Induced Demand and How it Affects You

By Michael Harrington

 transportation pic

What is Induced Demand?

There is in transportation department circles one guiding mantra above all others. It is called “Induced Demand”. According to a study by the Texas A&M Transportation Institute, the theory of Induced Demand is that if you build roads in a major metropolitan region it will fill up and congestion will continue at the same level. Some recent contrasting studies however disagree, but we will save that discussion for later.


Induced Demand is also used by liberals to identify whether there will be food shortages, fuel shortages and whether we’ll dramatically increase consumption of things as we increase the availability of things. Therefore, they wish to reduce supply to keep demand low. If this sounds like rationing, then you are correct in some circumstances and nearly correct in others. This Induced Demand concept is actually a deep portion of liberal ideology though few would be able to name it as Induced Demand. But this is a transportation article.


I am going to use my home city of Portland, Oregon in a lot of this article, comparing it to the theories involved, to history, to transportation problems, and finally to how to solve the actual problems.


Transportation Policy

First, we’ll discuss existing transportation policy which is in place in much of the United States and Europe. The transportation policy in place is known as Induced Demand and replaced the old method of building ahead of transportation needs. Induced Demand is the theory that if you build it they will start driving on it and if you don’t build it they will adjust to it. There is an additional theory of Reduced Demand which states if you selectively remove roads you can gain more value for the removed roads region and you can continue without increasing congestion.


The opening entry of Wikipedia sums up the belief structure of Induced Demand in the eyes of those who support it:


“Induced Demand, or latent demand, is the phenomenon that after supply increases, more of a good is consumed. This is entirely consistent with the economic theory of supply and demand; however, this idea has become important in the debate over the expansion of transportation systems and is often used as an argument against increasing roadway traffic capacity as a cure for congestion. This phenomenon, called induced traffic, is a contributing factor to urban sprawl. City planner Jeff Speck has called Induced Demand “the great intellectual black hole in city planning, the one professional certainty that everyone thoughtful seems to acknowledge, yet almost no one is willing to act upon.”


So the main theory, errr theology, is that if you increase supply you increase consumption. Additionally, there is a strong streak of “Man Made Global Warming” mixed in. Other theologies include increasing public transportation via buses, rail, bicycles and even walking.


In Portland, the last major spurt of construction was I-205 (finished in 1975) and the later construction of the Glenn Jackson Memorial Highway which spans the Columbia River into Washington (1982). There are five main Interstate Routes out of the city, I5 North, I5 South, I205 North, and I84 East. There is also US Highway 26 which heads to the Oregon coast.



Portland has since focused on bicycle lanes and streetcars while the State has made a number of light-rail lines. The cost of the light rail is approximately 6 billion after inflation for earlier work. A study placed the number of bicycle riders at 17,000. Supposedly this represents 7.2% of all commuters. There are 77 miles of Neighborhood Greenways, 188 miles of bike lanes, and 85 miles of paths. However, a quick look at the total number of jobs in the Portland Metro Region shows there are approximately 1,410,000 jobs in 2016. This would indicate bicyclists actually represent approximately 1.2% of the working population. This, of course, represents the statistics as provided by the bicyclist lobby in Portland which is typically seen as a very activist (liberal) group.


In winter the bicyclists are far reduced in numbers and bus commuters are increased. The local bus system, however, and trains, is not so impressive either. The combined bus, light-rail, train, and Lift vehicles provided 77,511,168 rides. In theory, this would be approximately 212,359 riders a day, except often passengers need to ride each way reducing it to at most 106,179 a day on average. Worse is that some people must get a third fare per a day to meet their needs. Therefore, the average should be near 100,000 to 105,000 a day on average. This represents about 7.45% of the population. If we introduce a bias, where weekdays have more than weekends, we could even increase this to 125,000 commuters a weekday for 8.8% of the population. A recent light-rail addition, the Portland to Milwaukie line, is at 3,484,200 rides a year or 4.5% of the daily commuters. This would be 5,625 riders a weekday approximately with our bias included. The cost of this expansion was 1.5 billion dollars. Therefore, the cost per daily rider is about $266,667. Yes, you read that right. Note: that does not include the operating costs.


Portland has, since the Glenn Jackson Memorial Bridge was built, reduced the number of major routes in the city for light-rails including a major West/East route (Burnside), a major North/South route (Interstate Avenue), and built light-rail in potential expansion areas next to Interstate 205, Interstate 84, and Highway 99E. Despite many rejections of light-rail projects the State Government continues to try to push light-rail. The city of Portland has initiated some lesser trains which have interfered with major routes as well but also has invested significantly in reducing automobile roadway in exchange for bicycle lanes. Many roads have had capacity reduced to 50% of their original capacity for expanded bicycle access including what were formerly major arteries. The traffic which was previously on those routes is now shunted to the Interstate system and/or is congesting additional routes.


