Articles

Gas Shock

The rising price of gasoline is prompting major  re-thinking of Virginia's transportation policies. Just ask Sen. Marty Williams, a conservative Republican who now supports growth management.

by Peter Galuszka

Since opening nearly four years ago, the concrete bridge at Pocahontas Parkway just south of Richmond has won accolades for dramatic design with its steep, sharply twisting access lanes high above the James River. But a $2-per-car toll kept some motorists away from the new 8.8-mile-long expressway that links Interstates 95 and 295 with 64. 

Thanks to soaring gasoline prices, that’s changing. Even though tolls went up 25 cents in January, usage of the parkway is up as much as eight percent so far this year compared to 2005. With gas prices so high, fewer motorists are willing to drive seven to 10 extra miles simply to dodge the tolls. That’s good news for parkway bureaucrats who feared that low traffic volume might hinder their ability to pay off long-term bonds. 

Pocahontas Parkway is a small but concrete example of how rising energy prices are changing Virginians' driving behavior. Newspaper accounts are full of anecdotes of people sharing rides, switching to mass transit, moving closer to where they work or finding creative ways to drive fewer miles each week. Meanwhile, in a sign that long-term structural shifts may be taking place, Virginia developers are showing greater interest in transit-oriented and pedestrian friendly development than at any time in half a century. 

Increasingly, General Assembly deliberations over transportation financing seem caught in a time warp. The Kaine administration and the state Senate insist that the state needs to find a stable, long-term funding source to pay for massive spending on new road and rail projects. But if Virginia is entering an era of permanently higher gasoline prices, it may be time to break from the Business As Usual mindset that accommodates the endless push of new development and roads into the countryside.

Gasoline shock may be changing some minds. One shifting view is that of Martin E. Williams, a Republican from Newport News who is chairman of the state Senate’s Transportation Committee. “I never thought I would agree with a growth management strategy that hurts property rights but I am already there,” he says. “We just can’t accommodate growth in outer areas like we used to.” 

The drop in driving is already a big blip on the General Assembly radar screen. Williams says that recent state revenue figures show that that higher prices are cutting into gasoline consumption -- 5.2 billion gallons in 2004 -- and revenue flows. Money earned through per-gallon gasoline taxes now should be about $800 million short over the next six years, Williams says. The figure may increase if gas prices go up more. 

If the past session is any indication, Virginia can expect to see more bills like the landmark legislation that required the Virginia Department of Transportation to review the impact of subdivision rezoning on local traffic. That particular law might never have seen the light of day had gas prices not spiked last summer. “Five years ago, that bill wouldn’t have gotten out of the first committee. I’d never thought I’d get there on this issue,” says Williams, who, as a conservative Republican, supported what he described as free market and property rights principles that encouraged real estate development with few controls. 

Future changes may involve counties and cities being less lenient than in the past about approving large subdivisions located far from work and shopping. New state laws could well put more burdens on developers to come up with bigger proffers or other ways of paying for infrastructure improvement if they want their projects to proceed. “If a developer is going to be responsible for a one-third increase in traffic, then they should pay for it,” says Williams. 

So far most of the analysis on rising gasoline prices has focused on the negative impact on state transportation finances. The Virginia Department of Transportation, for instance, has to find $362 million to cover the extra cost of asphalt for road paving since the product is based on now-expensive oil, according to E, Scott Kasprowicz, deputy transportation secretary.

But the gas shock works two ways. Virginians are looking for ways to drive less, which could render VDOT's 20-year forecasts of transportation demand out of date. Mass discounter Wal-Mart is worried that gas prices are keeping customers away, Tom Schoewe, the company’s chief financial officer, said in a recent press release. For the four-weeks ended May 26, when unleaded gasoline prices averaged $2.99/gallon, same-store sales were down about 0.8 percent compared to a comparable period in the previous May, when gas prices were about $2.30/gallon. “We believe that our customers are consolidating their store visits and focusing their spending on consumables – a trend we have been seeing since Easter,” Schoewe was quoted as saying. 

Meanwhile, developers are factoring higher gasoline prices into their thinking about the kinds of real estate projects that will sell. "Land speculators seem to have stopped snapping up larger tracts of land of 20 or more acres in areas in Culpeper and Fauquier Counties about 50 or 60 miles away from major urban or suburban areas,” observes Christopher Miller, president of the Piedmont Environmental Council. “I’ve seen a severe flattening of speculative development and pricing,” he says. 

Sensing a shift in energy economics, many prominent developers are building projects with shorter commutes and less fuel usage in mind. Vienna-based KSI Services, for example, is pushing a number of projects in Northern Virginia that put mixed-use projects within short walks of public transportation. One is Lorton Station where residents of 1,170 units are able to commute to jobs in downtown Washington, D.C., and at the Pentagon via a Virginia Railway Express train station nearby. In a reversal of its traditional formula of cookie-cutter subdivisions in outer suburbia, KSI officials anticipated higher energy prices and changing demographic dynamics in the mid 1990s and started planning more commuter-friendly projects. Their experience is being replicated across the U.S. in places such as Denver, San Diego and Chicago. 

Still, it does not appear that the public has made the leap from curtailing gasoline consumption to adjusting the state's transportation policy. Will voters finally understand that, with higher gasoline prices, they might not be able to continue their previous lifestyles? 

Some state officials decline to discuss it publicly, noting that the topic is too big and controversial. One reason, they say privately, is that many residents, especially those in low-density areas, have few transportation alternatives and would suffer hugely if gasoline prices continue their upward spiral. Living in places where houses, stores, jobs, schools and doctors' offices are far apart, these exurbanites are locked into an auto-centric lifestyle. “All of their discretionary spending goes away with fuel price hikes,” says one official. “They can’t upgrade. They can’t move.” 

Indeed, simply uprooting and moving closer to a city may not be possible for some because rising gas prices might decrease the values of their far-away real estate so much that they won’t have enough for a down payment for closer-in housing. This may be especially true if they have used up their housing equity, as many have, to pay off expenses such as credit card bills. 

Prices for housing properties closer to cities, meanwhile, will inflate and calls will come for more bus, light rail and rail public transit. While there are proposals on the books, such as expansions for the Washington-area Metro and more rail lines from Washington to Richmond and south and also from Washington south through Charlottesville to Danville, serious money will have to be found to support such ventures. Such funding is not likely until a public outcry for it becomes much stronger. 

Miller of the Piedmont Environmental Council says that Virginia’s Commonwealth Transportation Board and VDOT need to reevaluate overall transportation plans that were developed some years ago when gasoline prices were closer to $1 per gallon. He suggests a more realistic approach might be to do new studies looking at needs when gasoline prices are closer to $4 per gallon. His group, meanwhile, is pitching a joint study with Virginia Tech to study how $3 per gallon gas prices have changed real estate prices. 

It may take more pain at the pump to prod the public into the kind of mental metamorphosis that Sen. Williams has undergone. Williams acknowledges the the the sprawling, automobile-driven development he encouraged for years just can’t continue. “We couldn’t afford it 10 years ago and we just didn’t know it,” he says. 

However, simply passing more legislation with better land use planning alone won’t provide real solutions, says Stewart Schwartz, executive director of the Coalition for Smarter Growth in Washington. “The response must be much more robust and it is truly a national security issue.” For instance, the state’s transportation plans should include energy-use performance standards, he says. State economic development officials should factor in energy and commuting costs as they prepare sites to lure potential businesses. 

Such notions once would have been dismissed as far fetched. But if other legislators experience epiphanies like Williams, the General Assembly may be taking a very different approach to transportation issues than in the past.

-- June 14, 2006