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What City Observatory Did This Week

What $2 billion in R&D investments says about Oregon’s business climate. It’s time to bury the phony doom-loop narratives about Oregon’s economy that have been paraded in the media over the past year. While self-interested pessimists lament stagnation and point fingers at local tax and land-use policies, reality tells a different story. Recent massive investments—including Lam Research’s $622 million R&D facility in Tualatin and Genentech’s $750 million biotech expansion in Hillsboro—signify over $2.5 billion in capital committed to Oregon.

These decisions confirm Oregon’s fundamental strength, particularly the power of industry cluster agglomeration economies. As Lam Research’s CEO observed, locating in Portland’s established Silicon Forest facilitates interactions with sophisticated customers, accelerating the velocity of innovation. Meanwhile, the State Economist’s latest forecast confirms Oregon is closing the gap with national growth and is projected to outperform the U.S. in job growth for the coming decade.

The genuine threats to our economic future stem from federal fiscal turmoil and assaults on science and immigration—not imagined flaws in Oregon’s business climate.

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Where can passenger ferries actually succeed? While passenger ferries have a certain romantic appeal, transit consultant Jarrett Walker cautions that they face uphill geographic and economic battles. In his thorough analysis, Walker points out that ferries often struggle to compete with conventional bus and rail transit unless they offer high frequency, have exceptionally dense walkshed areas near terminals, and feature close and frequent land-side transit connections. Land costs and transport connections are critical.

“Waterfront land is expensive, so it’s hard to find space at a ferry terminal for everything you’d want at a transit node, including terminals for connecting transit, transit-oriented development, and (if you must) commuter parking”.

Unless these specific conditions are met, ferry proposals tend to be expensive, niche operations with limited ridership, rather than productive transit investments. Are you paying attention, Frog Ferry?

Falling market-rate rents in Denver are pulling tenants out of subsidized units. A major building boom has flooded the Denver apartment market, leading landlords to slash rents on market rate units and offer aggressive concessions to fill vacancies. While this represents a major win for renters, it is putting affordable housing developers and public administrators in an unexpected and awkward position. Rents on market rate units are so low that some low-income tenants are choosing conventional, market-rate units over subsidized alternatives because they’re just cheaper.

“The trend is affecting renters earning below the median income level for the area, who are finding market-rate apartments to be attractively priced in comparison with units supported with subsidies that are specifically designed or marketed as affordable”.

There’s another attraction as well, unlike subsidized units, which frequently require onerous paperwork and time-consuming eligibility determinations, private sector apartments (especially in these glutted market conditions) are closer to “cash-and-carry.” Denver is an illuminating paradox: market rate housing is, in many cases cheaper than “afffordable” housing. This is a reminder that affordability is a system condition, and not an intrinsic characteristic of a particular building.

Holy Moses! Has Mandami lost his magic touch? Few leaders has been as prolific or ambitious in demonstrating their progressive, urbanist credentials than New York’s Mayor, Zohran Mamdani. The latest in his flurry of steps to move the city forward seems like many to be a misstep: Mamdani’s has proposed breaking a log-jam over what to do with the aging Brooklyn-Queens Expressway (BQE) by spending as much as $4 billion to rebuild a particularly decrepit stretch in Brooklyn. His new plan to would take ten years to rehabilitate the deteriorating “triple cantilever” section of the Brooklyn-Queens Expressway and has sparked a harsh reaction from those who were hoping it could just go away. Instead of prolonging the life of this polluting, Robert Moses-era relic, community, environmental and transportation advocacy groups want the city to dismantle the highway entirely in favor of transit, public canals, or parklands. In effect, rebuilding the cantilever commits the city to another fifty years of heavy car traffic. Brooklyn Heightws Association leader Lara Birnback told the New York Times the proposal didn’t do enough to

. . .move us away from the Robert Moses era, which is about privileging cars and trucks and creating pollution that poisons New Yorkers.” [The plan is] a hugely disruptive, hugely expensive way to really just repair an infrastructure relic that at the end of the day leaves us with the crummy status quo we have now.”

Opponents warn that locking in the highway for several more decades will stifle progress in improving local transit and do nothing to lessen city’s severe housing shortage.

In Oregon, the high cost of affordable housing is apparently a state secret. One of the alarming contradictions in public policy is the very high, and rising cost of “affordable” housing. In Portland, some affordable projects have ended up costing $600,000 per unit, nearly as much as median single family home prices. Oregon’s housing agency—which has seen increased spending in the past decade, is avoiding this problem, not by holding down costs, but by keeping them secret. A major ProPublica investigation shows that an exemption to Oregon public records shields the financial details of affordable developments from public view. This lack of transparency prevents any examination of why development costs have nearly doubled. Oregon is unique among West Coast states in not disclosing this information. Pro-Publica notes

“Oregon is one of the only states in the country with a carve-out in its public records law that prevents disclosing the financial details of subsidized housing projects, thwarting researchers and journalists who have tried to examine their costs.”

Taxpayers remain in the dark about how efficiently public dollars are being allocated to address the region’s housing crisis. It’s hard to judge—much less improve—the efficacy and value of a program if you don’t know its costs.

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What City Observatory Did This Week

Oregon’s transportation finance system is in crisis, and the Oregon Department of Transportation’s leadership is essentially playing a game of “extend and pretend” with the multi-billion dollar projects that are bankrupting the agency. At least one legislator has stepped forward and called for a more realistic approach.

Senator Khanh Pham’s Instagram video contains a succinct analysis of the state’s transportation situation some clear and sensible direction for solving it.

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The case for economic integration. American metropolitan areas have long been plagued by the problems emanating from historic patterns of racial and ethnic segregation. Often overlooked are problems associated with economic segregation. Writing for The Argument, Milan Singh explains how American housing policy has tended to concentrate poverty--with devastating inter-generational effects. Reserach from Raj Chetty’s and co-authors convincingly shows that poor children who move to low-poverty neighborhoods before as pre-teens see a one-third increase in adult earnings compared to those who grow up in high poverty areas. The principal reason for the improvement in economic results appears to be exposure to cross-class friendships and more common employed adult role models. As Singh concludes;

“where children live — and who they grow up around — can profoundly shape their prospects as adults.”

It’s still the case that US metros are strongly segregated by income, with wide gaps between rich and poor neighborhoods. Many of these gaps step from public policies, like exclusionary zoning, which segregate the wealthy, and even affordable housing policies, which tend to concentrate low income housing in already impoverished areas. While the US has gradually made progress in reducing racial and ethnic segregation, more work is needed to reduce economic segregation.

Does upzoning lower housing costs? There’s a continuing controversy over whether upzoning--allowing greater density in high demand locations--is both a necessary and a sufficient policy to lower housing costs. At Building Abundance, Michael Wiebe provides some useful nuance on the economics of zoning reforms. His key point is that in order to expand supply and lower rents, upzoning has to result in “feasible” housing capacity, rather than merely theoretical capacity. Zoning codes, and related regulations are devilishly complex, and while some measures offer a theoretical potential for say, more units on a given lot, the interactions with other features of the zoning or building codes, or a simple lack of scale, can erase the potential benefits of the upzone. Examining large scale zoning reforms in Auckland and São Paulo, Wiebe shows that effective upzoning policies reduce land costs per home by dividing parcel prices among more units, even as individual parcel values rise.

It’s important to study large upzonings that increased density by a substantial amount, since this allows us to test whether upzoning has an effect. If you take a tiny dose of medicine, you can’t learn whether the medicine actually works. Similarly, a small upzoning that barely changes zoning laws or is counteracted by poison pills (regulations that undermine feasibility) is not informative.

In short, scale matters: when cities upzone broadly enough to erase the scarcity premium of high-density land, they empower more people to live closer to jobs and transit, ultimately improving regional affordability. Too much housing policy is small-scale, almost homeopathic, intervention. Wiebe makes a powerful case that we need to thing big if we’re going to tackle housing affordability.

Commuting behavior and the partisan divide. It’s well known that the red/blue polarization in the US cleaves along the urban/rural spectrum. Another way to look at this same phenomenon is to compare commuting modes with political preferences. Unsurprisingly, people who live in places with more transit, biking and walking are more likely to vote for Democrats that those who live in car-dependent areas. Yonah Freemark at The Transport Politic charted how county level commuting patterns correlate with vote int he 2024 Presidential election, utilizing 2020-24 ACS commute data and MIT Election Lab results. Strongly Democratic counties (D+20 or more) have an average active and public transit commute share of nearly 14 percent, while deeply Republican counties (R+20 or more) hover at just under 3 percent.

Transit is just one dimension of the nation’s polarization. As our friend Bill Bishop, author of the “Big Sort” has long emphasized, the growing geographic divisions in the nation are over-determined: we’re simultaneously sorting on a range of issues and identities, from political to social to economic, to transport choice.

In the News

City Observatory’s Joe Cortright is quoted in the Salem Statesman Journal’s article on conflicts of interest by consultants chosen to audit the Oregon Department of Transportation. The Oregon Legislature hired two firms with current or prospective business with ODOT, tasking them with potentially criticizing an agency that has the power to dispense valuable contracts to their firms.

The Statesman Journal reports no one bothered to ask about these conflicts before awarding the contract.

Anastasia Mason also has a video explainer of the story.

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What City Observatory did this week

Bankrupt: The cost of the I-5 Rose Quarter freeway widening has exploded to $3.5 billion, making the second highest cost highway project (per mile) in the nation. The Oregon Department of Transportation’s systematic mismanagement and deception have turned this into a fiscal black hole. ODOT is more than $2 billion short of the amount needed to actually build the full project, and yet is marching forward with construction, playing “extend and pretend” with a financial plan that threatens to absorb all of the region’s transportation financial capital for the next decade or more.

• Highest cost project in the US: At $3.5 billion for a 1.5-mile stretch, the Rose Quarter project now costs roughly $2.3 billion per mile—making it the second most expensive highway project in the United States, behind only the nearby $15 billion Interstate Bridge Replacement ($3 billion/mile).

• Seven-fold cost increase: Since the Oregon Legislature approved an initial $450 million allocation in 2017, ODOT’s cost estimates have ballooned seven-fold to $3.5 billion, resulting in a current $2 billion funding gap.

• Deceptive accounting. ODOT low-balled initial cost estimates to sell the project, never got legislative approval for cost increases, relied on over-optimistic revenue assumptions, commenced construction with a huge funding gap, and rather than facing reality, has been playing “extend and pretend” as costs exploded and revenue evaporated.

• The “driving stakes” strategy: By breaking ground on a tiny fragment (”Phase 1A”)--with more than $1.5 billion unfunded--ODOT used classic Robert Moses tactics to force political officials into providing further funding.

• ODOT is effectively insolvent: ODOT’s long-running reign of error is bankrupting the agency. Due almost entirely to persistent and growing megaproject cost overruns costing billions, ODOT is now functionally insolvent, even as it confronts a $200 million operating deficit

• Overspending to create land: Promised caps meant to heal the Albina neighborhood work out to an absurd $400 million to $800 million per acre of buildable land—roughly 100 to 200 times the market price for adjacent properties.

Must Read

As we’ve long noted at City Observatory, studies that purport to measure the “costs of congestion” are essentially thinly veiled propaganda, with no basis in science. Once again, Todd Litman of the Victoria Transportation Reserach Institute takes out the analytical and methodological trash, and debunks exaggerated congestion cost claims. Focusing on widely cited congestion reports—such as the INRIX Global Traffic Scorecard and TTI Urban Mobility Report—Litman shows they systematically inflate traffic delay estimates chiefly as ammunication to justify multi-billion-dollar highway expansion. Among the flaws in these studies:

• Unrealistic baseline speeds: Studies measure delay against free-flow or above-speed-limit traffic, treating normal, safe urban driving speeds as “congestion,” while characterizing the inability of drivers to exceed the legal speed limit as a “cost.”

• Overstated value of travel time estimates: Reports assign high monetary values to minor, predictable delays while ignoring the far higher economic costs of vehicle ownership and sprawl.

• Exaggerated traffic growth claims: Measured peak hour delay growth often stems from altered metrics and lower off-peak speeds rather than real-world traffic gridlock.

• Biased policy incentives: None of these so-called studies are peer-reviewed, and are generally the product of organizations looking to generate or amplify public concern about traffic as a way of selling their products (traffic monitoring) or advancing their point of view (more freeway construction). These same incentives lead authors to ignore more cost effective means of reducing travel costs, including better transit, demand management, and land-use reforms.

