A Fallacy of Settlement Size and Viability

I have seen it pronounced on twitter that new settlements are unviable, because if you load on needed infrastructure from settlements over 2,000, things like schools etc. they head into the red.

This is a fallacy. People generate need for infrastructure not houses. There will be a need for infrastructure where people are living now, and wherever they live. Those costs will be much higher in a dispersed development scenario.

The second problem is that you need to reduce land values according to the infrastructure cost. You cant compare an alternative use value in a no scheme world without those costs.

Yes it is niave because if you think about it it cant be true. The theory of optimum settlement size suggests cities grow until the point where marginal costs of infrastructure exceed marginal revenues from economic growth – what is known as the Henry George Theorum point. Global evidence suggest there are INCREASING RETURNS TO SCALE (Krugman won a Nobel prize for this) , as long as you invest in infrastructure. Only if you don’t and cities grow to many millions do you reach a point where further growth is uneconomic, like Beijing for example. We don’t see town freezing in growth at 2,000 do we, indeed the minimum size needed for rapid transit (100,000 or so) suggest increasing returns to and well beyond the 100,000 point. Remember it is the growth from increasing returns from rapid urbanisation that have dragged millions from poverty and will fund the transition to zero crbon. We dont all live in villages disconnected from the urban economy any more. City grwoth, in land value is captured, pays for itself – and some. .

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