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Portland’s drop in car use frees up $138 million in our local economy every year

Posted by on July 25th, 2016 at 11:12 am

Bike traffic on N Williams Ave-9.jpg

Per-person car ownership is down 7 percent since 2007 and miles driven are down 8 percent.
(Photos: J.Maus/BikePortland unless noted)

Last month, we wrote about the 38,501 additional cars and trucks that would be in Multnomah County right now if its residents still owned cars at the rate they did in 2007.

What does it cost to own 38,501 cars? Or more to the point, what does it not cost to not own them?

For that post, we focused on the amount of space those nonexistent cars would take up. They’d fill a parking lot almost exactly the size of the central business district, for example.

But what about the money that isn’t being spent to move, maintain, insure and replace all those cars, and can therefore be spent on other things? How much money have Portlanders collectively saved by having a city where car ownership (or ownership of one car for each adult) feels less mandatory than it used to?

Because we already tackled parking space to some extent, let’s not even try to estimate its costs, even though occupying the most precious real estate in the state (maybe you’ve noticed that space has been getting more expensive?) is one of the biggest social costs of car ownership in Portland. For simplicity’s sake, let’s focus entirely in this post on the cost of owning and operating the cars that never showed up.

As we wrote last month, Multnomah County auto registrations per resident are down 7 percent since 2007, a rate that has barely rebounded despite a strong local economy that’s seen rising real wages, even though the rates in neighboring Washington and Clackamas counties are pretty much back to their long-term averages.

passenger vehicles per resident

What’s more (as a couple people pointed out in the comments to the previous piece) as of 2014 Portland-area residents are also driving about 8 percent less than they did in 2007, even though other Americans aren’t:

chart

(Chart: Metro)

So what does it cost to own 38,501 cars?

Or more to the point, what does it not cost to not own them?

The widely cited American Auto Association cost estimate for car ownership is $8,558 in 2016 for an “average” sedan driven 15,000 miles per year. That figure doesn’t include parking (the cost of owning a property with a driveway or garage, for example) or the health costs of spending too much time in a car. But on direct costs it’s inflated, because it assumes you buy a new car every five years, buy top-quality insurance, drive it through five typical U.S. winters, and then trade it in. Most Americans don’t buy new cars constantly or top-quality insurance. And Portland winters don’t kill cars that fast.

So to be conservative, let’s cut AAA’s insurance cost estimate by 25 percent, to $917 per year. And let’s reduce its depreciation and financing by 75 percent, to just $1,111 per year. (This assumes that if you saved $93 every month, you could afford to buy a car with cash by the time the old one died.) And because auto registration fees in Oregon are very low and there’s no sales tax, let’s estimate $150 a year for registration, title fees and emission inspections rather than AAA’s $683 average.

That comes to:

$917 for insurance
+
$1,111 for purchase
+
$150 for taxes and fees
=
$2,178 for a very low estimate of direct car ownership costs per year

So just by not owning 38,501 cars that they would have owned in 2007, Multnomah County residents are saving $83,855,178 each year to spend on other things instead.

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Next, we need to figure how much Multnomah County residents are saving by driving less. That’s easier. We’ll use AAA’s figures for gasoline (8.45 cents per mile), maintenance (5.28 cents) and tires (1 cent). So 14.7 cents per mile.

According to figures compiled by Metro, the average Portland-area resident drove 472 miles less in 2014 than in 2007. So that’s another $69 annual savings per person, or $53,945,366 for everybody in Multnomah County.

So Multnomah County’s transportation savings from reduced car ownership comes out to:

$83,855,178 that we’re saving by not owning cars at 2007 rates
+
$53,945,366 that we’re saving by not driving cars at 2007 rates
=
$137,800,544 every year that we can spend on other things

Breaking news: $138 million per year is quite a bit of money.

For example, it’s enough:

To buy every Multnomah County resident a new $700 bicycle every four years. ($138 million a year.)

Cyclocross clinic with Team Grouptrail-4.jpg

Or to cover the annual wages and benefits, including vacation and overtime, for every TriMet bus driver. ($123 million a year.)

Bus at Rose Quarter Transit Center

(Photos: TriMet)

Or to very nearly eliminate TriMet fares. ($139 million a year)

MAX Orange Line at SE Milwaukie Station

Or to have built the city’s entire Bike Plan for 2030 (“Can the city afford it?”, the Oregonian’s front page asked in 2010) … by last summer. ($613 million)

Bike Master Plan open house - SE-8

Or to eliminate tuition at Portland Community College. ($103 million a year.)

pcc sylvania

(Photo: PCC)

Or to sextuple the size of this November’s affordable housing ballot measure, paying for about 6,000 new price-controlled public housing units rather than the 1,000 currently planned. ($115 million.)

