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Aussie Housing Bubble

By | | Housing
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That sound you hear the next time you go to the beach (at least on the West Coast) may be the Australian housing bubble popping. After Hong Kong, Sydney is rated the second-least affordable housing market in the world (see page 12), with median home prices more than twelve times median household incomes–and that’s based on 2014 data. Prices since then have gone up much faster than incomes.

As of September, prices in the country as a whole are 7.2 times incomes; that’s more than all but a handful of urban areas in the United States. Home prices and price-to-income ratios have both risen sharply since 2000. The country’s housing stock is worth nearly US$4.5 trillion, or roughly 20 percent of the U.S. housing market, which is pretty high for a country that only has 7.5 percent of the U.S. population.

Economists have been expecting Australian home prices to collapse for some time, and it hasn’t happened yet. But the UBS Housing Bubble Index ranks Sydney as the fourth-riskiest housing market in the world, after Vancouver, London, and Stockholm.

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Should We Be Paranoid About Connected Vehicles?

By | | Transportation
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Last week, the National Highway Traffic Safety Commission (NHTSC) formally proposed to mandate that all new cars be equipped with “vehicle-to-vehicle” (V2V) communications, also known as connected-vehicle technology. This would allow vehicles stuck in traffic to let other vehicles know to take alternate routes. It would also allow the governments–or hackers–to take control of your car anytime they want.

The good news is that the Trump Administration will take office before NHTSC has a chance to put this rule into effect, and there is a good chance that Trump will kill it. The bad news is that this rule will feed the paranoia some people have over self-driving cars.

This article, for example, considers self-driving cars to be a part of the “war on the automobile” because they offer an “easy way to track the movements of individuals in society.” In fact, the writer of the article is confusing self-driving cars with connected vehicles. As the Antiplanner noted as recently as last week, none of the at least 20 companies working on self-driving cars or software, as far as I can tell, are making V2V an integral part of their systems. This is mainly because they don’t trust the government to install or maintain the infrastructure needed to make it work but also because self-driving cars don’t need that technology.

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DC Metro Rail Far from Fixed

By | | Transportation
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Washington Metro has been interrupting service for various “safety surges” (they call them “surges” because it sounds better than “slowdowns”), but according to the Federal Transit Administration it has a lot more work to do. The FTA says that the rail system’s power supply is “in a deteriorated condition” and the tunnels and tracks have numerous defects that haven’t even all been identified, much less put on the schedule to be fixed.

Not surprisingly, the American Public Transportation Association’s latest ridership report reveals that Metro ridership in the second quarter of 2016 was 11.5 percent less than the same quarter the year before. As the Antiplanner has previously noted, this decline took place before the delays caused by the maintenance work, so most of it is because people have found other means of transportation due to Metro Rail’s low reliability.

Washington is not alone. Rail rapid transit systems in Boston, Chicago, and Philadelphia are just as bad off, and New York’s and San Francisco’s aren’t far behind. APTA’s president even issued a rather desperate-sounding op-ed begging for money to repair obsolete and dying forms of transportation.

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Is Waymo Way More than Google Cars?

By | | Transportation
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Google has spun off its self-driving car programs into a subsidiary called Waymo (which is apparently short for “a new WAY forward for MObility”), and Forbes celebrates by claiming that this is “waymo” than just a car. In fact, the real significance is that, by moving self-driving cars out of the company’s X Lab research division, Google is signaling that its technology is sophisticated enough that it is ready to start working on sales and not just research.

Uber has gotten headlines by starting a self-driving car-sharing service in San Francisco without getting permission from the state. This was supposed to be similar to the service it has going in Pittsburgh, where it is legal. The state of California immediately ordered Uber to shut down its service. (When someone documented Uber vehicles running red lights, the company blamed it on the drivers, not the self-driving technology.)

This is ironic because California’s self-driving car law was passed at Google’s instigation to allow for experiments like this. But the state passed regulations that were stricter than Google expected, so now even Google is doing most of its experimentation in places like Texas, which hasn’t passed a self-driving car law. Legal scholars say that operating a self-driving car is legal in most states so long as a licensed driver is behind the wheel ready to take over if necessary (which is how Uber is running its trial in Pittsburgh and planned to do it in San Francisco). But the California law is much more stringent.

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The New Housing Bubble

By | | Housing, News commentary, Useful Data
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Because the past few years have seen the slowest recovery from a recession on record, the Federal Reserve Bank has been keeping interest rates low and in fact cutting them to almost zero. But this has raised concerns among leading bankers that the low rates are producing another asset bubble, including another housing bubble.

