Today’s Wall Street Journal (19 April 2007) carries a story on Mumbai’s suburban rail system and its overcrowding, which surely sets the world standard. The article provides further evidence that the term “sprawl” has no generally understood meaning, noting that the rail system has created “suburban sprawl.” Lest any potential tourist should be tempted to cancel a trip to Mumbai, out of fear that it will simply duplicate Atlanta (the world’s least dense large urban area), clarification is in order.

Only one urban area in the world sprawls less than Mumbai --- Hong Kong. Mumbai is the second highest density urban area among the more than 700 with more than 500,000 population (See Demographia World Urban Areas). Mumbai’s more than 65,000 per square mile or 25,000 plus per square kilometer density is 20 times that of Portland and seven times that of Paris. Mumbai, with all its poverty, filth and excitement represents the full flower of the “compact city.”

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.

Posted by Wendell Cox at 07:52 AM | Permalink

In 1998, the Ontario Provincial Harris Government (Conservative) forced six municipalities to amalgamate into the megacity of Toronto. This was despite referendum votes of 70 percent or more against amalgamation in each of the jurisdictions (Toronto, East York, York, North York, Etobikote and Scarborough).

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.

Posted by Wendell Cox at 03:08 PM | Permalink

On the Baltimore Sun editorial....

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.

Posted by Wendell Cox at 10:25 PM | Permalink

Faced with some of the most unaffordable housing in the world, New South Wales residents continue to move away. According to data just released by the Australian Bureau of Statistics, 172,500 New South Wales residents have moved to other parts of the nation during the 2000s. This is an annual average out-migration of 24,600, up strongly from the 14,900 annual loss rate of the 1990s (when housing prices were also escalating relative to incomes). Approximately 24,000 people moved away from New South Wales in 2006 to other parts of Australia. Because the Sydney area comprises the majority of the state’s population, it seems likely that it has suffered most of the out-migration. The 172,500 loss is larger than the population of the city of Liverpool, one of Sydney’s larger local government authorities.

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

Posted by Wendell Cox at 08:12 PM | Permalink

According to the Sydney Morning Herald a survey in the Fujitsu/JP Morgan Mortgage Industry Report indicated that one-quarter of households has had to reduce spending to pay home mortgages in the bloated property markets of Australia.

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.

Posted by Wendell Cox at 11:39 AM | Permalink

An article in the Globe and Mail, Canada's oldest national newspaper, trumpets the results of the just announced national census with: the 2006 census data say population growth is exploding around Toronto, Montreal, Vancouver, Ottawa-Gatineau, Calgary and Edmonton. For the first time the city of Toronto comprises less than half the population of its metropolitan population.

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.

Posted by Wendell Cox at 08:59 AM | Permalink

To the editor:
Washington Examiner

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

Posted by Wendell Cox at 06:36 PM | Permalink

Much has been written about the housing industry slowdown in the United States and the “housing bubble” evident in overvalued house prices. In fact, only part of the US market is experiencing overvalued housing prices, with the rest of the nation enjoying historic housing affordability ratios in what has become a two-speed housing market. National Association of Realtors data indicates substantial reductions in existing house sales year-to-year in a number of states, most of which are characterized by highly regulated land markets (principally so-called “smart growth” policies). These policies ration the land available for residential development and, not surprisingly, inflate land and housing prices. The costs are substantial, with many years of housing expense (including mortgage interest) being added to the budgets of households now purchasing homes. In the longer run, it seems likely the “bubble” will deflate or even “burst” in the highly regulated markets. This could occur in various ways. Until the necessary correction occurs, the highly regulated markets can be expected to continue to experience laggard population and economic growth.

Continue reading "Regulation breeds seizure in a two-speed US housing market" »

Posted by Wendell Cox at 03:01 AM | Permalink

To the Editor: Sydney Morning Herald

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

Posted by Wendell Cox at 01:36 AM | Permalink

Two recent reports from Australia raise concerns about the health impacts of smart growth (called urban consolidation in Australia).

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.

Posted by Wendell Cox at 10:43 AM | Permalink

One of the most juvenile claims of smart growth and urban consolidation advocates is that urbanization is reducing the supply of farm land and that this threatens food supplies.
In fact, however, the farm industry has become considerably more efficient in recent decades and is producing considerably more on considerably less land. The rate of agricultural land withdrawal has been many times that of the increase in urban land use.

United States: In the United States, the land taken out of agricultural production has been greater than that of the state of Texas, Oklahoma and Vermont since 1950 (see U.S. Agricultural Land: 1950-2000. This is after accounting for the increased urbanization that has taken place over the same period. If all of the net land taken out of agricultural production were to be urbanized at U.S. urban densities, it could accommodate all of the urban population of China and India.

