The Era of Foreclosed Possibilities

The 2007 recession marked the end of the era of Mass OverConsumption. Suburban sprawl is over. It’s time to think about what comes next – and to adapt state and local government policies to new realities.

by James A. Bacon

The United States reached a historic inflection point during the Global Financial Crisis of 2007-2008. Many politicians and pundits anticipated that the economy would quickly right itself, as it had after every other recession since World War II. But it didn’t. From massive deficit spending to “quantitative easing,” federal authorities have tried stimulating the economy through time-tested methods of pumping up aggregate demand and lowering interest rates. But the economy shows no sign of returning to normal – and the future doesn’t look any brighter. The national debt, now surpassing $15 trillion, has grown so enormous that the dead weight of interest payments will constitute an increasing drag on the economy for years to come.

Historians will look back upon the recent recession as a bookend on an epoch in American history, the period beginning after World War II in which politics and the economy were organized around a bipartisan consensus to promote mass consumption or, as E M Risse prefers to call it, Mass OverConsumption. Politicians of both political parties competed on their ability to deliver economic growth, an expanded safety net and material comfort. Every American should own his own home. Everyone should be able to go to college. Everyone should own a car filled with cheap gas. Everyone should have high quality medical care. Everyone should enjoy a long and comfortable retirement.

The problem, simply put, is that we are running out of money. That’s not an easy truth to accept. Since the recession, politics has been marked by political gridlock in the nation’s capital and the search for scape goats in the hinterlands. The populist Tea Party and Occupy Wall Street movements have fixed their wrath upon ruling elites who plunder the nation by manipulating a corrupt political system. They have ample reason to do so. But in their more reflective moments, most Americans would admit that they have brought some of their troubles upon themselves by living beyond their means, both individually and collectively. Consumers maintained living standards by borrowing more than they could afford. Government maintained spending by borrowing more than it could afford.

Consumers were the first to collide with reality. The debt-fueled, consumer-driven economy came crashing down in 2007 and it cannot be reconstituted. The party is over, the hang-overs are throbbing, and someone has to mop up the puke on the floor. Meanwhile, it is increasingly apparent to all that the debt-fueled, government-driven economy is headed for the same fate, if not worse.

While the fall’s raucous presidential debate has focused the electorate’s attention on the fiscal constraints of the federal government, similar currents are running through state and local governments. States, cities and counties, too, are grappling with a structural budget gap stemming from chronically weak revenues and the public’s unremitting demands for more services. Local governments are more restricted in their ability to borrow to pay for spending, so their financial plight is more immediate and more pressing. To date, the primary fault line has formed over the issue of public-employee pensions and benefits. But other changes taking place at the level of cities, counties and towns are even more profound and unsettling.

Core state-and-local institutions invented or perfected in post-World War II Epoch of Unlimited Possibilities are rusting, rattling and running on fumes. Schools are graduating illiterates. Four-year college tuitions are the size of house mortgages. Health care inflation is pushing citizens, businesses and governments to the brink of insolvency. And the nation’s infrastructure, once the envy of the world, is crumbling all around. Call it the Era of Foreclosed Possibilities.

Across the country, states, cities and counties are ill equipped to deliver their contribution to the American dream. Nowhere is the crunch more evident than in the cluster of issues associated with “growth management” – the ability to accommodate growing populations with affordable housing supported by roads, transit, water, sewer, fire, police, schools and other public services. Just as Americans had come to expect an endless list of benefits from the federal government without fully paying for them, they developed entirely unrealistic expectations about what state and local governments could afford. Middle-class Americans wanted to live in neighborhoods of detached, single-family houses set on big lots. They wanted untrammeled mobility, meaning a car for every, and they wanted “the government” to build a road network that would allow them to drive anywhere, anytime, without undue congestion. And they wanted to keep taxes low.

The paradigm that guided growth and development for six decades has hit a dead end. State and local governments can no longer afford to build infrastructure for and deliver services to a population scattered over hundreds of millions of acres in scattered, low-density, disconnected human settlement patterns – commonly referred to as “suburban sprawl.”

Decades of experience have demonstrated that “sprawl” is fiscally unsustainable. The communities that have arisen from sprawl aren’t even what people prefer. Americans tolerated dysfunctional settlement patterns because they seemed preferable to the high taxes, troubled schools and horrendous crime in the core cities. But urban flight is a spent force. In healthy metropolitan areas, there is ample evidence that household preferences are changing and the flow of people out of the urban core is more than matched by a migration back into it. Jobs, especially the best paying ones, remain clustered within a relatively tight radius of the metropolitan core. Cultural attractions such as the arts, museums and restaurants loom larger as lifestyle magnets for the growing ranks of empty nesters. Frightful crime rates that once repelled middle-class households are showing marked declines.