Beth Osborne: Wait for a better Congress to address reauthorization. There’s legislation moving through Congress that would re-authorize the IIJA (the Infrastructure Investment and Jobs Act). Transportation for America’s Beth Osborne points out that this Republican-crafted bill--which shortchanges transit, active transportation, and safety, while providing even more generous funding for highway expansions--is a bad deal. She asks, in light of the political outlook, what’s the rush?

. . . even now, when it’s obvious to anyone watching that a full reauthorization isn’t happening this Congress and this bill will get extended into a Congress that might look very different, a lot of members of what could be the next majority—and some advocacy groups that would theoretically do better under a change in leadership—still seem to think this is simply as good as it gets. I have to wonder, why don’t they want a shot at this bill from the majority?

Transportation bills often have a long shadow, with reauthorization locking in the policy environment for several years. It would be a mistake to allow the current political environment to determine transportation priorities for the next five or more years.

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What City Observatory Did This Week

Portland’s Advanced Seminar on Sports Economics. Rather than simply roll-over to self-serving, bought-and-paid-for economic impact studies calling for a massive subsidy for a billionaire team owner seeking remodeled stadium, two Portland City Councilors convened a webinar with the most knowledgeable experts in the field. The full hour-long webinar is available on youtube. Here are some of the highlights:

• Economists (actually) agree: Over 100 peer-reviewed academic studies demonstrate that publicly funded sports venues generate virtually zero net gains in local employment, GDP, or taxable receipts.

• The Substitution Effect: Sports spending merely reallocates existing local entertainment dollars away from other area businesses rather than creating new economic activity.

• Consultant Reports are unscientific shilling: Team-commissioned “economic impact” studies are unscientific, un-peer-reviewed tools designed to press public officials into transferring taxpayer funds to private owners.

Must Read

Planning to reduce vehicle miles traveled. One of the key strategies to meet greenhouse gas reduction goals is to build more housing in locations that don’t require as much driving. That’s been one leg of California’s climate strategy. A new report from the Terner Center looks at how well local land use planners are capitalizing on the opportunity to add new homes in walkable, transit-served locations. The report, “Projected Transportation Impacts of California Housing Plans,” analyzes where local governments are planning new housing, and based on travel data, projects trends in vehicle miles traveled.

The key takeaway is that while plans are reducing future vehicle travel somewhat, compared to existing development, they are falling well short of the potential of land use to reduce VMT. The housing planned in the regional allocation process and reflected in local plans (middle two bars on the following chart) are less than the current level of VMT, but fall well short of what could expected if most new housing were located in the most optimal locations.

The report concludes that while regional allocations have are directing much new housing to jurisdictions with lower levels of VMT, within jurisdictions, most of the neighborhoods designated for new housing have higher than average VMT (for their jurisdiction).

. . . if housing were developed in accordance with these local plans by 2030, it would achieve a less than 1 percent (0.9 percent) statewide VMT reduction, per capita, relative to current conditions, leaving a large gap to the Scoping Plan target. This modest estimated reduction is due to the fact that regional governments allocated more housing to cities and counties with lower average per-capita VMT, but local governments did not propose sites in lower-VMT neighborhoods within their jurisdictions, on average.

Realizing the full potential of better land use patterns to reduce VMT will, according to the report require additional guidance to local government on selecting neighborhoods in which to prioritize housing, and also, making complementary changes to transportation policy, particularly cutting back on highway expansion.

https://ternercenter.berkeley.edu/blog/projected-transportation-impacts-of-california-housing-plans/

Is Austin evidence of the housing supply-side solution? Chuck Marohn of Strong Towns offered up a controversial claim that Austin’s success in lowering rents by building lots more homes isn’t “canonical” evidence for the role of expanding supply in improving affordability. Kevin Erdman disagrees. He points out that Austin really amped up construction, particularly of new multifamily housing, and that directly led to dramatic declines in rents. Erdman helpfully compares the rent trajectory in Austin with that of otherwise booming cities like Nashville and Raleigh which didn’t up housing supply as dramatically. Here’s his chart showing average rents in the US (black), Austin (blue) and Nashville and Raleigh.

Austin when from higher than the US average (and the other two cities shown) in 2015 to considerably lower today. All metros saw rent jumps the wake of Covid, but Austin’s supply response led to a much larger decline in rents. And, as Erdman points out, even though new construction has slacked off a bit from peak levels recorded two years ago, it remains comfortably above the US average. It would be a mistake to conclude that Austin’s housing market doesn’t offer a powerful lesson for policy makers about the critical need to increase supply if we’re going to improve housing affordability.

The Politicization of Disaster Assistance. The Trump Administration has brazenly denied requests for disaster assistance for Blue states while continuing to provide business-as-usual disaster funding for red states. Politico has traced out the history of FEMA (Federal Emergency Management Administration) grant approval since the 1980s. It shows that for the most part, grants have been approved by the President just about equally between red (republican leaning) and blue (democratic leaning) states for cdecades. All that has changed sharply under Trump 47.

This crass politicization isn’t just an immediate partisan issue. The notion that the laws will be administered fairly and equally, without regard to political persuasion, is one of the foundations of a healthy and robust market economy. When people believe that the system is rigged for or against certain groups, it undermines faith in the system, and ultimately that has been a cornerstone of long term prosperity.

In the News

The San Francisco Chronicle featured City Observatory’s analysis of the accuracy of Zumper rent estimates in its story looking at recent claims that San Francisco rents have topped $4,000 per month.

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What City Observatory Did This Week

How state agency, Business Oregon, lied about the effectiveness of tax incentives and the importance of “business climate.”

Oregon’s “prosperity debate” is being fueled by bought-and-paid-for distortions of authoritative academic research on what it takes to have a successful state economy in the 21st Century.

• Flawed Foundations: Business Oregon’s recent taxpayer-funded studies rely on distorted academic literature to push discredited tax breaks and business climate obsessions.

• Ignoring Causality: A 2022 property tax study explicitly ignored whether incentives actually caused business investments, yet officials falsely cite it as proof of economic return.

• Misrepresented Experts: Recruitment reports acknowledge leading scholars like Tim Bartik, but omit or distort his core finding that up to 90 percent of incentives are wasted.

• Smart Strategy: True 21st-century prosperity relies on cultivating distinct regional strengths and talent, not engaging in a race-to-the-bottom subsidy war.

State economic development strategies have been carefully studied over the past several decades. There’s an impressive body of evidence showing that widely practiced efforts to brag about a state’s business climate, slash taxes, and offer tax breaks simply don’t work. But that hasn’t stopped Oregon’s economic development agency from commissioning questionable “studies” claiming that somehow business climate and tax incentives are central to economic prosperity.

Two recent studies sponsored by the Oregon Business Development Department fundamentally mis-state the literature on economic development, and either omit, mis-state or ignore the key findings that nearly all business tax breaks go to firms for investments they were going to make anyhow, that an obsession with business climate is more likely to damage a state’s prosperity than help it, and successful strategies require states to emphasize distinctive strengths, not focus on imagined generic weaknesses. The department paid more than $150,000 for two of these studies, which are presented as representing reliable research on state economic development.

• Business Oregon’s consultants evaluating the impact of property tax incentives were told to ignore whether the tax breaks played any role in driving a firm’s decision to locate in Oregon.

• Another Business Oregon consultant mis-represented literature on the importance of business climate, and omitted a finding from what it called the “definitive” research on business incentives that 90 percent of incentives are wasted.

There’s an old saying about economic development: Shoot everything that flies, claim everything that falls. These reports are exactly the false claims that are rife among boosters. Sloppy, incomplete and dishonest representations about the importance of “business climate” and the effectiveness of tax incentives are not a reasonable basis for a smart economic strategy in the 21st Century.

Must Read

Mission accomplished: Time to move on from the Interstate Highway System. Admittedly, we’re a bit late with this news. The Strong Towns report “Mission Accomplished” offers a comprehensive indictment of the policy and financial bankruptcy of the federal Highway Trust Fund, which has metastasized from a “user pays” program that promised to build and maintain a system of interstate highways, to a grotesquely subsidized program that supports boondoggles and sprawl, while systematically neglecting maintenance, safety, climate and livability.

Within this culture, prudence becomes a liability. Engineers who propose maintenance over expansion are accused of lacking vision. Elected officials who delay projects are told they’re leaving money on the table. The system punishes humility; it prizes activity. The outcome is a quiet inversion of values: safety plans that widen dangerous roads, economic-development programs that subsidize endless sprawl, and maintenance budgets that shrink with every
“investment.” Because problems created by expansion justify more expansion, failure becomes proof of the need for more funding. Congestion becomes justification for widening. Maintenance backlogs justify new appropriations. Climate impacts justify “resilient” reconstruction. Each consequence of past spending feeds the rationale for more of the same.

While it gets the diagnosis largely right, there are good reasons to question the repoprt’s prescriptions, especially when it comes to transit. The Strong Towns proposal would eliminate categorical and formula funding for transit and eliminate metropolitan planning organizations (MPOs). This would leave transportation priorities to the tender mercies of states--and most likely state highway departments--to decide whether, and how much money to devote to transit. That, coupled with a road-centric performance dashboard, would likely mean the downscaling or demise of transit in many states and communities. A radical re-thinking of transportation finance is needed, but this proposal falls well short of being a good solution.

Lowering the high price of affordable housing. One of the painful paradoxes of affordable housing is that new housing constructed to be “affordable” is generally more expensive to build than otherwise comparable market-rate housing. One of the exceptions to this general rule is in Colorado, where state policies play a key role in lowering (or at least shouldering) some of these high costs. In general, construction costs (for materials, labor, design) and the like, are similar between affordable and market rate projects. But “soft costs,” including the process for planning, gaining approval, financing, and administering development of affordable housing tends to be much higher.

Writing at The Conversation, Solomon Greene explains key policies that address these issues. Colorado takes aim at soft costs by an effort to expedite what are often lengthy (and therefore costly) delays in project approvals. Colorado law provides for expedited local government approvals of development applications, and has centralized and simplified the process for applying for the complex array of financing tools that typically support affordable housing projects.

The other policy is that Colorado effectively provides a subsidy to affordable housing, by allowing public entities to convey land at for free or at low prices.

Developers paid just $1.50 per square foot, against about $23 for market‑rate builders, often on public land offered at little or no cost. That cheaper land, along with lower-cost building sites, more than offsets the higher soft costs that affordable projects still carry everywhere, Colorado included.

The overhead and high transaction costs associated with planning and financing subsidized housing, coupled with the often controversial approval processes are the key reasons for the cost paradox. Colorado shows that creative policies can address these issues.

Insights on Data Centers. The Brookings Institution has published a new report looking at the economic impacts of the surge in data center construction. Researchers gathered data on 1,200 data centers that opened over the last two decades, and looked at impacts on employment growth in affected counties, using otherwise similar counties that didn’t get a data center as a control group. The study concludes concludes that tax breaks aren’t particularly important, especially for the larger (hyperscale) data centers, and that job gains attributed to the industry are significantly exaggerated. To quote the report:

Location decisions for these facilities are driven by power availability, land, and fiber infrastructure, not by tax breaks.
Naive estimates [of data center job growth] that fail to account for preexisting growth trends overstate the effect by a factor of three.”

Data center investment is playing a disproportionate role in driving current US economic growth, and shows many signs of being a classic investment bubble. Data centers high demand for water and electricity is aggravating shortages of both, and driving up electric rates; coupled with growing skepticism about the social benefits of AI, public opposition is growing.

Is your home big enough for you to deserve a safe road? In the inaugural post for her new Substack, Beth Osbourne poses this question in response to Transportation Secretary Duffy’s claim that bike lanes and pedestrian infrastructure are giveaways to “woke” people.

Let me translate that for you: “Since we have forced people to get everywhere by car through government regulation that requires all your needs to be built far away and connected by roads that will kill you if you get out of your car, we are going to use the obvious result (forced driving) as a reason to double down.”

Whether you choose to live in an apartment or a dense urban neighborhood and shun car travel--or simply can’t afford a suburban single family home and obligatory car ownership--shouldn’t affect whether the government works to assure your safety in traveling. We look forward to even more trenchant observations from Beth. You can subscribe here.

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What City Observatory Did This WeekWhat City Observatory Did This Week

Damning by faint praise: Noah Smith’s claim that America’s suburbs are “better than you think” offers a kind of urbanist apologia for American suburbs. This rests in significant part on the statistical fact that many people live in suburbs. But the continued growth of American suburbs is less about consumer choice and more a reflection of a shortage of walkable urban neighborhoods.

