5 ms·

Why is it that many of the same people who argue against more roads and more parking lots on the basis of induced demand preventing more roads from meaningfully

by nullc 4y ago

Why is it that many of the same people who argue against more roads and more parking lots on the basis of induced demand preventing more roads from meaningfully solving congestion seem to think that in the densest and most competitive cities that adding units will necessarily make hosing affordable?

Panzer04 4y ago
Because the characteristics are different. Denser housing is very efficient, in the sense that it requires less infrastructure spend. Roads are just not very efficient - you need to spend a lot of money to get the same result as a transit line etc (and that’s after ignoring the fact that roads have lots of other expenses to the user that transit does not). People want to live in dense, well-serviced cities, and they actually pay for the privilege of doing so. Not so much for roads, unless it’s a toll road.
- nullc 4y ago
  I don't really follow. The idea for roads is that congestion moderates the utility of roads, so over a wide range of capacities roads will remain congested or even become more congested as you add roads, since if you build more you make the roads more useful (reaching more places faster, through better connections or increased capacity) and so people will use them more, potentially resulting in more congestion but almost certainly not less. The parallel idea for housing would be that cost moderates the utility of the city, people move into the city until the cost matches the benefits of density for them (driving up costs and pushing out people for whom the equation no longer works out). If you add units, you've just allowed more people to move from Idaho into the city, and made the entire city potentially more valuable from increased network effect and caused costs to go up further. This process shouldn't be expected make it affordable to live in the city, unless you've managed to either damage the utility of living in the city through the secondary effects of increased population/density or you've managed to build enough supply the you can sink the entire worldwide demand for living in one of the best and most valuable place, such that there are no more wealthier people anywhere in the world to sell to and you must go down market to get more customers. It would however, increase the number of people who can have the benefits of living there, but at the cost of displacing more people who can no longer afford it... the benefits go to people outside of the city: The wealthy ones that can move into the city, and the rest who enjoy lower competition for housing outside of the city. > Denser housing is very efficient Housing itself increases in efficiency to a moderate level of density-- a duplex is somewhat more efficient to construct than a single family home, owing mostly to reduced land costs (materials are somewhat higher due to the increased isolation and fire protection required). But the effects fall off with increasing density, and you run into issues that building higher involves structural and safety related costs that hurt their efficiency. E.g. https://ti.org/pdfs/APB36.pdf https://ti.org/pdfs/APB36.pdf Page 2-- high-density construction is significantly greater, per square foot, than low-density construction. Due to the increased need for steel, concrete, and similar materials, the cost of building three or more stories is progressively greater the more stories are built [...] building three stories costs 30 to 50 percent more, per square foot, than two-stories; four to seven stories costs 200 to 300 percent more; and eight or more stories costs 450 to 650 percent more" )
  - jltsiren 4y ago
    Either those numbers are obvious nonsense, or this is yet another way California is dysfunctional. In Finland, a typical 8-story midrise is ~50% more expensive to build (per square meter) than a typical single-family home. Construction costs only start rising significantly after 10-12 stories.
    - renewiltord 4y ago
      It is an American characteristic. Many more things are possible in this world than are possible in America but to Americans they seem like immutable characteristics rather than the result of choices. Mostly, it is regulation. Example of something is the two staircase rule for buildings.
      - ethanbond 4y ago