Meanwhile suburban counties have developed intractable problems of their own: traffic congestion, overcrowded schools and increasing pressure on tax rates. Even before the 2007 recession, few Americans would have described life in “suburbia” as idyllic.

biggest driver of change is an economic one: the rising cost of automobile ownership. According to the New Vehicle Index, the average cost of a new car surged 86.4% between 2000 and 2010, far outpacing the 26.6% increase in the Consumer Price Index over the same period. The Internal Revenue Service mileage reimbursement, a broader measure of the cost of ownership that includes insurance, maintenance, gasoline and other factors, increased almost as rapidly, from 32.5 cents in 2000 to 50 cents in 2010 –  or 53%. The mileage reimbursement has climbed even higher in the past year, to 55 cents per mile. After housing, transportation is the biggest component of the household budget. With incomes stagnant, Americans are finding the auto-centric lifestyle of the suburbs increasingly unaffordable.

Although gasoline is a relatively small segment of automobile ownership, it is one that people fixate on. Todd Litman, director of the Victory Transport Policy Institute, has developed a fascinating metric for tracking the affordability of gasoline: the number of miles a person can drive on one hour’s worth of earnings. The calculation works like this: In 1967 annual median income in the United States was $2,464, gasoline cost $0.33 per gallon, and vehicles averaged 12.4 miles per gallon. An hour of work could buy you enough gasoline to travel 46 miles. In 2000, median incomes were $22,346, gasoline cost $1.51 per gallon and vehicles averaged 17 miles per gallon, meaning that an hour of work could buy you enough gasoline to travel 126 miles.

After peaking in the late 1990s, travel affordability has declined precipitously. Wages have stagnated, fuel economy has improved only marginally but gasoline prices have risen. In 2010, an average work-hour could purchase enough fuel to take you 83 miles. (Remember, that’s gasoline only, not the full cost of car ownership.)

All of these trends – increasing congestion, fiscal stress in county governments, demographic changes, falling crime rates and the rising cost of car ownership – were evident in the 2000s but they were obscured by the real estate bubble. Low interest rates maintained by the Federal Reserve Board, the scrapping of traditional lending standards engineered by Washington politicians, and Wall Street’s mass syndication of mortgage loans without regard to credit quality all combined to induce a fever of rising housing prices and real estate speculation. Flush with credit, developers did what they’d always done: They built new subdivisions and shopping centers where land was cheap and red tape minimal on the metropolitan periphery.

The spasm of development in the 2000s was the last hurrah of the Epoch of Unlimited Possibilities. The bubble burst, housing prices collapsed, the economy tanked and millions of Americans lost their jobs. After two decades of accumulating debt, Americans realized they had been living beyond their means and resolved, with varying degrees of discipline, to mend their ways. This new frugality, bolstered by banks’ tightening of lending standards, led to a loss of buying power. Americans had no choice but to re-engineer their lifestyles not only to live within their means, but to pay down debt and save for the retirement. Spending on housing and transportation, which constitute half of total household spending, plummeted as families re-engineered their lifestyles.

There is no returning to the way things were. Banks will not renew the reckless lending of the 2000s any time soon. State and local governments will experience fiscal stress for years to come. The cost of automobile ownership will continue rising. The suburban growth model of the post-World War II, based on scattered, low-density development and segregated land uses, is shattered beyond mending.

Americans now are stuck with trillions of dollars of houses, shopping centers, office parks, roads, utilities and other amenities that are arrayed geographically in a matter ill matched to the economic, technological and demographic realities. Reconstructing these human settlement patterns to better serve the future will cost trillions more, which means that the process will take decades under the best of circumstances. Creating a new urban fabric – a process I call the Great Retrofit — is one of the great challenges facing America today.

Unfortunately, public policy in Virginia has not yet adapted to the new paradigm of consumer frugality and constrained government spending. The commonwealth is borrowing billions of dollars to expedite construction of road projects conceived during the heyday of suburban sprawl and locked into place through a bureaucratic process known as the Six Year Improvement Program. There has been no re-examination of the priorities set years ago.

Instead of repeating past mistakes, we should be thinking creatively about how to adapt to new realities. In future essays, articles and blog posts, I hope to explore a new path forward.

By James A. Bacon

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This article was made possible by a sponsorship of the Piedmont Environmental Council.

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47 responses to “The Era of Foreclosed Possibilities

  1. The board of the Tysons Partnership would chuckle at the idea it is relatively cheap to build in urban areas on a large scale. Shirley Construction has informed the board that the $1.7 B in road and non-rail capital costs are at least 15% too low in terms of today’s dollars. Most of the $1.7 is for roads, especially those heading west from Tysons.
    Avalon Bay has canceled plans to build apartments in Tysons because it cannot afford to pay its share of the road costs, which are based on the assumption taxpayers will fund between 58 and 67% of the transportation infrastructure costs.
    The Partnership has estimated they will need to impose a $225-275 per month premium on residential rents to recover their share of infrastrucutre costs, including proffer costs. The average rent on an 800 square foot apartment will be about $2300 per month, before the infrastructure adder.
    I too have seen a desire of many people to live closer to work, but how many people would be willing to pay $2500 per month to live in an 800 square foot apartment that does not include the cost of parking a car?
    Moreover, where is the evidence jobs are still not moving outside the urban core? The Dulles Corridor Fairfax-Loudoun has more jobs than Tysons does today.
    Tysons redevelopment is good to the extent it offers people more choices in housing. But that’s all it does. Larry is not going to live in a wilderness in and around Fredericksburg for a very long time, if ever.

