Bacon's Rebellion

Democracy Thrives in Sunlight

Gas Shock

—

by

James A. Bacon
in

The impact of high gasoline prices on Virginia transportation policy is prompting more than blog posts at Bacon’s Rebellion — see “Energy Independence and Sustainability,” “Straight Talk about Gasoline Prices and Transportation Policy,” “A World with One Billion Cars” and “Virginia’s Vulnerability to Oil Shocks.” There is evidence that legislators are reappraising their thinking about transportation policy.

Exhibit A: Sen. Martin E. Williams, R-Newport News, chairman of the state Senate’s Transportation Committee.

As reported by Peter Galuszka in the latest Road to Ruin article, “Gas Shock,” Williams is a self-described conservative Republican who for years supported free enterprise, property rights and the extension of development and roads into the countryside. As gasoline prices have risen, however, he has come to realize that Virginia’s transportation policy cannot continue as it has. Consequently, he has been willing to support measures linking land use and transportation that he never would have before.

“I never thought I would agree with a growth management strategy that hurts property rights but I am already there,” he says. “We just can’t accommodate growth in outer areas like we used to.”

I’m delighted to see that Williams is open to change, and I probably shouldn’t quibble. But I just have to set the record straight on one issue. I, too, support free markets and property rights, but I never equated those with the policies responsible for the pattern of scattered, disconnected, low-density development commonly referred to as “sprawl,” much less our sprawl-inducing transportation policy. To the contrary, few sectors of the U.S. economy are as heavily regulated (zoning codes, subdivision ordinances, comprehensive plans) and subsidized (road construction, the pricing of utilities and public services, mortgage financing) as real estate.

For me, “property rights” means that government should not have the right to take someone’s property, or diminish the value of someone’s property, without compensation. “However, property rights” does not entitle land speculators to make a profit, nor does it require local government to extend roads, utilities and public services to any old place that a developer decides to build a subdivision.

As Sen. Williams thinks through the implications of higher gasoline prices for transportation policy, I hope he also reconsiders what the terms “free markets” and “property rights” mean in the context of the heavily regulated, heavily subsidized real estate sector.

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26 responses to “Gas Shock”

  1. E M Risse Avatar
    E M Risse

    We were going to post a seperate note but this is as good a place as any the ask the question:

    Did anyone else notice that last Saturday’s WaPo Real Estate front page story on gasoline prices (“By the Tank”) included a RADIUS MAP!!!

    Eat your heart our Business-As-Usual, WaPo has discovered the impact of Radius Analysis.

    Twenty years too Late? At least 10.

    Also “we” all do not call it “sprawl,” some of us call it what it is dysfunctional human settlement patterns.

    EMR

  2. Jim Bacon Avatar
    Jim Bacon

    Ed, I apologize for my imprecise language. I have corrected my wording from…

    “the pattern of scattered, disconnected, low-density development that we call ‘sprawl’”

    to…

    “the pattern of scattered, disconnected, low-density development commonly referred to as ‘sprawl’”

  3. Ray Hyde Avatar
    Ray Hyde

    Huh?

    Density limitations and large lot restrictions have exactly the effect of diminishing the value of peoples property without compensation. At the same time, flood plain restricitons and drainage requirements actually support the public safetY and health.

    How do you distinguish between a land speculator and an owner that simply can’t stand the pain of increased property taxes due to higher assessments caused by outside demand?

    If the county refuses to extend utilities and also refuses the right to use alternative and privately funded septic systems, for example, then is that a legitimate safety, health, and financial matter or is that a charade for NIMBY?

    If the county supports services in one place and not another, how is that any different from the transfer of wealth you note in your comment on Rail to Dulles?

    Given that practically any decision the county makes has some impact on owners: positive in some cases and negative in others, what kind of compensation scheme do you think will level the playing field and encourage those who might be forced to try to develop in unfavored locations not to?

    It seems to me that the desired activites are BOTH encouraging development in areas the county elects to provide roads and services to and encouraging those in other places to forestall development and continue conservation practices.

    At present there is far more money devoted to the former than the latter, and that is a primary cause of disbalance in our communities. Incentivizing both of those activities will amount to subsidies of one kind or another, so where does the money come from, who decides how it will be distributed, and what kind of free market is that?

    If you take away what you call the subsidies for far flung roads and services, what do you replace it with unless you are willing to diminish the value of someone’s property without compensation?

    Finally, if you encourge development in some locations above others, what do you say to people like TMT who say, enough already?

  4. James Atticus Bowden Avatar
    James Atticus Bowden

    You have a property right to buy a place in the country. You don’t have a property right to demand that the county provide a road, water, sewer, electricity, cable, trash services to your property. Or, the county could help provide some of those support services and demand fees for them.

    Loyal lawyers, do the Virginia and local codes place a legal requirement for those infrastructure services on government?

    Glad I saw Ray Hyde’s post before I put up mine. I’m not disagreeing with Ray, just asking questions.

    The classical poli sci definition of ‘politics’ from the 1950s (Lasswell) is “who gets what”. Every decision on land use and taxes creates winners and losers. Every single one.

    I’ve proposed that we be guided by priniciples. Maybe I’ll do another Rebellion piece on those principles.

  5. Jim Bacon Avatar
    Jim Bacon

    Ray, you said: “Density limitations and large lot restrictions have exactly the effect of diminishing the value of peoples property without compensation.”