While some analysts view suburban expansion as proof that Americans simply prefer low-density living, treating population growth as a “revealed preference” overlooks pervasive and perverse supply constraints. Because exclusionary zoning limits the construction of new urban housing, prices in dense, walkable neighborhoods remain artificially high. Research by Jonathan Levine shows that while suburban-preferring households easily find matching housing, those seeking an urban lifestyle face a significant supply deficit and are often priced out into the suburbs against their preference. This is effectively a shortage of cities, not merely housing. It isn’t that we need just a few more homes in Brooklyn, but rather than we need interesting urban neighborhoods in metro areas across the US.

This mismatch carries clear economic trade-offs. Auto-dependent suburban living mandates vehicle ownership, which consumes roughly 16% of average U.S. household income and places a disproportionate burden on lower-income families. Addressing this imbalance requires land-use reforms that permit more dense, walkable housing, allowing the housing market to better reflect actual consumer demand.

Must Read

Remove, don’t rebuild, urban highways. According to a proposal by advocacy group Off-Ramp, summarized in the New York Daily News, New York City should remove the Brooklyn-Queens Expressway (BQE) rather than rebuild Robert Moses’s midcentury highway. Off-Ramp’s economic model reveals that replacing the BQE with at-grade light rail or bus rapid transit—paired with parks and housing—would cost 70% to 80% less than a highway reconstruction.

Building at street level avoids the immense expense of elevated or tunneled structures, saving taxpayers tens of billions while generating ongoing tax and farebox revenue. Off-Ramp emphasizes that freight demand can be shifted to alternative modes, traffic naturally “evaporates,” and expanding transit frees residents from heavy car-ownership burdens ($18,000–$28,000 annually). Many of the current proposals for ameliorating the effects of Robert Moses-like highways--whether called covers, stitches, or re-builds--are just extraordinarily expensive construction efforts that leave the damaging highway, and its polluting traffic, entirely in place. Alleviating the damage to urban fabric can best be done by simply removing the roadway.

America’s globally weak performance on road safety. A new study from the University of Washington’s Institute for Health Metrics and Evaluation finds that just a handful of nations stand out against a global trend of steadily improving road safety over the past few decades. In general, most countries roads have been becoming steadily safer since the 1990s. Among the handful of outliers are a few poor countries and the United States. To be sure, road deaths have declined slighty in the last couple of years, but through 2023, road deaths were rising in the US when they were uniformly falling pretty much everywhere else.

Between 1990 and 2023, global age-standardized rates of new road injury cases and deaths declined by 38.3% and 32.3%, respectively, but these gains were uneven across income groups. Mortality rates fell most sharply in high-income countries, while low-income countries saw little measurable improvement.

In contrast to the pattern for high income countries, traffic deaths in the US rose by about 13 percent in a little more than a decade, going up almost as fast here as they are declining everywhere else. The report concludes that road injury deaths are largely preventable, but requires infrastructure, investment, and policies that promote safety. This is clearly an area where the US could learn from other countries.

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New Knowledge

The distribution of wealth in the United States is more unequal than nearly any other country. New estimates from UBS show that wealth is distributed more unequally in the United States than in any other nation. UBS uses data from central banks, national statistical offices and international agencies, along with private estimates of net worth of wealthy individuals to compute the mean and median wealth of 30 of the world’s largest economies. There are a couple of striking findings. First, the United States is one of the wealthiest nations, with mean wealth of nearly than $700,000 per adult. But wealth in the US is more unevenly distributed than in any other developed economy. US Mean wealth is more than ten times higher than median wealth; the median US adult has only about $70,000 in wealth (about half of all adults have more and half less). While the US ranks second in mean wealth (behind only Switzerland), it ranks 28th (of 30) nations in median wealth, ahead of only Greece and Germany. (Greece is a lagging economy, devastated by the 2008 financial crisis; inequality in Germany is still amplified by lagging wealth in the former East Germany where median wealth is only about a third of that in the former West Germany.

Source: UBS, Global Wealth Report 2026

The Gini Index, which measures inequality in the distribution of wealth, shows that wealth inequality in the US the sixth highest among the countries measured, and is comparable to that in Saudi Arabia.

What the data show is that while the United States is, in the aggregate, the wealthiest nation on a per capita basis, that wealth is vastly more unequally distributed than in most industrialized nations. Despite the nation’s great wealth, the typical adult is much less wealthy in the US--with the typical household having just about $70,000 in net assets, about half the level found in Japan, France and the United Kingdom, and about a third of the level of median wealth in Australia. As Paul Krugman has written, this is powerful evidence that the US is in a Second Gilded Age, where wealth is highly concentrated in the hands of just a few.

UBS offers this description of its data sources and methodology

Net worth or “wealth” is defined as the value of financial assets and real assets (principally housing) owned by private individuals, less their debts. Private pension fund assets are included, but not entitlements to state pensions unless they are fully funded. Human capital is excluded altogether, along with assets and debts owned by the state (which cannot easily be assigned to individuals). Data sources include the United Nations, International Monetary Fund, OECD and World Bank, as well as the central banks and statistical offices of individual countries. We also use the UBS/PwC Billionaires database for our analysis. Certain information and data have been sourced from Forbes Media LLC.

UBS, Global Wealth Report, 2026. https://www.ubs.com/us/en/wealth-management/insights/global-wealth-report.html

In the News

The Capital Chronicle reported on the Portland City Club discussion of the Prosperity Council’s recommendations, quoting Joe Cortright’s analysis of the weak economic performance of states the council claimed were role models that Oregon should emulate. It wrote:

The prosperity council’s recommendations referred to states such as Arizona, Indiana, Virginia, North Carolina and Pennsylvania. In a scathing recent analysis, however, the left-leaning Oregon economic observer Joe Cortright noted that those states lag behind Oregon’s performance for measures such as median household wealth, per capita income, GDP growth and the percentage of self-employed people.

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What City Observatory Did This Week

Why it is really the Oregon Regressivity Council. With great fanfare, the Oregon Governor’s Prosperity Council released its report last month, but there are good reasons to believe the business dominated group was misnamed. While it claims to care about prosperity, its key policy aims seem to be dramatically increasing the regressivity of the Oregon tax system. While the report says it is worried about a $40,000 per year single worker paying a couple of percentage points more in taxes than in neighboring states (a claim that isn’t true according to independent analysts, In fact, Oregon’s tax system charges lower income families less than in neighborhoring Washington State. While the incidence of state and local taxes in Oregon is a “picket fence” with income group paying about 10.5 percent of income, the neighboring Washington tax incidence is a steep staircase, with those at the bottom paying moire than Oregon, and the lowest 20 percent of the population paying about three times as much of their income in state and local taxes as the richest one percent.

And despite caring for low and middle income families, all of the project’s policy prescriptions do essentially nothing for low and middle income earners. Instead,, every one of the project’s immediate actions invovles cutting taxes for the ten percent largest businesses, the five percent wealthiest estates, and millionaires. And the project’s principle long-term recommendation is that Oregon needs to make its tax system more regressive--to better match the state’s the Council says we are competing against. The Council proposes slashing income taxes and moving to sales taxes or other consumption taxes, which inherently shift more of the responsibility for payment to those with the lowest incomes.

Must Read

Revealed preference and another suburban apologia. The very sharp Noah Smith offers up a perplexing defense of the merits of the American suburb in his substack essay: The American Suburbs are better than you think. It’s worth a read, but also deserves a careful and critical reading.

Noah positions his case as a kind of urbanist apologia to (or for) suburban living. There’s little question that, whatever their advantages and problems, millions of Americans who live in suburbs do their best to lead happy, productive lives. But that begs the question of whether suburban living represents any kind of preference, or is they way they’d really like to live. There’s a tendency, as we’ve argued at City Observatory, to treat the settled pattern of suburbanization as a “revealed preference” of the consumer. This kind of argument takes n a “body count” view of growth, to claim suburbs are triumphing, and claim that growth of suburbs represents consumer choice. What that misses is that choices are constrained, and many people are priced out of the places they would prefer.

And actually, Noah knows this. The pattern of habitation we observe in the US is a product of our inability to provide the kinds of urban space that are in high demand; suburbanization is due in significant part to the shortage of cities. As Noah says:

The demand for life in cities like NYC exceeds America’s willingness to supply these environments; this raises rents in places like NYC, which pushes a lot of people into the suburbs who don’t want to be there. Forcing those city types into the ‘burbs raises rents for people who like suburbia. Basically, everyone would be happy if America had a few more Manhattans and a lot more Brooklyns.

As we’ve documented at City Observatory, dense, interesting, walkable, transit-served neighborhoods command a significant premium, both because people prefer them (when given a choice) and because we’ve build so damn few such places. The reason people move to suburbs as they age and have kids, is not because they don’t want to live in cities any more, its because we haven’t built enough housing so that they can afford to continue to live in cities.

Noah’s praise for the suburbs also turns a blind eye to the social and environmental externalities of suburbanization. Suburbs almsot everywhere have amplified ecoomic segregation, via the secession of the successful. And suburbanization has amplified automobile dependence and negative environmental effects. This essay glosses over the very high cost of automobile dependence in the suburbs, both the direct costs to households, and the social and environmental costs. For example, US households spend about 16% of their income on transportation, compared to about 11% in Europe. Moreover, transportation costs are regressive in the US, and progressive in Europe.

Americans, we can we sure, will do their best to live their best lives, wherever they end up residing. But we should avoid a kind of panglossian view of the suburbs as a reflection of our dreams, desires and preferences.

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New Knowledge

Immigrants, cities and innovation. There’s abundant evidence that immigrants have fueled long term US economic growth, and also that dense knowledge networks in cities have played key roles in promoting innovation. A new paper examines a rich and detailed set of historical data to show how immigration to particular cities played a central role in powering US growth in the late nineteenth and early twentieth centuries.

There’s little question that the “Age of Mass Migration” (1880–1920) transformed the American economy. The influx of 20 million people provided a massive labor force, new research from Costas Arkolakis, Sun Kyoung Lee, and Michael Peters suggests we’ve been missing a critical variable: geography. It turns out that the secret sauce of American innovation wasn’t just who arrived, but which cities, and which urban industrialnetworks they became embedded in..

The study, which links historical census records to the entire universe of US patents, reveals that immigrants were not merely “hands” for factories, but active participants in the nation’s “urban innovation hubs.” In part, the US attracted some of the betst and brightest, European engineers and crafts-people. And this talent infusion settled disproportionately in high-intensity cities like New York, Chicago, and Philadelphia, meaning immigrants effectively plugged themselves into the most productive knowledge networks of the era. This spatial sorting was so powerful that it accounted for roughly a quarter of the total GDP impact of this migration wave. The authors find that without these international arrivals, US income per capita would have been 8.2% lower by 1940.

“In this paper, we highlight a novel third mechanism: space. Migrants could have contributed to US growth by settling in the urban innovation hubs of New York, Chicago, and Philadelphia, where most innovative activity took place. . . . We find that without the inflow of international migrants between 1880 and 1920, US income per capita would have been 8.2 percent lower by 1940, and that both immigrants’ innate skills and their concentration in urban innovation hubs drive most of this effect.”

The study is a potent and timely reminder of the importance of two essential foundations of US economic exceptionalism: immigration and cities. Both of these foundations are currently under assault from the Trump Administration. The ability of our major cities to serve as incubators of new ideas and new businesses, fueled by infusions of talent from around the world, is very much in question.

Arkolakis, C., Lee, S. K., & Peters, M. (2026). Immigration, Innovation, and the Geography of Growth. (Cowles Foundation Discussion Paper No. 2538). Cowles Foundation for Research in Economics, Yale University.

http://cowles.yale.edu/

In the News

The Urbanist quoted City Observatory’s Joe Cortright in its coverage of the $15 billion Interstate Bridge Replacement Project, which is blundering ahead with only about a third of needed funds identified.

“Fewer vehicles will use the I-5 bridges and the I-5 between Portland and Vancouver once we implement tolls. The traffic will go from about 127,000 vehicles a day to 77,000 vehicles per day, and will basically never recover between now and 2050,” Cortright told the Oregon Transportation Commission in May. “So essentially, you will be building capacity that will be going unused at a time when we’re facing real shortages, you will have squandered billions of dollars on capacity that we won’t use, and at the same time, that will divert traffic to I-205 and gridlock, or greatly reduce the capacity, of I-205. This is a transportation own goal of epic proportions to put that much money into a project that actually makes our transportation system worse.”

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What City Observatory Did This Week

Want a stronger economy? Don’t copy losers! According to the newly released report from Governor Tina Kotek’s Prosperity Council, the problem with Oregon’s economy is supposedly that we “lag behind competitor” states, and if we’re going to improve our economy, we need to copy “best practices” from these states.

