BELLEVUE, May 8.—Keep it up, Seattle, says planning expert Wendell Cox, and it won’t just be the Sonics that move to Oklahoma City.
With a succinct presentation that challenges the prevailing thinking among urban planners in the central Puget Sound area and across the country, the Chicago-based consultant brought a bit of sobriety last week to the current effort to promote “smart growth,” make massive investments in light rail, and pry the steering wheel out of Seattle’s hands. A nationally recognized expert in the field of transportation policy and demographics, Cox spoke last Thursday at the annual transportation policy luncheon of the Washington Policy Center.
It was the kind of address that makes most sense the way he tells it, in his own words, and Washington State Wire presents his remarks in full. You don’t hear this kind of thinking very often in the Seattle area, where most emphasis these days seems to be on snarling the streets to the point that exasperated motorists will turn to the bus. But when that happens, Cox asks, what becomes of jobs? If Seattle and the region push things too far, they won’t just be chasing out cars, he says, they’ll be chasing out economic growth.
“It would be one thing if we can stand here and say the state of Washington went through this. They looked at growth management, they looked at VMT [vehicle miles traveled] reduction – they went through it exhaustively, and they said it’s okay to have a few points higher poverty in order to have these cities that look better. But you know what? That didn’t happen. And so I’m just hopeful that in the long run that we will see this debate grow. I don’t know what the outcome will be, but these are issues enough to at least be debated objectively.”
Cox, based in Chicago, is principal in Wendell Cox Consultancy, a Chicago-based firm engaged in research on transportation and demographic trends. He has worked as a consultant to the Urban Mass Transit Administration, and served three terms on the Los Angeles County Transportation Commission. You can call him a bit of a contrarian: Since World War II, he says, schools of architecture and urban planning have been preaching a doctrine of “smart growth,” in which public policy aims to force development of high-density communities. Lately that has been reflected in Washington State and elsewhere in the form of growth-management regulation, big investments in rail transit, zoning policies that encourage “transit oriented center” development, and policies that aim to cut greenhouse gas emissions.
And none of it really works – at least not in the way planners hope, he says. If the goal is to produce vibrant cities, not just ones that look nice, Americans need to consider the economic element, he says. In many cases, the planners’ goals are counterproductive – congestion means more pollution. But the more important result could be to throttle back economic growth at a time when the nation can’t afford it. The trend has come without public debate over its cost, Cox says. So someone has to challenge the assumptions.
In his remarks, Cox was particularly critical of the planning efforts of the Puget Sound Regional Council – though he noted that the orthodox view here really isn’t that much different in California and other major metropolitan areas. “It is not an easy battle, but we have got to fight it,” he said. “The economic future of this nation is at stake.”
Costs of ‘Smart Growth’
“What I’m going to talk about is something that is rarely talked about, and you’ve probably not ever heard much of this before today, and that is the costs of smart growth. We are going to spend a little bit of time talking about why the city exists and a little bit of the philosophical background, because we never seem to do that. [We’ll] talk about mobility and vehicle mile reduction, which is a state goal, land use and growth management, balkanizing the city through transit centers, and [we'll be] talking about a sustainable environment and how that is absolutely necessary, but [why] it is also necessary to have a sustainable economy, something public policy around the world routinely seems to forget.
“Smart growth focuses on higher density. It wants densification of our urban areas. It favors transit and it is fundamentally anti-suburban. Generally speaking, smart growth debates around the country have ignored very important issues, such as the impacts of greater poverty, the result of which I will talk about, and a higher cost of living. What we have here is a picture of Athens at a density just a little bit higher than the PSRC would like to see in the transit centers they’re talking about, and I’m serious about that, and of course a picture of the Beijing subway – not during peak period by the way.
Cities Exist Because of Economic Opportunities
“Why do cities exist? This is an important thing. Because if you look at what we hear out of urban planners, you would think that the city exists because people want to be in nicely designed places. I remember reading something recently about someone who suggested that cities exist to make good citizens. Well, not really. Cities exist because of economic opportunities. Cities are justified only by economics. The purpose of urban areas is to improve the affluence of their residents.