    I agree totally. That’s why I oppose most density limitations and large-lot restrictions.

    You ask: “If the county supports services in one place and not another, how is that any different from the transfer of wealth you note in your comment on Rail to Dulles?”

    I’d be open to the idea that counties should be required to extend services to anyone who wants them, with one caveat: that the developer (and/or landowners) be willing to pay the locational-variable costs.

    No one should plop down a subdivision in the middle of nowhere and demand as a right for government to extend water, sewer, roads, etc., and provide for police, fire, rescue, schools, at the same price as citizens living in more efficient locations.

    The difference with the Rail-to-Dulles situation is that the property owners don’t want to pay for the cost of extending Metro to Dulles. They want to reap the benefits with none of the cost. The schema that I laid out is fully consistent with the philosophical principles I’ve consistently stated.

  6. Ray Hyde Avatar
    Ray Hyde

    The radius map is only important if you think the central area is the only destination of importance.

    It seems to me that the impending redevelopment of Tyson’s and other locations shows that such a centralized way of thinking is outmoded and unuseful. To the extent that it is still useful, the radius map is no surprise. It has long been understood that people mae rational decisions that combine the costs of travel and the costs of housing: it should be no surprise that those who are considering changes (those that read the real estate section) would continue to take such costs into account.

    What would be more useful is a map that shows the combined cost contours for housing and travel, and that map should show the contours of equivalent costs not just for the the center but for the major employment centers.

    Such a map would likely show broad areas of equivalent costs away from the centers and smaller areas of equivalent but higher costs elsewhere. To a buyers those factors equate to risk and reward, which is the primary motivator for speculators of all types.

  7. Jim Bacon Avatar
    Jim Bacon

    Ray, You seem to be under the misapprehension that “the central area” of the Washington metropolitan statistical area (or New Urban Region) includes only Washington and, perhaps, Arlington/Alexandria. Tysons Corner may not stand at the geographic “center” point of the region, but as it re-develops into an urban area, is is becoming part of the region’s urban core. It’s right off the Beltway and it has access to the Metro. By comparison to Leesburg or Quantico, Tysons is centrally located.

  8. Ray Hyde Avatar
    Ray Hyde

    “No one should plop down a subdivision in the middle of nowhere and demand as a right for government to extend water, sewer, roads, etc., and provide for police, fire, rescue, schools, at the same price as citizens living in more efficient locations.”

    I sort of agree, but the fact is that you don’t get the same police fire and rescue services, let alone the others, at least not for many years. By itself that amounts to diminishing your property value, which of course is how you are able to sell. By the time you get those services, it is because the demand is high enough to make their provision “efficient”.

    How often do you re-assess the location variable costs? The first row of townhomes in Centreville took an enormous risk. Suppose they paid for the new infrastructure they required, and later other people came along to take advantage of it. Should they get some of their money back?

    What if the cost of providing that infrastructure was so high that the risk was no longer justified? Everybody in Centreville would have wound up in TMT’s back yard.

    Wouldn’t that result in a tremendous transfer of wealth to those that live in areas where infrastructure exists?

    Let’s face it. If Metro had to pay its own full locational costs, it would shut down tomorrow, and yet Metro is still an undeniable benefit to the region as a whole. No one knows where the benefits accrue or how to pay for them, but surely taking money from people who choose a different mode is unnacceptable.

    Right now you claim that scattered development is subsidized. Just because centralized development is claimed to be more efficient (and the evidence from taxes and housing costs does not support this), does that mean that development there is not also subsidized?

    What we are quibbling about is the efficiency of the subsidy, not the fact of it. But any measuremnt of efficiency has to consider time and that is what is lacking in cost of services studies that are frequently used to support your position. They are a snapshot of current conditions and not an average over time. The situation in Centreville now is a lot different than it was 20 years ago, but if it had to meet your criteria, it would never have been built.

    Even if a new area provided all its own infrastructure through develper and owner contributions, eventually the time comes when the area is sufficiently developed that it is efficient for the government to take over the roads, etc. Otherwise you have a hodgepodge of tolls and fees and banruptcies like we had in the 1800’s. No one seriously wants to go bac to that, so how do we work it in such a way that it is fair to all, suppports conservation where we need it, supports development where we need it, and halfway makes sense?

    As it stands now we ARE imposing large lot restrictions mostly as a means of directing development to other areas. The large lots mean that you will pay more for living in such areas, which in some way supports your idea of paying more to live in remote areas. Where the problem is again falls to a matter of time. Time is cheap to the government, but dear to mortals. An area may be designated for large lots, and that is fine for a time. But eventually conditions will change and the ordinances not, or not so fast. If new demand develops, it pushes up prices and assessments, making the large homes and lots unsustainable, yet there is no effective way out, and no way to agree on when the appropriate time is to change the rules.

    Even where infrastructure exists, new development means that you still need more of it: a refrain we frequently hear from TMT. If we consider time as an element, how do we know whether a Centerville solution is a better solution than say, redeveloping all Bailey’s Crossroads?

  9. Ray Hyde Avatar
    Ray Hyde

    Exactly my point. Where was the center on the map in the Post, and what was the diameter of the “Bull’s eye”? It now appears that the “center” of the region is becoming an elongated L shape, one leg of which is the entire corridor from Dulles to downtown.