So the Portland, Oregon policies are as described: dictated upon mass transit, upon reduction of road lanes, upon increasing capacity for bicyclists and for pedestrians. However, it is important to point out that this is the ideal of the Induced Demand traffic planning system. Induced Demand is in practice all around Europe and North America.



A study by Duranton and Turner was one of the early focal points for the concept of traffic based Induced Demand. Many studies have used the Texas A&M Transportation Institutes collection of data points as well as their claims of Induced Demand. While efforts exist to debunk Induced Demand (see this study, for example) those efforts are not generating headlines often and they are also entirely ignored in the many transportation departments.


I would like to take a moment to cover Induced Demand for other products. Remember that Induced Demand is the theory that the more available an item is the more society will use that item. A common argument of Induced Demand is that the more a product is placed in a vending machine the more people will choose to purchase it. Ergo a soda machine with more Coca-Cola will sell more Coca-Cola, a soda machine with more prune juice will see the prune juice outsell the Sprite. Yes, they really do ascribe to this kind of theory see the wiki if you dare… Instead, the reality is that the vendors tend to increase the products that are popular in a region. Pork Rinds, for example, sell far more often in the South than they do in the Northwest. This is determined via sales of products over a larger period of time.


If Induced Demand were applied fully then why do most people only have one cell phone in use at a given time? Why one car? Or one laptop? Induced Demand also ignores upgrades (yes some do like the old flip phones, me I want the most modern phone I can get within reason, using it for a year or two before upgrading again) and market trends. There is a reason the Commodore 64 is no longer a marketable item to the general public.


Instead what the theory of Induced Demand represents is communism. The entire principle is based on the premise that society is inherently irresponsible and that the government always knows best for you. Induced Demand theory would allow the government to tell you that you have too much access to Kale and therefore the price of Kale must go up or the amount grown must go down (which often results in the price going up).


Induced Demand requires that any and all road construction in an urban environment fill up quickly upon the construction being completed. This, however, is not always the case. A study concluded that one modification done in Texas reduced congestion and did not lead to an “Induced Demand” situation. Further, there is proof that some roads fill faster than other roads in any new construction. Phoenix has made the 101, the 202, the 303. As a trucker, the latest installment saved me more than a half hour on my frequent routes into Phoenix. People can find real-life variations that allow them quicker commutes with new construction.


The other theory the various departments in charge of transportation planning believe is a variation of “reduced demand“. The concept here is simple, by reducing the number of roads and road lanes they will get traffic to adjust to the circumstances and/or get society to change their behaviors to adjust. In Portland, this has resulted in a number of roads losing lanes to bicycle paths. Williams was a 2 lane one-way street (the street in the other direction was also modified) in Portland when they took a lane away and made it for bicycles only (excepting turn locations). The Portland Bureau of Transportation surely cited that traffic did find other directions to go. However, the effect is that there is indeed more congestion elsewhere. In fact, ODOT, the Oregon Department of Transportation, admitted that rush hour type conditions can happen at ‘nearly any time without notice’ in the Portland area. That a major North/South route leading from the core of Downtown to a major residential area was reduced by 50% capacity and speeds slowed as well had nothing to do with it in their minds.


Another symptom of Induced Demand is the concept of “Traffic Calming Devices”. Speed bumps and humps, roundabouts, narrow traffic lanes, choke points (where they deliberately reduce two lanes to one for a moment), closed off street access where the access is now bicycle or pedestrian only, and the reduction of left turn areas. Portland, as a rule, has widely adopted all of these policies, including major increases in the number of speed bumps.


In fact, reduced demand has been tried elsewhere and resulted in societal upheavals and rapid reversals by the government. Europe seems to be ignoring the issue as seen here, but previous efforts to ban cars has not gone well as seen here.  The concepts have been around for a long while, and various arguments (global warming, pollution, congestion, and so forth) have been used but when faced with the reality of it the people tend to quickly revolt. I would note the second article citing an 8% cyclist rate where Portland claimed a 7% rate that is actually 1% of the jobs. If they are faking their numbers as significantly as Portland it would be fairly significant for the follow-up number cited that only 3% ride in winter. Clearly, the automobile is not going anywhere anytime soon.


To that last part, the auto not going away anytime soon, they also have a supposed answer. In the next chapter, we will discuss public transportation.


Public Transportation

The left see’s the bus as the solution to the need for a car. They see trains, trolleys, trams, and subways as the solution to all worries and problems with commuting. This is true in many transportation departments, many governments, and so forth. It also significantly ignores the reality of things (the next chapter). However, this chapter is on public transportation. The Portland Oregon metro region has a diverse transportation system made up of buses, Light Rail, a city trolley system, a tram, and a train. The majority of these are run by “TriMet”, a tri-county public transportation company that has taxation rights on businesses inside its operating regions. Many cities have extensive public transportation such as New York and their famous Subway System, Chicago and their trains and buses, and Seattle with their electric powered buses.