        Mostly it is zoning which is largely pushed by NIMBYs who are trying to protect their real estate investments.
        nullc 3y ago
        There is a LOT more than zoning that goes into the cost of construction driven by regulations. I wouldn't be particularly surprised if you could only attribute a single digit percentage of the all in cost to zoning for construction in the bay area. Here is how you could do a first order approximation: Find property zoned so you could build dense housing and get its cost minus the cost of the improvements. Then find matched property zoned for a single family homes, minus their improvements. The difference is attributable to zoning for the purpose of this approximation. What percent of that is that in the overall cost of the multi-unit construction? I'm not sure of the figure but given that the entire land cost isn't that big a percentage in dense construction, I expect the impact from zoning to be fairly small but not negligible.
        ethanbond 3y ago
        Why would that tell you what zoning is doing? Restrictive zoning raises the costs of all land.
pornel 4y ago
Everything causes induced demand. Expansion of bike lanes and public transit also causes induced demand for these, but at least in the end you end up with more efficient transport. The increased efficiency/throughput gives you a better chance of outpacing demand growth. With housing you also have a better chance of outpacing demand growth if you build densely enough. Even that's never enough to meet all the demand, at least you end up housing more people in a desirable area than you'd otherwise if the density was kept artificially low. I realise it's a personal preference and in the US culture dense cities have a poor reputation, but dense cities can offer walkability and public transport infrastructure that wouldn't be economical otherwise. In many places around the world this is valued as a goal in itself.
- nullc 4y ago
  I agree that there are many benefits, and reasons to desire building more for those benefits. And costs: I wouldn't want to live in any dense city I've ever visited, and I've seen ones all over the world, but that's my choice-- and I think it's totally reasonable for people to have other preferences. But I think its far less clear that affordability should be expected to be among those benefits. It's hard to be sure how much value causes density vs density causes value, otherwise one would say that as the post shows-- the existing examples show that increasing density will decrease affordability. But many people do accept the argument that more roads mean more traffic.
- Tade0 4y ago
  > With housing you also have a better chance of outpacing demand growth if you build densely enough. I feel like one important driver of demand is missing here: investment properties. It's no secret that at one moment AirBnB essentially took over tourist hotspots in the most attractive cities, jacking prices up to ridiculous levels. There's a building in my neighborhood that consists of so-called "microapartments" - 18-25m2 units, which on the lower end, from a legal standpoint, wouldn't even be considered housing today. Of course half of them are empty because they weren't really meant to be occupied in the first place. This sort of demand is essentially boundless because while even a billionaire can only drive one car at a time, they can easily own thousands of investment properties and not even bother to rent them out if the market is hot enough. Of course regulations follow, but shitty housing built with investors in mind doesn't just disappear overnight.
scythe 4y ago
>Why is it that many of the same people who argue against more roads and more parking lots on the basis of induced demand preventing more roads from meaningfully solving congestion Well, partially because induced demand is a little bit of a meme, and partially because it's actually different. See, if you have a city that's dense enough that transit actually represents a high share of trips, it's possible that increasing road capacity will cause people to switch from transit to driving, which is essentially a wash for economic activity, and quickly replenishes congestion. In these very dense areas it's more appropriate to build infrastructure for other modes of transportation — just as it makes more sense to build apartments instead of houses. But if you have a city where trips are already almost always by car, then any induced demand actually represents a