The Projections Fallacy

car commuter driver driving

I’ll take my hometown as an example. Our old traffic projection models assumed that cars multiply like people (I guess that’s what’s going on in all those two-car garages), so we projected traffic based on historical growth rates the same way we projected population. Then what happened? I live in a resort/tourist area with cheap, abundant land and lots of natural resources, just the kind of place retirees and near-retirees wanted to move to, starting roughly in 1990. Fuel that desire with a stock market bubble (I wrote a lot of permits for people who paid cash for their new lake home after selling stocks) and then with a cheap credit housing bubble, and—unexpectedly—we are inundated with traffic.

Today we already have Super Walmart, Super Target, Home Depot, Menards, Fleet Farm, Kohls, JC Penny’s, Best Buy, Costco, and a myriad of chain restaurants, gas stations, and other highway parasites sucking off of the hundreds of millions we’ve invested in the adjacent high-capacity highway system stroad (street/road hybrid). The baby boomers are stuck in their existing homes, which are now worth much less than they had hoped, while many are also stuck in their job as their retirement savings suffers the same fate. The cheap shoreline is gone, sold off decades ago to people who are now reaching the age where maintaining a lake home may not be worth the effort. The cheap gas is gone, too, and it doesn’t seem too likely that the state is going to throw hundreds of millions more into shortening travel times from the Twin Cities.

Has any of this new reality informed our projections? Of course not. Like a mad scientist adding random chemicals to a potion they just don’t understand (and then testing it on unwilling human guinea pigs), we’ve tinkered with our models and convinced ourselves that this time will be different. And you can bet that there is no way we’ll be caught underestimating. We’ve “seen” what happens and so we’ve “fixed” that problem. The new answer is simple: estimate high (which is, in the perverse vernacular of the trade, called being “conservative” with the estimate).

We’ve had many discussions in the Strong Towns network about traffic projections, including the following comment from one of my friends: 

We’re working on a traffic study for a small development. According to their comp plan (from 2007) we need to offer recommendations for a county road equivalent assuming 4 percent annual growth. We looked up the numbers and found that VMT has (of course) declined steadily in the area since 2003/4. Someone at our firm contacted the county about the growth rate (a 26 yr old traffic engineer by the way) and, from the message that was relayed back to me, we were instructed to just proceed with the Comp Plan’s assumptions. Long story short, we’re probably going to have to recommend a turning lane. 

In another conversation, one of our members from California was knee deep in the debate over widening I-710 to 14 lanes. In a note to the spokesman for the Los Angeles County Metropolitan Transit Authority, he asked:

I know that the analysis of vehicle trips and container traffic for this project were done prior to the global financial system collapse in 2008, and so the idea of traffic volumes or container shipment volumes decreasing by 2035 were not considered.

 However, when the Panama Canal is open, it looks like our region will be receiving less cargo simply because going through Panama is much cheaper than shipping to LA or Long Beach and moving via trucks, trains, etc.

 Is anyone at Metro thinking about this project differently now? Shouldn’t the “No Build” alternative for this project (and all the alternatives) be revised?

Here was the answer he received:

The Ports re-evaluated their growth projections after the recession and made adjustments. The revised projections show slower growth in Port activity in the next decade, but the 2035 total TEU estimate remains the same: 42.7 Million. In other words, the Ports anticipate to handle 42.7 Million TEUs by 2035, even if growth is slower in the next few years.

In other words, it might slow down for a while, but we’re confident it will go back up ultimately because our projections say it will.

There is a certain contingent out there that is already pounding out their email to me demanding that, if I’m so smart, I provide a better way of estimating. There’s the fatal flaw in our current system. I’m not so smart, but neither is anybody else. The big difference here is that I’m not pretending to be able to predict the future.

Inherent within the auto-centric pattern of development that defines the Suburban Experiment is the hierarchical road network. Like a river swelling during a steady rain, changes on the periphery have an enormous impact on the trunk components of the network, as do many other things that have nothing to do with driver behavior. The reason we put so much time and effort into projections that we know will be wrong—that we have no consistent history of getting right—is because the cost of being wrong is so great. When the projection is off by even 10%, the level of service on major roadways can plummet. Since nearly every trip is funneled into this network, failure is catastrophic. This is an incredibly fragile approach.

We don’t need better projections, we need a system that is robust to modeling error. We need a system of growth and development where we don’t need to project correctly in order to succeed. We need a system where we build incrementally in a replicable and evolving pattern, one where each fractal evolves continually and naturally over time. We need a system where we’re not required to place huge bets on the future, oversizing infrastructure in service of projections, but instead can invest in high return endeavors where the likelihood of success is great.

We need a Strong Towns approach which, if you stop and look, is a lot like the pre-automobile approach that served us well for thousands of years. I’m not saying we get rid of the automobile, but when we build our entire environment around its propagation, we are slave to our own hubris and lack of understanding.

If you are interested in learning more about how we can comfortably live in a world where we don’t pretend to predict the future, we have created some pre-order bonuses for people who purchase Confessions of a Recovering Engineer before September 8. This includes “30 Days of Confessions,” a video series we have now begun rolling out to those who have pre-ordered the book. You can also immediately check out Aligning Transportation with a Strong Towns Approach at Strong Towns Academy, or the shorter Local-Motive session on “Establishing a Street Design Team.“

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