If a daily decision can be made about whether to take transit, and buying a vehicle is made with perhaps a 3-6 year future in mind, then the most serious choice consumers make affected by gas prices may be buying a house. This is a decision that is typically in consideration of an even longer time period. Housing decisions are affected by a number of other things besides gas prices, like schools, acreage, and proximity to work, but as gas prices rise and transportation eats up a more significant portion of household budgets, it’s not unreasonable to expect that housing patterns will start to change (assuming that tradeoffs for these other things remain constant). Given the current tumult in the housing market it is hard to see what trends may emerge, but it wouldn’t be surprising to see an increased rate of densification in the following years. Gas prices may be joined by another transportation cost in the near future: variable road pricing. The onset of this additional driving cost could have an even more dramatic effect on land use, vehicle, and daily transportation decisions.
The price incentive to increase the density of land use is not likely to go away, and it may in fact intensify. The ripple effect of high gas costs has not played out in its entirety, but we are certainly seeing some fascinating indicators of how higher transportation costs will alter people’s movement choices and land use patterns.