What City Observatory did this week

1. Introducing City Observatory policy memos. At City Observatory, one of our goals is to translate the best and latest urban policy research for advocates, organizers, and practitioners so it can inform their work. To better do that, we’re introducing the first of a series of policy memos: short, action-oriented, and highly readable documents meant to summarize the best evidence we have on a particular issue relevant to cities. Our first is on how to promote integration and economic opportunity. You can click here for a formatted PDF that’s easily sharable online or in hard copy.

2. Higher-inequality neighborhoods reduce inequality. While neighborhoods with close juxtapositions of the rich and poor extremes of our society can be jarring, and pose some special challenges, they’re ultimately a much healthier way to organize our neighborhoods than keeping everyone more “comfortably” separate. Recently, we got another piece of evidence to support this conclusion: New York University’s Furman Center published a report on how rising neighborhood incomes—often associated with gentrification—have affected local residents in public housing. Although there have been problems—including more difficulty finding affordable retail and a sense of belonging—there’s also much encouraging news. The highlights: public housing residents in affluent neighborhoods earn more than $4,000 a year more than those in low-income neighborhoods; suffer from less violent crime; and their children go to higher-performing local public schools, and perform better on tests themselves.

3. What’s really going on in gentrifying neighborhoods? Following up on the Furman Center study, we look at research from the Federal Reserve of Philadelphia that tries to answer the question: What happens to residents in gentrifying neighborhoods who live not in rent-protected public housing, but housing whose prices are set by the market? The results, perhaps surprisingly, are also encouraging: the study’s authors find little evidence of widespread displacement, with residents of gentrifying neighborhoods just 0.4 percentage points more likely to move in a given year, and those in the most rapidly gentrifying communities 3.6 points more likely. Just as important, those who leave are not more likely to go to lower-income communities. Those who stay are also likely to see an improvement in their financial condition, as measured by their credit score. Finally, it’s worth noting what happens to the poor neighborhoods that don’t gentrify. While it’s commonly assumed that they remain stable, this study shows that they actually experience severe decline, with average incomes falling 20 percent, and as a result—ironically—housing cost burdens rising by 10 percentage points.

4. Truthiness in gentrification reporting. In the last two posts, we looked at new evidence, echoing older evidence, that “gentrification”—the process of average neighborhood income and rents rising in otherwise lower-income communities—results in much less displacement of existing residents that commonly believed, and gives those residents, on average, some economic benefits. But despite this well-established and growing body of research, media narratives about gentrification continue to foreground stories of displacement while downplaying or dismissing positive stories. A New York Times piece about public housing residents in Chelsea, for example, spends its opening paragraphs on the challenge of traveling further to find more affordable groceries—and only reveals at the very end of the piece that the same resident considers herself “lucky” to have been in a neighborhood that has gentrified.

5. Knight Cities podcast. City Observatory founder Joe Cortright sat down with Carol Coletta of the Knight Foundation to talk about the latest research on neighborhood change, economic opportunity, housing policy, and more. Have a listen!

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The week’s must reads

1. When cities set minimum parking requirements in their zoning codes, those estimates of parking needs are based on rigorous, reasonably accurate studies. Ha ha, just kidding. At the Dallas Morning News, Brandon Formby reports on research by University of Utah professor Reid Ewing, which showed that actual vehicle trip generation at a residential development near a suburban Seattle transit center was just 37 percent of what guidelines developed by the Institute of Transit Engineers predicted. As a result, the 441-space parking lot could have been reduced to 278, representing a huge unnecessary expenditure. Reducing these requirements where appropriate (which seems to be most places) can save money, potentially reduce housing prices, and lead to more efficient development—not to mention drop an unnecessary and costly subsidy to car ownership.

2. At Business Insider, Amir Sufi and Atif Mian explain “why debt fuels bubbles.” In short, price bubbles—in anything from housing to tulips—are driven by “optimists,” who believe that the true market value of a good will continue to rise, or by people who believe there are enough “greater fools” to buy at higher prices, even if the “correct” market price is lower. Easy debt increases the ability of optimists to continue to buy, and to buy at higher prices—which in turn increases other players’ optimism that there will be “greater fools” to buy from them. As the authors put it, “even rational spectators may enter the market if they belive that irrational optimists can still get loans as the bubble expands.”

3. One of the biggest urban transportation reforms to fly under the radar is the reorganization of Houston’s local bus network, masterminded by Portland-based consultant Jarrett Walker. Two months after the debut of the new system—based on maximizing the number of frequent, “show up and go” lines, and encouraging transfers through a grid of routes to enable travel from almost anywhere to anywhere, rather than just downtown—Walker surveys the ridership changes and sees good news. Though weekday rides are down, Walker says that’s to be expected as people adjust to the new routes (and because Houston opened a new light rail service designed to replace some routes at the same time). Most encouragingly, the massive increase in weekend service has already paid off: Sunday ridership is up nearly 20 percent.

Houston’s frequent bus network before (top) and after (bottom) the reorganization.

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New knowledge

1. Though we recently argued that affordable housing policy ought to be more like food stamps (now known by the acronym SNAP), new research from the University of Chicago shows that together, housing vouchers and SNAP are already performing much more poverty-eliminating work than we previously thought. As Vox explains, by using more reliable administrative data (rather than surveys), it turns out that these two programs alone have helped push down poverty rates by almost double previous estimates: from 13.6 percent to 8.3 percent, instead of only 10.8 percent. And this is just the direct effect; as we’ve covered extensively, housing vouchers that allow low-income people to live in mixed-income neighborhoods have massive, and multi-generational, long-term impacts on economic mobility. These programs work—and if we’re looking for effective public investments to reduce poverty, they should feature prominently on our list.

2. JPMorgan Chase digs through their own customers’ (anonymized) credit and debit card data to answer a question of great importance to urbanists, planners, and the broader economy as a whole: When gas prices go down, how do people use the money they save? The answer: they spend about 80 percent of it. Almost a fifth of the not-gas-anymore money went to restaurants. Importantly, the study suggests that Americans spend much more of their gas savings than previously thought—stimulating the economy. The report is also full of interesting tidbits, like the fact that the median American spends $101 a month on gas—but those in the top 20 percent of consumers spend $359 a month.

3. Do “creative class” workers actually use neighborhood diversity as a major factor in deciding where to live, and if so, what kind of diversity? A new paper from researchers at the University of Nebraska at Omaha suggests that this tendency may be overstated. Using data from Chicago, they find the strongest relationship to be diversity in sexual orientation, with the density of gay couples explaining about 6.5 percent of the variation in computer/engineering/science worker locations. Linguistic diversity also helped explain 3.2 percent of the variation in education/library/training workers. Other “fundamentals” seemed to matter much more. Median home value, for example, explained up to 65 percent of the variation in creative class worker density.

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The Week Observed is City Observatory’s weekly newsletter. Every Friday, we give you a quick review of the most important articles, blog posts, and scholarly research on American cities.

Our goal is to help you keep up with—and participate in—the ongoing debate about how to create prosperous, equitable, and livable cities, without having to wade through the hundreds of thousands of words produced on the subject every week by yourself.

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

One role we hope to play at City Observatory is translator: taking some of the best, most rigorous research on American cities and urban policy and turning it into smart, sophisticated, and readable pieces that can inform people actually working on the ground, from community organizations to policymakers. So far, we’ve done that with blog-style commentaries and longer, more detailed reports. But to provide an even more practical, directly usable product, we’re introducing policy memos: short, action-oriented pieces focused on a particular public policy lever or goal, and formatted to be easily printed or shared.

Our first memo covers what should be one of the most fundamental aims of urban policy: to create equitable cities where everyone has the ability to reach the economic opportunities they need. We invite you to take a close look at this memo, share it with colleagues, and let us know if you think we’re on target—both with its tone and organization, and in terms of the substantive content. Look for more policy memos in the weeks ahead.

Click here to download a PDF.

Recently, we’ve received three new pieces of evidence on how gentrification affects the lives of poor people in changing neighborhoods. First, a study from NYU’s Furman Center suggests that residents of public housing in wealthier and gentrifying neighborhoods make more money, suffer from less violence, and have better educational options for their children, despite also facing some challenges. Then another study from the Philadelphia Federal Reserve Bank finds that there has been much less displacement of existing residents from gentrifying neighborhoods than is commonly feared—and that those who do leave aren’t necessarily more likely to go to lower-income neighborhoods. And finally, a Columbia University study on gentrification in London also failed to find evidence of widespread out-migration in neighborhoods with rising average incomes.

Together, these stories suggest that while gentrification can be disruptive, and makes residents anxious about the future, it neither produces measurably higher levels of movement from the affected neighborhoods, nor does it usually make residents economically worse off. If anything, residents of improving neighborhoods see greater wealth (as measured by credit scores) and higher incomes ($3,000 to $4,500 higher for residents of public housing in New York City).

So why is it that when media outlets report on neighborhood change, so many continue to ignore the abundance of evidence that relatively few low-income neighborhoods gentrify, and that when they do there is much less displacement than is commonly believed?

With the growth of research demonstrating the benefits of living in more economically integrated neighborhoods for low-income families, you’d expect to see more news articles about the positive aspects of neighborhood change. . This is especially true in light of the widespread reporting of Raj Chetty et al’s findings about the connection between integration and improved economic mobility for children growing up in poor households.

Unfortunately, most media coverage seems to ignore these consistent research findings. The result is a classic case of what Stephen Colbert famously called “truthiness”—the quality of seeming to be true according to one’s intuition, opinion, or perception without regard to factual evidence. The truthiness here is that we “know” that gentrification is an intrinsically malignant process, and so we deeply discount or simply ignore evidence to the contrary, even as that body of evidence is piling up. The studies have to be fit into our prior understanding of the issue, rather than adapting our understanding to the new facts.

The New York and Philadelphia studies both confirmed earlier research that gentrification is seldom associated with outmigration, and that it is frequently associated with higher incomes and better economic results for the longtime residents of gentrifying neighborhoods. But no reader of the media coverage would ever get that impression from a quick glance at the headlines or even the thrust of the stories’ narratives. Consider these three examples.

