I’ve been struggling with the concept in Hayek’s 1968 lecture, “Competition as a discovery procedure” that, essentially, we can’t really know what a problem is until the market finds a solution. But the work of Weld Seattle can give us some insight into that idea. The problem is a broken permitting process that is unpredictable and requires that a building permit be in hand before a building gets demolished.

Another part of the rule book mandates fines and hassles if the current tenants of the building aren’t properly moved out of the property. Any property owner wants a tenant paying rent until the last possible moment before demolition. What we end up with is an incentive to vacate buildings as soon as possible to avoid snags with the tenant rules and to be sure that whenever the permit does come, the building process can start as soon as possible. Add to this people who need a place to sleep and do drugs.

All of this results in boarded up buildings that become de facto safe drug use sites (or at least safer than an alley or park), an attractive place to squat for people without a place to live, and a vector for crime and health issues like rodents and human waste. Meanwhile, a building that could have been used for housing people becomes a net negative for the surrounding neighborhood.

The solution, use the vacant buildings as housing for caretakers who are not technically tenants, give those caretaker responsibilities to people leaving jail or prison who would have a hard time finding housing, and give those people an opportunity for training and jobs in the construction industry building housing. The City and it’s planners never could have figured this out, but construction needs workers, people leaving jail or prison needs a job and a place to stay, and builders waiting for permits and sitting on problem vacant buildings need help keeping them from becoming a hazard. That’s the Weld solution. But it happened spontaneously, not by mandate or fiat from government. Here’s Hayek,