Australia: From 1981 to 2005, more land has been taken out of agricultural production in Australia than is covered by the state of Victoria plus New Zealand. Yet agricultural production is up. All of the Chinese urban population could be housed in the withdrawn Australian agricultural land, at Australian urban densities Australia Agricultural Land: 1981-2005.

Posted by Wendell Cox at 08:12 AM | Permalink

For years what has passed as transportation planning in the Portland, Oregon area has been based on little more than ideology and virtually no reality. Portland has engaged in building light rail lines with the intent of attracting people out of cars, but its highway market share remains unchanged. Portland planners naively thought that people would rush to switch to better transit, not realizing that few are prepared to spend longer traveling or to use transit to go places that it does not go. Portland’s reward has been development of the worst traffic congestion of any primary urban area its size. Last year a report prepared for the planning agency indicated that firms were leaving and avoiding the Portland area due to its traffic congestion.

Now, the Federal Highway Administration has leveled strong criticism at Portland’s regional transportation plan (see: FHWA criticizes Portland planning). The agency commented:

“It is difficult to find the transportation focus in this opening chapter of (the) Regional Transportation Plan.” Instead, the plan focuses on bike trails, light rail, and expensive skyline transport.

FHWA further noted:

“The plan should acknowledge that automobiles are the preferred mode of transport by the citizens of Portland. . . . They vote with their cars every day."

This is a particularly unusual development, since government agencies are reluctant to criticize one another. This shows how desperate the situation has become.

Posted by Wendell Cox at 07:28 AM | Permalink

To the Editor:
The Age, Melbourne

Re: Australian dream just a recession away (17 February)

The Rory Robertson/Macquarie Bank criticism of the Demographia International Housing Affordability Survey and diagnosis of Australia’s severe housing affordability misses the mark. Macquarie uses US markets, astoundingly confusing local authority areas with metropolitan housing markets, while misclassifying low demand markets as high (examples San Francisco, Boston, New York) and higher demand markets as low (examples Indianapolis, Kansas City). Just ten years ago virtually all US markets were affordable or moderately unaffordable. Increasingly limited supply has caused the problem.

Markets with overly restrictive policies are unaffordable, whether high-demand (such as Brisbane and Perth) or low (Adelaide and Hobart). Markets without such policies remain affordable, both high and low demand. Macquarie labeled “dull” Atlanta, Dallas-Fort Worth and Houston have demand 250% to 350% that of “sexy” Sydney yet remain affordable. This is the reward for not materially constricting supply, while observing strong environmental standards. Macquarie apparently believes in a “law of demand,” rather than the “law of supply and demand.”

State policies in Australia have more than doubled house prices relative to incomes. It now takes years more of additional income to purchase and finance homes in Australia than just 10 years ago. No amount of rationalization will change that.

Wendell Cox
Co-author, Demographia International Housing Affordability Survey
Principal, Demographia
St. Louis, USA

Posted by Wendell Cox at 05:46 AM | Permalink

To the Editor:
The West Australian (Perth)

Re: Shared equity scheme for WA home buyers (12 February)

It is hard to imagine a more ineffective, even counter-productive approach to the housing affordability crisis than the state government’s “shared equity” program. The scheme meets the fundamental criteria for all too many public programs today --- rhetoric claiming “we care” and a program that indicates nothing of the sort. In the absence of substantial new supply of land for development, shared equity is likely to drive up demand, and prices even higher. The problem is land supply. Housing is unaffordable in Perth because the state has not allowed enough land to be developed to keep prices reasonable.

Perhaps most cynically, the program will miss most of the first home buyer market. Only 1,000 households a year would be assisted, less than 20 percent of normal first home buyer demand. The tragedy of these policies is that it now takes 10 years more in gross median income to pay for the median priced house (including interest) than just a decade ago. No serious or sustainable relief will be obtained without substantially increasing the land available for development.

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

Posted by Wendell Cox at 09:10 AM | Permalink

Letter to the Editor
The Australian

Re: Bidding Wars as Rental Markets Shift (10 February)

It is hard to imagine a more distorted header than “thousands of people are forced into home ownership” (by higher rental prices) as was used in this article. It is akin to complaining that a rise in the gross domestic product forces more people into a better quality of life.

Rising home ownership has been a principal driver of the unprecedented prosperity that Australia and other high-income countries have enjoyed since World War II. Only recently has the Great Australian Dream been severely compromised, even destroyed for some, by urban consolidation policies that have created land shortages and predictably exploded housing prices. Where such policies have not been adopted, for example in Canada and the fastest growing markets in the United States, the Median Multiple (median house price divided by median household income) is less than one-half that of Australia.

