"The Cycle of Undevelopment"
When I first moved to the U Street Corridor in DC, there was only a handful of business open east of 14th street. In the intervening five years, a ton of new stuff has opened up. But the pace at which vacant spaces get renovated and occupied has been frustratingly slow, and much the same is true along potential retail corridors on 9th Street and 7th Street heading south of U. What makes this especially frustrating is that these aren’t depressed areas anymore — buying a new condo in the area will cost you a pretty penny, and buying a single-family home would be very expensive. And yet, places go undeveloped with some parcels just resting vacant. The causes of this are multifaceted, of course, but the most maddening is this collective action problem highlighted by Ryan Avent: “if you have a piece of property in an up and coming neighborhood, you can develop and sell it now for $500,000 or wait three years and get three times that. As such, everyone is waiting for everyone else to build.”
And as a result, nothing happens and everything moves at a snail’s pace. I don’t have any policy ideas on hand to help break the logjam, but the mayor who does come up with a good solution to this problem will do her city — whichever city it may be — an enormous amount of good. Dense areas are full of feedback loops — if retail exists in an area, then it becomes desirable to live there, which makes it a more desirable location for retailers, etc., etc. — that can run in either direction. Measures that help push the ball in the positive feedback direction, even if modest on their own terms, can wind up having a huge impact.