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Perspectives

Transportation & the Economic Meltdown

Policy Expert Shares Views on Crisis

By Karl Vilacoba

About Perspectives

  • Perspectives features interviews with professionals making news in the transportation world.

To Todd Litman, the financial crisis has its roots in one of those inalienable rights laid out by the Declaration of Independence—the ever-elusive “pursuit of happiness.” Litman, executive director of the Victoria (Canada) Transport Policy Institute (VTPI), recently thought back to a time when families lived snugly in 1,200-square-foot homes, mom and dad shared a car, the kids split a bedroom and walked a couple of safe blocks to school.


Todd Litman is the executive

director of the Victoria Transport

Policy Institute, based in British

Columbia, Canada.

But somewhere along the way, the idea of what “happiness” meant changed. Societal pressure dictated that homes should be twice as large, each adult should have their own fancy car and riding the bus to work was stigmatized. The ideal American life portrayed in Norman Rockwell paintings was supplanted by sprawl and a lifestyle the average family income couldn’t possibly support.

The collapse of the housing market revealed how financially overextended American families had become, Litman said, thanks in large part to transportation costs like multiple car payments, insurance, gas, parking and tolls.

“Our household budgets should have plenty of flexibility, yet automobile dependency means that even a middle-class person is poor,” Litman said.

“We could be very happy with what we’ve got,” he said. “The tragedy is, we are so affluent that our economy is dependent upon . . . continually increasing waste. Once your basic needs are satisfied, we should have an economy that accepts that.”

Instead, he said, a person with a $50,000 annual income and a family of four feels poor.

“That’s a huge income by any measure except North American consumerist society,” Litman said. “Fifty-thousand dollars a year buys you everything you could possibly want except for a big suburban house . . . and a car for every adult.”

In 1995, Litman founded the VTPI, a non-profit research organization which advocates the innovative solutions to transportation problems and provides consulting services to clients around the world. In addition to his research work, Litman is a frequent speaker at conferences, an active member of several professional organizations, a published author and blogger.


Dwight Hiscano

Walkability is often overlooked as a

transportation investment, according to

Litman.

Litman said the financial crisis should influence policymakers to rethink what constitutes smart growth and affordability. Too often, governments have banished affordable housing to the suburban outskirts, sometimes only to meet counterproductive minimum parking requirements. Building small downtown apartments with little or no parking and better transit accessibility is a far more sustainable approach, he said.

“True affordability requires that we evaluate transportation and housing together. The worst thing that we can do is build a bunch of affordable housing in a location [where] everybody has to drive a lot,” he said.

Litman, who remained a U.S. citizen after moving to British Columbia years ago, gave high marks to President Barack Obama’s economic stimulus package for its emphasis on infrastructure maintenance and repairs. While people may not find upkeep projects inspiring, Litman feels strongly that they’re money well spent. His research indicates that once the basic Interstate Highway System was finished in the 1970s, by many common economic indicators, there was no more value in expanding the highways. From then on, the U.S. should have focused on alternative modes, he said, as Europe has.

“The most important alternative is walkability,” Litman said. “For a variety of reasons, walkability has been underinvested for the last 50 years. It simply has not been considered sexy . . . There should be a law that says [in] any advertisement for SUVs that the models should be fat and lazy-looking and impoverished, because that’s what an automobile does, and people walking by, bicycling by, should look really sexy.”

Litman sees the government’s efforts to bail out the auto industry as a potential threat to sound long-range planning. For years, the Big Three have profited from the popularity of gas-guzzling SUVs and trucks, he said. If the government becomes a major stockholder in Detroit, he wondered, would it not be motivated to promote auto-oriented land use patterns or allow the companies to continue building gas guzzlers so it will see a return on the investment?


Litman sees highway maintenance projects

as money well spent.

Beyond that, Litman contends American auto manufacturing is “a sunset industry by any measure,” a losing business proposition not worth backing. Litman says labor costs are crippling Detroit’s ability to compete with overseas automakers, and even “American-made” cars are built largely of foreign parts, so the economic value that stays in the U.S. is minimal. America’s future is in knowledge-based industries, not manufacturing, he contends.

“We don’t produce plastic toys—that’s not a crisis,” Litman said. “There is nothing special about producing a car.”

If Litman were Obama and could enact three transportation policies to make a long-term economic difference, he would hike the gas tax, demand more comprehensive analysis of investment decisions and reform car insurance so motorists are charged based on the miles they drive, thereby encouraging them to drive less. He sees the gas tax issue as crucial for shoring up the transportation funding gap and ending the “economic hemorrhage” of petroleum dollars abroad. Predicting gas prices will remain relatively low for a couple of years, Litman says now is the “perfect time” to begin a gradual hike. Around 50 cents per gallon should be added right away, with increases of 25 cents each year for the following five years.

“What that does is tell everybody right now, start thinking efficiently,” Litman said. “Every time you buy a car . . . or make a location decision, you should be anticipating getting back to that $4 or $5 a gallon price within five years.”

“There’ll be this trough right now which could last a few years, and our policies during that time will have a long-term effect on the fuel efficiency of our transportation system, and therefore the economic viability of our country over the next two generations,” he said.

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