It is not surprising that this effect should ripple through to rental markets. State land use policies must be changed to restore the balance between household incomes and house prices. The renters “forced into home ownership,” like others, will find that home ownership in the new Australia is more the form than the reality. Today, seven more years more of gross income are required compared to ten years ago to pay for and finance a the median priced home. This cannot but help to be a significant drag on the economy.

Sincerely

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

+33 6 10 59 59 92
Conservatoire National des Arts et Metiers
Rue St. Martin
75003 Paris

Posted by Wendell Cox at 04:19 AM | Permalink

Fifty years of unbroken population loss have ended in the ville de Paris (city of Paris), as INSEE, the French national statistics agency, has estimated growth of 1.4 percent from 1999 to 2005. INSEE estimates the ville de Paris population at 2,154,000, up from 2,125,000 at the 1999 census. The ville de Paris still remains 750,000 (more than one-quarter) below its 1921 peak and nearly 700,000 below the 1954 population.

Nonetheless, suburban growth continued to dominate, capturing 94 percent of the additional population. The share of Paris residents living in the suburbs rose to 81.1 percent, with a population of 9,246,000, up from 8,826,000 in 1999. This continues a long trend of suburbanization. While the ville de Paris lost 696,000 residents from 1954 to 2005, the suburbs added a population of 4,779,000.

Within the ville de Paris, nearly three-quarters of the growth was in the outer arrondissements (13 to 20). Nonetheless, the inner “ancient” arrondissements (1-4) experienced their first growth since the census of 1911. The “ancient” arrondissements have lost approximately 75 percent of their population since 1861.

Data:
Ville de Paris & Suburban Population: 1999-2005
Ville de Paris & Suburban Population: 1999-2005
Ville de Paris Arrondissement Population: 1999-2005

Posted by Wendell Cox at 10:13 AM | Permalink

To the Editor:
Sydney Morning Herald

Re: Cheaper Homes Often Come at a High Price (29 January)

Professor Gurran’s column misses the point completely on housing affordability. The issue is not urban form; it is rather the future of Australia’s young and emerging households. Policies intended to make cities more pleasing to planners are taking years of additional income for households to buy smaller houses on smaller blocks, and for no reason. These higher mortgage costs will mean that less money will be spent in the economy on other goods and services. Urban consolidation’s legacy will be a less affluent Australia. Moreover, economic naiveté only clouds the issue. Developers and home builders are not free to charge more than the competitive price, because that is all the market will bear. Thus, if land prices were brought back to reality, the price of new houses would drop. However, since 1993, the price of land for residential development has risen at a higher rate than any element of the Consumer Price Index, the result of urban consolidation’s land rationing policies. The experience from Sydney to Perth, Portland and London tragically demonstrates that urban consolidation is incompatible with housing affordability.

Sincerely,
Wendell Cox
Co-Author, Demographia International Housing Affordability Survey
Visiting Professor, Conservatoire National des Arts et Metiers
Rue St. Martin
75003 Paris France

Posted by Wendell Cox at 09:10 AM | Permalink

It is an attractive story line --- that Americans are cutting back on their driving and increasingly traveling by transit (“US Motorists Cutting Back a Bit", January 25). But it is misleading nonetheless. Between 2004 and 2005, the latest full year for which there is data, per capita travel by car declined 10 miles in the United States. This infinitesimal decline was not captured by transit, which had a per capita increase of 0.4 miles --- less than the Federal Transit Administration considers to be walking distance to a train station. In fact, however, the small decline in driving was concentrated in rural areas. In urban areas, where transit operates, travel by car increased at more than double the rate of transit.

Wendell Cox
Former Member, Los Angeles County Transportation Commission
Visiting Professor, Conservatoire National des Arts et Metiers, Paris
Rue St. Martin
75003 Paris, France

25 January 2007

Posted by Wendell Cox at 10:14 AM | Permalink

In Europe and elsewhere, there is all sorts of talk about the presumed necessity of getting people out of their cars and on to public transport. Of course, the big secret is that, for all of its talk, European Union is not ready to do anything to force people out of cars --- and for good reason. It is run by officials who depend upon the votes of those whose cars they would take away.

However, also in Europe and elsewhere, there is this presumption that public transport is available as an alternative to automobile users. Of course, it isn’t unless they have a lot more time for travel, a lot more patience and a willingness to go only those few places that they can get in a reasonable period of time on public transport.

One fundamental problem with public transport is that people have to depend upon government for its provision. In western nations, public transport is heavily subsidized. This means, all things being equal, that public transport service is limited by the amount of money that government makes available (of course, there is an even greater limitation, since most public transport is provided by public monopolies that are themselves far heavier consumers of money than they are producers of service).

