If charging scooters to use city streets makes sense, let’s charge cars proportionately

A little bit late to the party, but today the first electric scooters appeared on the streets of Portland. Bird announced that, with the city’s permission, it was scattering hundreds of its electric scooters in and around the downtown. A second company, Skip, is expected shortly, and Lime is also gearing up to enter the market.

One item in the Oregonian’s announcement of the new service caught our eye:  Bird will pay the city $1 per day for each scooter it operates, in order to help support the cost of road infrastructure:

Bird said it commits to: “collecting all of its vehicles each night for charging and necessary maintenance; practicing responsible growth by only adding more vehicles when each Bird averages three or more rides per day; and remitting $1 per vehicle per day to the city to build more bike lanes, promote safe riding, and maintain shared infrastructure.”

Interesting idea. As we’ve maintained at City Observatory, much of our urban transportation problem derives directly from the fact that the price is wrong: we don’t charge road users for the roadway that they use. The city is wisely asking Bird (and presumably other scooter operators) to pay in proportion to how many scooters they place on city streets. The dollar a day charge should keep them from inundating city streets with unused or underused scooters, and will provide money to maintain and improve infrastructure.

That got us thinking. What if the city imposed a similar proportionate charge on cars?  Right now, the city charges almost nothing to car owners living in the city. The city collects some money from those who park at metered downtown street spaces during prime hours, and gets a portion gas taxes (though not enough to cover the cost of building and maintaining roads). Let’s imagine that the city imposed the same kind of fee on cars it charges for scooters, but made it proportional to the number, size, weight, pollution, safety impacts and value of private automobiles.

Start with a simple per vehicle fee. Suppose each car owned by a city household paid a dollar day toward the cost of building and maintaining city streets.  According to the American Community Survey, Portland households own about 380,000 private vehicles.  If they each paid a dollar a day toward the cost of city streets, that would work out to about $365 per day, which is more than triple the amount of money that the State of Oregon (not the city) charges as an annual vehicle registration fee.  (This would provide $140 million annually for city street expenditures).

We should also consider the vehicle’s safety and environmental impacts. Scooters are smaller and cleaner than cars. A scooter occupies only a tiny fraction of the space occupied by a typical automobile. Also, keep in mind that a 25-pound, 20 mile per hour scooter is far less likely to be a lethal menace to pedestrians than a 2-ton, 60 mile per hour car. And the all-electric scooters (especially if charged overnight using renewable power, like wind or hydro), essentially emit no pollution (again, unlike cars). So if scooters are paying a $1 a day each, bigger, dirtier and more dangerous car ought to be paying several times as much.

We could also look at the road user fee relative to the value of the vehicle.  The kind of scooters that Bird is operating retail for about $500. A fee of $1 per day for infrastructure works out to $365 per year or an annual amount that is more than 70 percent of the cost of a vehicle. To be proportionate to value, a $10,000 car (a used, low value one) would pay a fee of $7,000 per year to use the roads.

Finally, we know that road damage is roughly proportional to the fourth-power of axle weight.  So a 25-pound scooter with a 150-pound passenger weighs only about 5 percent as much as a 2-ton car.  So if the car paid proportional to the damage it causes to the roadway, its fee should be something like several hundred times higher than the fee for a car.

There’s a profound mythology that we have a “user pays” road system. Car drivers pay only a fraction of the costs that they impose, and there’s almost no relationship between how much infrastructure one uses and how much one pays toward the cost of the system.

We should use pricing to align the costs of the transportation system with the demands that users put on the system. True, scooters will take up some urban curb space, and require road and bike lanes and sidewalks. But they take up so much less space, cause so much less pollution, cause infinitesimally as much road wear, and are so much less of a hazard than private automobiles that they ought to pay far less than cars.  Pricing is a sensible policy, to be sure; but if scooters are paying a dollar a day or so, then cars ought to be asked to pay $10 per day–or more.

A review of The Divided City

Alan Mallach, The Divided City:  Poverty and Prosperity in Urban America (Island Books, 2018, 326 pages).

Before you head out to the beach or mountains or wherever your summertime plans take you, grab a copy of Alan Mallach’s new “Divided City.” It’s a cogent analysis of the current state of play of the nation’s urban challenges and opportunities, and will give anyone who thinks about cities a wealth of new information, a powerful perspective on cities and neighborhood change, and some inspirational words that will guide you when you return to work.

Divided City is national in scope, but Mallach’s primary focus is on the plight of aging industrial cities, Detroit, Cleveland, St. Louis and others, who suffered most from the decline of manufacturing, and who have struggled most to adapt to the new knowledge economy. Mallach acknowledges that the recipe for wealth creation has shifted from the traditional view that production produces wealth, to one that is more complicated, and where the presence of amenities and their ability to attract and retain talent both drive immediate success and trigger greater productivity (pages

There’s some good news: Cities are coming back back. Mallach reminds us of the litany of urban obituaries written in the 1970s and 1980s: cities had become unlivable, their populations were doomed to unending decline, and would become reservations for the poor and the blacks surrounded by heavily guarded middle class suburbs. (page 26). Yet the narrative of urban decline from the 1970s and 1980s no longer holds; there’s a genuine renewal of urban life.

The locus of urban economic prosperity has shifted from manufacturing prowess to knowledge creation and the quality of life. This shift, while it has worked to the advantage of cities, relative to rural reas, has systematically disadvantaged the industrial cities of the midwest, relative to coastal metropoli.

The urban revitalization has been spearheaded by a generational change in attitudes toward urban living; young adults, especially well-educated ones are increasingly choosing to live in cities.

The red herring of gentrification

The highly visible movement of young adults to cities–and the growth of emblematic businesses (bars, coffee shops, restaurants, boutiques), draws media attention to “gentrification”. There’s a fair amount of pearl clutching and hand-wringing among many self-styled progressives that gentrification is somehow making the plight of the poor even worse. Mallach critically examines this view, and shows why it’s a poor diagnosis and leads to even worse prescriptions when it comes to urban policy.

As Mallach notes, gentrification is surprisingly rare, especially in these older cities. The growth that is occurring tends to be limited and centered near downtowns. This strongly makes the case that the obsession with gentrification obscures the big economic challenge facing cities and the poor. The big, un-reported trend that really explains the plight of the poor is occurring slowly and steadily outside the media spotlight–the steady growth of concentrated poverty.

