Presentation by Dr. Anthony Downs, Senior Fellow Brookings Institution Summary by Jed Smith, Managing Director, Quantitative Research
The REALTOR® University Brown Bag monthly lecture series features presentations by well-known economists, analysts, and social scientists on evolving national and regional issues of interest to REALTORS®. Lectures are available on www. realtor.org. The presentation by Dr. Anthony Downs focused on a housing issue of interest to everyone—traffic congestion: Watch the highlights video.
Most Americans agree that traffic congestion is a major problem in their communities, and congestion seems to be getting worse. Dr. Anthony Downs discusses the problems of traffic congestion—based on his book Still Stuck in Traffic. He focused on three major issues:
Why congestion occurs: Efficiencies of scale from the interaction of people increase as the number of people present increases. Bigger areas and gatherings of people produce even more efficiency than is the case for smaller gatherings. Economic efficiency, growth, and congestion seem to vary together.
Where future population growth is likely to develop: Dr. Downs noted that urban planners advocate high density, high rise population concentrations. However, analyses of urban areas with population growth in recent years have shown that the majority of population growth has occurred in the suburbs. High density population concentrations have not proven to be popular, although urban planners view such concentrations as desirable—their story and they are sticking to it! Planners project an additional 129 million additional people living in central cities over 2010-2050. There just isn’t enough space in the central cities to accommodate this number of people. Again—more commuting and congestion due to people commuting.
Will walkable communities will dominate future housing choices? Dr. Downs noted that urban planners focus on walkable communities as an ideal for the future development of cities, alleging that the Millennial generation prefers to walk, bike, or use public transportation. As he indicated, the Millenials have not yet reached two important stages in life: marriage and children. Small children need open space, monitored gathering places, playgrounds, and specialized facilities and services—not walkable open air bars and great shopping experiences.
What Does this Mean to REALTORS®? It’s easy to note that a house is in the midst of congestion. In some cases, that may be good for the prospective buyer—congestion goes with the desirable features.In addition, finding a home near good shopping and restaurants sounds great, but the buyer may want to think ahead a few years as to how the home will fit with long term needs.
Jed Smith is Managing Director, Quantitative Research with the National Association of Realtors®. He has worked on real estate issues for the past 20 years, providing input on a variety of housing, commercial real estate, tax, and planning issues. Recently he has been involved in several international studies.