The repatriation-financed infrastructure bank plan, as structured, is a TERRIBLE idea

The new iPad, and a bunch of money, from appadvice.com

By now everyone's heard of Apple's incredible network of tax shelters, which just in the last several years has saved them tens of billions of dollars in corporate taxes. Pretty much everyone except Rand Paul finds this reprehensible, but while Apple may be the best in the game when it comes to tax avoidance, they're far from the only player. Other big companies like Amazon and Microsoft do the same thing, keeping profits overseas so that they don't have to pay US taxes on them.

In many cases those companies would really like to bring that money back stateside, either to invest in their business here or (more commonly) to pay out dividends or buy back stock from investors. To do that, however, they'd have to pay 35% of those repatriated profits as tax. And no one wants to do that unless they have to.

Fortunately for these mega-corporations, they often don't have to. In 2004, under the Bush administration's leadership, Congress passed a law allowing a tax repatriation holiday, meaning that for a short period of time any profits brought back into the country would not be taxed. The purpose was to ensure that something productive would be done with that money--that it would be reinvested in US jobs and business needs. As the Treasury describes, however, this is not what happened:

In assessing the 2004 tax holiday, the nonpartisan Congressional Research Service reports that most of the largest beneficiaries of the holiday actually cut jobs in 2005-06 – despite overall economy-wide job growth in those years – and many used the repatriated funds simply to repurchase stock or pay dividends. Today, when U.S. corporations have ready access to cash they have accumulated and are holding here in the United States, it is even harder to make the case that a repatriation holiday will unlock new investment and job creation.

And perhaps even worse than all that, now that we have a history of allowing businesses to repatriate their earnings tax-free they have far more incentive to keep their money overseas as long as they can bear, waiting until the next time we forget ourselves and give them another opportunity to cheat the system--and the American public.

On cue, in steps Congressman John Delaney (D-Md.).

"Hey."

His proposed legislation, the Partnership to Build America Act, would create a federal infrastructure bank funded by $50 billion of repatriated corporate profits. Companies would bring their money back to the US, buying infrastructure bank bonds that pay out a low yield over fifty years, and they would pay full taxes on the money repatriated to purchase those bonds. This sounds great because it would take money that's currently sitting overseas doing nothing and use it to fund up to $750 billion in infrastructure projects (via leverage) with a heavy focus on loans and public-private partnerships. It almost sounds too good to be true!

And of course it is, because the catch is that this is much more a repatriation tax holiday than it is an infrastructure fund. Although the ratio sounds somewhat up in the air, Delaney suggests that for every $1 brought back, taxed, and used to purchase bonds, $4 could be repatriated tax free*. In effect, this would reduce the tax burden of repatriated funds by 80%; instead of paying the full 35% corporate tax rate (which is admittedly too high), they would pay a mere 7%. This is exactly what companies like Apple have been waiting for, and would be an utter validation of their tax avoidance strategies.

I obviously care a great deal about funding the infrastructure investment this country needs, and it's difficult to pass up nearly any opportunity to further that cause. But the fact is that if an infrastructure bank is a good idea with repatriated funds then it's also a good deal with taxed or borrowed money. Especially in an era of rapidly falling deficits and near-zero borrowing costs, there's no reason to reward US corporations' dishonesty with a $14 billion windfall just to try to keep the lights on.

Hopefully this proposal will be seen for the stealth repatriation tax holiday that it is and get shut down quickly, and we'll find a more reasonable way to fund the maintenance and mobility investments we require.

*It's hard to be sure if this is exactly how it would work--the description at Transportation Issues Daily, the linked article that describes this proposal is not 100% clear. It might actually allow businesses to buy bonds with money already in the US so that they're actually not paying tax on any repatriated money.

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Cities don't "aspire" to gentrification

In a recent article posted on New Geography, Aaron M. Renn asks what seems to be a fairly straightforward question: "Why Gentrification?" But unlike most writing on the subject, the question isn't why it happens or how to avoid it, but why cities aspire to it. This is the first sentence of his article:

The mostly commonly chosen means, or at least attempted means, of revitalizing central cities that have fallen on hard times is gentrification.

...What!?

This is perhaps the most egregious misunderstanding of the causes of gentrification that I've ever seen. According to this theory of gentrification, a city--any city, in any of its neighborhoods--could simply tear down a bunch of run-down homes or apartments and replace them with luxury towers, spacious retail and restaurant space, and some nice parks, and suddenly have an influx of affluent residents. It completely ignores the role of demand in driving redevelopment and gentrification, or, at best, gets the causal link between the two exactly backward.

