The new World Watch Living Planet Report provides strong evidence that the space required by urban areas is only a small part of what is required to support human habitation --- that the land required for agriculture, energy production and other factors is far greater --- 90 times greater. The World Watch data thus provides evidence that the urban form --- whether dense or sparse (“compact” or “sprawl”) --- is irrelevant with respect to sustainability. If the World Watch prescription is reliable, then strategies to combat “urban sprawl” would yield virtually no progress toward improving sustainability (even at the theoretical level).

The World Watch Report

(24 October 2006) One of the great pleasures of traveling in and through London is the number and variety of daily newspapers. I bought all four of the “qualities” today at Heathrow and found an article in The Times particularly interesting. World Watch is out with another “sky is falling” report, bringing hope to the “half empty” elites who depend upon apocalyptic tales. The Times gave the report a two page spread. Doubtless the panicked hand-wringing is to be found in a number of today’s newspapers around the world. Granted, I have not had been able to read the report yet, given that wireless internet is not yet available on Trans-Atlantic flights. But World Watch, in my view, has sometimes portrayed the future in a light that makes Malthus look like an optimist.

World Watch puts forward a figure for the amount of land required to support the residents of the world and particular countries. This includes land for living, commercial development, agriculture, energy production and other land required to support human habitation. World Watch claims that the average American is supported by approximately 23.5 acres.

Comprehending the World Watch Numbers

All of this will doubtless lead innumerates analysts to use the World Watch report as another tool in their battle against how people want to live --- with adequate space, a house and a car, giving further impetus to “anti-sprawl” efforts. However, the World Watch report would be wrongly interpreted as swipe at the demon “urban sprawl.” Indeed, its evidence provides a compelling case that, if there is a sustainability problem as World Watch suggests, limiting suburbanization would accomplish virtually nothing to solve the problem. Most of the land area World Watch considers necessary to support the average person is not the land that they live on.

Making America Hong Kong: the 1 Percent Solution

Accepting, for the moment, the World Watch data (admittedly, an act of great faith), it is useful to compare how much land would be required to support the average American with a United States urban form, compared to the most compact form in the world, that of Hong Kong. At average US urban densities, development occupies 0.27 acres per person, including all land for residences, commercial, industrial and government buildings, roads, railroads and airports and urban parks.

If Americans lived at the density of Hong Kong, the space required for their support under the World Watch formula would drop 0.25 acres. This would reduce the amount of land required to support each American by only 1.1 percent, or 1/90th. Thus, making cities more compact --- the anti-sprawl strategy --- is demonstrated by the World Watch report to be a marginal strategy, again assuming World Watch is right.

How Anti-Sprawl Policy Makes Economics Unsustainable

Of course, the bigger issue is that the affluent lifestyle Americans, Australians, Western Europeans, Canadians and Japanese have become accustomed to cannot be sustained where compact city policies are implemented. This is for the simple reason that anti-sprawl policies ration land inordinately increase the price of housing, destroying wealth creation, while intensifying traffic congestion and air pollution.

Posted by Wendell Cox at 06:53 AM | Permalink

As is the case with all new rail systems, the Delhi metro system opened to praise and hosannahs a few years back. To read the mass transit press, it would not be hard to imagine that the metro had transformed Delhi, especially by significantly reducing the Indian capital’s horrendous traffic congestion. The reality, however, is quite different. While the usual cheerleaders maintain their chorus, the stark reality raises serious concerns. The Metro is consuming world record subsidies while doing nothing to reduce Delhi’s world class traffic congestion.

The metro was to have carried more than 2 million passengers per day, but carries less than 500,000. Actually, this is not such a bad showing, compared to the Kolkata (Calcutta) metro, which carries only 10 percent of its projected ridership. But it is worse than the normal ridership over-estimation typical of public transport projects, as documented by Flyvbjerg, Bruzellius and Rothengatter in their book, Megaprojects and Risks.

But that is not the most significant difficulty. Dinesh Mohan of the Business Standard calculates the annual subsidy per passenger at 35,000 Rupees (Rs). This is more than the gross domestic product per capita of the nation, which is approximately Rs 28,500 (See: Dinesh Mohan, “Squandering public funds for a handful of people,” The Business Standard, 7 October 2006).*

As Mohan writes, "This certainly cannot be justified as a public expenditure in a cash-poor society. The obvious question that arises is, why does a small minority of Delhi’s population deserve such a huge national subsidy?"