There’s a big problem with these claims: There’s no evidence that any of the policies are best practices, and every one of the states lag well behind Oregon on a broad array of economic measures. In essence, the Governor’s Prosperity Council is recommending advising that Oregon copy a bunch of losers. The Council says Oregon should copy what it calls “best practices” from five states–Arizona, Indiana, North Carolina, Pennsylvania and Virginia–all of which have measurably worse economic vital signs than Oregon.

A comprehensive look at ten measures of wages, income, wealth, economic growth, entrepreneurship, innovation, manufacturing start-ups, and exports, shows that Oregon outperforms these so-called best practice states. Oregon is wealthier, has grown income faster, pays its lowest earning workers more, has more manufacturing start-ups per capita, exports more per capita, is more entrepreneurial, and is more innovative than any of these states.

As with so much in the report, the Council simply asserts that these states are “best practices” without offering any studies, any references, any proof whatsoever that what these states are doing is either measurably different from standard practice or what Oregon is doing already. The Council has simply anointed them as best practices, based on gossip, or less.

Dubious best practices from low-performing states with regressive tax systems aren’t a good model for building Oregon’s prosperity.

Must Read

Driving, More or Less. The Frontier Group has a data-driven article on trends in driving among US states. It’s a good news/bad news story. The good news is, in a few states, driving is going down; the number of miles driven per person now is lower than it was 30 years ago. This includes Washington State, which has been prosperous and grown its economy. The bad news is, driving is down in a very few states. As the chart makes clear, driving per person is up in about four-fifths of the states.

Even the states that have chalked up declines in driving aren’t really doing so well right now. As we’ve documented at City Observatory, for example, essentially all of Oregon’s decline in driving was recorded prior to 2014, and in the past five years, VMT/capita has been rising. As Frontier Group, and other research shows, it takes a combination of price incentives, and the long term effects of land use policy and complementary investments, to bring about consistent reduction in driving.

Single stairways to housing heaven? Could a single staircase hold the key to unlocking Cascadia’s housing crisis? Writing at Sightline Institute, Iain MacKenzie describes the results of a recent student competition--the Pacific Northwest DREAMS challenge--that charged architecture teams with designing six-story, single-stair residential buildings for small residential infill lots in Portland. While common globally, single-stair buildings—which allow for efficient, light-filled, family-sized apartments on small lots—remain largely illegal in North America, with the notable exception of Seattle. A big challenge is that, unless you travel, say to Europe, it might be hard to visualize how single-stair reform might lead to better buildings. The competition, replete with a variety of designs, shows what could be done.

​The competition winners showcased how key zoning reforms could enable high-quality urban infill. As developer Shane Boland noted, single stair designs open up a range of possibilities: “This typology creates a clean four-unit-per-floor configuration and allows each unit to retain two full sides of windows, enabling effective cross-ventilation and well-illuminated spaces.” It’s a compelling vision of what our neighborhoods could become if policy finally caught up with design.

New Knowledge

Yet another benefit from congestion pricing. ​While congestion pricing is routinely touted for its role in tempering traffic demand, smoothing travel times, and cleaning urban air, a new study from the National Bureau of Economic Research reveals a a related public safety dividend: faster emergency response.

​Analyzing New York City’s landmark cordon-based pricing program—implemented in January 2025—researchers Yulia Chikish, Gregory J. Colman, and their colleagues utilized a robust “difference-in-discontinuities” design to estimate the program’s impact from distinct from other operational variables. By examining approximately 1.6 million emergency medical service (EMS) incidents near the program’s 60th Street boundary, the authors demonstrate that the pricing scheme is not merely a traffic management tool, but a public health intervention.

Pricing led to a roughly 21 percent reduction in passenger vehicle traffic near the pricing boundary, which in turn yielded tangible improvements in emergency response times. As the authors conclude:

​”These findings suggest that cost-benefit analyses of congestion pricing systematically understate net social benefits by omitting emergency response improvements.”

​For urban planners and policymakers—especially those currently navigating the complexities of large-scale infrastructure and tolling projects—this evidence offers a powerful rejoinder to skeptics. When we clear the clutter of congestion, we aren’t just saving time for commuters; we are explicitly improving the efficacy of the critical systems that keep our cities resilient. The “social benefit” of congestion pricing is far larger, and more urgent, than our traditional metrics have acknowledged. Maybe cities around the country can enlist ambulance companies and fire departments in helping to make the case for congestion pricing.

Yulia Chikish, Gregory J. Colman, Dhaval M. Dave, Brad R. Humphreys, Zachary Santamaria, and Zachary Winship, “Congestion Pricing and Emergency Medical Service Response: Evidence from New York City,” NBER Working Paper 35414 (2026), https://doi.org/10.3386/w35414.

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What City Observatory Did This Week

A $650 million cash grab. The Prosperity Council appointed by Oregon Governor Tina Kotek just released its long awaited report. But rather than addressing the real factors that lead to long term prosperity, the business people that dominate the council have come up with a set of recommendations that do less to lay a foundation for our future Oregon’s economy than they do to help out big businesses and wealthy individuals.

It’s a cash grab bonanza for a few—the total cost is likely about $650 million in lost revenue in the upcoming 2027–29 state biennial budget:

• Estate Tax Cut: $400 million (benefiting the top five percent of Oregon estates)

• Corporate Activity Tax: $100 million cut (benefiting the top 6 percent of all Oregon businesses)

• Extending Trump’s “QSBS” break to Oregon taxes: $56.6 million; 94 percent of this tax break goes to households with incomes over $1 million.

• Reinstating an R&D tax credit: At a likely cost of $90 million, revive a sunsetted 15 percent tax credit for research and development.

The proposed tax cuts are unlikely to do anything to benefit the Oregon economy or help Oregonians wrestling with the growing cost of living, and they threaten to further imperil the state budget which will be coping with massive cuts to education, food assistance and health care due to Trump’s “Big Beautiful Act.”

Wrong before, wrong again, conservative critics crying wolf about taxes and the economy. For decades, conservative economists like Eric Fruits have warned that raising taxes will doom Oregon’s economy. We’ve heard this song before. In 2010, amidst a brutal recession, voters ignored these dire forecasts and approved Measures 66 and 67, raising taxes on high earners and corporations to protect public services.

Critics spectacularly predicted the tax hikes would “permanently impair” job growth, costing up to 55,000 jobs. Instead, Oregon ran the experiment and flourished. By 2018, the state added 300,000 jobs—outpacing the nation—and later recorded the fifth-fastest per capita income growth in the country. The data is clear: maintaining vital public services and investing in communities, not slashing taxes, is what matters to a vibrant Oregon economy.

Oregon’s minimum wage is a prosperity strategy. Governor Tina Kotek is right to celebrate Oregon’s increased minimum wage: Minimum wages, not tax cuts for businesses and the wealthy, are what matter to prosperity. Minimum wages make low wage workers better off in Oregon. Thanks in major part to the state’s minimum wage, Oregon’s low wage workers make about ten percent more per hour than low wage workers around the United states.

“Business friendly” = worker hostile. Low wage Oregon workers make about 16 percent more per hour than low wage workers in “business friendly” states. Compared to the wages paid to low wage workers in these business friendly states, Oregon collectively workers take home more than $750 million more in income per year.

High ranked states on the CNBC business ranking system, like Virginia, attribute their ranking to low minimum wages, right to work laws and other anti-labor measures. Economic research shows the higher minimum wages increase worker productivity, reduce turnover, and don’t cause unemployment.

In the news

A debate on the Governor’s Prosperity Council report. The Oregon Journalism Project sponsored a debate between City Observatory’s Joe Cortright and conservative economist Eric Fruits about the recently released report making recommendations for improving the Oregon economy.

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What City Observatory Did This Week

The Receipts: Why Oregon’s Prosperity is Built on Education, Not Tax Cuts. The Oregonian published Joe Cortright’s op-ed, Oregon’s prosperity won’t be built on tax cuts.” The essay challenges business lobby’s persistent mantra that tax cuts catalyze growth; that’s a self-serving myth debunked by hard data. Economic prosperity is not bought with tax breaks for the wealthy; it is built on human capital. Educational attainment statistically explains nearly 70 percent of the variation in state economic success.

Oregon’s own empirical record bears this out. Over the past 15 years, the state logged the fifth-fastest real per capita income growth in the nation, outpaced 42 states in productivity growth, and drove poverty rates below the national average while boosting real wages for low- and middle-income workers. If Oregon wants to secure its economic future, it must invest in public services and education, not starve them.

Must Read

Supersized vehicles and pedestrian deaths. The New York Times weighed in on the growing bulk of trucks and sport utility vehicles and their contribution to the nation’s growing pedestrian death toll.

After analyzing federal and industry records, including never-before-examined data on vehicle dimensions, we found that the rise of large pickups and S.U.V.s is an important factor. Our estimate is that about 200 to 400 pedestrians a year would not have died if vehicles had remained approximately the same size over the past quarter-century. That represents about 10 percent of the recent increase in pedestrian deaths.

The key vehicle design factors that contribute to the rising death toll are higher hood heights and larger blind spots. The higher hoods tend to be much more lethal to pedestrians, resulting in more head injuries, and pushing victims under vehicles, and the blind spots mean drivers don’t see pedestrians. Data show the average hood height of US vehicles has been steadily increasing.

In addition, there is a policy blindspot that mirrors the physical blindspot on larger vehicles. Federal motor vehicle safety standards only address the safety of a vehicle’s occupants, not those walking or cycling outside the vehicle. One hopes this clear illustration of a growing problem will lead to a change.

No going back. Jarrett Walker of Human Transit calls for us to take a different view of urban transit. Too much of the focus, he argues, is that we’re talking about restoring “pre-Covid” levels and patterns of transit ridership. That ignores the fact that urban travel demand has permanently changed, largely due to the advent of remote work. Systems geared primarily to serving a growing volume of peak hour trips to CBD office centers simply aren’t going to make sense. Instead, Walker argues, transit agencies

should tell a data-driven story starting around 2022, when the new world of urban transport demand began to stabilize. Managements turn over frequently in US transit agencies, so you probably can’t judge your current management on what happened more than a few years ago. In any case, the story should be how transit agencies are building for the new world, not how they are bringing back the old one.

The world of transportation, and especially transit, will look different going forward. We need to adapt our plans and expectations to deal with these changed circumstances, and not call for a return to the status quo ante. Nostalgia is not a strategy.

Another big bridge boondoggle founded on fallacious modeling. Regular readers of City Observatory will be all too familiar with the deeply flawed reasoning driving the $15.2 billion Interstate Bridge Replacement project. But across the continent, there’s another project with an eerie similarity. Greater Greater Washington has published an analysis, “Asphalt and Inertia” chronicling the highway department led plan that’s pushing for a $16.4 billion expansion of the Chesapeake Bay Bridge.

. . . a wider span seems to have been a foregone conclusion. By analyzing congestion pricing and bridge modernization apart from one another and apart from travel demand, relying on models that unrealistically divorce land use from transportation capacity, and sabotaging transit at every turn, the only option left standing was the $16.4 billion option.

The seemingly scientific (and to laypeople, bafflingly complicated) results of travel demand models cloak wasteful decisions in a veneer of precision and legitimacy. As the world has changed--and our needs change--we can’t place blind reliance on models that essentially assume that the future will be an endless extension of past trends, especially ones that no longer hold.

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What City Observatory Did This Week

Legislative Testimony. City Observatory director Joe Cortright was an invited witness to the Oregon Joint Committee on Transportation Oversight. He testified on the extent of Oregon Department of Transportation cost overruns, explored the reasons for cost overruns, documented the increasing reliance on consultants, discussed accountability and governance issues and provided the committee with broad recommendations for reducing cost overruns, and addressing the ongoing ODOT financial crisis. You can watch his testimony here:

Presentation slides are available here.

Must Read

North Carolina: The Empire Strikes Back--or threatens to. A few weeks back the Charlotte City Council voted to withdraw its support for the proposed $4.3 billion I-77 Express Lane project which would have widened the freeway through the city.. Without the City’s--and other local government’s support, the project may not go forward. Now, state legislators are threatening retaliation. They want to bill the City of Charlotte for $30 million cost of planning the lanes. Their proposed legislation would also reduce the city’s funding for street repairs and exclude the city from getting funding for some future projects.

The amendment would penalize any regional road planning group that through “unilateral action” walks away from a project that is part of the State Transportation Improvement Program. . . . The amendment gives DOT exclusive authority to decide if there has been unilateral action and the amount of the bill. Local governments would then need to reimburse the state in proportion to their participation in the decision. Until they do, none will receive Powell Bill road-maintenance aid from the state. The amendment would also bar DOT from “beginning any new STIP projects” in their jurisdiction, even at the level of pre-development work.