    If you make that the bull’s eye, then the radius map looks a lot different, and so does the transportation plan needed to support it.

    But my real point is that distance is unimportant by itself. What matters is the combination of distance and housing costs.

  10. Ray Hyde Avatar
    Ray Hyde

    JAB:

    You have a right to buy a property in the country. Presumably it will be served by some kind of county road. (That road might be a dirt road that any developer would be fined for leaving unprotected.)

    Suppose you are willing to share the (small use) of that road and share your property with another buyer. Your neighbor on the other side of the road is unwilling to share, so he opposes your sale. How does the county pick and choose over whose rights prevail?

    Your neighbor across the road drives all the way to U of MD. to teach, and in doing so he traverses and causes additional congestion in TMT’s piece of the planet. Your prospective new buyer is a local teacher. How do you decide what principle prevails, and how are TMT’s right protected?

    All the while you own the property, the county retains the right to take some or all of it for a new road or school to support other new residents. Under Kelo, the county also retains the right to manage your property for greater tax production. Presumably, that could also be interpreted to mean that the county has the right to manage your property for minimum tax expense impact.

    If the county has all those rights, then where exactly are the owners rights? What is left to him is only the right to stagnate.

    Even if the government builds a new road across your property, they could still prohibit you from developing part of the remaining property on the basis that you might use the road!

    If you have a place in the country, you are not going to get water, sewer, cable, or trash service unless you pay for it yourself. You might get some police and fire service, but you will have to wait a long time for it to arrive, and it may be a volunteer, not a professional.

    If you plan to put up a thousand homes, that is obviously different than if you put up one, but the rules are largely applied the same for all, with the result that the rules actually favor the large scale development we wish to prevent, or at least direct to the correct locations.

  11. Toomanytaxes Avatar
    Toomanytaxes

    Jim: “No one should plop down a subdivision in the middle of nowhere and demand as a right for government to extend water, sewer, roads, etc., and provide for police, fire, rescue, schools, at the same price as citizens living in more efficient locations.”

    I’d modify that to say: “No one should plop down a high-rise condo or a whatever in the middle of somewhere and demand as a right for government to extend water, sewer, roads, etc., and provide for police, fire, rescue, schools, where existing capacity to serve is inadequate without providing sufficient contributions to the cost of extending such infrastructure.”

    Clearly, there must be a balance between the rights and obligations of both existing residents and newcomers. It would be unfair, for example, for a county to impose impact fees for schools on an age-restricted community (i.e., 55+). It is not unfair, however, for that same county to impose impact fees for roads, parks, libraries, police, fire, etc. on the age-restricted community.

    I don’t see a difference in principle as to whether the new development occurs in the middle of nowhere or in the middle of somewhere. Development requires infrastructure regardless of where it’s located. A fair share of the the costs for that infrastructure should be recovered from the new development.

    I would readily agree that the infrastructure costs would vary depending on where the new development is located. There may be instances where an established community has spare capacity in a category of public facilities. For example, the District of Columbia has an excess of public school classrooms. Assuming for the moment that those facilities are adequate for their purpose, adding new homes — SF or condos — in an area with surplus classroom space has adds no incremental cost to the existing commuity. On the other hand, adding the same number of homes to a small community in western Loudoun County, for example, would likely create a substantial incremental cost for schools because there is (presumably) no excess classroom capacity on our western Loudoun County town.

    But move our new development from Washington, D.C. to Tysons Corner and we might not have excess classroom capacity at Marshall High School or the various schools feeding Marshall (Marshall serves the Tysons Corner area.) If no such excess capacity exits, there is a brand new incremental cost for constructing new classroom capacity in Fairfax County to serve the new development. Those costs are just as real as the ones incurred by my small town in western Loudoun County. Moreover, I submit that the basic cost structure in Fairfax County per unit constructed or remodeled is likely to be much higher than the costs per unit in rural Loudoun.

    In theory, this should all be addressable. The appropriate county boards should be able to insist on proffers sufficient to cover a fair share of the necessary classroom space in either Loudoun or Fairfax Counties. The data suggest that Loudoun County officials would negotiate fair cash proffers. But then there’s the current Fairfax County gang that will not negotitate fair proffers. Even the new higher (but well-below what’s obtained nearby) target proffer for Fairfax Schools still contains a discount for the use of trailers. Maybe that’s why we have so many trailer posing as classrooms in Fairfax County. Until voters can clean house in Fairfax, especially at the Chairman level, there’s going to be more opposition to development in Fairfax County. Many of us would rather see the sprawl continue given the policies of our supervisors.

  12. Anonymous Avatar
    Anonymous

    Comrades:

    Am I reading PRAVDA? The government does not, necessarily, extend water, sewer, cable, etc. It only does this if it WANTS to. The private sector does all of this – but only if the government doesn’t buy the space.

    I am really perturbed that a blog published by intelligent folks is espousing that government infrastructure (other than roads) is to blame for this.

    Please, (insert Deity here), grant some wisdom!

  13. Toomanytaxes Avatar
    Toomanytaxes

    9:14 – At the risk of being too flip, I must ask: Whether you understand what level of public investment is necessary to support development? No one’s talking about extending wires and cables. Verizon, Cox, Comcast, Dominion Power all do a good job of that.