The poor are increasingly concentrated in neighborhoods where a high fraction of their neighbors are also poor. These neighborhoods are also disproportionately people of color.

Although racial segregation has eased somewhat over the decades, it has declined primarily for families with means. As a result the economic segregation of African-Americans has skyrocketed. At the height of segregation, the entire black community was effectively forced to live in the same neighborhoods, so doctors, lawyers, teachers and professionals lived side by side with laborers, clerks and the unemployed. The advent of civil rights laws allowed upwardly mobile black families to move elsewhere–which they did, with the result that those continuing to live in historically black neighborhoods were disproportionately poorer than those who left, concentrating poverty. Mallach’s analysis of Indianapolis-often touted as one of the more prosperous cities in the Midwest-shows that the growth of high poverty neighborhoods has dwarfed-by a factor of twelve-the number of neighborhoods that have “gentrified.”

We appreciate Mallach’s clear-eyed analysis of the rhetoric around gentrification. The term was invented as polemic slogan: “it was never meant to be an objective description of a neutral phenomenon, but a politically charged and indeed pejorative term.” (page 98) In effect the word gentrification has come to be a universal epithet for describing the powerlessness of those living in poverty to control their own destinies and those of their communities. “the utter and complete lack of control the poor and the nonwhite have in where they are permitted to live.” (page 120, quoting Jake Flanigan)

It’s understandable that gentrification is the flash-point of urban controversy. Gentrifying neighborhoods sharply juxtapose poverty and prosperity-which are usually widely separated in most metropolitan areas. But as Mallach’s careful analysis points out, it is the growth of concentrated poverty, not the exceptional instances of gentrification, that are truly behind the worsening plight of the poor.

Our obsession with gentrification reflects the narrative simplicity and power of the “gentrifier as villain” story-line. Gentrification defines the enemy’s face and the front-lines of the struggle far more neatly than the complex and multi-faceted forces that are increasing and concentrating urban poverty. Mallach is spot on here:

“. . . gentrification is widely seen as something that’s being done by someone to someplace or somebody. In an increasingly tribal world, young white people with money and the members of the gentrification industrial complex working behind the scenes, are Them–a visible enemy on which to unload one’s frustration and anger . . . By contrast, neighborhood decline is painfully diffuse and impersonal. It is the product of a complex interplay of factors, many of which are difficult to tackle or even in some cases to define.  Those include global and national increases in economic inequality, demographic shifts, changes in employment, aging of the urban housing stock, suburban out-migration of middle-class black families and the continue fallout from the foreclosure crisis and housing-market collapse of the mid 2000’s. (page 142)

As Mallach argues (page 115), gentrification brings benefits that are often discounted: these neighborhoods become cleaner, safer places; new businesses provide more jobs and more consumption options. These neighborhoods become more integrated and public services improve. These are, in Mallach’s words “not insignificant benefits, and there is evidence in legacy cities that they are shared by many gentrifying neighobrhoods’ longtime residents.” (page 116)

Urban Economic Development

Mallach makes the case that too much money has been wasted on subsidizing stadiums, arenas, convention centers and the like. Nearly all of the benefit has been captured by the wealthy (and often absentee) owners of professional sports franchises, and the net economic effect of sports and related activities on regional economies is widely estimated to be close to nil.

While heaping hundreds of millions of dollars on shiny projects, cities have generally short-changed the investments in human capital that would make the biggest difference for those living in poverty and in poor neighborhoods.  Cleveland spent more than $600 million on three sporting facilities; by his calculation, a fraction of that amount invested in training and placement programs could have lifted thousands from poverty.

Mallach’s diagnosis of the edifice complex driving these choices is spot-on. Spending on big projects meets the needs of powerful interests in the community (developers, the chamber of commerce, construction labor unions), and provides the kind of showy ribbon-cutting opportunities politicians crave:

“development strategies, which are basically about building things, whethere stadiums, housing developments or corporate offices, are both easier and more visible than fostering more fundamental economic growth or improvement.” (page 243)

There’s much, much more in this impressive book. Mallach touches on the accomplishments and limitations of community development corporations, on the spread of poverty to first-tier suburbs, the challenges confronting rural communities, and the now pivotal role that anchor institutions play in shaping development in many cities.

There are compelling tales of how the process of neighborhood decline unfolds, step by step, with one small erosion of a communities assets triggering further losses.  The book concludes with a chapter considering what policies might most make a difference to the future of cities. Mallach isn’t waiting or wishing for the federal government to ride to the rescue; while there are some things the federal government might do much better (notably assuring that housing subsidies were more universally available and targeted to low income households), success will depend heavily on local leaders who aggressively pursue building communities that work well for and are inclusive of everyone.

Why congestion pricing makes sense for Portland

by Chris Hagerbaumer

Today, City Observatory is pleased to offer a guest commentary from Chris Hagerbaumer on value pricing. Chris is the deputy director of the Oregon Environmental Council. As we’ve reported at City Observatory, the Oregon Legislature directed the state’s transportation department to develop a plan to implement value pricing on the two principal interstate freeways in Portland: I-5 and I-205. Chris served as a member of the project’s public advisory committee.

The Oregon Transportation Commission heard public testimony earlier this month on the merits of congestion pricing. One of the proposed alternatives would add variable traffic-based tolls to all the existing lanes of these freeways. Chris’s testimony explains why pricing is a win-win-win solution for current traffic congestion woes: it’s the only method that’s been shown to reduce congestion, it saves billions in unneeded infrastructure costs, and will reduce pollution.

The question in front of you is: how do we actually solve congestion, solve it in a way that is the least cost to the taxpayer, and in a way that doesn’t result in more pollution. When we add more supply (in other words, build more roads) we end up exactly where we started when it comes to congestion (due to induced demand), we spend billions of taxpayer dollars (much of which comes from drivers who aren’t the ones demanding more road space), we harm surrounding communities as highways encroach into neighborhoods, and we pollute the air and heat up the planet.

Induced demand is the fact that when you add freeway capacity it induces longer trips, more sprawl and more driving. Traffic is like a gas, expanding to fit whatever space there is. In one infamous example, Texas spent nearly $2.8 billion expanding Katy Freeway to 26 lanes and congestion has actually worsened.

