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Editors Note: The following letter was sent by Alan E Pisarski to The Wall Street Journal in response to articles on highway productivity in the context of highway productivity and current proposals for highway spending. Pisarski is creator and author of the Commuting in America series a member of the consulting team to the Transportation Research Board (TRB) study of the upgrading of the Interstate highway system. The letter was not accepted for publication, but we are pleased to print it here.

PROPOSED LETTER TO EDITOR: THE WALL STREET JOURNAL

The WSJ in a piece by David Harrison written July 4 and now expanded in an addition on July 14 is aimed at questioning the federal spending being focused on roads. It introduces all of the standard research papers from over the years as if they were really news. We should do benefit-cost analyses – what a breakthrough thought! Basically, the pieces suggest what the transportation community has been doing for 50 years. The biggest payoffs are early in a road systems life – if the investment were rational one would expect so wouldn’t one. That point was made in research in the 90’s on the massive pay offs generated by the Interstates on the order of 25% of all productivity growth over two decades. The Federal Highway Administration has had a standard process for highways and bridges addressing all those points for decades. What he could have noted is that the data to drive that work is terribly outdated, mandated to be reported every two years and is still waiting. The data that Congress requires to base investments on are now 7 years old. But probably no one has looked at it, certainly no one has noticed its late! All of the data in the present debate in Washington is of the order of: my number is bigger than your number. No sense of quantitative analysis has even been in the room when financial “plans” are being waved about.

While David Harrison’s summary treatment of highway spending and productivity has a lot to commend it. There is great care needed in automatically assuming highway infrastructure spending will not generate greater productivity. His argument goes wrong in at least two areas:

The first is that travel increases on new roads, labeled “induced demand” is somehow unproductive – “the roads just fill up again” argument. That demand is a good thing. It means that more people and goods can go where they want, when they want and how they want – close to a perfect definition of transportation productivity. Would we make that argument about any other form of facility investment? The hospital just filled up again; the library just filled up again; the school filled up again – let’s not build anymore of them. “Induced” demand is really latent demand that had been deferred because of lack of adequate accessibility.

The second point, that we learned in the National Academies study of the Interstates, Transportation Research Board Special Report 329, reported to Congress in 2019 is that the doubled population growth and the economic growth since the building of the interstates has generated demand in new places. What was the population of Las Vegas and Phoenix in 1956 when we designed the Interstates? That’s why there isn’t one between those two massive regions. Take a look around. Bringing access to new areas can be an immense boon to productivity. Moreover, the economists are tragically weak on their ability to assess the logistical needs of interstate commerce and international competitiveness. To assume that there are no new connections or improvements needed is utterly unsupported and needs far more serious study. We can all agree that our transportation economic statistics are really in need of updating. Where in this legislation is there support for the Constitutional mandate to defend and support interstate commerce?

Finally, just the upgrading of our present highway systems, meeting the backlog of maintenance and upgrading the system to respond to new technologies on the horizon can keep a properly designed investment process productive for a decade or more.

Alan E. Pisarski

Alan E. Pisarski Consultancy

In an article entitled “Financial hit from Covid far less drastic than feared,” The Times of London reported on July 8 reported that “Unemployment, debt and earnings have not worsened significantly as a result of the pandemic, Britain’s leading economic think tank has concluded, hailing the findings as “astonishing”.

The report by the Institute of Fiscal Studies (IFS) expressed “surprise” that unemployment is much lower than was expected, that there has been only a small increase in people in arrears on bills and that the number of people using food banks increased minimally during the pandemic and is now below pre-pandemic levels.

At the same time, IFS noted “while the national picture was remarkable, its figures masked groups who have seen clear increases in hardship, particularly the self-employed and families already experiencing in-work poverty before the pandemic hit.”

The article attributed the positive developments to government interventions to support working people, more than one-third of whom received government support during the pandemic.

We add that, had it not been for the conversion to remote work, these results could not have been achieved. According to the OECD (See Note below), in Mid April of 2020, 49% of the United Kingdom pre-pandemic work force was working remotely, while 20% were working at their physical employment locations, leaving 31% who were not working (Figure). This data suggests that about 70% of the working population was teleworking (Figure). Had remote work not been embraced, the unemployment rate would have been far higher and the economic disruption would likely have been at least as bad as the most dire expectations.

Note: OECD, “Working during COVID-19: Cross-country evidence from real-time survey data.” At oecd-ilibrary.org

Wendell Cox is principal of Demographia, an international public policy firm located in the St. Louis metropolitan area. He is a founding senior fellow at the Urban Reform Institute, Houston, a Senior Fellow with the Frontier Centre for Public Policy in Winnipeg and a member of the Advisory Board of the Center for Demographics and Policy at Chapman University in Orange, California. He has served as a visiting professor at the Conservatoire National des Arts et Metiers in Paris. His principal interests are economics, poverty alleviation, demographics, urban policy and transport. He is co-author of the annual Demographia International Housing Affordability Survey and author of Demographia World Urban Areas.

