Freeway-widening grifters: Woke-washing, fraud and incompetence

The Oregon Department of Transportation’s glossy mailer to sell its $1.25 billion I-5 Rose Quarter Freeway widening project is a cynical, error-ridden marketing ploy.

ODOT doesn’t show or tell about its wider freeway and more traffic, but instead tries to sell the project based on buildings it won’t contribute any money for building.

ODOT sent an expensive mailer to thousands of Portland households studded with nearly two-dozen typographical errors.

The key part of salesmanship, whether you’re selling condominium time-shares or breakfast cereal, is to emphasize the really attractive things that aren’t part of what the customer is paying for, whether it’s models cavorting on a glistening white-sand beach or the fresh bananas and blueberries atop a pile of bland corn-flakes.  The grifters at the Oregon Department of Transportation have settled on just this strategy for peddling their now $1.25 billion Rose Quarter freeway widening project.  In their latest marketing material:  It’s not about cars or lanes at all, it’s about covers and community centers and housing built by Black artisans.  Never mind that these “features”—like the models and the blueberries—aren’t actually part of the ODOT project at all.

Woke-washing:  Fictional buildings

As we’ve documented at City Observatory, the Oregon Department of Transportation is implicated in the destruction of Portland’s historically Black Albina neighborhood.  It slashed through the area with three major highway projects in the 1950s, 1960s and 1970s, leading to a two-thirds decline in neighborhood population.  Today, its trying to sell its massive 10-lane wide freeway widening project—which would increase traffic and pollution—as a way to remediate the damage to the neighborhood.

Earlier this month, ODOT sent a glossy 4-page newsletter to thousands of Portland households.  Its key feature is illustrations portraying new, but entirely fictitious, buildings lining the streets of Albina.  Previously, they’ve shown proposed buildings to be constructed on or adjacent to the freeway as part of the project’s environmental assessment.  Earlier this year, they paid consultants to illustrate hundreds of entirely conjectural apartments on or next to the widened freeway.  Now their new brochure sets a new bar for illusion, showing a fictitious streetscape of N. Vancouver Avenue, with three imaginary buildings.  In the lower right hand side of the frame, a young Black man stands in front of a building labeled a “Career Development Center,” carrying a plaque stating:  “This building constructed by Black artisans in 2022.”  It’s a nice thought, but such a building is not part of what ODOT will build or pay for.  Nor, in fact, are any of these buildings.

This freeway widening project is part of a complete breakfast (some features sold separately).

If this were a commercial publication, it would have to include some kind of disclaimer.  ODOT went out of its way to emphasize the “highway cover” aspects of the project, without mentioning that the project’s real purpose is to widen the freeway. The brochure is doesn’t show a single car, nor does it reveal that the project is designed to expand the freeway to as much as ten lanes wide.

Fraud:  There’s no money to build these buildings

It would, of course, be nice to have more housing in Albina, and to have a career development center, and to advance the redevelopment plans of the Albina Vision Trust.  But in reality, none of these features is actually part of ODOT’s I-5 Rose Quarter Freeway widening project.

The fundamental problem with all these imaginary buildings, including new housing, and the career development center:  There’s no funding for any of them as part of the Rose Quarter freeway widening project.  And, as we’ve shown at City Observatory, the cost of new buildings shown would run to hundreds of millions of dollars.  Despite the fact that it demolished hundreds of homes to build its highways through Albina, ODOT has never provided a dime to rebuild any of them, and is saying it won’t as part of this project either.

At best, the project claims that it might provide the sites on which these mythical structures could be built, but even that claim is misleading.  The Oregon Transportation Commission is now seeking to stick city and county governments with the added costs of freeway covers wide and strong enough to support this development.  So while apartments and a career development center are being prominently displayed as the centerpiece of this project, ODOT isn’t paying for any of them, or even the sites on which they’ll be built.  They expect others to do so.  The fact that the agency pretends to care about social justice, but won’t contribute to repairing the damage its three highways caused Albina, including replacing the housing it destroyed, shows its commitment is a sham.

Incompetence:  A document shot-through with typographical errors

The full-color glossy four-page brochure, titled “Newsletter: I-5 Rose Quarter Improvement Project, Volume 1, Issue 2, September 2021” was delivered via bulk mail to thousands of households in North and Northeast Portland.  But while ODOT took great pains to downplay the actual nature of the project (a ten-lane freeway), and to incorporate images of African-Americans and fictitious buildings, they apparently didn’t have a budget for proof-reading or care enough to do a press check of their elaborate newsletter.

As publishers ourselves, we know that the occasional typo is the bane of one’s existence, and that a few always seem to sneak through.  No one is perfect.  But in this ODOT newsletter we counted 23 typographical errors. Here we’ve circled in red errors on pages 2-3 of the brochure.

There were errors on every page of the brochure.  One page of the report is titled:  “Our Values in Action.”  Apparently neither accuracy nor attention to detail are among the project’s values.  For years, the agency has been misleading the public about the project, concealing basic facts like the width of the freeway it is planning to build and repeatedly including illustrations of fictional buildings that aren’t part of the project (see below).

There’s a lot of missing substance in this ODOT newsletter.  It reveals nothing about the cost of the project, which has ballooned to $1.25 billion.  It conceals the fact that the real purpose of the project is to widen the I-5 freeway to 10 lanes, which will result in more traffic and pollution. It ignores news reports that have utterly disproven its false safety claims about the project.  It says nothing about the active community opposition to the project, which has produced thousands of citizen objections.  It doesn’t reveal that the project is being challenged in court for violating federal environmental laws and state planning requirements.  It fails to acknowledge that the project will increase greenhouse gases–a fact that has produced regular bi-weekly protests at ODOT’s Portland headquarters.

What this document really shows is that ODOT has no intention of telling the truth about the Rose Quarter freeway widening project.  This brochure, like the ODOT effort that produced it, is cynical, misleading and incompetent.  This is hardly an effort that should be rewarded with $1.25 billion in public funds.

ODOT’s deceptive history

Here are illustrations from the project’s 2019 Environmental Assessment showing wireframe buildings as part of the freeway-widening concept.  (Again:  There’s no funding for such buildings as part of the project).

Likewise, ODOT’s highway cover consultants created the illusion that apartment buildings (the yellow legos on this diagram) might be part of the project’s covers.  Building such apartments would cost between $160 million and $250 million, and ODOT is providing no funding for any such construction.



