Via Laura at 11d, I read this thread on cities vs. suburbs at Matthew Yglesias' blog. One comment jumped out at me:
"What's with this "suburbia is cheaper" claim? Where I live, suburbia is more expensive (which is why low income people live in cities and older suburbs)."
I'm not sure overall which is cheaper. It's certainly true that far-out suburbs are cheaper than close-in suburbs (at least in the DC area, I think elsewhere too.) That's why Prince William county just passed a harsh anti-illegal immigrant measure -- lots of immigrants have moved there, because a bunch of people can share a house for a lot less than renting small apartments close in. And there's lots of evidence that everything from food to bank fees to insurance costs more for residents of poor inner city neighborhoods.
So why don't more poor people move to the suburbs? The US Department of Housing and Urban Development did an experiment called Moving to Opportunity where people who lived in public housing were divided into 3 groups, one that was offered Section 8 housing vouchers that could be used anywhere they chose, one that was offered special vouchers that could only be used in low-poverty neighborhoods, and one that was not offered vouchers, but continued to live in public housing. This was a voluntary program, so everyone in it had said that they wanted to move. One of the interesting findings is that the majority of the people who used the unrestricted vouchers moved into neighborhoods that were still high poverty -- not as high as the public housing they came from, but still more than 20 percent.
Under the voucher program, what you pay is based on your income, not the rent, and you can rent any house up to what HUD calls the "fair market rent" for the metro area. So why did the voucher recipients stay in high poverty neighborhoods? If the researchers asked this, I haven't found the report that says it. But I can take some guesses: Because those are the neighborhoods that they knew, where their friends and family lived, where they knew how to navigate the transportation system and which grocery store had the best deals. Because landlords discriminated against them -- or because they were afraid that they might. Because they didn't have cars, and the upfront cost of buying a car is obvious, while the added costs of buying food in inner-city neighborhoods is hidden.
All this is mostly a long way of saying that I'm not sure that the fact that poor people live in inner cities proves that they're cheaper than suburbs.
So, Yglesias argues that the suburbs are only so cheap because the roads and other infrastructure are so heavily subsidized. Lisa Margonelli says that it's a myth that people will drive less if gas prices get high enough. She argues that high gas prices have hit the poor the most. I think this is probably right -- if people's driving is responsive to gas prices, it's clearly only in the very long run, as people choose where to work and live. Somewhat less plausibly, Richard Brodsky claims that Bloomberg's proposed congestion pricing plan for driving in Manhattan would be regressive, hurting poor and middle-income drivers the most. I'm pretty dubious about the idea that many poor New Yorkers own cars.
But outside of New York, I think the evidence is overwhelming that helping low-income families own cars is a highly cost-effective anti-poverty strategy. (We've actually just donated our old car to Vehicles for Change, an organization that does this.) It opens up a world of job opportunities, lets people shop at lower-cost stores, go to church and doctor's offices and more. In an ideal world, you could do all these things by public transportation, but in most of the US you can't.
So, how do we help the environment without penalizing low-income families? I still think that some version of Pay at the Pump auto insurance would be a good thing. It would convert a big part of the fixed cost of owning a car into a variable cost of driving it, so would both make car ownership more affordable for the poor, and discourage driving at the margin. School reform isn't usually thought of as part of an environmental agenda, but if you could improve urban schools to the point that they seemed like a reasonable alternative for families who have options, more of them would choose to live in cities.
Triple A says it costs 50¢ a mile to run your car right now. If gas is $3.20, 16¢ is for gasoline. Gas going from $2/gallon to $3.20/gal has raised the gas cost per mile from 10¢ to 16¢ - from, roughly, 20% of your cost of driving to 30%. It's not huge, and people haven't changed their behavior very much, nor would you expect them to. Useful article from the Independent, from which I have lifted a couple of paragraphs:
http://news.independent.co.uk/sci_tech/article2656034.ece "One thing most oil analysts agree on is that depletion of oil fields follows a predictable bell curve. This has not changed since the Shell geologist M King Hubbert made a mathematical model in 1956 to predict what would happen to US petroleum production. The Hubbert Curve shows that at the beginning production from any oil field rises sharply, then reaches a plateau before falling into a terminal decline. His prediction that US production would peak in 1969 was ridiculed by those who claimed it could increase indefinitely. In the event it peaked in 1970 and has been in decline ever since.
In the 1970s Chris Skrebowski was a long-term planner for BP. Today he edits the Petroleum Review and is one of a growing number of industry insiders converting to peak theory. "I was extremely sceptical to start with," he now admits. "We have enough capacity coming online for the next two-and-a-half years. After that the situation deteriorates."
What no one, not even BP, disagrees with is that demand is surging. The rapid growth of China and India matched with the developed world's dependence on oil, mean that a lot more oil will have to come from somewhere. BP's review shows that world demand for oil has grown faster in the past five years than in the second half of the 1990s. Today we consume an average of 85 million barrels daily. According to the most conservative estimates from the International Energy Agency that figure will rise to 113 million barrels by 2030..."
More relevant stuff at Wikipedia on Peak Oil: http://en.wikipedia.org/wiki/Peak_oil. Now, that 'we consume' is the world - us, and China, and India, and Indonesia, and Japan, and Europe. In the USA, we tend to be very US-centric in thinking about trends, but I doubt that our behavior really matters very much here. It seems to me that to believe that gasoline prices won't go sharply up to levels we haven't seen before you have to think that the world can smoothly ramp petroleum extraction up to 130% of today's without an enormous bidding war between our consumers and those in the rest of the world. I don't think that's likely, I think we should expect that prices will be a multiple of today's in five years.