The New York Times headlined its story “In Chelsea, a Great Wealth Divide,” and began by describing the plight of a retired resident of public housing who had to travel to New Jersey to find bargain shopping opportunities. Not until paragraph 14 did the story acknowledge the positive findings from a New York University study that public housing residents in high income or gentrifying neighborhoods enjoyed higher incomes, lower crime, better schools and higher test scores. And not until the final paragraph did the story report the resident’s firm opinion that despite the disorientation of change and the challenge of shopping, her neighborhood was unambiguously a better place to live post gentrification.

 

Or take the series on gentrification that Governing ran earlier this year. While the magazine acknowledged that gentrification (as defined by rising rents and educational levels) and displacement of the poor are not the same thing, it proceeded as if the link between the two were strong and well-established. In fact, there were more low-income people living in the neighborhoods that Governing identified as “gentrifying” in 2013 than in 2000.

There’s a similar issue in a more recent Next City story about the Philadelphia Federal Reserve study on gentrification, displacement, and credit scores. Although the piece leads by revealing that “gentrification hasn’t forced out as many residents as one might think,” and that those who do leave gentrifying neighborhoods aren’t necessarily more likely to move to more disadvantaged communities, it quickly pivots, announcing that the “findings didn’t leave much to celebrate.”

While the study in question was far from uniformly sunny, it’s odd that a report concluding that one of the most widely-feared aspects of gentrification is relatively rare would so quickly be dismissed. It’s true that on the whole, the news on housing affordability and economic segregation is bad. But reports like this one at least open the door to the possibility that when low-income neighborhoods begin to see renewed attention from people with incomes in the middle class or above, the effects need not be as exclusionary as we fear—and may even, with smart management, lay the groundwork for the kind of integration and reinvestment that has been a major goal of housing policy for decades.

There’s a man-bites-dog quality to the way we talk about poverty. While the gentrification narrative (having rich neighbors makes life harder for poor people) is common, you seldom read stories about the narrative of concentrated poverty (having mostly poor neighbors makes life harder for the poor), which is both more prevalent and demonstrably more harmful. More strikingly, we often turn a blind eye to more straightforward examples of displacement—such as suburban Marietta, Georgia’s $65 million bond issue to acquire and demolish about 10 percent of all its multi-family housing in a pretty transparent effort to move poor households to other cities.

The Marietta apartments in question, before and after being shuttered by the city.

Implicit in all these narratives is a strong crypto-segregationist impulse: Rich people ought to live with rich people, poor people ought to live with other poor people. Any thing that changes this status quo is suspect: If rich people move into poor neighborhoods we call it gentrification. If poor people move into rich neighborhoods, we call it social engineering. It’s difficult to see how this framing ever leads to a world in which there is less economic segregation.

We now have abundant evidence that promoting economic integration positively improves the lives of the poor. But to make progress in reducing concentrated poverty, we need to reframe the conversation and stop demonizing the very changes that are, however slowly and awkwardly, moving us in the right direction.

At his blog, The Transport Politic, Yonah Freemark pushed back this week on the idea that we’re seeing a revolution in the way people get around cities and suburbs, largely thanks to new transit-and-bike-friendly Millennials.

In fact, he cites one of our posts as an example of a narrative he doesn’t think is quite right: that despite an uptick in driving as a result of dramatically cheaper gas prices, economic and preference-based fundamentals suggest that we are still in the midst of a historic decline in driving after generations of consistently rising car dependence.

Freemark, who also works at Chicago’s Metropolitan Planning Council, is an excellent commentator on transportation and urban development, and we are all very much on the same page in believing in diverse, inclusive cities whose transportation systems contribute to walkable, integrated, sustainable neighborhoods.

Moreover, the central point of his post is not just correct, but hugely important for all transit advocates and urbanists to understand. As we’ve written, changing preferences are not enough to change transportation behavior, because a person’s behavior heavily depends on their options. Those options, in turn, depend on available transit services and land use patterns. If the only available public transit is a very slow bus that comes once every 30 minutes—or the only bike route is along a high-speed stroad without a bike lane—it’s likely that even the most car-hating Millennial will get behind the wheel to get to work. Land use is similarly important: if your job isn’t anywhere near a transit station, it’s extremely unlikely you’ll be able to avoid driving, even if you’d really like to. In effect, land use patterns lock in place the mode choice preferences of previous generations and changes in behavior can happen only slowly. We can’t have a transportation revolution without major improvements to transit services and road design, and major reforms to our land use laws.

 

(Another big part of transportation equation is transportation prices—which include gas prices, but also policy-driven pricing of scarce road space, parking, and insurance. In many cases, pricing may be one of the best and easiest ways to remove some of the subsidies we’ve given to private vehicle travel.)

But despite all that, there is more progress than Freemark allows. He shows, accurately enough, that total vehicle miles have hit a new record after a dip during the Great Recession. But population growth is doing most of the work there: per capita vehicle miles are still far below their 2005 peak, and while there has been a small rebound corresponding to the fall in gas prices, the pattern appears to remain consistent with a long-term slowdown in driving.

 

 

It’s also extremely encouraging that, as we reported in Surging City Center Job Growth, employment is re-concentrating in downtowns after decades of decentralization. Even without major changes in residential patterns, increasing the destination density of relatively well-served central areas can represent a major improvement in non-car transportation options, allowing the growing number of those who are so inclined to use transit.

In addition, while available transit services and land use patterns limit the extent to which changing preferences can be translated into behavior, the flip side of that dynamic is that the modest changes in behavior we’ve seen so far mask a truly massive change in preferences. We can observe those preferences in urban real estate, where indicators like “the Dow of cities” reflect the increasing demand to live in relatively central locations, and other researchers like those at Walk Score show that people are increasingly willing to pay a premium to live in walkable, transit-served neighborhoods.

Freemark is right to suggest that our biggest challenges are political: how to convince decision-makers to invest in transit services and reform our streetscapes and land use laws to make transit, biking, and walking a viable option for those who would like to use them. But those changing preferences themselves constitute major political leverage. Localities in the position to allow more walkable, transit-served development are likely to reap the benefits of greater housing demand by satisfying some of our “shortage of cities.” In that sense, much of our work as urbanists should be about illuminating the connections between street design, transit service, and land use law—connections that are still far from well understood by many civic leaders and their constituents—and showing what kinds of changes can create the communities people envision for themselves.

 

But it’s also true that focusing only on changing preferences sometimes leads transit advocates to put less emphasis on what Freemark calls “an ideological claim” about why creating cities where transit, biking, and walking are viable options is a better choice for everyone. Different people will have different priorities, of course, but two of the central advantages of transportation networks that don’t depend entirely on private cars have to do with inclusion and environmental sustainability. Allowing people to go without a car—or to use it less than they might otherwise have to—can save low-income households thousands of dollars a year, money that would be much better spent on school supplies, food, clothes, or almost anything other than gasoline, insurance, and car payments. Removing a neighborhood’s total dependence on automobiles also allows people who are too young or old to drive, or who have a physical disability that makes it difficult to drive, to remain independently mobile.  And transit can dramatically reduce greenhouse gas emissions, not only through directly displacing polluting car trips with more emissions-efficient (or zero-emissions) travel modes, but by allowing cities to be built more compactly.

The car dependence of American cities today is the result of nearly a century of interventions, both dramatic and subtle, into the urban fabric. Reversing that work is a project of a similar scale. But there has been some progress. More importantly, changing preferences give us reason to believe that there is the will to make much more; and our understanding of the central role of transportation in equitable, sustainable cities gives us the mandate to pursue that progress. Millennials aren’t going to save our cities single-handedly any time soon, but they’re helping us move in the right direction.

Our partners and supporters at the Knight Foundation have announced a new round of the Knight Cities Challenge, which gives grants to people and organizations around the country for projects that make their cities more livable. The deadline to apply is October 27—check it out!

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What City Observatory did this week

1. Affordability beyond the median. When we talk about how affordable a given city or neighborhood is, we usually reference median housing prices: the home for which equal numbers of homes are more and less expensive. But in most places, affordability is mainly a problem for lower-income people, who are likely to be purchasing relatively low-cost housing. In these cases, what matters more than the median price is the price of that low-cost housing. We illustrate the difference with two Chicago-area neighborhoods that have identical median housing prices, but very different 25th percentile prices (that is, homes that are cheaper than 75 percent of other homes in the area). The neighborhood with cheaper 25th percentile housing has much more economic diversity. Not coincidentally, the more diverse and affordable neighborhood also has a much more diverse range of housing types, from single family homes to small apartment buildings and a handful of highrises.

2. Eleven things you’d know if you read City Observatory. We may be preaching to the choir here, but as part of celebrating our first birthday, we’re collecting some of the highlights of our work over the last year. We put eleven of the most important research, analysis, and insights—from the way we subsidize car travel, to the “secession of the rich,” to the ways we’ve made traditional, diverse, and sustainable neighborhoods illegal—into a one-page PDF that we hope you’ll find helpful. If you do, feel free to share with others!

3. Why creating meaningful transportation change is so hard. We respond to an excellent post from Yonah Freemark at The Transport Politic, which argues we can’t rely on changing preferences alone to create an urban transportation revolution in the U.S. While we disagree somewhat on trends in driving—we tend to believe that the recent uptick in driving per capita is related to the sharp decline in gas prices, while Freemark argues it’s likely to continue regardless of gas prices—we agree that available transit services and land use patterns make it extremely difficult for people who might like to take transit, or bike, or walk, to do so. While the evidence strongly suggests a major change in Americans’ preferences towards more compact, walkable urban neighborhoods, our “shortage of cities” means that only a relatively small number of them can actually move to such areas.

4. Beyond gas: The price (of driving) is wrong. While we argue that gas prices have an important effect on driving behavior, they’re just part of the overall price of using private vehicles. When that price is too low, it hides the real cost of car usage—from the construction and maintenance of road infrastructure to the cost of more sprawled-out land use patterns and the public health costs of deaths and injuries caused by car crashes—and causes people to drive more than they would if they absorbed more of the real cost of driving. We revisit our review of a study from the Frontier Group that reveals just how much drivers reap in subsidies, busting open the myth that the gas tax covers the cost of public infrastructure for private vehicles.

