All Commentary
Tuesday, April 5, 2011

Who Should Rebuild Japan’s Cities?

Enabling real communities to emerge.

There are currently 12,000 confirmed dead, 2,800 injured, and over 15,000 still missing from the terrible Tohoku earthquake and tsunami that struck Japan March 11.  Experts estimate the economic loss will be $200 billion to $300 billion, or 4-5 percent of Japan’s gross domestic product.

But some 400,000 people were also displaced, and many remain in shelters and temporary quarters.  What will happen to them?  There are many aspects to this tragedy, but here I would like to look ahead to the rebuilding efforts in the severely damaged, and in some cases destroyed, cities and towns of northern Honshu.

The Japanese government, quite understandably, has already begun spending massively on rescue and recovery, and it is inevitable in these political times that it will continue to spend tens of billions of dollars more trying to rebuild what was lost, mostly in urban areas.  Despite my own market-anarchist leanings, I do believe there are better and worse ways for the government to do this.

But first it’s important to understand what a city is.

A City as a Spontaneous Order

Jane Jacobs, one of my heroes, defined a city as “a settlement that consistently generates its economic growth from its own local economy.”  In other words, a living city is an economic engine and an incubator of ideas.  It consists of the dynamic interaction between the social and the built environment; between the social networks that are constantly changing in unpredictable ways, and the buildings, streets, parks, and plazas they occupy and that also change, only much more slowly.  But which came first, the complex, emergent social order of the city or the intricate physical environment?  Neither.  They evolved together through countless interactions over time.

Look at a typical block in any halfway-decent city.  Each of the buildings probably went up at different times, some many decades apart, serving many diverse uses.  These uses have also undoubtedly changed.  An office building is converted into apartments, a former loft now houses an architectural firm, and so on.  Nothing stays the same because the people who use those buildings (and the streets, sidewalks, and the rest) don’t stay the same.  Families, groups of friends, coworkers, and myriad other social networks change and are changed by this evolving built environment.

Now look at a failing block.  One characteristic common to all such blocks is sameness.  Buildings are all the same age, either very old or very new, or the same size, usually very large.  The street could be any other street, without character or sense of place.  It’s overcrowded during the day and deserted at night.  This sameness is often the result of large-scale construction.  Things built at the same time grow old at the same rate. Jacobs argued that some old, worn-down buildings usefully provide people who have novel ideas but not much money a place to experiment. But where all the buildings are of the same vintage, blight is likely sooner or later.

The lesson is that you can no more construct or reconstruct a city than you can a family or a thriving neighborhood or a successful business district.  Even if you could rebuild every house, office building, restaurant, grocery store, or health spa exactly as they were before a disaster (natural or manmade), you would not be able to recreate the social order, the community, that lived in them and that shaped their evolution.  At best what you would get instead is a Disneyland district that may look good from a distance but up close has little intricacy, spontaneity, or life.

Lessons from the Kobe Earthquake

After the 1995 earthquake that leveled parts of Kobe, Japan (6,400 dead, 15,000 injured, and $150 billion in infrastructural and economic damage), the government apparently tried to rebuild quickly.  In a certain sense it was successful, and the before-and-after photos of some of the damaged areas are astonishing.  But here is what the Financial Times reported some years after the reconstruction was begun:

Take Nagata-ku, one of the most seriously damaged areas of the city, where [Yasuzo] Tanaka’s company is based. Its population is still well below the 130,000 that lived there in 1995 and only one-third of today’s residents were there before the earthquake. “The neighbourhood has changed beyond recognition,” Tanaka says. “Many people went to live in public housing that the government built far away from Nagata-ku after the earthquake. These people were not guaranteed public housing in Nagata-ku so they stayed where they already had a place to live. The buildings have become cleaner but there is no sense of community.

Part of the problem, he says, is the characterless, concrete condominiums built by the city, which replaced the crowded-together wooden houses that once dominated the area. “We asked the city to stop building condos,” he says.

Italo Calvino perhaps said it best when he divided cities into “those that through the years and the changes continue to give their form to desires, and those in which desires either erase the city or are erased by it.”  Kobe may have gone from the former to the latter.

Some Ideas

I can’t offer a detailed proposal here, but I do have a few basic ideas that I’ve drawn from several sources, most notably from Harvard urban economist, Edward Glaeser.

The ideal solution, of course, would be to let private resources and resourcefulness drive the recovery, as was largely the case, for example, in the rebuilding of San Francisco after the Great Earthquake and Fire of 1906, which had to rely almost entirely on private insurance and local initiative.  Until the advent of big government, this is way cities did it, and did it well.  But if it’s a given that the Japanese government will do something, here’s how it might do the least harm.

1. First, accept that an area which has been wiped out or severely damaged will never, ever be the same.  Also, basing reconstruction on any pre-disaster plans is problematic because the context has completely changed.  Just because a new school was “on the drawing board” before the earthquake doesn’t mean that it should now go to the top of the list.

2. After clearing away the rubble and debris, rebuild roads and highways, where feasible, at or near their former location, along with other basic infrastructure.

3. Some property owners who are able to identify their property should obviously be allowed to reclaim it.  Elsewhere, property has been destroyed, in some cases swept away in floodwaters.  Local government may initially control the area, but then sell the property to developers on the condition that they give first priority to former area residents and businesses.  Once, say, some percentage of the latter has bought back in, they should be free to sell on the open market.

4. Estimate the monetary value of the property lost.  Divide this by the known residents and business owners who were there at the time of the quake.  If $10 billion worth of damage was done and the area was populated by 100,000 persons, the government would write a check for $100,000 for each of those owners.  Part of this would come from the sale of land to developers.

There are big problems with this, of course.  First, what about renters, children, and dependents, or people who just moved in versus those who’ve lived there for generations, or large- versus small-property owners, or rich versus poor?  Second, why should the government do anything, especially if some people bought flood or earthquake insurance while others chose not to?

The answer to both of these sets of questions is that, whether we like it or not, the Japanese government will do something, probably something much bigger, more expensive, and more intrusive.  The goal then is to minimize the degree of government intervention.  Writing people a check, while an extremely blunt instrument, will probably in the long run save a lot more money and intrusions than if the government tries to rebuild the damaged cities and towns.  Moreover, the interaction between social and built environments just won’t be there, at least for a very long time, perhaps never.

It’s true that some will get much more than they deserve while others will get far less, but that would be the case with anything else the government would do.  It would probably be worse.

And this has the advantage of better enabling real communities to emerge in the damaged areas if the check holders decide to buy back into them, singly or in groups.  I think private resources and resourcefulness would stand a better chance than a more interventionist policy.  The refugees who don’t buy into existing places will then be able to go back to damaged areas and begin the process of rebuilding, slowly, over time, the way living cities have always evolved.

No one person or group of experts needs to or should rebuild Japan if the goal is to reestablish settlements that are genuine engines of economic growth and incubators of ideas.  Again, this is certainly not ideal, but the likely alternative, building Disneyland cities, would set Japan back for decades.

  • Sanford Ikeda is a Professor and the Coordinator of the Economics Program at Purchase College of the State University of New York and a Visiting Scholar and Research Associate at New York University. He is a member of the FEE Faculty Network.