Posted from Mumbai, 19 October 2007

*Original Link to Dinesh Mohan article in the Business Standard broken at 2007.03.26

Posted by Wendell Cox at 08:22 AM | Permalink

This week the United States celebrates its 300 millionth resident. Never in human history has one nation achieved such a high standard of living for so many people. Today, American average incomes are a third higher than that of the EU-15, the European Union before expansion to Eastern Europe.

All of this has been achieved as our people have pursued the American Dream of homeownership and personal mobility. Nonetheless, a powerful special interest lobby is doing all it can to make sure that the American Dream becomes the province of the few, not the many

But first, a summary of what has been accomplished. Since World War II, home ownership rates have increased 75 percent and now more than 90 percent of households have access to cars. Home ownership has made it possible to build up capital, through equity, that funds new business start ups and finances university for the kids.

The car has made it possible to work nearly anywhere in our now larger urban areas and still spend a minimum of time traveling to and from work. Despite the frequent publicity accorded traffic congestion, American urban areas are the least congested in the world. Even in the most congested urban area, Los Angeles, average work trip travel times are a quarter less than in Paris or London, despite the clear superiority of their mass transit systems. It is not surprising that virtually every first-world nation has followed a suburbanization model similar to that of the United States (though it is not obvious to tourists whose foreign visits tend to be limited to historic cores)

Moreover, the American Dream is spreading throughout the population. African-American and Hispanic home ownership rates are growing faster than the White-non-hispanic rate and there is the potential that they will continue to converge. A Swedish research institute found that average African-American incomes are as high as average Swedish incomes.

Once smog ridden urban areas have seen massive improvements in air quality --- so much so that mountains hidden for much of the year by pollution before can be seen much of the time in Los Angeles. American urban areas are among the cleanest in the world, and will continue to get cleaner as more efficient air pollution reduction technology plays a greater role.

In short, the modern American urban area is an “open city” in which individuals, communities and the nation have prospered as households have been permitted to live and work where and how they like.

Regrettably, many urban planners are threatened by this success --- out of a misguided fear for the future or perhaps a compelling urge for control. The result is imposition of authoritarian planning policies and practices (mislabeled “smart growth”) that would circumscribe the growth of urban areas into carefully confined spaces, so as not to occupy any more of the more than 97 percent of the nation’s land that is not in urban development.

But there is a bigger reality than a compulsion to hem in the growth of urban areas. The result is clear from places where authoritarian policies have been imposed with the greatest vigor. It all has to do with a simple economic concept --- that rationing raises prices. And so, in places like Portland (Oregon), San Francisco and San Diego, authoritarian planning policies have severely rationed land for development, driven the price of land through the roof and seriously retarded housing affordability. For example, in the San Francisco area, the cost of a median priced house has gone up so much that the average household would have to pay an additional $600,000 over a 30 year mortgage. Not even Hugo Chavez or OPEC can compete with this --- their price increases over the past five years would add little more than $10,000 to the average household’s budget over 30 years.

Authoritarian planning policies and practices are robbing many households, present and future of the potential for home ownership and joining the economic mainstream. Because of their disproportionately lower incomes, this burden will be born most by African-American and Hispanic households.

Fortunately, most of the nation has not opted to destroy home ownership through short sighted authoritarian planning. In places like Kansas City, Indianapolis, Atlanta, Dallas-Fort Worth, Houston, Cincinnati and many others, the open city prevails and housing remains affordable. Thus, for most, the American Dream remains alive and well. It is not surprising that recent census data shows a strong out-migration from metropolitan areas with authoritarian planning and high housing costs to metropolitan areas with lower prices. The American Dream is still alive, though not as widely available as before.

Census Bureau projections indicate that sometime around 2025, the nation will celebrate its 350 millionth resident. The nation will be far stronger and more socially cohesive if most of those new residents live in suburban houses they own and have the mobility only the car can provide to employment, shopping and other destinations they find make their lives more rewarding.

Posted by Wendell Cox at 01:17 AM | Permalink

A report by the Center for Housing Policy relies on data that is at odds with consumer expenditure data as reported by the US Department of Labor, Bureau of Labor Statistics. The report modeled transportation data that was readily available in consumer expenditure reports. The Center’s report generally puts the cost of transportation at more than double the figures reported by the Department of Labor. As a result, it would appear that the report, A Heavy Load is of dubious value.

The report does, however, rightly recommend measures that would make automobiles more readily available to lower income households.

