A great migration and a spontaneous order

In California, 40 percent of all new single-family housing is in a planned development; 60 percent of all new housing is governed by some form of community association. While most attention has been focused on a small subset of these, the gated communities, the larger significance of these developments is only slowly being recognized.

At the forefront of those helping us to understand the phenomena is Robert Nelson, whose new book, Private Neighborhoods and the Transformation of Local Government (Urban Institute Press) will be available this summer. I will be using it as a text in my summer class in USC's Master of Real Estate Development program.

Having evolved in Hayekian fashion, this new mode of living has important implications for governance, for development, and for the way that "public" goods and facilities are managed and supplied. "Market failures" and "government failures" are not the last word as long as institutions are flexible enough for institutional entrepreneurs to respond and provide superior alternatives.

Nelson carries the story much further because he suggests that the best way to help older neighborhoods (especially the poorer ones where conventional policy measures have been a bust) is to extend the benefits of a privately run neighborhood to its denizens. They would have new and stronger property rights and they will be less subject to corrupt and inept big-city governments (the real monopolists in America). It makes perfects sense once someone articulates it.

The move to private neighborhoods is one of the great migrations of our time. The prescription for the privatization of the inner city is timely. Both are beyond the pale for most planning professionals who fret over "sustainability", "regional jobs-housing balance", downtown redevelopment, and all sorts of related and irrelevant (and costly) silliness.