Introduction It is a pleasure for me to speak to you today on the important issue of metropolitan development. While you are a partisan organization, my discussion today will be bi-partisan. I have been appointed to public offices by the late Tom Bradley, a Democrat who served as Los Angeles' mayor for two decades, and by former Speaker of the House of Representatives Newt Gingrich, a Republican. Moreover, I will quote a Republican president and a Democratic presidential candidate. My subject today goes by many names --- the "new urbanism," "smart growth," the anti-sprawl crusade and Vice President Gore's "livability agenda." By whatever name --- and I will call it the "anti-suburban agenda" --- it promises to fundamentally change the way we live. I believe that it could cripple our economy and that the price will be largely paid by the traditional "blue collar" and low income Democratic constituencies that tend to support anti-suburban agenda candidates. The American Dream For generations, Americans have pursued the dream of home ownership. It preceded the automobile, as upper middle income households moved to suburbs served by streetcar (tram or trolley) lines at the turn of the century. They were followed by middle and lower middle income households after World War II, who were able to afford houses and cars as the nation became more affluent. The resulting suburbanization changed the urban landscape radically. There is no better example than St. Louis. From 1950 to 1990, the population of the city declined from 857,000 to 397,000 while the land area remained the same. By 1996, the population had dropped to 352,000 --- a loss of 59 percent from 1950. From 1950 to 1990, the population of the urbanized area (developed area) outside the city rose from 554,000 to 1,550,000, while urbanized land area increased by 219 percent. Obviously, as the more and more people obtained homes and cars, traffic congestion worsened and air pollution became a greater concern. Thousands of square miles were consumed by the nation's expanding urban areas, raising concerns about the loss of valuable agricultural land. The anti-suburban agenda arose in response to these issues. The Anti-Suburban Agenda The anti-suburban agenda includes the following initiatives: Drawing of urban growth boundaries, outside of which development would not be allowed. Channeling urban development toward infill within urban areas. "Transit oriented development" along urban rail corridors. Higher residential densities (smaller lot sizes) and higher employment densities. Little, if any, street and highway capacity. Limitations on suburban retail development, such as "big box" retailers. Regional government, or at a minimum less local control and more regional control. Anti-suburbanists claims that these measures will reduce traffic congestion, reduce air pollution, reduce automobile dependency, reduce travel times and preserve needed agricultural land. Evaluation Criteria Today, I will review the anti-suburban agenda in light of the most fundamental principle --- that of freedom. It is my view, and I suspects yours, that people should be generally free to do whatever they want unless they inflict harm on their fellow citizens. As a free market economist, I nonetheless have a strong respect for the role of government in regulating harmful behavior, whether it is by outlawing murder or banning the sale of tainted meat. Unless it can be shown that further suburbanization will inflict irreparable harm on the community, then the draconian growth control measures of the anti-suburban agenda are not legitimate public policies. Examining the Problems and Solutions Now let us review the problems and solutions on which the anti-suburban agenda is based. Traffic Congestion: Contradicting the anti-suburban vision, traffic congestion is worse, not better where population densities are higher. The US Department of Transportation's Roadway Congestion Index is higher in more densely populated urban areas such as Los Angeles and New York, and lowest in low densities urban areas, such as Kansas City and Indianapolis. The anti-suburban agenda would make traffic worse, not better. Air Pollution: Higher levels of air pollution are also associated with higher densities, not lower densities. This is, of course, to be expected, since air pollution is so closely related to traffic congestion, which we have already noted is worst in the higher density urban areas. Anti-suburban policies will make air pollution worse than it would otherwise be. Travel Times: Defying popular perception is the fact that average peak hour travel times have fallen in the United States over the past 25 years. According to the US Department of Transportation, one of the principal reasons for this is that more people are using cars instead of transit. Transit travel times are generally from 50 percent to 100 percent longer than that of the automobile, even where there are expensive urban rail systems. The anti-suburban agenda will lengthen commuting times. Downtown Revitalization: A common theme among anti-suburbanists is an interest in downtown revitalization. Privately financed efforts of organizations like St. Louis 2004 are commendable, and St. Louis is fortunate to have such a committed and involved private sector. In what might be considered the "Disneyfication" of downtown, the nation's central business districts are increasingly becoming tax supported regional amusement centers. But downtowns are no more deserving of public investment than any other part of the urban area, and they generally are already the recipients of inordinate subsidies. Favored treatment is not appropriate for anywhere --- downtown or suburban. The Role of Transit: Based upon my quarter of a century experience in transit, let me disabuse you of any misperceptions about the role of transit in the US metropolitan area. Of course, transit plays an important role in providing mobility to low income citizens and the disabled --- in short, people who do not have access to automobiles. But transit's role outside of that is very limited. Transit carries approximately one percent of travel in the St. Louis area. If transit ridership were to increase four or five fold --- and it will not --- the impact on traffic congestion would be imperceivable. The only place in the urban area that can be