Chris Matthews Says Stimulate With HSR

I posted a few weeks ago about an discussion on Real Time with Bill Maher where Chris Matthews was arguing with a "Amtrak does nothing" conservative. Today he goes on his show and says that HSR is the way to stimulate the economy. Obviously there is a lot more than that but I like the way he's going.

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What is "Economic Development"?

What comes to mind when someone says that light rail, streetcars, or BRT will bring economic development? My first guess is that people imagine that more buildings will be constructed along the route and the economic impact of that construction is what comes to mind. But what about other measures of economic development like worker productivity and connectivity to the regional employment pool?

I think too often economic development comes in one form when we're talking about transit, which I think might be going down the wrong path. We know that transportation decisions which provide or increase access to a place are likely to increase its value and ability to develop. But what about all the other benefits such as fostering denser employment clusters or connecting workers of all economic levels to regional jobs? Increases in the quality of workers that an employer has access to is another measure of economic development. Allowing workers to save money on transportation in order to spend it elsewhere is local economic development as well.

The related issue is who gains from this economic development. With the building construction based economic development, its easy to assume that developers and the people that buy the new condos are the only ones who benefit. This type of thinking creates a flash-point on which opposition to your project can zero in on to say you're not helping the people that need it the most. It's a valid concern but it's also missing out on the creation of tax base that goes back into the budget for the whole city to use. Denser areas for their part are huge economic engines. Not discussing this larger view of economic development is doing a disservice to the project, especially when you think through how the specific project will or will not help the situation.

If the main reason for a project is economic development, it would be helpful to describe the economic outcomes that you expect to achieve with the project. A streetcar or light rail line is going to provide a mobility benefit, but it is how we talk about those benefits that ultimately allow people to understand what the project is really about. Many projects don't do a good job at this and are maligned by the opposition. Many bad projects get oversold, hoping that "economic development" will save the day. I believe the key is to figure out whether the project is doing what its supposed to be doing, and move forward from there.

Setting Up Fiscal Sustainability

I was interested to see former Texas State Rep Mike Krusee talking about the subsidization of roads and others at the CNU Transportation Networks conference talking about his conversion from evil, especially after we know he screwed Austin back in 2000 and 2004 essentially getting them into the mess they are in now in a somewhat roundabout way.

What was especially interesting was to hear him mention that he was the one that wanted to look at how much roads cost and thus authorized the study to index how much roads cost in Texas. What did they find? No road pays for itself. None. Curiously, that study or any mention of it exists no where on the TxDOT site. The only memory of it existing is on the blogs that picked it up after it showed up again in a newsletter. We covered this back in 2007 and notice that the pages that once kept this information front and center at TxDOT are gone.

It seems like information like this would be extremely powerful in pointing out everywhere around the country that essentially our way of funding expansion of roads now is broken. And even though he's not one of my favorite people for many reasons, Krusee made a basic point that I think is important even if we probably don't agree on the outcomes. We have enough money in the system. We just need to start allocating it correctly.

Over the past 50 years, Krusee argued, the federal government was using tax money that came by and large from cities to subsidize roads to areas without access otherwise. "City dwellers have subsidized the land purchases and the development costs out in the suburbs," said Krusee. What's more, the gas tax, which city dwellers pay when driving on city roads, but which goes to freeways largely outside of urban cores, is "a huge transfer of wealth from the cities to the suburbs to build these rings."

This admission is important, and it points the way towards sustainability for the whole urban economic system. Once we realize that we can't keep expanding roads(or sewer, electrical systems which have similar costs to the roads in terms of return according to Scott Bernstein) further and further out, and that the goals of the interstate system have been co-opted by suburban development forces for fiscally and environmentally unsustainable practices, the more of an effect we'll have on changing every citizens fortunes, not just those who build sprawl.

This also brings me to a point that Scott Bernstein made at the conference, that in these hard economic times, we need to really focus on how these investments will create value and wealth for people and cities in hard economic times over the long run. As my college professor Shane Davies always said, if you want to make change, you "hit people in the pocketbook".

Freeway Swing

Ryan dug up a paper by Baum Snow that was reblogged by Matt Y. While the numbers are interesting in themselves, the swing was most dramatic to me. It wasn't just 18 percent drop with the introduction of freeways into the urban fabric but if we are to believe that city population would have increased by 8 percent that is a 26% swing in population for cities.

This is no small chunk of life and as we have seen, it was devestating to the economic vitality that cities would have maintained. As Scott Bernstein always says, urban places are the way we can build wealth. Unfortunately a whole lot of wealth was transferred and reallocated. It might be interesting to see what that 26% swing meant over time for the economics of the United States considering how much of the population lives in metro areas. We might be having different discussions today about sustainability.