21518398355_8d96bc2282_z

Velia Mendoza uses the bike lockers installed last fall at Hacienda CDC’s publicly backed housing development in Cully.
(Photo: Jaclyn Hoy for CCC)

Or to offer every Multnomah County resident one free pint of beer every Tuesday at the Lompoc 5th Quadrant, including tip. ($138 million a year.)

lompoc corral

(Photo: M.Andersen)

It’s not this simple, of course. The ways Portlanders are getting around instead of driving have some costs, too — a few more bus drivers in rush hour; the couple dozen new bike shops that have opened since 2007; thousands of bicycles; probably a few more burritos consumed per capita as more of us fuel our own movements.

This shift has already happened with hardly anyone noticing. And that’s sort of the point.

And the money being saved here can’t simply be moved from one use to another. The many thousands of families who enjoyed this savings have already spent it on other things they want … including the various tax hikes they may have voted for recently to improve local parks, schools and so on.

In other words, this shift has already happened with hardly anyone noticing. And that’s sort of the point. Not only has 7 percent of per-capita car ownership and 8 percent of per-capita driving been eliminated from the economy without overall ill effects — the local economy has been booming, with Multnomah County leading the pack.

Certainly the local economic boom is happening for many reasons. But it can’t hurt that in the last 10 years, we’ve successfully built a county whose residents don’t have to spend $138 million every year to move around inside well-crafted pieces of gradually disintegrating metal.

Imagine what other things we could do if we can keep chipping away at the $2 billion that we’re still spending on that.

— Michael Andersen, (503) 333-7824 – michael@bikeportland.org

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Ted Timmons (Contributor)qHello, KittyJames C. WalkerDan A Recent comment authors
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Dave
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Dave

Great fodder for a commercial–now can we collectively raise the money and hire a filmmaker to put it together?

David Hampsten
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David Hampsten

I realize that what you have written is not that there are fewer cars on the road in Multnomah County, but that the rate of increase has slowed down more so than the rate of increase for the population. However, I’m convinced that the rate of car registration decline is partly offset by a rising rate of non-registration of motor vehicles in the Portland area.

To check this, I suggest checking the average daily traffic (ADT) on the I-5/405 Willamette bridges year-by-year, and see if the rate of change is greater than the reported increae in the number of registered motor vehicles.

The other proxy I would check is a year-by-year intake of the 3-cent Multnomah County gas tax, which has been around for decades. If the money collected is rising faster than the number of registered cars is rising, then more vehicles are getting away without being registered.

If however the drop is real, then it does mean less gas tax revenue for PBOT and less money for bike projects.

TC
Guest
TC

I don’t think the last 7 years is a savings on cars but rather a reallocation of money. Rising cost of living in Portland simply removes the option for many people to own cars.

Ted Buehler
Guest

I was car-free for 2.5 years. With my savings I dropped a lot of $ at bike shops, locavore restaurants, locally produced food in grocery stores, and bike touring.

I’ve had a car again for 3 months now. Needed it for work for 1.5 months. Now I don’t use it. Might not keep it…

Good article, Michael, thanks for covering this.

Ted Buehler

B. Carfree
Guest
B. Carfree

Ignoring the health consequences of driving in an economic analysis is like ignoring the gold in a gold mine and focusing on the value of the other metals present. Sedentary lifestyles, of which car use is the major cause, and the toxics emitted by automobiles are known to cause diabetes, hypertension, heart disease, cancer, COPD, obesity, exacerbate arthritis (both osteo and rheumatoid) and damage brains on a level similar to ingesting lead paint chips among other woes (like the 2.4 million hospital trips for auto-caused injuries and the nearly 40,000 deaths per year).

Healthcare is about 20% of the total US economy and those ailments are most of healthcare, although not all of any of them are caused by cars, the percentage cannot be insignificant.

rick
Guest
rick

Bikenomics.

meh
Guest
meh

The average income in the US is dropping. Inflation though low is still existent. Just because people don’t have a car doesn’t mean they have any more money to spend on anything other than the necessities of life. Particularly those on the lower rungs of the economic ladder. A group that is growing larger each year.