Building new roads is a supply-side solution that simply doesn’t work.

An effective, least-cost, environmentally sound way to address congestion is the proposal before you: congestion pricing to manage demand. Drivers pay an automated fee to enter highly congested roads at peak hours; in return, they travel smoothly and reliably, getting where they need to go on time. Prices are set at the lowest possible level to free up just enough road space to eliminate bottlenecks.

When you eliminate bottlenecks and get traffic flowing freely, you have—in essence—added capacity. You no longer need to add new lanes, your save taxpayers a bundle, and you reduce dangerous auto and truck exhaust.

Congestion pricing is a demand management solution that’s proven to work and does so in cities around the world. Drivers opposed congestion pricing at first: no one wants to pay more. But that opposition of 60% or more turned into support of 60% or more after congestion pricing was implemented. People’s opposition turned to support because they now get that it works—they experience the value.

Equitable application of congestion pricing absolutely requires mitigating diversion to local streets. But note that congestion pricing actually pulls many drivers who were already cutting through local roads back to the highway because those drivers who were stuck in traffic now have an option to get where they need to go, on time, for a small price.

Equitable application of congestion pricing also requires significantly increasing transit service and other travel options in the corridor and considering other means to make the system work for low-income commuters who must drive during peak hours, such as targeted discounts or exemptions.

We think of highways as free and we think of driving as freedom, but by investing almost solely in infrastructure for cars over most of the 20^th century and into the 21^st century, we created a transportation system that is costly not only for our pocketbooks, but for our very health and wellbeing and our region’s economic prosperity, a transportation system that contributes to the existential risk of runaway climate change.

You have an opportunity to make a decision that will lead to less time stuck in traffic, healthier air, and more economic prosperity for the region and state. We hope you embrace that opportunity.

What aspects of the built environment give rise to greater social trust?

We’re pleased to offer a guest commentary today from Em Friedenberg. Em is a recent graduate of the University of Oregon, who’s studied urban design. Her recent research project provides some compelling illustrations of some of the key building blocks for the kind of urban fabric that both denote and encourage more cohesive communities and socioeconomic mixing. 

By Em Friedenberg

How does sharing a public space affect our trust in one another? How can the shape of that space build or destroy that trust? As a kid growing up in Portland, Oregon, I noticed my community’s distrust but never thought about its link to the built environment; this all changed after I spent a year studying in Copenhagen, Denmark. Copenhagen is famously one of the happiest cities in the world, with rates of bicycling that American cities can’t even conceptualize. There, parents leave their sleeping babies in strollers outside cafes, and women roam the city at night with confidence; at home in Portland, we locked our doors even when we were only in the backyard, and I felt uncomfortable walking the deserted streets after dark. This incredible trust entranced me, and I found myself mourning the US’s miserable levels, and wondering how we could change.

Back in Oregon, I studied urban design and began to link it with social trust; reading books investigating the two fields cemented even more their connection. I began to find support for my theory, each step in the logic chain proven by another book. Charles Montgomery proved that cities can be built for happiness and well-being, while Robert Putnam investigated the decline in social capital, and William Whyte noted how people’s use of a space depends on its physical attributes. My argument was built around these researchers: the shape of our urban space impacts how much time we spend in it; how much time we spend there impacts how many interactions we have with strangers, acquaintances, and friends; those interactions, of any intensity, build social trust; and social trust is healthy for the mind, body, and community.

Social trust, an essential component of social capital, is necessary for our individual and societal health, but the two have been declining since the 1960s, paralleling the rise of the suburb and the privatization of public space. Time spent in the public sphere is necessary for the daily social interactions upon which trust is dependent. To rebuild social trust in America, we can begin by building cities that give it room to grow.

Along with the theory linking social trust and urban design, I developed a list of twenty urban design changes that can be fit into American cities to encourage this trust. They range from large (mixed-use zoning provides destinations and supports density) to miniscule (a bench in a sunny spot prolongs the time someone might spend in the public space), and easy (cluster attractions so that activity builds upon itself and generates more activity) to difficult (purposefully limit the quantity and accessibility of parking, so people will have further to travel between their cars and destinations). Each is linked back to developing social trust directly or through larger goals like encouraging active transportation, creating lively streets where people are likely to bump into one another, or providing places for people to linger outside.

In order to maximize the audience and engagement of my project, I created a poster illustrating these design changes. The larger graphic visualizes a world of social trust, and call-outs draw attention to the many small changes that make up this world. My goal with this work is to draw people’s attention to the problem at hand, and to the changes that we are entirely capable of making. Communities around the world have seen the same problem and drawn themselves together with a shared backyard, an intersection adapted to provide spaces to meet, a parklet where old and young can spend time together; these existing projects serve as models, and inspiration.

Some highlights from the 20 design features illustrated in my work:

Mixed-use zoning: Intermix residences, workplaces and amenities such as restaurants and stores to bring life to the street and encourage active transportation.

Minimal parking: Reduce the number of parking spaces and convenience of access, increasing distances traveled by foot and likelihood of interaction.

Triangulate attractions: Identify destinations of all scales and cluster them so that their activity becomes a destination in itself.

Seating everywhere: Benches, moveable chairs and other sittable places are necessary for lingering and inclusive uses.

Social trust is a scale, and any change can have an impact. Our cities may be concrete, but we can adapt them to the forms best for their residents, through a bench, an infill project, or a bike lane. Our community is at stake; social trust is the mortar of a city. I hope, with this work, to inspire readers to galvanize their own communities and make change of any scale. Cities need our attention now.

You can learn more about Em’s work at her website (https://www.emfriedenberg.com/designingtrust) or contact her via email.

Denouncing developers and density is no way to solve a housing crisis

Editor’s Note:  Today we’re publishing a guest commentary from Ethan Seltzer responding to New York Times columnist Tim Egan’s recent column on housing and density in Seattle. In it, Egan condemned what he called an “unholy alliance” of developers and socialists who were going to ruin the city by planning for greater density.

Ethan Seltzer is an Emeritus Professor in the Toulan School of Urban Studies and Planning at Portland State University. He previously served as the President of the City of Portland Planning Commission and as the Land Use Supervisor for Metro, the regional government. He has lived and worked in Oregon and the Portland region since 1980.

