Yesterday, we explored the differences in car insurance premiums in the nation’s largest metropolitan areas. Today, we will take a look at homeowners insurance rates. Unlike car insurance, homeowners insurance is not required in states. Still, this insurance can be required by a mortgage lender, and it is an important action to protect one’s home. Premiums vary across the US, with location being one of the strongest determinants of price. Differences in weather, proximity to disaster-prone areas, crime rates, and density can vary home insurance rates across different metropolitan areas. We will explore these variations in insurance premiums and consider how it might affect the overall cost of living. 

Home insurance rates are important to examine right now because of the growing impact of climate change on our built environments. Differences in insurance costs among cities may become even larger in the years ahead.  The growth in wildfires and extreme weather events associated with climate change has already produced record insurance payouts. Insurance models are generally based upon historical data. They calculate the expected payout and create prices accordingly. What happens when climate change shifts trends in unpredictable ways? Just last year, disaster payouts from reinsurers, the firms that insure the insurance companies, were the fifth highest in history. Climate change prompts insurance companies, and the “re-insurers” who share these risks to reevaluate their rate-setting models. When the risk for payout increases, so does the cost of insurance. Mother Nature plays a crucial role when considering insurance rates. Nature’s volatility can significantly heighten your premiums.

Which cities have the least (and most) expensive home insurance rates?

Home insurance rates have similar variables that impact the rates across the country. The greater the likelihood for damage to the home, the more expensive the rate will be. We used Insure.com data to compile the average annual home insurance rates across 52 of the largest metropolitan areas in the country. Unfortunately, Insure.com did not have any estimates for Riverside-San Bernardino-Ontario, CA. The site did not have clear methodologies on the rate, however, it was uniform throughout so we can examine the relative differences across these metro areas. Among the large metro areas, the median rate was $2118.  (Cities have somewhat higher rates than rural areas, which is why the large city median is north of the national average of $1631). 

The cities with the highest home insurance rates were Miami, New Orleans, Oklahoma City, and Detroit. The lowest home insurance rates were found in San Jose, San Diego, San Francisco, Sacramento, and Los Angeles. Among large metro areas, California appears to be the cheapest state to insure your home. In fact, with Seattle, Portland, and Las Vegas all below the 25th percentile as well, the West Coast proves to be a relatively inexpensive place to insure your home. The South? Not so much. Eight Southern cities are above the 75th percentile. 

The risk of extreme weather in these regions appears to be a significant factor for these differences. Miami and New Orleans have hurricane seasons every year. In 2020, there were a record breaking 30 named hurricanes during the Atlantic hurricane season, with 11 landfalling in the United States. The risk for home damage due to the prevalence of events like this increases insurance rates. As climate change continues to disrupt the trends of the weather, we can expect home insurance rates to rise. Other regions also face their own unique risks: Oklahoma City is in a high risk zone for tornados, fires, and earthquakes. These natural disaster risks push up premiums. While there are wildfire and earthquake risks in the West, they haven’t produced dramatically higher insurance rates—yet. We will likely see changes in this over time as we continue to feel increasing impacts of climate change though. 

Insurance and the Cost of Living

Just like we did yesterday for auto insurance, we compared the BEA’s RPP for Rent with the insurance data below. What we found: a slight negative correlation for homeowners insurance. However, when looking at the graph, you can see California standing out as an outlier, bringing down the correlation. When the RPP for Rent ranges from 80 to 150, there is a clear positive association between the insurance premiums and the price parity. This trend points us to consider that there might be an increasing effect for insurance rates and housing costs.

Let’s consider two cities: Oklahoma City and Seattle. According to Insure.com, the average annual homeowners insurance rate in Oklahoma City is $6045, while Seattle’s average rate is $1214. Clearly, there is a notable difference between these two premiums. When we compared the sprawl tax to cost of living, we used estimates of rent differential as a benchmark for cost of living. The cost of housing varies the most across metropolitan areas, so this was an effective measure for comparison. The typical resident in Oklahoma City paid roughly $2,525 less in annual rent/housing costs compared to the typical large metropolitan area. In Seattle, the typical resident paid approximately $2,055 more. From our Insure.com data, the annual housing insurance premium in Oklahoma City is $3,927 above the median premium across large metro areas. Seattle, on the other hand, has an annual premium that is $904 less than the median rate. These data suggest Oklahoma City’s high homeowner’s insurance rates effectively cancel out the lower rents in the metro area. The cost of housing is heightened significantly by homeowners insurance, placing Seattle and Oklahoma City on roughly the same pedestal. Seattle’s lower cost of insurance made up for the high rents. A cost of living comparison that omits these significant variations in insurance costs probably isn’t reliable.