“Let me make sure that you understand what I am talking about when I talk about the city. This is a satellite map of the lights at night in the Seattle area, starting down near Thurston County at the end, of Pierce County, and up to above Everett in Snohomish County. Those lights represent the urban area, the area of continuous development. We have also got a couple of other areas, Bremerton across the Puget Sound and so on. This is what I’m talking about in terms of the city. I am not talking about the city of Seattle or the city of Tacoma or the city of Puyallup. Those are simply parts of the city, parts of the urban area.
“Let’s think about what has happened to urban population in the world in the last 200 years. In 1800, 5 percent of the world lived in urban areas. Within the last five years, that number has gone to 50 percent, a huge increase and something we need to keep in mind. Look at what has happened to respect to the world’s largest cities. Today the largest city in the world is Tokyo, at about 37 million people. In 1900 London had about 7 million. It was the largest. You know, before 1800 there was no city that had managed to get 1 million people and keep them, over the entire history of human civilization, so things have changed rather radically. In fact my picture down there at the bottom is Hangchow, China, which appears to have reached the highest population of any urban area before 1800, at about 1.1 million. And by the way, the city of Seattle, the Seattle urban area reached that population before 1970. So if you think about the Seattle of 1970, it was larger than any city that existed in all of human history up to 1800. So this is a radical change.
“Why has it happened? Well, it has happened largely because of transportation. These are GDP per capita data taken from Angus Madison at the OECD, where he basically estimated GDP per capita for most of the nations of the world from 1500 to 2000. You can see that from 1500 to 1800, the highest any nation had was about $3,000 per capita GDP in 2000 dollars. Notice the huge increase in the 1800s? Well, why did that happen? Notice that it picks up in the 1820s. Well, we have the coming of horse cars. We have the coming of transit, and transit makes it possible for people to get further, makes it possible for cities to get larger, makes it possible for labor markets to be more efficient. Then look what happens in 1900. All of a sudden you have a huge takeoff as a result of the automobile, which now allows cities to become larger. People move to the cities. They become more affluent. so there is a very clear connection between improved personal mobility and affluence.
“That gets us back to the basic point. The purpose of cities is economic. There is no other purpose. And it is a terrible shame that we in this country have allowed architects and planners to hijack the city policies without taking sufficient consideration of things like the cost of housing, mobility that creates jobs, and all of that kind of thing.
Suburbs Continue to Gain
“Now let’s look at some of the trends in urbanization at the moment. Virtually all urban growth has been in the suburbs for the last 50 years in the world, in the higher income world and frankly the lower income world, as well as the Seattle metropolitan area. And by the way, despite everything you read in the New York Times and all the planning journals, there is no evidence whatsoever of any return to the city. We can look at, for example, Australia, Canada, the United States, Western Europe and Japan – by the way, this is a picture of suburban Moscow; it didn’t look this way 30 years ago – where between 90 and 115 percent of urban growth has been in the suburban areas since 1965.
“We can look at what happened in the last decade in the United States. Seventy-seven percent of growth was in the suburbs. This is at a time that the planners were telling us everybody is returning to the city. Of course they wouldn’t even if they did, because they didn’t come from the city. Most of them came from the country. The historical core municipalities, places like Seattle and Portland, gained 11 percent of the population gain. The exurban areas gained a little bit more. So don’t believe this stuff about people returning to the city. Yes indeed, the cities are doing better than they used to. Belltown is a wonderful place. Seattle is doing better than it did in the past. But don’t go too far. The fact is that people are still moving to the suburbs.
“You’ve also probably heard about how all the young people are moving to the cities and there’s this big change coming and they are never going to go to the suburbs. Well, Joel Kotkin and I went back to the U.S. Census data for 2010 and 2000 and found that the people that were 25 to 34 in 2000 moved in large numbers to the suburbs over the next 10 years. Then you hear about how all the empty-nesters are going to move from their boring community-less lives in the suburbs to move back to the city. Well, here’s what happened. Yes, indeed, a few people did move out of the suburbs. Huge numbers of the elderly, the baby boom are not really elderly, 55 to 64 in 2000, huge numbers moved out of the historical core municipalities, and where they gained [were] smaller towns elsewhere that are not in major metropolitan areas. So all the trends are in the opposite direction and tend to support what has been going on for some time.
