CEOs want faster commutes… for whom?

When business leaders of the Federal City Council say traffic congestion might affect their decisions to move companies out of DC, how much are they thinking about the needs of employees, and how much is it mostly about the congestion on their own personal drives to work?

There’s a long history of research showing that a very large element of business location decisions is what’s most convenient for the CEO. Joel Garreau talks about this in the seminal urban planning book Edge City, and cites some earlier research from William Whyte:

Whyte, in his book City, has a great map showing that of thirty-eight companies that moved out of New York City in one period “to better meet the quality-of-life needs of their employees,” thirty-one moved to the Edge City around Greenwich and Stamford, Connecticut. …

The average distance from the CEO’s home: eight miles.

Compare that to the Federal City Council’s release:

When weighing a business relocation, over one-third (36 percent) of business, professional and civic leaders say they would consider moving out of the District with 12 percent who say they would strongly consider.

Relocation decisions are based on many factors including employee commuting experience. Nearly all (98 percent) say workforce commuters who travel by car are important to their business-location decisions, with 71 percent saying they are “very” important.

That’s why businesses locate on the west side of our region

Certainly traffic impacts people beyond just the head of a business, but one can’t help but wonder how much the concern over congestion really stems from a personal reaction: if the business owner faces a lot of traffic, it’s frustrating, and he might want to move the company somewhere closer to his house.

This is important when what business leaders want and what their workforces need or want aren’t quite the same. CEOs are much more likely to live in McLean, Great Falls, and Potomac than their lower-level workers. It’s little surprise that Tysons, the Dulles corridor, Bethesda, and the I-270 corridor have won more businesses than eastern Montgomery, Richmond Highway, or Prince George’s County.

When Montgomery County was planning the Great Seneca Science Corridor (also known as “Science City”) near Gaithersburg, one major factor tipping the scales (besides the fact that Johns Hopkins owned a farm there) was the convenient drive biotech company owners might have. That gives the site an advantage over the White Oak Science Gateway on the east side of the county. Prince George’s faces the same challenges in getting businesses to its Metro stations.

CEO convenience leads some businesses to choose suburban office parks

This split also applies to locating in walkable urban versus suburban office park locations. When organizations like the Greater Washington Board of Trade talk about what DC needs to compete, you hear a lot about what’s attractive about Tysons, or Route 50 and the Beltway (where Northrop Grumman put its headquarters). There’s a lot of driving infrastructure there, low taxes, and so on.

The view that the center city needs to out-suburb the suburbs drove transportation decisions for much of the 20th century. It’s what led many cities to decimate their downtowns with freeways that ultimately sapped the vitality of the places themselves while drawing people and their money away except from 9 to 5.

The other view is that some businesses will be in suburban office parks no matter what, while other businesses want to be in creative places like DC, Arlington, and Bethesda. Those businesses want to attract workers who want to live in dynamic walkable urban places, who prioritize being able to take Metro (if they can’t walk or bike) to the office. They also might want to be accessible for workers who can’t afford cars as well.

One obstacle, though, is when the CEOs and presidents who decide where to locate their businesses have different preferences. For tech startups like LivingSocial, the leaders want the creative, urban atmosphere too, but not necessarily for a defense contractor.

Without pricing, faster driving won’t really help CEOs for long

It’s important to note that DC does not go around making it hard to drive into the District. Most of the road spending of recent years has gone to bridges in and out of downtown. There are large freeways in from Virginia, and major arterials whose design prioritizes car flow at rush hours.

Nevertheless, as the region has grown, so has traffic. The big question we’re considering in the MoveDC citywide planning process is, should another huge chunk of future capital now go toward doing even more to bring even more cars even faster into the District?

Induced demand tells us that any effort to do this might alleviate congestion in the short term, but any new lane, or any road timed to move more cars, will soon fill up and become congested once more. The limiting factor in how much people drive is how much traffic they’re willing to tolerate, not the actual roadway itself.

So the Federal City Council’s recommendations won’t really help the business leaders for long. As we discussed yesterday, congestion pricing would, if it could go through. That’s an especially efficient solution, because the CEOs could pay for the fast commute they want while funding transit for many other workers.

The Federal City Council’s survey of their members tells us something, but it’s not that businesses need more driving capacity. It’s that the experience driving into DC definitely matters to Federal City Council CEOs and presidents. That’s nothing to ignore, of course, but important to put in its proper context.