    But, at least in Fairfax County, the government is involved in the extension of roads, sewer, water, schools, libraries, parks, police, fire, and Metrorail. Have you ever read a government’s capital improvement plan? Where, pray tell, do the funds for this infrastructure come except for taxpayers and, in some instances, ratepayers? The commenters in this discussion do understand reality.

  14. Larry Gross Avatar
    Larry Gross

    WOW – I think we’ve hit the mother lode in terms of THE issue.

    My view:

    On one side we have folks who think it is the responsibility of government through taxes on property and gasoline to provide roads, water and sewer to whoever wants it wherever they wants it whenever they want it no matter the scope and scale required.

    On the other side, we have folks who think that each person should pay their pro-rata share according to their wants and useage.

    Notice I’ve carefully not used the term “need” because that implies that a “want” is legitimate because it is expressed as a “need”.

    I’ll admit from the get-go that local governments DO make winners and losers when they designate where growth is intended to occur and appropriate infrastructure provided to support it.

    I’d point out also that governments are NOT required to provide one with water/sewer merely because their drainfield is failing. There are provisos that include the cost of extending water/sewer AND geography/gravity.

    Further – where I live – if one wants water/sewer – one pays a substantial availability fee that goes into the captial facilities fund – to upgrade/replace the water/sewer infrastructure that was allocated to your use.

    Further, you pay monthly for your use and if your use is high you’ll pay much more than those that use less.

    Ditto with electricty, phone, cable… you name it – EXCEPT roads which most people view as “free” and we all are getting a reality check with the Virginia GA budget process and transportation “needs”.

    The truth of the matter is that roads cost BIG money – not only interstates, but primaries and secondary roads that primarily serve subdivisions and homes – which are also known as settlement patterns.

    The “theory” is that the gasoline tax collected from each user will recover that users “fair share” via gasoline tax according to how much gasoline they use.

    In my opinion – this is like charging someone 1/10th of the true cost of water/sewer and then attempting to recover the actual costs from all taxpayers.

    One penny increase in the gasoline tax in Va will generate about 80 million dollars I believe. Lemme see, aren’t we talking about a billion dollar shortfall? Hmm… so.. we’d need to raise the gasoline tax by 15 cents or so to generate the billion. But wait.. there’s MORE. Even if our elected were brave enough to commit Hari Kari.. the economic folks tell us that increasing gasoline cost results in less gasoline use….

    So.. choose your poison – higher gasoline taxes and/or toll roads/et al pick em…

    BUT the bottom line IS.. as this BLOG and countless news organizations are reporting that folks who Choose to commute longer distances to work… ARE going to pay a LOT more than they used to – AND it will affect their decisions about WHERE to live in terms of How Far and/or what mode of mobility they will use.

    So.. will higher fuel prices result in changes in settlement patterns? Will the growth rates currently being experienced by counties like Loudoun, Stafford, etc… start dropping as the price of commuting goes up?

    Lots of food for thought. 🙂

  15. Ray Hyde Avatar
    Ray Hyde

    I think Larry has pretty well covered the territory and I also think the final answer will be some of all of the above.

    His comment about charging 1/10th the cost of sewer and then spreading the difference among all taxpayers is exactly on target: this is exactly what we do with real estate tax. The rates are set such that the argument is made that residential housing does not pay its own way. This is true whether it is new development or not.

    We are doing the same with the gas tax. We have refused to set the tax where it needs to be for political reasons.

    In both cases we now have a cash shortfall that cries out for tax adjustments that match the changes in the rest of the economy, but we are ideologically opposed to “new taxes”.

    With respect to gas taxes, the current plan is to avoid that form of hari kiri by diverting the blame for the inevitable cost increases to some faceless foreign owned company. And notice that their contracts WILL allow for toll increases to match inflation and traffic carried. Those are the same increases we have refused to apply to the gas taxes.

    Surely there are locational costs that need to be addressed, and just as surely there is a general benefit of increased infrastructure to everybody. For example, I live on the fringe. If I have to call a fire truck, there is one station available. If the fringe later builds out beyond me, eventually those people will have to pay for a new fire station to serve them, but now there are two stations available to me if there is a multi-alarm fire. The down side is that all those people who built farther out will now be using “my” roads to travel past me to get to work.

    But, If I happen to be a fireman, I now have th opportunity to commute the other direction…….

    So this all comes doen to a matter of balance. No one answer is going to be sufficient and focusing on any one solution is counterproductive. Furthermore, balance is a dynamic condition: it is one that is always changing and so claiming that only one kind of settlement pattern “works” is nonsense.

    What we really need to consider is what kind of settlement pattern adapts to changes most easily over the long term. That settlement pattern will adjust to changes with the least pain and angst and expense.

    Any attempt to prevent change can only create more unstable conditions in the long run. Those attempts currently take many forms such as flood plain restrictions, historical districts, agricultural districts, conservation easements etc. etc.

    That is not to say that we don’t have important resources that deserve protection.

    So, if we agree that some benefit of infrastructure accrues to all; if we agree that there are local costs in addition to general costs; if we agree that we need to plan ahead for flexibility; if we agree that the urban footprint is much larger than the urban area; if we agree that urban and rural areas are mutually dependent, then we have to come to the conclusion that some level of investment in prospective development is important in both places.

    That investment is going to be over and above our apparent current needs, but it is the investment that prevents nonsense like Faifax administrators working in the Taj Mahal of administrative building while Fairfax children attend overcrowded schools supplemented with trailers.