“Now, you look at what has gone on in the Seattle area over the last 10 years and you find virtually the same impacts. Most of the growth has been in the suburbs. The city of Seattle has done well after having been pretty flat in population for about 40 years, but the exurban growth was a little larger. And then you look at this – you hear out of California all sorts of research, for example, about how the coming generations and the coming demographics are not going to support single-family housing anymore. Well, you know, in the Seattle metropolitan area, about 60 percent of the housing stock was detached housing in 2000, and during the 2000s you added a higher share of detached housing than you had in your housing stock in California, where the policies of land use and transport are even more radical than in Washington, if you can imagine such a thing. The number is 80 percent.
“PSRC imagines that all sorts of growth is going to occur in employment in the central areas. Here is what happened in the Seattle area in the last 10 years. Downtown Seattle lost 26,000 employees. The balance of Seattle lost about 14,000, the balance of King County about 10,000, and look at all the growth in Pierce, Snohomish and Kitsap County. So again, the market is telling you something.
Mobility is Key to Economic Growth
“Now let’s talk about mobility and access, because this is the crucial thing, the connection between job creation and mobility. Mobility is the key to metropolitan job growth. Traffic congestion is associated with higher densities. Transit cannot substitute for most trips, and lower income citizens, believe it or not, largely commute by car. The research is very strong. the farther you can get in a metropolitan area, it doesn’t matter how you do it, the farther you can get in a metropolitan area to work in a period of time, like say 30 minutes, the better is going to be the economic growth. That is very important. So things like trying to reduce vehicle miles traveled, or trying to force people into transit and out of their cars does not improve productivity, as much against the conventional thinking that might be.
“We all know the difficulties that higher traffic congestion creates. L.A. has, of course, been leading the nation for years. Seattle during the recession slowed down, but Seattle has always had some of the worst traffic congestion in the country. I would like to show you Dallas-Fort Worth, and I realize that nobody here would ever want to live in Dallas-Fort Worth, but be aware that Dallas-Fort Worth is the first world’s fastest-growing metropolitan area, more than 5 million people and growing much faster than the Seattle area. Traffic is better there than it is here, despite the fact that the population there will soon be about double that of the Seattle area.
“A little chart on this slide basically shows you how the PSRC plan calls for huge increases in these centers that I will talk to you about, and I am suggesting this is going to increase traffic congestion substantially. This graph is superimposed on a picture of Hong Kong, the first world’s most dense urban area, and you can see, as the density increases, the traffic congestion increases. Now, by the way, this is in Hong Kong where 80 percent of travel is on transit, yet the traffic congestion there is much worse than it is in, say, Los Angeles.
“Or you can look at what traffic congestion does with respect to health. If you look at the 420 counties in major metropolitan areas in the United States and you ask, well, what do the air pollution emissions look like per square mile? Very clearly, the more dense, the worse and more intense the air pollution, and that creates serious health impacts.
Transit Not an Alternative
“Here’s a marvelous picture that I’ve always loved from Toronto. This is the Dawn Valley Expressway and a Go Transit commuter transit train over it, and one might wonder – now, why is it all those people are in those cars? Why aren’t they in the train? Well, I finally came to the view that maybe it is because those cars are not going to the same places those trains are going to, and that is exactly the point. And again, [it is a] marvelous system in Toronto, but the fact is, in Toronto, Seattle, Paris, you name it, they are principally reliant on the automobile.
“One of the problems, for example, in Seattle [it takes] 27 minutes on average to get to work by car and 43 or 44 by transit. That is typical around the world. Transit is never faster than the car, except for some trips. You know, there are a lot of trips to downtown areas, but we have to recognize that there is much more to an urban area than downtown.