  2. Looks like the rent I charge for 3500 sq ft inside the beltway will be going up.

    How can you claim we are running out.of money when people like Red McCombs are cooking income tax losses of 9.8 million by not claiming a stock transaction worth $256 million? Theses are people who spend more on accountants and lawyers Than most of us will ever see, just to avoid the taxes on one transaction.

    When it comes to mass overcoaumption, you are devoid of imagination.

  3. I suppose you missed the call in Sundays wapo to demolish the FBI building and build a new one in suburbia.

  4. ” The problem, simply put, is that we are running out of money. That’s not an easy truth to accept.”

    unfortunately with the mess in Europe – US Treasury bonds are in hot demand … people are begging us to take their money…

    and since the idiots in Congress cannot agree to cuts in the budget.. we’ll continue to borrow….

  5. re: “sprawl” and ‘growth management’

    every new kid adds a substantial cost to exurban locations – on the order of about 5K per kid. The paradox is that exurban counties offer “affording” homes for the price of the commute – but the problem comes when you look at how much tax that affordable house generates – about $1500 a year.

    do the math. the house generates 1500 and the kid in it costs 5000.

    some folks think that if you change the house from a 3 bedroom detached to a “Smart Growth” house in a mixed use development that it will cure sprawl even if that Smart Growth house is in a greenfield location in the exurban community and the breadwinner is a commuter to a job 50 miles away.

    Nope. Even if you could convince that commuter to live cheek by jowl in a mixed-use development – the math of the taxes generated and costs to educate don’t change. there’s still a gap.

    there is no such gap in Fairfax because the cost of housing is much higher and the commensurate taxes also higher.

    and it’s that math that pushes people to the exurbs… to save money….get “more” house for their money – but it’s that same dynamic that means that “growth” in the exurbs means inevitable tax increases.

  6. Except more and more homes do Not have kids in them. None of the ten homes nearest me have a kid in them and most of thiem have not had a kid for decaades.

    This birth rate is the lowest in fifteen years.

    Even suburban areas are closing land consolidating schools. What happens next.

  7. The problem with this post is that it is preaching an old message. By now, just about everyone knows that the days of high credit living are over. I think they figured it out perhaps four years ago.
    That said, I wouldn’t be so sure that suburban sprawl can be dismissed with some grand broad brush stroke. I see evidence that it’s coming back — albeit not at the same speed as before. Strip malls are reviving as are cul de sac subdivisions but with cheaper houses.
    A major problem with this blog is the tendency to call things way too soon.

  8. the problem with housing….

    before the big meltdown many people developed the belief that owning a home was no mutually exclusive to changing jobs.

    remember , before that – many people bought homes they intended to stay in their whole life because the job they had was nearby and expected to last for decades.

    when that changed people had to convince themselves that they could sell their home – even at a profit – if their job took them elsewhere but because homes were relatively easy to sell – it made owning a home even in a mobile society a viable option.

    Now – owning a home is not guaranteed wealth investment nor can one assume they can sell it quickly much less at a profit.

    owning a home is no longer the sure thing it used to be.

    will we get back to that and if so how long?

    will we get back to that when the current crop of underwater homes are eventually assimilated back into the market?

    there’s been good in this. In our area, for the first time in decades deputies and teachers can afford to buy a home. In years prior, they basically were priced out of the market.

    too many of us are living beyond our means. We live in homes that are twice as big as the average sized home in most industrialized countries.

    We use twice as much energy – both fuel and electricity than the average person in other industrialized countries.

    we’ve always felt that our system was superior and that is why we could but reality is proving otherwise. and now we are in blame mode..

    we’ve lost faith in our institutions both govt and non-govt and we are also blaming others in society for our problems and unfortunately we often refuse to accept our own involvement.

    some want to blame govt policies for the housing meltdown. Others want to blame Wall Street. We blame others for loaning us money for what ultimately turned out to be – speculation on our part.

    re: the days of “credit”

    I’m not convinced we’re off the binge …. just looking at college loans which I understand now exceed what we owe in credit cards.

    why in the world would some go into debt that would take 10 or 20 years to pay back for a degree for which there is little demand for in the real world?

    I can understand a Doctor doing that but people are doing it now for degrees that have little or no demand and/or the annual salary is not enough to pay back the loan unless it is stretched out for 20, 30 years.

    who can we blame THIS on?

  9. “Nope. Even if you could convince that commuter to live cheek by jowl in a mixed-use development – the math of the taxes generated and costs to educate don’t change. there’s still a gap.”.

    You got it. The only way to force people to live cheek to jowl in mixed use communities is to regulate the zoning and/or taxes to make that happen.

    And the only way we can afford the social programs is to either raise taxes and/or cut programs. The hope that various attempts at “efficiency” will make up the deficit is wishful thinking. It might help a little but we are in the midst of a need for a new mind-set.

    “Except more and more homes do Not have kids in them. None of the ten homes nearest me have a kid in them and most of thiem have not had a kid for decaades.”.