So let's guess that gas is at $10 a gallon in five years: 50¢/mile for gasoline. Your cost of driving, everything else being equal, has gone from 50¢/mile to 85¢. Behavior, I expect, will change: I think Margonelli will prove to be very wrong when price changes get bigger. Besides everybody getting rid of his/her 1990 F-150 and switching to a Toyota Yaris: lots of van pools: little cars running on compressed air, refilled in the garage at night. ALL of the used oil from the fry-o-lators at McDonalds will be running somebody's diesel Mercedes. Plug-in hybrids get very popular. Pay at the Pump becomes extremely unfair, because the fry-o-lator and compressed air people get a free ride out of it. Pork goes up, because (1) there is no old fry-o-lator oil to feed to pigs and (2) it costs twice as much to truck restaurant scraps out to the piggeries. The outer 'burbs get even cheaper, relative to the inner, because people factor in their expected commute costs.
The advantages you suggest for Pay at Pump - "big part of the fixed cost of owning a car into a variable cost of driving it, so would both make car ownership more affordable for the poor, and discourage driving at the margin.." are exactly right, and desirable, but I think PaP won't work for long because of the factors I mentioned. A better solution would be to put SmartPass readers on all the roads and charge stiff tolls for driving, variable by time of day. We squander huge amounts of fuel idling in traffic jams, but it's not worth it for any of us to get into car pools because that doesn't have any effect on the behavior of the singleton driver in the car next to us, but a stiff toll would get a lot of outer burb people into pools and lessen the congestion-caused useless consumption.
Posted by: dave s | July 12, 2007 at 06:15 AM
Circa 2002 when my kids were still in diapers, my husband and I were under a lot of family pressure to leave Chicago and move to the suburbs. We consistently got the "suburbs are cheaper and safer, with better schools" argument.
So I ran the numbers. Houses in the suburbs tend to be bigger, but I ignored that and found realtor listings for 3BR-1bath houses like ours. Then I factored in taxes. Then I factored in commute costs on both sides -- train for the city, extra car + insurance + gas for the suburbs. I ignored time, even though my commute into the city is only 30 minutes and a commute from the 'burbs would have been much longer. But it was too hard to quantify so I just left it out.
When I ran these numbers I immediately found that the suburbs were significantly more expensive, mostly due to high property taxes. (The base cost on the house in the city was a bit higher, but the overall house payment was lower because of those taxes.) The difference was so great that I went back and factored in the cost of parochial school in the city. The city still won.
If we had more kids the math would have changed. At some point you need a larger house as your family grows, and you pay more tuition for each kid who attends parochial school -- unlike property taxes, which you pay once regardless of whether you even have kids.
I think non-fixed expenses in the suburbs are cheaper, in that the shopping and groceries are typically cheaper. Why else do we see people trekking out from the city to hit Ikea and the outlet mall? You're constantly reminded of that cheapness, every time you buy toilet paper. The fixed expenses -- car insurance, house payment, tax bill -- are not things you're consistently reminded of in the same way.
Posted by: jen | July 12, 2007 at 09:11 AM
I think the cost of living for city vs. suburb might be relatively equal. Growing up in NYC many friends and family moved to Long Island and Jersey because the standadard and cost of living was better. Taxes were double that of the city, but schools were some of the best in the nation. You still get way more for your money in terms of house and property in in the outer counties than in the city. Condos have a major difference in pricing. Condos where I live start in the high $300,000s to over a million. A house is still more affordable if one can cover maintenance. If good transportation is in effect commute costs should not be that big of a factor. Near me parochial and private school tuition is on par with college tuition. Another reality is either due to cost or lack of family connections new immigrants, even those here legally, are still living multiple families to a house or apartment. If one looks at Brooklyn and Queens most single family older homes are being demolished to make way for 2-3 family homes. This is part of adaptation in terms of financial survival. NYC has changed rapidly in the past two decades in terms of affordability and demographic.
I voted for Bloomberg when I was still a NYC resident and I regret it everytime he opens his mouth with a new proposal. Bloomberg's congestion pricing plan will mainly impact people living in NYC boroughs other than Manhattan. Brodsky is correct on that issue. Bloomberg seems to forget that NYC is a total of 5 boroughs. Many people on Long Island will take the LIRR and Jersey residents take the Path train. By the time the LIRR hits Queens it is packed. People who can afford it will still drive or helicopter traffic will increase to the city (another issue of noise pollution that has faced the suburbs due to increased traffic). And there are alot of business owners that live in boroughs other than Manhattan that need to drive vans or trucks. If people are going to be charged more to drive to Manhattan everything else will also increase in price to cover the new expense.
Posted by: Christine | July 12, 2007 at 11:00 AM
When discussions like this arise, it always surprises me that no one considers small towns as an alternative. You can do your current city job and live in the city, or do your current city job and live in the suburbs -- or, you can quit your job and get a new one as an accountant or bank manager or teacher or whatever in a small town in Michigan. Even factoring the pay cut, wouldn't that be cheapest?
Posted by: Jennifer | July 13, 2007 at 01:31 AM
And some more about Pay at the Pump: right now insurance takes into account the risk you pose, both by being a hot-blooded teenager and by having a history of tickets/accidents. If you've been bad, you pay more. PaP - no differentiation. You run red lights, you speed: your gas costs the same. So it loses an incentive to fly right.
Posted by: dave.s. | November 20, 2007 at 08:43 PM