And I’ll bet that $700 every 4 years for a new bike, has more than been eaten up by taxes, rent and general inflation

bikeninja
Guest
bikeninja

Just as important as the amount of money saved, is the way in which the saved money is spent compared to auto based transportation expenses. Most of the $8000 per year ( using AAA’s number) spent on annual auto expenses immediatly leaves the local economy. Most of car capital cost goes far away, financing costs, insurance payments and fuel also leave the economy. The person who ditches their car and stops feeding the global corporate machine ( assuming their income stays the same) can support local food, bike shops, framebuilders, brewers, restaurants and crafts. Money spent this way is recycled many more times and benefits the local economy much more than dollars flowing to Auto Companies, Mega Banks and International Insurance companies. Giving up cars, buying local and standing up to out-of-town landlords is the best way to improve any local economy.

rachel b
Guest
rachel b

We (me and mine) got rid of our only car 4 years ago and hardly noticed. We live close-in, though, are kidless and are near our jobs, which subsidize bus passes. We mostly walked and used our bikes and mass transit prior to ditching the car so the change wasn’t jarring, but we do need to drive distances occasionally and so we rent a car (Zipcar or some other) or (again) take public transit, if it’s available. We don’t even have Car to Go and it’s still easy, this close in.

Our neighbor across the street has (at last count) 5-6 vehicles and has just parked yet another (a huge van/truck) on the street, already strewn w/ their vast collection. When you live this close in, it’s easy now to go without a car, and such a savings. I wonder if people in these near neighborhoods don’t realize how easy and convenient it’s become?

Good story–thanks.

ethan
Guest
ethan

It sure would be nice if even half of the bike network were built out already.

q
Guest
q

The savings numbers look even better if you figure that with taxes, you had to earn more than $1 for every dollar that you’re not spending. So if didn’t spend say, $1,000 by not having a car for a year, you saved yourself from having to earn something even more than that.

Brian
Guest
Brian

Hello, Kitty
I hope it is… but other places will be great too.
All I’m saying is that there is much more opportunity if you are early to the party than if you show up late. Some cities are just wheeling out fresh kegs, while Portland is starting with the Jaegermeister shots.
Recommended 3

I hope not. I haven’t been able to drink Jag since my 21st bday. I hear what you are saying. There are just things about Portland that are difficult to find in other places that make it so great, minus the local mountain biking of course. Proximity to the ocean, old growth, high desert, etc. The city itself is great, but it’s also the other things. Anyway, I’m glad to be here and feel fortunate that I am not trying to afford a place to live these days on a starting teacher salary.

Al M
Guest
Al M

Portland- the least diverse, most gentrified city in the USA.
But at least we don’t like cars.
Hallelujah

SE
Guest
SE

voodoo mathematics

Adam
Subscriber

The findings here seem to go against recent findings that show Portlamders own 1.46 cars per household, more than Miami, and about on par with Houston.

Ted Timmons (Contributor)
Editor

Op/Ed (column? whatever.) from Steve Duin in the Oregonian. Elided and emphasized snippets follow.
http://www.oregonlive.com/news/oregonian/steve_duin/index.ssf/2016/07/steve_duin_congestion_has_a_ch.html

South Waterfront gave me the latest update on metro-area congestion [64 minutes to I5/205 merge in Washington].

Those are vintage San Diego Freeway numbers.

Even as we set out the orange cones and orange bikes and celebrate small victories on downtown promenades, traffic congestion strengthens its chokehold on this city.

The state Department of Transportation figures motor vehicle volume has increased 6.3 percent in the last year, almost twice the national average.

Of the 40,354 new commuters the city gained between 2000 and 2013, 71 percent walk or bike to the office or work at home. If they spent as much time in their cars as I log in mine, the city’s arterials might be in lockdown.

But we’ve passed the tipping point.

..

In the last year the state gas tax in Washington has increased 12 cents per gallon. That’s twice as much as Oregon’s gas tax has increased in 23 years.

..

In the absence of more thoughtful investments by the state, the city is doing its best to prepare for the 260,000 new residents, and 140,000 new jobs, that will arrive in the next 20 years.

It’s evolutionary, not revolutionary. Biketown, the city’s long overdue bike-share system, has launched. Flanders Crossing finally has the funding to span I-405.

Well, they don’t spend as much time in their cars as you log in yours, Steve.

(I guess “downtown promenades” is the Ankeny Alley/Voodoo Donut thing)

James C. Walker
Guest

Hmmm, did the researchers consider the $138 million dollars not spent on cars and their expenses did serious economic harm to the businesses that sell cars, fuel, insurance, repairs and all the other factors of using cars?

James C. Walker, National Motorists Association