The Growth Factor
Responding to Dana Goldstein’s Janet Sadik-Khan profile, Ryan Avent makes the point that amidst growing interest in the environmental and social benefits of well-executed urbanism, one shouldn’t miss the fundamental point that getting land use right is important to economic growth and prosperity. I think that point tends to fade out of view when you’re talking about New York City and Sadik-Khan because NYC is already such an outlier in terms of density and wealth creation.
But at the end of the day, the economic benefits of sound land-use and transportation policy come from the same source as the environmental benefits. It’s all about efficient use of natural resources. When it comes to something like natural gas or uranium people generally understand that it’s important economically to be using scarce resources in an efficient way. It’s environmentally beneficial, of course, to do so but it’s also just important to the basic functioning of the economy. Reducing waste has huge benefits.
And space is a natural resource.
But while we’re somewhat accustomed to thinking of farmland or forest as a kind of natural resource, by far the most valuable form of space is space located near economically valuable activity. Consequently, try to buy up some land in Washington’s central business district or somewhere in San Francisco or Boston and you’ll find that it’s tremendously expensive. And even in cheaper places like Detroit or Baltimore you’ll find that land is much more expensive in certain choice central districts — often located near nodes for transportation to other cities — than it is in outlying areas. And of course whenever you’re near big cities you’ll find roads — the Long Island Expressway, the 10 — where space during rush hour is extremely rare and therefore valuable. The way our current policies work, these resources are not being used in their optimal way. There are too many cars on the roads at peak times for the roads to function properly. And there are too few square feet of usable housing, retail, and office space in the most valuable locations. Changing that would generate an enormous amount of value. But it requires more efficient ways of moving people around than everyone taking single-passenger car rides for all of their trips. That means a mix of “complete streets” that are friendly to cyclists and pedestrians, higher-quality bus services, and investments in high-capacity rail alternatives. Some of that stuff is expensive to do. But road pricing and denser building would both generate large amounts of revenue that could be applied to the task.
And the payoff would be large in terms of enhancing growth in an environmentally friendly way. Or creating a more sustainable planet in an economically viable way. Whichever way you want to look at it. The point is that whenever you can increase the efficiency with which resources are used, you create a lot more winners than users. And ensuring that we use our valuable urban and suburban spaces more efficiently is a set of huge potential gains that are just sitting on the table thanks to decades of postwar planning policies that have mandated inefficient uses.
40 Responses to “The Growth Factor”
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December 1st, 2008 at 11:27 am
The misuse of urban space is mainly caused by the failure to charge for road transporttion’s negative externalities. One aspect is the lack of a carbon tax to address global warning externality, althought this is not exclusive to road transportation. Another is the failure to charge for congestion. Technology is available to allow metering of any vehicle’s proximity to other vehicles. This data plus data on vehicle speeds should permit assessing a fee for participating in congestion.
December 1st, 2008 at 11:46 am
Because what we really need now are policies that increase housing supply.
Besides if Matt was truly concerned with the environment, instead of using it as a guise to promote his own way of life, he would support business growth in the suburbs (or smaller towns). What is so inefficient or environmentally-unfriendly about living just minutes away from where you work in less-dense neighbourhoods? Is there still really an economic advantage (that outweighs the obvious costs) for having lawyers work next to accountants who work next to bankers? I don’t think so and neither do most new businesses.
December 1st, 2008 at 12:06 pm
…if Matt was truly concerned with the environment…he would support business growth in the suburbs…
Because everyone knows that donuts are more space efficient than circles.
Better trolls please.
December 1st, 2008 at 12:40 pm
Something to keep on your radar if you are interested in this sort of issue. Revitalizing Older Cities Summit in DC Feb 11 and 12.