5. Another City Observatory post was republished at The Atlantic this week: this time, our comparison of the way we give public assistance for food and housing, and what that reveals about the flaws in our affordable housing system.

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The week’s must reads

1. For nearly two decades, the percentage of total national income going to workers has been falling. What’s making up the difference? As Matthew Yglesias shows at Vox, the answer is income accruing to the owners of housing. This trend shows that rapidly rising home prices, especially in urban centers where supply-restricting zoning regulations create a “shortage of cities,” are not just a concern because of neighborhood-level segregation: they’re also responsible for patterns of inequity at a national, macroeconomic level. This pattern has actually been established internationally as a possible explanation for Thomas Piketty’s widely-read theory about the underlying causes of growing inequality globally.

2. Via Streetsblog, a major set of reforms to federal road design guidelines is giving a big leg up to “complete streets” advocates and paving the way (sorry) for safer, more pleasant, and more lively urban neighborhoods. The Federal Highway Administration is removing many of the “outdated” requirements for urban streets with speed limits below 50 mph, including leaving “clear areas” with no permanent objects, such as trees, within a certain distance of the road bed, and excessive width.

3. PBS takes a closer look at two Texas metropolises that are taking very different approaches to their light rail systems. While Dallas has built one of the most extensive light rail networks in the country, most of its track passes through extremely low-density neighborhoods, and many stations are surrounded by parking lots, with few jobs or other destinations within walking distance. As a result, its ridership per mile of track is extremely low, posing financial challenges. Houston, in contrast, has so far built a much smaller network, but its line goes through the densest parts of the city, and planners are trying to encourage more dense development within walking distance of stations. Not surprisingly, its ridership per mile is much higher: Houston’s light rail system gets about half the ridership of Dallas’, despite being just a quarter as big.

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New knowledge

1. Who gets economic development subsidies? A new study from Good Jobs First suggests that small and local businesses are mostly shut out. The 4,200 deals in 14 states examined by the study were worth $3.2 billion—of which about 90 percent went to large or non-locally-owned businesses. GJF recommends that states reform their economic development programs to create public benefits for all employers by, for example, redirecting money to job training, education, transportation, and credit access programs.

2. Project-based rental subsidies, which provide affordable housing for more than 1.2 million households across the country, need to be periodically renewed to keep their subsidies. The Urban Institute reports that fully a third of PBRA units are up for renewal in the next few years, running the risk of dropping tens of thousands of affordable units from our cities in the midst of a growing housing affordability crisis. While most PBRA leases are renewed, the likelihood that projects are converted to market-rate rents increases in areas with high market prices—exactly where they’re most needed to promote integration and economic opportunity.

3. More evidence on the problem of under-priced road space: researchers from Turkey and the Netherlands examine the cost of “cruising,” or driving around looking for parking, generated by a marginal shopping trip. They find that in a given shopping district in Istanbul (though these findings could be applied to other busy districts with under-priced parking, leading to an excess of demand), the direct cost of traffic congestion caused by a car trip is dwarfed by the cost of the additional time other drivers spend cruising for parking because that particular space is already occupied. The takeaway is that proper pricing of public parking spaces could significantly reduce one of the major social costs of car travel.

Our recent conversation about the future of American driving habits, and the role of the price of gas in changing them, is a good reminder of a broader truth about transportation policy: prices are important, and getting prices right (or wrong) is crucial. And when it comes to driving, prices are frequently wrong.

That’s because driving is extremely costly: It uses vast amounts of valuable urban land and requires the construction and maintenance of public infrastructure. But it also has massive negative spillover effects, from forcing cities to sprawl more than they would otherwise (because of all that land used for parking and driving compared to more space-efficient transportation modes), to pollution and environmental damage, to the public health crisis of deaths and injuries caused by car crashes.

But drivers see very little of this in the price of using their vehicles. A study released earlier this year busted open the myth that drivers “pay their way”—even only counting the direct costs of maintaining their transportation infrastructure—through the gas tax. In fact, those revenues cover less than half the cost of building and maintaining road networks. Below, we’ve republished our writeup of that report (originally entitled “There’s no such thing as a free way”), which remains a hugely important piece of context for any debate over the future of transportation policy. A big takeaway: While gas prices are an important part of the cost of driving, they’re only a part. We ought to use other levers, from taxes to congestion and parking charges, to get the price of driving right.

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A new report from Tony Dutzik, Gideon Weissman and Phineas Baxandall confirms, in tremendous detail, a very basic fact of transportation finance that’s widely disbelieved or ignored: drivers don’t come close to paying the costs of the roads they use. Published jointly by the Frontier Groups and U. S. PIRG Education Fund, Who Pays for Roads exposes the “user pays” myth.

The report documents that the amount that road users pay through gas taxes now accounts for less than half of what we spend to maintain and expand the road system. The shortfall is made up from other sources of tax revenue at the state and local level. This subsidization of car users costs the typical household about $1,100 per year – over and above what they pay in gas taxes, tolls and other user fees.

While recent congressional bailouts of the Highway Trust Fund have made the subsidy more apparent, it has actually never been the case that road users paid their own way. Not only that, but the amount of their subsidy has steadily increased in recent years. The share of the costs paid from road user fees has dropped from about 70 percent in the 1960s to less than half today, according to the study.

There are good reasons to believe that the methodology of Who Pays for Roads, if anything, considerably understates the subsidies to private vehicle operation. It doesn’t examine the hidden subsidies associated with the free public provision of on-street parking, or the costs imposed by nearly universal off-street parking requirements, that drive up the cost of commercial and residential development. It also ignores the indirect costs that come to auto and non-auto users alike from the increased travel times and travel distances that result from subsidized auto oriented sprawl. And it also doesn’t look at how the subsidies to new capacity in some places undermine the viability of older communities (a point explored by Chuck Marohn at length in in his Strong Towns initiative.)

These facts put the widely agreed proposition that increasing the gas tax is politically impossible in a new light: What it really signals is car users don’t value the road system highly enough to pay for the cost of operating and maintaining it. Road users will make use of roads, especially new ones, but only if their cost of construction is subsidized by others.

The conventional wisdom of road finance is that we have a shortfall of revenue: we “need” more money to pay for maintenance and repair and for new construction. But the huge subsidy to car use has another equally important implication: because user fees are set too low, and because, in essence, we are paying people to drive more, we have excess demand for the road system. If we priced the use of our roads to recover even the cost of maintenance, driving would be noticeably more expensive, and people would have much stronger incentives to drive less, and to use other forms of transportation, like transit and cycling. The fact that user fees are too low not only means that there isn’t enough revenue, but that there is too much demand. One value of user fees would be that they would discourage excessive use of the roads, lessen wear and tear, and in many cases obviate the need for costly new capacity.

And these subsidies to car travel have important spillovers that affect other aspects of the transportation system. There’s a good argument to be made that part of the reason that subsidies to transit are as large as they are is that motorists are being paid not to use the transit system in the form of artificially low prices for road use and (thank you Don Shoup) parking.

 

There’s another layer to this point about roads not paying for themselves: Most of these calculations are done on a highly aggregated basis, and look at the total revenue for the road system, and the total cost of maintaining the road system. What the study doesn’t explore is whether particular elements of the road system pay for themselves or not.

Think about air travel for a moment. Airlines don’t simply look at whether their total revenue from passengers (fares and all those annoying fees) covers the total cost of jets, crews, and fuel (although the stock market pays attention to this). Airlines look at each individual flight and each route, and examine whether the number of travelers and the amount of fares that will be paid cover the cost of providing that service—when not enough passengers use a route, they discontinue air service (as many small market cities know too well). While this calculus is routine and well-accepted in air travel and the private market, it’s unknown for public roads.

The Frontier Group/US PIRG study also significantly understates the economic cost of the transportation system. Their analysis looks only at how much we are actually spending to maintain and expand the current system. This is problematic for two reasons. First, there’s abundant evidence that we’re not spending enough to keep the system in repair, and there’s a growing hidden cost in higher future repair bills from the added deterioration of the system. These hidden costs are accumulating and not reflected in what users pay now. Second, we’re doing nothing to recognize the economic value of the existing road system: the replacement cost of the current road system –what it would take to rebuild the existing asset—is likely on the order of tens of trillions of dollars. Current road users get free use of that inherited, paid for (but depreciating) asset. Again, this is unlike other forms of transportation: just because United Airlines may have long since paid off the purchase price of the 737 you are riding in, doesn’t mean that they don’t charge you for the capital value of using that asset.

The real question for transportation public finance is whether new roads—additional capacity—pays for itself. Does the volume of traffic using a new bridge or additional lanes of freeway capacity pay for the road they use in their road taxes? New projects are so expensive–$100 million or more for a mile of urban freeway–that the road users who pay the equivalent of 2-3 cents per mile of travel in gas taxes (depending on the tax rate and vehicle fuel efficiency) never contribute enough money to recoup the costs of the new capacity.

 

The surprising evidence from road pricing demonstrations (tolled HOT lanes) is that the revenue gathered from tolling often fails to cover the costs of collecting the tolls and operating the toll collection system: they never come close to paying for the roadway. (To be sure, tolling improves the efficiency of use of the freeway—traffic flows more smoothly, capacity is increased—but the tolls don’t pay for constructing, or even maintaining the pavement).

But again, the highly visible toll collection mechanism, like the very visible gas tax, creates the illusion that user fees are paying the cost of the system.

As the Transit Center demonstrated in its recent report, Subsidizing Congestion, the $7.3 billion federal tax break for commuter parking costs encourages additional peak hour car commuting which has the effect of causing greater congestion. The systematic under-pricing of roads has the same effect, with the result that taxpayers subsidize car use through higher taxes, and also face greater congestion than they would if road users paid their way.

To be sure, these same questions can, and should be raised about transit, biking and walking projects. And for transit projects, close financial scrutiny is far more common than for roads. A key difference with these other forms of transportation is that they arguably have big net social benefits–lower congestion, less pollution greater safety, and they support important equity objectives by making transportation available to those who don’t own or can’t operate a motor vehicle. The problem with hidden subsidies is that often that they’re hidden: if we made them explicit, and considered our alternatives we would likely choose differently and more wisely.