Talkin’ ’bout my gentrification

Jerusalem Demsas of Vox has a thoughtful synthesis of what we know about gentrification.  

If we’re concerned about poverty and inequality, gentrification is far from the biggest problem we face.

Gentrification is surprisingly rare, and while it brings inequality into sharp focus, there’s precious little evidence of widespread harms.  The bright spotlight shining on a relative handful of gentrified neighborhoods hides in the shadows the real and far more pervasive problem of concentrated poverty.

And, as we’ve written at City Observatory, the myopia of gentrification scholarship means that few studies every consider the counterfactual case of asking what happens to people who live in poor neighborhoods that don’t rebound.  

The most common anti-gentrification tactics—blocking new market rate housing—actually make housing affordability and displacement worse.

Writing at Vox, Jerusalem Demsas has become quickly established as a keen observer of urban issues.  This past week, Demsas waded into the gnarliest and most contentious urban debate, gentrification.  This balanced essay is worth a read.  Here’s our take.

Gentrification doesn’t create inequality:  It just makes it more visible.

America’s cities are segregated by race and class and essence of segregation is keeping these worlds separate and apart from one another, and by doing so, make inequality less visible.  What gentrification does, in effect, as Demsas convincingly argues, is to force us to see inequality:

Segregating neighborhoods does not get rid of these sentiments or the harms they cause: it simply hides them. In a wealthy, white enclave like the Upper East Side, there aren’t somehow fewer people who assume any Black person on their street is begging for money than there are in gentrifying neighborhoods. In fact, there are likely more. Gentrifying neighborhoods pull back the veil and allow for these worlds to collide, displaying the vast differences in income, access to education, and government protection and investment.  . . . Taken all together, it becomes clear why we focus on gentrification while the unseen culprits (segregated enclaves) are able to avoid controversy: Gentrification is the most visual manifestation of inequality in urban life.

Concentrated poverty, not gentrification is the big urban challenge

Much of the gentrification literature is fueled by anecdotes and narrowly drawn case studies that relate the dissatisfaction that long-time residents of gentrifying neighborhoods feel as a result of neighborhood change.  And there’s little question that change imposes social and psychic costs for long-time residents.  This kind of ethnographic research isn’t so much wrong as it is incomplete.  As we’ve pointed out at City Observatory, this kind of research is biased because is is missing the counterfactuals:  What do long-time residents of non-gentrifying poor neighborhood say about how their neighborhoods have changed?  And what would a neighborhood look like if it didn’t attract new residents.

We and others have assembled comprehensive data on neighborhood change in US cities.  It shows that gentrification is extraordinarily rare (over 4 decades, perhaps 10 percent of poor neighborhoods experienced gentrification, defined as having a poverty rate fall from twice the US average to anything less than the national average).  Statistically, the far more striking fact is the persistence and growth of concentrated poverty.  Poor neighborhoods that don’t gentrify steadily lose population (down an average of 40 percent over 40 years), and the number of high poverty neighborhoods in major US metro’s has tripled.  Americans in poverty today are more likely to live in neighborhoods of concentrated poverty.  Research shows that all of the negative effects of poverty are amplified by having lots of poor neighbors.  As Demsas concludes:

City by city, the message is clear: Segregation and concentrated poverty are the true blights of urban life, despite our fascination with gentrification.

There’s precious little evidence of the supposed harms of gentrification even in those relatively few neighborhoods that are changing. Careful economic studies show that gentrification generally benefits long-time residents.

Supposed cures for gentrification often make the problems worse

Demsas concludes by musing about the “ethical” ways we might use to promote greater integration, and ends up suggesting more housing, greater tenant protections, and less restrictive zoning in predominantly white and middle income neighborhoods.  Making it easier to build more housing in high demand locations makes a lot of sense, but that advice runs distinctly counter to most anti-gentrification efforts, which are squarely focused on blocking new market rate housing.

The painful irony of many anti-gentrification tactics is they simply serve to make housing affordability and displacement worse. Advocates regularly oppose up-zoning and new developments, or as in Atlanta, impose development moratoria to “save” the neighborhood.  Attempting to slow or stop  neighborhood change by blocking the construction of new market-rate housing—which many associate with gentrification—only makes housing supplies tighter, and drives up rents.  As Demsas notes, this flies in the face of a spate of recent studies that show that construction of new market rate housing actually helps hold down rents, and by setting off a chain of household moves, opens up more housing opportunities for lower and moderate income households.

Two of the big persistent problems in the American metropolis are segregation and racial wealth disparities.  And despite the pain of change, gentrifying neighborhoods are the places where these two interrelated problems are being ameliorated.  Our 2018 study America’s Most Diverse, Mixed Income Neighborhoods, showed that many places identified as “gentrifying” are the most racially and economically mixed places in the nation.  And contrary to common assumption, once neighborhoods become more racially and ethnically diverse, they tend to stay that way.

As Andre Perry and his colleagues at Brookings Institution have documented, there are persistent disparities in the value of homes in predominantly Black and predominantly white neighborhoods.  These disparities are a major contributor to the racial wealth gap. And these disparities are largest in metro areas with high levels of racial segregation.  It’s a seeming paradox, but rising home prices in gentrifying neighborhoods are actually diminishing this underlying home value disparity.  As bad as a it may be to have to pay higher property taxes because your home has appreciated (and your wealth has increased) it’s far worse to see your wealth stagnate or decline because slumping home values in a segregated neighborhood.

Climate efforts must be cost effective

Portland’s $60 million a year clean energy fund needs climate accountability

Any grant writer can spin a yarn that creates the illusion that a given project will have some sort of climate benefits, but if you’re actually investing real money, you should insist on a payback in the coin of the climate realm:  a measurable and significant reduction in greenhouse gas emissions.  That standard isn’t being met, mostly because even the most basic questions aren’t being asked of projects submitted for funding by Portland’s Clean Energy Fund.

