Unless you’re living under a rock, it would be difficult to avoid the escalated gas prices in the Tampa Area.  How many remember the good ‘ole days when a gallon of gas was only $2.00?  That would be a welcome relief compared to the nearly $4.00 per gallon today. 

Despite our complaining, there are no viable solutions.  Economic theory proves as prices rise, consumers opt for cheaper alternatives.  Yet, the problem of escalating fuel prices is two-fold.  There are no available substitutes for gasoline, and the majority of us are dependent on gasoline cars. 

This problem is compounded by the current housing crisis and its related issue.  Americans spend money based on wealth.  When home prices were rising people felt wealthier.  “They took advantage of their inflated equity by borrowing to continue spending” said Suzi Dieringer, Economic Research Manager.  During that time rising gas prices were an annoyance, but not a catastrophe. 

Now that home prices are dropping, people are rethinking their situation.  The median selling price of a home in the Tampa Area peaked in mid-2006 at $240,000.  Today, the average home is selling at less than $176,000.  That’s a $64,000 decrease and more than 25 percent. (See graph to left: Falling Home prices in Tampa Bay Area)

“You’re starting to see a reaction,” said Ray Chiaramonte, Interim Executive Director of the Metropolitan Planning Organization.  According to a recent Tampa Tribune article (5/28), Florida motorists are driving less and carpooling more.  Transit use and sales of smaller cars and hybrids are rising.  “It appears we’ve hit the price point at which people are taking notice and making changes,” says Chiaramonte.

What will happen when gas hits $6.00 a gallon?  If current trends continue, it won’t be long. (See graph to right: Gas Prices tred Upward Toward $6.00)  “We can jump start solving the problem before it becomes a crisis,” said Robert Hunter Executive Director of the Planning Commission.  He said, “We may have to think differently, even change the rules.”      

Increased drilling and oil production will only temporarily quench a worldwide thirst for oil that continues to grow and push gas prices even higher.  In fact, economists agree that even new drilling is allowed today, it would take between 8 and 15 years for those new sources of oil to hit the market. 

There is no short term fix.  Alternative fuels and modes of transportation are years away.  Even trying to reshape the way our cities have grown would take decades.   The important fact remains we need to rethink how we live, how our cities are designed, how our towns are bing built, and how we move around.  Change isn’t easy, but with proper planning its impact can be lessened.                 

Sources:  Florida Association of Realtors, AAA Autoclub South.