What’s the relationship between home values and insurance rates?  In general, we would expect that insurance premiums would be higher in cities with expensive housing, as it would be more expensive to repair or replace a home in an expensive metro than a lower priced one.  Overall, there is a positive but modest relationship between home prices and insurance rates. Generally, the more valuable a home is, the more expensive it will be to insure it. 

High homeowners premiums are likely to hike up the cost of living. However, low homeowners premiums in Western metro areas like Seattle, San Jose, and Sacramento at least partially offset higher annual housing costs. In contrast, some seemingly affordable Southern metro areas like New Orleans, Oklahoma City, and Memphis could have some or all of their affordability advantage eroded by notably high insurance premiums. These areas are where insurance makes its biggest impact in the overall cost of living. 

Although homeowners insurance isn’t mandated by law like auto insurance, it is widespread and many homeowners regard it as essential, making it an important element to include in cost-of-living comparisons. Auto insurance likely plays a smaller role in the overall cost of living. Owning and insuring a car is not a requirement in all places, so the lack of need for auto insurance (and other car maintenance) could help lower the cost of living. It is difficult to fully quantify the cost of living across different areas because there is value in the external benefits of different cities. These cost of living comparisons struggle to encapture the amenities which cities can provide for their constituents. Still, insurance has the potential to play a mighty role in the cost of living. Auto and home insurance can require thousands of dollars out of consumers’ pockets each year. The impacts of climate change on our world will increase those premiums. Climate change is making a more volatile and uncertain world. As extreme weather risks intensify, the demand for insurance will as well. The role of insurance will heighten as we move into the future and it will be important to keep in mind how hefty the price tag is across the nation. The role in cost of living may not be entirely significant now, but as the world becomes more unpredictable, we could see the price to protect your belongings rise to new heights.

 

 

Note: This post has been updated to provide a link to insure.com‘s website.

Everyone loves to compare the affordability of different cities, and most of the attention gets focused on differences in housing prices and rents. Clearly, these are a major component of living costs, and they vary substantially across the nation.  But as we’ve regularly pointed out at City Observatory, transportation costs also vary widely across cities, and some places that have somewhat more costly housing also have more compact development patterns and less sprawl, and therefore enable their residents to spend less on cars and gasoline for transportation. These differences can create a significant impact on the overall cost of living across cities. We’ve computed the difference in city living costs in our Sprawl Tax report.

There’s another important component to differing living costs across the nation that we think deserves additional attention: insurance costs. Nearly all drivers and the majority of homeowners carry insurance on their cars and homes. Insurance premiums vary widely across the US, based on differences in crash rates, losses to natural disasters, and state-to-state variations in legal standards (as well as other factors). Today we’re going to start looking more closely at these variations—we’ll start with differences in car insurance costs, and tomorrow, look at home insurance.

Car insurance is a requirement for many people living in auto-dependent places. Wide sprawling metropolitan areas often require more miles to be driven for commuting. We are curious about the role that insurance plays in relation to the cost of living. When a car is required to commute to work or the store, insurance is a necessity to protect yourself and the car. The price of insurance is dependent upon one’s personal background as well as the makeup of one’s setting. Location plays a major role, whether it be state policy, natural regional differences, or the composition of the insurance pool around you. Insurance can become a vital and costly expense for Americans. The magnitude of that expense could severely influence the way we view the overall cost of living across major cities. 

Which cities have the least (and most) expensive auto insurance rates?