“This busy chart gives you some incredible research by the Brookings Institution. They went out and said how many jobs can the average urban resident in the major metropolitan areas get to in 45 minutes by transit? The number [is] 5.6 percent. In other words, 94 percent of Americans cannot get to work by transit in 45 minutes. It’s a little bit better in Seattle, but the point is, that’s in a situation where the average one-way work-trip time in the United States is 25 minutes, not 45 minutes.
“Here in Seattle, a lot of times you’ll hear transit folks say, well, you know, X percent of the people in our community are within Y yards of a bus stop. That is absolutely irrelevant. In the Seattle area 80 percent of the people are within walking distance of transit. You want to know how many people can get to the average job in the community in 45 minutes? 6.7 percent. So the point is, again, it doesn’t matter where the bus stop is. What matters is how long it takes you to get to work.
“Here’s a marvelous chart basically showing access from where we are right now by transit in 30 minutes. And I realize that this is average stuff, and it is not reflective of peak [times] or whatever, but the fact is the chart on the left shows you transit access in 30 minutes from here. And you see you can get to a little bit of the East Side. You can even get to areas close to the south side of downtown Seattle. The other map shows you where you can get by car. Now, this is the problem. Transit is not an alternative for anywhere in this community where people have cars except for downtown. And let me compliment the system. It does a good job of getting people downtown. It cannot get you anywhere else.
Vehicle Mile Reduction Hurts the Poor
“If you think, however, beyond that about what we do with respect to our policies with respect to low-income people, a lot of people were surprised a few months ago when we brought out research that basically showed that 73 percent of the low-income people in the Seattle area, and it is pretty similar around the nation, get to work by car. So in fact, yes indeed, transit is important to low-income people, but the fact is cars are far more important to low-income people. In fact the Progressive Policy Institute, which is a conservative Democratic think tank, said that the shortest distance between a poor person and a job is along a line driven in a car. The basic point is, and the Clinton Administration saw this with respect to welfare revisions they made in the regulations, that basically car ownership is the best way to get low-income people to work, especially outside of downtown. You can imagine trying to get somebody to or from the Rainier Valley, for example, to a job in Snohomish County or in Redmond or anything like that. It is very difficult.
“Now we also have the VMT reduction and vehicle miles reduction benchmarks of the state. There was a report that was required by the law to look at the impact on low-income people. The impact was that for the majority of low-income households, a VMT charge would have negative effects and disproportionate effects. The basic point they were answering, if we force vehicle miles to be reduced, what will be the impact on low-income people? It will be bad.
“What’s interesting to me that I don’t see that anybody has paid any attention to this report yet, but the basic point is again when we have have looked at smart growth in the debates around the country, no one ever looks at the economics. No one ever looks seriously at the impacts on low-income people and we need to do this now.
“I’m not suggesting that it is impossible for transit to serve all the needs of the community. Here is a map of Portland on which I’ve superimposed the transit system that would be necessary to compete with the automobile in the Portland area. It would require – by the way, light rail won’t do it, it’s not fast enough – you would require a subway line every half-mile. Now, obviously this is meant as a joke. In reality, we have costed this, and the cost is more than the GDP per capita of the metropolitan area, so it is not going to work.
“If you think about downtown and how important it is, as impressive as it is, downtown Seattle only represents 13 percent of the employment of the area. Eighty-seven percent of the jobs are elsewhere. Yet downtown is the source of 57 percent of the transit commuting. Now that is good, but when you think about this kind of mismatch, the idea of having a situation where you are spending 53 percent of your funding over the next 10, 20, 30 or 40 years on transit really doesn’t look very good. And by the way, in 30 years, in 2040, it is hoped that transit will carry 5 percent of travel. I think that it is as exaggerated as Sound Transit’s light rail projections.
