The Use and Value

of Urban Planning
264510
Theory of Urban and Environmental Planning

SOURCE: Alain Bertaud http://alainbertaud.com/wp-content/uploads/2013/07/AB_China_course_part1_PPT_-.pdf

 Topics
1. Why do we need urban
planners?
2. Performances in planning
cities: success and failures
3. An urban planning
methodology which:
• Uses a cross sectoral
approach
• Takes impact on markets
into account when
developing strategies
• Increases the chances of
successful
implementation

2
 Section 1:

Why Do We Need
Urban Planners?
3
 THEORY
Theory - explains phenomena and
provide framework for understanding
Specialization of academic disciplines
Disciplines - consistent methods for
acquiring (agreed upon) knowledge

4
 Planning Rationality
Rationality
justifying self-interest & collective
benefits
at least one person better off and no
one’s situation is made worse

5
 Market rationality vs.
social rationality
Market rationality
unrestrained pursuit of self-interest
economic efficiency
Social rationality
collective interests precede individual’s

6
 Conflict of interests
State intervenes in market to mitigate
negative consequences of market
rationality
Public programs are likely to succeed
when compatible with corporate interests

7
Planning in public domain
Saint Simon and Comte - knowledge from
scientific and technical research for society

Planning combines scientific/technical and

pragmatic (experience) knowledge

Scientific knowledge is superior to experiential

knowledge?

Planning - justified in open forum (no divine

reason)

8
 Planning activities
Define problem
Model and analyze situation
Design potential solutions - policies, plans of
action with goals and objectives, forecasts,
spatial solutions, resources needed, procedures
for implementation and evaluation
Evaluate alternative solutions

9
Planning in market societies

National security planning

Economic planning
Social planning
Environmental planning
City planning
Regional development planning

10
 Why Do We Need Urban
Planners?
A city government usually
includes sectoral bureaus
that manage individual
sectors such as:
Transport
Water and sewer
Land
Housing, etc.
Good sectoral
management is
indispensable but it is
not enough!

11
 Urban Planners Should
Work Across Sectors
By contrast with sector managers,
urban planners are supposed to work
across sectors
For this reason their contribution to
the efficiency of a city is unique
Unfortunately, planners often
concentrate on planning land
use in isolation from other
municipal sectors
do not get involved in
infrastructure planning
Curitiba, Brazil

12
 Example of Cross
Sectoral Problems (1)
• Shortage of housing may be responsible
for overcrowding which in turn may
create traffic congestion
• The solution might be to increase the
supply of housing (cross sectoral
approach) rather than widening streets
(sectoral approach)

13
 Example of Cross
Sectoral Problems (2)
Lack of investment in water
supply in suburban areas may
create an urban land shortage,
which in turn may lead to a
housing shortage and high rent
The solution to lower rents might
be to built new water mains in
the suburbs (cross sectoral
approach) rather than build new
housing projects (sectoral
approach)

14
 Attempts to Minimize Costs
within a Sector Often Leads to
the Wrong Decision
For instance, a transport department may
attempt to minimize its budget expenditure
by avoiding building expensive bridges
In doing so the municipality may loose the
assets represented by the land across the
bridges
The value of land made accessible by the
bridge might be several order of
magnitude the cost of the bridges

15
Cost Benefit Analysis vs.
Minimizing Costs
Good management practice consists in
maximizing the difference between costs and
benefits, not in minimizing costs
One of the most practical way of measuring
the benefits from infrastructure investments or
regulatory change is to measure changes in land
values and rents
Urban planners are uniquely qualified to
evaluate investment benefits when they
understand the mechanisms of real estate markets

16
Reality Vs. Best Practice
In reality in many cities across the world, planners
tend to
focus on the design of land use plans in
isolations from other sectors
Ignore the reactions of the real estate market to
the shortages and/or oversupply that they may
unknowingly contribute to create
This explains why there are so many planning
failures and why the sectoral management approach
is more common than cross sectoral planning

