Category: Featured

A Done Deal and a Bad Deal: Why Rent Control Won’t Solve the Housing Crisis

By Eric Fruits, Ph.D.

Oregon will soon be the first state to have a statewide rent control program. Last week, in my first week at Cascade Policy Institute, I testified in opposition to the rent control bill, SB 608. The bill has the support of the Governor Kate Brown, House Speaker Tina Kotek, and Senate President Peter Courtney. About 100 people signed up to testify, and supporters outnumbered opponents by 2-to-1. It’s a done deal and it’s a bad deal.

During World War II, the federal government instituted a national system of rent controls, establishing maximum rents for rental properties. New York City was the only city to retain this first generation of rent controls after the war. During the 1970s, rent regulations were introduced in many cities, including Boston; Washington, D.C.; San Francisco; and Los Angeles.

In contrast with pure rent control (a fixed maximum price), SB 608 is a form of “second generation” rent controls that allows annual rent increases, limited to 7 percent plus inflation. Rent controls under SB 608 apply to buildings that are more than 15 years old. The bill also places strict limits on “no cause evictions.”

Nobel laureate Paul Krugman wrote in the New York Times that rent control is “among the best-understood issues in all of economics, and—among economists, anyway—one of the least controversial.”[1] Krugman’s well known and widely used economics textbook describes the economic inefficiencies associated with rent control:[2]

Rent control, like all price ceilings, creates inefficiency in at least four distinct ways. It reduces the quantity of apartments rented below the efficient level; it typically leads to misallocation of apartments among would-be renters; it leads to wasted time and effort as people search for apartments; and it leads landlords to maintain apartments in inefficiently low quality or condition.

Proponents of rent controls argue that “second generation” rent controls reduce or eliminate the inefficiencies associated with “first generation” rent controls. For example, Kotek was quoted in the Oregonian:[3]

What you’re hearing from landlords about rent control is they have an idea of it that’s very much the model that began right after World War II where properties had hard, fast caps on rents. That’s not the kind of rent control we’re talking about. We’re talking about second generation rent stabilization where there’s a process for managing rent increases that protects investors and tenants.

Kotek is correct that second generation rent controls are not as bad as first generation rent controls, but it’s matter of degree. Second-degree burns aren’t as bad as third-degree burns, but a second-degree burn still hurts.

While many proponents see rent control as one way to address housing affordability, none of them indicated it would do anything to resolve what is widely perceived to be a housing shortage. In fact, an expert flown in from Berkeley by the housing committee admitted that rent controls in other cities have led to the conversion of apartments to condominium. He went so far as to suggest legislation that would ban the conversion of apartments to condos.

This suggestion lays bare the pernicious chain of regulation that rent control brings. Second generation rent control doesn’t “work” unless there are strict limits on the termination of month-to-month rents. Then, it won’t work unless there are strict limits on the conversion of units. One witness even suggested that apartment building owners should be forbidden from selling their properties.

The limits on providers’ ability to terminate leases will lead to providers becoming more selective in to whom they rent units. In this way, the ordinance misallocates rental units among would-be renters and may do the most harm to those whom the bill is intended to help, such as those with a history of homelessness, impaired credit, criminal convictions, or employment instability. An older woman testified about her horror story of trying to find an apartment with her retired husband in Medford, applying to dozens of apartments only to be told she’d be on a list. Her story will become more common as rent controls reduce the supply of rental units.

In addition to the inefficiencies identified by Krugman, SB 608 will ultimately lead to higher rents than would occur in the absence of the law. As rental units turn over, providers will factor in the expected cost of the law into the rents and other fees that they charge incoming residents. Some or all of the expected cost associated with SB 608 will be passed on to tenants. Ultimately, the law will have the perverse impact of increasing—rather than reducing or stabilizing—rents over time and reducing the amount of market rate housing available to low- and middle-income households.

[1] Krugman, Paul. “A rent affair.” New York Times. June 7, 2000.

