WHY IS IT SO HARD FOR CITIZENS TO UNDERSTAND THE FACTS ABOUT LOCATION-VARIABLE COSTS?
THE 10X RULE AND ITS APPLICATION TO ACHIEVE FUNCTIONAL HUMAN SETTLEMENT PATTERNS IS A KEY TO UNDERSTANDING WHY LOCATION-VARIABLE COSTS ARE SO IMPORTANT.
In a recent ‘Current Perspectives’ draft (“A Shelter Must Read” 17 May 2010) Groveton, the newest BaconsRebellion Blog Contributor and frequent commentor over the past few years, again demonstrated continuing confusion.
After spinning out details of a hypothetical (aka, ‘typical’) eastern Loudoun County Household (See End Note One) Groveton asks:
“What else do we need to know in order to estimate how much these “scoff societies” are stealing from us?”
The short answer is: “Almost everything because that ‘data’ on the hypothetical Household has no relationship to an understanding of location-variable costs or their allocation.
STIPULATIONS
1. Under current conditions, two Urban Households that:
A. Occupy the same price dwelling (technically ‘two dwellings with the same assessment’ but not necessarily the same VALUE) in the same municipal jurisdiction, and
B. Have the same income and consumption profiles
Will pay about the same amount for most location-variable goods and services REGARDLESS OF THE SETTLEMENT PATTERN IN THE DOORYARD, CLUSTER, NEIGHBORHOOD, OR VILLAGE if their respective Households.
That is THE PROBLEM, it is not an indication that there is NO PROBLEM.
2. Often Urban Households with high disposable incomes choose to live in locations where subsidy of location-variable cost make living in these location DOUBLY attractive.
First they have the privacy and exclusiveness of “the American Dream” AND second, someone else is paying much of the cost of that privilege.
Three major points to remember about this second stipulation:
A. Neither Jim Bacon nor EMR have EVER said that Urban citizens should not have the right to live in these locations – or anywhere else – SO LONG AS THEY PAY THEIR FAIR SHARE OF LOCATION-VARIABLE COSTS.
B. If Urban Households in these ‘exclusive areas’ fall INSIDE the Clear Edge around the core of a New Urban Region (or one of its large SubRegions) this area MAY have a negative impact on the evolution of functional settlement patterns at the Alpha Community or SubRegional scale.
This is due to the fact that the ‘exclusive area’ may insulate, separate or isolate two or more components of the Community or SubRegion that would otherwise have a synergistic economic, social and / or physical impact. (See literature on NIMBYism.)
However, these possible Community, SubRegional or Regional costs are NOT factors in the 10 X Rule derivation because the 10 X Rule only deals with Urban dwellings at the Dooryard, Cluster, and Neighborhood scales. There are obviously cost at larger scales but they are beyond the scope of the 10 X Rule.
C. If Urban Households in ‘exclusive’ areas fall in higher Radius Band locations (beyond the logical location of the Clear Edge as clearly illustrated with census data and air photos in “The New Urban Region Conceptual Framework” a PowerPoint found in Chapter 49 of TRILO-G), the same Radius Band will ALSO include many Households that are in the bottom 90 percent of the Ziggurat. (NB: In this context the ‘Ziggurat’ may also be known as ‘the economic spectrum.’)
It is often suggested that those Urban Households in ‘exclusive areas’ which are at the top of the Ziggurat (both inside AND outside the Clear Edge around the Core of the New Urban Region) pay MORE than their fair share of taxes and fees. In some cases that may be true but these taxes and fees almost never contribute directly to a fair allocation of location-variable costs.
The less well-to-do Urban Households in Outer Radius Band – the bottom 90 percent of the Ziggurat – fall into two categories:
First: Those distributed around the middle of the Ziggurat have fallen for the Myths behind the “drive-til-you-qualify’ ploy to “get more house for the money” and the Myth that buying a bigger dwelling than the Household ‘needs’ is a good investment. (Larry G. articulates the views of these residents in Spotsylvania County and in similar locations on a regular basis.)
The second group are those at the bottom of the Ziggurat who are seeking Affordable Housing but end up with InAccessible Housing. (See discussion of concentrations of foreclosures and underwater mortgages in “A Shelter Must Read,” 17 May 2010 and in “The Importance of Housing Location,” 18 May 2010.)
LOCATION-VARIABLE COSTS AND THE 10 X RULE
With the above stipulations and clarifications that should put Groveton on a more positive track spelled out, EMR repeats yet again:
The Shape of the Future spells out:
1. Why the ‘cost of sprawl’ studies that have been a staple of the settlement pattern debate are tragically flawed.
2. The 10 X Rule and its derivation.
Here again is a brief summary:
During the mid-90s, planning graduate students carefully examined two conditions in several jurisdictional contexts:
In each case the a 10,000 acre area was selected and in each case 1,000 dwellings were located.
In Alternative A the 1,000 dwellings were designed in a Planned Neighborhood Development. See End Note Two.
In Alternative B the 1,000 dwellings were distributed on 10 acre lots.