Shorter NCDOT: We’re going to widen the freeway through your town, and you’re going to like it, or else. Somewhere, Robert Moses is smiling.

Is remote work degrading our mental health? The New York Times published a provocative opinion column by labor economists Emma Harrington and Natalia Emanuel arguing that there’s a big and largely unseen cost to the increase in work-from-home arrangements. Adults are getting far less in-person social interaction with others, and that seems to affecting their mental health. There’s growing evidence of an epidemic of loneliness, and its happening at the same time that remote work arrangements are further decreasing the number and intensity of face-to-face interactions.

Despite its advantages, remote work has significantly deepened Americans’ isolation and distress. Our estimates, published in Science this month with our collaborator Amanda Pallais, indicate that remote work explains a third of the deterioration in mental health between 2011 and 2024. Our research doesn’t suggest that work can occur only in the office. But it does mean that employees and companies should make a greater effort to prioritize face-to-face time with colleagues.

The effect seems to be most pronounced upon those living alone and working at home. Decades ago, Robert Putnam alerted us to the steady decline of social capital in his classic “Bowling Alone.” Today, we’re seeing those same trends ampllified by the increasing advent of “typing alone.” As we’ve written at City Observatory in our report Less in Common, place plays a critical role in promoting interactions: dense, diverse, walkable urban places offer many opportunities for social interaction. A high speed internet connection in an exurban cul-de-sac is a recipe for prolonged isolation. How we build our cities, and where we live matters.

In the News

The Portland Oregonian published Joe Cortright’s Op-Ed, “Oregon’s prosperity won’t be built on tax cuts“

Oregon businesses are right about one thing: we are in a competition with other states. But it is a competition we will win not by trying to be cheaper, but by working to be better and smarter. Cutting taxes for a favored few will undercut our efforts to educate Oregonians and will make the state less attractive to talented workers who have choices. Investing in talent is the real high road to prosperity.

The Salem Statesman Journal quoted Joe Cortright in its story “Oregon, Washington lawmakers raise concerns over I-5 bridge,”

Economist Joe Cortright said an IBR analysis found a 50,000 car daily decrease in I-5 traffic from tolling. “What this really means is, you’re gonna spend $15 billion on this project and you will find, 20 years from now, fewer people are driving on I-5 than are driving today and there will be massive diversion to the I-205 bridge,” he said.

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What City Observatory Did This Week

The Oregon Department of Transportation (ODOT) is currently engaged in an audacious attempt to re-write history. In testimony to the newly formed Joint Transportation Oversight Committee, agency officials claimed that the staggering cost overruns on projects like the I-205 Abernethy Bridge were the result of “rushed” estimates forced upon them by the 2017 Legislature. The facts, however, tell a much different story of expensive, detailed planning followed by a complete collapse in fiscal accountability.

The Myth of the “Slap-Dash” Estimate. ODOT Deputy Director Travis Brouwer recently implied the Abernethy project was greenlit based on incomplete, “back-of-the-envelope” math provided during the 2017 legislative session. This is simply untrue.

• The Detailed Directive: The 2017 Legislature did not fund the Abernethy project; instead, it specifically directed ODOT to produce a comprehensive “Cost-to-Complete” study.

• The $12.5 Million Report: ODOT spent nearly six months and $12.5 million on preliminary engineering, hiring the consulting firm HDR to produce a 169-page technical report.

• “Pretty Confident”: In 2018, HDR officials testified to the Legislature that they had advanced the design to 15-25% completion, consulted with contractors, and were “pretty confident” in their $248 million estimate for the bridge.

Bottom line: ODOT wants to blame others for its consistent failure to accurately estimate project costs in advance. The case of the Abernethy Bridge project shows that even with legislative direction to nail down costs, a six-month, 169-page report, produced at a cost of $12.5 million is no assurance that they’ll get the numbers close to right.

Must Read

Dangerous by Design, 2026. Smart Growth America has published the latest in its annual reports tracking the continuing and tragic toll of pedestrian deaths on the nation’s streets and roads. The report provides a comprehensive national look at pedestrian deaths by state and metropolitan area. While some states and metro areas do better than others, they can only take cold comfort. In most geographies, the sad news is that pedestrian deaths are rising almost everywhere. Some places improved their position on the rankings only because the pedestrian death toll rose faster in other cities or states.

There’s a distinct geographic pattern to the high pedestrian death toll, with Southern and Southwestern and metro areas having states having consistently high death tolls. There’s also a racial and ethnic bias, people of color are more likely to be victims of this traffic violence. The report is a stark reminder of a persistent, and growing, problem.

Congestion pricing reduces crashes. Pricing the streets of lower Manhattan continues to be one of the most successful transportation policies of the 21st century. The latest news confirms a reduction in crashes. We’ve reported that pricing triggered measurable drops in congestion, travel times, and air pollution. But according to Medical Xpress a new study in the American Journal of Epidemiology, it isn’t just that cars are moving smoother; it’s that they are crashing less. Researchers at Columbia and Yale found that the pricing was associated with a “substantial decline” in overall monthly crash rates.

However, a closer look reveals an interesting asymmetry. The drop in collisions was driven mostly by a reduction in relatively fender benders. While severe and fatal crashes—including those involving pedestrians and cyclists—also declined, the shift was far less substantial. This gap shouldn’t surprise us. While pricing successfully reduces vehicle volume (leading to fewer opportunities for bumper-to-bumper contact), it can inadvertently increase vehicle speeds as roads clear out, and speed in an urban environment is a key risk factor.

In the News

The Vancouver Columbian quoted City Observatory’s Joe Cortright in its article “Unacceptable Waste of Money: Critics say tolling only I-5 bridge will divert traffic to I-205 span.”

“You will have spent $15 billion chiefly widening the freeway and rebuilding seven interchanges to carry fewer vehicles,” Portland economist Joe Cortright said. “This is an unacceptable waste of money. And, at the same time, you will paralyze traffic in the Portland region because a good share of those vehicles will divert to the I-205 crossing.”

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What City Observatory did this week

ODOT goes full Orwell on claims about project schedules. ODOT projects are always on-time and on-schedule--no matter how many times we have to revise the schedule and forget or bury our earlier promises. The reality is that for major project, the Oregon Department of Transportation routinely blows through announced schedules. The now $15 billion Interstate Bridge Project, which was supposed to have finished its environmental review and gotten a record of decision in 2023, is still waiting for that approval, more than two years later.

The I-205 Abernethy Bridge, which ODOT said would be completed in 2025, is still dragging on and will continue through at least 2027--with further work needed to protect this seismic retrofit project from soil liquefaction lasting through 2030 (and costing an additional $130 million). The delays are bad in their own right--and are a key factor in driving up costs (and further enriching ocntractors and consultants). But ODOT continues to deny that anything is wrong. The former IBR project director falsely claimed that the agency never mentioned a 2023 due date for finishing the project’s environmental impact (it’s in the legislative record). And ODOT continues to talk about completing the Abernethy Bridge project “on-time” even though we’re the better part of a year past their originally announced completion date. ODOT has a problem meeting any of its stated schedules--and you can’t fix a problem you don’t admit you have.

Must Read

Maryland draws the line at $5 billion for the cost of rebuilding the Key Bridge. Baltimore’s Francis Scott Key bridge became the poster-child for American infrastructure after the container ship Dali crashed into the bridge in 2024. Federal and state governments moved quickly to remove the damage structure and committed to plans to replace the bridge, originally at an estimated cost of about $1.7 billion. The state inked a deal with construction firm Kiewit to commence work on some new pilings, even before the design was settled. The cost, not surprisingly rose, and the latest reports are that Kiewit has asked for as much as $9 billion. But the Marylnad Transportation Department is--unlike some state highway agencies we could mention (looking at you ODOT and WSDOT), isn’t simply rolling over. Maryland transportation secretary Kathryn Thomson said $5 million remains their cost estimate:

“To the extent you’ve heard substantially higher numbers, those are not our numbers, and I continue to say those will never be our numbers,” Thomson said. “So we’re in the 5-billion-ish range.”

The state is moving to terminate--in its words “off-ramp”--Kiewit and find a new construction contractor. The willingness to say “no” rather than allow a contractor to use their considerable leverage to extract more and more public funds, seems to be a rare commodity among state transportation agencies. We’ll continue to follow this project.

Let’s start tearing down urban freeways. A new organization has been formed in New York with the explicit goal of eliminating damaging urban freeways. Fittingly called “Offramp” the organization

This is a refreshingly honest, urbanist take on what to do with freeways. Too many cities seem obsessed with expensive and largely cosmetic “cover” and “cap and stitch” projects that put tiny band-aids on the gaping wounds caused by urban freeways. Typically, these efforts are just an excuse to indefinitely continue, and often expand, urban highways and their polluting, disruptive traffic. It’s time to end them, not pretend to “mend” them.

Road pricing for DC? Which city will be the next to give road pricing a try? After New York’s dramatic success implementing congestion pricing, you’d think that other cities wrestling with congestion problems and stuggling to pay for mass transit would leap to emulate this best practice. Washington DC undertook a detailed study to see how pricing might work in the nation’s capital. Unfortunately the DC Mayor Muriel Bowser tried to bury the report--which was eventually made public. It shows that pricing would dramatically reduce congestion, improve speeds and lower travel times for commuters, and provide millions for transport improvements (just like in NYC). The study estimates that a ten dollar daily inbound “cordon” toll similar to that in lower Manhattan would reduce traffic by about 7 percent (enough to save the average commuter 20 hours per year), and would generate nearly $350 million in gross revenue.

Greater Greater Washington has a summary of the report, and explains that the big beneficiaries of pricing would be automobile commuters, who, as in British parlance, would actually discover that pricing provides “value for money”: you pay a congestion fee, but in return you get a faster trip.

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What City Observatory did this week

Investment Grade Analyses still overstate traffic and revenue on tolled roadways. The Interstate Bridge Replacement (IBR) project’s newly released Investment Grade Analysis (IGA) reveals that the proposed $15 billion project is a massive waste of public funds. Despite the IBR public relations team’s efforts to spin these results as a “fiscally conservative, worst-case scenario,” the sophisticated, government-required Level 3 data paints a bleak picture of the project’s utility: with a proposed $4.60 toll on I-5, daily traffic will crater from 127,000 vehicles today to just 77,000, leaving a widened highway largely vacant for decades. Concurrently, tens of thousands of drivers will divert to the parallel I-205 bridge, crippling regional traffic and driving up pollution.

The state highway departments’ claims that these numbers are “too conservative” are flatly contradicted by data. IGAs are demanded by financial markets precisely to counter the inherent “optimism bias” of state departments of transportation (DOTs). In reality, IGAs routinely overestimate traffic on tolled facilities. Washington State’s recent history offers a stark warning:

• SR 520 Floating Bridge: Traffic fell by a third after tolling and never recovered; actual volumes are 33% lower than its IGA predicted, driving permanent traffic diversion to I-90.

• Tacoma Narrows Bridge: Traffic growth has crawled at 0.6% annually—barely a third of its IGA forecast.

• SR 99 Tunnel: WSDOT over-predicted toll revenues so severely that the legislature was forced to pass a financial bailout.

To mask these failures, IBR continues to rely on Metro’s flawed “Kate” regional travel demand model for its environmental impact statements. Stantec’s analysis shows the Kate model is heavily biased and highly inaccurate—registering a 14.5% error rate compared to Stantec’s 2.5% error rate. By overestimating travel speeds and underestimating travel times, the DOTs are utilizing an inflated baseline to artificially justify an oversized, multi-billion-dollar project.

Standard industry practice consistently exaggerates traffic and revenues to secure project debt. This IGA proves that building a massive, widened I-5 crossing is an expensive mistake that will simultaneously empty the interstate and snarl the rest of the region’s transportation network.

Oregon’s lagging investment in higher education. Oregon ranks 29th among US states in per student spending on higher education.

National average spending on higher education is about $9,700 per student, Oregon spends about $8,100, according to data reported by the National Science Foundation.

Neighboring states all spend more per student on higher education: California and Washington each spend almost 50 percent more per student on higher education than does Oregon.

State economic success is overwhelmingly determined by the educational attainment of state residents: the fraction of the adult population with a four-year degree statistically explains about seventy percent of the variation in economic success, measured by per capita income among the 50 states. Literally no other factor is as powerful explaining state prosperity.