    I am unconvinced. When I went to high school in Fairfax County the baby boom high schoolers had peaked and the county wanted to consolidate schools. Hence, Groveton and Ft Hunt became West Potomac in the same building where West Potomac once existed by itself.

    Fast forward 20 – 25 years, the baby boomers’ babies are in high school and the county can’t find enough space for the students.

    Those same echo boomers will start hitting their thirties in the near term. When they do, there will be another wave of births. The baby boomers’ grandbabies.

    “A major problem with this blog is the tendency to call things way too soon.”. Point well taken. EMR and I had this “back and forth” when he was posting and commenting here. I think it would be good editorial guidance to request that people who make predictions also predict when their predictions will come true. Obviously, a question for Jim and I would only recommend a suggested (rather than required) used of predicted dates.

    However, having said that, some trends are worrisome. For example, it seems like the length of recessions is getting longer and longer. This is the third long-running or (hopefully) U-shaped recovery in a row. Something is amiss and it’s not a one time peculiarity. I believe this recession will abate and we’ll see five good years of US economic growth starting in 2013. Unfortunately, nothing will be learned by the politicians or even the citizens. The next recession (starting around 2018) will be a doozy. It will turn into a depression and will be one of those cataclysmic events which will redefine history. When this happens you’ll want to live on an arable farm with plenty of guns along with neighbors who know how to use them.

    Jim Bacon and Ed Risse are “the brothers Cassandra”. They both foretell doom and gloom in their own unique ways. They both offer solutions. In Greek mythology the god Apollo fell in love with Cassandra and granted her the gift of prophecy as a token of his affection. However, Cassandra did not return Apollo’s love so he cursed her by ensuring that no one would ever believe her predictions.

    Not sure who Jim and Ed pissed off but it must have been one powerful dude. Rupert Murdoch?

  10. Jim Bacon imitates Yogi Bera…

    Interviewer: “Yogi, do you go that restaurant anymore?”
    Yogi: “Nah, nobody goes there anymore. It’s too crowded.”.

    Bacon: “In healthy metropolitan areas, there is ample evidence that household preferences are changing and the flow of people out of the urban core is more than matched by a migration back into it.”.

    Bacon (2): “Meanwhile suburban counties have developed intractable problems of their own: traffic congestion, overcrowded schools and increasing pressure on tax rates. “.

    Hmmm…..

    So, as people leave the suburbs for the cities, the suburban roads get more congested and the schools more crowded?

    Hmmm……

  11. Groveton, When I’m wrong (and know it), I publicly fess up — even if it gives Peter an excuse to jump all over me! I don’t know many prognosticators who do. My Boomergeddon predictions are right on track. Indeed, I may have been too optimistic by saying that calamity might be 15 to 20 years away (a prospect that seemed absurd to most people only a year ago). Now *you* are suggesting we’ve got only seven years before disaster strikes! Who’s the Cassandra?

  12. I get the part about unsustainable debt. I don’t understand how moving people and jobs to cities addresses debt. All development requires infrastructure, roads, schools, transit, police, fire, parks, libraries, sewers, water, etc. There are areas in already developed communities that can handle additional population with existing infrastructure. But most areas cannot, unless they are in very unattractive places, say Detroit for example. There are some cost savings for building infrastructure in dense urban areas. Fewer miles of sewer pipe might be needed to serve 20,000 people. But there are higher costs too. For example, it will cost someone a lot more money to build the extra traffic lanes on the DTR than it would likely cost to build the same lanes outside NoVA.
    Also, if we assume a significant number of businesses and people move closer to urban cores, wouldn’t there be a huge loss in wealth for many of them? If 33% of Spotsylvania County moves to Fairfax, who will buy the empty residences? Who will rent vacated office spaces? Wouldn’t that force society to take on even more debt? I guess that I am asking whether society has a interest in maintaining the status quo?

  13. Jim, Jim, Jim:

    Boomergeddon will not be an isolated event. It will be a recession which leads to a depression which leads to Boomergeddon. I peg the current business cycle at about 7 years. In other words, seven years from one recession to the next.

    I see your prediction as being two business cycles away. In other words, we’ll recover, grow for another six or seven years, go into recession, recover, grow for another six or seven years and then hit Boomergeddon.

    I think you are being overly optimistic by exactly one business cycle.

  14. TMT, clearly Tysons Corner is an example of a place where it has become prohibitively expensive to retrofit, far more expensive than building in a greenfield. Tysons may be FUBAR, beyond hope. But there are many other locations that can be retrofitted more economically.

    Groveton, You are right, when I was writing Boomergeddon, my thesis was so “out there” that I played it safe and guesstimated that we could muddle through one more business cycle before everything fell apart. I was too optimistic. I am now closer to your way of thinking, that the next major downturn could do us in. Events in Europe turned out to be even worse than I (or anyone else) figured they would be. And China looks like it could be sitting on a time bomb. If China blows, it could disrupt global supply chains, making the Fukushima disaster look like a day at the park. As long as Europe is ahead of us in the downward spiral, however, we will suck up their flight capital. Super-low interest rates over the next few years could give us time to clean up our act. But if interest rates on T-bills start rising, we’re totally hosed.

