Monday, October 10, 2005

Kunstler v. Cote

Recently James Howard Kunstler spoke at the "Petrocollapse Summit" and
in typical Kunstler fashion used the occassion to savage the suburbs.

Kunstler's one note blanket condemnation of the Grand Cotean Dystopia
is getting boring. The prediction is always the same; some long ignored
fatal flaw in the American Lifestyle is going to rise up and smack us
silly. Which fatal flaw he picks depends arbitrarially on the time and
place. Of course for a "petrocollapse" summit the flaw would be his
claim of energy dependence of the suburbs. In the past decades it has
been any number of other things and there's little doubt that if he
were invited to a "finalcialcollapse" summit it would surely be the
housing bubble that will bring us down. Knustler viscerally hates many
aspects of modern American development patterns but rather than discuss
those characteristics he chooses instead to blanket attack the
lifestyle choices of people who have been as uniformly correct all
these years as he has been wrong. $5 gas isn't going to send the masses
back to the ghettos. The difference between $3 and $5 gas is like
$1200/year. Painful but still only the difference between an $1800 an
$1920 mortgage. People do this housing math all the time and decide to
locate away from the CBD where their $1800 gets more QoL than close in
and a $1920 mortgage would buy. It isn't the -amount- of transportation
or even just energy the suburbs consume but the total cost. Those costs
are measured in money -and- BTUs -and- time. $5 gasoline will decimate
transit and temporailly inhibit POV mobility. Transit use falls in
tough economies and $5 gas will not help the economy. Inflation
especially hurts transit. As the costs of $5 gas as passed on this will
disproportionately impact transit which typically has costs outpacing
inflation by 3-4 times. Public funding will also dry up in a poor
economic environment where people are unwilling to vote for more taxes.
Over time $5 gas will shift POV choice to models that have lower
operating costs and generate lower fuel taxes thus widening the gap
beteen POVs and transit for those with a choice. Those with choice in
transportation are the same who exercise choice in residence location.
Those more efficient vehicles will still need the same infrastructure
thus the smaller Highway Trust Fund money will increasingly go more to
roads and less to transit subsidies. The consequences are obvious, $5
gasoline will decimate transit. Oh, and an unobvious counterpoint;
transit saw its' highest usage in 40 years at exactly the same time
gasoline was at its' lowest inflation adjusted price ever. Real transit
advocates should be pushing for cheap gas but their emotional desire to
punish autos in a misguided belief in a zero sum game and will instead
continue to shoot themselves in the foot. As to the housing bubble; The
housing bubble is a good thing. It is a voluntary mechanism to raise
municipal revenues and assures more efficient use of existing housing
stock thus reducing sprawl and stimulating the economy. Besides regular
people are not hurt when the bubble bursts, speculative investors and
people who make poor housing decisions are hurt. Take my county, May
prices are only 16.8% year over year higher. Quite a "cooling" from the
more recent 25% each of the previous 4 years. But that's only 900 (less
than 1%) homes in the last year. All the rest of the homes are looking
at being worth 40%-600% more than their purchase prices. A 20% even 30%
pop only theoretically hurts a few hundred and only if they cannot wait
before selling in the meantime they are supposedly enjoying a home they
were happy to purchase for the same price so they are still whole. The
people most at risk are ARMs holders and the public
transportationreliant. These and other unusual and risky financial
instruments are disproportionately being used in places with high costs
and generally high congestion and transit use. Not a correlation or
causation just an association. When the ARMs start twisting it is the
cenurbs that will see the greatest impact not the exurbs. Transit costs
typically increase much faster than general inflation and marginal
ridership decreases in poor economies. $5 gas is a triple hit to
transit ridership; higher costs, higher marginal costs, fewer riders.
What this means is that Kunstler has the entire end of suburbia as we
know it exactly wrong. Higher energy prices will spur new energy
efficient construction and demand for less congested (more) freeways
and erode support for the cenurbs as jobs move to where the people live
not vice versa.

1 comment:

Seb said...