A couple of years ago, the Antiplanner described a Portland program of accepting carbon-offset funds to do traffic signal coordination. While I support signal coordination, the claimed benefits seemed outlandish. When I found out that the money came from an organization called Climate Trust that was co-founded by the director of Portland’s Office of Sustainable Development, I smelled “scam.”
I didn’t pursue it any further, but it turns out I was right. According to this 2009 report from the Cascade Policy Institute, the Portland-based Climate Trust has been legally extorting money from energy companies for more than a decade and then failing to spend that money on activities that truly reduce greenhouse gas emissions.
New reports have raised questions about and spurred opposition to California’s grandiose high-speed rail plans. First, last April, the California state auditor reported that the state’s high-speed rail authority suffered from “inadequate planning, weak oversight, and lax contract management,” which is not exactly what you want to hear about an agency that is about to build the most expensive state-sponsored public works project in history.
Second, a new report from the University of California found that the state’s ridership forecasts “are not reliable.” Based on a re-assessment by economist David Brownstone (who is fast becoming one of the Antiplanner’s favorite economists) and two UC engineering profs, the fares needed to cover the trains’ operating costs would have to be more than double the original projections, which is also more than the cost of flying. Since the measure approved by voters in 2008 forbade any state operating subsidies, such high fares would doom the project.
One of the Antiplanner’s co-speakers during a couple of events in Honolulu is David Callies, a law professor and author of two books on Hawaii land-use law: Regulating Paradise and Preserving Paradise. Hawaii passed the first statewide growth-management law in 1961, and still has about the strictest land-use laws in the nation. Not coincidentally, it also competes with California in having the nation’s least-affordable housing.
Regulating Paradise, a 1984 book that Callies is currently updating, shows that the 1961 law (sometimes called Act 187) is only one of several laws that have limited development of the state. Landowners in some parts of the state have to comply with as many as 30 different sets of regulations, from historic preservation to coastal zone management.
The original purpose of the 1961 law was to protect farmland. But Callies points out that this backfired. By limited urban development to about 5 percent of the Hawaiian Islands, the law made housing so expensive that farmers could not pay workers a living wage and compete with other tropical countries that grew similar crops. As a result, Hawaiian agriculture is in decline, and the only justification for the land-use law is to provide scenic views for upper-middle class urbanites.
TriMet, Portland’s transit agency, is planning to spend $7 million upgrading the 24-year-old Rockwood station in the city of Gresham, Portland’s largest suburb. TriMet officials hope the improvements will “leverage investment in transit into nearby development opportunities” in that neighborhood. Fat chance, especially since it was the light rail that killed the neighborhood in the first place.
The Rockwood Fred Meyer in 2000. Note the light-rail train in the background.
For 45 years, the center of the Rockwood neighborhood was a Fred Meyer store, a “supercenter” selling groceries, clothing, variety, and hardware. Fred Meyer also leased storefronts to other businesses such as coffee shops and locksmiths. When Fred Meyer spent $400,000 remodeling the store after TriMet opened the light-rail line in 1986, TriMet triumphantly counted it as an investment inspired by the light rail. Never mind the fact that Fred Meyer bragged on its web site that it had remodeled all of its 130 stores at about the same time.
The truth was, things were not going well at the Rockwood store. In January 2003, Fred Meyer shocked the neighborhood by closing it even though it was obligated to pay a lease on the site for another 10 years. The store “was in decline for a number of years,” a Fred Meyer official told the Oregonian (article available to those with access to Infoweb). “It was in a decline before the last remodel.” This was the only time in the chain’s history that it closed a store without immediately reopening a replacement nearby.
Is it ironic, or just self-serving, that Richard Florida, the man who urged cities to attract the so-called creative class with policies that made housing unaffordable, now writes a Wall Street Journal article (link to full article for non-subscribers) arguing that “homeownership is overrated”? Pay no attention to the facts behind the curtain, which are that growth-management policies encouraged by Florida’s ideas created an affordability crisis, which led policymakers in Washington to pressure lenders to loosen mortgage criteria so people could buy overpriced homes, and that growth-management also made prices more volatile so that eventually a large share of American homeowners would be underwater.
Florida can get away with his brazen approach because most of his followers don’t understand economics well enough to follow the above train of logic. As George Mason University economist Dan Klein points out in the very next day’s WSJ, when asked if “restrictions on housing development make housing less affordable,” 60 to 70 percent of liberals and progressives incorrectly answer “no.” By comparison, only 16 percent of libertarians and less than 23 percent of conservatives said “no.”
This raises some interesting questions. Does economic ignorance lead people to lean left? Or do progressives cultivate economic ignorance? Klein doesn’t speculate about the answer. However, I suspect that some people find economics to be more intuitive than others, and those who don’t easily understand it are more likely to be attracted by flim-flam artists such as Richard Florida.
Robert Atkinson is an unusual liberal who does not support smart growth. In fact, he believes in automobility and in using market tools such as congestion pricing to reduce traffic congestion.
But he is still a liberal and as such he has much more faith in government than the Antiplanner. The Antiplanner believes government can only work if people watchdog it to keep in small and unintrusive. Atkinson believes government can and should pick winners. That, he explains, “means government identifying industries and technologies where the country needs to be competitive globally, (i.e. health IT, nanotechnology, green energy, biotech, robotics, broadband) and then developing and implementing policies to work with the private sector to ensure that we grow and retain high-end jobs at home in these key sectors.”
It may be possible, if you search hard enough, to find an example of a government successfully picking and promoting a winner. Atkinson specifically mentions “Internet, the web browser, the search engine, computer graphics, semiconductors, and a host of others.” One problem with these examples is that government did not pick any of these technologies with the aim of promoting the industries. Instead, it help develop these technologies because they were useful to government (mainly defense) agencies.
“I Correlate the Decline of Civilization to the Incidence of Roundabouts.”
(Audio Only)
To be fair, a well-designed roundabout can handle a modest amount of traffic more smoothly than an intersection with stop signs or traffic signals. But too many roundabouts are designed more to obstruct traffic than to facilitate it.
P.J. O’Rourke has some pithy and insightful comments about the auto industry and government regulation in this interview conducted by faithful Antiplanner ally Ted Balaker.
In part 1, O’Rourke blames Detroit’s problems, in part, on “volatile government regulation,” which made it hard for car companies to predict what kind of cars people will want to buy.
Part 2 is less oriented to transportation and more to O’Rourke’s path from a left-wing student to a libertarian adult. This interview is nearly a year old, but it provides nice filler while the Antiplanner is on the road.
Comparing housing prices in Los Angeles with those in Atlanta using a graph very similar to those used by the Antiplanner, Paul Krugman remakes the point that the United States did not have one housing bubble: it had many. And, he adds, the bubbles were caused by land-use regulation, while places that did not have government constraints on land did not have bubbles.
The Economistmakes the point, previously made by the Antiplanner (on p. 115 of Best-Laid Plans, that volatile housing prices reduces mobility and increases unemployment rates. When home prices drop and homebuyers find themselves “underwater,” some won’t leave even for better jobs elsewhere because they can’t afford to lose the house.
Unfortunately, most of the people who commented on the Economist article conclude that this means people are better off renting than buying. This may be true if you live in a region infested by smart-growth planners. But in relatively free housing markets, buying remains better for most of those who can afford the down payment — not because of the economic return you get from buying but because homeowners enjoy a higher quality of life.
