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Is 'The Old Economy of Car Dependence' Over?
David Goldberg, 14 Nov 08

Sydney%2C%20Sprawl.jpg
Sydney sprawl stretching farther than the eye can see


When the financial meltdown has cooled, lenders regain their intestinal fortitude and home-building fires up again, will most of the new housing follow the late 20th century pattern and pop up in car-dependent exurbs? Or will cities and their suburbs start filling in around newly-built public transit systems and take the form of walkable, less car-dependent neighborhoods?

The Australian government, apparently, is betting on the former. But new research from one of that country’s leading institutions pegs it as a losing proposition. Car-dependent development on the urban fringe requires taxpayers to spend astronomical sums on spread-out infrastructure, even as it exacts a toll on the air, land and planetary climate.

All in all, the costs are double those of more walkable neighborhoods closer to jobs and services, according to Curtin University's Professor Peter Newman. As stated in this article from The Sydney Morning Herald:

For every 1000 housing blocks, the Government could save $85 million on power, water, sewerage, schools and hospital services if it built close to central business districts rather than on the city's fringe, [Professor Newman] said, and as much as $250 million in transport costs could be saved over 50 years.
"It is actually an $85 million subsidy to developers on the fringe," Professor Newman said.
In fact, Newman goes so far as to conclude that, given the rising worries over oil dependence, environmental and pocket-book issues:
"The old economy of car dependence is over; with rising oil prices and climate change, people cannot afford to live in outer suburbs and drive to work."

In truth, the phenomenon of sending people ever farther into the countryside to find houses that they (barely) qualified to purchase played no small role in the current global financial crisis. The epicenter of the U.S. foreclosure crisis can be found on the metro fringes. The buyers who stretched and took on variable-rate or interest-only mortgages, along with punishing commutes, to get into houses on the edge found themselves caught in a double bind.

As gas prices and commute costs rose, their “cheap” houses became ever more costly, even as mortgage payments adjusted along with rising interest rates. But when they went to sell, they found the bottom had dropped out of that market, thanks not only to higher gas prices, but also to demographic and cultural changes that were leading more households to look for homes in more convenient locations.

Up to now, we have been too focused on managing the immediate fall-out to focus on the root causes of the twin financial and energy crises. But as governments around the world consider huge outlays to build the infrastructure that can create jobs now and lay the groundwork for the future economy, they would do well to absorb Newman’s research and heed his words of caution.

David Goldberg is communications director of the Transportation for America campaign, and of Smart Growth America. A veteran urban affairs journalist, he was a Loeb fellow at Harvard University in 2002-2003.

Image credit: Flickr/BunZip

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Comments

As a New York City resident, the benefits of living in a densely populated metropolitan area well served by public transportation are obvious to me every day. I hope the research cited above helps to shift public opinion in favor of walkable urban development.


Posted by: David Schatsky on 14 Nov 08

If there can be said to be a silver lining to any economic crisis, it could be that it allows us to slow down and reflect for a moment on where we are heading. If we set the course wisely, the rebound could push us forward building and planning a truly livable system of cities and countryside.

I like the optimism of this post ... it's pretty contagious.


Posted by: Daniel Nairn on 14 Nov 08

We are doing research in the school of architecture and landscape architecture to devise designs which allow for walkable cities for the sake of people and our environment. It is easy to get support when gas prices are up to $4.00 a gallon, but now that the price is back down (I paid $1.85 today) I see that people have their big trucks and SUV's back on the road. The tide is turning in our favor, but it is a big ocean.


Posted by: Rhonda Fields on 15 Nov 08

Totally agree.
Also live in New York City, but grew up somewhere else, so I have lived in both worlds.

I have always been annoyed at how many people say that, given the choice, people would choose the auto-centric exurban lifestyle.

No!
The only reason people choose to live that way is because the government is paying for it.
I think if people had to pay the true cost for massive interstate highways and their utilities that deliver water and electricity to their distant homes, this wouldn't be such a problem.


Posted by: dequeued on 15 Nov 08

I generally find the World Changing articles to be very useful and insightful, but I must admit that this one leaves me asking for more evidence to support the claims made.