Former Portland City Commissioner Steve Novick, and long-time Chair of the Oregon Global Warming Council, Angus Duncan are demanding that Portland’s $60 million per year clean energy fund have at least minimal performance standards when it comes to reducing greenhouse gases.  A bit of background:  using the city’s initiative process, activists forwarded a ballot measure to create a gross receipts tax on larger businesses, with the proceeds dedicated to clean energy investments.  The voters approved the measure by a wide margin, and the Portland Clean Energy Fund (PCEF) now is making grants to community groups for projects to promote greater energy efficiency, and, at least in theory, reduce greenhouse gases.  But in practice there are real concerns that the dispensation of grants is advancing either climate or equity considerations. As Novick and Duncan wrote in their Op-Ed:

Already, the fund has issued grants for projects that have nothing to do with climate or equity, including $100,000 for a rooftop garden on a yoga studio. For the program’s long-term success, we should ensure that the fund supports proposals tied to specific outcomes and cost-effectiveness goals. Unfortunately, the fund’s proposed scoring criteria do not provide any such benchmarks. Indeed, they are not really focused on outcomes at all.

The underlying problem is that PCEF doesn’t have clear standards for defining what constitutes either equity, or cost-effective greenhouse gas reductions.  According to Novick and Duncan, the application process is a kind of affinity-demonstrating beauty contest, with applicants chosen chiefly for the meritorious origins of the sponsoring organization rather than the characteristics of the project.

For example, applicants for large-scale grants of up to $10 million can earn no more than 8 points out of 100 for reducing greenhouse gas emissions. Think about that: “Clean Energy Fund” applicants could, apparently, get 92 points out of 100 without reducing greenhouse gas emissions at all. Meanwhile, applicants can only lose 5 points if their proposal will not “realistically result in intended outcomes.” So, you could get 95 out of 100 points even if your project has no realistic chance of succeeding. Applicants get a large number of points for “characteristics of the organization” categories, which may be important, but not more than actual results. The selection committee could simply require that organizational applicants meet certain criteria for diversity, etc., rather than allowing applicants to make up for a lack of substance by accumulating “organizational” points.

The idea of setting up a public sector fund to advance the twin goals of promoting equity and reducing greenhouse gases has considerable merit, but if it’s going to make any difference in either area, it needs to insist on measurable results and clear accountability.  The current PCEF regulations do very little to achieve this fundamental need.  Portland’s voters, historically disadvantaged communities, and the environment all deserve better.

Another exploding whale: ODOT’s freeway widening cost triples

It now looks like Oregon DOT’s I-5 Rose Quarter $450 million freeway widening project will cost more than $1.25 billion

The project’s estimated cost has nearly tripled in just four years, and still has further cost overrun risk

Even OTC commissioners question whether it’s worth more than a billion dollars to widen a 1.5 mile stretch of freeway

The Oregon DOT has experienced massive cost-overruns on all of its largest construction projects, and has systematically concealed and understated the frequency and scale of cost overruns

One of the most viewed clips on YouTube depicts the handiwork of Oregon Department of Transportation engineers. Over 50 years ago, in the fall of 1970, confronted with the rotting corpse of a 45-foot long sperm whale on a Pacific beach, ODOT engineers planted half a ton of dynamite under the carcass; when detonated it created a rain of blubber that sent bystanders running for their lives—a  a huge chunk that crushed a nearby car. ODOT has subsequently given up on exploding stranded whale carcasses (it now carefully buries them).  But it has found another thing to explode, and something it does regularly: project budgets.

ODOT then: Exploding Whales. ODOT Now: Exploding Budgets

Deja vu all over again.

Barely 18 months ago, we wrote about the latest ODOT fiasco:  the nearly doubling of the price of the ill-advised I-5 Rose Quarter freeway widening project in Portland.  The project, which was sold to the 2017 Oregon Legislature as costing $450 million  had its price tag balloon to almost $800 million in March 2020.

Earlier this month, the agency conceded that number was low, way too low, and that now the project will cost upwards of $1.25 billion (and could cost even more).  That means that in just four years—and without turning a shovel of dirt—the price tag for this project has nearly tripled.  Not only that, but basic questions (like the design and features of a lengthy covered highway tunnel, and relocation of principal on- and off-ramps, and the relocation of Harriet Tubman Middle School) are unresolved, and will almost certainly increase project cost further.

Just as the project has nearly tripled in price, it has become increasingly unclear how it will be paid for.  The 2017 Legislature earmarked $30 million per year to go towards the Rose Quarter project (when it was told the price was just $450 million). But the 2021 Legislature allowed that same $30 million in annual revenue to go towards billions of dollars of other freeway widening projects.  So the agency has less revenue for the Rose Quarter freeway widening at exactly the time it costs have tripled.  Oregon DOT says it will now make up the difference, somehow, by a combination of borrowing and tolling.  Borrowing will require interest payments that inflate the total cost of the project still further.  And ODOT’s own consultants have said tolling this stretch of I-5 would actually eliminate the need to widen the freeway at all.  The Rose Quarter project is looking more and more like the 21st Century version of ODOT’s exploding whale.

With good reason, the higher price tag for the project is finally starting to cause Oregon Transportation Commission members some serious heartburn.  Every dollar spent on this barely 1.5 mile long freeway widening project is a dollar that isn’t available to maintain or improve roads elsewhere in the state, and as we’ve noted, bonding grants this project an irrevocable priority for state and federal funds.  According to the Oregon Public Broadcasting,  Smith argued:

[OTC Commissioner Sharon] Smith questioned the overall viability of the project and asked her colleagues whether they believe Oregonians would approve the project if it were put on the ballot.

“Do you want to spend $1.5 billion on a road project? Is that the best use of our public funds right now? And I don’t know if the answer would be yes,” she said.

But wait, there’s more:  Who will pay for school relocation and building housing?

But that’s not all.  This estimate doesn’t include other likely costs. A key part of the Rose Quarter project is mitigating the negative effects on the Albina community.  Governor Kate Brown has promised state support for relocating and rebuilding Tubman Middle School—its school grounds are in the path of the widened freeway.  That $80 million cost is not included in the new budget.  Also, as we’ve reported at City Observatory, ODOT consultants have included gaudy illustrations of housing that might be built on the new highway covers to replace the hundreds of homes demolished to make way for ODOT highways in the neighborhood, but no one has identified even a dime of the hundreds of millions of dollars that would be needed to pay for the cost of the housing ODOT pretends will be built to restore the neighborhood.

Finally, the $1.2 million (or more) is just the today’s sticker price of the project; ODOT doesn’t actually have the money in hand, so it will have to borrow it. That borrowing will entail a considerable additional expense for interest.  This is a part of the fiscal reality of the Oregon Department of Transportation that no one talks about:  Prior to 2000, it was nearly debt free, and spent less than 1.5 percent of its budget on interest expense. Since then, its gone on periodic borrowing binges, that like consumer credit, let you enjoy shiny new things now, and push the cost off (with interest) into the distant future. No one’s bothered to spell out the interest costs of borrowing for the Rose Quarter project, but that, too is likely to run into the additional hundreds of millions of dollars.

