Busting The “Drive Till You Qualify” Myth

[ In the turquoise areas housing and transportation costs are higher than 48% of the area median income ]

The Center for Neighborhood Technology’s new Affordability Index, which includes transportation costs, has already buzzed around the local bloggies, see here, here, and here, but I can’t help piling on. Not least because I enjoy it so much when free-market-worshipping sprawl-apologists (e.g. Joel Kotkin and David Brooks) get smacked down with a dose of data-based reality.

Briefly the theory goes like this: sprawl is just fine and dandy because it is the result of good people making rational decisions to maximize their happiness based on options presented to them by the infallible free market. So naturally, people choose to live in the far-flung burbs where housing is cheap. End of discussion.

But oops, as the CMT study shows, many of those who are driving to qualify are not behaving like perfectly rational economic units, because they don’t have an accurate perception of the costs of transportation. And this is the way real life usually is — so complex and messy and partially understood that we can’t possibly be the rational economic actors upon which free market theory rests. So no, sprawl is not destiny, but rather the result of ill-informed decision making.

And such decisions look all the more dubious in the light of the inevitable rise in gasoline prices. Future costs tend to not weigh as heavily in decision making as do immediate costs — that’s human nature. And another inherent flaw in the free-market.

The CMT doesn’t include qualitative measures, but my sense is that many people who opt to drive till they qualify are also not fully cognizant of one in particular: time spent driving. Let’s say moving out adds an hour a day to your commute. If your time is worth $30/hour, that adds up to $650 per month.

And let’s not forget all the external costs of sprawl that do not enter into people’s decisions. And the fact that government policy has encouraged and subsidized sprawling development patterns. And all the warped cultural biases that come into play (e.g. white flight).

Observing objectively, the inescabable conclusion is that sprawl is a superlative example of market failure and its negative impact. But don’t try telling that to the editorial board of the Wall Street Journal. They’ll keep publishing Joel Kotkin and anyone else who helps keep alive the God of the Free Market.