[2] Krugman, Paul and Robin Wells. Microeconomics, 3rd ed. New York: Worth Publishers. 2013. p. 130.

[3] Friedman, Gordon R. “Portland’s Tina Kotek explains her rent control plans—and landlord pains.” Oregonian. February 4, 2017.

 

Eric Fruits, Ph.D. is Vice President of Research at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Cap and Trade in Oregon: All Pain, No Gain

By Eric Fruits, Ph.D.

The Oregon legislature is expected to pass a carbon cap-and-trade bill this session.

While there is some agreement that climate change can have a negative impact on livability in the Pacific Northwest and throughout much of the world, there has been little attention paid to how little Oregon contributes to worldwide carbon emissions.

Oregon emitted about 65 million metric tons of carbon dioxide equivalents in 2017. By way of comparison, total global emissions were about 37 billion metric tons. That means that Oregon accounts for less than two-tenths of one percent of global emissions. About one six-hundredth. That’s tiny.

In other words, even if Oregon were to reduce carbon emissions to zero, the state would do virtually nothing to change worldwide carbon emissions, which means it would do virtually nothing to slow or stop global climate change.

At the same time, the cap-and-trade program would hit the pocketbooks of every Oregonian. An earlier version of the bill estimated the state would sell about $700 million a year of carbon permits, with the costs passed on the consumers and businesses.

Oregon’s cap-and-trade bill fails the basic cost-benefit test: The costs of cap-and-trade to everyday Oregonians would be exceptionally high while doing nothing to stop or slow climate change.

Eric Fruits, Ph.D. is Vice President of Research at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Portland Economist Eric Fruits Joins Cascade Policy Institute as Vice President of Research

FOR IMMEDIATE RELEASE

Media Contact:
John A. Charles, Jr.

503-242-0900

john@cascadepolicy.org

Portland, OR – Eric Fruits, Ph.D. joined Cascade Policy Institute February 1 as Vice President of Research. Fruits is president and chief economist at Economics International Corp. and is an adjunct professor of economics at Portland State University. Cascade Policy Institute is a nonprofit, nonpartisan public policy research and educational organization based in Portland.

Fruits has been a long-time academic advisor and contributing analyst for Cascade Policy Institute. His most recent report, Ride-Hailing as a Solution for TriMet’s High Cost Bus Lines: A Proposal for a Pilot Project, was published in January. As Vice President of Research, Fruits will lead Cascade’s policy team and serve as an expert analyst of Oregon state and local public policy issues.

As a consulting economist, Fruits has produced numerous research studies involving economic analysis, financial modeling, and statistical analysis. As an expert witness, he has provided testimony in state, federal, and international courts. He has written peer-reviewed articles on initial public offerings, the municipal bond market, real estate markets, and the formation and operation of cartels. His economic analysis has been widely cited and has been published in The Economist, The Wall Street Journal, and USA Today.

Cascade President and CEO John A. Charles, Jr. said, “Eric is an outstanding economist who will add depth and breadth to Cascade’s research programs. He is also an entertaining speaker who can effectively explain complex subjects to non-technical audiences.”

Fruits indicated he is excited about joining the institute: “Cascade has a long history of producing high-quality, well-researched analysis and commentary. It plays an important role both on the front lines and behind the scenes on some of the biggest issues facing state and local governments in Oregon.”

About Cascade Policy Institute:

Founded in 1991, Cascade Policy Institute is a nonprofit, nonpartisan public policy research and educational organization that focuses on state and local issues in Oregon. Cascade’s mission is to develop and promote public policy alternatives that foster individual liberty, personal responsibility, and economic opportunity. For more information, visit cascadepolicy.org.

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Education Savings Accounts: Fiscal Analysis of a Proposed Universal ESA in Oregon

By Eric Fruits, Ph.D.

