The triumph of the car city

The reason most commuters drive to work across New Zealand is privately owned cars are more comfortable, faster, more private, more convenient in trip timing, and they are more flexible for multiple tasks on one trip than any bus or train can ever hope to offer. What cannot be avoided is:

As household incomes rise around the world, more and more people shift from slower, less expensive modes of movement to privately owned cars and trucks (Downs 2004).

Time is increasingly prized because of rising incomes and an explosion of consumer choice. Goods and services which are time intensive to use including buses and trains as the commuting option are just not popular. Downs argues that it is time to settle down and accept what cities are:

….peak-hour traffic congestion is inescapable in large modern metropolitan areas the world over. Business firms want most people on the job during the same hours so that workers can interact efficiently. Many firms also want to locate in low-density establishments scattered across the landscape. Households want a range of choices of where to live and work, and most want to live in low-density settlements that are separate from poorer households, use private vehicles for most travel and be able to carry out multiple errands on a single trip (Downs 2001).

The reality is most people drive in rush hours because they live in low-density areas that buses, trains and cycle-ways cannot efficiently even start to serve. Traffic congestion is the result of prosperity:

Peak-hour traffic congestion in almost all large and growing metropolitan regions around the world is here to stay. In fact, it is almost certain to get worse during at least the next few decades, mainly because of rising populations and wealth. This will be true no matter what public and private policies are adopted to combat congestion (Downs 2004).

About 97% of the benefits in benefit-cost analysis of road investments is from savings on journey times. Saving on journey times is what drives an urban transport policy that serves the interests of commuters, taxpayers and sustainable transport. Much of the remaining benefits are from reductions in accidents and fatalities. Cars are here to stay.

It is not a case of under-investment denying buses and trains their day in the sun. The overseas evidence is rail cost estimates and passenger forecasts are much more politicised than those for roads because of the political pressures to invest in more public transport no matter what (Flyvbjerg et al. 2006).

There is more organised political support for buses and trains and considerable organised (often NIMBY based) opposition to road building. A major driver of cost blow-outs in the road projects reviewed by the Ministerial Advisory Group on Roading Costs (2006) was scope changes to appease local political pressures to mitigate community and environmental impacts. Community group driven litigation under the Resource Management Act to frustrate NZTA road projects is proliferating. Their High Court loss which prevented the building of the Basin Overpass in Wellington is a recent example.

In contrast, light rail proposals such as a billion-dollar proposal in Wellington City for a few kilometers of track including a $400 million tunnel were entertained for far longer than any sensible benefit cost analysis could justify. Quite fanciful fast-rail proposals costing many hundreds of millions of dollars are floated in by-elections and from time to time by the commentariat and rent seekers. The proposed upgrade the Auckland to Northland railway line and the rail link to the port was costed by the Taxpayers’ Union (2015) at $198 million. Dreams of fast rail receives a generous hearing despite mind blowing costs and incredulous and sometimes impossible freight and passenger forecasts.

Buses and trains are not the forgotten children of urban transport policy. The Greens are passionate about massive investment in buses and trains at the expense of roads. Labour is also competing for the same urban middle-class votes so it too champions more public transport. In an MMP Parliament, all parties have an incentive respond to political pressures in a fine-tuned way when voting on budgets.

Public transport advocates do well in the scramble for taxpayers’ money. The road with the worst benefit-cost ratio of all in the post implementation reviews was the Auckland Northern Busway, which cost $182 million. It had a cost benefit ratio of a miserable 1.2 at approval and a no better 1.3 after its completion. With a benefit-cost ratio rounding down to one with ease, this bus network upgrade must have had political muscle behind it to dam the taxpayers, full steam ahead.

Supporters of public transport claim that better buses and trains and more compact city growth reduces combined housing and movement costs. The higher housing costs are offset by lower transportation costs so public policy should invest in buses and trains and limit outward urban growth (Downs 2002).

Supporters of more investment in roads claim the contrary, especially in cities where land prices are already high (Downs 2002). In addition, supporters of road funding point out that increasing urban densities in existing neighbourhoods (and the expansion of rail networks such as through light rail) will be “decisively rejected by the NIMBY-orientated residents” (Downs 2002).

There are strong national and local constituencies to use of zoning laws, district plans and the Resource Management Act for the foreseeable future to limit the supply of existing and new land for an expansion of medium density housing in inner-cities. Combining massive public transport expansions with greater urban intensification is unlikely to be a political feasible. NIMBYs enter the fray with big political boots well before politicians ask taxpayers to vote for taking twice as long to commute the same distance.

This entry was posted in economic history, urban economics on by .

About Jim Rose

Utopia - you are standing in it promotes a classical liberal view of the world and champion the mass flourishing of humanity through capitalism and the rule of law. The origin of the blog is explained in the first blog post at

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