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.

18 Responses to “Busting The “Drive Till You Qualify” Myth”

  1. dorian gray

    Congrats! I’m so proud of you for understanding the bid-rent curve.

    http://www.rri.wvu.edu/WebBook/Giarratani/fig6-4.GIF

    It’s essentially a race between elevators and cars -with cars getting better efficiency per mile than elevators. The basic premise was correct before the car and now cars essentially rape the city (use its services etc.) but depart the area before they have to pay for the services (tax base). As congestion increases real estate in downtown locations increases (Manhattan, Covent Garden etc.)

    I always laugh when the clones in my building complain about traffic and stress but insult me for paying so much for my small bode downtown. How much is the stress worth to them I wonder.

  2. michael

    It’s not often that I, as an urban dweller, get out to the burbs, but yesterday a craigslist purchase brought me out to Woodinville. So lush, green, and bucolic…I could see how some may be willing to pay the extra cost of time and gasoline to return to their peaceful eden…even if they have precious little time to enjoy it. But yes, the burbs as the more affordable housing option is bunk.

  3. Matt the Engineer

    “If your time is worth $30/hour, that adds up to $650 per month.” Ah, but for a better demonstration you should keep going with that calculation.

    $650/month = $7,800/year = $234,000 in 30 years.

    Adding interest into that figure, you could have a house worth $468,000 more over the life of your 30-year loan if you worked an hour overtime instead of driving. (or just buy a smaller house and spend that extra time living life)

  4. Matt the Engineer

    (oops – the interest is backwards. You could buy a house worth $119,000 more over the life of your loan.)

  5. SeattleArchitect

    Very thoughtful and articulate post. While I may differ just a bit in believing in the idea and salvation of a free market, I also see the need for better priorities and options. There is no better way to save this planet than to decrease the distance between where people work and where they live, to increase the amount of housing and workplaces in the urban centers [where the infrastructure already exists] and to improve the quality of the live/work/play environment of our cities, so as to make it the more attractive option. Density is our only salvation, but there is good density and bad density…lets hope that we can figure out the good way of doing it before its too late.

  6. John of Humdinger

    There is no such thing as “A flaw in the free market”.
    To believe in the existence of same necessitates the belief in some sort of universal “best buys”.

    The free market is simply the opportunity to spend one’s money, or waste one’s money, as one sees fit.
    If the sheeple find that a home in the suburbs is not worth their money they’ll move back. Every money spending decision is a gamble based on hope for future happiness. Sometimes it works; sometimes it doesn’t. (Some folks enjoy the hour’s commute as time for themselves; few folks charge themselves 30 bucks an hour for every hour they are not on the work clock, unless they live only to work.)

  7. Dan Staley

    Not everyone wants to live in Wallingford or Wallingford densities, as I did when Dan’l, Michael and I enjoyed each other’s company together (well, Dan’l might not have, but never mind). I liked the proximity, but I hated – hay-ted – the noise.

    That is: many don’t like those densities for various reasons. Lots of folks like bigger yards. The GF has a nice biggish yard that I enjoy being out in – nice and quiet, lots of veggie room.

    I think we find in typical preference surveys – there are enough out there now to draw conclusions from – that most people like to have the walkable amenities and stuff close enough to walk to other than the piece of grass where the dog poops. Do most, though, like, say, New Urbanist densities? No. 1/3-1/2 do.

    Will that change when gas is 7.00 a gallon, and rents are bid up in properties close to work? Dunno.

    We’ve had 3 generations of folks now all growed up or used to suburban lot sizes. Won’t change overnight. Do I want it to change? Yes. Do I want a yard to garden in? Yes, but I’ll take a P-patch if it’s a close walk.

    Is everyone like me? No. Chris Nelson thinks that by 2050, a full 25% of demand for housing will be in large-lot single-fam.

  8. danb

    Humdinger John: I would argue that there is, in fact, and universal best buy. It’s one that betters quality of life for the buyer without harming others or compromising quality of life for future generations.

    It’s true that the ideal model of the free market is flawless. The problem is that in the real world all the assumed conditions for flawless free market operation don’t exist and never will.

    DS: Nowhere did I say that people shouldn’t be allowed to want a big lawn. What I am saying is that if people had a full understanding of the costs, and had to pay all of them, including the externalitiies, then far fewer would chose sprawl.

