At 2:04 PM on 25 January under the post “Rail to Dulles is Dead: Give it a Paupers Burial” Groveton said:
“Jim:
“I guess you believe that the ends justify the means. The end is a more efficient pattern of human settlement. The means is to allocate some direct costs back to the people who cause those costs to be incurred while spreading other direct costs to everybody on a per capita or means tested per capita basis.
“This has nothing to do with fairness or equity. It is a mechanism for you to impose your worldview on others. Your worldview (or ends) is to force high density development on “core” NoVA. Your means is to gerrymander direct costs into location-specific and other. You vary the definition of location specific costs until (you think) it proves your point. This is an outcome based (vs. a fairness based) definition. You are willing to throw fairness aside in order to get to your desired outcome. I am not willing to do this.
“You make the following statement, “That logic does not prevail now — the system is rife with massive cross-subsidies — and as a consequence taxpayers living in location-efficient communities are subsidizing those who live in location-inefficient communities.”
“You have never demonstrated that point. A subsidy occurs when a group consumes more of something than they pay for with the balance being paid by others. You have a long litany of “proof points” where one style of development costs more than another style of development. However, you never seem to look at the other side of the coin – the taxes paid by one location vs. another. A subsidy can only exist when one location is paying too little in taxes to cover their costs. The only accurate test for a subsidy must be both an examination of costs and and examination of taxes paid. You give the cost side great effort. Yet you seem to ignore the (much easier to calculate) taxes paid side of the equation. Why?
“You also take the accountant’s view of costs vs. the economists view of costs. Accountants only count costs that are directly incurred. The economist counts costs that are directly incurred and then adds the opportunity costs as well. An accountant might think that a conservation easement which blocks economic development costs nothing since there are no checks being written. An economist might think that same easement costs quite a bit since there is (potentially) a large opportunity cost. Your accountant’s view allows you to excuse the opportunity costs of decisions.
“There are more flaws in the logic of your agruments but I have to get back to work. I am incurring an opportunity cost by not working. I’ll continue my critique when I have more time (and the opportunity costs are lower).”
Groveton:
While you addressed this comment to Jim Bacon, EMR will take a crack at responding to your comment since Jim’s position relies on nearly three decades of working with EMR and on EMR’s experience and research. EMR’s my notes are in italics. Since this post went through a word processor, spelling and punctuation from the original post above has morphed.
“I guess you believe that the ends justify the means. The end is a more efficient pattern of human settlement. The means is to allocate some direct costs back to the people who cause those costs to be incurred while spreading other direct costs to everybody on a per capita or means tested per capita basis.
“This has nothing to do with fairness or equity. It is a mechanism for you to impose your world view on others.”
One view of “fairness and equity” would be that in a democracy with a market economy each citizen, Household, Agency, Enterprise and Institution pays their fair share of the costs, unless there is a transparent, open reallocation of the cost by democratic processes. There are ethical, moral and practical reasons for “subsidies” (e.g. assisting those who have been systematically deprived in the past, those with special disabilities and needs, etc.) Those factors can be reflected in the transparent, open cost reallocation.
“Your world view (or ends) is to force …
No one is “forcing” anyone to do anything. If you want to pay the total cost of your actions, then do what you please.
… high density development on “Core” NoVA.”
It is important to note that this last phrase indicates that you agree with a central reality that in other contexts you seem to discount: More intense settlement patterns are more efficient. That is especially true with the rising cost of overcoming spacial dysfunction.
“Your means is to gerrymander direct costs into location-specific and other.”
On what do you base the charge of “gerrymandering?” Please be specific.
“You vary the definition of location specific costs until (you think) it proves your point.”
EMR has read Jim Bacon’s material for nearly three decades and has not seen any indication of this. Specifically, how is “the definition of location specific costs” (location variable costs) varied?
“This is an outcome based (vs. a fairness based) definition.”
As noted above, a fair allocation of cost is in fact “fair” by definition.
“You are willing to throw fairness aside in order to get to your desired outcome.”
This does not follow. Do you have a specific example?
“I am not willing to do this.”
Neither is EMR and suspect Jim Bacon is not either.
“You make the following statement, ‘That logic does not prevail now — the system is rife with massive cross-subsidies — and as a consequence taxpayers living in location-efficient communities are subsidizing those who live in location-inefficient communities.’
This is a fair and accurate statement. It could be more clear if “taxpayers” was replaced by “citizens” for reasons noted below. EMR believes Jim Bacons used “taxpayers” to mean “all citizens” or “all Households” in a specific component because “everyone pays taxes” not because the inequity is rooted in the level of taxes that citizens pay. Note that Jim appropriately uses the word “communities” with a small “c.” See GLOSSARY
“You have never demonstrated that point.”
