Thursday, November 13, 2008

Matt Yglesias fails to make the right case against highways

Matt Yglesias is one of the best mainstream bloggers on land use/transportation that I know of, and, as one blogger who I don't recall right now once said, his urban planning and transportation posts could be blogs in their own right. However, it's puzzling that in an article for Cato Unbound, he comes up with such a pathetic rejoinder to the O'Toole/Cox/Poole vulgar libertarian transportation cabal, who don't seem to have ever met a road they didn't like:

Or consider the fact that Randall [sic] O’Toole is indignant about the prospect of public expenditures on mass transit systems, but appears to have little to say about public funding of highways. This, too, looks more like a case of narrow business interests than sterling free market principles.

While Yglesias' instincts are right – current transportation markets in America are highly distorted – the reason they're distorted has little to do with the ways highways are financed. Based on some basic figures, Randal O'Toole concludes that the vast majority of road funding – over 80% – comes out of user fees. Now, of course there're still some subsidies there, but it's really nothing compared to the subsidies that mass transit systems receive, which in America never even come close to covering operating costs, nevermind capital expenditures. Now, there are some problems with the 80% number, such as the government's favorable access to bond markets and the legacy of infrastructure that wasn't paid for with user fees, but all in all, it's hard to argue that roads have a subsidy advantage over mass transit.

However, that's not to say that Yglesias doesn't have a point when he says that libertarians and conservatives have blind spots when it comes to how they see transportation. But the real government benefit that the road/car system has over mass transit is density: there are innumerable regulations at every level of government in the United States which favor low-density, single-family detached housing over the denser forms that dominated non-rural areas before the 20th century. Successful roads as we have in America require this low density to remain (almost) financially solvent – it would be very difficult to cope with people's road needs if they were allowed to build as densely as they would without maximum density zoning rules and minimum parking regulations.

As a thought experiment, imagine your local town/neighborhood with twice the density. Chances are, the roads would quickly become very congested. They would have to be widened, which would require money, and even more money than normal, because the government would have to purchase valuable land next to existing roads. (That is, assuming that eminent domain is not used.) The gas tax would have to be raised, and soon the costs would get out of hand. On the other hand, mass transit would become more profitable rather than less, because much less track needs to be laid to satisfy the same demand, and mass transit systems have much more excess capacity than roads. If densities are limited, though, then this alleviates both stress on roads that go through valuable urban property (which are expensive and difficult to widen) and forces people to drive farther, thus paying more in user fees.

There's a legitimate case to be made against American transportation and land use policy, but condemning highway subsidies ain't it.


Allen said...

Where are these Americans clammering for more density?

Raționalitate said...

Questions like that are hard to answer definitively, since only a true market allocation can tell us what people really want, but we can make guesses.

One way of making a guess is based on the sheer ubiquity of land use and parking regulations across America, in every city and town, large and small, and deep into the surrounding sprawl. These laws are not just unnecessary precautions – they exist because there would be a demand for densities that the town's municipal governance doesn't like, and wants to limit. So, by this measure, people everywhere are clamoring for more density.

Another way to analyze it is to just ask people. Jonathan Levine in his book Zoned Out has a case study with Boston and Atlanta, and finds that while Bostonians generally say they get what they want, density-wise (even those who desire car-based suburbs), less than half of the people who desire density get it (p. 166).

This method is flawed, though, for a couple of reasons. For one, it's just hard to get people to accurately evaluate what something is worth to them without having them actually be in the position to buy it or not. And secondly, you're asking people if they want to live in the cities of today – not in the cities of a world without land use regulations. But if your goal is to find out if people would be better off in a state without land use regulation, then just knowing if they'd rather live in a city under present conditions isn't a good predictor. Living space in cities today is very dear, but if higher densities were allowed, then obviously more space would be created and it wouldn't be so expensive. People are imaging raising kids in cramped city apartments, but I think their attitudes would change if space became cheaper and transportation infrastructure became better.

So anyway, there's a long answer to your short question.

Michael D. Setty said...

While total government subsidies to highways may be small proportionately compared to transit, but government highway spending is certainly "the tail that wags the U.S. land use/transportation dog."

Like you, I find it frustrating that libertarians such as O'Toole don't seem to get the connection with down-zoning and ubiquitous off-street parking requirements. And though you may disagree, I find O'Toole to be relatively intellectually honest compared to Wendell Cox--who still insists that the recent housing price bubble is almost solely due to Smart Growth and New Urbanism, as opposed to the many decades of downzoning in desirable places such as California and the East Coast where the bubble was centered.

Anonymous said...
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Anonymous said...

As a thought experiment, imagine your local town/neighborhood with twice the density

If I do that, then intellectual honesty requires me to halve my commute to work. If I did that, I'd walk to work (less car burden on the streets). Shopping would be closer, the park would be cut in half... Also, the sewer system would be too small, more garbage per sq. ft., less green space... schools would double in size... increased density would also mean more crowded trains and buses, meaning slower commutes. Perhaps the fare box would cover all the expenses of the system, but people who could afford it would opt out when they could. Which is exactly how we got to the current environment.

I think people tend to discount increased wealth when talking about transportation options. With a severely contracting economy, automobiles become a luxury some people can no longer afford and mass transit becomes a more-used option.

Also, one can't discount the tax situation in dense areas being a burden on industrial employment. I remember the City of Chicago placing a head tax on employees and changing the property tax from an even rate for all property to a higher rate for commercial and a lower rate for residential - policies which slowly moved industrial jobs to suburban and exurban areas (and in some cases overseas); not to mention the noise ordinances, the pollution ordinances, etc. When the higher-paying jobs move, the employees move or transport to them.

Raționalitate said...

If I did that, I'd walk to work (less car burden on the streets).

Even in very dense cities, this is unrealistic. Very few people in New York City or Tokyo can walk to work.

increased density would also mean more crowded trains and buses

Not necessarily – it depends on whose making the funding decisions and what decisions they make. But as opposed to cars which need roads to be constantly widened to accommodate higher densities (a very expensive – and most of the time downright impossible – proposition), intraurban rail systems have loads of excess capacity, owing to the fact that they have (mostly) dedicated rights-of-way, don't require as much space per person, and routes can be coordinated and planned to a much higher degree than can automobile traffic patterns. Also, and here's perhaps the biggest thing that you're ignoring: parking rates would skyrocket if densities were allowed to increase, and your parking needs don't change based on how far you drive.

Also, one can't discount the tax situation in dense areas being a burden on industrial employment.

Forget taxes – property values should be the reason industry shouldn't locate in densely-populated areas.

Allen said...

Sorry I forgot to do this earlier. Thank you for addressing my question. Yes, it's a short question but very complex. From you answer, it seems like something that could be addressed with a blog posts. I think it's a question a lot of people ask, especially when not taking into account how things like zoning that dictates a lack of density influences how we live today.