new trip that wasn't taken before. This must be distinguished from the true Braess paradox [1], which is rare. More trips usually mean that you actually improved people's lives, which is a good thing. The thing is that some modern urbanist activists just absolutely hate cars, so they exaggerate the case against roads. There are still other reasons to avoid expanding the road network: it costs money, it creates pollution, it causes crash risks, it drives sprawl and balkanization, and it contributes to impermeable ground cover and urban heat islands. Parking lots do all of this and make life more difficult for people who are walking. But the notion among some urbanists that building roads does absolutely no good is simply wrong. The literature on the economic benefits of road construction is extensive. I think that people who study the issue are leery of alienating their already tiny support base by gainsaying them about this, though. I personally like to point out that replacing intersections with roundabouts can achieve most of the goals of road widening while improving safety and pollution. Strong Towns in its early days emphasized building roads in such a way that all built capacity would be used as effectively as possible, but some more recent activists have been unhappy that they aren't more stridently anti-car. 1: http://en.wikipedia.org/wiki/Braess_paradox http://en.wikipedia.org/wiki/Braess_paradox
- nullc 4y ago
  Thanks for the Braess paradox link. I think you could potentially generalize the Braess paradox to talk about where people live. The intuition is that we'd be best off if the distribution of demand matched supply, then housing costs from town to town would be identically distributed and all markets would be well utilized and none over-congested. But many people selfishly prefer to live in dense areas because network effects make it more valuable to live in those places, more choice in jobs, more people to interact with, etc. Not only does this cause under-utilization in less desirable locations, it huts affordability-- which people consider a terminal value ('cause housing is necessary for life) independent of the overall utility or efficiency. Though we're OKAY with certain houses or even neighborhoods being out of reach of some, we consider it a problem when whole cities or regions are broadly unaffordable. [It's not clear to me that we should, any more than we consider it a problem that not everyone can afford to live in SwankyHeights. But it's a complicated situation, since there is a reason people want to live in dense areas, like wanting access to jobs or services, making "so go live elsewhere" not a great answer.] Okay, so we add housing. Now the incentives change around in terms of who wants to live where, and there isn't a particular guarantee that the equilibrium prices that result will be lower-- they could well be higher because we just shifted the balance to attract more people from elsewhere. It's a handwave, but over the time span of years, I'd argue that demand for dense cities is more like your transit-to-driving example than your "everyone-is-in-cars" example. People outside of the dense areas are "taking transit", but if you changed the economics they'd prefer to take a car. > More trips usually mean that you actually improved people's lives, which is a good thing. Right but that also assumes overall improvement is the thing people care about. So in a hypothetical where increasing the number of units in a city made every unit more valuable and so made the city less affordable, it would still create an aggregate improvement in utility and so it arguably should be done. But the issue being complaint about wasn't cities doing the most good possible, it was about cities being affordable to the most people. Kind of like complaining about roads because they take up space that could benefit mankind in other ways, vs complaining about roads because they facilitate cars.
joshlemer 4y ago
Oh the Urbanity on Youtube had a great video on this https://www.youtube.com/watch?v=c7FB_xI-U6w https://www.youtube.com/watch?v=c7FB_xI-U6w
lazyasciiart 4y ago
Because it's easier for people to change their commute than it is to move to another city.
imtringued 4y ago
"induced demand" is something that happens when something is subsidized like roads and parking lots. You're supposed to pay for your own housing no matter how dense it is. Hence induced demand makes no sense here.