In the real world, gentrification isn't the cause of demand, but the result of it. Cities, or specific neighborhoods within cities, become desirable for one reason or another, and eventually you have an increase in the number of people who are interested in living there. As the ratio of interested people to available housing units increases, competition between potential tenants increases and rents go up as a result. It's not a novel idea; it's exactly the same phenomenon seen in a "seller's market" for home sales, which is pretty noncontroversial.

If gentrification were as simple as providing upscale amenities, places like Detroit could just rebuild their cities and wait for the money to flow in. This never happens in practice, of course, because there's very little demand for living in Detroit.

When the demand does exist, as it does in successful, popular cities throughout the country, city leaders may respond in one of three ways. They can:

1. Attempt to reduce the ratio of potential/interested tenants to actual residents by changing zoning to allow for the construction of additional housing, either through infill development or increased building heights;
2. Do nothing, causing newer, more affluent residents to displace existing residents. This can either be due to the willingness of the new residents to pay higher rents, or through the more drastic action of purchasing, gutting, and upgrading existing buildings with fancy kitchens, spa bathtubs, etc.;
3. Attempt to reduce the ratio of potential/interested tenants to actual residents by deliberately changing the neighborhood to make it less desirable to wealthier residents. E.g., by reducing police coverage, not maintaining sidewalks and parks, discouraging businesses from opening in the neighborhood, etc.

Unsanctioned attempt at option #3. From griid.org

Obviously, no one (sane) is going to be in favor of #3. And while many people claim to want to keep things the same, as in #2, the amount of authoritarian city regulation necessary to make such a desire reality would be completely oppressive. It would require that rents be strictly limited, even when old residents moved out willingly and were replaced by new ones, regardless of their income. And besides just forcing new development out somewhere else--probably to a more auto-dependent, less environmentally and economically efficient location--it would discourage building owners from maintaining any of their holdings beyond the bare legal minimum. I encourage you to think through amount and complexity of city control it would take to actually make this work effectively; to do so here would require another post entirely.

The question of gentrification, as most of us know, is not "why do cities pursue it?" but "how do we maximize its positive aspects and prevent or minimize the negative?" 

After all, contrary to Renn's assertions, cities don't have much incentive to gentrify. It's a terrible situation for the displaced residents--that isn't in question--but it's bad for cities as well. Displaced residents generally don't end up leaving and bothering some other city, they just end up in lower-quality homes, further away from work, school, and the social or medical services they might depend upon. Whatever those needs might be, they don't disappear just because the family moves a few miles away-- they just become less effective, and more costly to deliver. As even middle-income residents get pushed out of the middle of the city, increased prices push out beyond the city core, affecting everyone negatively. Except landowners, of course.

Reducing displacement is the challenge of gentrification, and thus far, no city has solved it in a completely satisfying way. That's not to say that some haven't been more successful than others though: even San Francisco, notorious for its out-of-this-world rents and home prices, is barely half the cost of Palo Alto ($835k vs $1.55m). At seven times the density, SF has done a much better job of facilitating growth than Palo Alto (although still a comparatively poor job), and this is certainly part of the reason it's not doing as poorly. But San Francisco also only grew by 30,000 people between 1950 and 2010; over that same time period Seattle, a considerably smaller city, increased its population by roughly 140,000. (Just for comparison, Palo Alto has increased in population by only about 10,000 in the past fifty years, although it's much smaller.) What Renn ignores, and what complicates the context of these statistics, is that demand differs between each of these cities, and responses will be, or should be, calibrated accordingly.

More expensive than it needs to be. From westinsf.com.

Affordable housing, i.e., income-restricted units, are also an option, but can't be successful in isolation. The greater the difference between the average regional rent and the price-controlled affordable housing rent, the greater the burden of subsidization placed on the city and its residents. It's an invaluable resource to those able to secure an affordable unit, but their construction must be accompanied by vigorous market-rate housing development. Otherwise cities end up with unsustainable levels of housing subsidy for little overall benefit, and a system in which only the very rich and very poor lucky enough to find a subsidized unit are able to live there--those in the middle, unable to meet the income-restriction requirements but also unable to afford market-rate rents, are left out in the cold.