The problem of pricing roads correctly is one that will grow in importance in the years ahead. It’s now widely understood that improvements in vehicle fuel efficiency and the advent of electric vehicles is eroding the already inadequate contribution of the gas tax to covering road costs. The business model of companies like Uber and Lyft likewise hinges on paying much less for the use of the road system than it costs to operate. The problem is likely to be even larger if autonomous self-driving vehicles ever become widespread—in larger cities it may be much more economical for them to simply cruise “free” public streets than to stop and have to pay for parking.

As we’ve pointed out before, the root of many of our transportation problems is that the price is wrong. Puncturing the widely held myth that cars pay their own way makes this report required reading for those thinking about transportation finance reform.

A few months ago, we published a three–part series about why the way we measure housing affordability is all wrong. In particular, we objected to using the 30 percent ratio of housing prices to income as the benchmark of “affordable,” basically because depending on income and other necessary expenses, a given household might actually be able to spend way more than 30 percent of their money on housing—or way less.

But now we have another nit to pick. To wit, the nit: measuring housing prices by only looking at the median. Recall from math class that in any given area, the median-priced home is the one for which an equal number of homes are more and less expensive. But most of the time—San Francisco and New York and their peers in housing market dysfunction notwithstanding—we’re not mostly concerned with the median housing purchaser; rather, affordability problems will be concentrated in the lower part of the earnings scale, and so what really matters is the lower end of the home price scale.

For an illustration of this problem, imagine two neighborhoods. In both places, the median home costs $300,000. But in the first neighborhood, every home costs exactly $300,000, while in the second, there are a range of homes from $100,000 to $500,000. Although both neighborhoods have the same median home price, the second neighborhood has some homes affordable to low-income people, while the first neighborhood does not.

So rather than the median, or 50th percentile, home price, we really care about something like the 25th percentile: the home for which 75 percent of homes are more expensive.

Now, to be fair, the price of a place’s 50th percentile home strongly predicts the price of the 25th percentile home. If the median housing price hits a million dollars—as it does in, say, San Francisco—you can be quite confident that the 25th percentile home is also far, far too expensive.

But in more normal markets, there is enough variation in 25th percentile prices in places with the same 50th percentile price to make a meaningful difference in affordability for lower-income people. Let’s take Chicago, for example. Happily, the Census has home price estimates for both the 25th and 50th percentile homes (and 75th—the home for which just a quarter of all homes are more expensive—but we’ll leave that to another post). If you plot these two prices by ZIP code in Cook County, which includes Chicago and its inner-ring suburbs, this is what you get:

As we said, the median home price of a given ZIP code very strongly predicts its 25th percentile price. But let’s zoom in a bit—to, say, anywhere with a median price within $25,000 of $250,000.

 

Now we can see a strong amount of difference. Right on the $250,000 median price line, for example, ZIP code 60645 has a 25th percentile home price of about $149,000, while ZIP code 60422 has a 25th percentile home price of $187,000. In the simplest terms, then, a low-price home in 60422 is a full 25 percent more expensive than a low-price home in 60645—even though an average-price home is almost exactly the same in both places.

How does that happen? Well, zooming in on what these two ZIP codes actually look like on the ground, we can hazard a guess. ZIP code 60422 is in suburban Flossmoor, which has a small, walkable, “illegal neighborhood”-type downtown around a commuter rail station, but otherwise is almost entirely made up of single family homes, ranging from medium-sized to large.

 

ZIP code 60645 is in the West Ridge neighborhood of Chicago’s far North Side. It has its share of medium-to-large single family homes; but it also has a large number of multi-family buildings, from a large tower-in-a-park development to copious numbers of two-flats, three-flats, and larger lowrise apartment buildings.

 

The contrast is actually a brilliant illustration of one of our favorite topics, which is the way that traditional, “illegal neighborhoods” can use a diversity of buildings to create a diversity of people. West Ridge simply has many more kinds of homes than Flossmoor: there are single family houses for parents and their children who can afford a $250,000 (or more) home; there are relatively large apartment and condo units in lowrise buildings; and there are smaller apartment and condo units in lowrise and highrise buildings that provide a stock of affordable housing without subsidies.

It helps, too, that West Ridge has buildings from a variety of time periods, dating back to the early 1900s. As we’ve written before, new construction is almost never affordable to people of low or moderate incomes—but often homes that are built for the upper middle class become much more affordable after a generation or two. Much of the low-priced housing in West Ridge fits this story.

All these differences add up to very different neighborhood demographics. West Ridge has a median age, income, and poverty level that are all fairly close to those of the city of Chicago or metropolitan area averages. In Flossmoor, by contrast, the median age is 46—more than a decade older than the metro area median—in part because there are few homes suitable for young people who might not yet have a stable middle-class income. Moreover, just 2.9 percent of residents in ZIP code 60422 live below the poverty line. As we’ve covered before, while that might sound like a good thing, in a region where nearly 14 percent of people live below the poverty line, such a low level in an individual city isn’t a sign of economic success—it’s a sign that Flossmoor has (in part) used its built environment to exclude low-income people from one of the most opportunity-rich parts of Chicago’s south suburbs. Economically integrated West Ridge, by contrast, manages to keep a strong middle class while remaining inclusive of people whose incomes are much lower.

But none of these differences can be explained by median home price—because West Ridge and Flossmoor have almost identical median prices. Instead, we need to look at the price of a typical low-priced home to understand what’s going on.

Last week, City Observatory celebrated its first birthday. This week, we’re taking some time to look back at all the reports and commentaries we researched and wrote in the last year, and picking out some of what we think are the most important facts and insights. We put eleven of them into a one-pager with links to some of our greatest hits. We think it all adds up to a good portrait of where American cities find themselves now: in the midst of a historic increase in demand for city living, but with considerable challenges from concentrated poverty, segregation, and too many street design, transportation, and land use policies that are stuck in the past. We hope that you’ll find it useful—and look out for more highlights of from the first year of our work over the rest of the week.

1. Less time in traffic. People are losing 40 percent less time to traffic congestion since 2010.

2. 12 to 1. The number of newly-poor neighborhoods exceeds the number of gentrified low-income neighborhoods 12 to 1.

3. We’ve got a shortage of cities. Building more great neighborhoods would go a long way towards addressing city housing affordability.

4. Cars don’t pay their way. Car user fees cover 30 percent of the total cost of roads.

5. City jobs are back. After decades of decentralization, jobs are coming back to urban centers.

6. The wealthy are leaving. The growth in income segregation has been driven by the secession of the wealthy.

7. Wider does not mean safer. Wider streets are not safer streets.

8. We’re driving less. Americans are driving less—and that’s good for our economy.

9. Cities are more poor. Two million more people live in high-poverty urban neighborhoods than did in 1970.

10. That neighborhood you love is illegal. The country’s zoning laws prevent us from building more high demand, great places like Soho in NYC and Over the Rhine in Cincinnati.

11. 85,000 more young people. In 2014, about 85,000 more people aged 20 to 29 moved to central cities than suburbs.

(Click here for a formatted PDF version.)

Two of the most fundamental human needs are food and housing. As a result, we have government programs to help people who might not be able to afford them. But the way those programs work is wildly different.

So let’s imagine for a moment that we treated SNAP—the federal program, formerly known as food stamps, that gives money to low-income people for groceries—like American cities treat affordable housing.

 

First of all, local governments would suddenly have much more power over the program. Wealthy cities could decide that they wouldn’t give SNAP benefits to any of their residents, essentially banishing everyone who relied on them to feed themselves and their families to other parts of their metropolitan area. Those cities that did accept SNAP might have to cobble together many other different sources of funding to make it work, leading to wildly inflated food costs for beneficiaries.

In certain places, where the affordable food crisis got really bad, cities might institute price controls—but only for people who were already poor, and already living in the city, when the controls were passed. All newcomers, no matter their income, would have to pay full price, which would be inflated somewhat to cover grocers’ losses on the people who paid less.

And when it came time for local governments to put in their own revenue, they wouldn’t just use general funds; they would levy “affordable nutrition fees” on Whole Foods, boutique grocers, and fancy restaurants. They’d also create “inclusionary food” requirements, so that those grocers and restaurants had to donate ten percent of all the food they sold to the low-income. Of course, there’d be no guarantee that those measures would cover everyone who needed assistance buying food, and so literally thousands of people would end up applying for just a handful of grocery baskets.

Housing and food are very different goods, and there are obviously ways in which this is a bit of a strained analogy. But it does help illustrate some of the absurdities in the way we manage affordable housing.

In particular, while policies directed at making food more affordable surely are far from perfect, they have several key advantages over those that try to make housing more affordable. Most crucially, SNAP is funded through general revenue streams, and its benefits are guaranteed to anyone whose income qualifies.

In contrast, much of the affordable housing debate in many cities has focused on using impact fees, inclusionary zoning, or both, to extract resources from housing developers, who many accuse of creating the affordability crisis to begin with. But there are good reasons that’s not how we approach food policy, and most of them apply to housing, too. To begin with, blaming developers for high home prices just doesn’t reflect the actual reasons why some markets are more expensive than others. While it may make intuitive sense to many that greedy builders and landlords are ultimately responsible for the exorbitant rents they charge in places like San Francisco or Boston, for that to be true, it must also be the case that places like Phoenix and Memphis are so affordable because their developers and landlords are benevolent and self-sacrificing. And that seems a lot more far-fetched.

 

More importantly, though, by making local affordable housing programs dependent on such a narrow base of revenue—rather than general funds—we limit the number of households that receive help to far below the number who need it. (Of course, other programs that are funded at the federal level, including Section 8 vouchers and the Low Income Housing Tax Credit, get their money from other sources. But those aren’t sufficient either, and so it matters if local policies intended to fill the gap are doomed to miss that goal.) That’s how you get situations like 88,000 people applying for just 55 affordable units in New York City, or the fact that just 77 percent of those whose income qualifies them to receive housing assistance actually get any assistance.