The NIMBY’s have a new champ, none other than Timothy Egan of The New York Times. Mr. Egan, in a column published on July 6, 2018 (“Down and Out in San Francisco, on $117,000 a Year), goes to bat for the defenders of “neighborhood character” by slamming Seattle’s “unholy alliance of socialists and developers” who have apparently forced the city to upzone.

Upzoning, according to Mr. Egan and most owner-occupants of single family homes in the most exclusive neighborhoods in our cities, is at the top of the slippery slope leading to living like overcrowded rats in Blade Runner cities we used to love and call home. He goes on to declare upzoning a failure in addressing affordability, since home prices continue to increase in Seattle, by his own admission America’s fastest growing city, despite more housing production in the last five years than in the previous 50. He calls for a “new urbanism” to solve the problems of homelessness and housing affordability, though doesn’t venture a hint as to what it would be, other than incredible.

What’s wrong here? Several things. Egan declares upzoning a failure because after 5 years, it hasn’t reversed the effects of over 100 years of building and over 50 years of zoning. Never mind that a majority of Seattle is still zoned exclusively for single family homes; only a tiny fraction of the city’s land is available for building new apartments. And in the apartment sector, where there’s been a burst of new construction, there’s evidence that rents have leveled off and are starting to decline. Plus: there is inertia in markets and urban form, and it takes time to make the kind of change you expect. Second, Seattle has been growing, a lot. Demand is up, and though production is, too, it has to catch up with a lot of unmet demand before even addressing the needs of the folks showing up every day. As any elementary statistics student knows, correlation does not imply causation. Had Mr. Egan conducted any analysis to support his reporting, he’d probably realize this quickly.

Third, according to Egan, and most defenders of neighborhood character, it’s an unholy alliance of greedy developers and “socialists” (really, Tim?) who are driving all this. I’ve got news for you: the house you live in was built by a greedy developer. In fact, probably a greedy, racist developer. Paraphrasing Paul Simon, one person’s character is another person’s entrenched, codified, and institutionally supported pattern of exclusion. That particular memory may have faded (and been intentionally obscured), but time does not and cannot rinse away the injustices of the past that created the quaint and classy neighborhoods we know today. Mindlessly preserving the architecture of these neighborhoods in the name of “character” is probably the least socially useful thing we can do.

Finally, a drive around Seattle, and it won’t be quick, will reveal that an unholy alliance of capitalists and developers have already tried the alternative to denser, urban living, in the form of suburban sprawl, and it didn’t work. Metro Seattle spreads like chocolate on a hot dashboard. Without massive Federal transfers for roads, sewers, water systems, power grids, and even parks, long since ended (thank you, Ronald Reagan), none of that would have been possible. And if all of that gets revived, it still won’t work. Turns out that addressing homelessness is more complicated than manipulating markets by getting the public to pay for asphalt (wait, isn’t that Socialism?), and even Egan should agree that a new generation of sprawl is way more than our planet can tolerate.

Egan has written eloquently and well in the past. What happened here? My only guess is that his neighborhood might change and/or it’s summer in the Pacific Northwest, and understandably he wanted to be quickly unchained from his keyboard to enjoy the fleeting Seattle sunshine. Whatever the cause, it’s sad to see a formerly careful and informative journalist contribute to the demise of the news media, particularly in these times when we critically need his talent. Tim: we’re fans. Please do better next time.

Build expensive new “luxury” apartments, and wait a few decades

One of the most common refrains the the affordable housing discussion is “developers are targeting the high end of the market” and new apartments are just unaffordable. Left to its own devices, we’re told, there’s no way the market will build new housing affordable to the nation’s low and moderate income households. But the truth is that, with rare exceptions, the market has never built new housing for the bottom half of the income distribution.

In general, its the case that what affordable housing one finds today is housing that when it was first built, was occupied by people much higher up the income ladder. But as houses–and neighborhoods–age, they lose their market edge to new structures, and housing filters to progressively less affluent occupants.

This becomes clear when we take a longer-term perspective. Housing blogger Iain MacKenzie, who runs the definitive Next Portland website, tracking new housing and commercial developments in the Rose City, shared with us a couple of fascinating historical clips from the city’s paper of record, The Oregonian. They show that today’s affordable housing often started life as self-described “luxury” housing when it was originally built.

The first example dates back a half century, to the 1960s, when in the wake of urban renewal the city was building a wave of new apartments. The Oregonian of January 9, 1966 described the city’s booming market for new luxury accomodation:

“Luxury apartments, which start at $135 for a one bedroom unit and rapidly climb out of sight, have been sprouting in Portland at a breathless rate, and more are planned or abuilding.  The total investment in such properties is certainly above the $100 million mark here.”

One of these complexes was the Timberlee in suburban Raleigh Hills, a close-in suburban neighborhood. According to the Oregonian, the Timberlee on SW 38th Place was one of the most prosperous of the 13 apartment complexes it examined in its story, with 97 percent of its 214 units rented.

Of course, the Timberlee Apartments are still around.  While none of the units are currently for rent, according to Apartments.com, rents in the area run from about $1,000 for studios and one bedroom to $1,300 and more for two bedroom and larger apartments.  By today’s standards, the Timberlee seems modest, and a bit dated, rather than luxurious.

The Timberlee apartments are typical of those that were built around the country in the 1960s and 1970s.  As we’ve chronicled, similar vintage apartments in the Atlanta suburb of Marietta, started life as the preferred housing of (mostly white) young couples and singles, but as they aged, became so affordable that they constituted low income housing. The city spent $65 million of taxpayer money to buy and demolish these apartments, displacing hundreds of families.

Ian’s second clipping goes back just more than a century, to Christmas Day, 1910, when Portland was enjoying a small construction boom–interestingly, triggered by the advent of a tougher building code that would have made apartments more expensive or impossible to build in some neighborhoods.  Just as with today’s inclusionary housing ordinance, there was a land rush as developers filed for building permits in advance of the deadline.

But back to our story.  The 1910 article plays up the luxury of the new dwellings under construction.

The purpose of the builds is to establish a model for high-class apartments .  . . The building will follow the latest style of construction in vogue in New York, and will embody the extreme of luxury with every possible attention given to comfort. Some new features in the way of modern conveniences will be introduced, the aim being to attract the desirable class of patrons, those who will be willing to pay as high as $150 a month for the five and six room apartments which they house will contain.

