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The bolded stuff sounds like the Trump administration -- all about policing and walling off people and neighborhoods. This is NOT the predominant theory.
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I think the idea has merit when the walls and the policing are the responsibility of residents of themselves. I agree that as a "top down" idea it is flat out dystopian.
The goal would be to delineate public vs. private space so that normal cultural expectations that people in communities use to self-organize can take root.
In a typical American neighborhood, you put a fence around your yard. That says, I am responsible for everything inside of it and the stuff outside is public. Some activities are acceptable in one but not the other and it makes it easy to tell.
If a stranger is lurking in your yard they are in big trouble. If a stranger is walking down the street they have a right to be there. A great deal of conflict is resolved by making that distinction. In an apartment complex it is kind of ambiguous as to whether or not a stranger may lurk near your unit in the green space. You don't want to go snitch at the front office because maybe they are a resident and you wouldn't want to be treated with such suspicion if the shoe was on the other foot, but then what if they really are a threat?
Of course I'm not sure I agree with Pedestrian's analysis. These criticisms apply mainly to apartment complexes with a lot of awkward semi-public spaces. In a high rise or apartment block everything is different, apples and oranges.