Shared Air

Ryan Avent @ Atlantic Magazine points out an economic reality I think regional leaders are ill-equipped to see or seemingly lack the courage to respond to. And that’s either a shame, or poetic justice, because while only playing a land use game for 30 years (all the while resisting the idea of regionalism and its underlying social and transport networks as buffers to economic shocks), they will come to see that Land was not the point, Energy was. When asked, “What’s your plan? Why did you ignore this? What do we do now?” by the far-flung, isolated and irate citizens of Woodlake or Atlee Station or Burgundy Parke, they will have no answer, no Plan B, in the face of this:

[A] new McKinsey study warns of the inevitability of another oil shock. The fundamentals remain in place, they note, and the stronger the recovery from the current recession, the sooner the potential spike may take place (see charts here). Under the best growth scenario, a steady rise in prices could give way to a spike as early as next year, and even a deeper recession than is currently forecast would merely delay a spike until 2012 or 2013.

There’s not enough time to erase the threat from expensive oil; it took us decades to build this dependency, and it can’t be erased in three or four years. But progress is possible. Given that a long-term stimulus investment boost may be necessary to return us to trend growth, it would make a lot of sense to direct a healthy share of that investment toward efficiency, transit, and research on petroleum alternatives.

If we take the time to look, it’s not difficult to see a similar affliction hypnotizing manufacturers such as Detroit and regions such as Richmond… Unfolding before our eyes, GM, Chrysler, etc are experiencing the cataclysmic results of years of attempting to lobby and legislate away the longer-term realities of oil and transport economics. As Avent points out above, last year’s Oil-induced recession blew away the already shaky sectors of housing and transport with all the affiliated ripples affecting us all to this day.

And the Richmond Region? It too, ignores the kinds of Economic effects that Detroit, in it’s own myopic way, also tried to deny. Just as many mistake land use being the primary challenge when it’s really energy use that’s the ticking bomb so, too, do many talk about Smart Growth while missing the point that Dumb Economics are much easier to describe, target and tackle.

Let’s take a look at three examples that indicate why the Richmond Region’s voters will quite possibly be bringing torches and pitchforks to 2009, 2011 and 2012 elections.

1. Ignoring Economic Externalities – our counties have been built and grown, for 25+ years, based on a cheap energy model that’s 50 years out of date in 2009. Global Oil production looks to have peaked in 2007. Some will snort and say what’s that got to do with life in Goochland or Ginter Park? Simple. This background knowledge of scarcity is leading traders to chase up wild fluctuations in oil prices, with an ever-rising floor each time. An example of the resulting petro-commodity crunch led to $120 bbl oil in 2008 which rippled through the travel and materials costs involved in making far-flung exurbs viable.

In other words, many of those homes in Short Pump and past Brandermill suddenly no longer held their initial cost/benefit value proposition: More square footage for a cheap commute. . .  an equation that no longer had the cheap commute to rationalize them and their Alt-A or exotic mortgages–many that have yet to reset to higher rates.  The cost of petroleum-based materials like PVC pipe and vinyl siding and shingles and the gas for the trucks to bring the stuff and workers to building sites all spiked, pricking a saturated market and an already debt laden economy. The sharper point? With disappointing Exploration and Production forecasts being the norm for the next decade’s oil supplies, $120 bbl oil will be back, plus another $40 or $60 or more per barrel, once the awful demand drop of the current economic disaster is gotten under control.

As foolish and overstretched as many mortgage-holders were and are, let’s now examine the available networks of transport alternatives that their civic leaderships have ignored. Even an admittedly flawed GRTC “Ridership experience” saw spikes in usage. Scarce and necessarily reapportioned family dollars suddenly made old perceptions of mass transit seem like quaint, expensive and economically rash opinions. Money talks. And during the harshest of $4-plus gas, where did the lack of foresight of regional leaders leave their citizens? Without a net. Without choices or second chances, and in many cases, having to choose not between transport options but rather between food and gas or medicine or other bills. The dodged bullet for all those municipalities waiting for regionalism and networked thinking to deliver itself on a silver platter? Calm weather. Heaven help those leaders if that $4-plus spike had happened over the winter, cascading into heating oil and electric bills more than it already did. This is what Avent of Atlantic Magazine sees, and now other sources such as today’s article from Canada’s Globe and Mail are recognizing.