“Now let’s talk about growth management. It raises housing prices, even though every land-use planner will tell you it doesn’t. It reduces the discretionary incomes of all people in the community who pay higher housing prices. It increases poverty and it is associated with less economic growth. For example, in the Vision 2040 housing plan of the PSRC, it talks about how the [Washington state] Growth Management Act has as a goal maintaining appropriate housing production and supply. It notes that, however, housing prices have been significantly outpacing income growth over the last several years. Indeed they have. Who would have expected otherwise, except for someone who didn’t understand the very basics of economics?
“This is a chart out of our international housing affordability survey, looking at metropolitan areas with a population of more than 1 million. The reds are the places that have growth management policies. This is a ratio called the median multiple, which is the median house price divided by the median household income. Thus this index is normalized for incomes. Now, you can see Hong Kong is the worst. Your friends up to the north in Vancouver, who should be ashamed of what they have done to housing prices up there, are the second-worst. Still, Seattle is pretty bad at about 4 1/2 or so, and you can see the greens are the places where they don’t have growth management. I will tell you more about those.
“Don Brash, who is the governor of the New Zealand Bank, wrote that, in the introduction to one of our recent publications, ‘the affordability of housing is overwhelmingly a function of just one thing, the extent to which governments place artificial restrictions on the supply of residential land.’ It is what happens to the price of land that drives houses up, because frankly construction costs in the Seattle area aren’t that much higher than anywhere else in the country. What is higher is the price of land. It is very simple to illustrate the principle. I mean, why are we all concerned when OPEC meets and there are rumors about it cutting back production? Well, why we’re concerned is that when you restrict supplies, prices go up. It is a very basic economic issue.
“So we see again, comparing Dallas-Fort Worth and Seattle, just based on the median multiple, notice how affordable housing remained even through the bubble in Dallas-Fort Worth? And by the way, in much of the country there was no bubble. A lot of people don’t realize that. The bubble was limited to growth-management metropolitan areas. You can see the volatility in Seattle.
“And this is just to remind you about the growth rates. You can see that back in 1950, Dallas-Fort Worth and Seattle were almost the same size, and Dallas-Fort Worth will soon be double the size of the Seattle area.
“Now, the research is very clear on this. There is all sorts of research that basically connects growth management with higher house prices. There is also very important research from three countries connecting growth management with reduced economic growth. In the Randstad region of the Netherlands – the Amsterdam, The Hague, Rotterdam area – economic growth, according to a national study, has been reduced by growth management. In the United Kingdom, the same thing and a study for the Federal Reserve Board by Raven Saks suggests that employment impacts are negative where there is more growth management-style policy.
Transit Oriented Centers Balkanize the City
“Let’s talk about balkanizing the city, because that is what PSRC has in mind with regard to the transit-oriented centers. Transit can effectively serve only one transit-oriented center. You need to understand that. We don’t have places in this country or anywhere, with a couple of minor exceptions in London and Paris, where there is a center that has a large transit share outside the basic downtown area. Travel behavior is similar in high density areas in the suburbs to the low-density areas that are right next to it, and of course traffic congestion is greater.
“This picture, by the way, is of a failed experiment called Tensta in Stockholm where they were going to do what PSRC wants to do now. They tried it in the 1950s and 1960s. Sir Peter Hall, probably the best urbanologist in the world, has basically gone back and studied it and found that in fact all the Swedes have moved out and it has been taken over largely by low income immigrants. It has become low income. And the whole idea of having this compact [place] where everybody walks to work, takes transit to work – no, actually, the people that could afford it moved to the suburbs. They have their cars and have their detached houses.
“The balkanizing thing I’m talking about – remember we have the big labor market that has been created by mobility. We have Tokyo; we have Seattle, all these places that are far larger than anything that existed 200 years ago. But now what PSRC would like to do – and by the way, there are other planning agencies around the country, they want to do it [too], they want to try to build these transit centers and try to encourage people to ride transit and [build] walk-to-work locations, imagining somehow that we are going to get out of college and buy a house and live [there] until we retire and have the same job. I suspect very few of you, even those of you who are older, have had that experience. I mean, this is a new day. People are changing jobs all the time.
