What City Observatory Did This Week

Seattle just put the finishing touches on a new 2.7 mile subway connecting some of its hottest neighborhoods: unfortunately, its only built to carry stormwater runoff, not people, even though its big enough to accommodate a train.

This new stormwater subway is needed, largely because of runoff and pollution from roads that is properly attributed to cars and trucks, yet homeowners, renters and businesses in Seattle pay the full cost of the project (whether they drive or not) and drivers, especially those living outside Seattle, pay nothing toward the cost of this very expensive form of transit.

Joe Cortright’s testimony to the Oregon Transportation Commission on the Interstate Bridge Replacement Project. On May 8, 2025, Cortright testified to the commission that it was laying the groundwork for future cost-overruns by going ahead with a project for which it has no valid cost estimate, for which it hasn’t done accurate work on toll and traffic forecasting, and for which it is counting on $1 billion in federal funds for transit that are unlikely to appear. The OTC is committing to billions of dollars in cost-overruns that it will have to figure out how to pay for someday later.

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Sprawl is not the solution to housing affordability. Strong Towns leader Chuck Marohn has an excellent de-bunking of Connor Dougherty’s New York Times article musing that sprawl is some sort of magic solution to US housing affordability. As Marohn points out sprawl depends on a vast web of largely hidden subsidies, shifted costs, and isn’t financially sustainable in the long run.

Sprawling developments create long-term infrastructure liabilities—roads, water lines, sewer systems, schools, fire protection—that far exceed the revenue they generate. Local governments, which are really just collections of us acting together, are left trying to maintain and operate systems that are fundamentally unaffordable. . . .adding more housing is important, but if the development pattern itself is fiscally unsustainable, building more of it won’t solve the problem—it will deepen it. . . . If we’re serious about housing affordability, we can’t just count units. We have to care about where and how we build.

It’s refreshing to see the evolution of Marohn’s views on the topic of sprawl. Not too many years ago, he was making the argument that “Sprawl is not the problem.” Back in 2016, he wrote:

I’ve been writing at least three days a week here since 2008. In those hundreds of thousands of words — or in the over 300 podcasts I’ve recorded — you will not find me using the world “sprawl” except where I have excerpted or otherwise quoted someone else. There is a simple reason for that: I don’t think sprawl is the problem.

Actually, in a lot of ways, sprawl is the problem, both in a fiscal sense (its much more expensive to build roads and sewers and provide public services to sprawl), and in an environmental sense (more land consumed, more pollution, more energy consumption), and in a household economic sense (car dependence is a financial liability). A sprawling town is never a strong town, at least not for long.

The stunning success of congestion pricing. In every way, and every day, congestion pricing is making New York City better and better. That’s the clear conclusion from a very data-driven analysis in the New York Times. There are fewer cars, quicker commutes, faster peak hour traffic, fewer delayed buses, more bus and subway riders, fewer crash injuries, less honking, and no signs of traffic diversion to non-tolled locations. They summarize their findings in a kind of bingo-card format:

Congestion pricing is a miraculous policy success, which as Paul Krugman pointed out, is probably why the Trump Administration opposes it. It shows that if we just price our existing roadways–without adding any new capacity–we get vastly better results, almost instantly. It’s a miracle that other cities need to start copying, rather than squandering billions on highway expansion projects

More supply is pushing down rents in Denver. The evidence about how housing market works is in plain sight, if you just look: More housing = lower rents. The latest story comes from Denver, where a recent surge in apartment completions has produced a visible decline in rents.

The Denverite reports local rents are down for the first time in 15 years.

The median apartment in the Denver metro is renting for $1,733, a reduction of $65 a month from the same time last year. That’s a drop of about 3.6 percent. . . . The drop in price comes as record numbers of new apartments are opening – more than 20,000 units have been completed around the seven-county metro area in the past 12 months. In short, supply is growing faster than demand. The result: the metro’s apartment vacancy rate has broken 7 percent, with a greater percentage of apartments sitting empty than at any time since 2009. That’s putting pressure on landlords to drop rent and negotiate deals with renters.

The lesson seems clear: if you want to hold down, or drive down rents, make it easy to build more housing.

St. Paul throttles back on rent control. In contrast to Denver’s success in improving affordability, St. Paul shows the pitfalls of a tempting but ultimately ineffective policy: rent control. St. Paul voters enacted rent control in 2021, setting a maximum 3 percent yearly increase in rents. Predictably, the measure let to a significant drop in construction. MinnPost reports

Since the council first implemented the ordinance in 2022, construction has dropped off a cliff in the city; In 2024, 80% fewer housing units were built in St. Paul compared to the previous three-year average, according to a MinnPost analysis.

The St. Paul City Council has now voted to dramatically reduce the scope of the rent control law, exempting all new construction, and all apartments built since 2001. The hope is that will make development attractive enough that investors will build more housing, ease the shortages, and lay a foundation for more affordable rents in the future.

In the News

Oregon Public Broadcasting quoted City Observatory’s Joe Cortright on Oregon DOT’s chronic cost overruns:

“There are no consequences that anybody experiences for going over budget,” Cortright said Friday. “No one at ODOT has been removed or even chastised. They commission frowns, they shrug, and go and give the same people more money.”

StreetsblogUSA republished our commentary, “Check out Seattle’s new subway,” and Planetizen published a summary of the article, entitled “Seattle Builds Subway-Sized Tunnel — for Stormwater.”

What City Observatory Did This Week

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