17
 Section 2:

Performances in
Planning Cities:
Success and Failures

18
 Success and Failures
Cities in high income countries often appear to
be better planned than cities in lower income
countries, however it is not always the case
There are history of planning success and
failures in every countries of the world, rich or
poor
We can learn from the success and failures
story, but there are no directly transferable
models

19
Examples of Planning Successes
in Western European and
American Cities
In Western European cities:
Protecting historical neighborhoods while
maintaining their economic vitality
Linking economic regions with a dense and
efficient network of public transport
In American cities:
Maintaining a competitive housing construction
industry responsive to consumers demands
Reducing car pollution by imposing strictly
enforced pollutant emission standards

20
Examples of planning failures in
Western European and American
Cities
In Western European cities:
Planners tried to limit the growth of capital cities
like London and Paris, it did not work
The proportion of trip using public transport keep
decreasing in spite of effort of planners to increase it
In American cities:
Many city center are loosing jobs and people in
spite of planners effort to revitalize them
The proportion of trip using public transport keep
decreasing in spite of large investments in public
transport like light rail or metro

21
 Section 3:

An Urban planning
method that increase the
chance of success

22
 6 Steps for Successful
Planning:
1. Define priority objectives
2. Develop strategy
3. Identify and quantify inputs
4. Identify and quantify outputs
5. Project and then monitor outcome
6. Calculate and then monitor city wide
impact and compare to objectives

23
 6 Steps for Successful
Planning Examples(1)
1. Define priority objectives
increase supply of new housing
2. Develop strategy
Develop infrastructure to increase land
supply
3. Identify and quantify inputs
Land for roads right of ways
Costs of civil works

24
 6 Steps for Successful
Planning Examples(2)
4. Identify and quantify outputs
Length of roads and network to be built
5. Project outcome
Area and cost of land developed
Density and number of dwelling units
6. Evaluate city wide impact compared with
objective
Changes in land and housing prices
% increase in new housing

25
 Steps 5 and 6 are Very
Important for Successful
Planning
The 6 steps described above could be used for
planning regulation reform, infrastructure investments,
or local tax reform
Step 5: Projecting outcome is a way to anticipate the
reaction of markets to planned project
Step 6: validate the efficiency of the strategy
It is possible to plan projects or reform which appears
successful in isolation but have no impact at the city
level
Many government housing projects are unfortunately
of this last type

26
 Planners Do Not Always
Follow the 6 Steps
Master plans often contain
only objectives and strategies
and nothing else
Sometime there are lists of
inputs and outputs without
clear objectives
Most of the time anticipated
outcome and evaluation of
impact are missing
Success can be measured
only when impacts are
compared to objectives
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 The Most Current Weaknesses
in Following the 6 steps Method
(1)
Lack of clear objectives
Strategies inconsistent
with city’s spatial
structure
Inconsistency between
objectives and current
land use laws,
infrastructure investments
programs and taxation

28
 The Most Current Weaknesses
in Following the 6 steps Method
(2)
Strategy at odd with trends in consumer demand
Absence of financial resources to back projected
investments
Implicit costs unaffordable to consumers
Lack of regular monitoring of outcome and impact

29
 Summary of What Planners
Should Do to Increase Chances
of Successful Implementation (1)
Look at issues
across sectors,
Do not look at land
use in isolation
from other sectors
and from real estate
markets
Monitor real estate
markets and
interpret price
signals

30
 Summary of What Planners
Should Do to Increase Chances
of Successful Implementation (2)
Conduct cost benefits analysis and use
anticipated rent values as a proxy for
benefits
Investigate possible negative side effects of
regulations and infrastructure investments
Constantly monitor urban indicators like
densities, number and location of building
permits, traffic flows, land prices and rents

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 Uses of Planning
(for proper functioning of private sector)

Guiding economy
Providing public services
Investing in areas where there are little private
interests
Subsidizing corporate interests for public benefits
Protecting property values

32
 Uses of Planning
(Social Programs)
Redistributing income
Applying comprehensive planning to area
development
Restraining market rationality for social interest
Transferring income to victims of market
Ameliorating negative consequences of market
rationality

