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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

April 9, 2010 at 9:45 AM

McGinn is on the right track with light rail; the housing delusion continues

Seattle Mayor Mike McGinn is right to make the case for redesigning the 520 replacement bridge to include light rail. The world faces a future of higher energy costs, whether Americans want this or not. It doesn’t really matter what we want. We can want a pony. But the energy future is coming no matter how much we drill, baby. Electric cars? Maybe, but they’ll still be more expensive and require plenty of fossil-fuel “inputs.”

As a result, the metros that can offer the most transportation choices, especially retrofitting suburbia with trains and rail transit, will be the most sustainable and economically viable. China gets this, which is why it is in a crash program including subways and high-speed rail that America is still not building. The suburban retrofit has gotten little attention, but it’s vital, would also create new jobs, and is actually doable on portions of the East Side. We should be moving with a sense of urgency on I-90 and 520.

McGinn will probably lose. The process-is-everything ethos here can drag on for years until it can’t, and now “everybody” is ready to go, whatever the wisdom of continuing dependency on single-occupancy car trips. It’s funny that Seattle claims green cred yet always looks enviously at Portland, which continues to build light-rail, including a new bridge totally dedicated to transit. In reality, our metro area wants that pony — to be green, but still keep building a 1965 transportation system. But the 1965 energy world is not coming back, no matter what we want. No matter, even, what Microsoft wants.

The Back Story: Felix Salmon of Reuters takes a look through Fannie Mae’s 117-page National Housing Survey and comes away with a sobering conclusion: “People still believe in housing as an investment, and that the enormous nationwide housing crash has done much less to alter Americans’ attitude towards homeownership than we might have hoped.”

Is it important to the economy that there’s a high rate of house ownership? Eighty-six percent of respondents who are delinquent on their mortgages said yes; 77 percent of renters; 80 percent overall.

Writes Salmon: “This is horribly misguided, and it’s particularly depressing that even 77 percent of renters share in the mass delusion. Homeownership is, if anything, a drag on the economy, since it funnels resources into unproductive overconsumption, and helps to impede labor mobility. There is absolutely no reason to believe that countries with high levels of homeownership, like the U.S., have better economies than those with low levels of homeownership, like Germany.”

Today’s Econ Haiku:

Greece got cut by Fitch

The rating agencies are

always on the ball

Comments | More in Housing, Sustainability, Transportation, Urban issues

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