The problem that commuters face was well illustrated by a story out of London last week. The Times quoted the head of the railways at the Department for Transport, Mike Mitchell to the effect that commuters should expect to stand on trains for up to 30 minutes during peak periods. His advice? Travel during off peak periods. What a useful suggestion. Mitchell indicated that the government does not have enough money to provide seats for everyone. This is despite the fact that large increases in ridership are projected.

This came as rather unwelcome news to London area commuters, who pay up to £5,000 ($10,000) for an annual ticket. All of this shows how people who rely on government for services like transport are at its mercy. Despite all the promises about improving public transport, service cuts and fare increases are more the norm than improvements.

The great advantage to the automobile is that there is much less of a need to rely upon government. The car does not go on strike. Service is not cancelled on various routes. The frequency of service is not retarded. Not so with public transport. You pay, you stand. Is it any wonder that more than 85 percent of travel in Britain is by car?

Posted by Wendell Cox at 10:45 AM | Permalink

To the Editor
Seattle Times

Re: Seattle Times Column

Aaron Ostrom and Carla Okigwe could not be more wrong. Growth management is why housing affordability has been destroyed in Seattle. Rationing raises prices, whether gasoline or land for residential development. Seattle-like hyper inflation in housing can only be found in urban areas that have shortages of land for development, principally the result of “smart growth” policies. From Sydney to Portland, Auckland, London and Seattle, the story is the same. Housing affordability is incompatible with growth management as it is being practiced. Where liberal land regulations exist, housing remains affordable. For example, Dallas-Fort Worth is growing more quickly than Seattle and the median house price is approximately $150,000. If the entire nation were to see prices rise to Seattle levels, home ownership rates would descend to 20 percent, from the present nearly 70 percent. This is not just an economic problem, but a social one as well. The evidence has become so overwhelming that even the British, the originators of “sky is falling” urban planning are officially questioning it. It is not the “law of demand” that determines prices; it is the “law of supply and demand.”

Wendell Cox
Principal, Demographia
Co-Author, Demographia International Housing Affordability Survey
http://www.demographia.com/dhi-ix2005q3.pdf
Visiting Professor, Conservatoire National des Arts et Metiers, Paris

Posted by Wendell Cox at 01:05 PM | Permalink

December 28, 2006

To the Editor
Statesman-Journal
Salem, Oregon

Dear Editor

Victor Merced (December 26 Housing affordability keeps economic recovery at bay), is right to be concerned about declining housing affordability and home ownership in Oregon. The cause is Oregon’s land use policies, which were adopted without any serious consideration of the consequences. By law, Oregon communities ration land and rationing land raises land prices just as surely as rationing gasoline would. In many areas around the world, including Oregon, housing costs have been decoupled from incomes in an unprecedented manner due to such policies. On the other hand, where liberal land use policies are in place, housing affordability has been retained, even in areas growing much more quickly than Oregon. If, for example, the median house price in Portland was the same in relation to incomes as in Dallas-Fort Worth, it would cost approximately one-half as much. There are choices. One cannot stingily release land for development without it driving up land costs and denying young and minority households of home ownership and its opportunities for financial advancement. It is time for Oregon to have a long overdue debate about the very real choices between cities that please planners (and architects) and cities that provide opportunity for all.

Wendell Cox
Co-author, Demographia International Housing Affordability Survey
http://www.demographia.com/dhi-ix2005q3.pdf
Principal, Demographia (St. Louis metropolitan area)
Visiting Professor,
Conservatoire National des Arts et Metiers, Paris

Posted by Wendell Cox at 11:23 PM | Permalink

A Washington Post article indicates the disappointment that the higher densities being built in Fairfax County, Virginia (a Washington, DC suburb) have not resulted in less intense traffic congestion.

Surprise!

County officials blame developers for not keeping their bargains to reduce car use by residents in their buildings.

Continue reading "The Joke is on Fairfax County: University of Reality Needed" »

Posted by Wendell Cox at 08:28 AM | Permalink

The transport journal Access (University of California Transportation Center) added what appears to be a theology column in a recent issue. Floating Cars was an indictment of automobile ownership and bemoaned the fact that many cars were left behind in New Orleans, demonstrating an “excess” of automobiles and seems consistent with the anti-automobile religious dogma so rampant in urban and transport planning these days.

Continue reading "Articles of Faith: That Abomination the Automobile" »

Posted by Wendell Cox at 04:15 PM | Permalink

Letter to the Editor
The Chicago Tribune

Dear Editor:

The $1.25 million "Drive Less, Live More" program announced by Chicago-area transit agencies ("Campaign Pushes Car-Less Commute," December 15) says a lot about what is wrong with mass transit in the area.