Are these things “smart” or “responsible” or even “leaderly”? No. They’re fundamental flaws that pair short term thinking and foolish behavior against long-term fiscal wisdom that undoes many of the guiding ideas of what sustainable communities are supposed to be about. Next to sustainable community, any sensible person should place the term business continuity as well, so here’s one for the Chambers of Commerce. If $4-per-gallon freaked-out our margins and distribution and overhead models, six-bucks a gallon is going to seem like, well, a horror movie as we and our customers literally scramble to survive the scarcity and lost business activity.

2. Legislating by flight, fear and fiat – County Supervisors and, to be fair, Richmond City leaders, have gotten where they are by embracing the idea of “build it and they will come.” As administrators, their primary tools are ordinance, zoning and tax legislation. These are all tools that can be used for immediate gain in building activity and bumps in tax-base. Or, they can be used to better guide, meter and manage growth. Those last three things require patience, conviction and finesse. Rare but vital things. Each major locality will insist they have been prudent in their use of these levers but the massing of corridors in western Henrico and Chesterfield shows that their views of leverage are narrow and dated, much like the above-mentioned 50-year old energy models they adhere to. In terms of “Smart Growth,” the counties need not really embrace the concept of Smart (whomever’s definition) because they are still viewing growth as mainly a rural-to-exurban land swap. Yes, they’re being commodities traders not value-adders by this definition. Burying pipe, electrical and drainage are really just equivalents for abdicating their role as planners, merely creating blank canvases of tarmac Greyfields. The results are not pretty nor artful nor, in meaningful terms, sustainably planned for. Call this “build enough and let God sort out the mess.”

Again, economics displays its power here, offering a short-term choice for developers who have little interest beyond the 5 or 10 year windows of loan amortization that their industry lives on – the time it takes to need to re-furbish the second generation of a strip mall or to have bundled off the initial debt to a 2nd or 3rd party, one who’s likely only looking for cash-flow (not QOL) from their investment. Again, bad economics and dumb growth for a community and region, possibly good short term bets for far-off investors and decision-makers who need not live with the snarl and mess.

3. Allowing distant interests to squeeze out beneficial horizontal (and local) networks and choices – To put it bluntly, the profit participants in a REIT based in Philly or Chicago or Phoenix have little reason to do here what they might do, or insist on, in their own local communities: And that is ponder cost/benefit considerations such as Quality of Life or Quality of Opportunity. These are always considerations for them as they evaluate their own community’s functioning. But far-flung capital tends to devalue and denegrate what it can’t measure, touch or experience. It is not in their (current) short- or long-term interest to measure such things as QOL or QOO beyond their potential for Greenwash and brochure copy bullet points. The above descriptions or economic mis-incentives and legislative sloth feed into these investors’ desire for hurry to get projects rolling. And, the developers’ tools of persuasion – tax base increases, more building permits, ribbon cuttings and similar “Visible” change that public officials can tout—each of these are easily interpreted and spun as “good growth” in the sense that some joker will frame things, and be lauded, by saying reasoned sensible growth is anti-growth. The urge for action—any action—and the resulting short-sightedness causes leaders and policy decision-makers to race each other to the bottom. And, disastrously, to convey their judgments and responsibilities as civic leaders onto parties and interests who have little long-term vested care (beyond that 5-10 years debt exposure window) in the successes of our communities.

3 simple things, maybe obvious things. But, as George Orwell said, “To see what is in front of one’s nose needs a constant struggle.”

I’ll try to wrap this up: The above examples are ones where foolish economic decisions directly influencing our choices and satisfactions as citizens of the Richmond Region are being made by people who speak first to dollars and then to QOL issues because the former metrics are more familiar, more measurable on their face. Not better or more sensible, just more leveragable as metrics of achievement and compensation, however destructive. The honest truth is they reward, and give value to, impatience, greed, sloth, and “what’s in it for me?”

Hardly the most compelling or attractive definitions of community, nor stellar endorsements for the pillars of said communities, eh?

Perhaps, then, it truly is ironic and poetic–especially for prideful number crunchers, and for decision-makers skilled at jockeying for individual power–that in short order the numbers and the politics are going to force a few new questions and approaches: How could you let this happen? When were you planning on telling us? Who did you think you were representing? Why should we re-elect you? What’s in it for Us?