December 1st, 2008 at 12:43 pm
Matt,
I grew up in a utopian community which dealt directly with this issue in a way that would be interesting to you. My family was among the few who founded the Fairhope Single Tax Corporation in the 1890’s, and I was involved in a rent study that my father designed. There are things that we learned from this experience that would speak directly to urbanization. I have read your blogs long enough to know your turn of mind and I think you would find the whole thing both fascinating and useful. It would take a couple of pages to give you much of an idea how it works, but here is the teaser: among the founders were Libertarians and Socialists. If you would like me to give you a little introduction and where to find more information I guess you could e-mail me.
A word of warning, most of the people still involved with this are either excentrics or blood relatives of mine, but I believe that there are ways to adapt this to current urban development problems.
Or if you would rather do your research directly, research Pittsburg and “differential tax.” The city tried to put a similar program in place through tax structure.
December 1st, 2008 at 12:56 pm
OK, we agree that New York City is an outlier.
What percentage of the rail and light rail mass transit ridership is to or from New York City?
I don’t know the answer but I would guess it is over 80%.
Rail and light rail don’t make sense outside of a few cities.
Boston, New York, Philadelphia, Baltimore, Washington, Chicago and San Francisco. Did I miss any?
Houston is the 4th biggest city in the country and the light rail is a joke. It would be far better off having express bus lanes. LA’s, #2, rail system is a joke. It would be far better with express bus lanes.
Can someone find the data of rail and light rail and see how much is spent per rider? Wouldn’t it make more sense to have buses move the people and save a ton of money to spend on more buses?
December 1st, 2008 at 1:13 pm
michael pollan: make them prove they should build on farmland like they have to with wetlands
(that’s a fine idea linus)
okay but you can’t grow your own food or fuel if you live vertically and even having solar panels and home fuel cells (which should be widely available in a few years) is a problem, suburbs and rural places have some advantages
(you can replace the carpet with dirt linus and grow in the living room)
December 1st, 2008 at 2:15 pm
here’s a nifty little map from Time.com — choose the population shift tab, which lets you look at (somewhat vaguely defined) population (by census tract, I think) by day and by night in 8 urban areas.
http://www.time.com/time/2007/america_numbers/commuting.html
December 1st, 2008 at 3:12 pm
DTM
Please tell me WHERE a new rail system makes any sense at all.
The Second Ave line in Manhattan is one place.
I would love it for the US to have real cities. However, most of the big cities in this country don’t need new rail.
Please tell me where it would make sense?
I have seen Houston and the light rail is a joke.
I have seen Baltimore’s light rail and it is a joke.
DC probably should not expand the subway to the distant suburbs. Buses would be so much more efficient.
Look, I lived in Tokyo and they have built more new subway systems in 6 years than New York has built in 6 DECADES.
I have seen the express bus lane into the Lincoln Tunnel in New Jersey; the single lane of traffic that carries more passengers than any other lane of traffic in the WORLD!!!
The problem is that light rail is sexy and buses are not.
December 1st, 2008 at 3:54 pm
By the way, I’d note again that I think both trains and buses have a place as we expand local public transit systems. So it is not an either/or situation as far as I am concerned.
Its important to keep in mind that the systems themselves are also important. If your local transit system was designed 30 years ago and has been tweaked and prodded along the way to satisfy this and that demand, odds are the whole thing could use a reboot. Planning methods are better, route efficiency tools are better, values for determining efficiency are different, neighborhoods have changed in fundamental ways in many cases, and so on. Many light rail projects around the country don’t operate as efficiently as they could because they are not employed as imaginatively as they could be.
December 1st, 2008 at 4:03 pm
The problem is that light rail is sexy and buses are not.
This seems to me like an odd thing to say.
I mean, I guess if buses were just as sexy as rail, and every bit as good, plus cheaper, than that’d be great.
But the fact is they’re not as sexy, and we just need to deal with that – people’s preferences do count for something. Besides, ‘transportation systems’ are more than just ways to move people from point to point, and there are rational reasons to prefer trains to buses sometimes (e.g., the property development effects).
I would love it for the US to have real cities. However, most of the big cities in this country don’t need new rail.