reached by convenient service from everywhere else is downtown. This is not just in St. Louis, it is the same in New York, Chicago, Seattle and every other American city. The problem is that downtown has, on average, less than 10 percent of regional employment. Worse, downtown is losing market share in relation to the rest of the urban area. In St. Louis, 11 percent of downtown workers use transit, but only two percent use transit outside downtown. And non-downtown commuters have incomes 40 percent below average, suggesting that they use transit because they have no choice. If everyone who commutes by transit outside downtown were to begin using automobiles tomorrow, no one would know the difference (though they would get to work a lot faster). New light rail systems like the St. Louis "Metrolink" are very attractive, but exceedingly expensive and ineffective. While proponents claim that light rail can carry the equivalent of six freeway lanes, the practical fact is that they tend to carry one-fifth, and that the average arterial street lane carries twice the volume of a light rail line. Nowhere in the United States, nor even in Europe, has a new rail system made a perceivable difference in traffic congestion. There is a simple reason why. In both Europe and the United States transit does not and cannot go where most people want to go. For the overwhelming majority of trips, people do not choose transit because there is no usable transit to choose. Urban Growth Boundaries: Urban growth boundaries are a favored strategy of the anti-suburbanists. Urban growth boundaries seek to preserve open space, while forcing more dense urban development. But history suggests that, in any material sense, they will fail. Take, for example, London. In the 1930s, London established an urban growth boundary --- the "Green Belt." And while London is surrounded by 10 or more miles of Green Belt, it has not contained urban development or increased densities. London itself has lost more than 15 percent of its population. At the same time, three times as many people as have left London have settled just outside the Green Belt. The result --- much lower densities --- much greater automobile dependency. The same is likely to occur in America. Some people may be forced to live closer together. I suspect that many more will decide to live elsewhere or live in previously rural areas beyond the urban growth boundaries. Urban areas yielding to the siren song of anti-suburbanism are likely to become less competitive. Shopping: Anti-suburbanists are particularly hostile to suburban shopping centers in general and "big box" retailers such as Wal-Mart in particular. They mourn the loss of traditional downtowns with their smaller stores that have been driven out of business by the new suburban competition. But the proliferation of suburban shopping has brought lower prices to consumers. One has to ask, what is the purpose of an economy --- to serve consumers or to serve producers? Clearly, consumers are sovereign in the economy. Just as some mourn the loss of downtown shopping, others mourned the loss of horse drawn carriages and the Luddites sought to destroy the machinery of the industrial revolution. History proceeds, and the market changes. Retail establishments are justified by their ability to attract sufficient sales. To reverse course and favor one group of producers at the expense of another will only raise prices. The day could come that Americans, like Japanese and English, find their own products less expensive abroad. Moreover, limiting commercial construction will destroy jobs in construction and related industries. More Dense Housing: Anti-suburbanism would require houses to be built on smaller lots, generally in already developed areas. Even Portland's anti-suburbanists metropolitan government anticipates that this will raise housing prices. Fewer people will be able to afford houses, and there will be fewer jobs in construction and related industries. Regional Government: The anti-suburbanists are particularly concerned about the large number of municipal governments in most urbanized areas. They indicate concern about duplicative infrastructure, which they contend increases public costs. Yet there is no evidence that regional government or larger government are more efficient overall than smaller, more fractionalized governments. Indeed, larger municipal governments are more costly, as we found in a report for the city of Toronto in 1997. There are a number of reasons for this. Despite the large price tags, infrastructure is not the driving factor in local government costs --- it is rather labor, which represents 60 percent or more of annual budgets. Larger municipal governments tend to have larger staffs per capita and higher labor costs. Moreover, there are no economies of scale in larger municipal governments. Larger governments do, however provide economies of scale to special interests --- they are more susceptible to special interest control, which invariably drives costs up. These two factors --- larger payrolls and susceptibility to special interests combine with more complicated bureaucratic processes to make regional government less responsive to the people. Why should garbage collection be administered from St. Louis? Why should fire and police departments be centralized in St. Louis, Clayton or St. Charles. Where governments are larger, citizen and neighborhood interests are less important. Regional governments are necessarily less democratic than smaller municipal governments. To paraphrase Abraham Lincoln: Government of the people, by the people and for the people is government that is closer to the people. This is not to suggest that there is not a role for regional coordination and cooperation. Mandatory coordination is appropriate with respect to regional issues, such as air pollution. And, voluntary cooperation is appropriate with respect to other issues. Agricultural Land: For decades, America has been becoming a more prodigious agricultural producer. Since 1950, eight times as much land has been taken out of production than by suburbanization. Yet, agricultural production has risen by more than 100 percent. Suburbanization is not consuming needed agricultural land. To summarize, the problems the anti-suburbanists cite are not problems and the solutions they propose