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Economic impacts of auto-dependency

I’m reading a really interesting book at the moment, The Option of Urbanism: Investing in a New American Dream by Christopher B. Leinberger. It’s a good book because it takes a historical look at the shift in the mid 20th century away from what’s termed “Walkable Urbanism” and towards a “Drivable Suburbanism” as the main form of building cities and transportation systems and then starts considering more recent urban trends – suggesting a shift back towards walkable urbanism as the economics and environmental effects of drivable suburbanism start to no longer make sense. Changing demographics, particularly the shift away from “two parents with kids” households is also seen as a major cause of the trends back towards the type of urban form (and transport system to support it) that was more common before the Second World War.

There are potentially a few future blog posts to come out of the book, but one thing that I found particularly worth outlining are some of the economic effects of the extreme extent that urban development has gone down the drivable suburbanism path.

Transportation costs were eighteen percent of household income in 2005, second to the amount US families spent on housing (twenty-four percent). This compares with fourteen percent spent on transportation by the average family in Europe, where public transit is much more developed and there is more walkable urbanism. The geometric increase in VMT also indicates the increasing share that automobile transportation plays in US family finances. AAA calculated that the average cost of car ownership and maintenance for a typical car in 2006 was $7,800 per year. This covers loan payments, fuel, parking, maintenance, insurance and incidental costs…

…The result is that owning an average car is the equivalent of having an additional $135,000 mortgage (mortgage interest is tax-deductible, and this calculation assumes six percent mortgage interest). In essence, drivable suburbanism has probably been shifting family spending away from investing in a long-term appreciating asset (e.g. a house) or savings to a short-term depreciating asset (e.g. a car).

This is one of the hidden issues of auto-dependency. If people don’t perceive that public transport is good enough to meet their requirements then they will feel they have to buy that extra car in order to properly participate in society. And buying that extra car can end up being a huge financial burden. Thinking of Auckland, and the particularly crap public transport serving “blue collar” working areas like East Tamaki, Penrose, Mt Wellington, Auckland Airport, Wiri and so forth, the impact on lower income workers is likely to be particularly severe. This seem to be the case in the USA, as the book continues:

The above calculations were for a typical car-owning family, but the findings become even more grim for a working-class family. A 2006 study of eighteen metropolitan areas throughout the country found that working families spend even more on transportation than on housing, a reflection of the ‘drive until you qualify’ affordable housing strategy. “In their search for low-cost housing, working families often locate far from their place of work, dramatically increasing their transportation costs and commute times.” The unintended consequences do not stop there; this mean less time with the family, increased traffic congestion for the region, and greater greenhouse gas emissions.

Traditionally US cities had their poorest residents in the centre, with richer people shifting outwards as they acquired more money. This seems to now be changing, perhaps to reflect more how things are in a city like Auckland – where definitely the cheaper real estate is further out – creating that tricky trade-off of transportation against housing costs.

I think that it would be fascinating to look at the personal costs to families of Auckland being so auto-dependent. Many poorer parts of the city (Mangere & Massey immediately come to mind) suffer some of the worst public transport provision – probably forcing a large number of families to own more cars than they would ideally want to, pushing a big financial burden onto them and making it even more difficult for them to get ahead in life. I’m not sure how you would necessarily go about focusing transport investment in such a way so that it could help lower the extent to which these families need to have more cars than they’d ideally want – but car ownership rates in certain parts of the city could be quite a good measurement tool to work out whether transportation policies were working or not.

4 comments to Economic impacts of auto-dependency

  • I think another part of the story is that alongside the mass migration to the suburbs, the post-war suburbanisation of jobs across all sectors of the economy has also embedded car dependence in our cities. Since land-use policies have ensured that the majority of these jobs (in Australasian cities anyway) are off the principal public transport network, people’s origins and destinations have been (and continue to be) poorly served by public transport in comparison to pre-WWII patterns of centralisation of jobs and housing in the inner core and along railway/tram routes.

    The really interesting question is whether it is feasible to retrofit high-quality public transport (be it heavy rail/light rail/BRT/bus) into the suburban environment to ease the transition from multiple car-owning households down to a 1 or 2 car household?

  • How about “council houses” in every suburb so the occupants might be closer to a range of jobs that match their skills?

    Great article BTW, GRIST mentioned it

  • Barry

    What the AAA calculation does not bring into the equation is 1) the $7800 dollars is after tax income, depending on your income tax rate you might have to earn $15,000 a year or more to pay the $7800.
    2) There is no accounting for the societal costs of auto transport. The real cost of highway and road infrastructure is payed for by general taxes, the gasoline taxes do not come any where near paying for the highways. Then there is the cost of crashes, the human and medical costs. The costs of long term care for people paralyzed or brain damaged in car crashes and the costs of lost productivity. The costs of pollution caused disease are not counted. Neither are the costs of emergency response by Police Fire and EMS or the costs of gridlock.
    In Canada they salt the roads in the winter to melt the ice and snow and the salt pollutes the ground water and also contributes to the deterioration of the road infrastructure.
    So everyone contributes to the maintenance of this sick transportation system whether they drive or not

  • JB

    I agree with Barry’s comment, “What the AAA calculation does not bring into the equation is 1) the $7800 dollars is after tax income, depending on your income tax rate you might have to earn $15,000 a year or more to pay the $7800.”

    Grist magazine has run many good articles about the impact of the automobile on the environment, for example, Sara Goodyear is a regular writer. While we probably will not totally reduce the use of automobiles, trucks, et. al. we can make them more efficient, and less dependant on petrol. One great film I’d like to recommend is (not sure if I have the right title exactly), How Cuba Survived Peak Oil. It shows Cuba’s resourcefulness is running its’s country without oil, and is an inspiring documentary.

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