It is complete nonsense to assume that if people just knew more about transit they wouldn’t drive as much. People are not as daft as city planners believe. They know what it costs to drive. They also know there are economic and social costs associated with switching to transit services, which are slower and often don’t even go where they need to go.

There is no question about the value of the area’s mass transit services to downtown Chicago, where more than half the workers commute by transit. Elsewhere though, most who use transit do so because their low income deprives them of cars.

State Transportation Secretary Tim Martin was quoted as saying "it’s all about expanding service." Indeed it is, and this publicity program does nothing in that regard. People will get out of their cars when transit is a viable option. If that should ever happen, they wont need the state or transit officials to tell them.

Sincerely,

Wendell Cox
Senior Fellow, Heartland Institute
Visiting Professor, Conservatoire National des Arts et Metiers

Posted by Wendell Cox at 02:45 PM | Permalink

Perhaps it is time for the foundations and academicians dedicated to linking automobile use and obesity to turn their attention to other spurious connections between land use and health. Let’s start with smoking.

A quick look at the latest United States Bureau of Labor Statistics (BLS) Consumer Expenditures report provides what may be evidence of a strong connection between smart growth and smoking.

In 2005, the BLS reports that expenditures on tobacco products were $344 per household in smart growth Portland and $308 in smart growth Denver. However the situation was much different in Atlanta, Dallas-Fort Worth and Houston, where more liberal land use policies prevail. In Atlanta, per household tobacco expenditures were just $142 annually, less than one-half the Portland figure. Dallas-Fort Worth and Houston were at $228 and $246 respectively, both well below Portland.

In the event that Portland does become more dense, as the planners have dictated (though there is scant evidence that it has happened yet), local concentrations of smoke will be higher, making the health risk from second hand smoke all the greater.

Of course, this issue will require much more study, but federal data certainly suggests that chain smoking and smart growth go together. At this point the case is at least as strong as the connection between automobiles and obesity --- something the anti-suburban lobby has tried to do while making sure that diet and the explosion in video game use by children are as truants absent from their econometric specifications.

References:
BLS Consumer Expenditures Page

Posted by Wendell Cox at 05:08 PM | Permalink

Elizabeth Farrelly of the Sydney Morning Herald may have revealed the ultimate urban consolidation (smart growth or anti-suburban) agenda in a December 13 column entitled The End of the Great Australian Dream Cannot Come Soon Enough. The Great Australian Dream is the “down under” equivalent of the American Dream of home ownership. Farrelly is clearly outside the mainstream of Australian thought on the issue of home ownership, though may well be expressing the views of many in the urban planning community.

Continue reading "Australia: Smart Growth Agenda is for Less Home Ownership" »

Posted by Wendell Cox at 03:17 PM | Permalink

For any who perceive that “urban sprawl” (a pejorative term for suburbanization) is an American phenomenon, the new European Environmental Agency report Urban Sprawl in Europe: The Ignored Challenge provides a radically new perspective. Yes, there is suburbanization in Europe, and plenty of it.

Regrettably, Urban Sprawl in Europe is far from an objective, comprehensive review of urban trends. It blindly repeats dogma and, most importantly, fails to consider the momentous advantages that the land use developments of the last one-half century have provided in Europe.

Continue reading "European Commission Sprawl Report Needs Rewrite" »

Posted by Wendell Cox at 06:31 PM | Permalink

A Baltimore Sun editorial talks about transit, transit elections and reducing traffic congestion. What the Sun misses is that transit and traffic congestion are completely different subjects. No level of transit investment, anywhere in the world, has materially reduced traffic congestion.

Continue reading "Transit Envy at the Baltimore Sun" »

Posted by Wendell Cox at 06:27 AM | Permalink

Maps

HIGHLIGHTS
Fully access controlled (freeway standard)
Principally toll roads
Planned length in 2020: 85,000 kilometers (53,000 miles)
Planned length in 2010: 65,000 kilometers (40,000 miles)
Completed by 2005: 41,000 kilometers (25,500 miles)
Does not include separately constructed urban freeways

COMPARISON TO THE UNITED STATES
Original US Interstate System: Approximately 65,000 kilometers (40,000 miles)
Total US Freeway Length: 2005: 90,000 kilometers (56,000 miles)

Posted by Wendell Cox at 08:07 PM | Permalink

Britain’s "smart growth" urban planning laws are taking their toll. In just 5 years, the share of younger households purchasing their own homes has fallen 15 percent.

Continue reading "England: Smart Growth Drives Down Home Ownership by Younger Households" »

Posted by Wendell Cox at 02:01 PM | Permalink

A cadre of Western urban planners has descended on China offering advice. Chinese officials are admonished “not to repeat our mistakes.” The mistakes, they explain are urban sprawl (a pejorative term for suburbanization) and automobile use. Chinese officials who visit the West must marvel as for the mistakes at the myopia of our planners after witnessing the high standard of living, which is something they would like to replicate. For good reason, they are largely ignoring the bankrupt advice they are receiving from the Western planners.

