Missed Opportunity Costs
Former Editor-in-Chief Ryan Avent writes a weekly column about neighborhood and development issues.
It isn't particularly surprising, I suppose, that in Zachary Schrag's Metro history The Great Society Subway the role of central city savior is played by, you know, Metro. What is somewhat surprising, even to an unapologetic transit supporter like me, is how convincing his case is; faced with riot scarred neighborhoods and a downtown abused by suburban office and retail growth, the city was teetering on the brink before Metro helped usher in enduring prosperity. What shocks me most of all about Scrag's history, however, is how difficult a time Metro's builders had getting stations placed in some neighborhoods. The same community organizations you cheer when reading accounts of epic struggles against highway builders seem like total villains as they cost WMATA millions by forcing hearing after hearing on the placement of an airshaft.
Frustrating, yes, but it isn't hard to understand the base attraction of territoriality (Jackson Graham, who led most of Metro's early construction and faced dozens of angry residential neighborhood groups, found himself in retirement leading an effort to oppose the building of a road adjacent to his favorite country club). What's more difficult to identify and argue against in these situations, what fails to enter our minds often as we contemplate a new project, is the cost of doing nothing. We see money spent, and we imagine how else it might have been used, we see an airshaft and we think of the tree it displaced--that part of opportunity cost we get--but the burdens placed upon us by sitting on our hands are frequently ignored.
This week, the always enjoyable and informative Post columnist Marc Fisher wrote a piece arguing against the development of Poplar Point, a long neglected piece of relatively open land on the Anacostia, across from the Near Southeast baseball stadium development. His piece was eminently sensible from the point of view of the common man discussing land use over a beer. The residents of Ward 8 deserve a park just as much as those who live in upper Northwest. They need a place for their children to play, and after all natural land is scarce; there are, moreover, plenty of other places to develop east of the Anacostia river.
Hard to disagree. But what Fisher doesn’t acknowledge is that the potential tax revenues from development at Poplar Point, the potential jobs in retail establishments there, the gain to the city from having a bit more of its 66 paltry square miles developed are real and tangible things. On the surface, the cost of a park at Poplar Point is just the money needed to clean up trash and install some park benches. In real life, the cost is lost tax revenues and jobs, an additional barrier between economic activity in Near Southeast and Anacostia, and reduced space east of the river for commercial and residential properties. Open land in the Washington metropolitan area is scarce, but unused land near the center of the city is far scarcer. Maybe, after everything is added up, the park does outweigh the development. If so, then we should by all means build a park. But we do no one any good by pretending that the cost of that green space is simply the amount needed to clean up those few acres. The lost opportunities could easily run to the tens of millions of dollars, or much, much more.
Picture taken by Cary Scott Photography.
Like $10 billion, perhaps. That, according to a study commissioned by Mayor Williams, is the potential revenue available to the District over the course of two decades should the height limit in the city be increased by a mere 30 feet. That number is impressive, but it’s a lower limit on the gains such a change might mean for D.C. Greater heights should lead to additional space and lower rents, which would allow a larger and more diverse array of businesses to locate in the city. It would mean more residents, which could then support more businesses and employment opportunities. It would mean greater density, which would result in an increase in walking and transit use relative to automobiles. Those are gains which aren’t necessarily easy to quantify, but they are real.
And yet it’s easy to ignore them, because failing to raise the height ceiling is, on its face, costless, and it would no doubt entail protest from many who value things like the views accorded to citizens by low building heights. Those views do have great value, but placing them in one column and a null sign in the other and declaring the matter settled is absolutely wrong. It is important to ask ourselves what we’re willing to pay for our vistas. They are not free.
It’s something of an historical coincidence that $10 billion also happens to be the cost in nominal dollars of the construction of our Metro system, according to Zach Schrag's history. An impressive amount of money, to be sure, but in considering the alternative—a world where Metro had not been built--it certainly seems worth every penny. In imagining that world, where the central city either rots from poor accessibility or shrinks in potential due to a shift to lower densities and land loss to freeways and parking lots, one almost wishes that the planners had gone whole hog and spent $20 billion. With greater redundancy, capacity, and coverage of the area, the gains from the system might be larger still.
But even with the benefits of hindsight, we fail to consider the expense of doing nothing. Planned Metro to Tyson’s creaks under public opposition to its expense and engineering challenges, and practically no one even mentions expanding Metro in the core of the city, where a new line and river crossing would improve the utility of the whole system. It’s just too difficult to get past the idea of the billions that would be necessary to achieve such a thing. And maybe, in the final analysis, a new line wouldn’t be the best option. Maybe a light rail or streetcar network would be better. But the right calculus isn’t $4 billion on one hand and revenue from ads and fares on the other. Not embarking on such a big infrastructure project is expensive, too. It robs neighborhoods of value, it steals time from commuters, and it tamps down the economic potential of every area served by Metro. Doing nothing is never cheap.
There is growth pressure all around the Washington area, and the future will bring many choices like those above. There will be other green spaces to develop or not, other building projects whose densities will be subject to public scrutiny, and other chances to boost accessibility in our great city. The answer in every case might not be more building. But we will fail at every single decision if we don’t look at our problems correctly. Doing nothing is easy, but it isn't free.