A dispute about how tall the city of San Mateo, California, will allow buildings to be built may seem like a completely local problem that no one outside of San Mateo should care about. But the principle involved touches everyone from coast to coast, on issues having nothing to do with buildings, much less San Mateo.
Like most liberal and affluent California communities, San Mateo has a severe restriction on how high you can build, supposedly to prevent the community from looking like Manhattan. How is there anything wrong with that? Let me count the ways.
What is fundamentally wrong with this and a whole range of other government decisions at all levels is that no one is forced to count the costs.
If people want to build ten-story buildings but the law limits them to building five-story buildings, then there will be twice as many buildings required to house the same number of people. That means twice as much land on which to put the buildings.
In places where the land can cost more than the building itself -- as in much of coastal California -- that can mean that tenants living in the shorter buildings will have to pay twice as much rent to cover the higher costs created by height restrictions.
It doesn't stop there. When a community cannot expand vertically, it expands horizontally, creating "urban sprawl." That means more highway commuting and more highway fatalities.
One of the biggest arguments against tall buildings is that they generate heavier traffic. But spreading out the population generates more commuter traffic on the highways -- and when that highway traffic reaches the city, it becomes street traffic.
Anyone who has driven in San Francisco during the rush hour will find little difference between the traffic jams in this city, with its height restrictions, and the traffic jams in Manhattan with its skyscrapers. If anything, people are probably commuting longer distances into San Francisco, where even the immediately surrounding counties have astronomical housing prices.
The point here is not that a particular policy in San Mateo or San Francisco is wrong. The point is that those who make such policies are not forced to count all the costs created by those policies.
Most people making most decisions, whether in government or in the private marketplace, have no idea in what way their particular preferences add to the costs. But, in the marketplace, the price conveys the end result -- which is what matters for making decisions.