Executive Summary

Education Savings Accounts deposit a percentage of the funds that the state would otherwise spend to educate a student in a public school into accounts associated with the student’s family. The family may use the funds to spend on private school tuition or other educational expenses. Funds remaining in the account after expenses may be “rolled over” for use in subsequent years.

Empirical research on private school choice finds evidence that private school choice delivers benefits to participating students—particularly educational attainment.

Currently, Arizona, Florida, Mississippi, North Carolina, and Tennessee have active ESA programs that are limited to particular groups of students such as those with special needs. The proposed Oregon ESA bill would introduce a universal ESA program for all K–12 students.

ESAs are frequently designed so the amount of funding provided to families is less than the amount the state would otherwise pay for a student to attend public school, with the state recouping the difference. In this way, ESAs can be designed to produce a net fiscal benefit (i.e., cost savings) to state and local government budgets.

A fiscal analysis of the proposed Oregon ESA bill finds that it would cost the state approximately $128 million a year but would lead to savings of about $130 million a year to local school districts, for a net state and local impact of approximately $2.2 million in reduced costs. There is virtually no net impact on per-student spending for students who choose public K–12 education. ♦

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CLICK HERE FOR A ONE-PAGE FACT SHEET ON SB 668

Eric Fruits, Ph.D. is president and chief economist at Economics International Corp., an Oregon-based consulting firm specializing in economics, finance, and statistics. He is also an adjunct professor at Portland State University, where he teaches in the economics department and edits the university’s quarterly real estate report. His economic analysis has been widely cited and has been published in The Economist, the Wall Street Journal, and USA Today. 

Dr. Fruits has been invited to provide analysis to the Oregon legislature regarding the state’s tax and spending policies. He has been involved in numerous projects involving natural resources and Oregon forest products such as analysis for Ross-Simmons v. Weyerhaeuser, an antitrust case that was ultimately decided by the United States Supreme Court. His testimony regarding the economics of Oregon public employee pension reforms was heard by a special session of the Oregon Supreme Court.

Dr. Fruits has produced numerous research papers in real estate and financial economics, with results published in the Journal of Real Estate Research, Advances in Financial Economics, and theMunicipal Finance Journal.

 

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Press Release: Hillsboro CPA and Former Oregon State Legislator Katie Eyre Joins Cascade Policy Institute Board of Directors

FOR IMMEDIATE RELEASE

Media Contact:
John A. Charles, Jr.
503-242-0900
john@cascadepolicy.org

Portland, OR – Katie Eyre was recently elected the newest board member of Cascade Policy Institute, a nonprofit, nonpartisan public policy research and educational organization based in Portland. Eyre, a Certified Public Accountant, is a Tax Partner at Fordham & Co LLP in Hillsboro and is a former Oregon state legislator. The Cascade Board of Directors elected Eyre in late 2018 to begin her term in January 2019.

Katie Eyre joined Oregon accounting firm Fordham & Co in 1998 after gaining broad tax experience in several long-term positions with other firms. She assists business and individual clients with complex tax and compliance issues.

Prior to joining Fordham & Co, Eyre served as controller at a financial service company with more than $1 billion under management, all in multi-family housing. There, she gained experience in integrating and consolidating the financial operations of multiple companies. Since joining Fordham & Co, she now manages the firm’s tax practice as well as providing tax consulting services for closely held business, mergers and acquisitions, and estate planning.

Eyre represented House District 29 in the Oregon House of Representatives during the 2011-12 Oregon Legislative Session. She has also served on the Hillsboro Planning Commission for more than ten years, most recently as President.

Katie Eyre joins nine current Cascade board members, including Chairman William B. Conerly, Ph.D., Vice Chair Gilion Dumas, Cascade President and CEO John A. Charles, Jr., Michael L. Barton, Ph.D., Manuel Castañeda, Pamela Morris, Ruppert Reinstadler, William Udy, and Peter Wendel.