33
 Planning in capitalist
societies
geographically bound, occurs in all
levels
depend largely on market
encourage and support the interests of
capital while prevent negative effects
political mobilization is needed to solve
conflict of interests

34
Planning in political order

Territorially based system of social

relations
nested hierarchy
Political order vs. revolutionary practice
revolutionary practice rejects the legitimacy of the
establish political order
violent opposition to political order

35
Basic dynamics of territorial system

System maintenance
Bureaucratic/administrative
Allocative planning
System change
Social guidance - promote corporate economy/top-down
management of public affairs
Allocative/innovative planning
System transformation
Innovative/radical planning
Revolutionary practice

36
 Concepts of Planning
Planning as a form of technical reason to
link scientific and technical knowledge to:
actions in public domain
depart from routine & initiate chain of
consequences for change
processes of social guidance
allocative/innovative planning
processes of social transformation
social transformation

37
 Planning
Eclectic field: draw theories from disciplines -
social science, political science, geography,
economics, design, public health, etc.
Social rationality in public domain
Knowledge to action
3 forms of planning - allocative, innovation, and
radical planning - corresponding to 3 states of
political system - maintenance, change, and
transformation

38
Conclusions

39
 Conclusions
Foreign models are not directly transferable
There are a lot of planning success and
failures everywhere in the world
Using a systematic methodology which
anticipate markets reactions to planned
regulations, investments and taxation decreases
the risks of implementation failure
Urban planning is not an exact science, but
successful urban planning can bring substantial
efficiency benefit to a city

40
The Role of Markets,

Urban Planners and

Government

41
 Topics
1. Government and real estate markets
2. Role of government and role of urban
planners within government
3. Role of markets in urban development
and what urban planners should know
about markets

42
 Section 1:

Government and
real estate markets

43
In a transition economy, the role
played by Government and urban
planners must be clearly defined
The different roles that government,
planners and markets are playing in
building cities should be clarified.
The problem is particularly important in
China during the period of transition
between a command economy and a
mixed system where markets have to play
a larger role.

44
 Government has a very
important role to play in a
market economy
It is a mistake to think that in a market
economy the role of government is less
important than in a socialist economy
In fact the regulatory role of government
is more important in a market economy
than in a socialist economy

45
 The regulatory role of
government in a socialist and in
a market economy
In a socialist economy the government is
a planner, a developer and a builder,
its role as regulator is secondary
In a market economy the government is:
A regulator first
its role as developer is much reduced to
primary infrastructure and some social
facilities,
it has no role as a builder.

46
 The regulatory role of
government
Because the Chinese economic system is
evolving toward a mix of markets and
socialism, the laws and practices which are
essential for the functioning of markets may
not yet all be in place
The government may not yet be playing the
strong regulatory role which is required in a
market economy while it may be tempted to
play too large a role as a developer and
builder.

47
 Section 2:

Role of government and role of

urban planners within government

48
 Role of government and role
of planners within government
It is important that government focus its attention
and resources on developing:
An urban policy:
Setting up priority objectives
Developing strategies
A framework for the market to operate:
Urban land regulations
Investments in primary infrastructure
Land taxation

49
 Role of government and role
of planners within government
Setting up policy and priority objectives is
a political function. It cannot be optimized.
Urban planners should concentrate on
coordinating the market framework with
the government objectives:
Land use regulations
Primary infrastructure investments
taxation

50
Role of urban planners
“The market framework” mostly developed by
urban planners will allow the market to implement
government objectives
However, planners have to make sure that the three
components
Land use regulations
Primary infrastructure investments
Taxation
are completely consistent with government
objectives

51
 Role of urban planners: Land
use regulations and government
objectives
To insure consistency with government
objectives planners will have to anticipate
the effect of land regulations on markets
Land use regulations should be submitted to
the 6 steps described in a previous session.
This will include testing the probable
outcome of these regulations on land prices
and rents, and the impact they may have on
the spatial development of the city.

