The Bear’s Lair: The economics of sprawl

Residents of suburban Virginia, like me, are being bombarded with propaganda to vote in favor on Nov. 5 of one of the most indefensible referendum objectives I have ever seen: to pay an additional 0.5 percent sales tax to build new roads and transit projects in the region.

While tiresomely local in its details, the Northern Virginia Referendum issue raises interesting questions about the economics of suburban sprawl.

As is well known and incessantly pointed out by Europeans, growth in the U.S. since the 1950s has been much more automobile-based than in Europe. In cities such as Los Angeles, there is almost no public transportation and commuters’ freeway journeys can extend for an hour or more, even if the traffic is moving freely.

Traditionally, this is held to have precipitated the decline of U.S. city centers, although the spread of urban blight in London, a city in which no significant road project has been undertaken since the completion of the Westway in 1969, suggests that the truth is more complex than that.

Since the 1970s, of course, the U.S. left has thought it had the answer to the urban blight problem. Spend enough on public transportation, make it attractive enough for commuters to leave their cars at home, and the city center will fill with pedestrian traffic and be reinvigorated.

Projects such as Boston’s Quincy Market were predicated on this theory. Boston has always had good public transportation, and the congestion in Boston’s downtown, particularly in the past decade since the start of the infamous “Big Dig” project, which sought to put the freeways under the city center, has meant that for commuters without underground office parking, to bring their cars into downtown was an act of insanity. In Boston, the “urban regeneration” theory has more or less worked.

In Washington, it hasn’t. Washington had the enormous advantage, beginning in the 1970s, of having U.S. taxpayers build the nation’s most expensive subway system, just for the Federal government employees they respect so much.

Thus, public transportation should not have been a problem. Moreover, certain elements of the “downtown” are preserved at U.S. taxpayer expense — the White House, the Smithsonian Institution and the Capitol are not going to turn into ghettoes anytime soon.

Nevertheless, in spite of escalating real estate values, downtown Washington is not a poster child for urban renewal. For one thing, even in the most expensive neighborhoods, the public schools are frighteningly bad, with test scores far below those of suburbs with far lower average family incomes. For another, there are no big stores downtown any more.

Thirty years ago, when I first lived in Washington, the streets may have been dangerous, but the shopping was pretty good, with flagship stores of two high-quality retail chains: Woodward and Lothrop and Garfinkel’s.

This made sense; there is a substantial high-income residential community in Washington, an even larger universe of relatively affluent suburbanites commuting daily into the city on the heavily subsidized Metro, and the downtown area is one of the largest tourist destinations in the U.S. If that customer base can’t support one or even two department stores, what can?

Nevertheless, both regional store chains went bankrupt in the 1990-92 recession and have not been replaced. The result is that downtown Washington has no retail hub, but simply a formless mass of small boutiques, generally with high prices and low quality.

For an alternative vision of how it might have turned out, look at Boston (where Jordan Marsh and Filene’s flourish) or even Philadelphia, where — in a city that has had none of the economic vibrancy of Washington in the past decades — the downtown Market Street remains a very pleasant shopping area, anchored by the magnificent traditional department store Strawbridge and Clothier, to enter which is to travel back in time.

Where Washington differs from Philadelphia and Boston is only partially in the greater enthusiasm with which Washington built freeways and a beltway in the 1955-75 period. After all, Boston, a city of similar size but slower growth, has not one but two beltways.

More important is population growth. The metropolis that is Washington grew by 21.7 percent in population in the 1980s and 17 percent in the 1990s, for a total of 42.4 percent over the two decades. That compares with 13.2 percent in Philadelphia, 14.2 percent in New York and 22.3 percent in Boston.

From 1950-2000, metropolitan Washington more than trebled in size, its population growing by 206 percent, compared with 59 percent growth in Philadelphia, 45 percent in New York and 47 percent in Boston. Thus if population growth and wealth alone allowed a city to sustain a vibrant downtown, Washington would have one and Boston, New York (of course, a much larger city) and Philadelphia would not.

Population growth in Washington, therefore, has been much faster than in the other three cities. In spite of the hugely subsidized Metro, this has contributed to traffic gridlock, the hollowing out of downtown (which, given the example of New York, would not have happened had size of population alone been the criterion) and the growth of urban sprawl.

Washington ranked fourth nationwide in 1970-90 for growth of urban sprawl, behind Atlanta, Houston and New York, with 450.1 square miles of new urban sprawl in those decades. Since this included the relatively slow-growth 1970s, Washington’s urban sprawl ranking for 1980-2000, including the explosive-growth 1990s, would have been even higher.

Indeed, so rapid has been the growth that Washington’s urban sprawl has outrun the growth of the Metro, whose termini, after 30 years of hugely subsidized construction, remain far inside the boundaries of the current metropolis.

There are two further reasons for disliking the objective of the Northern Virginia Referendum, one political and the other of national importance.

Politically, the referendum is pretty clearly an attempt to detach the Northern Virginia counties from the rest of the relatively low-tax, small-government state that is Virginia, and render them more similar to the high-tax, big-government suburbs in Maryland.

Once the principle of differential taxation is accepted, higher local income tax, as in New York City, cannot be far away. Since my job compels me to live in the Washington area, I resent the attempt to lock me into a high-tax, big government nexus, whether I share those values or not.

The nationally important reason is of course that Washington is the home of the national government, and hence its population level heavily influences the type and cost of that government. If Washington’s population increases rapidly, then this will produce not national wealth — as might an equivalent increase in say the Silicon Valley suburbs of San Francisco or the Route 128 tech belt around Boston — but national impoverishment.

The additional people will either work for the Federal government directly, at direct cost to the taxpayer, or more insidiously, they will work for the army of lawyers, lobbyists, government contractors and political fixers that infest the Washington area.

In the latter case, their direct salary cost may not appear on the national budget, but the laws they write, the special privileges for which they lobby, the government contracts they win and the political favors they obtain will all cost the taxpayer money, generally far more money than their own substantial earnings.

Vote for slower population growth, more balanced development, a revitalized downtown and above all a smaller Washington. Oppose the Northern Virginia Referendum!

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(The Bear’s Lair is a weekly column that is intended to appear each Monday, an appropriately gloomy day of the week. Its rationale is that the proportion of “sell” recommendations put out by Wall Street houses remains far below that of “buy” recommendations. Accordingly, investors have an excess of positive information and very little negative information. The column thus takes the ursine view of life and the market, in the hope that it may be usefully different from what investors see elsewhere.)

This article originally appeared on United Press International.