For both Alternative A and B 40 (+/-) location-variable costs were calculated. The number of categories varied from jurisdiction to jurisdiction depending on the way goods and Services were packaged and delivered but for most situations there were 30 plus goods and Services that were the same in every case.
One bellwether was the cost of the construction of the electrical infrastructure and the cost of delivery of a kilowatt of electric service due to line loss. One of the easiest was the cost of Roadways because of the standards enforced at the time by VDOT.
The result was the 10 X Rule:
In a typical case, the same size dwelling with the same uses in configuration A would have an annualized cost of $6,700. In configuration B the cost would be $67,000, thus “10 X.”
VALIDITY OF 10 X
There has often been disbelief expressed about these results. However, no one with understanding, experience and access to actual land development data has offered a substantive critique or suggested that the 10 X Rule does not present a valid perspective on location-variable cost allocations.
Several factors makes incremental scattered Urban dwellings in the Countryside seem less expensive than they turn out to be:
One is the excess capacity in Countryside serving infrastructure that exited before 1950.
For example farm to market Roadways intended to serve NonUrban land uses can be used for this and that new dwelling and it is only when the total impact of a decades accumulation is considered that the true impact is realized.
It is widely agreed that traffic from orphan Dooryards and Clusters were dumped out on VDOT roads by county “pro-growth” land use control processes. This is the root cause of ‘congestion’ in Fairfax, eastern Loudoun and Prince William Counties.
Another ‘excess capacity’ illusion that hid the real impact of scatteration was the subsidized electrical distribution system. When Urban users are added, the rate payers in the entire service area – those with efficient patterns and densities as well as those with inefficient patterns and densities – pay for system capacity expansion.
Another major factor has been the failure to factor in externalities such as the cumulative impact uninspected and unmonitored septic tanks on ground water and the impact of over fertilizing and watering mown grass.
Perhaps most important is the stupendous power of FLAT RATES for goods and Services ranging from mail delivery to electrical service.
Flat rates were justified before computers made it possible to fairly allocate the cost on an individual Household basis.
Understanding the basis for a locational-variable cost bill would be the most powerful way to demonstrate the truth in the overarching reality illuminated by David Owen in Green Metropolis.
Exacerbating the impact of flats rates has been the use of volume discounts to reduce the cost of a good or Service if one uses more of it. This seemed like a good idea when the economy was based on burning through Natural Capital.
IN RETROSPECT
After a decade and a half there have been no substantive questions raised about the 10 X rule – or the other four Natural Laws derived from the settlement patterns that have evolved since 1950.
There are, however, several caveats:
First and most important, the 10 X Rule and the 10 Person Rule were based on settlement patterns that evolved when energy was cheap and the use of Large, Private vehicles was heavily subsidized by burning through Natural Capital.
Those days are gone. As suggested in prior work by SYNERGY, the rising cost of energy as well as the higher cost of ALL goods and Services if the current level of technological activity is to be preserved means that and ‘sweet spot’ of 10 persons per acre at Alpha Community scale will be significantly higher and thus the 10 X rule may become the 20 X Rule.
It is clear that all costs have gone up but that does not mean there has been a fundamental shift in true cost / benefit relationships.
No one has yet figured out a way to:
Transport children from scattered location to school except by bus.
Mix clean water with human waste and Household waste (that now includes a range of chemical and biological pathogens) and then treat / dispose of it in a way that is easy, cheap and has not significant externalities.
Propel Large, Private vehicles (directly via petrochemicals or indirectly via carbon generated electricity) that is cheap and free of environmental externalities.
Grow mown grass in the Mid-Atlantic MegaRegion without extensive use of fertilizer and water
Perhaps the best illustration of location-variable costs is electricity. No one has figured out how to deliver electricity without transmission lines, substations, distribution networks and transformers AND no one has figured out a cost effective way to reduce line-loss, especially at low voltages.
With these notes, it is hoped that bright folks like Groveton can articulate ways to inform citizens about the importance of fairly allocating location-variable costs. In addition this post will give Larry G. enough information so he does not ask yet again for the “list.”
EMR
……………….
END NOTES
1. From Groveton’s comment: “Oh yeah … the house is in Loudoun County, required a $40,000 proffer to build and generates 1% real estate tax on its assessed value. The working couple who live in the house have a combined income of $250,000 and are raising 2 children (ages 10 and 12) who attend public school. Their average state income tax is 5.4% and their average federal income tax is 34%. They spend @75,000 per year on various things paying an average sales tax of 5%. The husband commutes to Tyson’s – which is 17 miles away. The wife commutes just 8 miles. Hubby uses a combination of the Greenway and Dulles Toll Road. Wifey uses surface streets (i.e. no tolls).”
2. (Actually, Alternative A was more complex. The plans evolved in stages. First, the 1,000 Units were distributed in compact Dooryards, in the next iteration, the Dooryards were collected into compact Clusters and finally the Clusters were located in a single Neighborhood. The X factor was calculated for each step up toward functionality.
