The Week Observed: June 27, 2025

What City Observatory Did This Week

Why Oregon’s legislators should vote “No” on HB 2025. HB 2025 proposes over $11 billion in tax increases for transportation in Oregon. Unfortunately, HB 2025 doesn’t fix the Oregon Department of Transportation’s financial problem—it makes it even bigger. The bill promises more than it pays for, and will lead ODOT to start projects it can’t afford to finish–without shortchanging road repair, or causing further tax increases.

In the B-Engrossed bill, Section 120, the anchor projects fund, writes a check that Section 60, all allocation of the 38 percent of the privilege tax on vehicle dealers, can’t cash. Nothing in the testimony, the staff report or the fiscal impact statement discloses the actual cost of these promises. Together the five named mega-projects will need an additional $3.5 to 4.0 billion, and when bonded, the net increase in revenue over the next 25 years, would cover less than half that: only about $1.3 to 1.4 billion. HB 2025 automatically create a budget hole that future legislators will be forced to fill.

There is still no accountability at ODOT: It’s simply failed to present accurate data on how it will pay for promised projects. And HB 2025 provides nothing for virtually certain cost overruns on the IBR project. ODOT’s track record of persistent cost overruns, and wildly optimistic schedule, engineering and revenue estimates virtually guarantees an even bigger problem in the years ahead.

Must Read

No such thing as a free bus. Nate Resnikoff takes a close look at the case for "free"--fareless--transit. Arguably, in the best of all possible worlds, we'd have abundant transit, and no one would have to pay fares. Alas, we live in an at-best second-best world where transit is chronically under-funded and under-provided (given its immense social and environmental benefits). Resnikoff criticizes a proposal to make New York City buses free because it would both increase demand and reduce funding for supply:

. . . at the same time that it could overload the city’s bus system, fare elimination also threatens to drain the subway of millions of paid trips per year. In effect, the city would be draining revenue out of two major transit systems simultaneously.

Calls to make transit fare-free are wrapped in equity concerns, but as Resnikoff points out, its both more efficient and more equitable to provide selective rate relief (through discounts to low income groups and fare capping) than it is to eliminate fares for everyone.

In our real world, eliminating fares at cash-strapped transit agencies means that transit users will inevitable get less service than they would otherwise. And there's a paradox here: a bus that never comes essentially has an infinite fare*, something that equity advocates overlook. (* - Not really infinite: its the cost of a ride-hail ride, which is arguably out of reach for those low-income folks we're trying to help).

The end of zoning tyranny in Texas? Texas law has long featured an obscure and anti-democratic feature that essentially requires super-majority approval for zoning changes if enough neighboring land-owners disagree. The requirement is manna for NIMBYs, making it relatively easy to round up a bare minority of "no" votes to block develpoment. As the Austin Chronicle reports, the law was even held to require a super-majority approval for a re-write of the citywide zoning code.

Under current law, property owners surrounding land that a neighboring owner is seeking to upzone (that is, build more housing on) can band together and file a petition with the city. If 20% of neighboring landowners sign a petition, then to have upzoning approved, the subject landowner must win a supermajority vote of the governing body with zoning authority over their land (in Austin, that’s nine of 10 City Council members).

Legislation now moving through the Texas Legislature would reform the "tyrant's veto" and make it easier to upzone to allow new housing. It's a reminder that the legal framework encumbering housing is vast and complicated, and will take continuing diligent work to overcome.

How to use the 30 percent of your city that is streets? Portland's City Council is taking a fresh look at how the city is using its real estate. City Planners confirmed that nearly a third of the land area of the city is in the form of city street rights of way, nearly all of which are used for transportation (and parking). But many streets are under-utilized, and the city faces a chronic and structural shortfall of the revenue needed to maintain all the streets. Converting some streets to other uses, particularly public spaces is one alternative, as Jonathan Maus explains at Bike Portland:

There’s a growing consensus on city council that Portland has more streets than it needs for driving on and that in the future, plazas and other creative uses of the right-of-way will flourish citywide. With support from council and city staff, backed up by Portland’s existing transportation policy and programs, and combined with an eager network of advocates — we could be on the the brink of an exciting new chapter in how we use streets.

Re-thinking the use of city streets goes hand-in-hand with policies to encourage greater efficiency in the use of the streets that remain dedicated to transportation. Planners presented data showing how much more efficient transit is at moving people through the city that private automobiles.

New Knowledge

Many central cities are adding housing. A new study from the Economic Innovation Group looks at housing production in central cities, and finds that many central cities are building more housing. The study uses Census and USPS data on housing to look at the geographic patterns of new housing construction across counties, and by tract within counties in the US.

The data show that in many counties, new construction occurs at higher rates in Census Tracts with lower density. This, of course, reflects the pattern of suburbanization and decentralization; tracts with low density by definition have higher amounts of vacant land and can easily accommodate more homes. What's remarkable though is that in aggregate, new construction is higher in the most dense neighborhoods than it is in the second and third most dense deciles. In short, more housing is getting added, per person in the densest ten percent of census tracts than in the next two most dense deciles of housing. Graphically, the pattern looks like this:

This phenomenon means that many central cities, with relatively high density are outpacing their surrounding first-tier and inner-ring suburbs in adding new housing.

Consider New York City, which added only 34 new homes per 1,000 residents over ten years. That’s modest compared to the Fort Worth suburbs, where fast-growing neighborhoods like Llano Springs have pushed the surrounding county’s rate to 70 homes per 1,000 residents. But New York City still vastly outbuilds its suburban neighbors — Westchester and Nassau counties each built only 7 homes per 1,000 residents. Even the notoriously construction-adverse San Francisco exceeded its suburbs in per capita construction: 31 homes per 1,000 residents in the city versus just 17 in neighboring Napa County.

Jess Remington, "Not Just Suburban Sprawl — Dense Places Can Still Build. Learning from DC and other Downtowns, Economic Innovation Group, Jun 20, 2025. https://agglomerations.substack.com/p/not-just-suburban-sprawl-dense-places