Continue reading "Hobbling the Competition: Export Western Planners to China?" »

Posted by Wendell Cox at 01:55 PM | Permalink

India's Tata Motors plans to market a $2,200 car that could make it possible for millions of households to obtain personal mobility and its economic advantages.

Continue reading "Hope for 3rd World Poor: The $2,200 Car" »

Posted by Wendell Cox at 12:17 PM | 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.

Continue reading "Delhi Metro Subsidies: More than GDP per Capita" »

Posted by Wendell Cox at 08:22 AM | Permalink

letters@economist.com

Of course the UK’s new suburbs have not attracted people out of cars and into public transport (“Field of Dreams”. July 29, 2006). For the vast majority of trips, whether in the suburbs of Northampton, Phoenix or Paris, public transport is at best a slower, poor substitute for travel by car. Often, it is not even available. Public transport is about the core, the only destination to which public transport can compete with the car. Urban travel has long since been much more dispersed than that. It is a reality the planners would best stop ignoring.

Wendell Cox

Continue reading "The Economist: Daft on Automobiles" »

Posted by Wendell Cox at 05:57 PM | Permalink

One of the most enduring urban planning mantras is coordinating land use and transportation. While no one can dispute the desirability of coordinating land use and transport, the current strategies do exactly the opposite. That is because urban planning has been captured by an anti-automobile dogma that has the equation backwards. The idea is to densify and locate as much as possible adjacent to existing transportation infrastructure. The result, of course, is to significantly increase transportation demand.

Continue reading "Coordinating Land Use and Transport: Getting it Wrong" »

Posted by Wendell Cox at 10:25 AM | Permalink

So says a press release by the New Zealand Libertarian Party...

Posted by Wendell Cox at 05:34 AM | Permalink

New Zealand’s virtually national embrace of so-called “smart growth” policies has driven home ownership sharply downward. A New Zealand Press Association report cites an A. C. Nielson Commercial Finance Monitor report that found home ownership declined six percentage points in a single year.

“Smart growth” policies have led to unprecedented housing cost escalation in New Zealand, as large swaths of land have been made off-limits to development. The Second Annual Demographia International Housing Affordability Survey shows the three largest urban areas, Auckland, Christchurch and Wellington to have median multiples (median house price divided by median household income) of over 5.0. These urban areas are now classified as “severely unaffordable.” Historical median multiples have been at 3.0 or less.

The smart growth-induced decline in home ownership is an ominous sign. Home equity is a principal source of middle-income wealth creation. As the share of home owners declines, it can be expected that economic growth will suffer.

Posted by Wendell Cox at 06:49 AM | Permalink

In a Winnipeg Free Press commentary today, I argue that the city of Winnipeg’s slow development approval processes have the potential to do as much damage to housing affordability as radical smart growth policies. Our Demographia Second Annual International Housing Affordability Survey had ranked Winnipeg as one of the most affordable housing markets out of 100 in six nations in 2005. The bottlenecks now occurring at Winnipeg city hall could, if not corrected, destroy housing affordability just as surely as the anti-suburban policies that have been adopted in places like Vancouver, BC, Sydney, Australia and Portland, Oregon.

Posted by Wendell Cox at 10:26 AM | Permalink

An article in today’s People’s Daily,, the official newspapers of China, expresses concern about housing cost increases that can occur from foreign speculation. The following letter to the editor has been sent.

To the People’s Daily:

China is right to be concerned about speculation in real estate. Home ownership has spurred widespread prosperity in western nations, allowing middle-income people to build up substantial equity. This has occurred because of generally liberal land markets. Housing construction has been permitted on inexpensive suburban land. Some markets, such as Portland, Oregon, Sydney and elsewhere, have significant restrictions on new housing that have driven prices up.

A liberal development market is the best defense against speculation, foreign or domestic. Speculation is driven by scarcity and there is no scarcity of land for urban development in China (or in Portland or Sydney). Continued development of the housing market is just as important in China as it has been in the West.

Continue reading "China: Best Defense Against Speculation is the Market" »

Posted by Wendell Cox at 09:47 AM | Permalink

The St. Louis Post-Dispatch (July 19, 2006) carried an advertisement by Missourians for Smart Growth endorsing Joe Brazil, a candidate for the Missouri Senate. An examination of the website indicates that the organization equates “smart growth” with opposing eminent domain, which is laudable. Moreover, it is encouraging that Missourians for Smart Growth does not appear to endorse so-called smart growth strategies (such as urban growth boundaries) that have destroyed housing affordability in many urban areas of the United States, the United Kingdom, Australia and New Zealand and have virtually stolen the future from many younger households who will be relegated to renting for the rest of their lives. Nor is there any reference to the anti-mobility strategies that would stop roadway construction, seek to heard people onto mass transit services that don’t go where they need to go and drive business expansion to other urban areas. If our reading is correct, this is smart growth worth supporting.