by nullc 4y ago

Panzer04 4y ago

Because the characteristics are different. Denser housing is very efficient, in the sense that it requires less infrastructure spend. Roads are just not very efficient - you need to spend a lot of money to get the same result as a transit line etc (and that’s after ignoring the fact that roads have lots of other expenses to the user that transit does not). People want to live in dense, well-serviced cities, and they actually pay for the privilege of doing so. Not so much for roads, unless it’s a toll road.

nullc 4y ago
I don't really follow. The idea for roads is that congestion moderates the utility of roads, so over a wide range of capacities roads will remain congested or even become more congested as you add roads, since if you build more you make the roads more useful (reaching more places faster, through better connections or increased capacity) and so people will use them more, potentially resulting in more congestion but almost certainly not less. The parallel idea for housing would be that cost moderates the utility of the city, people move into the city until the cost matches the benefits of density for them (driving up costs and pushing out people for whom the equation no longer works out). If you add units, you've just allowed more people to move from Idaho into the city, and made the entire city potentially more valuable from increased network effect and caused costs to go up further. This process shouldn't be expected make it affordable to live in the city, unless you've managed to either damage the utility of living in the city through the secondary effects of increased population/density or you've managed to build enough supply the you can sink the entire worldwide demand for living in one of the best and most valuable place, such that there are no more wealthier people anywhere in the world to sell to and you must go down market to get more customers. It would however, increase the number of people who can have the benefits of living there, but at the cost of displacing more people who can no longer afford it... the benefits go to people outside of the city: The wealthy ones that can move into the city, and the rest who enjoy lower competition for housing outside of the city. > Denser housing is very efficient Housing itself increases in efficiency to a moderate level of density-- a duplex is somewhat more efficient to construct than a single family home, owing mostly to reduced land costs (materials are somewhat higher due to the increased isolation and fire protection required). But the effects fall off with increasing density, and you run into issues that building higher involves structural and safety related costs that hurt their efficiency. E.g. https://ti.org/pdfs/APB36.pdf https://ti.org/pdfs/APB36.pdf Page 2-- high-density construction is significantly greater, per square foot, than low-density construction. Due to the increased need for steel, concrete, and similar materials, the cost of building three or more stories is progressively greater the more stories are built [...] building three stories costs 30 to 50 percent more, per square foot, than two-stories; four to seven stories costs 200 to 300 percent more; and eight or more stories costs 450 to 650 percent more" )
- jltsiren 4y ago
  Either those numbers are obvious nonsense, or this is yet another way California is dysfunctional. In Finland, a typical 8-story midrise is ~50% more expensive to build (per square meter) than a typical single-family home. Construction costs only start rising significantly after 10-12 stories.
  - renewiltord 4y ago
    It is an American characteristic. Many more things are possible in this world than are possible in America but to Americans they seem like immutable characteristics rather than the result of choices. Mostly, it is regulation. Example of something is the two staircase rule for buildings.
    - ethanbond 4y ago
      Mostly it is zoning which is largely pushed by NIMBYs who are trying to protect their real estate investments.
      - nullc 3y ago
        There is a LOT more than zoning that goes into the cost of construction driven by regulations. I wouldn't be particularly surprised if you could only attribute a single digit percentage of the all in cost to zoning for construction in the bay area. Here is how you could do a first order approximation: Find property zoned so you could build dense housing and get its cost minus the cost of the improvements. Then find matched property zoned for a single family homes, minus their improvements. The difference is attributable to zoning for the purpose of this approximation. What percent of that is that in the overall cost of the multi-unit construction? I'm not sure of the figure but given that the entire land cost isn't that big a percentage in dense construction, I expect the impact from zoning to be fairly small but not negligible.
        ethanbond 3y ago
        Why would that tell you what zoning is doing? Restrictive zoning raises the costs of all land.

pornel 4y ago

Everything causes induced demand. Expansion of bike lanes and public transit also causes induced demand for these, but at least in the end you end up with more efficient transport. The increased efficiency/throughput gives you a better chance of outpacing demand growth. With housing you also have a better chance of outpacing demand growth if you build densely enough. Even that's never enough to meet all the demand, at least you end up housing more people in a desirable area than you'd otherwise if the density was kept artificially low. I realise it's a personal preference and in the US culture dense cities have a poor reputation, but dense cities can offer walkability and public transport infrastructure that wouldn't be economical otherwise. In many places around the world this is valued as a goal in itself.

nullc 4y ago
I agree that there are many benefits, and reasons to desire building more for those benefits. And costs: I wouldn't want to live in any dense city I've ever visited, and I've seen ones all over the world, but that's my choice-- and I think it's totally reasonable for people to have other preferences. But I think its far less clear that affordability should be expected to be among those benefits. It's hard to be sure how much value causes density vs density causes value, otherwise one would say that as the post shows-- the existing examples show that increasing density will decrease affordability. But many people do accept the argument that more roads mean more traffic.
Tade0 4y ago
> With housing you also have a better chance of outpacing demand growth if you build densely enough. I feel like one important driver of demand is missing here: investment properties. It's no secret that at one moment AirBnB essentially took over tourist hotspots in the most attractive cities, jacking prices up to ridiculous levels. There's a building in my neighborhood that consists of so-called "microapartments" - 18-25m2 units, which on the lower end, from a legal standpoint, wouldn't even be considered housing today. Of course half of them are empty because they weren't really meant to be occupied in the first place. This sort of demand is essentially boundless because while even a billionaire can only drive one car at a time, they can easily own thousands of investment properties and not even bother to rent them out if the market is hot enough. Of course regulations follow, but shitty housing built with investors in mind doesn't just disappear overnight.

