Transport and Housing: Chicken and the Egg?

August 2, 2006

British policy makers seem to have a tendency to first develop land and then put suitable transport infrastructure in place. Obviously, a significant factor for people choosing their next residence is road infrastructure and, to a lesser degree, public transport. Current government plans include creating over 100,000 new houses in regions like the South East, partially to release some pressure from the already overcrowded London. In cities like Ashford, in Kent, the local job market is almost non-existent, and the only population that can potentially be attracted to these new developments are London commuters which move their residence but keep their jobs in London.

The authorities seem to forget who they are really promoting housing for: without suitable public transport, London commuters will not chose to live in Ashford; without an inflow of public money and incentives to businesses to relocate to Ashford, there won’t be any job creation. The government policy is however to invest in infrastructure only after there is housing demand. Obviously there won’t be any housing demand since there is no infrastructure for the London commuters.

To be completely fair, some level of investment is being made in road infrastructure. Road construction creates local jobs and gives a huge inflow of construction money to the regions of Britain, boosting local economies with public money, and providing a fertile environment for new businesses, thanks to public money and modern transport links. Altogether, road infrastructure investments create significant public wealth and are a powerful vehicle to redistribute wealth.

Road infrastructure investments however result in increased flows, and surprisingly do not reduce traffic jams but in the very short-term. Quite the opposite, new motorways end up creating more traffic congestion, measured as person*hours of wasted time to the economy. While road infrastructure investments have clear benefits for local and regional development, they don’t quite help to attract new population since road infrastructure does not make a commuter’s journey significantly shorter.

The British authorities should consider investing more in public transport, and less on motorway expansion. Without better public transit, it will prove impossible for the authorities to introduce the planned road pricing and ramp metering changes; at least not without becoming a political suicide.

Most London commuters use trains, often their only choice. The railway system offers very poor service levels due an ageing and undersized infrastructure, and it requires multi-billion investments to be fit for purpose. Unfortunately it’s not only a matter of money: the railway system is very hard to scale around London given the scarcity of land. It proves to be a very unpopular choice to demolish a voter’s house!

Giving these constraints, British authorities should really look of infrastructure as an instrument for local and regional development, and they should clearly consider alternatives such as High-Occupancy Vehicles, Fast Lanes, Commuter Bus Services, and potentially faster rail commuter services.

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