  15. TMT:

    Last night I was busy inhaling a combination of paint thinner and ether with reading Carlos Castaneda when it all became clear. Jim Bacon and Ed Risse are two sides of the same coin. Well, more llike two edges of the same sheet of paper.

    Let me explain …

    I think you really have to read between the lines of the Bacon – Risse theology. They talk about human settlement patterns but underneath that talk is a weird intersection of socialism and conservatism.

    If you take a piece of paper and color one edge red and the other edge blue, it is posible to bend the paper until the red edge abuts the blue. Ed and Jim are the two edges and Human Settlement Patterns are the paper which can be warped.

    Ed’s philosophy is something of a socialist philosophy … and I mean that in the French way rather than the Soviet way. It seems to me that Ed believes that too few people consume too much of the Earth’s natural resources and those resources will run out and all hell will break loose. He is especially concerned that rich people really burn through the natural capital and that causes prices to rise faster and thereby impoverish the poor people more quickly. I have always seen the term “pay your fair share of location variable costs” as code words for wealth re-distribution. If somebody wants to shell out a small fortune to suck up a large lot within the clear edge then fine … they should pay for the costs of that decision. Ed uses the economist’s definition of cost rather than the accountant’s definition. Part of the cost of buying large tracts of land for single family housing inside the clear edge is that makes affordable housing less affordable. That opportunity cost is part of the “location variable costs” you should pay. By the time all of these opportunity costs are added up anybody rich enough to live in a nice suburban home won’t be rich long. Then, they can move to the city with the rest of us.

    Bacon comes at the issue from the opposite side of the paper but ends up in the same place. Jim’s philosophy is essentially libertarian. He thinks you should be able to pay for anything you care to buy. However, he hates the idea of government taking money from you and buying things because the act of taking is involuntary and infringes your liberty. He sees subsidies everywhere and yearns for the day when all the subsidies are gone because everybody pays for everything directly and the only government we need flys fighter planes and operates nuclear submarines. Well, not quite. Somebody still has to run the prisons and lethal injection rooms but you get the point. Want to drive? Pay for the roads by the mile. Want to ride the subway? Pay the full cost. In Jim’s world, making everybody pay the “location variable costs” is the antidote to income redistribution. Why would government need to tax me if it doesn’t pay for the roads, subways, bus lines, medical care, etc.

    Jim also knows that the only way to operate a society where there are few subsidies is to pack the average Joes and Janes into cities. They can live in little apartments, take the bus to work, walk to the store, etc. Hell, you can live pretty well in Calcutta on just a little bit of money. So, once all the Joes and Janes are packed into the cities hopefully we can stop all the whining about the wealth gap. After all, if city living isn’t cheap then why are all the ghettos full of poor people? As for the rural poor – they shouldn’t be in the countryside. They should be packed inside the clear edge the same way as the urban poor. In low cost housing. Spending their own damn money on transportation and eating with whatever is left. Meanwhile, of course – the rightful heirs to America – the descendants of Pocohontas – will continue to live in the West End.

    Ed Risse wants everybody to be in the middle class because that would be fair and would slow down the burning of natural capital. Ed imagines the opening sequence to the Jetsons when he envisions his classless society.

    Jim Bacon wants nobody to be in the middles class because the middle class is getting expensive and might start eating into the ancestral fortunes amassed by the Descendants. Jim imagines Oliver Twist as we undesirables huddle in our shanties and know enough not to ask for “more” from our betters.

  16. Oh Groveton.

    Innocence lost.

    ;-0

    the problem with ED’s view is he is expecting some benevolent govt to rule and make people be good….

    I think Jim is more Rino than Libertarian…. myself….. but he competes with himself on this.

    I thought Groveton was a fiscal conservative but the man has gone hog-wild here of late… and he actually sounds like a progressive… at times.. HORRORS

    re: the trouble with density

    density is not free. It’s probably more conservative of resources but you can’t have a Tysons for “free”.

    Density is an Oxymoron in the exurbs… if the folks who live in such density leave the area to commute to a distant job… it’s a bit on the nutty side….but we are overwhelmed with hand-wringing do-gooders who can’t stand the thought that when they decided to move to the exurbs – they did…. “sprawl” and all the bad stuff that goes with it.

    and it’s ludicrous to hear people say they “had no choice” but to move to the exurbs then drive solo to work every day 100 miles rounds trip – “no choice”.

    if you want folks to pay their fair share for transportation infrastructure – for daily solo commutes – put a toll on the road. that’s appropriate and fair.

    I do hesitate if the next step is to take those tolls and spend them on mass transit but if people will allow it to happen then so be it.

  17. Groveton is correct to describe the emr/jab hegemony as weird. It he has missed entirely the real issue.

    Jab and emr are peculiar accolytes. They will believe and preach ANYTHING that preserves open space.

    Especially including the outright lie that dense urban living saves money and resources, and is somehow more efficient, no matter how constrained and generally unpleasant, aggravating, and dangerous.

  18. Groveton is correct to describe the emr/jab hegemony as weird. It he has missed entirely the real issue.

    Jab and emr are peculiar accolytes. They will believe and preach ANYTHING that preserves open space.

