Adopting environmentalist tactics of poorly communicating risk in context to defend abstract libertarian principle is a bad idea. This week Steve's Junkscience Column for Fox News is part of the junk rather than exposing it. In a timeworn rearguard effort he complains that Corporate Average Fuel Economy standards are killing people. So if this chance is increased by 7.5% that means that CAFE standards would increase the chances of the average American dieing in a traffic fatality to 1in 92,500 annually. As father Guido Sarducci once said on Saturday Night Live: "I'm shakin' in my boots.

There is, admittedly, more truth to this line of reasoning than the idea that Alar was killing people, but in context CAFE standards are a non-issue with regard to automobile safety. At first blush it sound like I'm talking through my hat. Various studies cited by Steve suggest that a median of about 2500 traffic fatalities a year might be attributed to CAFE standards. With NHTSA statistics showing a total of 33,000 traffic deaths a year this appears to be more than an insignificant number, i.e. it represents about 7.5 percent of the total. But if one factors in transportation statistics regarding total vehicle miles (VMT) from the Center for Transportation Analysis at the Oakridge National Laboratory, the total number of deaths represents a statistical risk to a individual American of 1/100,000.

In a “request for proposal,” the city indicates that enrollments are increasing in areas outside the inner city (read “suburbs”). The city of Portland has large expanses of modern suburban areas and, indeed, nearly all growth in the city of Portland since 1980 (or for that matter since 1950) has been in these areas --- principally in areas of annexation. The core area, like virtually all urban cores except Los Angeles, has lost population.

Propping Up a Failing School District

The program would provide first home buyer grants and rental assistance to encourage residents to stay in the inner city sections of the Portland School District rather than moving to the suburbs or elsewhere. Right away, there is a problem, because Portland’s smart growth policies were to have strengthened the core and discouraged the continual shift to the suburbs. Inner city enrollments should be increasing relative to enrollments in the metropolitan area. Education mirrors the trends in population growth and employment growth, where suburban growth overwhelms core and city growth.

The city of Portland partially attributes declining inner city enrollments to insufficient education funding. Yet, this very same city has found the money to support urban renewal projects (such as the “Pearl District”) to the tune of $225 million in bonded indebtedness, 10 year tax forgiveness for new development near light rail stations, and “gift certificates” for developers in the form of development fee waivers in favored areas. Portland has the money to pay for what it values. Kids come after architecture.

Naively, the city’s misses what may be the most important factor --- that suburban systems provide better education than the Portland School District. This is not just a Portland phenomenon. Central city public school systems throughout the nation generally perform more poorly than average. The same deficiency, however, is not exhibited in the large parochial systems (principally Roman Catholic) in large cities such as Chicago and Philadelphia.

Another connection not made by the city is between smart growth and house cost increases. In the last 10 years, the median price house in the Portland area has risen 60 percent relative to median household incomes. This drives people away and keeps others from moving in.

Smart Growth’s Ultimate Externality: Destruction of Housing Affordability

Everyone knows that smart growth land rationing policies are the principal cause of escalating house prices, though the planners (and agencies like Portland’s Metro) are in denial. Where smart growth land rationing policies do not exist, housing prices have remained near the historic 3.0 Median Multiple (median house price divided by median household income). In Portland, the Median Multiple in 2006 was 5.0.

Paying Themselves by Moving to Atlanta

By comparison, in the high-income world’s fastest growing metropolitan area, Atlanta, the Median Multiple was 2.9 in 2006. This difference is the ultimate cost of smart growth --- now $250,000 per household buying the median priced house, including mortgage interest. The median income Portland household moving to Atlanta receives a reward of more than four years income, not to mention a larger lot and house. Overall, the median house in Atlanta is 15 percent larger than in Portland, while the average lot size is more than three times as large. Moreover, this is for the entire housing stock and does not consider the decline in house size and lot size in the Portland area that has been driven by smart growth policies in recent years.

Of course, there are also the incentives of the larger house and lot sizes and better education systems in Clark County and Columbia County --- outside the reach and control of Portland’s Metro.