“We have already seen it tried. The Chinese Communists for years had a work unit system [in which] everybody lives right where they work. And when Deng Xiaoping came to power, they started pulling it apart. It doesn’t exist anymore, because there were all sorts of our problems with it. In a lot of poor areas of the world they still have these programs. This is the Rochinha Favela in Rio de Janeiro. You can see the people live within walking distance of the places where they are servants, and if any of you get to the Olympics in 2016, behind every good area in Rio and São Paulo you can see this kind of thing. Now, this is not what I’m suggesting PSRC has in mind. What I’m suggesting is that this is the counterproductive kind of program that would take us back to the urban areas of before the 19th century and would destroy the very purpose of the urban area.
“There is also this myth running around PSRC that says if we just put all these people in this high-density, they will drive less – by the way, based upon some really, really questionable research. Well, let me tell you, the Canadians have had an awful lot of experience with this, and they have some pretty bad policies going on in Vancouver and Toronto. A lead researcher for Statistics Canada has just published some research that basically says, based upon their review of travel habits of people in places like Vancouver and Toronto, when you create high-density more than 6 miles from downtown, the people in the high-density have virtually the same travel characteristics as the people in the low-density. And by the way, the whole ‘centers’ concept is based upon that flawed suggestion.
“There is another problem too, because if you read that PSRC stuff, you get the impression [that] one of the reasons we are going to do this high-density stuff is that we can use existing infrastructure. You are going to take an area that was built for 3,000 or 4,000 people per square mile and build up to 30,000 per square mile. I’ll bet those people that put in those sewers didn’t have that in mind at the time. The fact is that this has happened in Sydney, Australia, this being a headline from a local newspaper there.
“Even Sound Transit has acknowledged the difficulty with the centers concept. This is a slide from one of their presentations, basically indicating that the idea of transit oriented development, it had better be market or it won’t work.
Will Encourage Exodus
“The other thing is to recognize that we are in a situation where people have choices. Nobody is forced to live in Seattle. Now, granted, as I keep telling people, the moment they move Seattle 2,000 miles east, I will move here, because I like access to that part of the country, but this is a wonderful place. But you know what? California is a wonderful place, too. You think about what part of the country grew faster than any over the decades since World War II, clearly [it is] California. Yet what’s happened in the last 10 years, with what’s happened to its government, what’s happened to its housing affordability – it is even worse than Seattle – in the Los Angeles metropolitan area, the San Francisco/San Jose metropolitan area and the San Diego metropolitan area, 2.2 million people have moved out of the state to other states – domestic migration, moved out. Now granted, they still grew because there was international migration, and there was a natural growth rate, but the fact is 2 million people moved out. Now that is big stuff.
“If you are going to rate the best places to live in this country — you know, if you could afford it; I would argue the first principle of livability is affordability, [but] that is a different discussion — the fact is that San Diego was seen as a very great place to live. And you know what? San Diego lost domestic migrants at a rate faster than Detroit and Cleveland in the last decade. So what I’m saying [is that] you in Seattle have much, but the fact is if you go pushing things too much, prices go up too much, or jobs are not created in a high enough level, and all of a sudden it will be more than the Supersonics moving to Oklahoma City.
Greenhouse Emphasis Misplaced
“One of the problems also is that much of the smart growth philosophy is based upon a flawed environmental analysis. There is no reason why we can’t have a sustainable environment and at the same time continue to live good lives. The fact is that the idea of requiring major lifestyle changes to reduce greenhouse gas emissions is unnecessarily harsh, and of course it is going to lead to dire poverty and less discretionary income. The McKinsey Co., with the support of the Natural Resources Defense Council and the Environmental Defense Fund, just to give you an idea that it wasn’t a bunch of right-wingers, they’ve done a report in which they basically suggest that sufficient greenhouse gas emission [reductions] can be achieved in the United States with no change in thermostat settings, with no downsizing of vehicles, no downsizing of homes or commercial areas, traveling the same mileage with no VMT requirement, and no shift to denser housing. Okay, it is possible. It is possible.