Using data from TheZebra.com, we compiled the average annual auto insurance premiums across the 53 largest metropolitan areas in the United States. The Zebra estimated the typical premium paid by a 30 year old single male driving a Honda Accord. In the typical large US metropolitan area, the average automobile insurance premium is about $1,800 per year.  The rankings of large metros are shown below. Premiums in these large metros are higher than the overall national average auto insurance premium. In general, rural areas have generally lower rates. Insurance companies base their rates upon the perceived risk at obtaining a claim. The more at-risk the company is at receiving a claim, the higher their insurance rates will be. Cities increase the risk, as insurance companies report that claims are higher in urban areas, thus their rates increase accordingly.

The cities with the highest car insurance rates were Detroit, New Orleans, Miami, and New York. Detroit, by far the highest, had an average insurance rate of $6,280. The Motor City has annual prices approximately four times higher than the median rate for large metropolitan areas. The cities with the lowest car insurance premiums were Cincinnati, Charlotte, Virginia Beach, and Raleigh. These annual rates were all between $900 and $1200, significantly lower than the highest tier. Generally inexpensive cities (25th percentile) and generally expensive cities (75th percentile) vary by $670.

Other living cost estimates, like the sprawl tax, vary differently than auto insurance rates. The sprawl tax in particular has less extreme values, yet a wider range of variation across the middle of the data. The median sprawl tax, $1,302, is less than the median insurance rate by roughly $500. At the same time, the sprawl tax in generally inexpensive cities compared to generally expensive cities is nearly $1000, a greater difference than insurance rates. Insurance premiums in the most expensive cities are by far greater than the sprawl tax. These clear outliers make the distribution of auto insurance premiums standout compared to other living cost estimates. 

Another interesting difference can be seen by examining which cities standout across sprawl tax and car insurance. For instance, New Orleans and New York are two of the most expensive cities to insure your car. Yet, they have the lowest sprawl tax. Moreover, five of the ten most expensive cities to insure your car are all below the 25th percentile for the sprawl tax. Let’s take a closer look at the relationship between miles traveled and insurance rates. Using data from the Center for Neighborhood Technology, we compiled the annual vehicle miles traveled per household across metropolitan areas and compared it to the auto premiums. We assumed that we would see a positive relationship. The more miles you drive, the greater your risk for filing a claim. Instead, we found the opposite – auto insurance rates decreased as annual VMT per household increased.

Insurance rates were lower in the places where people drove more often. Insurance rates were higher in places where people had lower sprawl taxes. Why? Car dependence. In sprawling metropolitan areas, people need to drive themselves to get where they need to go. People are reliant on their cars for nearly all commuting travel, which in turn makes insurance a necessity. Insurance pools grow with more insurers distributing the risk of payout across more people, which consequently decreases rates. Sprawl may have a negative impact on insurance rates because of its impact on the demand for insurance. 

We believe that the structure of insurance policy is a strong contributor in the variation of rates across metro areas. State laws regulate the market for automotive insurance policies, which can be choice no-fault, a tort liability, or a combination of both. A no-fault state means that in the event of an accident, neither driver is deemed “at fault” and both drivers use their insurance to cover their own damages. As a result of this, no-fault states require personal injury protection (PIP) to cover medical costs, economic benefits, and death benefits. This additional protection on top of the ordinary liability can raise prices. Michigan is a no-fault state that also requires personal property insurance (PPI), and Detroit feels the consequences of that. In fact, 6 out of the top 10 cities for annual auto insurance rates (Detroit, Miami, New York, Tampa, Grand Rapids, and Philadelphia) are all in no-fault states. PIP requirements are likely a key player for the higher prices. Starting in July 2020, the state of Michigan readjusted their auto insurance policy to allow the insured to choose their level of PIP. This may lead to reductions in overall costs in the nation’s most expensive city for car insurance.

A city’s demographics are also important to consider when thinking about insurance rates. We have explored discrimination in automobile insurance before at City Observatory. We found that there were higher auto insurance rates in black neighborhoods, even those with safe drivers. Black drivers were found to be less likely to speed, yet they pay substantially more because of living in a predominantly Black neighborhood. A quick look at our data shows that several of the cities with the largest Black populations—Detroit, New Orleans, Philadelphia, and Baltimore—face some of the highest premiums of all the 53 largest metros. Race and population demographics could help explain some of this variation in average insurance premiums across the country.