Moving the goalposts to understate the cost overrun

Media accounts of the latest escalation of the project cost actually understate the size of the cost overrun:  They omit the fact that the project’s original cost estimate, from just four years ago, was a relatively paltry $450 million.  Instead, they compare the project’s price tag only to its now 18-month old update (in which we were told that the highest likely cost of the project was a little under $800 million.  Two major local news organizations were fooled into under-reporting the size of the cost overrun:  The Portland Oregonian overstated the project’s “original” pricetag.

The original proposal was expected to cost between $715 million and $795 million and had a projected “midpoint” construction timeline of 2025. ODOT projects that the larger freeway caps — as well as relocating a freeway ramp to accommodate them— will cost between $1.8 [sic] billion and $1.25 billion and reach its midpoint of construction in 2027.

Likewise, Oregon Public Broadcasting was duped into mis-stating the project’s initial cost estimate and thereby minimizing the cost overrun:

The project’s cost has risen significantly from its initial price tag of between $715-795 million to upwards of $1.18 billion. The project could top $1.4 billion if a more robust cap over the freeway was pursued to allow heavier development.

Incidentally, sending earlier cost estimates and project schedules down the memory hole is a routine practice at ODOT, which enables them to always claim that a project is “on-budget and on-schedule” by simply forgetting any and all previous statements.

ODOT:  Where cost overruns are just the way we do things

To some, a cost increase of this magnitude may seem like an aberration.  For anyone who has followed ODOT closely, its apparent this is very, very common.  Over the past decade and a half at least, ODOT has blown through the budget estimates of virtually every large project they’ve undertaken.

Like other highway agencies, ODOT has consistently underestimated the cost to complete its major highway projects.  A review of ODOTs own reports for the largest projects its undertaken in the past 20 years shows a consistent pattern of cost overruns, as summarized here:

Source: Compiled from ODOT reports. Note: Newberg Dundee estimates are for entire project, which is only partially complete. Other projects latest cost reflect total cost as completed.

There’s abundant academic evidence about the consistent tendency of “megaprojects” to overrun early cost estimates.  Bengt Flyvberg has literally written a book about it.

The problem isn’t unique to Oregon.  Two of the biggest bridge projects nationally (rebuilding the Tappan Zee Bridge N. of NYC, and SF’s Bay Bridge West Span both produced colossal overruns).

No Accountability for Overruns

There have been furtive efforts to oversee ODOT.  In November 2015, Governor Brown said she was commissioning an performance management audit of ODOT.

ODOT did nothing for the first five months of 2016, and said the project would cost as much as half a million dollars. Initially, ODOT awarded a $350,000 oversight contract to an insider, who as it turns out, was angling for then ODOT director Matt Garrett’s job.   .

After this conflict-of-interest was exposed, the department rescinded the contract in instead gave a million dollar contract to McKinsey & Co, (so without irony, ODOT had at least a 100 percent cost overrun on the contract to do their audit.)

And what McKinsey produced amounted to a whitewash, as I explained at Bike Portland.  The audit covered up a long series of ODOT cost overruns, and instead focused on a long series of meaningless measures of internal administrative processes, such as the average time needed to process purchase orders. Meanwhile, the state’s million dollar auditors excluded from their cost overrun calculations the US20 Pioneer Mountain project, the single most expensive project that ODOT had undertaken, and even though excluding it, managed to understate and mis-label the 300 percent cost-overrun.

The final report from McKinsey recommended that ODOT could become more efficient by giving more money to consultants like McKinsey (as humorist Dave Barry would say “I’m not making this up.”)

Which, in a way, brings us full circle:  Dave Barry was one of those principally responsible for popularizing the exploding whale story.  With ODOT, the explosions just keep coming, but now they’re confined mostly destroying project budgets, rather than raining blubber. At least with whales, ODOT learned from its mistakes.  When it comes to massive cost overruns, it’s simply become the way this agency does business. We give the last word to Barry, who narrates the whale explosion:

So they moved the spectators back up the beach, put a half-ton of dynamite next to the whale and set it off. I am probably not guilty of understatement when I say that what follows, on the videotape, is the most wonderful event in the history of the universe. First you see the whale carcass disappear in a huge blast of smoke and flame. Then you hear the happy spectators shouting “Yayy!” and “Whee!” Then, suddenly, the crowd’s tone changes. You hear a new sound like “splud.” You hear a woman’s voice shouting “Here come pieces of… MY GOD!” Something smears the camera lens.



The Week Observed, September 17, 2021

What City Observatory did this week

The cost of Oregon DOT’s Rose Quarter project has nearly tripled to $1.25 billion.  Just four years ago, the Oregon Department of transportation sold its mile-and-a-half long I-5 freeway widening project through Portland as costing a mere $450 million.  Earlier this month, it revealed new cost estimates that show the project will cost almost triple that amount (as much as $1.25 billion).  And that’s before any payment of interest on the borrowing that will be required to move the project forward, much less the cost of building housing and rebuilding schools promised as a way of mitigating the damage the freeway has done to the historically Black Albina neighborhood.  Massive cost overruns are a regular feature of ODOT projects, which have routinely posted final costs 2 to 3 times the estimates floated when they were approved.  Just as the agency famously dynamited a whale on an Oregon beach in 1970, this is another thing that’s blowing up in the agency’s—and taxpayer’s—faces.

ODOT then: Exploding Whales. ODOT Now: Exploding Budgets

Must read

1. The chain reaction of building luxury apartments. Often times, the sight of new luxury apartments leads to accusations of gentrification and rent increases. Advocates for affordable housing typically challenge this construction because they believe it only helps the wealthy. Full Stack Economics’ Timothy Lee refutes that argument and highlights research from Finland and the USA to show the comprehensive impact of luxury apartments on the overall housing market. Last month, three Finnish economists published a research paper that showcased a chain reaction from high-end apartment construction that fall across all income levels. The economists wrote, “For each 100 new, centrally located market-rate units, roughly 60 units are created in the bottom half of neighborhood income distribution through vacancies.” The new construction led to affordable housing options for rich and poor renters. In America, the results from research by economist Evan Mast prove to be similar. Chain reactions occur when new apartments are built. In this piece, the author emphasizes the positive impacts of construction, regardless of its status. When new luxury apartments are constructed, older buildings receive vacancies. The more new buildings being constructed means that older buildings will be “filtered down” to lower income tiers at quicker rates. Lee argues that the goals of developers and affordable housing advocates do not conflict like it may seem. More housing is good housing – even the luxury high rises.