Cascade President John Charles stated, “Katie Eyre has a long record of community service at both the local and state levels. She also understands complicated tax-related problems. Her life experiences and leadership skills will significantly strengthen Cascade’s capacity to design innovative public policy solutions.”

About Cascade Policy Institute:

Founded in 1991, Cascade Policy Institute is a nonprofit, nonpartisan public policy research and educational organization that focuses on state and local issues in Oregon. Cascade’s mission is to develop and promote public policy alternatives that foster individual liberty, personal responsibility, and economic opportunity. For more information, visit cascadepolicy.org.

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Press Release: Report shows Oregon’s “smart growth” policies make housing less affordable for Oregonians

FOR IMMEDIATE RELEASE

Media Contact:
John A. Charles, Jr.
503-242-0900
john@cascadepolicy.org

PORTLAND, Ore. – Cascade Policy Institute has released a new report examining the links between anti-sprawl, “smart growth” regulations and increasing housing costs in Oregon. The report measures the extent of supply restrictions in Oregon and their impact on housing prices. It concludes that “smart growth” policies contribute substantially to the decrease in affordable housing and single-family housing options in Oregon.

The report, The Housing Affordability Crisis: The Role of Anti-Sprawl Policy, was written by Randall Pozdena, Ph.D. Pozdena is president of QuantEcon, Inc., an Oregon-based economics consultancy.

Over the last fifty years, many states have adopted “smart growth” or “anti-sprawl” policies. Enough time has elapsed for the effects of these policies to be studied. The evidence shows that many urban areas now have housing prices that make either home ownership or rental increasingly unaffordable.

In the face of resulting “affordable housing crises,” cities and states are currently considering additional regulations and subsidy policies to attempt to provide residents with more affordable housing options. There is virtually no public policy discussion of whether regulatory interventions precipitated the housing crisis in the first place, let alone consideration of abandoning these damaging policies.

In The Housing Affordability Crisis, Pozdena examines the links between anti-sprawl regulations and the spectacular increases in housing costs and the virtual disappearance of affordable housing in many markets. Specifically, he measures the extent of site supply restrictions and its impact on housing prices using an economic model of housing markets, data on the economic conditions in housing markets, and trends in development revealed in satellite inventories of U.S. land uses. At the national level, using state and Metropolitan Statistical Area data, Pozdena concludes:

  1. Twenty-three of the 50 states studied fail to provide housing units at a volume adequate to keep housing prices and incomes growing at a rate consistent with affordability. On average, these states under-provided housing units by 6.4 percent of their current stock of housing units.
  1. Those states that fail the affordability and supply adequacy test are overwhelmingly those with documented adoption of one or more aggressive anti-sprawl growth regulatory initiatives.
  1. Annual housing price inflation exceeded annual income growth by 14 percent each year during the study period in those states that failed to provide housing in sufficient quantity to keep it affordable. Extrapolating the findings to the nation, the housing stock is smaller by as much as 4.5 million housing units than it should have been to preserve affordability.

Cascade Policy Institute President and CEO John A. Charles, Jr. said, “Oregon land-use planners have long pretended that Urban Growth Boundaries and other site restrictions have no real effect on housing supply. Dr. Pozdena’s analysis clearly shows that this is wrong. We cannot solve the housing crisis by simply ‘throwing money’ at public housing projects; growth controls need to be reduced or repealed if we want to make the American Dream affordable.”

The full report, The Housing Affordability Crisis: The Role of Anti-Sprawl Policy, can be downloaded here.

Founded in 1991, Cascade Policy Institute is Oregon’s free-market public policy research center. Cascade’s mission is to explore and promote public policy alternatives that foster individual liberty, personal responsibility, and economic opportunity. For more information, visit cascadepolicy.org.

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The Housing Affordability Crisis: The Role of Anti-Sprawl Policy

By Randall Pozdena, Ph.D.