Posted by Wendell Cox at 10:09 AM | Permalink

It’s time to stop pretending about transit. That is the message of the new Statistics Canada data that shows the average transit commuter spends three hours more time weekly traveling between home and work than the average automobile driver or rider. The complete story is outlined in my National Post oped Travel Times Prove Transit a Non-Starter. The National Post is Canada’s second largest national newspaper.

Posted by Wendell Cox at 05:40 AM | Permalink

I highly recommend Randal O’Toole’s Plague of the Planners which appeared the Canada’s largest national newspaper, The Globe and Mail on June 26, 2005.

Continue reading "Smart Growth is No Growth 3: Planner’s Plague" »

Posted by Wendell Cox at 07:34 PM | Permalink

It is probably too much to expect The Economist to make sense in assessing suburbanization, which it and those inclined toward fashionable urban planning dogma call “urban sprawl.” In an article on page 53 of the 8-14 July issue (“Growing Pains”), the magazine characterizes Vancouver as having had “relative success in containing sprawl.”

Continue reading "Vancouver: Containing Opportunity, Not Sprawl" »

Posted by Wendell Cox at 05:46 PM | Permalink

There is still more evidence of the failure of Portland’s anti-suburban policies. According to the 2005 downtown census of the Portland Business Alliance (the regional chamber of commerce), 4,000 downtown jobs have been lost since 2001. At the same time, the balance of the metropolitan area has gained nearly 24,000 new jobs.

Continue reading "Smart Growth is No Growth 2: Portland CBD Employment Down" »

Posted by Wendell Cox at 12:19 AM | Permalink

Portland’s urban growth boundary seems to be doing what its critics claim --- keeping out growth. This is indicated by the latest US Census domestic migration data.

Continue reading "Smart Growth is No-Growth 1: Portland's Urban Growth Boundary" »

Posted by Wendell Cox at 02:44 PM | Permalink

Proposals to create dedicated taxes to support Washington’s Metro and bus service are both ill advised and unnecessary. It is likely that such a tax would simply increase the demand for future taxes, while providing the national capital area with little, if any new service. Worst of all, Congressman Tom Davis (R-VA) has introduced a bill to give $1.5 billion in federal taxes if local officials approve the same amount in additional funding (for a total of $3 billion). Taxpayers from Miami to Nome would be justified in throwing a Potomac Tea Party in protest against this taxation without representation.

Continue reading "Unnecessary Dedicated Tax for Washington Metro" »

Posted by Wendell Cox at 08:47 PM | Permalink

Chicken Little Makes Policy: "Global warming" has become the latest weapon of the anti-automobile crowd. This may be best illustrated in Montreal, where public officials and the local media object to virtually every road improvement and suburban development on the basis of greenhouse gas emissions (GHG). Never mind that Environment Canada data shows automobile GHG to be so small that if all Canadians gave up their cars and began walking tomorrow, the nation would still fall far short of meeting its Kyoto agreements. (See Housing and Transportation in Montreal – How suburbanization is improving the region's competitiveness .)

Continue reading "Replacing Transit with 5 Light Bulbs" »

Posted by Wendell Cox at 10:19 PM | Permalink

Rhetoric versus Reality: The mind-numbing drum beat goes on as advocates of transit funding use even the 50th anniversary of the interstate system. In a Jun2 28 USA Today article (Note 1), representatives of the Sierra Club and the Surface Transportation Policy Project (STPP) extol the virtues of transit and talk of the “resurgence of light rail” in places like Denver, Salt Lake City, Dallas and Houston. It is well to keep this discussion in context.

Continue reading "Transit’s Impossible Dream" »

Posted by Wendell Cox at 07:11 AM | Permalink

Selling a White Elephant: According to a story in the The Las Vegas Sun, the Las Vegas Monorail continues its financial slide. The system, financed by tax-exempt bonds downgraded to junk bond status by Wall Street, was to carry more than 53,000 riders daily in its first year of operation, according to “investment grade” ridership projections. Into its second year of operation, daily ridership is at 20,100, which is near the midpoint of the range I projected in a 2000 report (Las Vegas Monorail Report). According to The Sun, both ridership and revenue are dropping.

