This week I went to the Mid City Neighborhood Organization community-meeting in New Orleans. There were at least 80 people there and most seemed to be there to discuss a proposed development that would include a Winn Dixie grocery store and a 5 Guys Hamburger shop. It was interesting to hear about peoples’ concerns and what they were trying to do at the meeting.
Many of the people who spoke were concerned about rain runoff and drainage. That makes sense to me. Storm runoff is a type of externality.
In general the meeting was very Austrian and that was exciting.
There was quite a bit local knowledge prevalent in a very detailed discussion of traffic patterns. The developers knew the current traffic patterns, but meeting attendees tried to explain how people in New Orleans respond to changes in traffic patterns. They tried to argue that the developers hadn’t accounted for the way that locals respond traffic direction. This was a pretty cool example of local knowledge or tacit knowledge. There was no real good way for a traffic planner away from New Orleans to know how New Orleanians will respond to direction. Apparently they do not like to be told how to drive and ignore directions. But they also seem to ignore directions in a way that other New Orleanians can predict even if out of towners can’t.
I’m not sure if it was Coasian bargaining or regular bargaining, but several people in the audience were trying very hard to get some sort of concession from the developer. People wanted donations to the bike lane project, some sort of concession to bring in a certain number of local businesses, and some kind of unintelligible plan to do something for pets. That might seem like greedy people trying to get a handout from a developer who is helping the area recover from blight. But externalities are subjective. I see new competition and a 5 Guys as good things. That doesn’t mean everyone does. Some people may legitimately see this development as a negative externality and want compensation.
The conversation about local business was very interesting. Attendees did not consider a local franchise owner to be a local business. They wanted local funky stores that show New Orleans’ uniqueness. They couldn’t understand the developer’s perspective. The developer danced a bit not wanting to explicitly say, “Hey we want to make as much money as possible.” But he gave a good response. He didn’t know exactly what stores would end up being at the site. Different businesses will come and try to make a go of it. Some will make it some will fail. It depends on how well they serve local customers and what those customers want. If people say they want funky but only buy from national chains then national chains will be in the development. People then asked if the developers would be willing to talk to local businesses. The development had to try to explain that he wants as many businesses as possible to bid for space. That way he can get the most rent. All of this seemed very alien to attendees. No one offered to buy the site from the developer in order to build a better development with all funky stores.
The next day it was announced that the site had been approved. That made me wonder why we had the meeting at all.
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