2. Half a million public EV chargers is not the answer.   The discourse on electric vehicles has been all the rage recently, particularly with President Biden’s goal of 50% EV sales by 2030. Just last week, the New York Times published an article announcing the US was in need of hundreds of thousands more public chargers. They argued that in order to make the adoption of EV feasible, fast public chargers would need to be placed across the nation (similarly to gas pumps). However, Vice’s Aaron Gordon does not agree. In this article, the author refutes that a lack of public chargers is a major barrier to the EV industry. Instead, he challenges readers to chance their concepts of an electric vehicle. While a normal car needs a gas pump, an electric vehicle does not need a public charging station to drive where it needs. Gordon explains,

“Most EV owners charge their cars like their phones, plugging it in overnight and having a full charge that lasts all day or more in the morning. In fact, a car charge will last much longer than your phone, on average. You’ll probably use a public charger much less often than you plug in your phone away from home.”

With the ability to charge at home, an electric vehicle eliminates the consistent need for public refuel centers. Gordon writes a thorough explanation for why adding half a million public EV chargers like the New York Times suggested would be unsustainable, expensive, and wasteful. The author asserts that “the path to a better, greener future is actually far more achievable than one might think or experts are advising.” The future of electric cars is viable. Adding unneeded infrastructure will only make this future harder to achieve.

3. The disappearance of long commute times in the Seattle area.  The rise of remote work as a result of the COVID-19 pandemic has lead to drastic changes in people’s travel patterns. What length of commutes have been altered the most due to remote work? The Seattle Times’ columnist Gene Balk uses Nielsen data to explore the changes in the work commutes of Seattleites. Balk found that the number of people who did not commute more than doubled from pre-pandemic life. Breaking down the data by commute time showed a compelling relationship. Nearly 250,000 workers who had commutes over 20 minutes no longer traveled to work while there was a slight increase of workers commuting in under than 20 minutes. In particular, there was a 34% decline among 30-59 minute commutes. Remote work environments eliminated the longer commutes at a staggering level. Galk compared these results to occupational status to find a slight correlation. According to the data, a higher proportion of white collar workers lived more than 20 minutes away from their office. These workers were also more than twice as likely to work remotely compared to a blue collar occupation. Remote work changed the lives of many throughout the past year, and for nearly a quarter of a million in the Seattle area, it terminated the long commutes.

New Knowledge

France’s SRU Law and its Potential in the US.    At the beginning of the century, France took a major leap in combating the economic segregation in its housing. In December 2000, the Los relative à la Solidarité et au renouvellement urbains (SRU law) passed, jumpstarting a redistribution of affordable housing more evenly across all communities in French metropolitan areas. In 2013, the law was strengthened, mandating that urban metro areas reserve 25 percent of housing stock to social housing by 2025. (Unlike inclusionary housing requirements in the US that require private developers to set aside privately built units as affordable housing, the SRU law applies to the construction of social housing, paid for directly with public funds). Dr. Yonah Freemark recently published an evaluation of the law’s effectiveness in France and tested the applicability of this housing initiative in the United States.

In his study, Dr. Freemark finds that the law led to  a more equal distribution of subsidized housing in French urban areas. In particular, the SRU law was effective in opening up neighborhoods that had historically excluded low-income housing. In the French cities with the lowest share of social housing, the number of these affordable units increased from 626 in 1999 to 4,737 in 2017. Wealthier, lower-affordability communities saw significant improvement in their shares of social housing, which highlights the law’s success. Segregation by income across the country decreased as a result of the SRU law. While Freemark finds that France’s goal to have 25 percent social housing by 2025 is unlikely to be accomplished, the SRU law has shown its ability to impact the structure of urban housing markets.

The study then examines the possibility for a similar fair-share housing act to be implemented in American urban areas. Freemark compares France’s housing distribution to the state of Connecticut. What he finds – Connecticut’s affordable housing stock is significantly lower in urban areas and its distribution statewide is severely less evenly among metropolitan areas compared to France. Freemark claims that the public subsidized, affordable housing in Connecticut is more inequitably distributed than France ever experienced. This highlights major room for improvement that states like Connecticut could have by implementing similar programs to the SRU law. While there are clear limitations, Freemark asserts that there is potential for programs that could benefit thousands of American families. France’s fair-share SRU law has been effective at creating more equitable housing across the country, and it is a model that could aid low and moderate-income families in the United States as well.

In the News

Strongtowns has a great article profiling freeway fights across the country, plaintively asking why state DOT’s are planning like its 1961, instead of climate crisis 2021.  They focus a spotlight on City Observatory’s coverage of Portland’s proposed Rose Quarter Freeway widening project, calling out the cynical woke-washing of the project by the Oregon Department of Transportation:

The Week Observed, September 10, 2021

What City Observatory did this week

Talkin’ ’bout my gentrification.  Jerusalem Demsas of Vox has a thoughtful synthesis of what we know about gentrification.  If we’re concerned about poverty and inequality, gentrification is far from the biggest problem we face. Gentrification is surprisingly rare, and while it brings inequality into sharp focus, there’s precious little evidence of widespread harms.

The bright spotlight shining on a relative handful of gentrified neighborhoods hides in the shadows the real and far more pervasive problem of concentrated poverty. And, as we’ve written at City Observatory, the myopia of gentrification scholarship means that few studies every consider the counterfactual case of asking what happens to people who live in poor neighborhoods that don’t rebound.  The most common anti-gentrification tactics—blocking new market rate housing—actually make housing affordability and displacement worse.

Must read

1. What is the conservative position on zoning?  Libertarianism, local control or “owning the libs.”  Writing at the bloc Pocket Track, Alex Schieferdecker has a thoughtful essay digging into conservative politics and political philosophy as applied to land use.  There’s a division on the right, according to Schieferdecker.  Philosophically, the libertarian and less-government conservatives ought to be opposed to most land use controls, which ought to put them in league with the YIMBY activists.  After all, what is single family zoning but a constraint on the property rights of a landowner.  Meanwhile–and with a substantial boost from Donald Trump and right-wing media–other conservatives have come out swinging to protect the ability of governments to strictly regulate property (as long as they’re local governments and they’re regulating out apartments).