Continue reading "Junk Bond Las Vegas Monorail Nears the Brink" »

Posted by Wendell Cox at 10:23 AM | Permalink

High Speed Rail Proposal A high-speed rail system has been proposed for California, which would serve San Diego, Los Angeles, Sacramento, the San Joaquin Valley and the San Francisco area. Planners place the cost at $37 billion and claim that the alternatives would cost more. History suggests that projects such as this virtually never achieve their objectives and experience exorbitant cost escalation. Taxpayers beware!

Continue reading "California High Speed Rail: Taxpayers Beware!" »

Posted by Wendell Cox at 06:20 PM | Permalink

America’s interstate highway system is celebrating its 50th anniversary. It is hard to imagine an infrastructure project that has provided greater economic and social returns. The interstate system has been instrumental in the widespread affluence that has occurred since it was established in 1956. At the same time, the interstate highways system has saved hundreds of thousands of lives and millions of injuries.

Continue reading "The Interstate Highway System: At the 50th Anniversary" »

Posted by Wendell Cox at 10:09 PM | Permalink

The Brookings Institution has just released a study showing a decline in middle income families and neighborhoods in US metropolitan areas between 1970 and 2000. Reading the press clippings and the report, it would be easy to get the impression that there is a disappearing middle class in US metropolitan areas. Things are not so simple.

Continue reading "Brookings Institution on Middle Incomes: Unrepresentative and Unnecessarily Negative" »

Posted by Wendell Cox at 12:39 PM | Permalink

A study published by the Montreal Economic Institute notes the potential for improved competitiveness for the Montreal metropolitan area Housing and Transportation in Montreal – How suburbanization is improving the region’s competitiveness (also available in French: Transport et logement à Montréal – Comment le développement de la banlieue rend la métropole plus compétitive .

Continue reading "Toronto's Land Use & Transport Policies Make Montreal More Competitive" »

Posted by Wendell Cox at 09:13 AM | Permalink

An op-ed New Urbanism=New Feudalism in Canada’s National Post decries adoption of what it calls Toronto’s “new fuedalism” urban policy, which proponents call “new urbanism” or “smart growth.” Peter Shawn Taylor notes that the program “is a deliberate strategy to curb suburban growth and force more people into downtown high-rise apartments -- thus frustrating the hopes and dreams of many young potential homebuyers across Southern Ontario.” He also notes that the policies will lead to “greater income stratification,” an inevitable outcome of a land rationing system that forces up the price of housing in relation to incomes. The plan would impose densities double that of the ville de Paris according to Taylor. the National Post is Canada's second largest national newspaper. The previous day the paper featured an op-ed by Wendell Cox How Toronto's Policies Improve Montreal's Competitiveness outlining the potential opportunities that the Toronto program provides to Montreal, which has far less restrictive land use and transportation policies

Posted by Wendell Cox at 08:44 AM | Permalink

Claims of transit ridership increases greater than autos rely on
"apples to oranges" comparisons calculated from an unrepresentative
base year.

Calls to "Dump the Pump" and use transit to avoid higher gas
prices are baseless rhetoric. The reality is transit is not available
for most urban trips and cannot be made available at a price society
can afford.

The Public Purpose #89

Posted by Wendell Cox at 10:09 AM | Permalink

Researchers at Flinders University in Australia are coming to a not surprising conclusion that children who grow up with bigger back yards (as is typical of the suburbs) are more healthy. However, as reasonable a conclusion as this seems, it stands opposed to a well funded campaign by university researchers in the United States and Canada to prove virtually the opposite.

Continue reading "The Suburbs Make Us Thin" »

Posted by Wendell Cox at 07:56 AM | Permalink

In recent years, the ville de Paris (central city of Paris) has attempted to reduce automobile use and increase mass transit use by converting general purpose traffic lanes to bus-only lanes. According to Rémy Prud’homme, Pierre Kopp, Juan Pablo Bocarejo of the University of Paris, the cost to the economy is an economic loss of approximately $1 billion per year (€834 million) and an intensification of automobile produced air pollution.

Continue reading "Paris mass transit priority: $1B loss & more pollution" »

Posted by Wendell Cox at 05:17 AM | Permalink

http://www.smh.com.au/news/national/citys-east-north-home-to-biggest-water-guzzlers/2006/03/31/1143441342300.html

Shattering more myths....

Posted by Wendell Cox at 12:19 PM | Permalink

The Ventura County Star is running an op-ed by Heartland Senior Fellow and blog contributor, Wendell Cox, discussing urban sprawl and mass transit.

Posted by Michael Van Winkle at 10:12 AM | Permalink

Faced with some of the highest unemployment rates in the nation in recent years, one of the nation's worst housing affordablity trends and with nearly all Portland area inward domestic migration locating outside the urban growth boundary (particularly in the neighboring state of Washington), Oregon will undertake a review of its land use policies.

Continue reading "Oregon Land Use Due for Review" »