The city of Portland simply does not have enough money to pay people to stay in the face of such lucrative incentives.

Voting with their Feet Against Smart Growth

Portland has a real problem in maintaining its population. Between 2000 and 2005, the city’s overall population growth has accounted for only 2.5 percent of the growth in the metropolitan area. Just released Bureau of the Census data indicates that a net 28,000 “domestic migrants” moved out of Multnomah County (which includes Portland) between 2000 and 2006. Domestic migrants are people who move within the United States. Multnomah County’s slow population growth results from an excess of births over deaths and immigration (international migration).

Indeed, people are voting with their feet against Portland, Multnomah County and the smart growth of the Portland region. Since 2000, 80 percent of the population growth in the Portland metropolitan area has been outside Portland’s famous (or infamous) urban growth boundary. Portland’s “smart growth” has been a boon to growth in Clark County, Washington and in the exurban counties of Columbia and Yamhill in Oregon.

The city of Portland, along with state and regional officials would do well to drop their ideology and look at reality. So long as their policies make the declining standard of living in Portland hideously more expensive, people will be attracted away to Clark County, Columbia County, Indianapolis and Atlanta. You can’t pay them to stay.

And, no, the sprawl (which apparently means any development of any sort anywhere), was not caused by the trains. Mumbai has expanded into one of the world’s largest urban areas because of the opportunities it provides for people moving from India’s countryside and villages. Much of Mumbai may look decrepit, even offensive to affluent first worlders, but Mumbai is better than where most of its residents came from. If it were not, the crowing on the trains would be outbound only.

See: Mumbai Affluent Archipelago in a Sea of Poverty (Rental Car Tour)

Recommendation: Maximum City: Bombay Lost and Found, by Suketu Mehta is unique examination of Mumbai in its many dimensions. There is no better introduction to this urban area. It is available through Amazon and other booksellers.

The government had pursued the amalgamation claiming that it would lower the costs of government. However, some analysts interpreted the amalgamation as a vendetta against then Socialist Mayor Barbara Hall of Toronto (she had embarrassed the government in leading a demonstration in front of Queen’s Park, the provincial legislative building). As was predicted at the time (by me and others), the savings have not occurred, but unlike Montreal, the amalgamation cannot be reversed.

While governments can force municipal amalgamations, they cannot afford them to be accepted in the long run by people who are allowed to do what they like. The latest census data shows that people are still voting against amalgamation in Toronto, now with their feet.

In the five year census period immediately preceding the amalgamation (1991-1996), the six municipalities since forced to amalgamate gained 110,000 residents, more than 30 percent of the growth in the Toronto census metropolitan area. In the first census period after the amalgamation, the megacity added 80 percent fewer people (22,000). Megacity’s share of population growth dropped to five percent. At the same time, the Toronto census metropolitan area grew by 430,000.

Now, for the first time, the megacity area contains less than one-half of the metropolitan area’s population. The decline will continue.

The Sun got it partly right in its March 23 editorial "Squeezed Out." Maryland's loss of housing affordability has driven people out of the state, as it is driving households out of other unaffordable states like California and New York, not to mention the counties of northern Virginia. And yes, it is too bad. However, the Sun's suggestion that there is plenty of room for more housing in Baltimore is hopeless. Generally, people would rather locate out of state to York, Sussex, Kent and Berkeley Counties. The sooner Maryland wakes up to this reality, the sooner it can adopt the more liberal land use policies that make housing affordable. Otherwise, the prospect is for things to get even worse.

Queensland has been the beneficiary of the New South Wales losses. During the 2000s, Queensland has gained 210,600 internal migrants, an annual average of 30,100. This nearly equals the strong 1990s in-migration, which averaged 31,000 annually.

Outside of Queensland, only Victoria has posted a gain in internal migration during the 2000s, at a modest 4,700. Western Australia lost 4,900 movers to other parts of Australia, though in the last year gained 3,100. Tasmania has lost 1,600 during the decade. More substantial losses have occurred in the Australian Capital Territory (8,800), the Northern Territory (11,800) and South Australia (19,000).