Sunday Night Notes

The mean green of UNT have done another study looking at the economic effects of constructing light rail in the Dallas region. The study says $5.6 Billion in economic benefits just from construction, not from development near the stations.
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This seems to be an issue all around the country. State roads are under state control, so it becomes harder to get local changes on them including transit. Places that are designated as State Roads seem to add another level of bureaucracy, even if they likely get gas tax money for repairs. This issue is popping up in Ogden Utah as well as on Van Ness.
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I wish alignment decisions weren't so political. The realistic solution is to look at the numbers for the starter line as we discussed in the job center post below. Check the places with the highest bus ridership and see what major job centers need to be connected. Granted I'm not familiar with Tampa, but you wouldn't need a million dollars to do a study of where the first line should go.
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The FHA is going to start giving mortgage credit for living near transit. This is part of the ACES bill better known for its fights over cap and trade:

Similar concessions on loan applicants' incomes would be extended for properties located in areas close to employment centers or mass transit lines. No concessions would be made for homes in far-flung neighborhoods that eat into family incomes because of long commutes, which would add to carbon emissions.

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An interesting article about the folks who operate out of coffee shops and other people's houses for work by internet. The digital nomad.

Quote of the Day

On a discussion of the issues that bike tourism brings to the town of Sausalito just North of San Francisco.

Noting that the bike tourists bring cash to the city, the Sausalito business
community expressed concern about making the experience unfriendly for tourists.

"We love the cyclists and tourists that come into town," said Cheryl Popp, Chamber of Commerce president. "Bikes are good for the economy and they are green and clean."

Build In California Alone

So says Ed Glaeser. He states that because of the temperate climate, more people should live in density in California cities to increase environmental savings. Though this doesn't really work if the people moving here don't have water, the climate changes, and we can't grow food in the central valley.

If this is along the same lines as Randal O'Toole and Wendel Cox are pushing, build in the preserved open spaces at existing densities with limited regulation, then no thank you. However, if its building more density in greyfields and on transit corridors with better transit then sure. But people shouldn't mix the two, that would be a disaster.

Big Cities That Are Going Bust

We've seen numerous stories about Dubai, a city that is rapidly losing people as they jump ship or man made sand island but what about American cities? It looks like we have the usual suspects with a few new friends. Cities that have been known as thriving metropolis' but also allowed real estate to run wild. The two big ones that would have probably been on my own list are Las Vegas, Atlanta, and Orlando. Other cities in the rust belt such as Detroit and Dayton are not a surpirse but what about Richmond Va? The best cities are Boston, New York, and Honolulu, areas with hefty real estate and living costs.

I'd love to see other statistics on these cities such as the types of growth patterns over the last 15 years and see if the disconnected nature has something to do with it. I'm not sure if that would show anything, but it would be something to think about. I also wonder about the soul of these cities. What are they known for. Obviously we know Vegas is entertainment but what are Atlanta and Orlando known for? Would having more of an identity make them more like a New York or Boston? Would it have precluded the real estate mess? I don't know the answers, but its always interesting to ask them.

Ooh Look, Something Shiny

Maybe keeping Larry Summers busy with cars will keep him from messing with transit.

When You Ride Alone, You Ride With Larry?

A number of recent blog posts as well as Peter DeFazio in an interview with Rachel Maddow have pointed blame for the reduction in rail funding in the stimulus package at the Obama folks and more directly at former treasury secretary and Obama advisor Larry Summers. It's not surprising that he is in favor of tax cuts given his plea for them even before the economic slowdown in 2007. Recently he's become a convert to infrastructure in words alone, but it doesn't seem like the actions are following through. Instead they've put in tax cuts as funding for infrastructure, particularly rail was junked. But as Tom states at Angry Bear:

The underlying problem is that helicoptering money to "consumers" by way of tax cuts or lump-sum grants a la last year's stimulus payments does little or nothing to help satisfy demands that are latent due to incomplete markets. Give me $100 and I can drive to Chicago for the day, not insignificantly because past public infrastructure spending built the roads from here to there. Give everyone in Madison $100 and it still does sod all for extending the Amtrak Hiawatha service, seeing as the city was cut off from such passenger rail network as still exists in the upper Midwest and reconnecting it requires a substantial investment. Maybe in libertarian fantasyland, there are no such things as collective action problems, but elsewhere overcoming them may be considered to be a useful function of government.

As opponents like to say, 90% of people drive, well then we should spend 90% on roads. But its a cycle of spending that causes this to happen. As we've seen in places like Copenhagen, if you build infrastructure to support other modes such as cycling and transit, you will get more and more riders and shift the policies. This is what we did in the 50's in support of the automobile. It was a collective push to increase funding and regulations for that mode that led to its rise. At the time, many felt it was the way of the future, but looking back we know that was completely wrong.

But the issue with the stimulus that continues is the fact that we aren't doing enough and a lot of people don't seem to understand what is "enough". Calling $3 billion adequate is kind of lame, especially given the $250 billion in new projects that are in que as well as the thought that California's high speed rail line would be $40 itself. There is a want for a national high speed rail network, or at least start of work on the key city to city lines that would increase productivity and connectivity. And the excuse that it won't be started fast enough is based on existing FTA and DOT timelines in which transit is suffocated based on underfunding. Another excuse is that we should wait for the next transportation bill. But if we are able to make investments now and write a bill that can fold some of them in, why not do it?