Executive Summary

So-called smart growth policies are advocated as a means of avoiding sprawl.  These policies have at their heart a policy of reducing the availability of land for housing in urban areas. In Oregon and some other states, anti-sprawl policy is implemented by regulations that impose urban growth boundaries (UGBs).  Other regulations impose minimum density policies and others reduce spending on highways and increase spending on transit service—especially light rail—as an alternative.  Advocates of anti-sprawl policies argue that such regulations would allow urban growth to proceed at a lower overall cost.

Many states adopted smart growth policies in the last five decades—enough time for the policies to have demonstrated their purported advantages.  The evidence, at least on the housing front, is that the cost-containment claims have not materialized.  Instead, many urban areas are finding themselves with home prices that make ownership and rental of housing increasingly unaffordable.  Cities and states are thus using or considering additional regulations and subsidy policies to provide their residents with more affordable housing.  There is virtually no discussion of whether anti-sprawl regulatory interventions precipitated the housing crisis, let alone consideration of abandoning the policy.

The purpose of this study is to examine the links between anti-sprawl regulations and the spectacular increases in housing costs and the virtual disappearance of affordable housing in many markets.  Specifically, we measure the extent of site supply restrictions and its impact on housing prices using an economic model of housing markets, data on the economic conditions in housing markets, and trends in development revealed in satellite inventories of US land uses.

We apply the analysis to data from all 50 states and identify those states whose development policies reflect constrained site supply and those that do not.  Because Oregon has among the longest-standing and most aggressive implementations of smart growth land use policy, we pay particular attention to the state, and drill down with analyses at the Metropolitan Statistical Area (MSA) level in Oregon to demonstrate that the state-level findings are corroborated for all of its MSAs.

The primary metrics examined in this study are the rate of housing price appreciation, the degree of rigidity (“inelasticity”) of the supply of new homesites, and the degree to which the housing stock has failed to increase enough to affordably provide additional housing services.  Since we note that the adverse trends in house price inflation and slowing of site supply took greatest effect the last 30 years or so, we scrutinize market behavior subsequent to this period.  Because of the onset of the Great Recession in 2007, however, we estimate our models on this period.  This is because we do not wish to conflate the effects of anti-sprawl policy with the collapse of mortgage markets and home construction that persisted for the next half decade.

After establishing the linkage between constrained site supply and housing prices and affordability, we turn to the evaluation of the various policies that are in place or proposed to redress these problems.  This analysis is performed for the state of Oregon only.  The State’s wide-ranging and aggressive policies and proposals make it broadly representative of the nature, cost, and effectiveness of these policies—both those in place and those recently proposed.  With theory as a guide, and our acquired knowledge of the reactivity of the housing market to various stimuli, we can then opine on the likely effectiveness of these policies.  We also offer our own suggestions.

At the national level, using state and MSA data, we find the following:

  1. Twenty-three of the 50 states studied fail to provide housing units at a volume adequate to keep housing prices and incomes growing at a rate consistent with affordability. On average, these states under-provided housing units by 6.4 percent of their current stock of housing units.
  2. We demonstrate that those states that fail the affordability and supply adequacy test are overwhelmingly those with documented adoption of one or more aggressive anti-sprawl growth regulatory initiatives.
  3. Annual housing price inflation exceeded annual income growth by 14 percent each year during the study period in those states that failed to provide housing in sufficient quantity to keep it affordable. Extrapolating the findings to the nation, the housing stock is smaller by as much as 4.5 million housing units (in 2015 likely) than it should have been to preserve affordability.

Because Oregon has aggressively pursued anti-sprawl policy, it was given special attention in the study.  We found the following:

  1. All eight of Oregon’s MSA housing markets failed the test of affordability and adequacy of supply over the various study periods for which data was available. The estimated total shortfall in supply equals approximately 18 percent of the existing stock—virtually identical to that found for Oregon using state-level data.
  2. We analyzed the current and proposed housing policies of the state of Oregon. At present, proposals include approximately $2.3 billion by the State and the Department of Housing and Urban Development (HUD) to assist housing access and over $600 million in new affordability-related programs. This study finds that there is little hope that these policies can redress the scale and extent of Oregon’s affordable housing problems and, in some cases, may worsen them by burdening developers of housing with new regulations.