    Especially including the outright lie that dense urban living saves money and resources, and is somehow more efficient, no matter how constrained and generally unpleasant, aggravating, and dangerous.

  19. The single thing that has foreclosed the most opportunities for me and my wife, and limited our opportunities for financial success is my local government, which seems to be rippled with people who have the same mistaken predilections and prejudices as jab and emr.

    People who have more interest in control than they have in freedom.

  20. I. cannot figure out Larry’s incosistent insistence on tolls as the solution for anything. These are nothing but a bad idea that we will grow to regret. As a funding plan for transit, this is a funding plan that is self destrau give, and completely counter to the idea of paying location dependent costs. It literally has. Nothing going for it, and for the life of me I do not understand why it has not raised serious and loud objection.

    Except that, so far, e eryone believes as Larry does that it will only affect the Guy behind the tree.

    Such people do not understand the true nature of transportation, as a cornerstone of the economy and liberty.

  21. “Europe is ahead of us in the downward spiral, however, we will suck up their flight capital. ”

    Do you guys ever read anything besides your own writings?
    What is going on is a massive worldwide unwinding of the derivative trade. The money that supposedly comes here goes right back out again as the algorithms desperately attempt to reach parity before infinity. If money was staying here, our deficit clock would be counting backwards.

    The bad news is that time has run out, as an increasing number of unaware customers will find when their account statements begin coming up ‘short’. That’s what happens when money is merely a hexadecimal entry in a computer matrix. A Fed slight of hand easily changes your life savings to a digital IOU or null.

  22. Cmon, Darrell. Multinational corporations are making global money. Shipping is up, leading indicators are up, commodities are up, home sales are , population is up,lifespan is up.

    Communication is faster and easier than ever. I do not see business coming to a halt any time soon. The only thing to screw it up is governance or lack thereof..

  23. Groveton actually did a pretty good job of describing my philosophy in the first paragraph — “Jim’s philosophy is essentially libertarian.” Then in the second paragraph, he went off the rails.

    “Jim also knows that the only way to operate a society where there are few subsidies is to pack the average Joes and Janes into cities. They can live in little apartments, take the bus to work, walk to the store…”

    I don’t believe in “packing” anyone into cities. I believe that people should pay their location-variable costs, and then exercise free choice. I am the antithesis of a social engineer. I don’t presume to tell people how to live. If people want to live in single family dwellings on five-acres lots, this is America, and they should be allowed to. They just shouldn’t expect their choice to be subsidized by the rest of society.

    I do believe that economic logic and changing generational values will bring about major changes in peoples’ preferences in where and how they want to live, and that more people than before will prefer to live in urban areas (whether in “cities” or “counties” is probably irrelevant to them.) Insofar as government assumes responsibility for building infrastructure and providing public services, it should take those changing preferences into account. Right now, Virginia transportation policy still reflects the social and economic realities of the 2000s. That era is gone. We need to establish a new set of priorities, and those priorities have to be fiscally sustainable in what will be a very fiscally constrained era.

  24. Groveton,
    Keep up your psycho-sexual line of analysis! It is intriguing.

  25. why tolls? Because they are a better proxy for “need” than what we use right now.

    second, people don’t like tolls but they dislike higher gasoline taxes even more so what are your options? To do what EMR does and advocate a benign dictator to do what is right and good?

    perhaps after a couple decades of tolls, people will change their mind and agree to change back to higher taxes but I’m betting not.

    why tolls? because I don’t mind paying for a trip that I need to make if it saves me time and/or because it is tolled – it provides a more reliable trip.

    variable tolls let people decide WHEN they want to make a trip and many trips simple do not have to be made at the most congested time periods.

    why tolls? driving solo at rush hour every day causes massive congestion.

    the folks who cause the congestion should be the ones to participate in the solutions. there is no reasonable, feasible way to expand urban roads to add significant capacity anyhow so what is the solution?

    if we do nothing – we get gridlock. if we actually wanted to add capacity at billions of dollars per new lanes WHO should pay other than the people who are causing the congestion to start with?

    Most toll roads – the first think you notice is that traffic is moving and not stacked up. It can be busy but it moves. I like that and I don’t mind paying my fair share to get it.

  26. The folks who cause the congestion should be the ones to participate in

    +++++++++++?++?+

    But that would be everyone who suffers congestion not just the new guys moving in. People like gas taxes less than tolls because Republicans have taught them to hate taxes. It is a scam, and an expensive one. People think, wrongly, that they wont pay the tolls. This is an expensive mistake, and we will eventually rue the day we went down this road.

  27. HOT lanes are predicted to REDUCE the number of car pools.

  28. Bacon’s location variable costs are based on the presumption and the argument that said costs are lower in more densely populated areas. Therefore costs will be prohibitive in less populate areas. Despite his claim of not being social engineering, the plan cannot work without zoning that preferentially treats certain areas over others.

    If his argument was genuine, then he would argue for true transfer of development rights, which would amount to a market for zoning permits.

