What does "induced demand" really amount to?

We should build infrastructure that people use

One of my resolutions for the new year is to encourage people in the pro-housing community to spend less time engaging with the bizarre arguments of Marxist geographers and other hard-left NIMBYs and more time addressing normie concerns about a world of housing abundance.

And the biggest, most important thing on that list is traffic.

I live in an unusual (for America) neighborhood where almost all of life’s daily errands — trips to the elementary school, the supermarket, the dry cleaner, the gym, haircuts and pedicures, etc. — can be done on foot. According to the Census, only 13% of our tract’s commuters drive to work.¹ This is way below not only the national average but the city average, so if D.C. got wise and allowed tall apartment buildings in our neighborhood, that would drastically reduce the per-person driving in the city. But 13% is not zero. And even though a family like mine drives much less than the typical American family, we do own and occasionally drive a car, so the overall volume of traffic would increase if our neighborhood was upzoned.

The basic anxiety is even more severe for in-demand communities that don’t have strong traditions of walking and transit use. A future version of Los Angeles with lots of dense infill construction would become much less car-oriented than the current version of the city, but it would still be pretty car-oriented. If you built tall mixed-use projects near all of LA’s metro stations, the residents of those buildings would drive less than the Angelino average, but they would still drive some. And this would create problems for existing residents.

I think in both cases, the downside of more traffic is actually relatively small compared to the benefits of a more economically dynamic city. People don’t like traffic jams, but they don’t like high taxes or high levels of homelessness either. But the traffic issue is worth tackling on its own terms both because it’s a problem in the cities we already have and because fear of traffic is a major impediment to building the cities we should have.

What induced demand does and doesn’t show

The New York Times recently did a big feature grounded in induced demand theory headlined “Widening Highways Doesn’t Fix Traffic. So Why Do We Keep Doing It?” which skirted around the kind of obvious answer that we do it because it lets more people drive to more places.

In other words, I think the idea of induced demand is just somewhat less paradoxical than people make it out to be.

Consider the traffic impact of a mass transit project rather than highway widening. In the aforementioned Los Angeles, a project is currently underway to extend the little stump of a purple line in the map below and extend it west to Beverly Hills, then down Wilshire Boulevard into Santa Monica and to the Pacific Ocean. This may never happen due to the usual litigation and delays, and it’s conceivable that once completed the project will be a low-ridership white elephant. But let’s stipulate that it gets built and that lots of people take advantage of this transit option.

Well, what happens next?

• Some of the people riding the new Wilshire Metro will be making trips they wouldn’t otherwise have made, taking advantage of new opportunities and making their life better.

• Some of the people riding the new Wilshire Metro will be making trips they otherwise would have made by car, reducing traffic.

• But now that there’s less traffic, some people throughout Los Angeles will make trips they otherwise would not have made due to fear of traffic jams, bringing the system back to congested equilibrium.

In other words, “Ambitious Mass Transit Projects Don’t Fix Traffic. So Why Do We Keep Doing Them?”

New York City has by far the biggest and most robust mass transit system in the country, but that hasn’t ended road congestion. And yet I think it’s obvious that a high-ridership extension of the Purple Line wouldn’t be a policy failure even if, via the induced demand mechanism, it didn’t end up impacting traffic congestion. The success would be that more people get to go more places. Some of those extra people would be metro riders and some would be drivers, but the point is that region-wide mobility would be improved. By the same token, the existence of serious traffic congestion problems in New York doesn’t show that the New York City Subway, NJ Transit, Metro-North, and the LIRR are all pointless. They’re vital to the existence of the region — without them, the whole metro area would be smaller and poorer.

In other words, I don’t think the induced demand critics of highway widening are wrong exactly. But they’re not really saying what they mean. This is what I think they mean: