Smart Growth, Traffic Congestion Reduce Growth

One of the more persistent myths in the urban planning profession is that traffic congestion is either economically benign or may be a symbol of urban vibrancy. Adrian Moore and I debunk much of this in our book Mobility First (see chapter 3), but it now looks like the news media is beginning to take note based on the results from Reason Foundation’s new study Gridlock and Growth by transportation analysts David Hartgen and Gregg Fields.

Specifically, the Examiner newspapers are running a nationwide editorial discussing the link between traffic congestion and economic growth. They are also pointing out the negative economic implications of so-called Smart Growth policies that either ignore these effects or dismiss their importance.

Their [Hartgen and Fields] results point to the significant economic upsurge that would result from eliminating traffic congestion. In San Francisco, for example, the study found that eliminating congestion around five key areas would generate $10 billion in new economic activity and add $750 million in tax revenue to local coffers. The figures for Denver are even more impressive, with $38 billion in economic growth and more than $2 billion in new revenue for local authorities. The average boost in economic growth for all eight cities studied was nearly $16 billion by 2030. The average tax-revenue increase was $900 million.

Hartgen and Fields’ bottom line is that reducing congestion and increasing travel speeds enough to improve access by 10 percent to key employment, retail, education and population centers increases regional production of goods and services by 1 percent. If that seems like too little return for the effort, the figures for increased economic growth and tax revenue would be quite tangible to those filling the new jobs, along with to the beneficiaries of enhanced government services made possible by added tax revenue. The alternative is to continue the losing “smart growth” regulatory game of increasing traffic congestion that suffocates economic expansion in the name of mass transit systems that the vast majority of people can’t or won’t use.

The full study and a more accessible policy summary can be found on Reason Foundation’s web site.