Data

The Demographia International Housing Affordability Survey reported earlier this year that housing prices relative to incomes (the Median Multiple) had escalated to more than double the historic norm in all major Australian markets.

The net effect is house price escalation so severe that in Perth, it now takes 11 years of additional pre-tax household income to pay for the median priced house than would have been the case if housing had remained as affordable relative to incomes as 10 years ago. In Sydney, the additional income required is more than eight years, in Adelaide seven years and more than six years in Adelaide and Melbourne.

It should come as no surprise that consumer spending is taking a hit. A household with six to 11 years less income will buy fewer cars, fewer television sets, and less of just about everything. Households simply are not able to spend money that they do not have (or cannot borrow). Taking years of income away to pay for overheated house prices can only hurt the ability can only hobble the economy in the long run, leading to less job creation and less home ownership. Given the wealth creating effects of home ownership, inordinately high housing prices are likely to expand poverty, not to mention the escalating rental prices that must inevitably follow out-of-control land prices.

The housing bubble that has developed in Australia is not to be found everywhere. In a number of US and Canadian markets housing remains affordable, with Median Multiples near or below the historic norm of 3.0. Today, housing prices relative to incomes are little different than a decade ago in these markets. This includes markets such as Atlanta, Dallas-Fort Worth, Houston and Austin, which have stronger demand than any major Australian market, demonstrating that the universally available low interest rates and exotic mortgage products are not the explanation.

The difference, of course, is land use policies. Virtually all of the overheated Australian markets (as well as the overheated markets in other surveyed nations) have development restrictions, in law or practice, which severely ration the amount of land available for new housing. The law of supply and demand makes it clear that rationing supply drives up the price of any desired good or service. And, state land rationing in Australia has driven the price of land up with a vengeance --- at a rate that exceeds any element of the Consumer Price Index. Not even Typhoon Larry could drive the price of fruit up as much as urban consolidation policies have driven up the price of land. Few if any government policies in history have inflicted such horrendous losses on future generations in so short a period of time.

The loss of housing affordability in is about much more than academic discussions of home ownership rates. Rather, it is about the future of the economy and the quality of life in Australia.

Yet the message of the article is not the continuing suburbanzation of Canada, which mirrors the continuing suburbanization of virtually everywhere that governments allow people to live where they like. Rather, the story imagines a rejection of the suburban life style by the very residents who have moved to the suburbs. The Globe and Mail's proof? A few anecdotes here and there that say more about the urban elite preoccupation with autophobia than trends as they are really occurring.

The article mentions a suburbanite who has managed to add 80 minutes to his daily commute by riding a bicycle to a rail station in Vancouver rather than using the car. The Globe apparently misses the connection between time, productivity and economic growth. What if everyone in Canada spent an additional 80 minutes each day traveling to work? Our bicycling hero spends a total of 3 hours daily traveling to and from work --- more than three times the average American commute. Surely Canada would have among the world’s highest gross domestic products per capita. China, which is trading its bikes in for cars could wave good-bye to Canada in not too many years.

Here is what the story should have said. Despite considerable efforts on the part of governments and planning officials, Canadians continue to choose the suburban lifestyle (Data).

In the Toronto area, nearly 95 percent of growth was outside the core Municipality of Metropolitan Toronto, which itself includes vast expanses of suburban territory forced in by the provincial government in a 1997 amalgamation.

In Montreal, 80 percent of the growth was outside the ville de Montreal, which also includes considerable suburban territory as the result of a Quebec government forced amalgamation, some of which was undone by popular referenda.

Vancouver is the central city growth champion. Vancouverites "rejected" the suburban dream by locating at a rate of 75 percent in the suburbs.

In Canada's other large metropolitan areas, the story is similar, though sometimes masked by large central municipalities that incorporate most suburban development.