Of interest is that the bus system is impacted by Induced Demand as well. Of course, certain “prioritized” services such as TriMet’s Light-rail system are not dramatically affected by congestion but the bus system certainly is.


The bus system in most regions is based upon certain hours, a list of pick up times, and fares. Fares in Portland, Oregon are getting rather high. An adult year pass currently, as of Jan 2018, goes for $1100. It is considered a deal since it gives you a month for free. Yes, this is not the cost of buying 12 monthly passes. That works out to $3.84 a day or so – if you do not ride on weekends at all and only twice a weekday, once to work and once back.


But the fare system is not the only cost present. TriMet collects taxes in the region to support the bus services. Collected from all businesses in the area as payroll taxes and from the self-employed. These taxes exceed $561,637,836 for the 2017 budget. Amazingly these are not the only tax based incomes that come in, there are a variety of State and local funds coming from various Government agencies and departments which make far more revenue, in fact, revenue from all sources is budgeted to be $1,199,397,787 in 2018.


TriMet estimates they prevent about 202,000 cars from being on the road a given day. That includes extensive bus service in Clackamas, Washington, and Multnomah Counties as well as limited service down into Marion County and Columbia County. It also has some service into Clark County Washington. In 2010 the Portland Metro region was 2,226,009 and in 2016 it was estimated to be 2,350,000 for a net gain of 124,000 individuals. In six years a number of people came in enough to take up more than half of the total current passenger count on the public transit in the region. Clearly the fact that if their estimates are correct the 9.36% riding TriMet is a significant reduction, but as far as reductions go it is nowhere sustainable compared to the incoming count of new residents.


Due to the Induced Demand system, it costs $5,936 per each of those “202,000 cars” not on the road system. This should be a shock to everyone. That is quite a sum of money to be tossing around in public transit. Consider if each of those had an average Uber or Lyft cost of $20 per a day, for 52 weeks a year, 5 days a week. That cost would be $5200 and would represent a savings of $736 per passenger. Mind you this is PER PASSENGER on those costs. It is simply incredible the vast amount of money being spent for public transportation in Portland. Now if you remember the passengers must come up with $1100 of that, which means taxes pay for $4,836 per passenger. Divided amongst the population of the Portland Metro region we see that there is $242,000,000 revenue supposedly paid in fairs, so there is another $957,397,787 being paid for by 2,350,000 people, or $407.40 per a person in Portland. Except some of this is probably being paid for by all Oregon residents and some is definitely being paid for with Federal Funds. Still, this is an alarmingly high cost per citizen in the region.


Another aspect of public transportation is that it is taking up space available for use for roads and/or vehicles on existing roads. Buses take space, they cannot drive at speeds autos can in some areas, they need more space to turn, they cannot accelerate as fast as automobiles can. Worse is where they take away auto lanes for express bus routes and light-rail. In Portland, two major routes were gutted for the light-rail, Burnside Road, and Interstate Ave. These were both considered primary arteries prior to the light-rail being developed there. Max, as the light-rail is known by, has never lived up to the promises made about it as well.


There are more considerations with the public transportation system. TriMet has been unwilling to fire employees caught in the act by TriMet cameras raping disabled women, assaulting passengers, or committing other felonies and misdemeanors. Unsafe drivers are given far more chances than anyone would get outside the Public Agency due to a Union which exhibits extreme power over personnel choices at TriMet.


There are additional costs to society as well. The accident rate for TriMet is 823 per a year. Every week approximately 10 to 12 accidents involving the buses occurs. This number exceeds the accident rate for School Buses, Semi-Trucks, and even most other cities bus systems. TriMet is averaging near 3.3 crashes per 100,000 miles driven.


Portland, however, has adopted bicycles as a mode of transportation. As said earlier, it makes up about 1% of the working population despite claims it is higher. Bicyclists also do not make up a meaningful portion of the freight (or even a measurable amount) in comparison to Semi-Trucks. In result, Portland has made some areas have a reduced number of vehicle lanes in exchange for bicycle lanes impacting the ability to move people and freight through the city.


The final part which encompasses all of public transportation is time. I used to ride a bicycle when I was army fit, for 15 miles to work and back. It took me an hour each way. I used to take the bus here in Portland, sometimes for 2 hours each way. Time is critical and when all you do is work and then use public transportation for a real majority of the day it wears you down. Riding a bus is not the same as riding in a car (unless it is a luxury bus, which no one on Earth would claim of TriMet).

Note: As reported in the first section TriMet has probably got on order something near 100,000 daily riders and is not removing a supposed 202,000 cars a day as stated. Instead, at best they may be removing 110,000 autos.

See page 2 for more…

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