The Antiplanner’s loyal opponent, Todd Litman, has come out with a new report claiming that urban sprawl costs Americans more than a trillion dollars a year. While it is rather quaint that people are still worried about the costs of sprawl, the Antiplanner has to point out that there are several problems with Litman’s analysis.
Many of Litman’s Numbers Are Hypothetical
First, many of Litman’s numbers are hypothetical. He casually presents data describing such things as “optimal regional densities” and “optimal vehicle ownership rates” without ever defining “optimal” or proving that his numbers are, indeed, optimal. In fact, any actual optima change from day to day and to claim that one “knows” what the optima are is to claim an omnipotence that simply does not exist. Such claims are what leads people to think they can engage in central planning which almost invariably leads to more harm than good.
Most of Litman’s Costs Are Internal
Of the supposed trillion-dollar annual cost, more than $600 million is internal, that is, it is paid by the people who choose to live in low-density areas. Since they are choosing to pay those costs, they obviously think it is worth it to them to enjoy the advantages of single-family homes over multifamily and driving over collective or non-motorized transport.
Litman Ignores the Costs of Smart Growth
Litman presents smart growth–which Litman plainly defines as policies constraining urban growth to force people to live in higher densities–as the alternative to sprawl. Yet the costs of smart growth are much greater than the costs of sprawl.
For example, Litman complains that one of the costs of sprawl is the expense of building more roads to serve low-density areas. But roads are cheap, costing less than $0.5 million dollars per lane mile for ordinary streets and around $2.5 million per lane mile for limited access highways. Roads also mostly pay for themselves: user fees pay for nearly all state highways; developers pay for the initial cost of local roads; leaving only maintenance of local roads to be paid for out of general tax dollars.
By comparison, the high-capacity transit systems needed for high-density areas are extremely expensive and don’t begin to pay for themselves. As the Antiplanner has documented, light rail today is costing $200 million a mile while heavy rail costs more than $300 million a mile with some projects costing more than $2 billion per mile. Transit fares pay a fraction of operating costs and no capital or maintenance costs.
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Nor does Litman count congestion as a cost of smart growth. Ironically (at least to those who understand congestion), he claims congestion is one of the costs of sprawl. In fact, low-density development is the defense against congestion. It is only in dense areas that congestion becomes a serious problem.
Similarly, Litman bemoans the extra costs that people supposedly pay to own homes in low-density areas. But smart growth makes housing far more expensive. According to Caldwell Banker’s 2014 home price index, a 2,200-square-foot home in Portland–the epitome of smart growth–costs $418,000, while the same home in Houston is $239,000.
Multiply the difference by the number of homes in the country–about 82 million single-family homes–and the total cost is almost $15 trillion. While that’s a total and not an annual cost, annualizing it at 3 percent more than offsets the $400 billion in external costs that Litman calculates as the costs of sprawl. This doesn’t even count the increased costs that smart-growth policies would impose on the 50 million multifamily homes in the country.
Litman Ignores the Alternatives to Smart Growth
Litmus’s paper is written for the Global Commission on the Economy and Climate, and its purpose is to point the way to “the new climate economy.” In fact, as the Antiplanner has thoroughly documented, smart growth is an extremely expensive way of reducing greenhouse gas emissions. Not only is it not cost effective, it may not be effective at all: transit uses as much energy per passenger mile as cars and high-density housing uses more energy per square foot than single-family housing. Smart growth only works if it can severely limit people’s mobility and force them to live in smaller homes.
If the goal is to reduce greenhouse gases, much more cost-effective solutions include making homes and other buildings more energy efficient and making cars more fuel efficient. Both of these things can be done at affordable costs without forcing unwanted lifestyle changes on the majority of Americans.
Too Much of the Paper Is Self-Referential or Refers to Litman’s Ideological Allies
Litman’s paper is 89 pages long including 16 pages of references, 26 tables, and 23 figures. This all looks very impressive, but most of the tables contain qualitative or hypothetical data only. Much of Litman’s argument comes down to just three tables of data on pages 22, 43, and 44. The table on page 22 cites a paper by Ewing and Hamidi, two smart-growth advocates at the University of Utah. The table on pages 43 cites earlier paper by Litman himself. The table on page 44, probably the most important table in the paper, simply cites a spreadsheet Litman has prepared. Though the paper has a link to the spreadsheet, attempting to use the link returns a 404 error.
