Suburban Design is a Tragedy of the Commons

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So what? Can’t we each just decide how we individually want to balance access and space, move to a community that matches those preferences, and be done with it? If you like having ramen shops open at 2 a.m. and I like peaceful morning walks where I don’t see another soul for hours, you move to Tokyo and I’ll move to Maine. What’s the problem?

Your neighbors’ housing decisions shape the options available to you.

If you live in a tiny apartment but everyone else chooses a sprawling McMansion, then you get the downsides of a small home with none of the upsides of a vibrant, dense city.

In the extreme case, if every other human on earth decides that they value a yard more than the ability to walk to work, then all neighborhoods will be suburban. If you want to live in a five-story walkup with a bodega downstairs within walking distance of your job, you’re out of luck—those neighborhoods just don’t exist.

(Interestingly, this is asymmetric: If everyone else chooses to live in tiny apartments in a city, you could still go to the countryside and live a rural life far away from them.)

Okay, sure. So what? The scenario where everyone prefers a larger space and gives up access to urban amenities isn’t realistic. There are plenty of people who prefer city living. Why not just move to a dense neighborhood filled with those people?

Dense neighborhoods are undersupplied, because urban density is a tragedy of the commons.

While there are some places where enough people have leaned towards density and access over space and privacy, there is more demand for these neighborhoods than there is supply. Part of the reason for this is because urban density behaves like a classic tragedy of the commons.

The aggregation of everyone’s preference for more space leads to an undersupply of dense urban neighborhoods. This happens even in cases where everyone in the neighborhood wishes it were more dense and urban!

Let’s walk through the game theory. You don’t control what your neighbors will do, and there’s a spectrum from dense to sparse that any given neighborhood has already collectively chosen. To simplify our model, let’s treat these as binary options and just look at the extremes on either end of the spectrum, but keep in mind that there are possibilities in the middle, too. These are the two simplified possibilities for how your neighbors might behave:

  • Your neighbors all choose to live in small homes that are densely packed with each other, enabling a vibrant urban environment with lots of interesting amenities like parks and restaurants.

  • Your neighbors all live in large homes that span multiple acres, enabling them to have maximum privacy, space, and control within their own domain.

Now imagine you don’t have control over which of those two neighborhoods you’re house-hunting in, but you do have a choice between two options of where you will live in that neighborhood, both of which are within your budget:

  • A tiny apartment, too small to host a dinner party.

  • A luxurious mansion, with plenty of guest bedrooms to host friends.

Everyone I know would choose the luxurious mansion in a heartbeat. Regardless of which path your neighbors take, you’re going to do the same thing: You’re going to look for the largest, nicest home you can find that falls within your budget.

This is called a Nash equilibrium, a fancy way of saying that you’re going to choose the same strategy regardless of how your neighbors behave around you. If everyone else lives in a small space to maximize the population density of a neighborhood, you can free ride on that and choose a bigger home to get the benefits of both more space and access to the amenities enabled by density.

Let’s model this in a game theory matrix:

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