As long as we have such a fragmented, ad hoc approach to housing, those issues will continue. As housing affordability becomes a larger problem, particularly in certain parts of the country, we need to deal with it in a comprehensive way, finding solutions that don’t just symbolically lift up a tiny fraction of those who need help, and that aren’t subject to the caprice of local governments that decide they don’t want to help anyone at all.

A year ago today, October 15th, 2014, we launched City Observatory, a data-driven voice on what makes for successful cities.

 

The past year has been a whirlwind: We’ve released four major reports—Young and Restless, Lost in Place, Surging City Center Job Growth, and Less in Common—each of which use data to examine some of the most important trends in American cities today: both the remarkable growth and transformation of central cities, as well as the persistent concentration of poverty and decline of “civic commons” spaces that pose some of our greatest challenges.

With each passing day, the evidence that cities are leading our nation’s economy becomes more compelling: City home values are rising much faster than in their surrounding suburbs, an indicator we call the “Dow of Cities.” City center job growth is outpacing that in the suburbs for the first time in decades, and the expansion of large metro economies is driving the national economic expansion.

Young people—especially young people with college degrees—are increasingly moving back to city centers. And the growing pool of talent in cities is drawing jobs and economic growth back to those centers as well.

We believe all of these things should encourage you, even if you don’t consider yourself an urbanist. The return to urban living has the potential to help create a healthier planet, as people drive less and use less energy to maintain relatively smaller urban homes. It can help make people healthier, too, by allowing them to walk more, and reducing their exposure to one of the greatest causes of death and serious injury in the country: car crashes. Finally, overwhelming evidence shows that bringing people with social capital and middle-class incomes back into urban neighborhoods that had lacked those things for years creates more social equity and economic mobility.

But the shift to cities comes with challenges as well as opportunities. The urban renaissance has been so robust that the demand for city living is growing at a much faster pace than the supply of great urban homes and neighborhoods. As a result, we have a “shortage of cities.” Many of our greatest urban challenges—declining housing affordability, traumatic neighborhood change, conflict over growth—trace their roots to this worsening shortage.

We’ve also pushed back on myths and miscalculations. We’ve challenged the still-too-common narrative that cities are dirty, dangerous and congested, and shown that we’ve made progress in making cities, safer, cleaner and more convenient. We helped lead the charge against the incredibly misleading “Urban Mobility Report,” which uses bogus figures about traffic congestion to convince the public and policy makers that our cities need even more highways, instead of investing in more affordable, sustainable, and efficient ways to get people where they need to go. And we’re working to encourage greater honesty and reflection in how we talk about change in cities—acknowledging that the cities we see today are not the product of some process of immaculate conception, but have evolved as a result of market forces and policy, including policies with the inherent contradiction that housing should be both affordable and a reliable source of wealth creation.

In our second year, we’ll turn even more of our attention to analyzing what we’re calling our “shortage of cities.” That’s the gap between the new increased demand for urban neighborhoods and the amount of housing actually available in them, which is held down both by zoning that prevents the construction of more housing in urban areas, and regulations that require newer neighborhoods to be ultra-low-density and car-dependent. We believe that understanding the causes, consequences, and potential cures for our national shortage of cities is key to many of our most important urban challenges, from making housing affordable to maximizing economic opportunity and creating a more sustainable transportation system.

And while we bill City Observatory as a “virtual” think tank, early next year, we’ll be engaging policymakers and thinkers in person, with a live City Observatory salon event to be held in Washington DC. Stay tuned for details.

We also want to thank everyone on our mailing list or Twitter who took the time to fill out our birthday survey, and we’re extremely gratified with the response we’ve received there and elsewhere. Though, as numbers people, we know these are hardly scientific stats, over three-quarters of survey respondents said they had spread the word about City Observatory by recommending our work to friends or colleagues, and many of you had kind words about our commentaries, research, and weekly email roundup, The Week Observed—with one calling it “absolutely my favorite thing I’m subscribing to right now.” (And for those of you who aren’t subscribed, you can do so at the top of the page!) We also heard your concerns about some issues with our website, from the way images load to the color scheme, and want to let you know that we’re working on making improvements.

Finally, we want to acknowledge the generous support of Knight Foundation in starting and sustaining City Observatory. Without Knight’s support and vision, none of the last year would have been possible.

Our partners and supporters at the Knight Foundation have announced a new round of the Knight Cities Challenge, which gives grants to people and organizations around the country for projects that make their cities more livable. The deadline to apply is October 27—check it out!

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What City Observatory did this week

1. Why America can’t make up its mind about housing. American housing policy is simultaneously trying to accomplish two things: keep housing broadly affordable, and keep property values strong. In other words: keep home prices down, and keep home prices up. Not surprisingly, it has struggled to achieve both of these goals. The belief that homeownership is—or should be—a surefire means of wealth accumulation leads to public policies that in many respects undermine efforts to make housing of all kinds more affordable. The tilt of tax policies to subsidies for single family homeownership, and local land use policies that constrict the expansion of housing supply in the name of “protecting property values” help inflate house prices—but at the cost of affordability. We won’t be able to successfully address the nation’s housing problems until we grapple with this inherent conflict.

2. A modest proposal: treat affordable housing more like food stamps. Imagine if, rather than allowing anyone whose income qualified them to sign up for government aid to buy food, we imposed an “inclusionary food” requirement on boutique grocery stores. Ten percent of all their sales would have to be donated to food pantries, and thousands of people would line up to apply for just a handful of grocery baskets every week. That would be insane! And yet it’s how many cities are approaching affordable housing. Without denying the many differences between housing and food, we think there are some things to learn from contrasting affordable housing and food stamps—and that as long as our housing policies remain fragmented, ad hoc, and subject to the whims of potentially hostile local governments, we’re not going to come close to solving the problem of unaffordable housing.

3. Happy birthday to us! This week, we officially made it to our first birthday! It’s been quite a year: we’ve published four major reports covering concentrated poverty, the growth of jobs in city centers, and the declining civic commons; written well over a hundred commentaries on housing, transportation, the interplay of urban policy and economic opportunity, and much more; and taken on myths about American cities, from the idea that more highways will solve traffic congestion to fear about a (false) resurgence in urban crime. We’re excited about the next year, and thrilled to have you along with us!

4. Two of our commentaries this week were republished in The Atlantic, helping us spread the word about smart urban policy to a much broader audience. On Monday, it was Joe Cortright’s piece on the “least unequal” city in the country, and whether it offers any lessons for the rest of us. And on Wednesday, the magazine published “Why America can’t make up its mind about housing.” Look for more of these collaborations in the future.

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The week’s must reads

1. While the face of early 21st urban public transportation might be light rail and streetcars, David Alpert, founder of the excellent urbanist blog Greater Greater Washington, argues in the Washington Post that buses are actually the key to a workable transit system. In the vast majority of American cities, trains don’t serve most trips that most people have to take—either because there are no stations nearby, or because the rail line only goes in one direction, usually towards downtown. But better bus service has the potential to create reliable, affordable mobility. Dedicated lanes, all-door boarding, and other measures are relatively low-cost ways to improve these services. Unfortunately, as we’ve shown, the trend line appears to be heading in the wrong direction.

2. Also at the Washington Post, Emily Badger writes a convincing takedown of the idea that cities, neighborhoods, or even countries can be “too full” to take on new residents. Rather than a legitimate argument against allowing the construction of new homes, or accepting international refugees, the idea that a place is “full” is used to shut down discussion while eliding the often unsavory reasons that existing residents oppose sharing their neighborhood or country with more people.

3. At CityLab, Eric Jaffe covers the demise of Leap, a startup that wanted to offer a private alternative to public transportation. Leap charged $6 for a “premium” bus ride, and led to early speculation that they might “disrupt” public transit the way Uber has hit the taxi business. But it never really got off the ground, and Jaffe has a great explanation of why that is: not just that people were turned off by its “tech bro” feel, but that public transit is simply not the kind of service that can be served by the private market in American cities. Just as roads need major government subsidies for car travel to work, very few transit lines can be sustained with fares alone, and having access to a large network of lines is what makes transit valuable.

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New knowledge

1. While homeownership has helped many millions of American families build middle-class wealth, we’ve known for a long time that black homeowners are much less likely to see their property values appreciate. Now a new study from Johns Hopkins University paints an even bleaker picture: even during the boom years of 2005-2007, black first-time homebuyers lost 47 percent of their net worth—while white first-time home buyers increased theirs by 50 percent. These new numbers underscore that no discussion of the importance of homeownership as a wealth-building tool is complete without acknowledging these massive racial gaps, and that this strategy doesn’t just work less well for African Americans—it’s often actively a wealth destroyer.

2. A new study from the Philadelphia Federal Reserve confirms earlier findings on displacement in gentrifying neighborhoods, while adding new details. The paper finds that residents of low-income gentrifying neighborhoods are just 0.4 percentage points more likely to move than residents of low-income neighborhoods that don’t gentrify—and those people who do leave are not especially likely to move to lower-income neighborhoods. However, out-migration rates are higher for people in the most rapidly gentrifying communities, and for renters. On the whole, however, the authors find that gentrification is driven overwhelmingly by changes in the demographics of in-movers, rather than elevated rates of out-moving. Moreover, while the median gentrifying neighborhood in Philadelphia saw its average income increase by 42 percent between 2000 and 2013, low-income neighborhoods that didn’t gentrify saw their average income fall by more than 18 percent—confirming the “reinvestment or decline” pattern we found in Lost in Place.

3. In a small glimmer of happy news, researchers from the US and Sweden dive into the decline of racial segregation in Los Angeles. While 40 percent of Angelenos lived in “strongly segregated” neighborhoods in 2000, just 33 percent did in 2010. This included significant declines among all major ethnic groups except for Hispanics, and in particular significant declines in homogenous white neighborhoods. Another finding: huge levels of racial change in most parts of the city. Of course, while racial segregation is at least slowly declining in most American cities, economic segregation—with a strong racial component—is growing quickly.

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The Week Observed is City Observatory’s weekly newsletter. Every Friday, we give you a quick review of the most important articles, blog posts, and scholarly research on American cities.