    We can sit around and point fingers at everybody else as the ones that are causing “the problem”, but we have met the enemy and it is us. Or as Larry says, pick your poison.

    I am not convinced that there is such a thing as “more efficient locations”. If that was true taxes in arlington would be the lowest around. I’m also not convinced that the proposed location variable costs are anywhere near as high as some people claim, and furthermore to the extent that they are, it really represents an investment in future flexibility: our cost accounting is not taing into account the governments long view of things.

    I don’t see any way around it. We need more conservation and we need more development. Both of them are expensive, and taken together they are more expensive than either one singly.

    It is going to cost more money than we are now spending, and now we face the political reality of whose pockets it is coming out of. No single answer will work, and ideology is the enemy. We will need to exploit every good idea from traffic management, to better sewage treatment, and we will all have to pay more to implement the ideas. At the same time, every good idea that works will become a valuable business for someone.

    While we are going forward we need to examine what looks like good ideas, such as Metro West and Albemarle place. If they turn out to be not what we think then (proponents or opponents) should be prepared to admit we were wrong, and learn from our mistakes.

    One thing that I am sure will fail is the idea of a strategic stalemate.

  16. Ray Hyde Avatar
    Ray Hyde

    I have promoted the idea that some of our transportationproblems can be eased by creating new jobs in places other than the central areas. The following was taken wholesale from the Virginia Centrist blog and it is entirely out of it’s intended context. But I was particularly attracted to the notion of relocating certain functions from high cost urban locations.

    What was that about efficient locations again?

    a non-blogging state employee said…
    Understandably this whole debate in the primary was missing some important nuance.

    An idea termed rural outsourcing or farmsourcing looks at the significant technology infrastructure investments in Rural America since the 1990s (broadband, wireless, etc) and considers how some industries might utilize that technology to locate in the American back country just as easily as in Bangalore.

    There are a few recent examples in Virginia you could identify with this. Here are two:

    1) The location of high end IT jobs from Northrop Grumman and CGI-AMS in Russell County

    http://www.washingtonpost.com/wp-dyn/content/article/2006/01/01/AR2006010101034.html
    http://www.csmonitor.com/2006/0223/p02s01-usec.html

    2) VEDP’s new distributed services initiative encouraging in-state relocation of certain functions from high cost urban locations to rural ones

  17. Toomanytaxes Avatar
    Toomanytaxes

    More Jobs in More Places – a factoid and a bit of speculation. Nissan is moving its North American headquarters from California to near Nashville, TN because of California’s high taxes and high cost of living. Not exactly Russell County, but the principle is the same.

    Virginia’s year-to-year state spending increases are out-of-control and our Governor and state Senate seem to think that the biennial solution is higher taxes. But then, California is much different from Virginia, isn’t it?

    Second item. At the present time, a very high concentration of defense and homeland security contractors are located in NoVA. Do we have the equivalent of a single point of failure? Obviously, these contractors are not all located in one complex, but do the Departments of Defense and Homeland Security become concerned that a serious disruption in NoVA effectively creates a serious disruption in the government’s contractor base? If so, do they begin to put pressure on contractors to have a base of operations that is not in NoVA? Do some contractors with operations outside NoVA (in much less expensive areas) begin selling this as a strategic advantage? I’m just speculating.

  18. Ray Hyde Avatar
    Ray Hyde

    Some years ago the Vint Hill Base near Warrenton was closed down. the county has (ineffectively) tried to redevelop it ever since. The sole successful part of the operations were the capture of a big FAA facility and the development of a number of large single family homes.

    The county government has recently turned down the redevelopment authority’s request for another thousand homes.

    Maybe instead, they should put the fences back up with some new office buildings and create a private version of Fort Belvoir for homeland security and other government contractors.

  19. Ray Hyde Avatar
    Ray Hyde

    http://www.washingtonpost.com/wp-dyn/content/article/2006/05/19/AR2006051901718.html

    Hear is a link to a story about aging planned subdivisions. It seems that as existing infrastructure ages, it costs more to replace than planned. Accordingly the homeowners associations are assessing new and additional fees, but only on the new buyers in the development.

    According to the article….

    “Lake Ridge recently began charging new homeowners a one-time $500 fee, and Reston residents recently approved a $250 fee for people who buy new homes there.”

    “The older the communities get, the more cash they need,” said John Rhodes, executive vice president of Legum and Norman, a residential management company.

    and

    “Many older communities are low on funds to keep up and replace their pools, centers and trails. That’s because previous boards of directors tried to keep homeowner fees low or were prevented from increasing fees by the group’s bylaws”…. “It was well-intentioned but misguided,” …..

    Sound familiar? Isn’t that the same thing that is happening to the community at large?

    “Local real estate agents say they are not enthused about the fees…… “There are some significant questions about its enforceability and fairness…..”This is an existing community imposing this fee on new purchasers.”

    Does this sound familiar, too?

    “At the time Lake Ridge was developed, there were no proffers, the voluntary fees developers pay to support such county services as fire stations, libraries and schools. But Ken Thompson, an original developer of Lake Ridge, said the developers tried to be responsible, donating open space and land for schools and a library.

    Though the donations were generous, the open space — trees and trails and the picturesque Occoquan Reservoir — that still makes Lake Ridge desirable was more upkeep than people thought, resident Linda McCabe said.”