Auto Insurance and the Cost of Living

As we explained in our Sprawl Tax series, the Bureau of Economic Analysis Regional Price Parities (RPP) is the most comprehensive measure we have of inter-metropolitan differences in consumer prices. Variations in rents are the largest component of overall cost-of-living variations between cities. But, how does the variation in auto insurance premiums relate to the variation in housing costs? Does the cost of insuring your car significantly change the cost of living? We compared the BEA’s RPP for Rent with the insurance data below. BEA’s RPP for rent does not include the cost of insurance. Insurance is included within the RPP for services, however it does not hold significant weight on their calculations (only about 6%).  

Comparing insurance rates to BEA RPP’s for rent, we find a slightly positive relationship with auto insurance and cost of living. This trend points us to consider that there might be an increasing effect for auto insurance rates and housing costs. However, when thinking about insurance and the cost of living, it is imperative to consider the quantity of insurance. Whether or not someone insures their car is dependent upon the makeup of the city. 

For example, in New York City, auto insurance is quite expensive, but owning a car is not a necessity for living within the city. The accessibility of consistent public transportation and the walkability of the city remove the need for a car and thus auto insurance. An interesting trend we have noticed in our data is that as annual vehicle miles traveled per household increases, the insurance rate decreases. So, while insurance rates might be high in cities like New York, a car is not a vital aspect of living within the city. New York’s relatively high car insurance rates aren’t a cost burden for the large number of households that don’t own cars. This is similar to our takeaways comparing insurance to the sprawl tax. High insurance rates may be more due in part to a lesser demand to drive a car and thus a lesser demand to insure an automobile. Car dependence makes auto insurance a necessary additional cost of living. However, limited sprawl and accessible alternative modes of transportation create an environment where insurance is not required. While this may cause rates to increase, it does not imply an increase in the overall cost of living. 

The real impact on the cost of living arises when automobile insurance is a required aspect of living. Looking objectively at the rankings does not paint the picture of cost of living. We must consider the auto dependence and the sprawl tax across these metropolitan areas to attribute the cost of insurance into transportation costs. It seems simple: people who don’t drive don’t insure cars. For those who must drive, auto insurance can pose an expensive burden annually. For those who don’t, the omission of auto insurance from their expenses is a valuable amenity. It is important to consider not only how much insurance costs but where the costs are necessary.

All in all, the cost of insuring a car can create a serious dent in your paycheck depending upon where you live. If you move across Pennsylvania from Pittsburgh to Philadelphia, your rates could increase by over $1000. The variation between these cities is notable. Racism and the structure of insurance policy may be major contributors, but other factors, like density and land use policy, might help explain this variation as well. Car dependence results in car insurance dependence. When you have to drive, insurance can place a burden onto your budget. This is where the impact on cost of living appears. People can save a whole lot of money annually when they do not need to insure an automobile.

 

In Miami, e-scooters pay four to 50 times as much to use the public roads as cars

If we want to encourage greener, safer travel, we should align the prices we charge with our values

Florida is home to some of the most unsafe cities to be a pedestrian or a cyclist. Miami is currently attempting to change their image as an auto-dominated city and create a more inclusive transportation network along their downtown streets. They hope to increase the safety of bikers, pedestrians, and e-scooter riders. The Miami-Dade County of Transportation and Public Works Department plans to add bollards and concrete barriers along three miles of city streets to create protected lanes for bikes and scooters. Part of their plan to pay for this new infrastructure? A daily fee on e-scooters. The tax code reads that:

“operators shall remit to the city a motorized scooter fee in an amount of $1.00 per motorized scooter per day. The motorized scooter fee shall be calculated monthly based on the number of scooters authorized by the city of the current period…. During the duration of the pilot program, this motorized scooter fee shall be designated for sidewalk/sidewalk area, and/or street improvements within pilot program area.”