Our goal is to help you keep up with—and participate in—the ongoing debate about how to create prosperous, equitable, and livable cities, without having to wade through the hundreds of thousands of words produced on the subject every week by yourself.

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

Last week, our partners and supporters at the Knight Foundation announced a new round of the Knight Cities Challenge, which gives grants to people and organizations around the country for projects that make their cities more livable. The deadline to apply is October 27—check it out!

What City Observatory did this week

1. What’s behind the debate over American streets. Going off an excellent postfrom the Quebec-based traffic engineer and blogger Simon Vallée, we investigate the idea that many of the clashes about “complete streets” come from two incompatible visions of transportation policy: the “engineering approach” and the “economic or behavioral approach.” The engineering approach, which has been dominant for decades, takes a certain number of vehicle trips as an unchangeable given, and then asks how to redesign streets to allow those vehicles to move through as quickly as possible. The economic or behavioral approach, on the other hand, takes a step back, and asks how we might get the people in those vehicles to their destinations—without assuming that the answer will involve cars.

2. The end of peak driving? After a decade of decline, vehicle miles per person in the U.S. have started to creep up again. Is this a sign of the resurgence of car-dependent living? Hardly. Rather, it’s likely an effect of the steep decline in gas prices, which have fallen by more than a dollar in many places since a year ago. While the effect of gas prices on driving isn’t instantaneous—many factors, including the kinds of cars people buy and the home locations they choose, make driving levels sticky—it does have an impact. And unless gas prices continue to fall, we’re unlikely to see a sustained increase in vehicle miles per person.

3. Talent, opportunity, and engagement are essential to successful cities. To mark the beginning of Knight’s Cities Challenge, we wrote about what it means to be a “successful city” by imagining a successful neighborhood. From a park for people to gather and meet at, to local shops where people can conveniently run errands, to easy, affordable, and safe transportation, to abundant access to jobs, we have a good idea of what makes a place attractive and livable. Unfortunately, too often we throw up impediments—from making “illegal neighborhoods” to creating a “shortage of cities”—to meeting that vision.

4. The danger of taking policy lessons from extreme cases. Two recent media reports have lauded Ogden, Utah, as an unlikely beacon of hope in the battle against inequality. It turns out that Ogden has the lowest Gini coefficient—the most commonly used index of inequality—in the country. But is studying Ogden actually helpful? Mostly not. It turns out that its “success” is largely about being in the orbit of another, larger metro area (thus benefitting from the dynamic of relatively poor and wealthy people living in the city center), and by having the third-highest concentration of federal jobs in the country, which tend to support a strong middle class. Neither of those are scalable solutions to other cities—not to mention that we’ve questioned the premise that low inequality at the local level is usually a good thing.

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The week’s must reads

1. Media representations of “urban” neighborhoods often make it seem like you need to go to the coasts, or at least Chicago, to find dense, walkable communities. But Granola Shotgun’s photo essay of urban Louisville, Kentucky, proves that’s just not true. In fact, walkable urbanism is a tradition all across the country—it’s just that sometime around the middle of the 20th century, many localities in the South, Midwest, and on the coasts adopted zoning codes and other regulations that created “illegal neighborhoods.”

2. At Planetizen, Todd Litman dismantles a paper from the Center for Opportunity Urbanism that claims sprawl and low-density neighborhoods are best for low-income households. Litman shows that the index of affordability used by the COU is actually meant to describe the typical expenditures of a relatively wealthy worker, and its assumptions categorically exclude savings inherent to urban areas. For example, while it includes the cost of gasoline, it does not include the likelihood of owning fewer or no cars, or changes in average distance driven. It also measures housing costs using only single family homes—eliminating the cost savings of multifamily housing in urban areas. (Litman published this piece back in August, but we missed it, and thought some of you might have, too!)

3. Also via Planetizen, the news that we have a traffic safety crisis because of the way we design infrastructure, and not because of the individual faults of drivers or pedestrians, has reached—of all places—Dallas, Texas. The Dallas Morning Newsreports on a charged debate in the City Council sparked by a report from the police and Department of Street Services, which claimed that the 32 pedestrian fatalities suffered so far in 2015 in Dallas are mostly the result of “pedestrian error.” Council member Philip Kingston, however, challenged that idea, arguing that the real problem is “infrastructure that places the pedestrian in harm’s way”: narrow or nonexistent sidewalks, excessively wide roadways, high speeds, and few crosswalks. Once again, the movement to reform our cities shows that it’s about much more than the big coastal cities.

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New knowledge

1. The Urban Institute released its Q3 2015 Detroit Housing Tracker, with updates on the state of that city’s ongoing transformation. With summaries of key Detroit housing programs, a rundown of major market news, and more, it’s a must-read for anyone with an interest in Detroit, the broader industrial Midwest, or the future of American cities. One of the takeaways is the very different paths of the riverfront areas, especially east of downtown, and the Woodward corridor, which continue on a robust recovery, and much of the rest of the city, which is still struggling.

2. Richard Benton, a professor at the University of Illinois, has published research showing that civic participation in groups like churches or neighborhood associations can play a key role in “reducing social capital deficits and fostering the ties that bridge the divide between upper- and lower-class status lines.” These ties, in turn, can be extremely valuable for an individual’s capacity to, say, find jobs or make other important connections to improve their lives. Unfortunately, opportunities for these sorts of face-to-face interactions may be diminishing, as we recorded in “Less in Common.”

3. Gizmodo reports on a new study from McGill University researchers about howdifferent types of commuting produce different levels of stress. This may not come as a surprise to many of you, but it turns out that driving is by far the most stressful way to get to work. The least? Walking, followed by transit—though part of what makes transit less stressful is the walk to and from the train or bus. Given what we know about the effects of chronic stress, we’d put this on the growing pile of research suggesting that neighborhoods that force everyone to drive to almost everything are a serious hazard to your health.

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The Week Observed is City Observatory’s weekly newsletter. Every Friday, we give you a quick review of the most important articles, blog posts, and scholarly research on American cities.

Our goal is to help you keep up with – and participate in – the ongoing debate about how to create prosperous, equitable, and livable cities, without having to wade through the hundreds of thousands of words produced on the subject every week by yourself.

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

Two recent press features have suggested that one Utah city has worked out the recipe for equitable development. The cover story from Newsweek’s October 2, issue offers “Lessons from America’s most egalitarian zip code.” It proposes that Ogden, Utah is a model for how the US can address income inequality.

 

The article is at least the second in this vein. Writing in the Los Angeles Times in July, writer Don Lee said that quiet Ogden offers a surprising glimpse of income equality.

The premise of both of these stories is that the Ogden-Clearwater metropolitan statistical area has the lowest reported Gini coefficient (.3949) of any U.S. metropolitan area, an indication that income inequality is less there than in any other place.

The fact that one metropolitan area should have a measured rate of inequality that is lower than other metropolitan areas is hardly a surprise: somewhere, obviously, has to rank first, and somewhere else has to rank last. From a policy perspective, however, the question has to be: Is there anything we can learn from Ogden that we can apply to other metropolitan areas, or the nation as a whole?

Ogden has several unique characteristics. First, it’s very much in the economic orbit of the considerably larger Salt Lake City metropolitan area. While it is now classified as a separate metropolitan area, until 2000 Ogden and Salt Lake City were combined for federal statistical purposes. In some respects, Ogden resembles a large somewhat distant suburb of Salt Lake. Like many metropolitan areas, very high income and very low income households are somewhat more likely to be found in the urban center. Just as many of the suburbs of metropolitan areas have measurably less inequality than large urban cities, it shouldn’t be any surprise that Ogden has lower measured inequality than Salt Lake City.

 

As we pointed out in our post, high marks for equality may actually be a symptom of exclusiveness rather than equality: cities that exclude poor people frequently have higher measured equality than do more inclusive cities.

It’s also worth considering the structure of the Ogden economy. Two of the largest employers are arms of the federal government: Hill Air Force Base and the Internal Revenue Service. While neither pays particularly high wages, federal jobs are disproportionately large source of jobs and income in Ogden. According to the Bureau of Economic Analysis, federal payrolls account for more than 15 percent of all non-farm income in Ogden:  more than $2 billion annually in a local economy of about $13.7 billion.  And at more than 12 percent of the local economy, the share of Ogden’s metro economy made up of federal civilian payrolls is the third-highest in the country among large and mid-sized metropolitan areas.  Federal paychecks are a bigger share of the local economy only in Huntsville, Alabama, and metropolitan Washington, D.C.  In the typical large metropolitan area, federal civilian payrolls make up about 2.2 percent of the local economy; in Ogden, they are more than five times larger.

One thing is clear about the Utah experience: Cities in Utah (and many other Mountain West states) have higher rates of measured intergenerational economic mobility than the U.S. as a whole. Relying on statistics from the landmark Equality of Opportunity study conducted by Raj Chetty and his colleagues, both articles report than kids growing up in poor households have measurably better chances of moving up in the income distribution as adults than the typical American.

The Newsweek article attributes the city’s low rates of inequality to its economic and community development efforts. Apparently the city has revived its downtown and added to employment in the past decade or so. But there’s little evidence that higher measured equality in Ogden is the product of any recent policies or programs. The Chetty study measured the intergenerational mobility of kids who grew up in Ogden in the 1980s and ‘90s—at a time when Newsweek says the economy and community were struggling. And even in 1999, Ogden—then combined with Salt Lake City for federal statistical purposes—had one of the nation’s lowest levels of measured inequality. And as we’ve noted, the same pattern holds for many other communities in the Inter-Mountain West.

The statistics in the Chetty study show that the strong correlates of high intergenerational mobility across all communities are intact families, strong schools, limited sprawl, and low levels of racial and ethnic and income segregation.  These factors tend to be more deep-seated and slow changing than economic development programs.

So what are the real lessons Ogden offers for those looking to reverse the growing tide of inequality in the US?