In particular, I have seen no evidence that supports the statement that foreclosures are centered outside of city cores (although this seems believable) or that falling home prices can be attributed to gas prices and changing demographic and cultural preferences. All evidence I have seen points to changes in the lending standards used by banks as the primary cause of the housing crisis.

(In particular, lending institutions started assuming home prices would always increase when determining whether or not someone could handle a loan despite the fact that it was interest rates (then pretty much bottomed out) that had been driving the price increases. Thus, institutions were lending to unqualified buyers.)

While I do agree that living in the suburbs has been made artificially attractive due to what amounts to government subsidies, I cannot believe that the housing crisis was largely influenced by people's desire to live in the city without further evidence.


Posted by: Erika on 15 Nov 08

Sadly, too few people realize the age of car dependence is over.

Most people still have their heads in the sand, and won't see the light until they've suffered a string of disasters.

That's just human nature.


Posted by: John O. Andersen on 15 Nov 08

It is well to identify the problem, but how will we get to the point were we can relocate those millions of commuters from the far suburbs to the transit hubs? In my own situation I live 22 miles from my office. There are no buses that go where I need to go when I need to go there. I am not in danger of defaulting on my mortgage mainly because I moved far enough out of town to be able to afford a modest home. I congratulate those that had the foresight to live in town, but don't denigrate those of us that are just trying to get by day to day.


Posted by: Gary on 16 Nov 08

Parsons Brinckerhoff (PB) commissioned this research to encourage debate and discussion about how to plan more sustainable urban environments.

The research supports the case for creating urban places (either in cities or regional centres) where people like to gather for work, rest and play. Professor Newman talks about such places as necessary for the knowledge economies of the future.

PB's PlaceMaking team is already busy at work creating such places.

In regards to evidence, you can download the research report at www.pb.com.au under Insights and Ideas > Insights.


Posted by: Elaine on 17 Nov 08

Makes sense - as it always has. But the article misses out on the political clout of big business, particularly auto-makers, infrastructure developers, real estate speculators, and steel and cement and finance corporations. For them, "sense" has much more to do with quick mega-bucks. Any evidence that the meltdown is going to challenge and change that clout?


Posted by: dunu on 19 Nov 08

The post ran an article a few months back (with a map) showing post-gas-price-spike housing prices were falling at a rate directly proportional to a property's distance from the nearest major urban core. This held true for a dozen major cities they looked at - except for Detroit, for obvious reasons. Even now with gas prices back down, the damage has been done and the trend continues. You can draw your own conclusions about what this means for future land-use patterns.

Oil price spikes have always matched up with economic meltdowns. Since the gas prices were caused by demand exceeding supply, and since petrol supplies are in irrevesible decline, this cycle will soon be repeated, except each time the ceiling is lower before another crisis in triggered. You simply can not operate a banking system based on exponential debt and perpetual growth when energy supplies are in an irreversible decline. There is no bailout for that. The only way to fix the debt situation is to destroy the (fiat) currency with massive inflation. Print lots of money. Pay people to build an infrastructure we can use and maintain with much more limited resources.


Posted by: Lee on 24 Nov 08

I grew up in NYC and although moving around the city was cheap and easy due to the public transportation infrastructure, but the city is polluted. I would have to say that living in suburban New Jersey is much healthier. I adore my large back yard, the 20 some odd trees that surround my house and the fresh air all day long; i also grow my own veggies and herbs and actually have enough room in my kitchen to continue to grow them during the winter. I have a compost bin and I hardly produce any garbage, because anything from the occasional newspaper to all my veggie and fruit peels goes into the bin.
Someone above mentioned that the government is paying for the sewage and water etc... weather it's highway or sewage lines or the metro transit, tax payer money is involved anyway. SO WE ARE PAYING REGARDLESS.
Car dependency is an issue, but we should look at the cars we drive and how we use them. Honda has a brilliant hydrogen car that if embraced can potentially eliminate a vast amount of the problems mentioned in the article above. As far as our extensive highway system, that is simply a spawn of the great depression, a time when jobs needed to be created. I believe we will see more highways built or expanded in the next 5 years because of the same problem. The government is creating jobs to make up for all the ones lost in this latest crisis. So now to sum up, weather you like it or not, the sub-urban sprawl and the highway system is going to continue to grow... Focus on a better, non-oil dependent car instead.


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