Reprieve for the American Dream (and Metropolitan Economies)

Just at the moment that urban planning stands within reach of adopting plans to forbid urban expansion and place further barriers in the way of automobile use, much of the justification has slipped away. New projections by the US Department of Energy (DOE) indicate indicate that greenhouse gas emissions from cars are set to decline substantially, the result of huge anticipated drops in gasoline use.

For nearly seven decades, Americans have been moving en masse to detached homes in the suburbs, fulfilling the American Dream of home ownership. For nearly as long, the American suburban urban form has been disparaged by international analysts, who have decried its spatial expanse (urban sprawl) and automobile use, even as cities around the world have copied the suburban model. Suburbs have been under verbal siege by US retro-urbanists who would prefer to stop the natural evolution of cities and turn them back toward their early 20th century forms, with much higher densities and with little car use (and, by the way, their much poorer populations).

The effort to reduce air pollution was, at one point, the hoped for justification for freezing urban areas in place. However, rapidly improving technology took this away, as for example, the air cleared so much that Los Angelos could often see the mountains.

The effort to reduce greenhouse gas emissions provided yet another chance for the desired urban surgery. Armed with studies about how low density housing wastes energy and touting the environmental friendliness of transit and walking, they proposed “smart growth” policies,  that might finally force people out of their cars and into higher densities.

The principal mechanism would be urban containment strategies, especially urban growth boundaries, which virtually forbid residential development outside artificially drawn lines, severely restricting construction of the detached suburban housing most American households prefer. Of course, these policies have consequences.

Because any demanded good tends to raise prices, the restrictions on land for development has destroyed housing affordability just about everywhere it has been tried. This can be seen in the higher house prices in California, Portland, Seattle (not to mention Vancouver, Sydney and London). Urban containment policies raise house prices just as surely as OPEC supply limitations increase the price of gasoline. London School of Economics Professor Paul Cheshire may have said it best, summarizing the research as indicating that urban containment is incompatible with housing affordability.

The difference in housing costs accounts for nearly all of the cost of living difference between high cost metropolitan areas (such as San Francisco) and lower cost metropolitan areas (such as Dallas-Fort Worth). As a result, higher housing costs lead to a lower standard of living. Household discretionary incomes are reduced, and poverty is made more intense. Urban containment policies make the detached house in the suburbs unaffordable for many middle income households, and drive up rents.

The higher higher densities can be expected to worsen traffic congestion, imposing further economic losses. Despite planning hopes to the contrary, drivers are not attracted to transit services that cannot get them where they are going or take too long.

These factors contribute to economic research conclusions associating dampened economic growth and job creation with smart growth and urban containment policies.

The new Department of Energy projections indicate reductions in GHG emissions sufficient to make urban containment policies unnecessary. Two rounds of new car fuel efficiency standards have substantially improved the future of GHG emissions from cars. According to DOE, driving will increase 40 percent from 2010 to 2040, yet GHG emissions from cars will fall by a quarter.

Some even suggest that the reduction in gasoline use could be more. For example, in a recent report, USPIRG suggested that driving would increase at a slower rate, reducing gasoline consumption up to 55 percent. This would mean a GHG emissions reduction of up to 55 percent, because every gallon of gasoline produces the same volume of emissions. All of this assumes that nearly all cars will continue to be fueled by gasoline. Greater progress toward alternative fuels for cars could further reduce GHG emissions.

Meanwhile, despite the international criticism, US cities have been doing some things right. They are the richest in the world — 36 of the 50 most affluent metropolitan areas in the world are in the United States, according to data in the Brookings Institution GlobalMetro Monitor. They have the some of the most affordable housing in the world. US traffic congestion is less intense, largely due to their lower population densities and more dispersed employment patterns. Finally, American cities have have shorter work trip travel times than in Europe, Canada or Australia.

The good news that sufficient GHG emission reductions can be achieved without forcing behavior modification on the citizenry. GHG emissions are on the way down. Technological improvements could accelerate the reduction even more. A reprieve has been granted for the millions of households who aspire to the American Dream and to metropolitan economies that depend on better mobility and a lower cost of living to attract new employment.

Wendell Cox is principal of Demographia, a public policy firm in the St. Louis area.

Comments (10)

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  1. Charles Shelton says:

    Good news indeed! Keep up the good work.

  2. Dewaine says:

    “The difference in housing costs accounts for nearly all of the cost of living difference between high cost metropolitan areas (such as San Francisco) and lower cost metropolitan areas (such as Dallas-Fort Worth).”

    That is incredible considering that there is a markup of nearly 1000% for comparable housing between DFW and San Francisco. All this time they had been trying to convince us that the price difference is because nobody wants to live in Dallas…

    “As a result, higher housing costs lead to a lower standard of living. Household discretionary incomes are reduced, and poverty is made more intense. Urban containment policies make the detached house in the suburbs unaffordable for many middle income households, and drive up rents.”

    This needs to be more widely known. People think that these policies help the poor. They don’t. They impoverish people and ultimately destroy lives.

    • JD says:

      They do destroy lives. It is hard for us to put a finger on exactly how much wealth and life is destroyed by these regulations, but if you need a visual just picture the “Biff is rich” future vs. the original 2015 from Back to the Future 2.

    • Terrel says:

      This is interesting and needs to be more openly debated out in the public.

  3. Dewaine says:

    “Finally, American cities have have shorter work trip travel times than in Europe, Canada or Australia.”

    That is shocking considering how long it takes to get to work here. If we have it good, I don’t want to know what it is like to have it bad.

  4. Dewaine says:

    “The higher densities can be expected to worsen traffic congestion, imposing further economic losses. Despite planning hopes to the contrary, drivers are not attracted to transit services that cannot get them where they are going or take too long.”

    This is a problem. While there are some things trending that could help alleviate the traffic problem, personal vehicles remain practical. I wonder if we are missing something more central to traffic congestion, the roads themselves.

    What effect would road privatization and competition have on congestion? Wouldn’t roads compete based on ease of travel? I imagine that we would pay more for more open roads and less for more congested ones.

    Wouldn’t it also save money? The government is inherently inefficient, so we would save with private roads.

    • JD says:

      I think that you are right. The privatization of roads and the competition that that introduces would solve much of our traffic problem.

    • Andrew says:

      It would be very interesting to see roads become competitive among different enterprises attempting to make their roads less congested and safer. However, I don’t know if this will ever happen. Imagine the expense of buying roads for a company. Conversely, it’s practically free for the government to own that public land.

      • JD says:

        I imagine that buying roads would be feasible for large companies. Just like buying huge buildings, or ships, airplanes, etc.

        “Practically free” maybe in the accounting sense. But, the value forgone is incalculable.

  5. JD says:

    A great reason why we shouldn’t rush into “fixing” these problems with government regulation.

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