One of the new luxury apartment buildings constructed in 1910 was the Belmont Court, on the city’s growing East Side. Plans called for a modern 24 unit-apartment building with a range of conveniences.

Some fine dwellings of this class are being planned for the East Side. MacNaughton & Raymond have designed for E. L. Taylor a three-story brick veneer apartment-house 50×100, to be built at East Fifteenth and Belmont Streets and to cost $30,000. It will have seven three-room apartments on each floor and 24 in all, including the janitor’s quarters and two other suites in the basement.

More than a century later, the Belmont Court building still stands. In fact, two of its apartments are for rent just now. According to Zillow, average apartment rents in Portland are about $1,600 per month. With studio apartments renting at just under $1,100 they’re not exactly cheap, but they cost less per square foot than newly built units, and with a Walk Score of 92, there located in a neighborhood where one can conveniently live without a car.

Another interesting historical change.  Described as three-room apartments when they were built, the Belmont Court apartments are today described as studios.  They have a separate living area, kitchen and bathroom (each of which, a century ago, merited counting as a separate room).  In an era when a large fraction of urban residents were boarders in boarding houses, a private kitchen and bathroom may indeed have been a luxury.

Here’s the takeway:  New housing is almost always built for and sold to the high end of the marketplace.  It was that way a hundred years ago and fifty years ago. But as it ages, housing depreciates and moves down market. The luxury apartments of two or three decades ago have lost most of their luster, and command relatively lower rents. And the truth is--that’s how we’ve always generated more affordable housing, through the process that economists call “filtering.”  And the new self-styled “luxury” apartments we’re building today will be the affordable housing of 2040 and 2050 and later.

What causes affordability problems to arise is when we stop building new housing, or build it too slowly to cause aging housing to filter down-market. When new high priced housing doesn’t get built, demand doesn’t disappear, instead, those higher income households bid up the price of the existing housing stock, keeping it from becoming more affordable.  Which is why otherwise prosaic 1,500 foot ranch houses in Santa Monica sell for a couple of million bucks, while physically similar 1950’s era homes in the rest of the country are either now highly affordable–or candidates for demolition.

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Special thanks to Iain MacKenzie and NextPortland for their original research ideas and sharing these vintage news articles.

What City Observatory did this week

1. Don’t demonize cars, just stop subsidizing them. Is there anything in the urban space that is more inflamed than the passion and rhetoric around cars and driving? Advocates on both sides are bitter and uncompromising: with cars (and their parking spaces) regarded as either a fundamental right or an existential threat. Finding a middle ground for compromise isn’t easy, but we suggest a starting place: stop subsidizing car ownership and use. From un-priced and under-priced roads, to a wide range of public subsidies to cover the injuries and environmental and health damage done by cars, to the prodigious subsidy in the form of urban space devoted to parking and the hidden cost of parking requirements, we essentially pay untold billions of dollars to people to drive more than makes economic sense. If we ended all these subsidies, people would make different and much better choices about whether to own cars, and how much, and when and where to use them. Inviting car users to pay the full-cost associated with their choices is a much more plausible way forward than simply demonizing vehicles.

2. What a cohesive community looks like. In a guest post for City Observatory, Em Friedenberg talks about her studies of the connections between features of the built environment and social trust. There’s a palpable difference between the streetscapes and urban form of many older, European cities and the contemporary US urban space. The former have higher density, a greater mix of uses, and much more conscious investment in the public realm, that both support and encourage greater social interaction. Friedenberg has a poster cleverly illustrating twenty urban design features that cities should employ to promote better, more interactive public environments.

3. How luxury housing becomes affordable. It’s one of the most widely repeated talking points of housing activists:  “new housing just isn’t affordable for low and moderate income households.” The implication is that there was once a time when lots of inexpensive new housing did get built for the lower half of the income distribution–but that’s not how housing markets work. It’s almost always the case that new housing gets purchased and occupied initially by higher income households, and as it ages and depreciates, it moves down market. The affordable housing of today is chiefly the market rate housing built in the 1970s and earlier. Affordability problems arise when we don’t build enough new high end, market rate housing, prompting higher income families to hang on to and bid up the price of the older housing stock that would otherwise become available for households of more modest means.

Must read

1. Much new technology is really urban technology. Richard Florida sifts through the data on global venture capital investment trends and concludes that much of the new technology that’s being developed is really revolves around urban living. Whether its Uber and Lyft implementing ride-hailing, or e-bike and scooter companies, or firms looking to disrupt housing markets (like Air BnB), much of the investment is aimed at the urban space. Given that a growing share of the world’s population and economic activity are concentrated in cities, this hardly seems surprising: urban areas are where the market is.

2. How public policy tilts toward homeowners and against renters. Brookings Institution’s Jenny Schuetz has a primer on the fundamental and pervasive ways in which the combination of federal, state and local laws, regulations and tax policies tilt decisively in favor of homeownership (particularly by higher income households) and work against renters (who on average have much lower wealth and income. Whether its restrictive local zoning that drives up rents and home prices, state homestead exemptions that reward property owners but not renters, or key provisions of the federal tax code, especially the favored treatment of capital gains from housing, and the mortgage interest deduction, there’s little question that renters get far less help than homeowners.

3. A Pedestrian Bill of Rights. With considerable help from the Twitterverse, Transportist blogger David Levinson has compiled draft 0.1 of a Pedestrian Bill of Rights. It’s a thought-provoking read, and a reminder of how many of the “rules of the road” have been written (or interpreted over time) to privilege auto-travel over the most basic and universal form of human transport–walking. There are 15 articles in the bill of rights, and the first three give you a good flavor for what’s on offer.

1. Pedestrians have the right to safely and conveniently walk along and cross any public right-of-way without regards to who they are, with whom they are associating, when or why they are traveling, or where they are coming from or going to. #NoPoliceStops
2. In the event of a conflict with vehicles, pedestrians automatically have the right-of-way. Where no dedicated footpaths are available, any pedestrians have the right-of-way over any other traffic and speeds shall be limited to that traveled by those pedestrians. Pedestrians shall never be required to give way to self-driving vehicles. #Right-of-Way #Footpaths #SharedSpace #StopForNoBot
3. Any pedestrian may cross roads at any point at any time where they will endanger neither themselves nor others by doing so. #JaywalkingIsNotACrime.