I think avoiding bust-and-boom cycles of residential development is also important to limiting the ill effects of gentrification, but I'm going to save that for a later post. I'm certain there are some creative suggestions out there for possible solutions--keeping in mind that no one answer will completely solve the problem of gentrification--and I invite you to share your own ideas here in comments, on Reddit, or with me via email.

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Seattle city council falls short on affordable housing, again

South Lake Union concept art, from Studio 216.

As a part of the ongoing redevelopment wars going on in the South Lake Union neighorhood, Publicola recently wrote about yet another half-measure approved by the Seattle City Council, this time in regard to the fees developers pay for additional density. Publicola reports:

The city council, meeting as the special committee on South Lake Union, unanimously adopted a compromise incentive zoning plan for South Lake Union (for our extensive previous coverage, start here) this afternoon that would allow developers to build taller, denser buildings in the growing neighborhood in exchange for new, on-site affordable housing or payments into an affordable housing fund.  

The proposal the council committee adopted is most similar to a compromise proposed by council member Mike O'Brien that will require developers to pay $21.68 into an affordable housing and child care fund for every additional square foot of density above what's allowed under existing zoning rules. The proposal would increase the requirement, known as a "fee in lieu" of building affordable housing, annually according to the rate of inflation.

The mayor's proposal called for a fee of just $15.15 per additional square foot of density, a level that appeared much too low, given that "developers who've taken advantage of existing incentive zoning rules in South Lake Union and downtown have universally chosen to pay into the fund instead of building actual affordable housing." If the goal of the program is to incentivize construction of affordable housing, the $15.15 per square foot cost was clearly failing on that measure.

Councilmember Nick Licata proposed that we increase that fee to $96 per square foot, a level that effectively ensures any additional density results not in fees but in affordable, on-site apartments. This proposal was shot down, apparently because it was unrealistic that any developer would be willing to pay such a large amount.

My question is, why is that a problem? If the goal is for private developers to build more affordable housing--and they can build it more cheaply than the city, so it should be--it shouldn't matter if they always opt to build rather than pay the "fee in lieu". Assuming building affordable units in exchange additional building height/density is a profitable proposition for developers, it doesn't matter what the fee in lieu is set at. The fee should be set at a level that is less appealing than providing on-site affordable housing. It probably doesn't have to be $96 per square foot, but $21.68 is probably still far too low. And if developers are opting to not build additional density at all, then the incentive program has much more fundamental flaws than the fee in lieu amount.

This all goes back to the question of how committed the city council and mayor really are to providing affordable housing in Seattle. Last month the council passed up more than $10 million in funds for affordable housing in order to arbitrarily limit building heights in SLU to 160 feet, which will have the dual negative effects of reducing the number of affordable units and limiting the total available supply of housing in a fast-growing and highly desirable neighborhood. Now, working within the framework of those 160 foot heights, the council seems to have compromised with themselves yet again, to the benefit of no one, for weak-hearted incentive zoning rules as well.

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With new study, air travel subsidies get another pass

There's a new MIT study out highlighting the struggles of small- and medium-sized airports, which over the past five years have seen 18.2 and 26.2 percent declines, respectively, in domestic flights. This means that people served by these airports have less options, and also that the costs of their flights have increased faster than those at larger regional airports. NPR has more on the specifics.

Plane taking off from Decatur airport -- decatur-parks.org

First, I just want to point out that this means service is objectively worse for travelers over this time period, even with continued federal and state investment in airport infrastructure. Unlike what we see with Amtrak, however, I have yet to hear any politicians threatening to pull the plug on the $4 billion in federal (and who knows how much state) spending on airport construction, or the billions we spend on security and traffic control. Are they okay with continuing to prop up an airline industry intent on withdrawing service from much of the country?

Perhaps a better analog of Amtrak's service--the unprofitable long distance routes, at least--is the US DOT's Essential Air Service. It saw the smallest decline in flights of all airport types, five percent. The EAS was created in 1978, coincident with the deregulation of private airlines, and was "put into place to guarantee that small communities that were served by certificated air carriers before deregulation maintain a minimal level of scheduled air service."

This service costs over $200 million a year, with most of the ~150 affected airports only making a few 19-seat flights a day; you can bet it serves far, far fewer passengers than Amtrak's 5 million annual long-distance passengers, or its 15 million state-supported route passengers. (Amtrak requested $373 million in operating support this year, a number that has been declining rapidly in recent years as ridership has soared.)