would impair the quality of life and the economy. Portland's False Fronts Let me just mention a few words about Portland, Oregon, the anti-suburbanist ideal. Portland's metropolitan government has adopted a number of anti-suburban measures, and its missionaries literally circle the globe with an evangelical zeal rivaling any found in the last century. They claim that Portland's urban growth boundary, adopted 20 years ago, has made Portland the attractive city it is today. But behind the false fronts of Portland's policies is found an urban area little different than any other, and the first evidence of serious consequences. As one who grew up in the Portland area and has visited often, I can tell you that the Portland of 1999 looks little different from the Portland of 1980, except for its having sprawled to a greater degree than any other major western city. Moreover, the urban growth boundary has not contained growth --- it was drawn so far from the city that it has only recently been approached. And, Portland has embraced the First Commandment of anti-suburbanism --- Thou shalt build no highways. Portland has decided that, on balance, it is better to have two million cars in 400 square miles than 500. They are already paying the price with rapidly increasing traffic congestion, and traffic congestion is likely to be worse than that of Los Angeles within 15 years. Moreover, Portland has been converted from a low cost housing market to one of the nation's most expensive. The Decline of the Central City and "Push" Factors Before discussing the probable effects of anti-suburban policy, it is appropriate to consider the issue of urban decay. Why is it that our central cities have declined so? Anti-suburbanists would like us to believe that it is because of the automobile the building of the interstate highway system and other public policies. But suburbanization was well on its way in the 1950s, before any significant part of the interstate highway system opened. Of course, as people have become more affluent, they have sought new houses on larger lots, in pursuit of the American Dream. But there are other factors --- what some have called "push factors."--- that have hastened the decline of the central cities. Examples include: Higher central city public service costs, which have necessitated higher taxes. Inferior quality services in central cities. Special interest control of large cities and political corruption. Poor central city education Much higher central city crime rates. Even so, however, similar demographic trends have occurred in virtually all major cities in the developed world over the past 30 years --- dense central city areas are losing population to the more spacious suburbs. The American Dream is the Universal Dream Anti-suburbanists often point to Europe as a model for US urban development. But, despite this perception and in spite of much more regulated economies, Europe and Japan, and virtually every other developed area of the world is suburbanizing, and automobile use is increasing. The central city of Paris has lost 800,000 people in the last 50 years, while the suburbs have burgeoned to hold five times as many people as the city. Over the past 50 years, all growth in London, Stockholm and Copenhagen has been suburban growth, as central city populations have fallen substantially --- just as in the United States. Europeans have become nearly as dependent upon their automobiles as Americans, despite gasoline prices of $4.00 per gallon and more. Automobile ownership and use is exploding in Japan. The American Dream has become the Universal Dream --- and why not? The Anti-Suburbanist Nightmare The anti-suburban agenda addresses a problem that does not exist, with solutions that threaten the American economy. The anti-suburban agenda is likely to replace a the American Dream with a nightmare, characterized by: Increased traffic congestion, air pollution and travel times, and a retarded quality of life. Increased housing prices, putting home ownership out of the reach of millions of Americans. Higher product prices, due to less efficient and less competitive retailing, lowering the standard of living. Fewer jobs across the economy, starting in the construction trades, spreading to related industries and beyond. The issue was framed quite effectively nearly 50 years ago by Illinois Governor Adlai Stevenson as the 1952 Democratic Party Presidential candidate: Our people have had more happiness and prosperity, over a wider area, for a longer time than men have ever had since they began to live in ordered societies 4,000 years ago. Since we have come so far, who shall be rash enough to set limits on our future progress. Who shall say that since we have gone so far, we can go no farther? Who shall say that the American dream is ended? It would appear that Governor Stevenson's question has been answered --- the anti-suburbanists, including the Vice-President. It is expected that anti-suburbanism would be a major policy agenda of a Gore administration. Already, the US Environmental Protection Agency is underwriting the anti-suburban activities of hundreds of interest groups. Your money is being used against you. Democratizing Land and Mobility Anti-suburbanism could represent the most serious assault yet on the American Dream. It is, at its core, a threat to freedom that is not warranted by any genuine common interest. It is just the latest battle in a conflict between: those who believe that government should plan our lives and those who believe that we should be free to plan our own lives. America's spacious suburban areas have brought many benefits. Traffic congestion is less severe because of suburbanization Air pollution is lower because of suburbanization Travel times are shorter because of suburbanization Housing prices are lower because of suburbanization. Houses are larger because of suburbanization. Yards are bigger because of suburbanization Prices are lower because of suburbanization There are more jobs because of suburbanization. The economy is stronger because of suburbanization. Through the American Dream, land use has been democratized. And, through the American Dream mobility has been democratized. These are not dishonorable deeds, they are sources of just pride. Our task is to expand the American Dream, not to draw a growth boundary around it.