Hopefully, this is just the start of the conversation. With the likely advent of driverless vehicles in the next few years, it’s a very good time to revisit these fundamental questions about who has what rights when it comes to using the common streetscape.

New Knowledge

The declining number of homeowners with children. The stereotypical view of homeowning households as being nuclear families with a couple of parents and kids is increasingly out of date. As we’ve noted a City Observatory, homeownership is now increasingly concentrated among much older Americans (with the only net increase in homeownership occurring for households 55 and older). The flip side of that trend is fewer and fewer home-owning households with kids. The analysts at RentCafe have run the numbers on this and find that the US has 3.6 million fewer households with children 18 and younger living at home than a decade ago.

There’s been a sharp increase in the number of families with kids who rent (up 16%) and now its the case that homeowners are less likely to have kids living at home than renters.  As RentCafe’s Nadia Bolint explains:

As of 2016 (the most current Census estimates), 14.3 million households with minor children rent in the U.S. (up from 12.4 million in 2006), representing 33% of all renter households. By comparison, there are 22.1 million families with minor children that own their home (down from 25.7 million in 2006), representing 29% of owner households.

What City Observatory did this week

1. Portland rents are going down. There are those who are skeptical that we can “build our way to affordability.” But the economic evidence suggests that’s exactly what’s happening in Portland. New apartment construction in the Rose City is finally catching up to demand (there’s a long lag between increased demand and more new housing). ApartmentList.com reports that the average rents for a one-bedroom apartment have declined 3 percent year-over-year. In addition to lower sticker prices, many landlords are also offering off-the-books inducements like months of free rent. While the current construction boom promises to add to the housing supply and put further pressure on rents, a misguided inclusionary zoning requirement could stifle further growth after 2019. Will policy makers learn from the evidence the market is producing right now?

2. Why congestion pricing makes sense for Portland. We turn the City Observatory microphone over to Chris Hagerbaumer, Deputy Director of the Oregon Environmental Council, who recently testified to the Oregon Transportation Commission on the merits of congestion pricing for Portland area freeways.

3. The limited allure of small towns. It’s regular fare from your contrarian journalists: Forget what you’ve heard about millennials moving to cities, here are some instances in which a young professional has grown tired of the crowding and expense of urban living and de-campled to a tiny rural town. This week’s installment is from Slate, which tells the story of independent film maker Joel Levinson, who’s moved from Los Angeles to Yellow Springs, Ohio (pop. 3,500), and continues to crank out award winning films. What this leaves out, of course, is that Levinson put in a decade in Los Angeles honing his craft, building his resume and making invaluable contacts. Statistically, cities help young people find careers, build skills and become more productive, which is why even more smart young people live in cities now than ever before. A select, older few, having acquired skills and built networks may, later in life, move to a small town, but cities have become even more powerful and alluring engines for economic success.

Must read

1. A personal story of segregation from Pete Saunders at Cornerside Yard. We write about the impacts of segregation at City Observatory in a largely aggregated, statistical fashion. But segregation has real and personal impacts. Blogger Pete Saunders describes the segregated Detroit neighborhoods he and his family have lived in, and how segregation and decline wrought a substantial financial and emotional toll for them. For most Americans, buying and owning a home is a way to build wealth and pass it along to the next generation. While both Saunders parents and grandparents were able to buy homes, they were in neighborhoods that saw little appreciation. His maternal grandparents home on Detroit’s Eastside is now gone, a victim of neighborhood decline. His parents home’s value hasn’t even kept pace with inflation:

Both sets of my grandparents were able to establish excellent footholds into the American Dream, just like so many other families in America.  But their ability to pass that dream onward and upward faced constraints that other families didn’t have to face. . . . There was no transfer of generational wealth from my grandparents to my parents. . . . There was no transfer of generational wealth from my parents to me and my siblings, either. . . . what happens when communities are allowed to decay to the extent that Detroit’s East Side and Inkster have?  There’s no chance at intergenerational transfer.

Saunder’s story is more than just an anecdote; the empirical data show that whether homeownership help builds wealth varies dramatically by race (see our New Knowledge story, below).

2. Berkeley chooses a gas station over more affordable housing. Famously progressive Berkeley shows itself as tone-deaf as any other NIMBY jurisdiction. Recently, the city’s zoning appeals board turned down a 23-unit housing project (composed mostly of dorm-like rooms with shared kitchens) that would help provide more affordable options. The board was concerned that the five-story building would be out of scale with the neighborhood and cause parking problems. Now it appears that the site will remain in its current use–as a gas station. It’s an object lessons in the severe limits of the “new localism” to address national and global scale problems like climate change. The incentives and structure of local government often fundamentally work against the achievement of broader social goals; the pressure to play “beggar thy neighbor” with these big problems means that there’s simply no substitute for the right national policies. (Hat tip to the blog “Systemic Failure.”)

3. Community preference policies: Curing displacement or fostering segregation? Writing at The Urbanist, Natalie Bicknell has a thoughtful review of the promise and pitfalls of using resident priority programs to fight displacement. The idea behind these programs is that existing neighborhood residents ought to be given preferential access to new affordable housing constructed in a neighborhood. Variations of this idea have been tried out in New York, San Francisco and Portland. While appealing in theory, these policies bump up against the reality of segregation: granting preferential access to existing neighborhood residents tends to reinforce patterns of segregation. In New York, a group of prospective tenants (persons of color) filed suit against the preference program because it reduced their opportunity to move to higher opportunity neighborhoods in Manhattan. The federal government weighed in against an early version of San Francisco’s residential preference policy, arguing in violated fair housing laws. In both San Francisco and Portland, preference programs have resulted in a relative handful of affordable units going to households with long connections to the neighborhood. It’s a complex and difficult area for policy.

New Knowledge

Race, Homeownership and Wealth Creation.  A recent paper by Tom Maycock (Comptroller of the Currency) and Rachel Spritzer (Federal Reserve Board, called Socioeconomic and Racial Disparities in the Financial Returns to Homeownership, lends credence to the story told by Pete Saunders at Cornerside Yard.  Maycock and Spritzer looked a more than a million home purchases in nine major metropolitan areas (including New York, Boston, Chicago, Detroit and San Francisco), to see how individual homeowners fared financially over the life of their investment.  They found that capital gains have been systematically lower – and the real cost of ownership has been systematically higher – for low-income and minority home buyers in every market. They report that their findings “call into question the widespread claim that encouraging homeownership for low-income and minority households is a panacea for addressing wealth inequality.”