    And there you have it in a nutshell: conservation is expensive, existing development is expensive, taxing newcomers additional fees because existing residents have not paid enough is unfair, and part of the problem was caused by limiting increases in homeowner fees to 5% a year, which, over time, was not enough as it turns out.

    If you ever wanted an exact proxy, analogy, or a sample experiment to show you exactly what is happening in the larger society, this is it.

  20. Larry Gross Avatar
    Larry Gross

    re: more jobs in more places

    okay – you won’t find a person more concerned about growth and transportation and quality of life and ways to come up with a better way.. more efficient.. more equitable and less damaging to the environment.. but basic economic realities have to be reconciled.. accepted.. and acknowledged as .. well as realities.

    Companies locate where it is in their best interests. That’s where their enterprise can find adequate qualified labor at a competitive wage… and where they can operate successfully.. i.e. selling goods and/or services for a profit.

    There are literally thousands of places in the USA that do not have population pressures, growth, overloaded transportation systems, loss of habitat.. etc… just wander though places like Iowa, Kansas, Missouri, Arkansas, or even Southwest Va .. Kentucky, WVA, etc. They would just LOVE the kinds of “problems” that NoVA has.

    But we cannot and should not force companies to NOT locate in the DC area and instead suggest they go to these other places.. can you?

    Would you do that to a company any more than you would tell people that they cannot come here to take a job and find a place to live?

    ( as an aside.. you COULD tell the Feds to move to other places.. and the private contractors would follow).

    But.. in general, the phrase – “more jobs in more places” … is this really a practical thought for most companies and most urban areas that attract companies? I know I’m ignorant.. so if I’m not seeing this.. please feel free to further my education.

    re: publically funded infrastructure – is also NOT economic reality if there is not a close relationship between USE and COST. If we provide ANY service at the same equivalent low cost to everyone no matter what their useage then we WILL create a situation that is not sustainable. Sooner or later.. people will use more than is available.

    Try the publically-funded road solution with water/sewer or electricity.. and see what happens.

    The same thing that has happened with roads will happen with water/sewer/electric… we’ll bankrupt those services.

    People will wash their cars every day and leave the hoses running… or everyone will get a swimming pool and fill it up every time it gets a little dirty… folks will turn on every light and device that consumes electricity and leave them on all day long.. etc. Heck..people will buy plug-in electric cars and fuel them for peanuts…

    This is what has happened with roads… (in my view). People drive as often and as far as they want because there is virtually no disincentive to doing so.

    The actual costs of their driving are not allocated to them when they purchase fuel. We all basically pay a token amount of tax for roads and have no incentives to “save” like we must with other services that DO charge according to how much we use.

    I do think.. that once folks each have to pay a realistic cost for driving – defined as what it takes to provide enough/adequate funding for roads – then the issue about settlement patterns, growth, affordable housing, proffers, etc .. will begin to change because, in essence, these issues are dysfunctional responses to the fact that we do not charge what we should for transportation in the first place.

    $5 a gallon gasoline … or 25 cents a mile toll… I predict.. will have a profound impact on many of these issues.

  21. Ray Hyde Avatar
    Ray Hyde

    I agree that people should pay a realistic price for driving, and I fault the government for not stepping up to the plate and incrementally raising the gas tax every year since 1987. Had they done they we would not have to take the sudden jolt of pain that is coming. Over the years many people might have made other living choices as a result, and *some* of our sprawl and transportation problems might be different.

    I’d prefer fuel tax over tolls because we have the method already in place, it charges for weight and distance, and we could apply it to home heating as well as travel. It would not require expensive toll stations and equipment or cause the inevitable delays and it is universal as opposed to locational. If the tax was set at a realistic level, then it would not be a token payment.

    Companies locate where it is in there best interests. In DC the Fed provides a powerful self interest, and in HR it is the Navy, shipyards, etc. But when the central areas become to expensive or too vulnerable, then it is in companies interest to find other areas. Yet what we see here is a cry to keep them in confined spaces, which not only increases their costs, but creates enormous traffic problems.

    Businesses are moving out of the central area, and some of them even to other states, like the heating and cooling company owner I quoted. We are still constructing arterail travel systems that no longer meet our needs.

    Maybe we can’t force companies NOT to locate in an area. Yet we do exactly that to homeowners through large lot restrictions. Those restrictions penalize some owners and please others, but the net result is to forcibly create a denser labor market than might otherwise occur. This creates a windfall for land owners in the denser areas and a denser labor market for businesses: it is a subsidy for business.

    I view Metro as a huge subsidy for business. It has done nothing to alleviate congestion but it does allow a larger labor market to reach the central areas.

    While Jim Bacon and others view sprawl as being massively subsidised, I think the evidence shows just the opposite. We know the central areas are higher taxed and more expensive overall. It is difficult and expensive to attract and retain people who are willing to subject themselves to either the expense or the commute. So why does the situation persist?

    In part it doesn’t and we see businesses moving out. In part it is a matter of time. In part it is because we massively subsidize the ability of business to stay there via Metro and our continued emphasis on arterial roads.

    When DC and other cities ask for commuter taxes the reason is that they want to be able to subsidize the services that they provide to business, and at the workers expense. Charging locational costs that are higher than justified in outlying areas has the same effect.

    And you are right about the Feds. FBI is in West Virginia. Why is the Agriculture department downtown? And a lot of what contractors do can be done elsewhere as well.

