Fuel prices changing city planning and commuter patterns

Posted By Mike Padgett

July 11, 2008

The popularity of suburbs, cross-town shopping trips and Sunday drives seems to be headed the way of the dinosaurs.

Until recent years, commuters and shoppers cruised wherever they wanted, whether it was to work, wander the malls, buy groceries or check out the newest model homes.

Little thought was given to keeping the fuel tank full.

Today, the ticket to ride is painful, especially for workers with long commutes. Motorists are pouring more and more of their paychecks in their gas tanks. They are reconsidering where to live, work and shop. They are combining trips, taking buses and parking their SUVs to ease the pain at the gas pump.

The real estate chant of “drive until you qualify” seduced more than a few homebuyers in recent years to purchase new homes on the edges of metro Phoenix. But what some buyers overlooked or ignored when they were crunching their loan numbers was the cost of longer commutes between their dream homes and their jobs.

Today, with gasoline costing more than $4 a gallon – about triple what it was in 2002 – some homebuyers are struggling to keep up with their mortgage payments.

And anyone hoping for lower fuel prices will be disappointed because they are likely to increase, said Phoenix Community Alliance President Don Keuth.

Higher fuel costs are changing lives nationwide, from homeowners struggling to pay their mortgages, to city planners and homebuilders trying to predict where the next new community should be located.

Keuth said that while cities in metro Phoenix have resisted proposals for new high-density developments, that resistance is expected to cave in to reality.

“I think $6-a-gallon gasoline is going to have a lot to do with it,” he said, suggesting that fuel prices will keep increasing.

Fuel prices popped bubble

Keuth’s thoughts echo the findings of Joseph Cortright, a Portland, Ore., economist who says high fuel prices helped pop the national housing bubble.

His new report, “Driven to the Brink: How the Gas Price Spike Popped the Housing Bubble and Devalued the Suburbs,” was commissioned by CEOs for Cities, a national network of urban leaders.

Cortright’s report concludes that high fuel prices will spark a dramatic change in future growth. It says central city neighborhoods, because they are closer to work and shopping, will become more popular while the recovery of property values in the suburbs will be sluggish.

Other factors triggering long-term changes in planning in metro Phoenix include a large inventory of unsold new homes, a stalled economy, the start of the Valley’s light rail system late this year, and the approaching wave of baby boomers seeking smaller residences.

At the same time, central and southern Arizona’s population growth is projected to continue, partly because of rising fuel costs.

As the price of fuel increases, so does the cost of heating homes in the nation’s colder states. Keuth said it costs more to heat a New England home by 50 degrees than it does to cool an Arizona home by 25 degrees.

He said homeowners facing hefty increases in heating bills in cold states will consider moving to Arizona or other warmer states.

Formidable tasks

All of the new challenges to Arizona’s future have become the topics de jour in the wake of the May 16 Phoenix growth conference, “AZ One, A Reality Check for Central Arizona.” The conference at the Phoenix Convention Center was organized by the Urban Land Institute.

That was the day 300 business owners, elected officials, city planners, educators, developers, Native American officials and other residents participated in the daylong growth-planning conference.

In 30 groups of 10 each, the participants discussed new residential and employment centers, open space, transit corridors and medical centers for metro Phoenix.

Since the conference, its organizers have been sifting through the participants’ thoughts, criticisms and proposals. New ideas for growth are needed because the old model is failing, said developer and DMB Inc. Managing Director Drew Brown, cochairman of the event with Jay Hicks, principal and vice president of EDAW Inc., a landscape architecture and urban design company.

“We can’t continue to sprawl at the rate we have been,” Brown said.

The conference’s morning keynote speaker was Robert Grow, founding chairman emeritus of Envision Utah, a private and public growth partnership founded in 1997.

Envision Utah became the model for similar growth planning exercises in Los Angeles in 2002; Washington DC in 2005; Dallas/Fort Worth in 2005; Maryland in 2006; and Tampa, Fla., and Charleston, S.C., in 2007.

Regional issues

Grow encourages stronger cooperation among the Valley’s cities and towns because they share identical challenges.

“If you want to talk about protecting water, you need to deal with watersheds,” he said. “If you want to talk about protecting the air, you need to deal with ‘airsheds.’ If you want to talk about fixing transportation systems, you have to deal with ‘commutersheds.'”

All of these issues, and others, cross city boundaries, making them regional in scope, Grow said.

The conference’s afternoon keynote speaker was Arizona State University President Michael Crow. He said Arizona’s growth corridor, roughly from Prescott south to Phoenix, Tucson and Sierra Vista, is one of about 20 megapolitan regions in which 80 percent of the nation’s population will live.

Arizona’s advantage over many other cities, Crow said, is its relative newness, which he said means fewer redevelopment headaches.

“In terms of infrastructure investment up to this point, we’re the youngest, the newest, the least built and therefore have the greatest opportunity to do it right,” Crow said.

“We have the fewest things to correct, the fewest things to tear down and the greatest opportunities to build.”

Updated report

The results of the May 16 “AZ One Reality Check” conference as well as new data on growth and transportation issues will be unveiled to the public Sept. 9 at a real estate conference at The Arizona Biltmore Resort & Spa, said Valley Partnership President Richard Hubbard.

On June 27, about 30 of the conference participants met again at the Phoenix Community Alliance offices. They were briefed by Keuth about similar growth challenges in other states.

EDAW’s Hicks said Pinal and Pima counties and the city of Tucson are needed in the Arizona planning process because those areas, like metro Phoenix, are facing continued growth.

Keuth added that rising fuel costs are only part of the Valley’s future challenge. Over the next two years, he said, “every community in the Valley is going to have to take their general plan back to the voters” for approval.

A city’s general plan is updated regularly, based on changes in population growth, traffic patterns and other factors.

Like fuel costs three times what they were in 2002.

(Full disclosure: Mike Padgett has lived in metro Phoenix since 1968. He participated in the AZ One Reality Check conference.)

Jul 11th, 2008

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