Must Read

DC Policy Center: Breaking the Subsidy/Scarcity Cycle. It’s seldom recognized as such, but in effect in housing policy, we frequently end up “chasing our tails.” We try to device policies to provide more affordable housing (by subsidizing housing, regulating rents and other means), but for the most part these policies are responding to an affordability problem created by other policies (notably zoning, parking requirements, building codes and other regulations). Our failure to recognize these connections, often leads to well-intended, but isolated policy measures making problems worse. The DC Policy Center has a new report “Breaking the Subsidy/Scarcity Cycle“ which refreshingly takes a comprehensive look at the entire scope of the housing problem, identifies the nautre of the “subsidy/scarcity” cycle, and proposes a detailed set of policy changes to break the cycle.

This report argues for a new vision for housing policy in D.C. The District should first make it easier and cheaper to build and operate housing at scale across the city. After expanding housing supply, it should use preservation tools and operating subsidies to create affordability where it is most needed. Durable affordability for all income levels will be created from abundant supply, lower production costs, and better-targeted subsidies.

While many of the details are unique to DC, anyone who’s worked on housing policy will recognize that many of the dynamics and tradeoffs are common to virtually every community with an affordability problem. At City Observatory, we regularly read a ton of white papers, policy reports and similar anlayses. Very few of them are as comprehensive, well-reasoned and clearly explained as this. Its a model, not just of housing policy, but policy analysis. You may not agree with every single detail of the report, but the framework it provides for thinking about the comolex inter-relationships that bedevil housing policy, and the succinct arguments for a wide-ranging set of solutions is well worth the read.

Tough times for public transit. New data from the American Community Survey shows that transit is still struggling with a decline in ridership, and consequently serious financial issues in the wake of the Covid pandemic. The ENO Foundation has compiled indicators for a representative cross section of cities showing key transportation indicators. Ridership, measured as the fraction of commuters traveling via mass transit is still depressed relative to 2019 levels. This persistent decline mirrors the shift to work from home.

Declining ridership and increasing costs have also meant decreased farebox recovery, and more financial stress for transit operators. That financial blow has been cushioned by one-time federal Covid relief funding, but those monies are running out.

In the News

KATU Television quoted City Obseratory’s Joe Cortright on the proposed $15 billion Interstate Bridge Project.

“Once we implement tolls, the traffic will go from about 127,000 vehicles a day to 77,000 vehicles per day, and will basically never recover between now and 2050,” Cortright told commissioners, citing a recent investment-grade tolling analysis he said he obtained through a public records request.

Cortright argued the projections undermine the justification for the current scale of freeway widening and warned diverted traffic could shift onto Interstate 205 instead.

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What City Observatory did this week

What the Investment Grade Analysis (IGA) says: High tolls will mean a massively over-supersized $15 billion bridge and highway will be largely empty, and meanwhile I-205 traffic will be jammed to capacity. Charging tolls ranging from $2-$4.60 will cause 50,000 vehicles to stop using I-5, and many of these will divert to I-205. The environmental effects of these diverted trips and added I-205 congestion aren’t included in the IBR’s final enviornmental impact statement, which is likely a violation of federal law.

If anything the investment grade analysis overstates tolled traffic on I-5. Past “investment grade” studies have not been conservative as IBR officials claim--they’ve actually over-stated tolled trafffic, and under-estimated diversion to free routes. What this means is that the Oregon and Washington Highway departments have devised $15 billion project that is a transportation disaster: they’ve sized the widened highway to handle vastly more cars that will ever use it because of the high price of tolls, and meanwhile, traffic diversion will likely overload the region’s other key North-South corridor, I-205.

Must Read

The highway-industrial complex dictates US transportation and land use policy. A new study, published by the Union of Concerned Scientists, documents the naked political power of the oil, automobile, highway construction, and engineering industries to shape the way we travel and live in the US. Their report--“Freedom to Move: Investing in Transportation Choices for a Clean, Prosperous, and Just Future,”--documents in great detail the way trade associations in all of these industries virtually dictate policy and resource allocation at the national, state and local levels. They show that over 80% of US transportation spending, public and private, goes to the auto, oil, and roadbuilding industries.

The report shows how trade associations field a battery of lobbyists to influence legislative and administrative proceedings, how industry officials personally participate in government activities, and how firms and individuals provide significant campaign contributions. As the report shows, the intent is unabashedly to get key political and administrative leaders, especially Governors and highway department directors, on board with industry priorities.

As the UCS report makes clear, the trade association priorities have produced a transportation system that fails to meet critical national needs: transportation is a huge household expense, second only to housing, is the largest source of greenhouse gases, imposes huge fiscal burdens on state and local governments, and few Americans have any realistic alternative to automobiles for most of their daily travel.

Paul Krugman on comparing living standards between the US and Europe. Paul Krugman has an insightful post challenging claims that Europeans are worse of (and/or are falling behind the United States in living standards. He offers up some interesting technical observations (Americans are somewhat more productive, but mostly because we work more hours). But he points out that our standard of living is in many respects lower: we don’t live as long, are more likely to die in traffic crashes and alone among industrialized nations, don’t have universal health care. To all these statistical observations, Krugman adds an urbanist footnote:

Other problems with the US way of life — like our lack of walkable cities, access to public transportation, and feasibility of living without a car — are harder to summarize with simple numbers. But they are real failings.

Gross domestic product alone doesn’t tell us everything about quality of life. Much of what we value about life, particularly in cities and communities, is in relatively short supply in the US, something that isn’t reflected in the most common economic statistics.

Science and education cuts hit MIT. Trump Administration cuts to science and education funding are slashing research and reducing students at the Massachusetts Institute of Technology, one of the nation’s leading institutions. According to MIT President

MIT has experienced a decline in campus research activity funded by federal awards of more than 20%. Still more concerning is that our number of new federal research awards is also down more than 20%. Outside of Sloan and the EECS MEng program [business school and computer , still in the midst of admissions, compared with 2024, our departments’ new enrollments for next year are down close to 20%. . . . That means that, in total, outside of Sloan, we could have about 500 fewer graduate students. . . . hundreds of exceptionally talented young people will not have the benefit of an MIT education – and we won’t have the benefit of their creative brilliance.

The research and education at MIT--and other higher education institutitons has underpinned American leadership in high tech industries for decades, and these cuts will produce lasting economic damage.

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What City Observatory did this week

What Oregon’s Prosperity Council can learn about economic development from America’s best performing mid-sized metropolitan area. Governor Tina Kotek’s “Prosperity Council” is on a mission to figure out what it takes to have a successful economy.

If we want to learn how to succeed at economic development in the 2020s, Oregon would be well advised to learn some lessons from the #1 performing mid-sized metropolitan area in the country. As it turns out, if you’re looking for best practices, we don’t have to go far to study a wildly successful place:

• Bend Oregon is the top performer nationally: The Brookings Institution ranks Bend as the #1 mid-sized metro in the U.S. for growth, prosperity, and racial inclusion.

• Building wealth: With a mean household wealth of $1.1 million, Bend ranks as the 7th wealthiest metro area of any size in the nation, just behind San Francisco and Silicon Valley.

• All Oregon’s metros are significantly above average: Portland, Salem, and Eugene all rank in the top tier of their respective categories for prosperity and inclusion.

• The payoff from Oregon’s “Second Paycheck”: Success is driven by quality of life and environmental amenities that attract talent, exactly as the late Ed Whitelaw foretold decades ago.

Oregon’s consistent top-tier rankings prove that a high quality of life is the ultimate 21st-century economic engine, rendering complaints about tax structure and “business climate” moot.

Measuring labor markets: EPOP shows Oregon closely integrated to the national economy. The Employment-Population Ratio (EPOP) is a superior economic health indicator compared to unemployment rates because it accounts for discouraged workers and ignores multiple job-holding distortions. By measuring the fraction of adults aged 18–65 with jobs, EPOP reveals that Oregon’s economy has successfully transitioned from a historical laggard to a national leader.

While Oregon suffered more severely during the Great Recession, it fully converged with the U.S. average by 2017. Today, Oregon’s EPOP of 75.2% exceeds the national average, reaching 21st-century highs. This shift reflects a diversified, integrated economy well-positioned for continued growth alongside national trends.

Must Read

Krugman goes urbanist! In a reply to a Wall Street Journal article claiming that Europeans have vastly lower living standards than the US (they don’t), Paul Krugman reframes the argument, asking,
What Happens When Americans Realize How Miserable We Are?
What if Americans figure out how screwed they are compared to other developed countries. We have to work longer hours, die years younger, and of course are the only advanced country not to guarantee health care to all. He leads with a graph showing how much more likely Americans are to be killed in traffic crashes than in the rest of the world:

In the process, Krugman goes full urbanist, writing:

Other problems with the US way of life — like our lack of walkable cities, access to public transportation, and feasibility of living without a car — are harder to summarize with simple numbers. But they are real failings.

As this Nobel-prize winning economist writes, life is about more than GDP. Something that we’ve seem to have forgotten in the US. And quality of life has value only as long as you’re around to enjoy it, and in the US, that’s dramatically less than in many other countries.

How the highway-industrial complex dominates transportation policy and costs

Charlotte says “No” to a freeway expansion project. Charlotte’s City Council voted 6-5 to terminate the city’s support of a plan to expand I-77 by adding toll lanes through the city. As usual, the project is pitched by the state’s transportation department as having to deal with a rising tide of traffic which will happen whether or not the project is actually built.

The controversial toll project would add toll lanes to an 11-mile stretch of I-77 from uptown to the South Carolina border. The reason for the I-77 project is to reduce traffic and crashes. I-77 South, according to NCDOT, has the state’s highest congestion levels, seeing over 160,000 cars a day. The agency estimates that, with or without the toll lanes, I-77 will see a 25% increase in traffic by 2050, meaning the roadway will see over 200,000 cars a day.

All of these claims fly in the face of scientific findings of induced (and reduced) demand. Highway traffic increases when roads are expanded, and either declines (or stagnates) when capacity is constrained. If Charlotte, or any city, wants to minimize the negative effects of traffic, it needs to stop building roads.

In the News

Willamette Week and the Oregon Journalism Project reported on the release of key data from the forthcoming Investment Grade Traffic and Revenue Analysis of the proposed $15.5 billion Interstate BRidge Project; these doucments were obtained by City Observatory. The documents show tolling will dramatically reduce traffic flows on I-5 to below current levels for between two and three decades, and divert tens of thousands of trips to I-205, facts not disclosed in the project’s Environmental Impact Statement.

The $2.3 million analysis, conducted by the engineering firm Stantec, evaluated four different tolling scenarios. Although the analysis has not yet been completed, Portland economist Joe Cortright, a longtime critic of the bridge replacement project, obtained some of the key aspects of Stantec’s work through a public records request.

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What City Observatory did this week

Contrary to ODOT claims, Oregon is driving in the wrong direction to acheive its adopted climate goals. Oregon’s Statewide Transportation Strategy (STS) targets a 20% per capita reduction in vehicle miles traveled (VMT) by 2050, yet current data shows the state is moving in the wrong direction. While ODOT claims a 9 percent VMT/capita decline since 1990, nearly all those gains occurred before the STS was adopted in 2013--meaning we’ve made no progress since then.

Annualized Rate of Change in Per Capita VMT, Oregon

PeriodDurationYearsGrowth Rate Since STS11 Years2013-20240.0%Since before Covid5 Years2019-20240.5%Latest2 years2022-20240.7% To meet STS Goal26 Years2024-2050-0.6%

In reality, per capita driving has increased by 0.5% annually since 2019. ODOT is ignoring this trend and planning to accelerate driving in the years ahead by spending billions on highway expansions that assume a 25% increase in total driving—directly contradicting state climate laws. By relying on outdated baselines, the agency obscures a critical reality: transportation emissions are rising, not falling.

• Up is not down; You can’t take credit for things that happened before you even adopted your climate plan

• State climate plans count on Oregon reducing driving per capita 20 percent statewide by 2050

• In fact, ODOTs own data shows that over the past five years (2019-2024) per capita driving has increased at an annual rate of about 0.5 percent per year.

• All the decline in driving from 1990 levels happened more than a decade ago

• At the current rate of change Oregon will never achieve its VMT reduction goal

• Bottom line: Oregon transportation greenhouse gases are increasing, not decreasing. ODOT’s climate plans are failing and the agency is simply in denial.

Two bad years for two big firms. Some business groups would like to claim that a recent drop in Portland employment can be blamed on a “bad busienss climate.” The real explanation is closer to home. Two of the area’s leading employers, INtel and Nike, have both had their two worst years in more than two decades. Their job losses--due to idiosyncratic business problems, not local public policies, explain most or all of Portland’s perceived economic weakness.

It is a statistical fact, according to the Oregon Department of Employment, metro Portland ended 2025 with about 8,800 fewer jobs than it started. To some, that’s a symptom of a failing economy and justification for radical changes to local and state policies. In 2024 and 2025, Portland’s two marquee firms had their worst years in several decades,. Is it any wonder Portland’s growth lagged the nation’s during those years?