I genuinely have nothing against the airline industry, and actually think their private, deregulated system is pretty effective. As a whole, the airline industry also serves many more passengers every year. I don't even really mind the EAS much, although there are some cases where it's clearly being abused. The point is that just as with our system of roads and highways, no travel mode comes without some amount of subsidy (nor should it--mobility is an invaluable public good). Despite this, only rail and transit are portrayed negatively for their dependence on public support. 

This double standard is ridiculous, but especially so for the following reason. We spend hundreds of billions of dollars on roads every year and tens of billions on airports and security, and does anyone honestly think either driving or flying has gotten any better? Rail, transit, and bikes on the other hand, the most scorned forms of transportation in this country, and worst funded, are only becoming safer, more convenient, and more popular. I don't even know who the joke is on.

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How do we address "Sunk Cost Bias"?

When someone is interested in shifting from car dependence to greater reliance on active and public transportation, they're often faced with a problem: the vehicle itself, one of the greatest costs of car ownership, is already paid for. Unlike gasoline and parking, which are relatively fixed and recurring expenses, a car is a sunk cost--the purchase is in the past, and much of its value is irretrievable. At that point the only really noticeable costs of driving--the ones that affect you on a regular basis--are gas, insurance, maintenance, and parking. Taking only these into consideration can make driving seem much more affordable.

From NYdailynews.com

This is less applicable to those who wish to sell off their vehicle and abandon car ownership entirely, but few people are willing to take such a leap without trying a car-lite lifestyle first. For those who just want to dip their toes in the water, to try something between complete car dependence and complete transit dependence, using public transportation isn't so much a replacement and reduction of costs as it is an additional cost. Not only do you still have to pay for insurance and some gas, you now have to pay for bus fare as well, and suddenly the savings don't seem like such a great deal compared to the relative inconvenience of transit (excluding the few places in the country where transit is actually more convenient). It's a catch-22: as long as you're holding onto the car you're not saving a lot of money, but unless you're saving a lot of money you may not be convinced to get rid of the car.

This problem is compounded by something I'm calling "Sunk Cost Bias," the tendency to try to make the most of your investment by driving more. This may sound foolish since the more you drive the more the costs pile up, but, in a way, it's also perfectly sensible. After all, the more miles you get out of your car, the lower the per-mile cost of ownership. And if you've already got the car and don't have a monthly transit pass, a trip on the bus or train can actually cost more than driving if you're only going a short distance.

We all know that public transportation is a less expensive way to get around that owning and driving a car, but what's less appreciated is that it's not a straight line from one extreme to the other. The jump from car-free to car-lite is massive. In reality, the spectrum of car usage and costs looks something more like this:

Just replacing some car trips with bus/train trips won't save you much money, but for many people getting rid of the car altogether may seem too drastic. The question then, as policy makers and policy advocates, becomes how to bridge this gap. How do we make it more appealing to try a car-lite lifestyle, with the hope that some who try it will end up going car-free?

Here are just a few quick ideas:

(1) Widespread adoption of mileage-based insurance rather than a flat charge could reward people for driving less.

(2) Likewise, vehicle-miles traveled fees instead of (or in addition to) gas taxes, which will be ever-less-burdensome as car mileage improves.

(3) There's also evidence that offering drivers free transit for a few months can change their long-term commuting habits.

(4) Renting out your car while you take the bus might also be fairly lucrative. Maybe some car-share services out there are interested in buying peoples' cars and including a bunch of free access to their service in addition to a decent chunk of money.

None of these feel like they're enough though. For nearly all the people I know who don't own cars, it took moving to a new city or a maintenance catastrophe to finally get rid of them. (In my case, both at the same time.) It shouldn't be such a big deal to consider ditching your car.

So what do you think? If making the car-lite experience more appealing is critical to getting more people to go car-free, what can we do to improve things?

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Pro-car populism is about protecting cars, not people

Bill Lindeke over at streets.mn wrote an interesting post a few days ago titled "What To Do with Pro-Car Populism?", about a recent discussion he had with an old friend. The premise of it is summed up nicely in the following paragraphs:

I began explaining the distortions in the parking market. With his economics background, I thought he’d be interested. I did my best to describe the cumulative effects of minimum parking requirements, the perverse incentive structure of parking meters, the hidden cost of asphalt, and so on. The solution, I said, was to externalize the price of parking, raise prices in certain areas and begin acknowledging the opportunity cost of urban space. (See my explanation here.) Prices should reflect the cost of parking, I concluded. 