    Rather than making zoning exclusive, it would come with a price scale: if you wish to do x in y zoning then your fee will be z.

    Under those conditions Bacon’s argument would ring true instead of hollow.

  29. I don’t say anything about “new” guys. If you drive…and you find yourself on congested roads – and you want less congestion – then you are the one who should participate in funding new infrastructure.

    I don’t think people think they won’t pay tolls. I think they know they will but they also know they don’t have to if they chose not drive on roads that are tolled or if they do, they travel when tolls are lowest.

    in the end, it’s really about what you want to pay for..not what you are forced to pay for even if you are not affected by congestion.

  30. I don’t know about Facquier but in Spotsy they are now allowing TDRs.

    it’s still very much a work in progress. What development rights are “worth” is still a black art….. in many ways…. A parcel of land 25 miles away from the nearest water/sewer, real civilization is valued very differently that a same-sized parcel that is a 1/2 mile from the nearest water/sewer.

  31. I don’t think people think they won’t pay tolls. I think they know they will but they also know they don’t have to if they chose not drive on roads that are tolled or if they do, they travel when tolls are lowest. in the end, it’s really abou

    ++++++++++

    And all of those things are additional unproved costs of toll roads, which make them look like a better deal than they are.

    The tollroad looks great, but the system, and the TOTAL costs suffer.

    It is a scam.

  32. A toll road or HOT lanes generally gives drivers a choice. I’ve driven to New England a number of times on both the NJ Turnpike and on I-95, but more often on the Turnpike, as it is more direct route and gets rid of the truck traffic near NYC. I normally go to Reston via Route 7. It’s all about choices. The proceeds should be used for the upkeep of the toll road and to redeem construction bonds and not used for other purposes.
    Traditional sources of road funding are too often misspent. The CTB regularly funds projects that provide less than a good return to drivers. It’s a source of pork that doesn’t belong in the process. The Free Congress Foundation has proposed increased funding of transportation projects, but realize how badly the existing process has been abused.
    It’s point number two is: 2. A process for road and surface construction must be merit based, with objective criteria, to carry out the national strategy. Earmarks for projects to reward particular Congressmen must be abolished, and publicly condemned if the country is to advance to transportation programs.”

  33. What is the start date for development rights to be counted? How many had to be eliminated before there was a market for the remainder? Who sets the price? If I buy a development right, am I guaranteed the right to use it?

  34. I – 95 used to have tolls, but they were removed, and for good reason.

  35. re: development rights.

    as I understand it… if you are developer with a parcel with X “by-right” development rights, you can add to that X by buying development rights from owners of other parcels.

    but I see problems with this….

    a development right in a growth area served by water/sewer is going to be worth far more than a development right on a parcel of land 25 miles away out in the hinterlands.

    a developer could, of course, forgo buying development rights all together and just make a higher than by-right density to the BOS anyhow or perhaps offer other “goodies” instead.

    the new UDA law basically says that there are designated areas within a county where the BOS will ENTERTAIN higher density than by-right proposals.

    All that really means is that the BOS will listen to a proposal…which is what they had to do all along anyhow before the UDA law.

    about the only difference is that an area designated as a UDA is a defacto area of available water/sewer ..once you get your proposal accepted of course.

    Now is the county’s designated UDAs are in areas not already served by water/sewer then thats where things get interesting because even though there is an implicit offer of providing water/sewer… there is no date certain…. and of course none of it matters anyhow if your development proposal is turned down.

    UDAs make perfect sense in places like Fairfax but they are totally redundant as Fairfax already has a comp plan with designated land uses ad growth areas..

    UDAs in exurban locations… especially greenfield locations is a totally different critter…..

    putting a mixed-use development in a leapfrog fashion where it jumps past existing undeveloped land … is prima fascia sprawl ESPECIALLY if the folks who live there are going to commute 50 miles away to a job.

    Of course that sorta pushes to another question which is why someone would commute 50 miles to an exurban location to live in a mixed-use development that looks like the ones close to where they work… why commute 50 miles to one especially if 3 bedroom traditional subdivision homes are available….??

    Ah… that’s where the UDA law starts to take some unanticipated twists and turns because the law does not say if you create a UDA “node” that it cannot be surrounded by 1/4 acre or 1/2 subdivision lots all served by the water/sewer that was extended ostensibly to the UDA mixed use development.

    see where this is going? If you do.. you see more than the so-called Smart Growth folks see….

  36. My first question would be, now that you recognized development rights as property to be bought and sold, which by rights will you recognize? The ones I have now, the ones I had five years ago, ten years ago, 20 years ago or 25 years ago. That would be zero, one, 3, 7, a nd 40 respectively.

    Offering. A tdr plan after all the drs have been exterminated sets up a false market.

    Under the Oregon plan they went back 25 years to reinstate development rights or as long as it had been in one family.

  37. Nice conspiracy theory, Larry. As I understand it, the state has now ruled that localities cannot ban alternative sewage treatment systems, which opens the door for HOAS to become private sewer districts.

    I don’t this k you can zone based on how far you think the occupants will drive.