scythe 4y ago

>Why is it that many of the same people who argue against more roads and more parking lots on the basis of induced demand preventing more roads from meaningfully solving congestion Well, partially because induced demand is a little bit of a meme, and partially because it's actually different. See, if you have a city that's dense enough that transit actually represents a high share of trips, it's possible that increasing road capacity will cause people to switch from transit to driving, which is essentially a wash for economic activity, and quickly replenishes congestion. In these very dense areas it's more appropriate to build infrastructure for other modes of transportation — just as it makes more sense to build apartments instead of houses. But if you have a city where trips are already almost always by car, then any induced demand actually represents a new trip that wasn't taken before. This must be distinguished from the true Braess paradox [1], which is rare. More trips usually mean that you actually improved people's lives, which is a good thing. The thing is that some modern urbanist activists just absolutely hate cars, so they exaggerate the case against roads. There are still other reasons to avoid expanding the road network: it costs money, it creates pollution, it causes crash risks, it drives sprawl and balkanization, and it contributes to impermeable ground cover and urban heat islands. Parking lots do all of this and make life more difficult for people who are walking. But the notion among some urbanists that building roads does absolutely no good is simply wrong. The literature on the economic benefits of road construction is extensive. I think that people who study the issue are leery of alienating their already tiny support base by gainsaying them about this, though. I personally like to point out that replacing intersections with roundabouts can achieve most of the goals of road widening while improving safety and pollution. Strong Towns in its early days emphasized building roads in such a way that all built capacity would be used as effectively as possible, but some more recent activists have been unhappy that they aren't more stridently anti-car. 1: http://en.wikipedia.org/wiki/Braess_paradox http://en.wikipedia.org/wiki/Braess_paradox

nullc 4y ago
Thanks for the Braess paradox link. I think you could potentially generalize the Braess paradox to talk about where people live. The intuition is that we'd be best off if the distribution of demand matched supply, then housing costs from town to town would be identically distributed and all markets would be well utilized and none over-congested. But many people selfishly prefer to live in dense areas because network effects make it more valuable to live in those places, more choice in jobs, more people to interact with, etc. Not only does this cause under-utilization in less desirable locations, it huts affordability-- which people consider a terminal value ('cause housing is necessary for life) independent of the overall utility or efficiency. Though we're OKAY with certain houses or even neighborhoods being out of reach of some, we consider it a problem when whole cities or regions are broadly unaffordable. [It's not clear to me that we should, any more than we consider it a problem that not everyone can afford to live in SwankyHeights. But it's a complicated situation, since there is a reason people want to live in dense areas, like wanting access to jobs or services, making "so go live elsewhere" not a great answer.] Okay, so we add housing. Now the incentives change around in terms of who wants to live where, and there isn't a particular guarantee that the equilibrium prices that result will be lower-- they could well be higher because we just shifted the balance to attract more people from elsewhere. It's a handwave, but over the time span of years, I'd argue that demand for dense cities is more like your transit-to-driving example than your "everyone-is-in-cars" example. People outside of the dense areas are "taking transit", but if you changed the economics they'd prefer to take a car. > More trips usually mean that you actually improved people's lives, which is a good thing. Right but that also assumes overall improvement is the thing people care about. So in a hypothetical where increasing the number of units in a city made every unit more valuable and so made the city less affordable, it would still create an aggregate improvement in utility and so it arguably should be done. But the issue being complaint about wasn't cities doing the most good possible, it was about cities being affordable to the most people. Kind of like complaining about roads because they take up space that could benefit mankind in other ways, vs complaining about roads because they facilitate cars.

joshlemer 4y ago

Oh the Urbanity on Youtube had a great video on this https://www.youtube.com/watch?v=c7FB_xI-U6w https://www.youtube.com/watch?v=c7FB_xI-U6w

lazyasciiart 4y ago

Because it's easier for people to change their commute than it is to move to another city.

imtringued 4y ago

"induced demand" is something that happens when something is subsidized like roads and parking lots. You're supposed to pay for your own housing no matter how dense it is. Hence induced demand makes no sense here.