I was surprised at his reaction. ”What about poor people?” he asked me. “You’re going to make it impossible for them to drive. In my city, nobody can afford to live in the city. I've been to these towns and neighborhoods where the poor people live. They’re miles away from jobs. They drive everywhere. You have to think about them!” He began to get passionate, as he usually does. “If you make parking expensive, only rich people will be able to drive. Driving will only be for the wealthy.”

For many urbanists it can be kind of a slap in the face to be told you're not looking out for the interests of the poor, since we generally see dependence on the automobile as having negative consequences for everyone, and lower-income people in particular. Often, we may see ourselves as champions of the poor and down-trodden, fighting against a car-centric status quo and the great costs associated with it. But it's true that, within the current framework, increasing the costs of parking, gas, etc will disproportionately hurt the poor.

Lindeke's answer to pro-car populism amounts to a rejection of the premise; that is, a system in which driving is subsidized (as it currently is) can never be favorable to poor people--parking reform, vehicle-miles traveled fees, and everything else is just tinkering around the edges of an already busted system.

I think he's completely correct, but even he admits that he's not entirely satisfied with his response. After all, car subsidies and expensive city housing is the framework in which we live. To change things in a way that makes things better for a much greater number of people, the poor included, we need to demolish that existing framework and build anew, from scratch.

The following paragraph from Lindeke's post is where I think that reconstruction might begin (emphasis mine):

We've demolished affordable housing to make room for freeways and parking garages. We've eroded government services through municipal fragmentation, civic tax shelters, and fostered spatial segregation. We've abandoned our transit systems, relegating them to the margins. We've refused to accommodate transportation alternatives in ways that foster deep inequalities.

This is just a small part of the overall problem, but it highlights the choice we have when making local spending decisions, a choice that always exists even if we don't always acknowledge it: do we spend this money on making driver cheaper and easier, or do we spend it on increasing the supply of affordable housing (like the Yesler Terrace redevelopment, for example)?

Choose: more of this...

Right here in Seattle, for example, we have the Pacific Place parking garage. In 1998, the city bought the garage for $73 million, and it has been losing money for more than half that time. Now the city is looking to sell it for $55 million rather than continuing to bail it out year after year. 

...or this?

The city did not need to build or operate this garage. They did it because they wanted to encourage business downtown by making it easier to drive in the city. This was a choice to prioritize ease of driving over affordable housing, whether they thought about it in those terms or not (and you can be sure they didn't). It made it easier for people to get downtown by car, poor people included, but the basic problem of having to own an expensive personal automobile was unresolved. And, let's be honest: the people shopping downtown, on average, are not the people pro-car populists are concerned with.

The root of the problem, and what drives the pro-car populist's argument, is that poor people generally can't afford to live in the parts of the city where transit access is best. As long as that is true, owning a car will be necessary, or nearly so, for many of those forced to live in the suburbs. Instead of trying to reduce driving costs for lower-income car owners, why not just spend that money on providing them with housing in the city where they don't need to own a vehicle?

The problem with the pro-car populist's position is that it doesn't contain a solution. You just keep pouring money into services and infrastructure that keep driving costs as low as possible for the poor, but driving is always going to be problematically, if not prohibitively expensive for some people. And it's only going to get worse. 

The pro-car populist understands that allowing more people to live in the city is good for health, environment, access, and, if affordable housing is available, the pocketbook, too. In combination with other housing supply policies (like reaping greater incentives from developers by relaxing height/density/parking regulations), we should consider the long-term return on each dollar spent on driving subsidies versus affordable housing. By doing so, we can start to actually address the root cause of the problem and shift the paradigm of poor = suburbs = car dependence = poor, give people a greater array of choices, and save people some money and commute time in the process.

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Owning a car doesn't cost the average person $9,000 a year

Every year, the auto club AAA releases a study titled "Your Driving Costs" that--you guessed it--calculates the average cost of driving for various vehicle types. And every year, urbanists and other transit, walking, and bicycling advocates point to it as evidence of how expensive it really is to own a car. This year, for the first time, that average yearly cost exceeded $9,000.

The problem with this, as anyone who's ever simultaneously owned a car and earned less than $80,000 a year can tell you, is that it's completely untrue.

Owning and operating a car is indeed an expensive venture, but for the average person $9,000 per year is a pretty wild exaggeration, and for most of us the truth of that is obvious. Sharing this study without appropriate qualification is irresponsible, and especially so for those of us working toward a healthier, safer, more efficient and less restrictive transportation system. When car owners are told what they may perceive to be a lie about the cost of their driving, they're not likely to be receptive to any of your other arguments.