Business groups want to blame public policies for recent job declines, but a much bigger factor is competitive failures by Nike and Intel. Both companies announced layoffs: Nike 740 layoffs and Intel 4,500. Together, these announced layoffs equal a majority of Portland’s 8,800 job losses in 2025.

What’s more, when big firms like Nike and Intel lay off people, economists expect those to cause additional layoffs in the broader economy–enough to have accounted for more than the net decline in employment in Portland in 2025. The claimed multipliers in Nike- and Intel-commissioned “Economic Impact Statements” imply the two firms’ layoffs should have cost the local economy more than 20,000 jobs. The region has lost barely a third of that many jobs. In other words, while struggles at Nike and Intel created challenges for the area’s job picture, job growth at other area enterprises offset much, if not all, of the economic fallout from Nike and Intel’s layoffs..

There’s an old saying: a crisis is a terrible thing to waste. The region’s businesses are trying to turn the miscalculation and business missteps by Intel and Nike into a cudgel, shifting the blame away from the firms’ responsibility for region’s job losses, to fashion a tool to extract policy concessions from the public including a reduction of business taxes. The fate of individual companies is always more volatile than the overall economy: while Intel has struggled for most of the past five years, it has come roaring back in the past month--even as Nike still lags--but no one should confuse the fluctuating fates of specific firms for the underlying strength of the state in which they are located.

How’s Oregon’s economy doing? The state’s economic forecast weighs in with generally positive news. Carl Riccadonna lead Oregon’s Office of Economic Analysis, charged with forecasting the state economy and preparing state revenue forecasts. He summarized the condition and outlook for the Oregon economy in a recent media interview. Here are the key points he made:

• Recent Growth Rebound: Despite lagging behind the national economy post-pandemic and struggling through a “lousy” first half of 2025 due to trade and tariff challenges, Oregon rebounded in Q3 and Q4, growing faster than the national trend.

• Economic Diversification: Oregon’s shift from legacy industries (timber, agriculture) into semiconductors and service industries has stabilized the economy, linking its success more closely to national performance.

• Recession Sentiment vs. Reality: While many Oregonians feel like the state is in a recession due to slowing growth and sputtering job markets, the state does not currently meet the technical criteria for one.

• Income and Inflation: Although gasoline prices have caused a recent inflation spike, personal income growth in Oregon has generally outpaced inflation during the post-pandemic period.

• Revenue Resilience: State revenue streams—including personal and corporate income taxes, estate taxes, and lottery revenue—remain strong and do not reflect recessionary patterns.

Must Read

Don’t call it Freedom. Mathew Lewis has a great substack essay on why, if we really allowed markets to work their magic, we’d have vastly more dense, walkable, interesting cities. He challenges the claim that American’s somehow willingly chose sprawl, and that auto dependence is a revealed preference, shaped by market forces.

Start with a basic question. If Americans truly prefer car-dependent suburbia above all other ways of living, why is it illegal to build almost anything else? If you want to know what people actually want, look at what they pay for. And what Americans are paying for is the thing we made illegal: Walkable neighborhoods. Because that is the actual situation. In most American cities, on roughly seventy-five percent of all residential land, it is against the law to build a duplex, a corner store, a small apartment building, or anything denser than a single detached house on a large lot.

A decade ago, City Observatory published Robert Liberty’s insightful “My illegal neighborhood,” showing that his dense, mixed use, walkable Northwest Portland neighborhood was both the city’s most valuable residential area, and flatly illegal to build under current laws. The continued high price of dense interesting urban places is a signal that there’s unrequited demand for this kind of neighborhood, largely blocked by zoning and related development restrictions. We would do well to recognize this latent demand, and adjust our policies to allow more of what people want.

The Iran War’s run up in gas prices is punishing exurban real estate. John Burns Consulting has a timely analysis of how the nearly 50 percent increase in gas prices triggered by the Iran War has already impacted US residential real estate sales. The recent spike in fuel prices—now exceeding $4.40 per gallon—is exposing a key liability of exurban sprawl. The housing industry’s long-standing “drive-till-you-qualify” model is hitting a wall as transportation costs erase mortgage savings.

• The Commute Gap: Burns reports that Census data show that owners of new construction (built since 2020) commute 12% longer than the average homeowner. In markets like Stockton, Greeley, and Dallas, new homes are clustered on the extreme fringe where land is cheap but travel is mandatory.

• The Affordability Illusion: While some white-collar “move-up” buyers may be able to buffer higher gas prices with work-at-home, entry-level buyers enduring long commutes to afford homes are disproportionately tethered to in-person jobs. For them, a 45% jump in fuel costs is a direct hit to household liquidity.

• A potential market shift. More central locations, nearer to job centers offer lower commuting costs, which may help give Infill communities and transit-served neighborhoods a distinct competitive advantage over the fringe.

When gas prices spike, the “affordable” home on the outskirts becomes a financial liability. As our 2008 study, Driven to the Brink, showed, higher gas prices tend to depress prices for peripheral neighborhoods. If the run up in gas prices persists, that’s likely to happen again. And regardless, the experience of $5.00 a gallon (or more) gasolline is likely to make prospective homebuyers much more wary about the liability bound up in exurban housing.

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What City Observatory did this week

Eight reasons the Interstate Bridge Project shouldn’t and can’t legally go forward. After six years of deliberation and $270 million in consulting fees, the Interstate Bridge Replacement (IBR) program has finally released its 10,000-page Final Environmental Impact Statement (FEIS). But far from providing a roadmap for construction, the document reveals a project that is legally insolvent, physically truncated, and built on a foundation of flawed “Highway Department math.”

• Half a project: The FEIS evaluates a massive $15.5 billion build-out, but ODOT and WSDOT only plan to build a $7.6 billion “core.” By leaving out the light rail and highway connections used to justify the project’s environmental benefits, the agencies have invalidated their own environmental impact statement.

• Fiscal Insolvency: Federal law requires projects to be part of a “fiscally constrained” plan. With both DOTs effectively broke and no guarantee of future funding, starting a project they cannot afford to finish is a direct violation of federal transportation regulations.

• The “Independent Utility” requirement: Federal rules prohibit “half-built” projects. A bridge that ends in a bottleneck or a light rail line that stops 90 feet in the air above the Vancouver waterfront lacks “independent utility”—meaning it’s a billion-dollar expenditure that provides no stand-alone benefit.

• The Light Rail Legal Fiction: To bypass state land use laws, the IBR claims a “Land Use Final Order” (LUFO) intended for light rail. However, with transit construction likely delayed until after 2030, the project is a highway expansion masquerading as a transit project to dodge legal scrutiny.

• Bogus Traffic Projections: The FEIS claims traffic will grow at 1% annually, yet official counts show I-5 traffic has actually fallen to 1990s levels (127,000 vehicles/day). The agencies are suppressing “Investment Grade” data that would prove the bridge is being over-engineered for demand that doesn’t exist.

• Negative Benefit-Cost Ratio: U.S. DOT grants require a project’s benefits to outweigh its costs. With the price tag exploding to $15 billion while benefits remain capped at roughly $4 billion, the IBR no longer meets basic federal cost-effectiveness standards.

• A Violation of Climate Law: State and regional policies mandate a 10% reduction in driving, but the IBR is predicated on a 25% increase in vehicle miles traveled (VMT). The FEIS fails to disclose this fundamental conflict with Oregon’s legally adopted climate goals.

• Consultant Capture: Over half a billion dollars has been billed by consultants for a project that project director Greg Johnson calls “basically the same” as the failed CRC. The current plan extends construction to 2050, ensuring a “forever project” that serves the billing cycles of engineering firms rather than the public interest.

Biotech: Still Clustered after all these years. Everyone has long known that three metro areas dominate the US biotech industry: San Francisco, Boston and San Diego. Yet for decades, large cities around the country, most which have a major medical university, and research facilities, have been trying to spin biotech research into pharmaceutical businesses and high paid jobs. The best evidence is that those efforts have almost entirely failed to alter the fundamental geography of US biotech. In 2002, when we undertook a study of biotech clustering published by the Brookings Institution, those three metro areas accounted for 63.9 percent of all US venture capital investment in life sciences firms. Now, more than two decades later, those same three metropolitan areas still account for exactly the same share of venture capital investment: 63.9 percent.

The remarkable stability of that leadership is a testament to the powerful competitive advantages of being located in one of these clusters. Firms are vastly more likely to find good ideas, be able to easily assemble top-notch teams of researchers, managers, and marketing and regulatory affairs experts, link up with venture capital firms, and increase their chances of success by being located in an established industry cluster. In addition, the fact that these three centers continue to dominate, even though they are in some of the most expensive housing markets in the US, and two states (Califforina and Massachusetts) with relatively high taxes, signals that cost factors are at best secondary to the busienss advantages that stem from locating in a cluster.

Must Read

The political consequences of a failing boondoggle may come down soon. A primary election in suburban Washington County may hinge on the utter failure of a multi-billion dollar boondoggle. For years, long-serving State Rep. Susan McLain has been an unflinching advocate for the now $15 billion Interstate Bridge Project.. But in its endorsement for her primary opponent, Portland area alt-weekly Willamette Week excoriated her record on the IBR boondoggle:

Worse, McLain co-chairs the Joint Committee on the Interstate 5 Bridge—perhaps the only project going worse than the ODOT funding package. In less than four years, as the Oregon Journalism Project revealed, the estimated cost of the project has more than doubled, from $6 billion to $13.6 billion. The replacement bridge may never span the Columbia River, but McLain appears to be in denial. She says the project has been “successful” because “we’ve met every target and goal we’re supposed to.” She refuses to concede costs have ballooned, or admit that her fellow committee members were outraged at project officials for keeping the new numbers under wraps. Discussing the bridge with her is like watching The Office’s Michael Scott drive his car into a lake on the instructions of his GPS.

McLain is a long serving incumbent; it remains to be seen whether the race will turn on this issue or others. Vox populi.

Using outdated and simply wrong traffic forecasts to justify highway widening in New York. Streetsblog Empire State reports on how, once again, highway agencies are using “hockey stick” models of future travel demand, and ignoring the steady erosion of traffic growth rates to justify spending billions on highway widening projects. In this case, the NY state Department of Transportation used 15-year-old traffic models to justify its plan to expand Rt. 17 in Orange and Sullivan counties — ignoring a 10-year drop in traffic and overemphasizing a few busy summer weekends, according to report prepared by traffic expert Norm Marshall. Streetsblog reports:

A central pillar of the state’s argument for widening the road is the Orange County Travel Demand Model, which Marshall found to be fundamentally flawed. The model calculates travel behavior using a survey conducted in 2010 and 2011, and therefore doesn’t account for changed driving habits in the last 15 years, including a sharp decline in driving among young people. While the state’s projections are based on the assumption of a traffic boom, the actual 10-year trend for the corridor is down, not up, Marshall said.

Highway agencies cling to their outdated views that traffic can only increase, and that expanding capacity is the only way to avoid gridlock, even as traffic growth rates slow--and are likely to slow even more due to recent fuel price increases. They also routinely ignore the effects of induced demand, in which expanding highway capacity only generates more sprawling development patterns and more car dependent communities.

One more stab at convincing housing supply sketptics. Welcome to the fight for economic literacy, Milan Singh. Writing, appropriately enough at “The Argument” Singh once again takes up the battle to show skeptics that the only way to lower rents and housing prices is to build more housing. He takes on a common claim, made by many, that new housing is always associated with higher rents, therefore, the new housing must be causing the higher rents. He writes, exasperated:

The Georgetown report is pretty sloppy: The authors didn’t even try to do causal inference; they just point out that cities with a lot of new housing units are also the ones where rent is going up. No shit. Developers choosing to build new units isn’t exogenous to demand shocks! That is, developers don’t build in a vacuum. The very reasons they choose to build new units are directly related to the reasons a place is attractive to new entrants: a new employer moves in, a transit line opens up, crime drops, the schools improve, a location becomes fashionable, and so on.

The essential point here is that when demand for urban living goes up, or is high, rents will tend to rise as well, and the only way to bring them down is for supply to catch up. Singh goes past the simple explanation to dig into the latest literature about supply increases and moving chains, and we hope a few more skeptics get the message. But no doubt the argument will go on.

The real conspiracy: one-hour cities. The idea of promoting walkable and livable urban neighborhoods has been under attack in many quarters. Some see 15-minute living and low-traffic neighborhoods as a kind of globalist conspiracy to restrict freedom, directly, presumably by some international cabal. Now comes the Urban Truth Collective--aka Grant Ennis, Brent Toderian, Tom Flood--to turn the tables on the conspiracy theorists.