The underlying divide between right wing pro-zoning politicians and latent-YIMBY libertarians has everything to do with zoning’s key role in establishing and enforcing class and racial divisions.  As Schieferdecker writes:

. . . the intention of the vast majority real-world zoning laws has been to separate people from each other. These laws were originally written explicitly to separate different races until that overt approach was ruled unconstitutional. Cities then seamlessly pivoted to writing zoning laws that separated different styles of housing as a proxy for social classes which in turn were a proxy for race. Not everyone is willing to say it out loud, but the central purpose of much of American zoning remains the preservation of spatial income segregation. The identical idea is instead smuggled into the public conversation under the guise of “protecting property values” or “preserving community character.”

2. Glaeser & Cutler on the shortage of cities.  In a Wall Street Journal Op-ed that previews a key theme from their new book—”The Survival of Cities”—economists Ed Glaeser and David Cutler voice a familiar theme:  Many thriving desirable cities, especially in California, have blocked the construction of new housing that would allow more people to participate in their productive thriving economies.  Blocking housing construction in productive cities pushes up home prices, leads to sprawl and lengthened commutes, and contributes to greater energy use and greenhouse gas production.  An essential first step, according to Glaeser and Cutler is getting state legislatures to mandate that local governments allow more housing, something that is starting to happen, but in their view needs to go considerably further.

With housing, the key actors are state legislatures, because they can rewrite the rules of local zoning on a dime. Last month, the California legislature passed a law that could make the permitting of two-unit projects far more automatic. It’s a good beginning, but states should go further and only allow localities to impose regulations and rules that have gone through rigorous cost-benefit analysis.

Overall, this op-ed echoes a key theme we’ve pursued at City Observatory:  the demand for cities and urban living has far outstripped the supply of great urban places. Improving our cities, and building more housing in the places where demand and opportunity are abundant is a key to addressing many national challenges.

3. American’s don’t really hate density.  The latest version of a Pew survey on America’s residential neighborhood preferences has invited a wide range of punditry.  The survey claims to find that by a 60 to 39 percent margin, Americans would prefer to live in larger homes, more distant from schools, stores, work and other common destinations.  While some see the demise of urbanism, or the lingering effects of the pandemic, we think Alex Pareene has a far more nuanced take.  The question of the idea community has gotten bound up in the culture wars:  The real motivation has less to do with urban form than the ability to determine who one’s neighbors are:

White Americans want an endlessly appreciating asset and the ability to police who their neighbors are and what they do. Housing segregation, suburban sprawl, and planned communities are how they won those things, and how they protect them. Automobile dependence is mainly a necessary side effect.

As Pareene points out, when it comes to vacationing at Disneyland or going on an ocean-cruise, middle and upper class Americans have no resistance to dense, car-free environments–they even pay a premium for the privilege.  What’s really at work are issues of class and control.

New Knowledge

The red-blue dimension of Covid vaccination.  New data on county level vaccination rates underscores how the profound political divide in the United States is affecting public health.  People who live in counties that voted most strongly for Joe Biden have the highest rates of vaccination; those who voted for Donald Trump have the lowest.    The following scattergram, using the red/blue partisanship convention shows vaccination rates of US counties as of August 31, with county population proportional to bubble size.  The fitted regression line implies that on average a county that voted 65 percent for Biden had about a 55 percent vaccination rate, while a county that voted 65 percent for Trump had a 40 percent vaccination rate.

Over the summer, the relationship between county partisanship and vaccination status has grown steadily stronger.  In the Spring, county vote for President explained only about 5 percent of the variation in vaccination rates across counties; today it statistically explains about 45 percent of the variation.  Unlike the previous waves of the pandemic, when there was no available vaccine, the current wave, driven by the Delta variant is plainly a product of our political division.

Charles Gaba, Weekly Update: U.S. #COVID19 Vaccination Levels By COUNTY & Partisan Lean,, August 31, 2021.


The Week Observed, September 24, 2021

What City Observatory did this week

Freeway-widening grifters: Woke-washing, fraud and incompetence.  The Oregon Department of Transportation has been trying to sell its $1.25 billion freeway widening project as a way of restoring the historically Black Albina neighborhood that was decimated by three highways the agency built in the 1950s, 1960s and 1970s.  It’s absurd on its face to suggest that making a freeway wider—and increasing traffic and pollution—will help the neighborhood, but ODOT has double-down on that phony claim with a “woke-washed” media campaign that depicts a rebuilt neighborhood with new housing, a career center, and other development.  A newly released brochure doesn’t show the plan to widen the freeway to as many as ten lanes or even any cars, but does depict imaginary buildings which are not actually part of the project.  The fictional career center even carries a plaque reading:  “constructed by Black artisans in 2022.”

Trouble is that the project’s budget contains no funding for any of these highlighted amenities.  It’s a cynical, misleading attempt to sell a freeway.  Plus, a 4-page, full color mailer that ODOT sent to thousands of Portland households is studded with dozens of typographical errors.

Must read

1. You don’t have to be afraid of public transit. The coverage of public transportation in the United States is constantly intertwined with people’s fears. From crime to homelessness to illness, public transit is typically presented as dangerous and undesirable. Is this unappealing image a reality? Vice’s Aaron Gordon thinks not. Gordon argues, “Before we can fix American public transportation, we need to fix the way we talk about it.” This article debunks the incorrect, poorly constructed arguments against public transportation in the media. Gordon breaks down the lack of credible sources and the misguided framing of transit in the media and politics. Gordon writes,

“Mass transit is a window into the American psyche . . .  It is a subject on which facts always seem secondary to narratives, a service covered through the psychology and experiences of those who don’t and won’t use it, or who aspire to never have to use it again, rather than those who do and must, or heaven forfend even prefer it to driving.”

When it comes to public transportation, narratives hold the power. The most dominant one  discourages riders and promotes a misguided sense of “danger” on mass transit. Gordon is fighting for a change in the narrative, advocating for one that removes the Boogeyman from transit nationwide.

