Monday, October 10, 2005

Energy vs. the Exurbs

Why suburbs?

Crime, school quality, congestion, environmental quality, taxes, stated
and revealed preference, hobbies and sports, pets, gardening, privacy,
investment, ...

Note; I can do the same for the many reasons some people choose
urban living; cultural venues, transit, higher educational access, job
constraints, stated and revealed preference,...

The last time we bought a house the bank didn't like the fact that we
owned all our vehicles and so basically assumed we'd be making two car
payments when figuring our disposable income. Point being the
distortions in the housing market are not favoring the suburbs. Ever
hear of the redlining practice called LEMs? There is another factor;
the recent run up in prices. I start with my situation as a perfect
example. I bought in 1995 for $220,000. Today's price, $1.4m. Yeah,
weird. So anyway I effectively pay 1/6th of 1% annually as property
taxes. Were I to be given this house outright, at today's price, my
property taxes would be $1200 per month. I cannot relocate to a
different but equivalent home because of the tax consequences. Think
of it reversed. My personal travel budget makes it desirable to
commute $1000 worth (direct costs and my time value) rather than move
closer to work just because of rising POV ownership costs. The transit
advocates also forget that transit costs continue to spiral away faster
than even the recent POV price increases. It is only a matter of time
before transit pricing reflects the current situation. The cities are not
immune nor even comparatively less effected by energy costs and
people making housing choices know this. [The only exception being
NYS that apparently uses 40% less energy per capita than other Metro or
exurban place in the nation. That is just too much of an outlier to be
anything other than an accounting error in the reporting.]

Primary residence location choice is complex, varied and constantly
changing. To simplistically try to toss it off as being mortgage plus
transportation costs is a disservice to any intelligent reader.

The -issue- is as simple as it is clear even if the reasons are complex.
The recent rise in energy prices
is not going to cause any of the land use or transportation shifts urban
planners and transit advocates wish. Energy is still far too little a
portion of the total cost of living to start becoming a plurality
consideration when choosing housing. No matter the cost it doesn't seem
that there will ever be enough of a clear consumer benefit to influence
suburbanization trends. Due to decades of modernization of suburbs and
disinvestment in most urban places traditional cities are at significant
infrastructure disadvantages. One aspect of that is the ongoing false
accounting that pretends transit expenditures are a form of investment.

Just like cost effectiveness, energy considerations are just not one of
the many legitimate reasons to advocate for urban patterns or transit.

1 comment:

Seb said...