The truth, they argue, is that the real conspiracy--one that has succeeded wildly--is to saddle us in living in one-hour cities, car dependent places that sap our time and money, endanger our health, increase loneliness and wreck the environment. There clearly are groups that have lobbied to block better urban living:

The one-hour city probably does not involve a bunch of evil men in suits conspiring around a big, sinister table. Short of audio-video footage of said meetings, or extensive documentation, we’ll never know for sure. But we do know from extensive evidence that there is a collection of aligned interests that make a lot of money from people driving more. These actors have lobbied for laws that make it harder to get to shops, businesses, schools, restaurants, and government and medical services near to where people live.

It’s a bit tongue-in-cheek to respond in kind, but there’s more than a grain of truth. And you have to fight a narrative with a better, more compelling and more truthful narrative. We should indeed be talking about the conspiracy that has forced us to live so far from one another and the things we want to do, who it actually benefits, and what might be done to create different and better options for living.

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What City Observatory did this week

Happy Earth Day, Oregon: Let’s commit to squandering tens of billions on highway expansion as greenhouse gases keep rising. Despite legal pledges to reduce greenhouse gases to address climate change, Portland’s transportation greenhouse gas emissions are going up, not down. State, regional and city governments have adopted climate goals that purport to commit to steadily reducing greenhouse gases, but we’re not merely failing to make progress, we’re going in the wrong direction.

In the face of these persistent failures, Oregon is moving forward with plans to billions and billions dollars into three Portland area freeway widening projects. As a result, April 22 isn’t so much Earth Day as a macabre Groundhog Day, where every year we’re reneging in a bigger and more expensive way on our climate pledges, even as the crisis grows visibly worse.

Oregon’s economy continues at a 25-year high in per capita personal income as a percent of the national average. The current debate surrounding Oregon’s “economic crisis” relies on a narrow reading of short-term data while overlooking broader, long-term evidence of success. Any “prosperity” strategy must start with an accurate assessment of where the state actually stands.

The Oregon Prosperity Council has recently been subjected to a barrage of unduly negative claims. However, the data tells a different story. According to the Brookings Institution’s “Metro Monitor,” Portland ranks in the top ten large metros for prosperity, while Bend is the number one performing mid-sized metro in the nation. The most revealing measure of economic health is per capita personal income. In 2010, Oregonians earned just 88% of the national average. According to revised BEA estimates released April 9, 2026, we have climbed to 96%—the highest level in a quarter-century.

Oregon’s official econometric model—which is calibrated on post-2020 data—forecasts that our job growth will outpace the national average over the next decade. In fact, our economy has consistently outperformed these models, resulting in five consecutive “kicker” payments.

While external risks like federal tariffs or global instability could trigger a recession, Oregon’s pro-cyclical economy is catching up to the nation. These are not the symptoms of policy failure, but of a region reaching a new level of national competitiveness.

Must Read

Why Oregon should take the “high road” for economic development. Oregon Governor Tina Kotek has appointed a Prosperity Council to offer advice on improving the state’s economy. Two members of the council, Alice Dale and Robert Camarillo have submitted a white paper laying out a vision for raising incomes for all Oregonians as the centerpiece of any prosperity strategy. The report counsels against an obsession with business climate rankings and tax cuts as a way to assure the state’s long term prosperity. In a global, knowledge-based economy, states find economic success by bolstering talent and building quality of life.

Focusing on merely growing the economy, reducing taxes on the highest income earners or businesses, or relying on flawed business climate rankings, which are often biased and unreliable indicators of a state’s economic prosperity, miss the mark. A highly educated and trained workforce is the single most powerful economic lever for increasing incomes. Just like any smart CEO, Oregon should pursue a strategy of its own and ignore the low road of doing everything other states do, just more cheaply. Oregon should build on Oregon’s strengths, especially its unparalleled quality of life, and appeal to the smartest, hardest working, best-educated workers and the most innovative firms to help us build a high-skill, high-wage, high quality of life economy in the knowledge-driven world of the 21st century.

(City Observatory’s Joe Cortright was a contributor to the High Road report.)

You are what you consume. An essay about consumption and identity. Economist Blogger Noah Smith, of Noahpinion fame, has a provocative essay about how what we consume, rather than what we produce ought to have a more prominent and acknowledged role in defining ourselves.

Why should what you produce, rather than what you consume, be the most important thing about you? Why shouldn’t the fact that you race boats or watch anime or drink matcha lattes be what defines your identity? Why should I call myself a “writer” rather than a “science fiction fan” or a “rabbit dad”?

There are important parallels to a point Ed Glaeser made about the “Consumer City” two decades ago: The economic rationale for cities is shifting from their advantages in production, to the advantages they afford in consumption. Increasingly our well-being (and as Smith argues, our identity) is more about what we consume, including a range of non-market goods, services and activities. Quality of life, rather than quantity of work, will become increasingly important.

Exposing the Congestion Cost Charlatans. The invaluable and inimitable Todd Litman of the Victoria Transportation Institute once again does the homework to show how phony and contrived are the claims of the Texas Transportation Institute, and others who claim that traffic congestion costs us untold millions of hours and billions of dollars. Every year, they tell us traffic is getting worse and costing us more--even when travel times are down, and traffic congestion has lessened, largely due to post-pandemic changes in travel behavior. In his usual workman-like fashion, Litman dismantles these false claims. He notes three leading ways the congestion-costing industry cooks the books:

1. The “Speed Compliance” Scam. Most studies calculate “delay” by comparing actual traffic to an economically absurd baseline: the free-flow speed of a 2:00 AM joyride. In reality, much of what TTI calls “congestion cost” is actually just speed compliance. By their math, a driver doing 55 mph in a 55 mph zone instead of 70 mph is “delayed” if the road was empty enough to speed.

2. The Off-Peak Mirage. They claim congestion is exploding, but the reported “growth” isn’t caused by peak-hour traffic getting slower; it’s caused by off-peak traffic getting faster. When mid-day speeds increase, the “gap” between peak and off-peak appears wider, allowing the industry to claim congestion has worsened even if your morning commute hasn’t changed in a decade.

3. Exaggerating the Pain. These reports rely on “value of time” estimates that treat every minute of a commute like a lost billable hour, while exaggerating fuel and emission impacts. The reports conceal the much larger loss of time due to longer travel distances in sprawling, car-dependent areas, and ignore the effects of induced demand, by calling for highway expansions—like the Interstate Bridge Replacement—that only induce more driving and restart the cycle.

Meanwhile, the reports almost entirely ignore the one policy--road pricing--that’s been shown to actually reduce congestion. But the purpose of these reports isn’t to shed light, or build understanding, it’s to rationalize throwing more money at highway building. No one should be fooled.

In the News

Oregon Public Broadcasting quoted City Observatory’s Joe Cortright in their coverage “A battle is brewing over Oregon’s economic future.” Disputing claims that recent job losses in Oregon are signs of a structural flaw in Oregon’s economy, instead their driven by, and largely mirror a dramatic slowdown in national job creation, which has fallen by 90 percent, from 2 million jobs in 2024, to fewer than 200,000 jobs in 2025.

“It’s like, yeah you caught a cold, that doesn’t mean something is fundamentally wrong with your health,” Cortright said. “You caught a cold when it was winter.”

Strong Towns republished our commentary on how Portland ought to pay for streets.

City Observatory’s Joe Cortright was interviewed on the Oregon Center for Public Policy’s podcast “Policy for People” discussing Oregon’s “business climate.”

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What City Observatory did this week

The Interstate Bridge Project is hiding its toll revenue study—which will show that tolls will have to be higher and provide less revenue for the $15 billion project. They’re delaying this bad news to get officials to move forward with project approval, and plan to stick us with the bill later on.

• IBR officials have told Oregon and Washington legislators that the project’s Investment Grade Analysis (IGA)—a rigorous, independent estimate of future toll traffic and revenues—will be delayed by more than a year, to June 2027.

• According to the project’s own December 2024 schedule, the key milestones—traffic and gross revenue forecasting and net revenue forecasting—were supposed to be completed in October 2025. They are now nearly six months overdue, with no firm completion date for those critical steps.

• There’s an obvious reason for the delay: IBR staff have almost certainly already seen draft results showing that toll revenues will fall well short of the $1.25 billion they’ve been promising—and that hitting that target would require tolls far higher than they’ve been advertising.

• We’ve seen this movie before. The 2013 Investment Grade Analysis for the Columbia River Crossing—which IBR’s own former director called “basically the same project”—cut projected future traffic nearly in half (from 178,000 to 95,000 vehicles per day) and nearly doubled the minimum toll (from $1.34 to $2.60).

• Four factors suggest IBR’s toll revenues will come in at the low end—or worse: bridge traffic is already down to 127,000 vehicles per day (not the 142,000 routinely cited in IBR materials); population and traffic growth have slowed; post-pandemic work-from-home has permanently dented commuter volumes; and 30-year interest rates have nearly doubled, shrinking how much can be borrowed against any given revenue stream.

City of Industry: Portland, Oregon–Number one large metro in new manufacturing firms. Portland leads the nation’s metro areas in the growth of new local manufacturing firms.

Over the past five years, Portland has added 250 more new manufacturing businesses than if it were growing at the national average rate. New manufacturing startups are a leading indicator of future prosperity. All of Oregon is a hotspot for new manufacturing firms

Must Read

Bring back Single Room Occupancy. Writing at Governing, Alex Horowitz and John Bonura make a strong case for bringing back rooming houses and single room occupancy buildings as a way to address affordability and reduce homelessness. Its worth reflecting that in an earlier age, whem America was much poorer than it is today, that the lowest of the low income people were seldom force to live outdoors. Most cities, especially city centers were characterizes by relatively abundant single-room occupancy hotels; residents had private bedrooms but share a bath-down-the hall and kitchen facilities. Most neighborhoods also had the functional equivalent, boarding houses, in which individual rooms in a single family dwelling were rented out--with “board”, or communal meals--often by a widow or widower, as a source of retirement income. These venues were a staple of 30s and 40s cinema.

In the decades since, SROs have been regulated out of existence. Some of the motivation was positive: many viewed SROs as poor quality housing. But few people gave any thought to how this might affect tenants, and, as we’ve seen, in a housing shortage, many who would gladly live in a decent if minimal single room, end of living on the street. In effect, as xxx and yy conclude, Overregulation, mostly by localities, has been a major driver of mass homelessness.

A key part of the solution is to legalize single room occupancy housing:

. . . . for homelessness to largely disappear, we’ll need housing that Americans earning the lowest incomes can afford. Unnecessary and costly mandates require large units, redundant stairways, extra-large elevators, windows that open even though they’re not required in hotels, and parking spots for people who often can’t afford cars. They force people to sleep on the sidewalk because the best housing option they could afford is prohibited.

The changing demographics of crime. As we’ve noted at City Observatory, there’s been a significant and continuing downturn in crime in the United States, something that has bearly registered in public awareness, as evidenced by public opinion surveys claiming that crime is as bad, or worse than ever.

There’s another overlooked and interesting fact about crime--the demographics of criminals are changing. One of the enduring verities of crime is that most crimes are committed by young adults, criminal activity rises in the teenage years and tends to peak in the twenties, and decline thereafter. But as James Tuttle, who publishes the Substack Crime Forecast shows, the age-crime curve has flattened dramatically in the past two decades. The decrease in crime is being propelled by younger generations being much less likely to commit crimes.

Here’s a chart showing male aggravated assault arrest rates by age for each of three years: 2005, 2015 and 2025. Virtually all of the reduction in crime is a result of the decline in arrests of those in their twenties. The age-crime curve has flattened and its peak has moved to the right; the peak age of aggravated assault arrests was about 18-20 in 2005, and is over 30 today. Arrest rates for older men are essentially unchanged from earlier decades.

This same pattern holds, in varying degrees for a range of violent and property crimes. This appears to portend a major generational shift in criminal behavior:

These shifts in arrest patterns serve as evidence for a dramatic difference between cohorts. While a full age-period-cohort analysis will likely be needed to precisely tease out these effects, the kids of today are simply ‘built different’ than teens of the past.

This kind of deep and nuanced view of crime statistics is a welcome change from the all too common media coverage of crime. Let’s hope it finds its way to wider understanding.

In the News

The Portland Business Journal featured City Observatory’s analysis of manufacturing startup rates in its April 15, 2026 story, “Portland area ranks first in manufacturing startup rates.”

Clark County Today republished our commentary, “The high cost of hiding – Why IBR’s delayed revenue study is a $15 billion warning sign.”