2. The high cost of transportation in the United States. The average American spends roughly 13 percent of their household expenditures on transportation. On average, an American household spends $9,737 each on transportation costs annually, with the bulk of it being car ownership and maintenance. In this blogpost, The Institute for Transportation and Development Policy explored the distribution of these expenditures across income levels. Their analysis examined transportation expenditures by income level. As the income quintile rises, the portion of expenditures on transportation decreases. This means that the lowest income bracket pay the largest portion of their income on transportation. So, while on average, Americans spend about 13 percent of household costs on transportation, the lowest quintile of Americans spent 29 percent. Due to the lack of affordable transportation options, low income households are forced to spend their money on personal vehicles and the extensive associated costs. Europe’s transportation system, on the other hand, is different. Plentiful transit, denser land use, and tax policies create a more efficient, equitable cost structure. The proportion of transportation expenditures increase by income quintile, and the revenue from it is implemented into the public transportation system. If the United States want to reduce the financial strain on its poorest citizens, we need to focus on creating public transit that supports all people.

3.  Incentives are important tools for policymakers and entrepreneurial firms to uplift local businesses and support local economic development. Recently, Smart Incentives published a new  Kauffman Foundation-funded report and a technical appendix detailing the existing condition of business incentives, highlighting successes and failures and a path towards better policy. Here, Darrene Hackler presents three recommendations for maximizing the impact of incentives. The first improvement starts with policy design – strategic planning and comprehensive research are needed to create effective incentives. The most effective programs are part of a larger economic development strategy, one that identifies and tackles the needs of the local ecosystem. The second level of improvement is through program management and implementation. Proper administration and guidance throughout the incentive program leads to better results. The final level is monitoring and assessment:  \ policymakers should establish data and research standards to create a program that they can learn from and compare their results to similar efforts.

New Knowledge

Revising the history of red-lining. Redlining, the practice of not making mortgage loans in low income and predominantly minority neighborhoods, is part of a widely reported history of segregation in the US. There’s a kind of “just-so” story, that points to maps drawn in the late 1930s by HOLC, the federal government’s Homeowners Loan Corporation, which rated neighborhoods in cities across the nation as “high risk” (red) and low risk “green.” It’s often assumed that these HOLC maps were a prime reason for segregation and lending discrimination. But a new paper makes it clear that the reality is more complex.

HOLC was just the first of two major housing programs established as part of the New Deal, and was a temporary measure to refinance existing home mortgages after private lending collapsed. It was augmented by a permanent agency, the Federal Housing Administration (FHA), which guaranteed new home mortgages. While HOLC did all of its lending in the mid-1930s, FHA has continued.Key features of FHA lending, particularly restricting new home mortgages to chiefly suburban areas led to charges the agency was discriminating against people of color and low income households. There’s clear substance to these charges, but FHA systematically destroyed its records and maps of lending activity, leaving present day scholars with scant data on the actual geographic patterns of its lending. The HOLC maps, on the other hand, famously survived, and have been digitized for use by researchers.

It’s common to conflate HOLC and FHA in telling the tale of systemic housing discrimination, but Fishback and his co-authors cast doubt on the claims that HOLC played a key role. After examining local records of mortgage activity in three cities, they found that HOLC refinanced loans to black homeowners in rough proportion to their representation in the local population. In comparing HOLC maps and lending activity by HOLC and FHA, the authors find that even “redlined” areas had substantial HOLC lending activity. In contrast, FHA did largely exclude low rated neighborhoods from lending.

In addition, HOLC’s maps were created after the agency had issued nearly all of its mortgages. And finally, the maps themselves, though public today, were kept confidential by the agency at the time.

It’s clear that housing discrimination was rampant in US cities in the 1930s, but it didn’t begin with, nor was it limited just to these two agencies. Homeowners, realtors, city officials, banks and others widely practiced segregation and lending discrimination, and the maps that HOLC drew were more an illustration of extant discrimination than its cause.

Price Fishback, Jonathan Rose, Kenneth Snowden & Thomas Stores, New Evidence on Redlining by Federal Housing Programs in the 1930s, September 2021, National Bureau of Economic Research Working Paper, No. 29244

In the news

City Observatory’s Joe Cortright was a featured guest on KGW-TV’s “Straight Talk” public affairs program, debating the merits of the proposed $5 billion effort to revive the Columbia River Crossing.

The Week Observed, September 3, 2021

What City Observatory did this week

Portland’s Clean Energy Fund needs accountability.  Portland voters approved a ballot measure creating a $60 million annual fund to invest in community-based clean energy projects, particularly ones that promote equity.  It’s a well-intended program, but in practice the review process that’s been developed does too little to establish measurable results, either in reducing greenhouse gas emissions, or improving the lot of historically disadvantaged communities.  We look at the critique of the program offered by former Portland City Commissioner Steve Novick and state greenhouse gas commission chair Angus Duncan.

Purple mountain tragedy. Oregon’s iconic Mt. Hood sees its snowpack disappearing.

Must read

1. Paul Krugman connects the dots: Urbanism, Housing shortages and a polarized nation.  California, in a microcosm represents the key challenges of urbanism in a knowledge economy.  The state has flourished because its created strong industry clusters and attracted (and educated) tons of knowledgable workers.  In the past, the growth of such industries has produced wide benefits, but it California, acces to those benefits is limited by the state’s highly constrained housing supply–the product of NIMBY land use policies.  As a result, access to opportunity is cut off for many.  As Krugman writes:

” . . what we see in California is that while highly educated workers are moving in to serve the tech boom, less-educated workers are moving out,”

Working-class families should be able to share the region’s economic success. Yet, with housing costs rising, these families are being driven out.  In turn, this pattern of migration is amplifying the blue/red polarization of American communities. Krugman argues for increasing housing density in California could broad access to opportunity. Building more housing helps create diverse, healthy cities. Housing is at the core of The Golden State’s problems.

2. What if we applied scooter rules to cars?  Streetsblog’s Kea Wilson has a devastatingly on-point critique of the profound double-standard at work in US transportation policy.  Tiny electric scooters–a relatively new transportation innovation on urban streets–are subjected to a range of technological and regulatory standards far in excess of those applied to the much deadlier and prolific two-ton metals boxes that dominate US streets.  Scooters have built-in speed limiters, and also have “geo-fencing” that keeps them out of some areas (and regulates their speed still further in others).  Many even have built-in technology to prevent drunk operators, and cities and states have strict weight and size limits.  How much safer would the US transportation system be if we applied even a fraction of this level of regulation and scrutiny to the vehicles that kill or maim tens of thousands of person each year?