Before I stopped driving I owned a 1995 Toyota Camry for about five years. It cost me $5,000 to buy and I ended up running it into the ground before its time, but even with fuel, maintenance, insurance, and everything else the annualized cost of ownership couldn't have exceeded $4,000--and that was a lot of money for me at the time! (Actually, it'd be a lot now, too.) It didn't come anywhere close to the AAA "average" though. And, in fact, even the average fully-employed adult doesn't spend so much.

AAA's annual study [PDF] is widely reported on every year, by organizations ranging from transit advocates, to local government, to the AARP, to CNN. Given its automobile-oriented mission, it's taken for granted that AAA is not going to misrepresent the truth by artificially inflating vehicle ownership costs. The report itself even says that their goal is to "promote the interests of motorists and travelers." So what's the deal?

Cost estimates from AAA's "Your Driving Costs"

One possibility is just poor modeling. The study calculates the cost over five years, assuming the owner is driving 15,000 miles per year. Implicit in the study is the assumption that the average driver is buying a new car every five years. In reality, new-car owners hold onto their cars for closer to six years, and those cars aren't usually headed to the junkyard after the first owner is done with it--the average age of vehicles on the road is roughly 11 years. Over the next five years, the auto industry is also only expected to sell about 70 million cars to more than 200 million drivers. Used cars still rule the road, but they're being entirely overlooked in this report.

The study assumes that these cars are being paid off in five years, which is pretty typical. It completely fails to account for any of the years afterward, however, when the car owner is no longer making car payments (and the rate of depreciation has decreased). It's possible that AAA is really only interested in calculating the driving costs for people who purchase new cars every five years, but it's not clear why they'd desire such a narrow focus, and even if they do it's their responsibility to better communicate that fact. Mainstream news outlets aren't going to do the work for them, unfortunately.

Another, more charitable answer to this is that AAA is being selective about who they include in the study. Discussing their report's methodology (which is proprietary) they note: "It incorporates standardized criteria designed to model the average AAA member's use of a vehicle for personal transportation over five years and 75,000 miles of ownership." [emphasis mine] AAA has about 53 million members, and its likely that their members are somewhat more affluent than the average car owners, so it's possible that among AAA members average yearly costs really are around $9,000. The study limits itself to mid-priced vehicles like the Ford Fusion, Toyota Camry, and Honda Civic though, so this seems doubtful.

"What about me?"--Tesla Roadster, From TopSpeed.com

As to why this matters, I've already noted that this is argument is a huge turn-off for those who drive older cars (just look at the comments section of any articles discussing the study). It's actually worse than that though: some families really are spending $9,000 or more per vehicle every year, but the type of person earning enough to buy a new car every five years is the last person you're going to convince to get rid of their car for economic reasons. For the most part, people who burn through cars that quickly are not hurting for money. The people who might actually be swayed by concerns about their transportation spending are exactly those for whom this number is least accurate.

Just to grind this point into the dirt, 15,000 miles a year is a lot of driving. If you drive that much, there's a good chance you live pretty far away from all you do: work, go to the movies, shop for groceries, visit friends, etc. The easiest and most likely car-to-transit convert is someone who lives closer-in, nearer to city centers where transit, bicycling, and walking access is much better. So again, if you want to focus on those people the 15,000 mile estimate (and associated costs) is probably way too high.

I've written about the impact of transportation costs on peoples' lives and think it's incredibly important that every car owner understands the true, full cost of driving. The way to do that, however, is not to offer a one-size-fits-all number, especially one that doesn't even fit anyone. If asked to calculate how much they spend on driving, including the cost of purchasing their car, maintenance, and all the rest, people are perfectly capable of doing so. The problem is that not enough people are being asked, or asking it of themselves.

Whatever the cost is for the individual, the question then is whether the freedom of movement they get from owning a car is worth that amount. Is that freedom worth $4,000 a year to you, even in light of the health, safety, and environmental benefits of more active forms of transportation (assuming those things matter to you)? How about $6,000? Even if $6k a year could buy you a home worth $100k+ more than your current one, or pay off your loan ten years early? These are questions that can really change a family's thinking on transportation. Starting off that discussion with what amounts to a lie can shut that conversation down before it's even begun, so we need to be careful when communicating costs to those who know them best.

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