Litman cites plenty of other sources, including Wendell Cox, Edward Glaeser, and Peter Gordon, but these people do not necessarily agree–and some would strongly disagree–with Litman’s methods or conclusions.
In sum, Litman’s paper is conclusory, ideologically driven, and based on questionable methodologies. Litmus’s conclusion that government should control how densely people live and how they travel condones policies that are as harmful to the economy as they are to personal freedom.
Really? Not according to the Tax Foundation:
So I guess 50 percent is nearly all?
That’s news to me. Most places where I’ve lived government uses the promise of new roadbuilding as a carrot to lure developers to come and bless us with sports stadiums and big box stores.
Yeah, let’s ignore that. Obviously not important to any discussion of the costs of sprawl.
Why can’t the Antiplanner just admit that the sprawl he so dearly loves is as much a product of preferential government policy and subsidization as any other development pattern, he just likes it better?
Or, Litmus’ conclusion is that government is controlling how densely people live and the way it’s doing it is costing us more than a trillion dollars a year.
leaving only maintenance of local roads to be paid for out of general tax dollars.
“Yeah, let’s ignore that.”
Why not? Government certainly does.
Neighbor I talked to yesterday is in a Mini club and has a few collectable cars. He talked about how the poor condition of government roads caused a belt on his tire to break, and apparently the tires for that particular model are very hard to get.
Roads are so bad here and the city so excellently mismanages tax revenue that the mayor is asking for a nearly a billion-dollar levy from property taxes.
Anyway, Ohai is conveniently forgetting or willfully omitting the fact that the AP—as well as others here—have repeatedly called for an end of subsidized streets and for electronic tolling to pay for those roads.
Similarly, Litman bemoans the extra costs that people supposedly pay to own homes in low-density areas.
Not sure why this is considered a cost. It certainly isn’t external. The fact that most people prefer more living space to less, all else equal, is not news.
Really? Not according to the Tax Foundation:
Highway user fees and user taxes made up just 50.4 percent of state and local expenses on roads
So I guess 50 percent is nearly all?
Yeah, two points there. First, the Tax Foundation analysis covers all state and local road spending, not just highways. Most state and local roads are local, since they are required to provide property access in urban (and some rural) areas. Local roads cannot reasonably be claimed to be in incentive toward “sprawl”, since the don’t provide higher-speed or longer-distance movement. Also, presumption that local roads are underpriced or “subsidized” implies that one knows what the optimal price and charging mechanism for them is. I see no consideration of that. Just an assertion that property taxes are the “wrong” way to do it.
Secondly, read through the whole Tax Foundation study. Anyone else think they have a rather arbitrary definition of what constitutes a “user fee”?
Ironically (at least to those who understand congestion), he claims congestion is one of the costs of sprawl.
I guess it doesn’t matter to him that there isn’t any serious evidence for this claim. Or that fact that government mispricing and suboptimal investment in roads is a far more serious and proximal cause of congestion.
@Frank
You and AP have been calling for tolling local roads? I thought just highways and major arterials? If a road is widened or a new highway is built, and buildings are to be knocked down to make way for it, would the tolls you advocate be high enough to make up for lost property tax receipts? Does your user pays principle extend to utilities? Should the water or power company be required to bill everyone at the same rate? Or if a low density area requires more miles of pipe per household should the utility be allowed to charge more because of greater costs? Same for communications companies?
@ahwr The water and power company are the model that road financing should follow. In Texas, our electric bill has two parts: a flat toll per kwh to the power line company for the maintenance of the transmission infrastructure and another charge per kwh to the actual generator of electricity. It works very well here.
With roads you should have a toll per mile to the owner of the roadway and then, of course separate charges to fuel and pay for your vehicle. My personal opinion is that the toll should also vary by the axle weight of the vehicle. Higher axle weights would pay a higher toll rate to compensate for the higher wear and tear they create.
The problem with roadways in America is the same problem with any third party pay system, the connection between consumer and producer, the price mechanism, is missing and you have consumers consuming too much and producers without any clue as to how much to produce.