3. Are students an environmental menace? Airports, highways, and college classrooms are all in the same boat when we consider environmentally damaging infrastructure. One of these is not like the others, yet, according to the California Environmental Quality Act, they all fit in the same category. A lower court judge recently ruled that “increases in student enrollment above the current enrollment level at UC–Berkeley could result in an adverse change or alteration of the physical environment.” Siding with a local group, Save Berkeley’s Neighborhoods, the court halted the university’s ability to increase enrollment. Now, the university must reassess the ecological cost of its students.  Slate’s Henry Grabar writes on this decision and talks to members of the Berkeley community across both sides of the debate. The author illustrates how this controversial decision is tied to the NIMBYism of Berkeley residents. He writes, “the ‘environment’ protected by a university enrollment freeze isn’t the atmosphere, or ecologically sensitive habitats, or the wildlands of urban sprawl. It’s the front lawns and quiet nights of Berkeley homeowners.” Are college students really an environmental burden on the same scale as highway construction? What benefit does limiting the number of diverse students at a prestigious university do for our climate goals?  The final irony, of course, is that the CEQA process doesn’t ask what would be the environmental impact of not admitting more students to Berkeley; because the university is denser and better served by transit than alternatives, its likely that the total environmental impact of educating these students would be less than having them go to college elsewhere.

New Knowledge

Cities, clusters and knowledge:  Why the pandemic likely is reducing innovation and productivity.  Berkeley’s Enrico Moretti has written several papers documenting the economic gains we get from urbanization (and the economic costs we experience from restricting the growth of the most successful, productive cities).  Wired drew attention to a new paper from Moretti looking specifically at the role of cities, and the close collaboration and interaction that they facilitate, in stimulating innovation.

Moretti’s paper, “The Effect of High-Tech Clusters on the Productivity of Top Inventors” looks specifically at patenting activity as an indicator of innovation.  Inventors of all sorts are more inventive if they’re in a milieu with lots of other inventors.  Moretti looks at a variety of measures of how patenting changes with the size of the local industry cluster:   inventors in larger clusters tend to be more productive, on average, than those in smaller clusters, and importantly, those who move to larger clusters become more productive.

As the Wired article summarizes:

. .  . people in the tech and biomedical sectors who move from a small industry cluster to a larger one like those in Silicon Valley, Seattle, or Austin become 12 to 14 per cent more productive, Moretti’s research shows. They become more productive almost immediately after they move, and they sustain their productivity for several years afterwards.

The converse is also true:  When a cluster shrinks, the inventors in the cluster become, on average less productive.  Moretti looks at the decline in patent productivty in Rochester New York, following the decline of the photo-optic cluster anchored by Kodak.

All this has implications for remote work in the wake of Covid:  If researchers distant from strong clusters are less inventive, that’s likely to make them and the firms that employ them less successful.  In contrast, cities with strong local clusters of businesses are likely to generate more novel ideas, and be more successful over time.  As we’ve argued at City Observatory, the competitive aspect of lower remote work productivity isn’t apparent when everyone has to work at a distance, but as more and more of us return to the office, or to the lab, those who work remotely (and the firms that employ them) will increasingly be at a disadvantage.

Enrico Moretti, The Effect of High-Tech Clusters on the Productivity of Top Inventors, University of California, Berkeley, March 2021.


Where we embrace socialism in the US: Parking Lots

How we embrace socialism for car storage in the public right of way

Florida Senator Marco Rubio has denounced President Biden’s $3.5 trillion spending program as un-American socialism.  Rubio claims:

In the end, Americans will reject socialism because it fundamentally runs counter to our way of life.

That’s not accurate, of course.  Socialism is well-established in the US, at least for car storage; something that is near and dear, certainly to Republicans.  You think otherwise?  Before you denounce socialism, Senator Rubio, consider this perspective.

Comrades, rejoice:  In the face of the counter-revolutionary neo-liberal onslaught, there’s at least one arena where the people’s inalienable rights reign supreme:  parking.

Fear not, comrade sister: you will not have to search for a parking space in our socialist utopia!

We may not be able to make health care a right or make housing a right, but the one place the revolution has plainly succeeded in usurping the market is in the case of parking.  Every worker’s council (though they may still brand themselves in the pre-revolutionary nomenclature of “city councils” or “townships” or “planning commissions”) has established the right of every citizen to abundant, free parking.

To everyone, we can point to parking as one place where private property and the intrinsically inequitable forces of capitalist distribution don’t disadvantage the working classes and the poorest among us. There may be massive inequities in other aspects of life, but each citizen is guaranteed equal access to adequate parking spaces. To paraphrase Anatole France, the law in its majesty protects equally the right of the rich and the poor to park their massive sport utility vehicles pretty much wherever they would like without having to pay a penny for doing so.

True, we may face public opposition from reactionaries in the media, like New York Times columnist Tim Egan, who has decried the people’s efforts in Seattle to secure greater access to housing as a conspiracy between socialists and developers. Tosh!  As we have shown with our parking requirements, we will bend developers to the will of the people.

Throughout the nation, workers councils city councils have decreed that the people’s right to parking is supreme. No bourgeois developer may build so much as a small shop or an apartment without adequately providing for the needs of the automobiles that may travel to or from these destinations. We may still struggle to require inclusionary zoning for people, but we have long since achieved inclusionary zoning for cars.

Together, comrades, we embrace the timeless historical wisdom encapsulated in the ITE parking handbook, which assures that each citizen is allocated sufficient parking spaces at each of the places he or she may wish to store a vehicle.

To those neo-liberal apologists and enablers who call themselves “economists” and claim that socialism is flawed and unworkable, we can proudly point to the successes of the parking supply diktats established in every community, large and small.

The production of parking spaces has exceeded the quotas established in the five year community plans. Comrade Scharnhorst has produced a report that showing that in Seattle, there are 1,596,289 parking stalls, more than 5 parking spaces for every household: indeed, a triumph of the planned economy!  (Now if we could just figure out how to get one house per household?)

The production of parking spaces continues to set glorious new highs

Scharnhorst cleverly infiltrated the Mortgage Banker’s Association to assemble the data for his report; just as V. I. Lenin foretold, we will hang the capitalists with the rope they sell us; surely had the great teacher been writing in this century, he would have said we will disrupt capitalism with the big data downloaded from their servers.

Take heart comrades: whatever our challenges in other domains, we can proudly tell the masses that we’ve succeeded in establishing a socialist utopia for car storage.  Forward!