  9. Dan Staley

    And I’m saying that if we had a full understanding of the large fraction of the population that doesn’t mind (for whatever reason, such as the prestige Madison Ave has imparted on them for purchasing that car) spending an hour in their car, we’d offer a broad range of strategies to entice folks with families into denser neighborhoods. A good start is dumping Euclidean zoning. Not a good start is paying all externalities, as that would end global capitalism – I don’t want to be around for that fight. Peak oil will do that job; sensitive, knowledgeable, caring, other-regarding people won’t, as there’s not enough to create a critical mass to replace a system that depends upon willful or selective or imposed ignorance of full costs and externalities to work. I’m all for paying somewhere closer to full costs and avoiding costs, and I’m not glad these energy-seeking food shortages are making people hungry (as was expected), but I’m glad they are pointing out the fragility of our constructed and continued exploitative existence on this planet.

    Hmmm…maybe I’ll write these after I’m fully caffeinated.

  10. vanderleun

    “So no, sprawl is not destiny, but rather the result of ill-informed decision making.”

    Yes, if only people such as your informed self could rule the Earth what a bright world it would be!

    Note to wizard: People do not generally do time-benefit analysis on their lives, but prefer to live as they prefer to live. It’s not all money, is it?

  11. wizard

    Gosh vanderleun, thanks for the compliment. “wizard,” I like that. Cause after all, this blog is all about me trying to look smart.

    $30/hr was just a number to put it in perspective. If you happened to be a parent and you spent that hour a day giving your kids quality attention, it would probably be more like $1000/hr, if you could quantify all the potential benefits, which of course you can’t.

    No doubt many people feel that their long commute is a trade off that’s worth it. But I’ll say it again: fewer would feel that way if they were paying the full costs of their lifestyles. And to that I’ll add: I believe that American culture has glorified the suburban way of life to such a degree that many people do not have a realistic perception of other ways of living and the benefits they can offer.

  12. Dan Staley

    The Murrican culture has glorified individualism too*, which has helped to contribute to sprawl and many’s dislike of density. Folk, when surveyed, understand the benefits of other ways of living, as they desire walkable neighborhoods by a large margin. They desire neighborhoods with lots of amenities. They desire attractive streetscapes.

    They also desire to find a bank to take the mortgage close in if they are serious about acquiring these amenities, and if they have kids, they desire to find a decent school system.

    *Rugged individualists, marching in lockstep is the modern paradigm.

  13. john of humdinger

    DanB wrote: “I would argue that there is, in fact, and universal best buy. It’s one that betters quality of life for the buyer without harming others or compromising quality of life for future generations.”

    For the universal bestbuy to exist we must believe in a super big brother who defines the components of the best buy, such as “quality of life”. This has been done many times over the centuries. It wasn’t all that long ago that big brother told us to burn a few children every few months in order to keep the gods happy and thereby improve the quality of our lives. Today big brother tells us its OK to kill 4-month old unborn babies, but we are forbidden to kill 200-year old redwood trees. Throughout history the popular edicts of temporarily respected big brothers are seen to be ridiculous in retrospect.

    Do the sheeple make bad choices sometimes?
    ‘Depends on who is the judge and the jury.

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  16. Michael

    Actually, the “data-based dose of reality” is when you look at the map and see that the people WITHIN the City of Seattle with lower transpo costs are the ones who either:

    - Live where they work (Downtown/Belltown)
    - Live immediately adjacent to the most major bus corridors (Rainier Ave, Northgate, U District).

    Everyone else suffers from our extreme deficiency in mass transit – a city our size should be using shorter bus routes connecting to train/streetcar hubs…but there are no trains or streetcars.

    So to avoid spending hours each day traveling merely within the city limits, most of us drive and pay the necessary fees. And those people who DO choose to transfer two and three times and walk up to a half-mile to and from work spend more of their time commuting than many suburbanites. (But we all know the average bus rider’s time isn’t worth that much, right?)

    I just find it really amusing that this debate is going on in this city at this time. In 2075 or whenever our toy rail line actually starts serving neighborhoods, let’s talk about whether it’s worth it to live in the city. Right now it’s basically a wash.

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  18. Jeremy Jobst

    This is a good approach to what, for some, may be a controversial topic. Very well though out post. – I am an only child. I have one sister. – Woody Allen Born 1935

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