Recently, the Center for Housing Policy issued a report on the costs of housing and transportation to American households in metropolitan areas (A Heavy Load: The Combined Housing and Transportation Burdens of Working Families. The report found, among other things, that transportation represents a larger share of household income in a number of metropolitan areas. Moreover, a thesis of the report seems to be that people who move farther away from their jobs to obtain less expensive housing end up spending most of the savings on additional transportation costs.

It is worthy of note that the figures developed by the Center for Housing Policy are considerably at odds with the Consumer Expenditure reports of the U.S. Department of Labor Bureau of Labor Statistics. For example, among the seven metropolitan areas that the Center singles out for detailed analysis, the share of household income committed to housing averages 28 percent, while the share committed to transportation amounts to 31 percent. Data from the 2004 Consumer Expenditure report indicates rather more moderate figures --- 22 percent for housing and 12 percent for transportation.

What is the difference? To start, the Center relied on 2000 Census information (1999 data) for consumer expenditures. It is fair to suggest, however, that the authoritative source for consumer expenditures is the Consumer Expenditures report and its data is five years more current. The Center used a modeling technique to estimate the transportation expenditures, which it notes was “peer reviewed.” This was a wholly unnecessary exercise, since 1999 transportation expenditure data was directly available from the Consumer Expenditure report for that year (not to mention every year from 2000 to 2004).

Moreover, the Center notes that lower income households spend a larger share of their incomes on housing and transportation. True enough. The Center estimates that households with incomes from $20,000 to $35,000 spend from 54 percent to 70 percent of their income on housing and transportation. The 2004 Consumer Expenditures report shows that households with incomes of $20,000 to $30,000 (the closest approximation to the Center’s $30,000 to $35,000 classification) have total household and transportation expenditures of 49 percent --- below the low range estimate in the Center’s report.

None of this is to dispute the fact that housing and transportation costs are a burden for lower income households. It is simply to point out that the data in A Heavy Load is at considerable odds with the Consumer Expenditure report and may raise more questions than it answers.

However, A Heavy Load makes a useful recommendation: “Policies to encourage car sharing or make car ownership more accessible and affordable (through subsidized loans or insurance, for example) could go a long way to reducing the transportation cost burdens of Working Families.” Amen to that. Research by the Brookings Institution and the Progressive Policy Institute has come to similar conclusions.

Regrettably, A Heavy Load slips into the usual hopeless rhetoric about improving mass transit for commutes to suburban areas. If mass transit could be made competitive with the automobile for employment locations outside downtown areas, then people would use it for such commutes. Nearly three years ago, we issued a challenge to the transit industry to propose an automobile competitive transit service design for an entire urban area. Not a a single serious reply has been received. There is good reason for the silence. Automobile competitive mass transit service cannot be provided for a price that can be afforded, except to downtown. Even the Center’s report finds average transit commutes to approach or even double average car travel times. Working households choose cars because they minimize their transportation burden, by providing far more time for household activities and leisure.

However, whatever the reality, the fact is that people often move farther away from their jobs to obtain better housing at a lower cost. They do so in the full knowledge that their commuting costs will be higher. In the longer run, many may change jobs and restore lower commuting costs by working closer to home, a choice made possible by the dispersal of employment locations. This factor is an important reason why American urban areas have such short average commute times by international standards.

Finally, A Heavy Load uses 1999 data that does not reflect the huge runup in housing prices that have occurred, principally in areas that have adopted authoritarian planning practices, such as the more draconian “smart growth” measures. Perhaps the greatest threat to the future expenditures of lower and middle income households is the escalating housing prices that have been generated by these opportunity destroying policies. For example, the average household buying the median priced house in 2004 in the San Francisco area will pay at least $600,000 more in mortgage payments and capital costs than if the house had been bought in 1999. This is a price not even Hugo Chavez or OPEC can match. Over the same 30 years, the average household can be expected to pay less than $11,000 on gasoline due to the gasoline price increases that occured over the same 1999-2004 period.

Posted by Wendell Cox at 06:35 AM | Permalink

YouTube is already displaying the scrupples of its new owner Google, i.e. "Censorship is fine if it suits our business interests; but, if not, its a matter of principle.".

This World Net Daily article is a bit sensational in the sense that the send up of Albright was not blocked but had an extra warning jump installed in front of it.

On the other hand, a few weeks ago Michelle Malkin was evicted from youtube.

So much for "net neutrality".

Posted by Brian Bishop at 07:47 AM | Permalink