Ah the fallacy of many questions, all of which are loaded and presuppose that government can only do things. Oh, and several that are just intended purely to distract.
But I’ll take the first. Here’s one article and you can Google to find more if you’re truly interested. From the comments section of this article:
@Jardinero
If a new housing division is built that requires five times as many miles of power lines per kWh served as average for your power company, who pays the increased cost? Does the developer pay an impact fee to cover the initial cost of construction? What about following life cycles? Do the residents of that housing division have to pay an elevated per kWh transmission fee to reflect the greater cost of providing electricity? Or is it a flat rate for all of the utility’s customers? Everywhere I’ve lived it’s been a flat rate for all customers. Same with water.
@Frank
Based on what I’ve read here I was under the impression that local roads were not included in future toll ideas. I suppose that’s been more in the comments than the posts.
“Based on what I’ve read here I was under the impression that local roads were not included in future toll ideas. I suppose that’s been more in the comments than the posts.”
Perhaps you are right. It would be good to see more from the AP on how local roads could be tolled and what that system would look like. I don’t know if it would be an effective way to pay for maintenance of local roads (besides county roads, arterials, etc.) but I do know that the current system here at least is broken as the local streets once built are just left to deteriorate.
@ahwr The short answer is that the rate payers all pay for the increased infrastructure or they all suffer a decline in service.
Wherever there is increasing population and increasing electricity use there will be an increased demand for transmission infrastructure. If you increase population density form 3000 ppsm to 6000 ppsm you will have to add infrastructure. Adding transmission infrastructure in an already built environment is more costly than creating infrastructure in a green belt development. So less density is less costly than more density in your electrical infrastructure scenario.
@ahwr One other thing about electrical transmission infrastructure is that, in Texas, at least, the developer of a greenfield development, installs the transmission infrastructure for the development. The cost of the infrastructure is paid fully by the first buyer of each new home. In a densifying area, the developers adds additional units and the powerline company makes the upgrades, at greater cost, for the new residents in the densifying area and then transfers the costs to all other ratepayers. Thus, in a densifying environment, the new ratepayers are getting a net subsidy from the existing ratepayers on the periphery.
So the question it seems to me should be…..Do we want the government to be fiscally able to do everything they want to, or should our goal be that the individual be economically solvent, and able to provide for their needs without fear of punitive taxes and regulation? The primary roll of municipal, county, and state government is to build and maintain infrastructure, and provide a save environment for residents to go about their business – those are the basics, every thing else is extra. I think a government that is fiscally constrained, and budget challenged, is the sign of a healthy community.
Planners will always find Communism and extreme authoritarian and dictatorial government to be the most “efficient” system, since that is the only way they can dictate what everyone else should be doing. They never assign any value to liberty and freedom — you know the things that people willingly die to try to get. Democracy is always highly “inefficient” because it makes no sense to leave decisions about how society works open to “non-experts”.
In BC, the province where Todd Litman lives, taxes on road users raise more than enough money to cover all the financial costs of all road infrastructure in BC and all government spending on transit. Fuel taxes in BC in fact raise more money than is spent by government on all forms of transportation.
This is clearly not the case everywhere but it is very much the case in BC.
Data comes from provincial, federal and municipal budgets and fiscal statements.
Care to add a citation, other than a vague comment about where the data comes from?
http://www.surreyleader.com/news/151919875.html
Translink has an operating budget of ~1.5 billion, another few hundred million for capital expansion, right?
The data comes from me and is privately done work for a client that has/is using for policy advice and negotiations in BC. My contract does not allow me to publish the work.
I may not have expressed my point well, the total take in all fuel taxes, and related charges on vehicles, in BC more than covers everything that is spent by the government on transportation and transit
BC Translink raises a lot of revenues from other sources – it does get a large chunk for fares and property taxes.
Once again I will state that local residential roads serve a ton of local government purposes, from utilities to fire, police and medical services. Plus the state function to provide transportation to schools pretty much makes road maintenance and repair even an education responsibility or requirement for subsidy.
People should be paying $2 for mile that they drive, but both conservatives & liberals don’t want to pay!