder to find affordable housing near opportunity; in the 1850s immigrants fresh off the boat changed tenements every 6-8 months as their circumstances changed, a buoyant low-transaction-cost housing and job market that Bertaud himself experienced changing apartments three times and jobs three times in his first 30 months in New York.
“the whole thing for hundreds of years that Americans did is they moved. They got up and they moved to a city. But now the ability to move to a city is much harder than it used to be.”
Deregulating minimum unit size would create affordable housing suitable for modern household composition.
- A high-end apartment can rent for a lot of money, but many smaller units can also rent for a lot in total even though each is less per unit, so simply allowing smaller floor space would create affordable housing; as fewer Americans marry and more live alone, limiting household size and square footage is a recipe for high rents and long commutes or only rich people in urban centers—an easily fixed problem illustrated by a legal 8-square-meter (86 square foot) Paris apartment that would be illegal in New York.
“it's true that a high-end apartment can rent for a lot of money. But a lot of smaller units can rent for a lot of money, too, even though they'd be less per unit. You could just change the floor space.”