    Sure a developed development right will be worth more in an urban area, but undeveloped they are worth the same. This provides incentive for the farmer to sell his development rights to an urban developer, who will pay more for it than it is worth to the farmer. This is exactly what the save open space smart growth people want.

    Otherwise, Larry is correct, all the USA says is that there must be SOMEPLACE where you will consider density: you cannot zone solely for equestrian estates. And no telling when the required adequate public facilities will be supplied. Marshall was a service district for forty years before the services were supplied.

  38. A finite number of development rights envisions an area that is perfectly planned. When all development rights are used then the area is built out and preserved forever. New development must go someplace else and travel farther.

    Which pretty much blow out the idea of smart growth, which says it would be more efficient to increase density – create more development rights, just as if they had never been expired. Only now, having taken them away for free, the locality will expect proffers, goodies, and even bribes, to give the former development rights back again.

  39. Therefore, we see that development rights are not finite. They are created by the locality and so rightfully belong equally to every citizen and are not tied to the land until used.

    Each. Citizen would get chits worth a fraction of a development right. Anyone who wants to build simply buys up enough chits, and he is good to go, providing he meets the technical building requirements.

    Chits would expire after one year and the planning board would issue new ones depending on what the capital plan can stand.

  40. Under this plan, everyone gets a chance at the benefits of development, if they choose. Otherwise they can sit on their chits and pay the cost of conservation. Either way, the people will have spoken.

  41. I don’t believe Fairfax County has used the UDA. As Larry stated, the County is pretty well set under the Comp Plan, which is reviewed periodically. The County seems willing to add density in TOD areas, under the assumption that mixed use development near rail, when coupled with very strong transportation demand management programs, will allow for growth with less than the otherwise expected increase in traffic. It makes sense in theory, and Arlington County has implemented it in practice reasonably well. Tysons will be a much bigger test.
    The best thing for rational development has been the passage of Chapter 527, which forces localities to conduct traffic studies that address the increase in volume with development and potential mitigation steps, and then submit the materials to VDOT for comment. That law clearly prevented Fairfax County from playing games in Tysons.

  42. Why is 527 the best thing? The end result is a comment from vdot. You do the studies you know you have a problem and you know the mitigation wont work. What then?

    Go someplace else.

    2% of people who travelled today travelled by train, yet Fairfax is staking it’s transportation plans on demand.d mannagement and trains in the forlorn hope that things will be less worse than otherwise.

    They have missed the point completely.

    • Hydra:

      If you are quoting the 2% statistic on Thanksgiving Day in comparison to a jurisdiction – sized subway system then you have missed the point completely.

      The only valid comparisons to the plans for Metro would be other densely populated metropolitan areas on typically congested wordays.

      The question is how many people in Atlanta, within reasonable distance of a MARTA stop, use MARTA.

      New York (1904), Washington (1976), San Francisco (1972), Chicago (1893), Philadelphia (1907), Boston (1897), Atlanta (1979), Los Angeles (1993), Baltimore (1983) and Cleveland (1955) are all among the US cities operating heavy rail rapid transit systems in the US.

      Some of these systems have been in continuous use for over 100 years. Others have been built more recently in answer to pressing transportation needs.

      The notion that extending Northern Virginia’s rapid transit system is odd doesn’t hold any water.

  43. The D.C. Metro Area would be severely strained to handle the traffic if Metrorail were not operating. That seems pretty clear to most people. Does that mean WMATA is well managed or that specific projects to expand Metrorail are cost effective? Certainly not. But it is in the public interest to keep Metrorail running. The extra gas tax in NoVA is a key tool to that mission.
    The value of the 527 Transportation Impact Analysis. Can VDOT veto a project that has an adverse impact on transportation? No, but having a county or city conclude a project will have a negative impact on traffic, and with VDOT agreeing or, often, stating the locality’s assumptions are overly hopeful makes it very difficult for the locality to approve the development as is. That is worth a lot to any community, including commercial real estate interests.
    The 527 TIA process also led to Table 7 in the Tysons Comp Plan amendment. Table 7 sets forth specific transportation needs, cost estimates and deployment time periods. It’s good transportation planning. Perfect? No, but it beats road planning by lobbyist.

  44. I only meant to point out that on the busiest travel day of the year 2% travel by rail. 8% by air, and 90% by auto. This is pretty typical.

    If rail is the answer to pressing transit needs, it is indeed an odd choice. It takes a long time to do, is not adaptable to change, it is expensive to build and requires continuous subsidies to run. And all of that is in addition to the subsidy it gets in the form of substantial and expensive additional density, said density requiring a lot of OTHER expensive infrastructure to make it work: sewers, Parks, schools, and oddly enough parking.

    If the 527 process points out that all this is what you are up against, then it should not take much analysis to conclude that almost no amount of additional commerce crammed into a small area can make such an effort pay. And yet the Tyson’s disaster rolls onward.

  45. one of the interesting things to me is that the 527 process… and most analyses SEPARATE the modes when they analyze.

    what if you had a 527 process for transit?

    what if the 527 process INCLUDED BOTH transit and roads?

  46. Transit is discussed in a 527 TIA if it is part of the proposal to address the increase in traffic. So is TDM.

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