REUTERS/Lucas Jackson

Semi-coercing private companies into building parks is a good way to build some pretty bad parks

Zuccotti Park, the privately-owned public space that’s been the center of the Occupy Wall Street movement, is finally set to be cleared out for the first time since it began, so owner Bookfield Office Properties can clean it up. While the official line is that the protesters will be allowed to return, new post-clean-up rules banning tents and sleeping bags could very well put an effective end to the weeks-long campout. The action throws into stark relief the tension inherent in the privatization of public space that Nate Berg wrote about on September 29. But park mandates are problematic policy even in more normal times, a way of hiding costs that ends up giving us too little building and too few parks. 

The park was built in the first place under New York City’s Privately Owned Public Spaces initiative, which lets developers get “density bonuses” if they agree to build POPs. More density means more leasable square footage (and thus more money), so the idea is that a firm will build a POP if the cost is less than the profits derived from extra density. It’s a win-win. Sort of. 

One problem is that semi-coercing people into building parks is a good way to build some pretty bad parks. The latest version of the plaza guidelines, adopted in 2007, isn't terrible, but glancing at some of the rules they've felt compelled to institute—a ban on using little metal spikes from deterring people from sitting down—is a sign of how misaligned the missions are. There's a basic tension between the public purposes these kinds of spaces are supposed to serve and the actual interest of the private property owners who own them.

More broadly, the undertaking suffers from the usual suite of problems that occur when the government tries to finance public services through indirect regulation rather than directly paying the cost. The bonus/park trade is, in essence, a kind of tax on dense structures. If the benefit of greater density exceeds the price of the tax, both the building and the park get built. But there are times when a denser structure would have some economic benefit, just not enough to make it worth building the park. In those cases, you get a smaller building and no park. This is perverse, however, because a denser structure would have generated more tax revenue anyway through the conventional property tax, taxes on the salaries of the office workers, and taxes on the retail sales of their lunches and dry cleaning. Simply relaxing the restrictions on how densely you can build, and perhaps levying a slightly higher overall tax rate, would generate much more revenue. 

That would allow for more and better park-building, since facilities would be designed in order to be useful, rather than grudgingly conceded to meet a regulatory mandate. Parks would be regular public parks subjected to normal public space rules. It would also be possible for citizens to think about how many parks they really want relative to other public services. Maybe spending the money on more frequent bus service would be a better idea? The regulation approach is appealing because it appears to conjure public services up out of thin air, with no budgetary cost. But this is an illusion rather than a miracle, and hiding the costs merely encourages confused decision-making and sub-par facilities. 

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