“Does Induced Demand Apply to Bike Lanes?” and Other Questions

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When you build a new road or expand a congested one, in the short term it makes some destinations less costly (that is, time consuming or onerous) to reach for some people, while in theory not making any destinations harder to reach than they were before. And that would be the case, if the destinations themselves stayed put. But they don’t.

Over time, development in the places that are now better served by road becomes more profitable and attractive. A lot more people are interested in buying a house that’s 30 minutes from a major downtown than are interested in buying one that’s 50 minutes away. So when you shorten the trip, newly-marketable development follows the new roads. This is especially true with expanding or building new freeways in a growing city: whether we add lanes near downtown or out in the ‘burbs, shortening the commute time from the exurbs is a boon to land speculators and builders in those outlying areas.

Meanwhile, the value of close-in locations is depressed, because the competitive advantage of being close to the city has just become a little less. So over time, less development happens in these places, there’s less of a market for infill, and in the most depressed neighborhoods, buildings might even be abandoned or demolished. I wrote about this, and visually illustrated it, in “The Other Reason Freeway-Building Hollowed Out America’s Cities.” 

These trends make doing far more driving a necessity, not a choice. This is reflected in U.S. national statistics on Vehicle Miles Traveled (VMT) per capita, which show a steady but dramatic increase throughout the suburban era.

In 1941, your kid might have walked 15 minutes to the neighborhood school. In 2021, you drive your kid 15 minutes to school. Oh, and this isn’t your choice: they tore down the old school and replaced it with a parking lot. 

In 1961, you might have biked or driven a few blocks to a corner store for milk and eggs. In 2021, you drive 3 miles to Kroger for milk and eggs, and there is no corner store. Has your utility increased? Or are you mostly just consuming more resources?

Road travel is fundamentally different in this respect from other kinds of things you might “induce” demand for, like housing, clothing, food, or entertainment. It’s different because doing more of it doesn’t mean you’re better off.

It’s also different from other means of transportation. I promised we’d get back to bike lanes. Bicycle facilities can certainly induce adjacent development (sometimes a whole lot of it) based on their recreational/amenity value, but they don’t meaningfully alter the development pattern of an entire region.

What about mass transit? Transit expansion can dramatically alter travel times, and a major rail project can have an enormous effect on land value around its stations. But the effect tapers off quickly once you get outside walking distance of the station. 

Because cars are the fastest widely-available means of getting around we have, it’s road building, and essentially only road building in our present-day context, that induces the large-scale changes to our cities that force us to drive ever farther. We’re like an addict who needs an ever more powerful dose just to get the same high. The theoretical demand for travel is infinite as long as technology keeps advancing. It can never be satiated. It would be far cheaper to build and live in cities where the people and things we care about are simply nearby to begin with.

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