Re: Berliner says ‘McMansion’ legislation is in the works (March 7)

Over-development is one of the predictable outcomes of the so-called “smart growth” (anti-suburban) land use policies that have been implemented in Montgomery County and the Washington area. Whether it is large areas that are made off-limits to new residents (such as the Montgomery County Agricultural Preserve), or the large-lot zoning sweeping Northern Virginia, the result is artificial land price escalation. Developable land becomes so valuable that over-development becomes attractive. The second and far more damaging impact of smart growth is the destruction of housing affordability. In the last decade, the house prices to income ratio (“Median Multiple”) has risen so much that the equivalent of five more years of median household income is needed to buy and finance the median priced house in Washington. Of course, the third impact is that people move to West Virginia and undertake long commutes or move to other areas. Where smart growth policies have been avoided, housing affordability remains at historic norms. For example, far faster growing Atlanta, Dallas-Fort Worth and Houston have housing prices less than one-half that of Washington relative to income. These higher demand markets have also had the same low interest rates that some wrongly claim have driven house prices up. It is time area public officials wake up to the damage they are inflicting on the future.

Sincerely,
Wendell Cox

Re: Co-operation essential to great Aussie dream (21 February)

ALP Housing Shadow Minister Tanya Plibersek notes that the scarcity of land in Sydney does not explain why costs are high in other parts of Australia. True enough. However, house costs are high elsewhere in Australia because similar land shortages exist elsewhere in Australia. This is documented in reports by the Urban Development Institute of Australia and the Residential Development Council. Costs are high in Perth, Brisbane, Adelaide and Melbourne because of planning induced land shortages in Perth, Brisbane, Adelaide and Melbourne. Land for development has escalated in cost more than any of the 90 elements of the Consumer Price Index and more than double that of petrol. Prices do not rise with such a vengeance where supply is permitted to respond to demand.

In turning their backs on the Great Australian Dream, state governments have driven the cost (including interest) of the median price house up by from six to 11 years of gross annual household income (median), and that in just 10 years. The mechanisms vary. In Sydney, there are direct and ideological urban consolidation plans, while in Perth, a less direct, yet just as destructive bureaucratic morass is the cause of the land shortage. There is simply no hope of restoring the Great Australian Dream without dealing squarely with the problem of government strangled land supply.

Wendell Cox
Co-author, Demographia International Housing Affordability Survey
Visiting Professor, Conservatoire National des Arts et Metiers, Paris

The first, a report by Griffith University and the Australian Alliance for Children and Youth raises concerns about the welfare of children living in the higher densities required by Australian urban consolidation policy. The paper is a case study, which notes a relationship between higher densities and disadvantage, a lack of exterior space for physical activity, social isolation and insufficient security at parks in high density neighborhoods.

The second, by Archicentre (the building advisory service of the Royal Australian Institute of Architects) raises concern that Australia’s destroyed housing affordability is leading to more substantially more stress that could lead to major “health and welfare blowouts” in future years.

Australia’s unprecedented loss of housing affordability is principally the result of state government urban consolidation policies. Urban consolidation policies have seriously restricted land on the fringe of urban areas for development and sought instead to force many more people to live in dense, inner city environments, especially high rise buildings. In some cases, such as Sydney, Adelaide and Melbourne, urban consolidation policies have been enshrined in detailed metropolitan strategies, while in other cases land for development has been severely rationed by bureaucratic processes rooted in urban consolidation ideology (Perth and Brisbane). This shortage has driven the price of land up substantially, while the construction costs of houses have remained constant relative to inflation.

Housing costs have risen so much relative to incomes in Australia that in all major urban areas it now takes at least five more years of gross household income (median) to pay for the median priced house than 10 years ago, including interest. In Perth, the figure is more than 11 years.

The 3rd Annual Demographia Housing Affordability Survey documents housing affordability in six international markets (the United States, Canada, Australia, New Zealand the United Kingdom and Ireland). It summarizes research pointing to land use policies as the cause of housing cost escalation relative to incomes. Some markets, in Canada and the United States, have retained housing affordability by not implementing smart growth or urban consolidation policies.