    We can not and should not force companies to locate in other places, but we don’t have to subidise them to locate where they will cause problems either. I’d say allowing a company to locate where it will cause environmental and safey and economic problems through increased traffic congestion is at least as undesirable as allowing residential development in a flood plain. We don’t seem to have any problem in prohibiting the latter, why not the former?

    As for suggestions, I don’t see why not. We suggest that people live in TOD, what’s the difference? If we can define a *legitimate* safety and health issue then government has a responsibility to act.

    I come at it 180 degrees away from Jim Bacon, but I come to the same conclusion: we need to back off the building restrictions and let things happen. Here is where we differ. Having done that (relieving building restrictions), we need to do two things: charge fair and realistic locational costs and step up to whatever transportation needs result. Those transportatin needs will also have to be paid for by fair and realistic locational costs.

    My observation and prediction is that if that actually happens, then the costs associated with cities will limit their density. That is why we have air rights limitations in New York, for one extreme example.

    If I’m wrong and the kind of density develops that needs and can support subways etc. then fine. If I’m right, then we should stop whining and build a road network that works. Either way, the users should pay something near the full costs, but not all.

    I don’t think that is going to happen. What I think will happen is that a powerful few will continue to suck the life out of the countryside to benefit a few landowners as Jim Bacon has observed. They will preserve their water at our expense and after they foul the water they will ship the sludge and garbage back to the country.

    I think we need to think more carefully about who is incentivised for what, and what the results are.

  22. E M Risse Avatar
    E M Risse

    GAS SHOCK WRAP UP

    Peter’s story upon which Jim builds in this post does a fine job of laying out the basis for “Gas Shock” applying MainStream Media reporting and protocols. Jim’s responses to comments in this string are right on target.

    This string has covered some good ground but has gone about as far as it can go without a transformed perspective of some participants.

    Over the course of this and related strings at Bacons Rebellion Blog spanning the last few years those who started out just wanting to justify subdividing their land outside the Clear Edge for urban uses are still searching for ways to avoid reality – all be it in a less confrontational manor. They have not yet come to recognize many of the complexities and forces causing settlement pattern dysfunction.

    The same is true for some inside the Clear Edge who just wanted housing, jobs and traffic to go somewhere else.

    Larry Gross capped off the Gas Shock discussion with an observation that may be paraphrased / expanded as follows:

    In a large nation-state with a robust economy and far more land devoted to (and speculatively held for) urban land uses than there is any foreseeable need, enterprises, talented (Creative Class) citizens who have a choice and those seeking to better themselves (legally and illegally in the US of A) will all choose to move to large, fast growing New Urban Regions.

    This reality is based on the fact that these places are where there is opportunity to prosper and succeed. They move to the places where, under the current rules of the game, they believe their goals are most likely to be achieved.

    Forcing these enterprises and citizens to go to other places where those new jobs or that talent is “needed” smacks of a “planned economy” with a Five Year Plan and will fail as have all such plans.

    Most commentors at Bacons Rebellion seem close to admitting that within large, prosperous New Urban Regions the governance agencies have set up the wrong processes and incentives to guide location decisions and that citizens and organizations have made location decisions that are not in their own best interest.

    So what of Gas Shock? Gas price increases, added gas taxes and tolls and other user fees will cause changes but not Fundamental Changes.

    In a democracy with a market economy a Fundamental Change in settlement patters and a Fundamental Change in governance structure requires better informed citizens to make more intelligent decisions in the voting booth and in the market place. Thus the importance of PROPERTY DYNAMICS.

    An important first step is to get past a few simplistic bromides that float around dressed up as “solutions.”

    It is very clear that it is not enough to change the location of new economic activity by spreading jobs around. New job and other economic activity has to be focused in Balanced, Alpha Communities both inside the Clear Edge and in Balanced But Disaggregated Communities Outside the Clear Edge.

    In both cases the key is to fairly allocate all the location variable costs. This is not the five or six directly related to the conversion of nonurban (open) land to urban uses. Roadways, water, sever, schools, fire and safety are important but they are only 5 to 8 (depending on how they are classified and grouped) of the 40 +/- location dependent goods and services upon which the Cost Of Services Curve is based.

    It is also clear that setting lot size minimums does not “lower” the value of land. These controls raise the value of more land because it forces developers to convert more land to urban uses than they would otherwise do. Land that is poorly located for urban land uses is devalued by compact development because there is more land now held for (dreamed of selling for) urban uses than can possibly be used. The fear of lost value is the root cause of the whining about “crowding” by those who have “escaped” to large lots and want to be sure their value does not go down when reality sinks in and those who what to subdivide their land.

    The prior paragraph is prove by the market for quality urban space. Units in places with density at and above 10 persons per acre at the Community scale sell for more than those in lower density places and have for the past 50 years. In Village-scale station areas served by shared-vehicle systems, the value per square foot of residential and nonresidential uses far exceeds even the most lavish McMansion on a large lot or the most up scale “town center.”

    Any rational observer can come to understand exactly what will happen when the traditional municipal location and density requirements are removed. It is called the Greater Houston New Urban Region.

    For non-residential land uses (15 to 20 percent of the total) there are pods of employment / enterprise uses

    A high-rise core that is now acquiring a shared-vehicle system

    Refineries, docks, warehouses and low-value fabrication along the ship canal,

    Warehouses and high-value fabrication near the airports

    Agglomerations of service and office uses at “Freeway” interchanges.