First, it really helps to have a strong source of good, or at least middle-wage, jobs. While those have been increasingly hard to find in the private sector, if you’re lucky enough to have a substantial government employment presence—like a big military base or extensive administrative offices—you’ll probably have a bit more income equality. Whether that’s a recipe for other communities or the nation isn’t clear: quintupling the number of federal jobs in every metropolitan area doesn’t seem to be on anyone’s political agenda.  Being one of the fortunate few cities with a large concentration of government employment isn’t a scaleable solution to inequality.

Second, while some smaller metros on the periphery of a big city do well on the inequality statistics, many of the problems of inequality end up being outsourced to cities. Suburbs, especially exclusionary ones, tend to ban the kinds of affordable housing construction that enable poor people to live in a community. Cities offer a bigger base of job opportunities, more affordable transportation (workable transit systems) and often have better social support networks. Cities also attract high income households. Big city centers have more inequality, but it’s because they facilitate diversity and inclusion—not because they generate inequities.

While it may show up differently in different locales, the roots of the nation’s inequality problem are national and not merely the sum of local inequalities. The diminished value of the minimum wage, the falling clout of unions to raise worker wages, the growth of global competition, a tax code that favors the accumulation of wealth and the rise of superstar returns in a range of industries have all caused inequality to increase nationally. These challenges are largely beyond the power of cities to address.

Ironically, as we’ve pointed out at City Observatory, those places with a low measured level of equality may be the one’s that are the most diverse and inclusive, providing both attractive places for talented higher income workers to live and invest, and also providing access to housing and job opportunities for those at the bottom of the income scale.

So the story of Ogden is reminiscent of H. I. McDonough’s dream at the end of “Raising Arizona”:

But still I hadn’t dreamt nothin’ about me ‘n Ed, until the end. And this was cloudier, ’cause it was years, years away. But I saw an old couple bein’ visited by their children, and all their grandchildren too. The old couple wasn’t screwed up, and neither were their kids or their grandkids… And I don’t know. You tell me. This whole dream, was it wishful thinkin’? Was I just fleeing reality like I know I’m liable to do? But me and Ed, we can be good, too. And it seemed real. It seemed like us, and it seemed like, well, our home. If not Arizona, then a land not too far away, where all parents are strong and wise and capable, and all children are happy and beloved. I don’t know. Maybe it was Utah.

Here are two ideas that, if you’re like most Americans, you probably mostly agree with:

1. Government policy should help keep housing broadly affordable, so as not to price out people of low or moderate incomes from entire neighborhoods, cities, or even metropolitan areas.

2. Government policy should protect residential neighborhoods from things that might negatively impact housing values, because homes are an important investment and wealth-building tool.

Having read them together like that, you’ve probably already jumped ahead to the big reveal, which is that these two ideas are almost entirely mutually exclusive. The first essentially says, “Use housing policy to keep home prices down”; the second says, “Use housing policy to keep home prices up.”

It’s no wonder, then, that housing policy is a bit confused. The same municipal governments that require that housing on scarce urban land be taken up only with resource-intensive, high-building-cost single family homes; that use zoning to separate out unwanted apartments, shops, transit lines, and other uses on the grounds that they might hurt home values; and promote neighborhood beautification and other projects on the grounds that they will raise housing values, also issue affordable housing reports trying to understand why home prices aren’t lower, and levy “impact fees” on new development for the alleged crime of, you know, raising home values.

The problem is that, at least in certain contexts, both of these goals are legitimate and important. Of course, especially in the wake of the Great Recession’s housing market collapse, a number of people have expressed skepticism about homeownership as a wealth-building tool; surely there are less risky—that is to say, less potentially ruinous—ways to a retirement income or college fund than investing hundreds of thousands of dollars in a single asset whose appreciation, as we all now know, is far from guaranteed.

And perhaps, if we could go back to the New Deal and talk this over with President Roosevelt before he inaugurated the era of mass homeownership with a federally regulated and subsidized mortgage market, we would want to make that point. But today, some eighty years later, it’s a bit late. That’s because homeownership has already provided a route to middle-class stability for tens of millions of households—and those households are mostly white. As the Washington Post wrote in a fantastic series earlier this year, public and private housing discrimination has led to a situation where home prices in black neighborhoods—even ones where the vast majority of households have solidly middle-class incomes, or higher—are much, much more unstable than in white neighborhoods.

This inequality is buttressed by the fact that our homeownership subsidies have worked selectively to the benefit of higher-income homeowners: the mortgage interest tax deduction, for example, gives larger tax expenditures to people who own more expensive houses. The more your home appreciates in value, the more benefit you get from the exclusion of home sales from capital gains tax. Ditto the value of excluding imputed rent, and deducting property taxes. The net result, according to the University of Chicago’s Atif Mian and Amir Sufi, is that homeownership has significantly magnified wealth differentials in the US.

One result of all this is that many white families have built generations of wealth through homeownership, while black families have made barely any progress: In fact, The Atlantic reported on a study suggesting that homeownership has been a net financial loss to African Americans since 2000. In 2013, the median white household held $126,000 in wealth from their home, while the figure for the median black household was just $31,000. That gap, in turn, represents a massive difference in the ability of a family to withstand a big financial shock—unexpected unemployment, for example, or a serious medical crisis—that may go some way to explaining why black middle-class workers are much, much more likely than their white counterparts to fall back into poverty.

(And the resistance of many neighborhoods to growing property values is quite strong indeed: look at how much of central and southern Brooklyn has actually lost property value since 2004.)

Giving up entirely on the idea of homeownership as a path to wealth-building would essentially be saying that black Americans have just missed the boat on this one, and will have to remain behind forever. On the contrary, in the relatively few places where housing values finally do go up in mostly black neighborhoods, it represents—at least in part—a kind of justice: giving black homeowners the same access to financial gain that their white counterparts have enjoyed for the better part of a century.  

Unfortunately, that gain also represents a loss for people, especially renters, who can’t afford to pay much more than they already do, and for whom artificially low prices in largely minority neighborhoods meant access to locations that they would not be able to afford in a normal market where race did not play such a major role in housing prices.

 

So how to square that circle? Well, that’s basically the challenge of housing policy in a nutshell. Perhaps a start would be to acknowledge that there is, in fact, a tension here—that “protecting” or “promoting” property values is the same thing as “making housing more expensive.” It’s somewhat discouraging, for example, when community organizations claim that “affordability doesn’t mean housing values have to remain stagnant,” without acknowledging that if housing values aren’t stagnant—ie, they’re growing—that means they’re also becoming less affordable.

But there is some hope. For one, robust production of housing that isn’t priced by the market, and therefore isn’t affected by rising market prices. That can be accomplished through public housing, privately-developed affordable housing with programs like LIHTC, and housing vouchers. At the moment, few places produce non-market housing at anything close to a scale that would provide broad affordability, but there are encouraging examples: Portland, for instance, has created 2,300 units of affordable housing in its redeveloping Pearl District, adjacent to downtown, supported largely with funds from tax increment financing.

In many places, having a wide variety of housing types and sizes can also make room for people of a wide variety of incomes. My street in the Edgewater neighborhood of Chicago, for example, contains a handful of single family homes, whose value at this point probably reaches into the seven figures; expensive newer condo buildings; older multifamily buildings, some of which have large, luxuriously updated units, and others whose apartments are somewhat smaller, or have less up-to-date finishes; and a few single room occupancy buildings, with minimal accommodations. As a result, there is market-rate housing for everyone from upper-middle-class professionals to working-class immigrant families to low-income elderly adults. Of course, that sort of diversity is typical of a pre-zoning “illegal neighborhood”: a vanishingly small proportion of American neighborhoods allow that sort of mix to be created today, which is a large part of the problem.

We are, in conclusion, profoundly conflicted as a nation when it comes to housing: we want it to be affordable, but we also want its prices to rise fast enough to be valuable as a financial investment. That’s a contradiction we need to acknowledge if our housing policy debate—and, ultimately, our housing policy—is going to be coherent and constructive.

A little over a year ago, a gallon of regular gasoline cost $3.70. Since then, that price has plummeted, and remains more than a dollar cheaper than it was through most of 2014.

Over the same period, there’s been a small but noticeable uptick in driving in the US. After nearly a decade of steady declines in vehicle miles traveled per person, car use has suddenly pushed upwards. Average miles traveled per person, which were 25.7 a year ago, have jumped up to 26.4 in July—the first sustained increase in driving in more than a decade.

Some in the highway community have heralded the growth in driving in recent months as a sign that we need to invest much more in road construction.

The increase isn’t very big, however. In historic terms, Americans are now driving at about the same rate as they were in 2000. It would take nearly a decade of growth at the current rate of expansion just to get back to the level of driving of 2004. But there’s little reason to believe anything like that is in the cards.

During the long period of driving declines, many were tempted to dismiss gas prices as a factor in shaping driving behavior, arguing instead that the decline was solely due to demographics, changing tastes, improved communication technology, and American’s falling out of love with cars. All of these trends were in play, but it’s clear now, as it should have been then, that price matters.

Nevertheless, highway advocates have predictably seized on the uptick in driving to claim that we need to throw a lot more money at road widening projects. Does the upsurge in driving really signal an end to the millennial abandonment of motoring? Is there a renewed “love affair” with automobile?

We would argue no: The cultural explanations of the driving trends have to be read in the context of prices. Millennials coming of age in the era of $4.00 a gallon gas behave very differently than baby boomers who paid 29 cents a gallon.

For some people, however, this is not obvious: they look at the trends in gas prices and vehicle miles traveled (VMT) and conclude that there’s little correlation. The very sharp Doug Short at Adviser Perspectives, argues, for example, that “the correlation is fairly weak over the entire timeframe.” Similarly analysts at the State Smart Transportation Institute argued that: “There is no clear evidence that fuel prices have distinctly influenced driver behavior during the past decade”

But “price elasticity”—the way that people change their consumption behavior in response to how much something costs—still matters. The fact that driving has risen as gas prices fall is far from a coincidence. In fact, evidence shows that Americans react to higher gas prices by driving less—and to lower gas prices by driving more.