In summary, this study finds anti-sprawl policy to have been implemented in a manner that has pernicious effects on housing affordability.  Specifically, regulatory constraints on site supply have caused an on-going crisis of housing supply and affordability.  In many markets, the development of land for housing is regulated too aggressively.  Additionally, existing and new programs for addressing housing affordability rely on other regulation and spending programs that will not have the designed effect of providing affordable housing.  This study strongly recommends, instead, relaxation of regulations that limit the land area available for housing development.  Any residual concerns about sprawl should be addressed by reforming current highway and transit pricing and finance practices, which are known to be economically inefficient.

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Press Release: Report shows ride-hailing services would be a viable solution for TriMet’s high-cost bus lines

FOR IMMEDIATE RELEASE

Media Contact:
John A. Charles, Jr.
503-242-0900
john@cascadepolicy.org

PORTLAND, Ore. – Today Cascade Policy Institute released a report that recommends TriMet pursue a one-year pilot program which replaces one or more high-cost and low-ridership bus lines with ride-hailing services. The program would be supported by a subsidy funded by the costs saved by eliminating the bus line.

The report, Ride-Hailing as a Solution for TriMet’s High Cost Bus Lines: A Proposal for a Pilot Project, was authored by Eric Fruits, Ph.D., an Oregon based economist and Portland State University adjunct professor.

The proposed pilot program would offer riders point to point service from ride-hailing companies like Uber and Lyft within a ride-hail zone, when and where within the zone would be most convenient to the rider. The two high-cost bus lines suggested by Fruits include lines 97 (Tualatin-Sherwood Rd) and 63 (Washington Park/Arlington Hts). These lines intersect other bus lines and MAX stops, so the proof of the transaction should be used as a 2.5-hour TriMet pass. Doing so would allow passengers to connect to other buses or light rail in the area.

Cascade President and CEO John A. Charles, Jr. stated, “TriMet should embrace the benefits ride-hailing services offer instead of viewing them as a threat. Pairing services like Uber and Lyft with TriMet’s bus services would give riders a convenient and affordable way to commute while saving TriMet considerable money.” Indeed, the cost of subsidizing 75% of a user’s ride-share fare would be 55% lower than the current cost of operating proposed bus lines 97 and 63.

This proposal comes with its own set of challenges in the form of barriers to access. Services such as Uber and Lyft are hailed through an app on an individual’s smartphone and paid for by linking an individual’s bank account to the app. Some TriMet users do not own either a smartphone or a bank account. Jurisdictions which have adopted similar programs have handled this challenge by creating call centers available to riders without smartphones and by giving unbanked riders prepaid gift cards.

Ride-hailing services also contract out wheelchair accessible rides to third-party companies which would allow disabled riders to continue to commute in the corridor.

Similar pilot projects have been implemented in cities across the United States as transit authorities have recognized and taken advantage of the benefits ride-hailing services offer. TriMet should follow suit and engage in a low-stakes, one-year pilot project in order to cut costs that are rising due to declining ridership in certain areas. Doing so will serve riders, TriMet, and taxpayers alike.

The full report, Ride-Hailing as a Solution for TriMet’s High Cost Bus Lines: A Proposal for a Pilot Project, can be downloaded here.

Founded in 1991, Cascade Policy Institute is Oregon’s free-market public policy research center. Cascade’s mission is to explore and promote public policy alternatives that foster individual liberty, personal responsibility, and economic opportunity. For more information, visit cascadepolicy.org.

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Ride Hailing as a Solution to TriMet’s High-Cost Bus Lines

A Proposal for a Pilot Project

By Eric Fruits, Ph.D.