Perhaps Jim has not but EMR has. Based on 25 years of experience in actually building the components of human settlement pattern, EMR derived five “Natural Laws of Human Settlement” and four of the five (The Cost of Services Curve, The 10X Rule, The 10-Person Rule and The 87 ½ Percent Rule) taken together support Jim’s statement. He does not cite these laws every time he notes the cost allocation inequities and neither does EMR. See Natural Laws in GLOSSARY.
You do not have to believe EMR. Do the numbers yourself. Those who would like to profit from shifting costs to others scoff at these Rules but no one has yet to demonstrate that they are not an accurate refection of the agglomeration of human settlement patterns over the past six decades.
This is critically important because those who are uncomfortable with the implications of the positions the Jim and EMR take, immediately leap to illogical, emotional and pseudo-scientific irrelevancies without ever addressing the core principles upon which these arguments are based.
“A subsidy occurs when a group consumes more of something than they pay for with the balance being paid by others.”
That is a fair statement.
“You have a long litany of “proof points” where one style of development costs more than another style of development. However, you never seem to look at the other side of the coin – the taxes paid by one location vs. another.”
Here is where use of the word “taxpayer” becomes a source of confusion. Taxes are a red herring in these discussions because “taxes” (especially municipal taxes on property) only cover a few of the 40 +/- important location variable goods and services. State and federal taxes cover a few more and with some notable exceptions such as the federal and state gas tax they are flat rate taxes. Your federal tax bill does not have a line item for the military cost of keeping oil costs low since 1973.
Regulated utility rates are not generally considered “taxes” and neither are special fees added to utility bills specifically intended to “level the playing field for those with ‘locational disadvantages’” – check your telephone bill.
A good way to come to grips with the impact of gross magnitude of location variable cost mis-allocations is to review the electric utility rates per kilowatt hour charged by Household in the northwest quadrant of Fairfax County. The best way to get a full understanding is to go through the proofs of the Five Natural Laws.
“A subsidy can only exist when one location is paying too little in taxes to cover their costs.”
Again “tax” is not the issue. It turns out those who are benefiting from the overall location cost mis-allocation subsidies are frequently benefiting from a tax subsidy as well but that is another story.
Because scattered urban land uses frequently cannot benefit from some “urban” services paid for through municipal (especially property) taxes it is assumed the scattered location urban land use is being “overtaxed” for services. That is one of those illogical, emotional and pseudo-scientific irrelevancies we note above.
“The only accurate test for a subsidy must be both an examination of costs and examination of taxes paid.”
See above on taxes.
“You give the cost side great effort. Yet you seem to ignore the (much easier to calculate) taxes paid side of the equation. Why?”
Why? Because you assume the use of the word “taxpayer” meant the only issue was “taxes.” It is not.
Before going on to your next point it is important to understand that in the Washington-Baltimore New Urban Region, including the National Capital Subregion (and in every major New Urban Region in the US of A) there is far more land already devoted to urban land uses than can be efficiently used to support the projected population for the next 50 years.
You have already noted above that rational patterns and densities of land use are more efficient. An excess of land devoted to urban land uses and a finite demand means that every decision to develop more land deprives citizens, Agencies, Enterprises and Institutions of the “opportunity” to make existing settlement patterns more efficient and functional.
Given the rising cost of energy to overcome spacial dysfunction this is a huge “opportunity cost” that is not yet on your screen.
“You also take the accountant’s view of costs vs. the economists view of costs. Accountants only count costs that are directly incurred. The economist counts costs that are directly incurred and then adds the opportunity costs as well. An accountant might think that a conservation easement which blocks economic development costs nothing since there are no checks being written. An economist might think that same easement costs quite a bit since there is (potentially) a large opportunity cost.”
This is a bit demeaning because Jim has demonstrated a broad, not narrow, view of the world. Condescending tone aside, when you get all the costs, including the opportunity cost and benefits to the scattered development proponent on the table, Jim’s original statement is right on.
“Here is the rub. There are lost “opportunity costs” but there are also “avoidance costs” things that would cost a lot if they were allowed to happen that are never billed.”
This is a lot easier to calculate with goods and services, it is not as easy with settlement patterns but when all is said and done and all the costs are fairly allocated, Jim is right.
“Fair allocation” takes in all these costs and benefits and says, if you want to pay, go for it. EMR says if someone is willing to pay the total cost and it is still not in the best interest of society as determined by democratic processes then there should be compensation paid.
That would almost never happen because most of that “loss of value” is “loss” from an inflated, speculative valuation based on failure to understand the first of the five Natural Laws: A= PiR2.
“Your accountant’s view allows you to excuse the opportunity costs of decisions.”
See above
“There are more flaws in the logic of your arguments but I have to get back to work. I am incurring an opportunity cost by not working. I’ll continue my critique when I have more time (and the opportunity costs are lower).”
Groveton, you make a lot of very good observations and have some solid ideas about governance change but critiquing the core tenets of the evolution of functional and sustainable settlement pattern is not a “while I eat my lunch” sort of effort.
Keep up the good work. Abandon the rest, no one can do it all.
EMR
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