Mayor Tom Bradley appointed him to three terms on the Los Angeles County Transportation Commission (1977-1985) and Speaker of the House Newt Gingrich appointed him to the Amtrak Reform Council, to complete the unexpired term of New Jersey Governor Christine Todd Whitman (1999-2002). He is author of War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life and Toward More Prosperous Cities: A Framing Essay on Urban Areas, Transport, Planning and the Dimensions of Sustainability.

Fortune recently published an interview with Ed Pinto, director of the American Enterprise Institute Housing Center, and former chief credit officer of Fannie Mae.

In the interview, Pinto tells Fortune’s Shawn Tully that the high end prices have increased in price as at least as much as medium to high portion of the market. This is unusual, but not so unusual is the fact that prices of high end housing are increasing faster than the low end of the market, which typically experiences the biggest price increases.

Pinto attributes this to “The work from home economy” that has “unleashed people who before the pandemic were tied to jobs in expensive coastal metros and empowered them to move to cities where they can get a lot more house for the same or in most cases less money.”

Pinto describes the United States as having two housing markets, the coasts and the interior. About a quarter of the population lives in the coastal market, where house prices average seven times income, according to Pinto. In the interior, on the other hand, house prices are 3.5 times incomes. Pinto says: “That opens a high-pressure dynamic that’s pushing people to move to where housing is more plentiful and a lot cheaper.”

He notes that restrictions on new house building have forced people in metros like Los Angeles and Seattle “to pay ever higher prices for a relatively small, aging pool of homes.

He cites migration increases to the usual domestic migration magnets like Austin and Raleigh, but notes big increases in less likely metros such as places like Pittsburgh and Columbus. Moreover, he cites local moves away from urban cores to peripheral locations in California, observing an equally strong trend from “downtown rentals” to “roomy homes” far out of town.

Read the complete article at: fortune.com

Wendell Cox is principal of Demographia, an international public policy firm located in the St. Louis metropolitan area. He is a founding senior fellow at the Urban Reform Institute, Houston, a Senior Fellow with the Frontier Centre for Public Policy in Winnipeg and a member of the Advisory Board of the Center for Demographics and Policy at Chapman University in Orange, California. He has served as a visiting professor at the Conservatoire National des Arts et Metiers in Paris. His principal interests are economics, poverty alleviation, demographics, urban policy and transport. He is co-author of the annual Demographia International Housing Affordability Survey and author of Demographia World Urban Areas.

Mayor Tom Bradley appointed him to three terms on the Los Angeles County Transportation Commission (1977-1985) and Speaker of the House Newt Gingrich appointed him to the Amtrak Reform Council, to complete the unexpired term of New Jersey Governor Christine Todd Whitman (1999-2002). He is author of War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life and Toward More Prosperous Cities: A Framing Essay on Urban Areas, Transport, Planning and the Dimensions of Sustainability.

After a COVID interruption, CICA has now announced winners the 2020 Bruno Zevi Book Award, and Infinite Suburbia is among those honorably mentioned. The award is highly competitive and will be presented at UIA World Congress in Rio de Janeiro.

Congratulations to the authors!

Read about the awards: CICAarchitecture.org.

On LCAU website: LCAU.mit.edu

Linkedin: linkedin.com/feed/update

Buy Infinite Suburbia

The Washington Examiner reports on a poll by the San Francisco Chamber of Commerce indicating that “Almost half of San Francisco residents are planning on moving out of the city due to rising crime and a deteriorating quality of life.” The poll, is an annual update in the Chamber of Commerce “Citybeat” series and is summarized in a press release “New Polling Shows That 8 Out of 10 Residents Believe Crime Has Gotten Worse in San Francisco; Vast Majority Support Increasing Police Officers and Expanding Police Work.”

According to the Chamber, “San Franciscans are overwhelmingly supportive of solutions to these issues that were proposed in Mayor London Breed’s recent proposed budget. 60% of San Franciscans believe that it should be a high priority for the city to maintain funding for police academy classes, so that we can recruit younger, diverse, progressive members to replace those who have retired or left the SF Police Department. 76% of San Franciscans believe that it should be a high priority for the city to increase the number of police officers in high-crime neighborhoods.”

Results of the poll were presented at the 171st annual City Beat breakfast on June 23. The Chamber also hosts an “Economic Recovery Dashboard” on its website, with statistics on issues such as “percent of small businesses opened,” a measure on which the city trails New York City, homeless tent complaints, broken storefront windows, overflowing trash cans, animal and human waste, etc.

The city of San Francisco has been particularly hard hit by the pandemic and related events. According to The New York Times, the city of San Francisco has trailed only New York in the percentage of job losses among major municipalities (as opposed to metropolitan areas)

For more information see: 40% of San Francisco residents plan to leave due to quality of life: Poll and the San Francisco Chamber of Commerce press release.