Occam's Razor

Tim Kaine has only been governor of Virginia for a couple days, but he is already showing unusual common sense. Governor Kaine has proposed what has hitherto been unthinkable here in the Old Dominion: allowing counties to restrict housing growth until the transportation infrastructure exists to sustain it.

“Over the long term, the most important single change we can make is to reform the way we plan at both the state and local levels,” he said. “We cannot allow uncoordinated development to overwhelm our roads and infrastructure.”

Grasping this idea is not like trying to understand calculus. I am hoping that our new governor will prove adept at the power of persuasion. If history is any guide, this proposal will probably not get too far. With zero limits on campaign contributions for those running for state offices here in Virginia, candidates supported by business interests tend to have unfair advantages. Not surprisingly then, developers have enjoyed undue influence in our state government, and are often the largest contributors to state campaigns.

Predictably, developers and real estate agents are aghast by Kaine’s proposal. Two hundred of them are planning to come to Richmond to lobby against the governor’s initiative. The times though may be a changing at last. I live near the edge of Loudoun County, hitherto a reliable, solidly Republican county. Yet the citizens of Loudoun County picked Tim Kaine over his Republican opponent Jerry Kilgore by five percentage points.

Was it that the small but active Muslim community in the county that came out en masse for Kaine that made the difference? Or did Kaine’s message resonate with them? Most moved to the county in order to find affordable housing only to soon find traffic jams and crowded schools. Additional new housing keeps going up, but the infrastructure is not keeping pace.

Virginia is perhaps like most of the country. The philosophy of local governments has been to accommodate developers and worry about dealing with the overcrowded roads and schools later. Not that the counties had much of a choice. Virginia law left them with few options.

Tim Kaine though gets it and is the first politician of his stature to actually to promote sensible growth in the state. As you build houses, also build an infrastructure sized to fit all the people, cars and houses that will be placed there. That means creating four and six lane roads when the houses are put in, not decades later when the existing roads have morphed into giant parking lots. Developers, naturally, would prefer that local governments absorb these costs. They want to shift the true costs of creating new civilization to all taxpayers. This lets them keep their house prices artificially low. By the time these bills come due, they have moved on to literally greener pastures.

What would the premium be on a new house if it included the costs for the wider roads and bigger schools that are needed? My guess is that it would raise the cost of a new house by $50,000 or more. That suits me fine. I think this would provide powerful incentive to redevelop land near or in cities, where the infrastructure already exists. As many developers are learning, there is good money in building closer in. It would also discourage destroying our fast disappearing natural world.

Clearly, our nation’s population will continue to grow. Our residents have to live somewhere. Nevertheless, that does not mean those who choose to live in new developments should get a subsidy from taxpayers. If the true costs of these developments had to be paid up front, our choices might be much different.

Our current rate of population growth is not sustainable forever. Governor Kaine’s proposal is a sensible first step toward ensuring a better quality of life for the citizens of the Commonwealth. If proposals like his become more widely adopted, what we are likely to witness is a form of reverse cost shifting. Residents seeking cheap new houses are going to move to communities where house prices are artificially subsidized by local governments. This will just increase the cost pressures on these local governments. Eventually these governments will figure out that their communities are the ones getting screwed, and states with planned communities are benefiting by their lack of common sense. I hope that this will drive desperately needed controlled growth. In addition, I also expect that the quality of life of our citizens will improve.