52
 Role of urban planners: Land
use regulations and government
objectives
Examples:
A regulation that limit density in a given area will
normally lower the price of land in this area but
will require an increased area of land to
accommodate this same population and therefore
an increase expenditure in infrastructure;
A regulation which increases allowable density in
a given area will normally increase land price and
will contribute to decreasing the land needed to
expand the city

53
 Role of urban planners: Land
use regulations and government
objectives
Higher densities normally result in cheaper housing
than lower densities (in spite of higher land prices).
Land use regulations therefore have a direct impact
on the price and the supply of housing.
Planners should therefore anticipate the effect of
the land regulations they design on:
The cost of land
The price of housing
And check if these are consistent with government
policy

54
Role of urban planners: Primary
infrastructure and government
objectives
The development of primary infrastructure
have an impact on:
The supply of land which can be developed
The density at which land can be developed
Therefore primary infrastructure affects also
directly the price of land and housing.
Primary infrastructure has an impact on
transport, congestion and therefore has a direct
impact on the economic viability of a city

55
Role of urban planners: Local
taxation and government
objectives
Local taxation on land and rents is imposed primarily
to raise revenues for the municipality, however:
It has an important impact on land use
For instance, a high land tax forces obsolete land use
out of expensive well located land. Taxation might be
a way of giving an incentive to remove obsolete
industries from downtown areas.
For this reason, urban planners should consider land
tax as an urban planning tool in the same way as
regulations and Infrastructure.

56
Role of urban planners:
It is important that planners understand the role
of :
Regulations
Primary infrastructure
Land taxation
In :
Shaping the spatial development of cities
Impacting the price of land and floor space
Allowing economic growth

57
 Section 3:

Role of markets and what

urban planners should know
about market land prices

58
 Role of markets
Real Estate prices react to changes in
supply and demand
But they also react to changes in land use
regulations, in primary infrastructure
availability and in changes in land
taxation.
Urban planners should understand the
messages send by land prices and rents

59
Role of markets: understanding
land prices signals
The variations of prices for land and floor
space carries a message that planners
have to interpret:
Rising prices, in general, indicate that
there is more demand than supply,
Falling prices indicate that supply is
larger than demand

60
Role of markets: understanding
land prices signals
Although lower land and floor prices might make
housing more affordable to more households,
falling prices are not always a positive sign
For instance if land prices and rent are falling in a
neighborhood, it may have 2 possible meanings:
Supply is catching up with demand (positive
signal)
Demand is decreasing because of poor
environment, poor quality of services and
infrastructure (negative signal)

61
Role of markets: understanding
land prices signals
An increase in land and rent price could be a
positive sign; for instance:
A new paved road replacing an unpaved
road will increase rents in adjacent land and
buildings
A prestigious school will increase rents in its
neighborhood
However, an increase in land prices and rents
in the entire city may mean that there is a
shortage of developable land and housing

62
Role of markets: understanding
land prices signals
Rising or falling prices are sending messages
which need to be interpreted by the urban
planner. Often large price movements will
require some action on his/her part:
Regulatory changes, or/and
New infrastructure investments
In order to be able to react to price changes,
urban planners should monitor markets
routinely, in particular the evolution of prices
and rents in different part of the city.

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Role of markets: land prices
and land use changes
Land prices are also a mechanism to trigger land
use changes.
As a city economy evolve, some land use
become obsolete.
For instance, the amount of industrial land in
cities has decreased throughout the second part
of the 20th century.
When land become expensive, factories, when
allowed to do so, can sell their land and move to
a more convenient place where land is cheaper

64
Role of markets: land prices
and land use changes
The mechanisms of real estate markets have
been the main incentive for improving land
use efficiency in cities in advanced economy;
land use plans had very little to do with it.
Urban planners in China should also use land
prices and rents to trigger an improvement of
land use efficiency by allowing obsolete land
users (factories, warehouses, etc.) to sell their
land use rights to the highest bidder.

65
 Conclusions
The regulatory role of government is extremely
important to allow real estate markets to work
Government should set up clear objectives and
strategies
Urban planners should develop new regulations,
infrastructure investments and a land tax system
which are internally consistent and support the
objectives of the government
Urban planners should monitor real estate markets
and interpret price signals in term of changes in
supply and demand.

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