“This is where I find such difficulty with the Washington state act that sets benchmarks for VMT reduction. If we are trying to reduce vehicle miles traveled, what does that have to do with greenhouse gas emissions? I mean, if you really want to reduce greenhouse gas emissions, how about a law that says that we are going to reduce greenhouse gas emissions and let’s do it the best way possible? My sense is, and I would like to stay away from conspiracy theory, but it really looks to me like somebody dislikes cars more than they dislike greenhouse gas emissions.
“If you look at nationally at some of the reports that been done, you see that the whole idea of denser housing and forcing people onto transit doesn’t get us much. A Transportation Research Board report suggested that through 2050, 90 percent would come from better vehicle efficiency. Another report by the Urban Land Institute said more like 95 percent. And by the way, these reports were before the Obama Administration’s talk about a 54 1/2 mile per gallon mileage standard. So the very idea of going and looking at these more radical and harsh proposals really makes no sense at all. And in fact, the hope for vehicle efficiency improvements is absolutely huge and can take care of virtually anything that you require in reduction in carbon dioxide from vehicles to meet the objectives.
“The other thing, too, that is wrong with VMT reduction is that it assumes that vehicle miles have a relationship to carbon dioxide. They don’t, not unless the speeds are the same, because you know, as you slow down, the consumption of fuel increases, and greenhouse gas emissions are at a one-to-one relationship with fuel consumption. When you have congestion, it drops as well, so that for example, this again being from Canadian research, since Americans have been very careful not to look at this subject, what you find is that a 5-mile trip in congested conditions on either an arterial or a freeway emits the same amount of greenhouse gas emissions as an 8 1/2 or 9 mile trip in less congested conditions.
“Now, what good will it do us if we all of a sudden reduce everybody’s vehicle miles traveled and we increase traffic congestion and reduce speeds? What it will do is not get the greenhouse gas reductions that we have hoped for.
Economic Analysis Ignored
“This is a marvelous slide that I took in Shenyang, China. Now, I took it because the typical Chinese, they love to talk about the future and electricity and all that kind of thing, but the IPCC, the international Intergovernmental Panel on Climate Change, says that we can get enough gas emissions to meet the international goals at a rate of between $20 and $50 per ton. Now that being the case, I would have expected that PSRC and the state would have stepped back and said maybe we should do an economic analysis. But you know what? I have yet to find an economic analysis anywhere in this country. All I find are all sorts of people who are interested in pushing their own hobbyhorse as the answer and not looking at it economically.
“I would suggest to you that Olympia and for that matter, Sacramento, cannot effectively drive international greenhouse gas emission policy. Right now, the market rate on the European carbon markets is less than $10 per ton, and let me tell you, I’m confident that if anybody were to look at the cost per ton removed in the PSRC plan with respect to transit and with respect to the higher housing prices, these numbers would be very small.
“Let me tell you about the work that I’ve done on the California high-speed rail project, which we soon hope will be dying a very well-deserved death. The California High-Speed Rail Authority did not look at how costly it was to remove the greenhouse gas emissions that it claimed it was going to remove. We did in a report we did in 2008 – $2,000 per ton. And that is if you believe the crazy ridership projections, which have since been dropped significantly.
“So again, if we’re serious about reducing greenhouse gas emissions, we better be doing this kind of economic analysis, and it is really a problem that it hasn’t been done.
Economic Sustainability Must be Considered
“Now let’s talk then about what’s necessary. Indeed, we need a sustainable environment. But no, it is not necessary for us to get everybody to live the way the planners want. There are alternatives. But just as important as a sustainable environment is a sustainable economy, and that basically is an economy that develops access and economic growth. It allows you to get throughout the labor market, the metropolitan area, as far as you need to go to get the job you need, and it requires also a lower cost-of-living, minimizing the cost of living. In fact, I would suggest to you that a well-governed city – and remember, by city, I’m talking about from north of Everett to south of Tacoma – a well-governed city, even though it has got 80 government units in the state Legislature, is going to be one where the policymakers are looking at these kinds of indicators. How far can people get to work in a certain period of time? And how costly is the housing? And if those indicators are not looking good, I would suggest to you there needs to be a refocusing of the priorities.