Summary and recommendation

This report recommends TriMet pursue a one-year pilot project that replaces one or more of its high-cost bus lines with ride hailing services supported by a subsidy funded with the cost savings from eliminating the high-cost bus line.

  • A subsidy covering 75 percent of the fare to eligible riders would be straightforward and relatively easy to understand, implement, and use.
  • TriMet bus lines 97 (Tualatin-Sherwood Rd) and 63 (Washington Park/Arlington Hts) would be reasonable candidates for the pilot project. These lines provide the best combination of lower user costs and cost savings to TriMet.
  • The average rider’s cost would be slightly lower than current TriMet fares. Because the customer is paying a portion of the fare, riders would be more likely to weigh the benefits and costs of using the ride hail service as a connection to the TriMet system (first mile/last mile, a complement to TriMet service) versus door-to-door (a substitute for TriMet service).
  • The cost of the 75 percent subsidy on lines 97 and 63 would be approximately 55 percent lower than the current costs of operating the high-cost bus lines.

Each of the bus lines identified in this report intersects with other bus, MAX, and WES stops or overlaps TriMet transit centers. Uber found that nearly 25 percent of Uber trips in suburban Portland began or ended within one-quarter mile of a MAX or WES station, as shown in Figure 1 and Figure 2 of this report. To encourage use of ride hailing services as a complement to the TriMet system, proof of fare payment should also serve as a 2.5 hour TriMet pass.

More than a dozen cities in the United States have programs similar to the proposed pilot project. Many of these cities have developed procedures to accommodate users who do not have a smartphone and users with ADA-related needs. Several of the programs began as pilot programs that have been extended because of the success of the pilot.

TriMet faces a challenge of declining ridership in conjunction with rising costs. In addition, the agency operates a number of high-cost bus lines. At the same time, ride hailing services, such as Uber and Lyft have grown in popularity since their introduction to the Portland region in 2015, providing convenient, reliable, low-cost service to millions of riders.

Recent research finds that ride hailing services have the largest positive complementary effect on rail service in cities with large public transit systems already in place, such as Portland. For these cities, the researchers found a small, but statistically significant, complementary effect on bus ridership.

The pilot project recommended in this report would be a low-cost, low-risk test of potential synergies between public transit and private ride hailing. If successful, the lessons learned can and should be applied to additional high-cost transit lines.

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Survey Shows Florida Scholarship Parents Are Overwhelmingly Satisfied with Their Children’s Schools

By Kathryn Hickok

Florida’s Tax Credit Scholarship Program currently helps more than a hundred thousand of the state’s most disadvantaged students to get a better education through privately funded scholarships, making it the largest private school choice program in America. The program has been funded by voluntary corporate donations to nonprofit scholarship organizations. In return for these donations, companies receive dollar-for-dollar tax credits against their state income tax.

Last week, EdChoice released the largest-ever survey of the parents of Florida’s tax credit scholarship students, revealing these families’ educational priorities and experiences.

Analyzing the responses of more than fourteen thousand parents, EdChoice concluded:

  • “The vast majority of Florida scholarship parents expressed satisfaction with the tax-credit scholarship program.”
  • “Florida parents chose their children’s private schools because those schools offer what their public schools can’t/don’t.”
  • “Among respondents whose children were previously enrolled in a public district or charter school before using a scholarship to enroll in a private school, most parents reported engaging in a variety of education-related activities more often than before switching schools….”

Children have different talents, interests, and needs; and they learn in different ways. The landscape of educational options to meet students’ learning needs is more diverse today than ever. For more information about school choice in Oregon, visit schoolchoicefororegon.com.

Kathryn Hickok is Executive Vice President at Cascade Policy Institute, Oregon’s free market public policy research organization. She is also director of Cascade’s Children’s Scholarship Fund-Oregon program, which provides partial tuition scholarships to Oregon elementary students from lower-income families.

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