Critiquing the “Twenty Percent” Argument

(Cross-posted from www.planetizen.com)

I just received a email newsletter raising the decades-old argument that public transit gets too much federal support because transit gets 20 percent of federal funding for surface transportation, but its share of trips and transportation mileage is far lower.

One obvious retort to this argument is environmental: highway spending, by encouraging automobile travel to car-dependent places, increases vehicle miles traveled (VMT), thus increasing pollution—not just greenhouse gas pollution, but also more heavily regulated types of pollution such as carbon monoxide and particulate matter. To the extent that highway spending increases such social harms, one dollar of spending may be one dollar too much, let alone the tens of billions of dollars currently devoted to roads.

In addition, highway spending can create other negative side effects: for example, where jobs track new highways but public transit does not, a “spatial mismatch” exists between the pre-highway population and jobs; population was located in more urban areas, but the highway has shifted jobs into outer suburbs and exurbs. To the extent people react to this spatial mismatch by buying cars and driving more, they have suffered additional costs caused by government action. To the extent people too poor to buy cars cannot reach work, they have suffered an even more severe cost: the loss of job opportunities.

Furthermore, the “20 percent” argument overlooks both the impact of past spending and the existence of current non-transportation policies that effectively subsidize highways and sprawl.

In the first half of the 20th century, government at all levels spent liberally on highway, but streetcars (the leading mode of public transit in most of the United States) were a private industry, which meant that government’s job was to tax and regulate it. So in many places, roads got not only the money devoted to roads, but also the implicit subsidy that government created by taxing and regulating the competition. And over the course of the 20th century, transit received far less than 20 percent of government transportation spending. Continue reading

When Nuisance Law Is A Nuisance

(cross-posted from planetizen.com)

In the recent case of Loughead v. Buckhead Investment Partners, a group of Houston, Texas, homeowners filed a common-law nuisance action to prevent a developer from building an apartment building in their neighborhood; the plaintiffs asserted (among other claims) that the apartments caused increased traffic—a claim that would be true of any new housing. Under the law of nuisance, a landowner may recover damages whenever another person uses their land in a manner that causes substantial, unreasonable harm to other landowners. A jury awarded the plaintiffs damages in December 2013, and the verdict will be appealed.

The landowners sued for nuisance because Houston has no zoning code and the city could therefore not legally exclude the apartments—but at common law, something permitted by zoning can still be an actionable nuisance. So if the Loughead action is upheld on appeal, landowners all over the country may become more willing to file nuisance actions to keep out multifamily housing (or for that matter, any other allegedly undesirable land use).

It seems to me that states should prohibit nuisance claims against new multifamily housing (either through state legislation or through judicial decisionmaking), for three reasons.

First, the public policy in favor of affordable rental housing dictates against such actions. Throughout the United States, there is a rental housing shortage. Between 2000 and 2013, median household income has increased by 25.4 percent, while rent has increased by 52.8 percent. The explosion in rental costs has not been limited to gentrifying, traditionally high-cost cities such as San Francisco and New York. For example, in Hattiesburg, Mississippi, rents increased from 20 percent of household income in 1979 to 35.2 percent in 2013. The explosion in rents is in large part the result of increased demand for rental property; tighter credit standards and stagnant wages have kept would-be homeowners from buying houses and forced them to rent instead. The supply of multifamily housing has increased, but not fast enough to keep up with increased demand: the national rental vacancy rate (8.3 percent) is at its lowest point since 2000. Continue reading

In Defense of Airbnb

(cross-posted from cnu.org, with some modifications)

The public benefits of Airbnb (a website allowing people to rent out rooms in their houses and apartments) seem fairly obvious to me. Visitors and new movers can pay less for their lodging by renting a room in someone’s apartment than by renting a hotel room, thus enabling longer trips, thus enabling city economies to benefit from more tourism. So it might appear that Airbnb might make housing more affordable, at least for visitors and movers.

But the hotel lobby and a variety of other opponents have sought to shut down Airbnb, especially in high-cost cities like New York and San Francisco where it competes most effectively with hotels.

For example, Sen. Dianne Feinstein (whose is in the hotel business)* has written an op-ed arguing that Airbnb allows landlords to “vacate their units and rent them out to hotel users, further increasing the cost of living.”

In other words, Airnbnb opponents see lodging as a zero-sum game: what benefits visitors must harm existing renters. By this logic, govenrment should just outlaw hotels, since every hotel unit is a potential apartment.

More seriously, the zero-sum argument assumes that every room rented to a visitor would otherwise be rented to a roommate. But the two “products” are not reasonably interchangeable; roommates involve advantages (such as familiarity and a regular rent check every month) and disadvantages (such as a 365-day relationship) that differ from those of Airbnb “temporary roommates.”**

Moreover, the supply of Airbnb rooms is actually pretty limited; for example, I just searched for Airbnb rooms in San Francisco renting for under $100 (and thus cheaper than most private hotels) and found a grand total of 486 rooms (not counting entire apartments, which compete more with ordinary landlords than with hotels). When I searched for rooms cheaper than the cheapest hotel on hotels.com, I found only 74 rentals- hardly enough to affect housing prices.  In less expensive cities, Airbnb is even less popular and thus even less likely to affect housing supply; for example, in Houston, I found only 139 rentals for less than $100. Continue reading

Car Dependent by Design

Click for larger image

by Andrew Price

I am writing a series of blog posts on my website about zoning, starting with my previous blog post on the different types of zoning systems. In this post, I will be talking about how single-use Euclidean zoning is distorting market demand, and how many places are automobile dependent by design. If you do not know me by now, I am ‘traditional urbanist’ – I advocate for pleasant fine-grained, human-scaled, organic urbanism. Anything that goes against this is, in my mind, a very bad idea. I will also present one possible alternative approach to Euclidean zoning that our towns and cities can easily transition over to.

What we asked for

I will be referencing the zoning system in Conway, Arkansas as an example, not because I am picking on you Conway, but because I live here and it is much easier to reference a place where I have lived.

You could argue that we live in a free market country. That all of our decisions are based on what people want – that Conway is sprawled because the people want the city to be sprawled, and that Conway is automobile dependent because people want to drive.

That is a bunch of baloney. Continue reading