“We have great difficulties. I don’t know what Washington looks like at this point. I can tell you that Illinois is the only state that anybody ever puts in the same category with the basket case called California, and I happen to live in Illinois, so I’m very sensitive about that. We have here the latest data that I looked [up], the Greek GDP per capita, the debt of the Greek nation per capita per GDP was 8.5 percent. That is the deficit. We are at 10.3. We have tough difficulties.
“We don’t have money to throw around, and it is about time we wake up and remember that money wasted in one discipline is money that could be spent more effectively in another. We need to understand that we cannot take economic progress for granted. And all we have to do is look at history – and by the way, 10 years from now, it will be a much better presentation, because we are going to be able to describe the potential breakup of the euro and all sorts of difficult things that will have happened with respect to the PIGS [Portugal, Ireland, Greece and Spain], but that is a different issue.
“Look at what has happened over the last 110 years in terms of GDP per capita in just a few nations. You see the United States has, not surprisingly, done very well. Japan has done okay, but it has had some difficult times in recent years. Look at Argentina. Argentina, through the time of the coming of Juan Peron, was one of the richest nations in the world, usually ranked within the top 10 for GDP per capita, but what happened? It adopted really bad policies. It ignored economics. It made promises that it couldn’t keep, and while Argentina has made a little bit of progress in recent years, the fact is Argentina is close to being passed in GDP per capita by Mexico. Now, that is good for Mexico. Mexico is doing a lot better than it ever did before, but still the fact is that it is a terrible mistake to ignore economics.
“So we have choices. Smart growth does indeed have significant costs, and my hope today is to bring to you some issues that basically I hope will cause some additional thought on these [topics]:
“VMT reductions versus job creation – if you force vehicle miles down, you are going to retard job creation.
“Growth management versus a lower cost-of-living – the differential in the cost of housing across the nation accounts for almost all the difference in the cost of living between metropolitan areas. Therefore we need to keep get the cost of living down, and the present iteration of the growth management act makes that impossible.
“And combined, VMT reduction goals and growth management mean that there will be higher levels of poverty, because when housing costs more, that means low income people have less money to spend and they have greater rates of poverty. And at the same time everybody else does worse, because despite the higher wages and salaries that exist in the Seattle area, the fact is the higher cost of living consumes some of that higher level.
“We are now, I hope, embarking on the long-needed debate on this issue. From everything that I’ve seen, in 1990 nobody went before the state Legislature in this state and said, well, you know what this Growth Management Act is going to do to housing affordability? If they did, nobody listened. I can tell you for sure that in California, when Assembly Bill 32 was passed, the Global Warming Solutions Act, back in I think 2006, or when Senate Bill 375 was passed in 2008, which imposed a land-use regulatory framework that is the most radical in the country, at this point there was no discussion of these issues. The planners came up and said, oh this is all good. All that matters is the design of urban areas, what they look like. Nobody ever thought to think about the fact that urban areas are for people and they are there for people to become affluent.
“We’ve seen in the last few weeks some really exciting things develop. I had an op-ed in the Wall Street Journal about three weeks ago, ‘California Declares War on Suburbia,’ and that, by the way, led the Journal’s site four days in a row on the number of hits and four days in a row on the number of comments. Two weeks later, Joel Kotkin, who is a colleague of mine, had an interview in the Saturday Wall Street Journal that said a lot of the same things, caused a lot of the same reaction. And just yesterday, state Senate President Pro Tem Darrell Steinberg in California, who is also author of Senate Bill 375, had a response to me called ‘A Bold Plan for Sustainable California Communities.’
“The point is that we have to have need to have these discussions. It would be one thing if we can stand here and say the state of Washington went through this. They looked at growth management, they looked at VMT reduction – they went through it exhaustively, and they said it’s okay to have a few points higher poverty in order to have these cities that look better. But you know what? That didn’t happen. And so I’m just hopeful that in the long run that we will see this debate grow. I don’t know what the outcome will be, but these are issues enough to at least be debated objectively.”