    The remaining 80 to 85 percent of the urban land uses – residential and residential service uses are scattered across millions of acres.

    The residential uses are agglomerated at the dooryard, cluster and neighborhood scales (with a few villages-scale and community-scale agglomerations) in widely dispersed areas. True to the market reality noted above, those residential uses located in Community scale agglomeration above 10 persons per acre have far high values. But at the dooryard and cluster scale almost all live in components of settlement patterns that would fit in Alpha Communities except that they are scattered across the landscape.

    Oh yes, the traffic congestion and immobility are among the worst in the US of A.

    This is what happens if you remove the “traditional” settlement pattern “controls” but do not allocate all the location variable costs fairly.

    After getting past the non-solutions citizens must come to understand the “Five Critical Realities that Shape the Future” at db4.dev.baconsrebellion.com and understand how to start the process of implementing the Six Overarching Strategies in PART FOUR of The Shape of the Future.

    The first of the Six Overarching Strategies is to fairly allocate cost of location variable costs. There is no need for new controls or incentives, the market will take care of the evolution of functional human settlement patterns.

    EMR

  23. Jim Bacon Avatar
    Jim Bacon

    Ed, What I’d like to see — perhaps in a future full-length column — is a discussion of the 40 location-variable costs. What are they? And how might they be altered to be “fairly” allocated? I totally agree with you in the abstract. But the devil is the details. How is a concept like the “fair allocation of of location-variable costs” applied in real life?

  24. E M Risse Avatar
    E M Risse

    Jim:

    Interesting you should raise these questions.

    We have just completed a cycle of intense discussion on that very topic with a person well trained in the natural sciences.

    A scientist who held senior positions in government and the Smithsonian recently undertook to critically read every page of “The Shape of the Future.” He stumbled over the Cost of Service Curve when first encounter in Chapter 2 Box 3. He called it “Humbug.”

    After a series of exchanges he has now come to the conclusion that the Cost of Services Curve is a valid representation of the summation of location-variable costs.

    As suggested above, that conclusion is very important to the fair allocation of location-variable costs.

    I have just gone back over Chapter 24 which is devoted to the strategy of the rational allocation of location-variable costs. I think the answers you seek are there. After reading the chapter, if you have specific questions, I might recast some of the recent exchange into a column on the topic.

    You will also need to look at Chapter 2 Box 3 and Chapter 4 Box 5 and Box 6.

    Two threshold observations:

    If citizens understood that the location-variable services were not being fairly charged they would demand immediate change because the majority are subsidizing a minority. That is not a popular condition in a democracy.

    None of the “Cost of Services” studies carried out by governance agencies we have reviewed are worth the paper they are written on because they focus on just the services provided by municipal agencies (5 or 6 out of 40 +/-) and the costs are not allocated by organic component of settlement pattern.

    Finally, a Note on the quantity “40 +/-” : The work of graduate students upon which the Cost of Service Curve is based first started by listing the goods and services that contemporary citizens demand / expect. We came up with between 39 and 42 depending on how several (e.g. micro wave transmissions) were classified and combined. In Chapter 24 Box 3 we used “30 to 40” as the number of services. With the writing of Handbook we shifted to use of “40 +/- ” because the number changes and morphs as new technology comes on line.

    It is clear that every good and service has some location-variable cost component. We eliminated those where the costs of transport from source to user were generally factored into the cost. For instance food at the super market or at the farmers market includes, or should include, transport cost.

    So the Cost of Services is based on the goods and services that involve or result in specific expenditures that vary based on the location.

    Let me know if you have questions after reading Chapter 24.

    EMR

  25. Ray Hyde Avatar
    Ray Hyde

    I’ll agree that every service has some location variable cost component.

    However, we have been over this before, and most of the services you describe are commercial services. The forty plus services actually boil down to a handful, of which five account for almost all the cost. Schools, roads, fire, and police, garbage disposal. Everything else is minor, commercial or exists only in some locations, where it is charged as an extra, as in sewer and water service.

    I’m glad you brought up the subject of transport cost for food. Doesn’t that imply that every neighborhood should have it’s own food supply? Doesn’t that imply that we need more places surrounded by open spaces? Doesn’t that imply that everything else we move would have to be moved farther? Isn’t the cost of transport already included in food? And isn’t the cost of transport already so cheap that you can truck watermelons from Mississippi cheaper than you can grow them in Northern Virginia?

    Give me a break. You are a very convincin, if confused, fellow: you had me going for a while. But I’m afraid your scientists first thought was correct: Humbug.

  26. E M Risse Avatar
    E M Risse

    TO READERS OF THIS THREAD:

    As Jim Bacon has noted one needs to take everything the prior commentor says as his own opinion.

    The following is a good example:

    “However, we have been over this before, and most of the services you describe are commercial services. The forty plus services actually boil down to a handful, of which five account for almost all the cost. Schools, roads, fire, and police, garbage disposal. Everything else is minor, commercial or exists only in some locations, where it is charged as an extra, as in sewer and water service.”

    “We” have not been over this before unless the commentor has a mouse in his pocket.

    The prior paragraph is a gross misstatement of the content of the Cost of Service Curve and the only intent of this post is to avoid reality and support the subdivision of land in the Countryside for scattered urban land uses.

    EMR

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