At City Observatory, we examined Portland’s scooter pilot program in 2019. The implementation of e-scooters into the city had positive results. Scooters were most used during peak travel hours, consequently reducing congestion. They provided a greener solution for people to make short trips throughout the city’s downtown. The program was successful and popular, but it left us wondering about how differently the Portland Bureau of Transportation treats these micro-mobility solutions as opposed to large, gas-guzzling automobiles. In Portland, we estimated  that scooter riders were paying ten times as much in fees per mile traveled than car users pay in gas taxes. For example, if payments were based on the amount of space taken up on the streets or the pollution generated, drivers should have been paying significantly more than scooter users. 

Miami’s new pilot program is another example of this stark double standard. Once again, we focus on how much the city charges different vehicles to use its roads. Miami’s tax code charges each scooter $1 per day. How does that compare to what it charges for a car? 

Gas taxes are a key source of local and state revenue for road infrastructure. The total tax imposed in Miami-Dade County on gasoline sums to 36.6 cents per gallon. If we assume the average car gets about 25 miles per gallon, the average vehicle in Miami pays a little more than 1 cent per mile traveled. Miami residents drive 19.2 miles daily according to the Federal Highway Administration. After some quick math, our estimate for the daily price car users pay in Miami comes to roughly 25 cents. This means, on a daily basis, e-scooters pay four times more per day than cars do.

 

Another way to look at this is to consider the amount the city charges per mile. A case study analyzing the e-scooter program in Indianapolis provides us with a template of what micro-mobility travel could look like in a major city like Miami. The Indianapolis e-scooter program averaged 4,830 trips per day and a median number of scooters in service per day of 1,654. This gives us an estimate of 2.92 daily trips for a unique scooter. The median trip length in this program was .7 miles. If we assume that Miami would see similar daily usage, scooters paying the city’s daily dollar fee pay roughly 34.2 cents per trip and 48.9 cents per mile. As we estimated above, the average vehicle in Miami pays roughly 1 cent per mile traveled, nearly 50 times less than our e-scooter estimate. Scooters in Miami will travel significantly shorter distances than cars in the city, however, they will likely be paying at vastly higher rates for using the roads. 

The City of Miami is not making a poor decision adding infrastructure to protect bikes, scooters, and pedestrians. The experiment in Portland showcased that there is a positive impact of increasing micro-mobility accessibility. There will be rewards from restructuring a car-dominated downtown to create safe, viable options for other modes of transportation. While their mission is in good faith, the partial funding by scooter fees begs the question: why are cars paying so much less each day?

Cars impose the most negative externalities onto the roadway. They are heavier. They take up more space. They create unsafe environments for other users of the road. Yet, the 25 pound scooter which is small enough to sit on the sidewalk pays 4 times as much to use the road each day. Research performed in London finds that e-scooter rentals could replace 5 million car trips, reducing both traffic congestion and CO2 emissions. These micromobility options provide a path to a transportation system that is safer, greener, and more efficient. If this is the future we want, it is imperative that we appropriately charge the most damaging and dangerous vehicles on our roads. Our prices ought to reflect our goals and our values. The disparities between what we charge those who use cars and scooters are a double standard that transportation departments must consider. Shouldn’t cars be paying more to improve the roads and make the city a safer place?

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.

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:

What City Observatory did this week

1. Cars kill city neighborhoods.  Across the nation, America’s cities have been remade to accomodate the automobile.  Freeways have been widened through city neighborhoods, demolishing homes and businesses, but more than that, the sprawling, car-dependent transportation system which is now firmly rooted across the nation is simply toxic to urban neighborhoods.  A recent study from the Federal Reserve Bank of Philadelphia shows that across metropolitan areas, population growth and decline is directly related to proximity to urban freeways:  urban neighborhoods close to freeways decline; suburban neighborhoods near freeways thrive.

In short, freeways are toxic to urban neighborhoods but a tonic to suburban sprawl.  In close-in urban neighborhoods, freeway construction was associated with an 80 to 100% decline in population within one mile of a freeway.  In and near city centers, the closer your neighborhood was to a freeway, the larger its population decline.  The reverse is true in the suburbs, where population growth was concentrated in those areas closest to freeways.  The evidence across six decades of freeway building shows us that freeways kill cities.