It’s unclear to me what a “real city” is in this context. It seems to mean simply one that already has a functioning rail network, like NYC or Tokyo. But then it’s just a tautology and a Catch-22: Houston doesn’t need a rail system because Houston isn’t a real city because Houston doesn’t have a useful rail system…
What am I missing?
Please tell me where it would make sense?
That’s a really difficult question best left to teams of consultants doing user surveys and cost-benefit analysis.
And even for them, it’s usually an incredibly ambiguous answer because of questions about timescales, and the difficulty of teasing out genuine transportation preferences from the crazy world we actually live in, with all it’s inadequate pricing mechanisms (congestion, pollution, parking) and cultural/lifestyle influences.
My own feeling is that there really aren’t too many cities that WOULDN’T benefit from good urban rail systems, at least when you take the very long view. Denser development is good economics, good environmentalism, even good for people – and rail enables denser development. But it takes a long time for urban landscapes to adjust to new influences, and it’s not as simple as “build it and they will come”: you have to get everything else close to right too – zoning, housing, parking prices, regional cooperation, etc.
December 1st, 2008 at 4:10 pm
Please tell me WHERE a new rail system makes any sense at all.
Between Downtown Pittsburgh and Oakland. Densest employment center in the US (or damn close) and the second largest economic engine in the area where the big Universities are. Separated by a few miles, there are scads and scads of full buses that run between the two that one light rail connection could eliminate. A unique example, but there are others around the country.
December 1st, 2008 at 4:13 pm
Many light rail projects around the country don’t operate as efficiently as they could because they are not employed as imaginatively as they could be.
I’m not sure I’d call it a failure of imagination, or just plain failure, but the fact is that many light rail (and even some heavy rail) projects around the country have been built with real indifference to (what we now understand to be) their strengths.
For example, miles and miles of track adjacent to an existing freeway, where there’s little or no opportunity to build new rail-oriented residential and commercial property (and a lot of difficulty for rail riders in using the existing freeway-oriented stuff).
December 1st, 2008 at 6:16 pm
The problem is that light rail is sexy and buses are not.
I commute daily in Los Angeles via the Orange Line (articulated buses on a dedicated busway) and Red Line (heavy rail subway). At my old residence, I commuted via Metro Rapid, which is a sort of limited-service bus that operates in mixed-flow traffic.
While I agree that L.A. could use a lot more dedicated busways, it could also use more rail. Rail is not just sexier than buses, it also has a much higher capacity, is smoother, faster, more reliable, and easier to understand. It is also, of course, more expensive.
The Orange Line (busway) is pretty good but during morning and evening rush hours (i.e., when I ride it), it operates at or above capacity. Passengers can pack into the bus until no more can fit, and there can still be stragglers left behind. With buses operating every five minutes, the only realistic way to improve capacity would be by converting it to light rail.
There are numerous other routes in L.A. with enough capacity to justify rail, and thank God Measure R passed, so we’ll actually see more of these before we all die.
Then there are others that could support busways. Both are worthwhile. The distances to be traveled in L.A. are great, and rail is well worth it to offer an alternative to the crowded freeways.
December 1st, 2008 at 6:51 pm
We need millions more 3rd World immigrants to make this work!
December 1st, 2008 at 7:57 pm
I wrote:
There are numerous other routes in L.A. with enough capacity to justify rail,
Sorry, I meant “enough demand to justify rail.”
December 2nd, 2008 at 10:26 am
Except for (I think) Paula above, I haven’t noticed a mention of a land policy that promotes density and other good uses of land without complicated regulations. That is simply setting tax rates solely on the value of land, not including improvements. I know that this brings up memories of George’s single tax, but the point is simply to raise local revenue while not discouraging full use of land. Case in point: railroads are reluctant to electrify even heavily used routes because the improvement would result in higher property taxes. Of course, dismantling lots of zoning laws would also be necessary. And of course this is a long range thing, but surely some long range thinking is useful.
December 15th, 2008 at 1:13 pm
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