Patrick McSweeney


 

A Pricing Approach to Growth

Growth in Virginia is inevitable but sprawl is not. The key is not more government control but less -- in particular, an end to transportation subsidies. 


 

In discussing sprawl and its consequences, we should distinguish sprawl from growth in general. Whether sprawl occurs or not, Virginia will continue to experience growth and land development unless the economy collapses or  the population stops increasing. Over the long term, neither of those circumstances is likely.

 

Land development is necessary to accommodate anticipated economic and population expansion. The Metropolitan Washington Council of Governments forecasts approximately 1.6 million new jobs in the region and a shortage of about 92,000 new housing units in 2030.

 

Housing supply has consistently lagged behind job growth in the Washington, D.C. region. One contributing factor is tighter land use regulation by suburban counties. This has not only slowed housing development in those counties, but also driven up land costs. Those working in the region are being pushed farther and farther into more remote counties where land costs are lower and land use less regulated.

 

Regardless of the pattern of development, there are unavoidable costs associated with growth. If we can identify those costs and assure a means of covering them, the debate over sprawl takes a different direction.

 

The most visible problem associated with metropolitan growth is traffic congestion. Automobiles are the leading source of air pollution in these regions. The cost of constructing new transportation facilities and maintaining the expanded network far exceeds available and foreseeable revenues.

 

This is where the private sector can contribute significantly. Improvement will come not simply by giving private companies greater flexibility in designing, constructing, operating and maintaining transportation facilities, but by giving individuals in the region the broadest array of potential choices about where they reside, work, attend school or open businesses and by allowing markets to set prices for those specific choices.

 

The manner in which we finance transportation facilities largely determines whether we achieve true efficiency. The present tax-funded approach is highly inefficient in large part because the allocation of those tax funds is highly politicized. For example, Northern Virginia taxpayers pay an enormous transportation subsidy to taxpayers in other regions. Less than half of the transportation-earmarked taxes collected in Northern Virginia find their way back to that region.

 

If Virginians want true efficiency, an assured source of revenue for roads and public transit is not the answer. It will lead to rigidity. The policy debate over congestion has proceeded in precisely the wrong direction. Rather than looking for more tax revenues, we should be dismantling the current funding arrangement and demanding that Congress do the same.

 

The only way to achieve a more efficient transportation system over the long term is to price transportation the way telecommunications and energy are priced. The old model may have worked tolerably well in a simpler time, but it is ill-suited to the ever-changing and increasingly complex mobility challenges we confront in metropolitan areas.

 

For decades, we have built government roads to accommodate scattered development. More people drive more vehicles on more trips over longer distances than last year. Without a radical change, we can expect that to worsen in the future.

 

Congestion of these roads is an example of the tragedy of the commons. Because everyone can use a road without a user charge, no one takes the cost of the road into account in deciding where to live, work or engage in any other activity requiring travel. Pricing of transportation that reflects its true value would contribute more to rational patterns of development than any set of government land use policies and regulations devised ever could.

 

-- January 3, 2005

 

 

 
 

 

 

 

 

 

 

Contact Information

 

McSweeney & Crump

11 South Twelfth Street
Richmond, VA 23219
(804) 783-6802

pmcsweeney@

   mcbump.com

 

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