The above graph shows the home price index for several metropolitan areas calculated by the Federal Housing Finance Agency using the Case-Shiller method. (The official Case-Shiller Index published by Standard & Poors doesn’t include as many metropolitan areas as the FHFA index.) It shows that, not only are housing prices rising again, in some urban areas–on the chart, Honolulu, San Francisco-Oakland, San Jose, and Seattle–already have prices much greater than they were at the peak of the 2006 bubble. It seems likely that these prices are going to crash again soon.

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Portland Falls to Number 2

By | | City planning, Housing
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Portland housing prices have been rising faster than in any other major city in the nation, but the latest data show that the city has fallen to number 2 in that measure. Seattle housing prices rose by an annualized 11.0 percent in September, while Portland prices rose by “just” 10.9 percent. No other major city saw prices rise as fast as 10 percent.

Seattle prices are rising so fast that the city is selling every available vacant lot that it has, even though some would rather those lots be turned to parks. Seattle developers are renting studio apartments for $750 a month that are so small–just 130 square feet–that there is no room for a bathroom door.

Portland’s housing market is so tight that 17 acres is considered a large parcel. Naturally, the owners are planning to put multi-family housing on it at 70 units per acre. The largest available parcel in Portland suburb Lake Oswego is a mere 4.5 acres that will be developed at 48 units per acre.

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Fake News Stories Undermine Our Economy

By | | News commentary
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Democrats complain that fake news stories from web sites linked to Russia undermined the electoral process. The Antiplanner has been concerned with a related issue for some time, which is fake news stories inspired by Russia that undermine our economy. Here are a few of those stories that I hope Democrats will disavow.

Fake News Item #1: Urban sprawl is paving over all of our farms–This is an old one that has been used to justify central planning similar to that done in the Soviet Union. According to the U.S. Department of Agriculture, the contiguous 48 states have 900 million acres of agricultural land, of which we use only about 40 percent for growing crops. The acres used for crop production have been declining, not because they are getting paved over, but because per-acre yields of most crops are growing faster than our population.

Meanwhile, the department also says that just 84 million acres have been urbanized. This is a little less than the Census Bureau’s estimate of 106 million acres, but either way, as the Department of Agriculture says, urbanization is “not considered a threat to the Nation’s food production.”

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Can Trump Stimulate a New Suburban Boom?

By | | Regional planning
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President-elect Trump has “the opportunity to preside over a Great Wave of suburbanization and give another generation the opportunity to unlock the modern version of the American Dream,” says Walter Russell Mead in The American Interest magazine. Mead is a professor of foreign affairs at Bard College. While the Antiplanner appreciates Mead’s ambition, he greatly underestimates the barriers to such a vision.

Mead inaccurately claims that American suburbanization took place in two waves: one between World War II and the 1960s (which he associates with Eisenhower) and the second in the 1980s through the early 2000s (which he associates with Reagan). Since both of the previous waves, he says, were led by Republican presidents, its natural for Trump to lead a third wave.

In fact, suburbanization began in the 1840s and hardly slowed down at any time since then. Mead’s first wave saw a large amount of working-class suburbanization, but even that began in the 1920s. In any case, much of that wave took place under Truman, not Eisenhower, and contrary to popular belief, Eisenhower’s Interstate Highway System had almost nothing to do with it.

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It’s Infrastructure, So It Must Be Worthwhile

By | | News commentary
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The city of Port Angeles, Washington spent $107,516 putting up wind turbines in a new city park. The turbines will power 31 lights in the park. This will save the taxpayers of Port Angeles a whopping $41.58 per month. At that rate, it will take 216 years for it to pay off (at zero interest rate).

That’s before subtracting operating costs, though no one yet knows how much it will cost to operate them. The city is in a dispute with the manufacturer, so it will be another month or so before they turn them on.

The ridiculous benefit-cost ratio is unimportant, says one city councilor, because the purpose of the turbines wasn’t to generate electricity, it was “to educate folks about wind power.” That’s quite an education they are getting. “I wouldn’t have voted for it knowing it was that little” electricity, the councilor added. Isn’t it her job to ask questions like that?
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Secretary Carson

By | | Housing
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Ben Carson has accepted Donald Trump’s nomination as Secretary of Housing & Urban Development, leading to all sorts of personal attacks and dire predictions for the future of cities under his leadership. The main point of contention is Carson’s belief that the federal government should not get involved in most local issues, which ought to be supported by the fact that many federal urban programs have had disastrous results, particularly for blacks.

The Antiplanner’s friend, Samuel Staley, has some “early thoughts” on what Carson might do as secretary. Most of them sound good to me and I hope they aren’t wishful thinking.

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