In the News

Planetizen featured our story on rents declining in Portland, thanks to the recent increase in apartment construction.

In its article, “Why are developers only building luxury housing,” Strongtowns quoted our commentary on housing affordability, showing that continually building new housing, even if at higher prices points, causes existing housing to become more affordable.

Bike Portland highlighted our commentary on America’s “secret socialism” when it comes to car storage.

What City Observatory did this week

1.  Nattering nabobs of NIMBYism at the New York Times. Columnist Tim Egan called plans for a limited upzoning to enable more people to live in Seattle an unholy conspiracy of developers and socialists. In a guest commentary, City Observatory friend Ethan Seltzer responds, pointing out that all of the quaint historic neighborhoods that Egan wants to preserve are themselves the product of greedy developers (though perhaps long-forgotten ones).

2. Where socialism is triumphant in the US: Parking. While they may have failed to establish health care or housing as a human right, the American socialist community can celebrate one great victory: the right of every citizen to abundant parking (a right assured to those who don’t own cars, as well as those who do). A new study shows that in a typical metropolitan area–Seattle–there are more than 6 parking spaces for every household. While that city may face a shortage of housing for people, there is no such shortage of housing for cars.

Must read

1. Why traditional gridded streets are better. CNU’s Robert Steutville has a column exploring the advantages of the traditional street grid system, through the lens of his home town, Ithaca, New York. Like most US cities built before World War II, the city has a legacy of gridded streets intersecting at right angles. He shows that, despite substantial population growth, the gridded system has dispersed traffic in a way that minimizes congestion. It turns out that the street grid is better both for pedestrians and cars. All this is further proof of arguments advanced some twenty years ago by highway engineer Walter Kulash, who showed that much of our urban transportation problem can be traced to the dendritic, hierarchical structure of poorly connected streets that we’ve built since 1950.

2. Bending (the numbers) like Beckham: More phony economic impact analyses to support stadium subsidies. David Beckham and his partners are trying to build a stadium for South Florida’s new MLS soccer franchise, and as you would expect, is asking for substantial subsidies from the city of Miami. City officials have claimed that the ballpark will generate an additional $44 million in new tax revenues annually. But the Miami New Times takes a critical look at these numbers and finds them wanting.  Most of the money would purportedly come from additional retail sales, but its dubious that any of the sales tax revenue from ancillary developments near the stadium such as retail or restaurants represent “new”  tax revenue for Miami-Dade County–these sales taxes more than likely are from spending that would occur in the jurisdiction whether the new stadium were built or not.  There might be good reasons to spend public money on the stadium (civic pride, soccer fandom), but expecting a big economic return isn’t one of them.

3. Aldermanic prerogative perpetuates Chicago segregation. Chicago is divided into 48 wards, with each ward represented by a single Alderman. Legally and by tradition, each Alderman has effective veto power over all of the land use decisions in her or his ward; in particular, neither upzonings nor affordable housing projects move forward without the express approval of the local Alderman. The practical result of this system has been to perpetuate and accentuate racial and economic segregation in Chicago, according to a new report by Sargent Shriver Center National Center on Poverty Law, entitled “A City Fragmented.”  It’s a classic instance of how NIMBYism is baked into the structure of local government, and is a cautionary tale for those who would assert that localism-new or old-can grapple with problems of inequality and segregation.

Must Listen

Long-form public radio discussion of gentrification. NPR’s public affairs program “On Point” has a good discussion of neighborhood change, cautiously asking “Can Gentrification be a Good Thing?”  Host Linda Wertheimer seems initially skeptical that the answer might be “yes,” but hears a strong case from Economist writer Idrees Kahloon arguing that gentrification has big benefits. His article in The Economist “In Praise of Gentrification” is also worth a read. Kahloon echoes City Observatory research on the relative rarity of gentrification, noting most poor neighborhoods remain poor for decades, and shifts attention to the problems of concentrated poverty, which gentrification helps to break down. Columbia’s Lance Freeman and the University of Pennsylvania’s Susan Wachter also weigh in on the question. By the end of the nearly hour long program, the panel seems to have offered a consensus that gentrification can indeed be a good thing, provided public policies and community organizations aim to leverage change to maintain neighborhood economic diversity and promote social interaction.

New Knowledge

Does the growth of tech jobs raise wages for non-tech workers? There’s little question that knowledge-based economic activity is increasingly concentrated in cities. A big question is whether the growth of high-paid high tech jobs in these places benefits lower skilled workers in non-tech industries. A new research paper from Thomas Kemeny and Taner Osman considers this question, looking specifically at differences in wage levels for less skilled workers. He finds that the presence of more tech jobs exerts a positive, but very modest upward effect on wages of workers in other industries, even after adjusting for cost of living differences; a 10 percent increase in high tech employment is associated with about a 0.1 percent increase in real wages in the local or non-traded sector fo the economy.

Thomas Kemeny & Tanner Osman, “The wider impacts of high-technology employment: Evidence from U.S. cities,” Research Policy, https://doi.org/10.1016/j.respol.2018.06.005

In the News

PlanPhilly cited our analysis showing that renters are likely to move whether or not their neighborhoods gentrify in their story on retail development near Drexel University.

Willamette Week quoted City Observatory director Joe Cortright in its coverage of the proposed congestion pricing system for Portland freeways.

What City Observatory did this week

1. Envisioning how we want to live in cities. Much of the discussion of the future of cities seems to revolve around what kind of new technologies we might apply in urban settings. But in our view, planning for the future city ought to be guided by our aspirations: what about cities gives us joy and fulfillment. In contrast to the gadget absorbed view offered by many, a recent television commercial from Samsung paints one picture of what that might be like. The big question we face is what kind of story we want our cities to help us live: If we have a story that centers on technology, vehicles and frenetic movement, we can remake our world in that image. If, instead, we have a story that embraces experience, and place and freedom, we’ll get a very different world.