 

It’s important to remember that there’s no reason to expect the reaction to changing gas prices to be instantaneous. An axiom of economics is that elasticities are larger in the long run than the short run. People make so many decisions (where to live and work, whether to own a car, etc) that can’t be changed immediately. Likewise, perceptions and expectations about future price changes make a big difference: Few people anticipated the advent of $4.00 per gallon gasoline in the early 2000s. The technical challenge with estimating price elasticities is that analysts have a hard time sorting out short term and long term effects (prices change rapidly, behavior much more slowly), and many of the changes in prices are either too small to be noticed by consumers or short-lived. As a result, the reaction to price changes plays out slowly, over time—the decline in VMT per capita after 2008 continued right through 2013, even though prices were not increasing above their previous peaks.

But while it may be attenuated, and play out gradually over time, there is still a behavioral response to changing prices. Already, there’s evidence that the decline is gas prices has produced a change in the kind of vehicles we’re buying. The sales-weighted average fuel economy of new vehicles, which has been steadily rising, and reached a high of 25.8 miles per gallon in the summer of 2014, has fallen by 2.3 percent to 25.2 miles per gallon today, according to researchers at the University of Michigan. Because of the long life of vehicles, lower fuel economy gets “baked into the cake”: meaning that lower fuel prices today produce greater fuel consumption and more emissions for years to come.

And while there may be a break in the longer-term decline in VMT per capita, there’s little reason to believe that we’ll see a return to the long term growth path that prevailed in the 1980s and 1990s—growth that many transportation departments’ forecasts still cling to.

It’s certainly true that demographics (an aging population), changes in tastes (the growing preference for urban living, biking and walking), and technology (the ability to use telecommunications to reduce trip taking) will all continue to contribute to a diminished demand for driving. But prices still matter. What we’re embarking on, courtesy of a highly volatile and unpredictable global market for petroleum, is a very interesting experiment to find out exactly how much—in economics terms, to discover the price elasticity of demand for driving. We’ll be watching to see the results.

What City Observatory did this week

1. Cities’ role in growing our nation’s economy. New data from the Oregon Office of Economic Analysis builds on our “Dow of Cities” post and Surging City Center Job Growth report to show that urban centers are at the heart of the country’s recovery. Large metropolitan areas—those with over a million residents—are growing faster than smaller metros, and central cities are growing jobs faster than their suburbs. Recognizing, encouraging, and taking advantage of this trend is important both for urban areas and the country as a whole.

2. The high cost of affordable housing and the shortage of cities: notes from a panel. Our own Joe Cortright took part in a panel at Oregon’s Metro regional government on whether San Francisco’s housing woes are in Portland’s future. Along with Tech Crunch’s Kim-Mai Cutler, Elissa Harrigan of the Meyer Memorial Trust, and developer Eli Spivak, Joe argued that a “shortage of cities” is driving rapidly rising home prices in places around the country. Cutler also brought up the shockingly large sums spent on affordable housing projects—often the better part of a million dollars per unit—and pointed out that at such prices, building those units on its own isn’t a scalable, sustainable strategy to getting out of the housing crisis.

3. When it comes to transit use, destination density matters more than where you live. While we often imagine that the decision to drive or take transit depends on where you live, it turns out that where you’re going is even more important. Using data from the American Community Survey, we show how much more concentrated transit use is by job location than home location. The lesson: land use should prioritize getting jobs and other important destinations (like schools and shops) near transit, especially central transit stations. That way, everyone in the region stands to gain from improved access.

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The week’s must reads

1. The University of North Carolina – Charlotte’s Plan Charlotte blog takes a look at how their city zones land, and it fits the “illegal neighborhood” problem to a T. Just 9 percent of Charlotte’s land area is zoned for any kind of mixed-use buildings, making neighborhood corner stores, hardware stores, or cafes much, much more difficult to open. Moreover, fully 61 percent of Charlotte is zoned for single-family homes only—while just 7 percent is zoned for multifamily residential. Laws like these help explain why development has yet to catch up with demand for mixed-use, walkable urban neighborhoods, creating our “shortage of cities.”

2. Streetsblog New York City covers the case for a bus rapid transit line in Queens—from a public safety perspective. Woodhaven Boulevard, one of the main corridors for the proposed BRT line, is been one of the most dangerous streets in the city, with car crashes causing hundreds of injuries and several fatalities in just the last few years. Dedicated bus lanes and new pedestrian islands would help calm traffic and create a safer street for people in cars, buses, bikes, and on foot.

3. The Urban Institute has a new paper, “Housing Policy Levers to Promote Economic Mobility,” that’s a must-read handbook for anyone who cares about promoting long-term economic and social justice in America’s cities. The report’s authors go through the major governmental housing programs one by one, picking out ways they could be used to improve opportunity for the low income, and especially those living in high-poverty neighborhoods. Among the recommendations: incentivize Low Income Housing Tax Credits projects to be located in communities with good schools, transportation access, and employment opportunities; create a “renter’s tax credit”; and end exclusionary zoning laws that keep home values artificially high in desirable neighborhoods.

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New knowledge

1. Via Streetsblog, a new study by the Transportation Research Board finds thatwithout public transit networks, American cities would have to be 37 percent larger. That’s because transit allows for more compact land use, by reducing the need for sprawling surface parking lots and encouraging development to be done within walking distance of stops. In fact, the TRB finds that the land use effects of transit are dramatically larger than simply the substitution of car travel for other modes: If everyone who takes the bus or train drove tomorrow, that would increase vehicle miles traveled by 2 percent. But if the land use effects of transit disappeared, that would increase vehicle miles traveled by 8 percent.

2. Researchers from Texas A&M University tested the hypothesis that improving walkability really creates economic value, and they found that it does. Moreover, the benefits may rise faster as the neighborhood becomes more and more walkable: In the most walkable neighborhoods, a one percent improvement in walkability leads to $1,329 in additional property values, while in moderately walkable neighborhoods, the same-sized improvement creates somewhat less new property value.

3. Katie Fitzpatrick of Seattle University writes about her new paper on the effects of “food deserts”—neighborhoods with little to no access to grocery stores—on food purchasing and consumption. The results contradict much of the conventional wisdom: holding other factors constant, residents of “food deserts” actually did not have significantly different outcomes on most measures than other people. What did matter, however, was transportation: people in food deserts who did not own a car had much worse outcomes, suggesting the importance of accessible transportation to destinations like grocery stores.

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The Week Observed is City Observatory’s weekly newsletter. Every Friday, we give you a quick review of the most important articles, blog posts, and scholarly research on American cities. You can sign up to get it in your inbox by clicking “Subscribe” at the top of the page!

Our goal is to help you keep up with—and participate in—the ongoing debate about how to create prosperous, equitable, and livable cities, without having to wade through the hundreds of thousands of words produced on the subject every week by yourself.

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

What are roads for? For that matter, what’s transportation policy for? Much of the urban reform movement of the last few decades has been about re-asking, and re-answering, these questions. Most people who follow trends in urban policy could outline at least a rough sketch of the debates: high-speed car traffic versus “complete streets” for pedestrians, bicyclists, and transit users; building more and more highway capacity for private vehicles versus investing in “alternative” modes of transportation.

Last week, at his blog, the Quebec-based traffic engineer Simon Vallée posted an excellent diagnosis of the wonkish roots of these disagreements. He frames it as the “engineering” approach against the “economic” approach—and, though he’s an engineer himself, he comes down on the “economic” side.

The basic distinction is this: Engineers typically look at roads as a closed system, with a certain number of vehicles and a given amount of space, and then ask how to arrange that space to ensure the most efficient passage of that quantity of vehicles. The preferences of the people inside the vehicles really don’t enter into the equation. As Vallée puts it, “the engineering approach…essentially eliminates humans from the problem.”

 

The economic, or behavioral, approach brings back humans—and with them, the idea that given amount of vehicle trips isn’t just a feature of the natural world, but the result of decisions by actual people who want to get somewhere in order to do something. The question then changes in a subtle but profound way: not how to speed vehicles through a road most efficiently, but how to best connect people with the places they want to go.

The engineering approach is simple, but inherently limited: because it takes the number of vehicles as a given, its tools are generally restricted to either creating more space by building new roads and widening existing ones, or getting rid of impediments to the flow of traffic—impediments like safe crossings for pedestrians, or sidewalk or plaza space that could be “better used” as wide-radius side lanes so cars don’t have to slow down as they turn.

In contrast, when vehicle trips aren’t a fact of nature but the result of decisions people make about how to get to the places they want to be—decisions that depend on many different factors, like travel time, cost, and the feasibility of other transportation options—you get a much bigger toolbox. Maybe charging for scarce and valuable road space through congestion pricing could help open up roadways in dense areas so that people who really need to use them can do so without crawling through traffic. Maybe the revenue from those congestion charges could help improve service on public transportation, so that some number of people choose not to drive, reducing the number or shifting the timing of vehicle trips (the same number that the engineering approach treats as unchangeable) and moving people onto much more space-efficient vehicles, like buses. Maybe changing land use policy would allow people to make fewer, shorter vehicle trips, or make other modes, like walking, biking, or transit, more attractive for some of them.

 

Bringing humans back into the question also allows you to acknowledge that people have desires that aren’t directly related to transportation. Safety, for example. Reducing the number and length of vehicle trips translates straight to fewer car crashes, and fewer avoidable serious injuries and deaths. Making streets a pleasant place to walk and gather—something that’s difficult when sidewalks have been narrowed to make room for speeding cars just feet away—can pay serious economic dividends and help establish a sense of community. In the economic or behavioral approach to transportation policy, all of these goals suddenly become fair game.

We would also add that the engineering approach means that a substantial amount of urban policy energy goes into “getting there”—rather than on the broader experience of “being there,” and how we might maximize those benefits, in terms both economic and social. Turning our cities’ streets into excellent conduits for high-speed vehicles means that they’re not excellent places for people to be. That takes a toll, both on our ability to create tight-knit, supportive communities that people are proud to be a part of, and to create thriving, prosperous neighborhoods with economic opportunities.

Vallée goes into much more detail on his blog, and it’s very much reading his whole post. The takeaway, however, is that transportation isn’t just about infrastructure: it’s about people, and what they want, and the full range of ways that we might help them get it.