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.