2. How immigrants make America great, as always. On Independence Day, we remember that the United States is fundamentally a nation of immigrants. It’s more than just a national principle; immigration is a powerful explainer of economic success: cities with a high fraction of well-educated immigrants tend to be the nation’s most productive.

Must read

1. SUV’s implicated in the rising pedestrian death toll. The Detroit News has an investigative report revealing evidence that sport utility vehicles are a key contributor to the rising number of pedestrian deaths in the US. The story relates the findings of a 2015 NHTSA report concluding that pedestrians are two to three times more likely to suffer a fatality when struck by an SUV or pickup than when struck by a passenger car. (Hat tip to Streetsblog’s Angie Schmidt.)

2. Worldwide city rents compared. Reddit User KyleKun513 has created a graphic image of the variation in rent levels between 540  cities around the globe.  Data are from Numbeo.com’s compilation of rents; the data visualization groups cities by rent levels (by hundreds of dollars per month) with color-coding by continent.  Rents range from the equivalent of $200 a month or less in cities in India and Egypt, to more than $2,400 in Bermuda, Hong Kong, San Francisco and Manhattan.

3. Highway Boondoggles 2018.  USPIRG is back with the fourth edition of its report on expensive, ineffective freeway projects that drain the budgets and drain the life out of cities. The report calls out the folly of freeway projects in Dallas, the San Francisco Bay area, Shreveport and other cities. USPIRG marshalls evidence that highway expansions take money from other transportation priorities, don’t solve congestion, make environmental problems worse, and add to public debt. This year’s report also contains an update on the status of prior year boondoggles.

A “war on cars” won’t win many hearts and minds; let’s ask for responsibility

It’s clear that cars, and particular the large numbers of cars we have, and the way in which we and our urban environments have become dependent upon them, is either at the root of many of our most pressing problems (including climate change, public finance, and inequality, to name three). That routinely leads many passionate activists to take a stridently anti-car stance in their public posturing.

At City Observatory, we try to stick to a wonky, data-driven approach to all things urban. But numbers don’t mean much without a framework to explain them, and so today we want to quickly talk about one of those rhetorical frameworks: specifically, how we talk about driving.

Our wonky perspective tells us that there are lots of problems that stem from the way we use cars: We price roads wrong, so people over use them. Cars are a major source of air pollution, including the carbon emissions that are causing climate change. Car crashes kill tens of thousands of Americans every year, injure many more, and cost us billions in medical costs and property damage. And building our cities to accommodate cars leads to sprawl that pushes us further apart from one another.

But the problem is not that cars (or the people who drive them) are evil, but that we use them too much, and in dangerous ways. And that’s because we’ve put in place incentives and infrastructure that encourage, or even require, us to do so. When we subsidize roads, socialize the costs of pollution, crashes and parking, and even legally require that our communities be built in ways that make it impossible to live without a car, we send people strong signals to buy and own cars and to drive—a lot. As a result, we drive too much, and frequently at unsafe speeds given the urban environment.

 

Many people—transit boosters, cyclists, planners, environmentalists, safety advocates—look at the end result of all this, and understandably reach the conclusion that cars are the enemy. The overriding policy question, then, becomes: “How do we get people out of their cars?”

In this December 2015 story in The New Republic, for example, Emily Badger quotes Daniel Piatowski, a planning PhD presenting a paper on “carrots and sticks” at the Transportation Research Board conference, saying: “The crucial component that’s missing is that we’re not implementing any policies that disincentivize driving.”

“Getting people out of their cars” is a rallying cry and a mission statement that’s guaranteed to provoke a formidable opposition. That’s because most people, correctly, can’t imagine any time soon when they won’t need to use a car for most—even all—of their daily trips. As a practical matter, the fact that for seven or eight decades the entire built environment and most transportation investments have been predicated on car travel means that we can’t quickly move away from auto dependence. For most Americans, driving isn’t attributable to an irrational fondness for cars. In many places, it’s simply impossible to live and work without one.

But there’s good news. The first is that incentives matter. We learned that higher gas prices, for example, had a large and sustained impact on driving behavior. After growing steadily for decades, vehicle miles traveled per person peaked and declined after 2005 (as gas prices shot up). This produced knock-on changes in housing markets, and helped accelerate the move back to cities. And the decline in gas prices since 2014 has triggered more driving. “This shows that more intentional kinds of pricing schemes, like congestion pricing or parking pricing, could have similar effects.”

The second point is that small changes matter. Even slight reductions in car use and car ownership will pay big dividends. Traffic congestion is subject to non-linear effects: small reductions in traffic volumes produce big reductions in traffic congestion. Travel monitoring firm Inrix reported that in 2008, the 3 percent decline in vehicle miles traveled led to a 30 percent decline in traffic congestion. . As driving declined, carbon emissions declined and so too, did crashes and traffic deaths.

Moralizing about mode choice is a recipe for policy gridlock

Bitter and acrimonious flamewars between people who are convinced that one side or the other is trying to run us off the road will surely be unproductive. We agree with most of the policies advocates like Piatowski want, including the “sticks” like parking and congestion fees—but not the way they’re being described.

 

Rather than being framed as a punishment, it should be more about responsibility. Drivers should pay for the roads that they drive on. They should be regulated in a way that protects the safety of other users of the right of way. Trucks ought to pay for the damage they do to roads. Every car driver ought to pay for their parking space they use—whether it’s in the public or the private realm. All cars and trucks should be responsible for the carbon pollution they emit. We shouldn’t require third parties such as homebuilders or renters or local businesses to subsidize car travel and parking. This isn’t about creating a “disincentive for car use,” but, as a matter of fairness and practicality, dropping what have essentially been subsidies for financially and socially expensive and dangerous behavior.

Driving is a choice, and provided that drivers pay all the costs associated with making that choice, there’s little reason to object to that. After all, very few people think that a zero car world is one that makes a lot of sense. Low-car makes much more sense that non-car as a policy talking point. How do we get people to make these choices. There’s an analogy here to alcohol. We tried prohibition in the twenties. It was moral absolutism, zero tolerance. Alcohol in any amount was evil. That didn’t work.

When we experienced the epidemic of drunk driving, we didn’t go back to prohibition. Instead, we raised penalties to make drivers more responsible, set tougher limits on blood alcohol content, and put more money into enforcement. People still drink—but there’s a different level of understanding of responsibility and consequences, and fewer people drive drunk.