Three different readers sent me this story, published in the International Herald Tribune, about the impact of rising gasoline prices on human settlement patterns in the United States. The headline says it all: “Life on the fringes of U.S. suburbia becomes untenable with rising gas costs.”
Money quote:
In Atlanta, Philadelphia, San Francisco and Minneapolis, homes beyond the urban core have been falling in value faster than those within, according to analysis by Moody’s Economy.com. …
Many factors have propelled the unraveling of U.S. real estate, from the mortgage crisis to a staggering excess of home construction, making it hard to pinpoint the impact of any single force. But economists and real estate agents are growing convinced that the rising cost of energy is a primary factor pushing home prices down in the suburbs – particularly in the outer rings.
Bacon’s bottom line: Virginia legislators need to read this story. The very same trends are unfolding here. While transportation tax revenues are down, inducing a panic in the political class, so is driving. While some cuts in Vehicle Miles Driven are short-term — “I’ll rent a beach house in Virginia Beach this summer instead of Myrtle Beach” — many people are making longer-term adjustments, choosing to live closer to where they work in order to reduce the length of their commutes.
People, households are responding to higher gasoline prices. Human settlement patterns are changing. Vehicle Miles Driven are declining. Congestion may be easing — it is undoubtedly shifting to new locations. Yet lawmakers are determined to finance a long-term transportation plan based upon forecasts and capital projects based on the price of gasoline at less than $2 per gallon.
I know that calls for studies are often a tactic a tactic to delay decision making. But if ever Virginia needed a new study to re-evaluate its transportation funding needs, it would be now.
Multiple tips of the hat to: Jim Norvelle, Sallie Daiger and another reader I can’t remember (sorry!). Also, along these lines, Jonathan Mallard recommends a blog post on Freakonomics, in which Justin Wolfers opines upon the impact of gas prices on real estate.)