2.  The Bum’s Rush. The Oregon Department of Transportation’s $800 million I-5 Rose Quarter project has recently had a major shift in its plans. Just last fall, ODOT’s Director of Urban Mobility Brendan Finn stated that the project is only 15 percent designed and that there is “almost an amazing opportunity here to connect neighborhoods.” However, after this magical moment, ODOT claims that it is simply too late to think about doing anything differently than the original plan. This sudden change is completely different from the outlook expressed last fall. It disregards the community and their own consultants support for buildable covers. ODOT argues that it is too costly to consider buildable caps. Acquiring more land would be “necessary” to implement them, rather than narrowing the excessively oversized roadway it intends to build. The change from a work in progress plan to an unchangeable design showcases ODOT’s true desires once again. There is not a fight for “restorative justice” for the Albina neighborhood nor a push for the economically best model. ODOT is only interested in building a wider freeway.

Must read

1.  The case against freeway widening:  Milwaukee edition.  Around the country, urbanists, social justice activists and climate warriors are all challenging plans to squander billions of dollars widening urban freeways.  We’ve known for decades that wider freeways do not reduce traffic congestion, rather they simply increase traffic, air pollution and sprawl.  A battle rages in Milwaukee, where this coalition of local groups is fighting against state plans to spend upwards of billion dollars widening I-94. 

Writing at the local blog, The Recombobulation Area, Dan Shafer describes the multi-faceted community alliance that’s pushing back.  Their efforts are a template for freeway fighters across the nation.

2.   If it’s really a climate emergency, maybe we should start charging for parking.  Vancouver city planners are showing that they’re willing to take some serious steps toward fighting climate change.  They are proposing a $1,000 annual fee for residents parking high polluting vehicles on city streets.  The fee would be zero for non-polluting vehicles, like electric cars, and graduated based on vehicle emissions.  While this is definitely a second-best approach compared to a strong carbon tax or a congestion fee, such a measure sends a tangible economic signal to the region’s residents about the environmental consequences of high polluting vehicles. 

While the headline number of $1,000 sounds like a lot, it actually works out to about $2.75 a day (about $2.20 in US$), which is less than a single, one-way bus ticket in most US cities.  However, this measure is far from perfect, the fee only applies to newly purchased vehicles (model year 2022 or later). Grandfathering older vehicles may seem politically wise, but it would incentivize people to keep their old dirty cars for longer.  If the climate is really a crisis, maybe we should charge people more for polluting than for taking transit.

3.  Gentrification is not the real problem. Writing at Shelterforce, Brett McMillan argues that “we have a major problem with how we talk about gentrification in this country.” In this piece, he explains gentrification’s flawed theory and the greater problems that the term fails to cover. Neil Smith’s theory of gentrification was a hypothesis introduced in the 1970s to explain the demographic pattern of people moving from the suburbs back into the city. Numerous studies have found this theory to be insufficient. For example, scholars Lance Freeman and Tiacheng Cai found that the white “invasion” into areas with predominantly Black populations (50% or more of the population) has been a relatively infrequent phenomenon since 1980, despite a slight recent uptick.  McMillan is particularly critical of the failure of the gentrification literature to clearly define or document gentrification-driven displacement:

In 2020, a paper in the high-ranking academic journal Urban Studies criticized statistical analyses that showed limited displacement because their “progress in identifying [displacement’s] extent has been remarkably slow,” meaning, as I take it, that we ought to reverse the scientific method. Which is to say, rather than forming a hypothesis, rigorously testing it, and adjusting it in light of studies’ results in order to better understand problems motivating the analysis, such claims suggest we ought to make results conform to a pre-determined outcome.

McMillan supports his argument with links to a number of critical studies. He pushes to change the framework for discussion to address broader, structural issues. Neighborhood-level inequalities and housing shortages and the growth of concentrated poverty, it turns out are more serious issues masked by a too frequent focus on gentrification. McMillan states that wealthier people moving into and driving up costs in particular urban neighborhoods is merely a “symptom” of urban equality issues, not its cause. Solutions that address systemic roots like increasing housing supply and eliminating exclusionary zoning are necessary for greater housing equality. Controlling the conversation around the term “gentrification” fails to take into consideration the structural problems and the solutions which could alleviate the adverse effects of inequality.

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