While many will point to the New Deal as a major part of what got us out of the depression, the cap was World War II in which we turned auto plants into tank and plane manufacturers and people saved instead of continuing thier spending. No extra rubber around for new cars, only for the war effort. In fact, this poster reminds us of the lengths people took to save energy and resources. Imagine if in this time period of hardship people were asked to save a little more and come together to build or invest in more of what is needed such as education and technology.


If I were in charge, perhaps I would have an office of infrastructure reconciliation. This means bringing our rail infrastructure up to a current standard and increasing output dramatically, much like China. We'll have to also wait and see on the idea of an infrastructure bank but this is no time to comprimise or seek middle ground as Mr. Summers stated Obama will do. Tax cuts are an idea of the Republicans, thier solution to EVERYTHING over the last 30 years. After a while, there's not much left to cut. Look where that has gotten us. Seems like this is a time to strike forward with big thoughts and ideas.

Restructuring Property Tax to Land Alone

I don't remember posting this when it popped up, but its something I remember a classmate discussing in grad school and I just found it again after the break. At the ULI blog:

How about restructuring the property tax across America to install a two-tiered system? More tax on those horizontal pieces of empty land and asphalt, less on the buildings. That is, reduce the tax rate on homes and other improvements, and substantially increase the rate on the site value. I think such a system would induce more compact development and more infill work.

Pittsburgh has used the system for years until problems arose with the way assessments worked out, as my colleague and former Pittsburgh Mayor Tom Murphy has told me. Nonetheless, if assessments are fair, the higher land tax would bring vacant or woefully under-used central sites into use, giving new life to inner cities and reducing sprawl. It would also stem land speculation, which is the big engine behind house price escalation, thus stabilizing neighborhoods and keeping sale prices and rents more affordable. The land tax returns to government--the values it creates with bridges, roads, and other infrastructure--helping to pay for maintenance and necessary improvements.

I think this is a very interesting idea. This would keep large swaths of downtown land from continuing on in life as parking lots. But it might also have the effect of having something built, but not quite to the density that it really should be over the long term.

Pent Up Demand, Synergy, & The Market

Chris Leinberger is hopping on the urban train so to speak. Brad Plummer's post over at TNR's The Vine has already gotten some coverage at Greater Greater Washington and The Bellows but here's the money quote that discusses the lacking supply of walkable communities people want but can't afford.

By his count, some 30 to 50 percent of residents in U.S. metropolitan areas want to live in a walkable urban environment—a trend fueled by the growing number of single and childless couples, who will constitute 88 percent of household growth through 2040. Trouble is, he estimates there are currently only enough walkable neighborhoods to satisfy about 5 to 10 percent of metro residents, which is why rents in transit-accessible areas are so exorbitant.

The other side of this as both blog posts noted above is the issue of land use and zoning. I'm going to throw another wrench in and say there has to be a market. There have been a few rail projects that hope the build it and they will come system will work but there needs to be a concerted effort and existing market to make it work precisely because of the problems with our zoning code. An example of this is Cascade Station in Portland. On the way to the airport, the Bechtel company traded building the line for the land at the station. Unfortunately 911 hit a few days close to the opening of the line and the market dropped out from under the developers.

There's also the synergy issue. Places like the Pearl District and the South End in Charlotte were the next places to grow and close to the downtown urban market. I would say the transit was able to shape the development intensity. Further down the South Corridor has been a bit slower to take off. Over time as the prime properties are expanded, I expect the development to move further south along the line.

So while I see there is demand for walkable urbanism as Chris calls it, there are timelines of implementation that should be mentioned as well so that people don't expect overnight change. The Rosslyn Ballston corridor didn't take off over night either. I feel like the synergy point is an important one that gets missed from time to time when people expect TOD everywhere once the line opens. It's a long term investment with long term results. It will be interesting to see what happens in Denver as the opening of the whole transit system almost at once under the Fastracks program. I have heard some state that the push and focus that happened along the Southeast Corridor won't be replicated because the demand will be spread out among all the opening stations. It makes for an interesting test of the synergy idea and whether transit will be able to focus the intensity as it has in other corridors that had all the attention.

On the issue of paying for lines, I think developers will get a major boost from the infrastructure investment and should pitch in, or at least not be able to keep the massive windfalls from the investment that was made by everyone. But its also dependent more on vacant and extremely underutilized property appreciation. More money will be generated through vacant to build out than the appreciation of properties that already exist. Too many people think value capture will always be the answer when sometimes it will not, because the increment is too small to generate the funding needed. These issues and a ton more are discussed in a recent paper on Value Capture by the Center for TOD. We'll discuss that piece another time.

Also, a while ago I covered some key quotes in Chris Leinberger's book, The Option of Urbanism. Here's the series post by post.

Series Intro
The Favored Quarter
The Endless Landscape
Real Development Subsidization
Metro Brings Change
Subsidizing the Rich

Congrats to Krugman

Seems he won some Nobel Prize. From Nobel:

Economies of scale combined with reduced transport costs also help to explain why an increasingly larger share of the world population lives in cities and why similar economic activities are concentrated in the same locations. Lower transport costs can trigger a self-reinforcing process whereby a growing metropolitan population gives rise to increased large-scale production, higher real wages and a more diversified supply of goods. This, in turn, stimulates further migration to cities. Krugman's theories have shown that the outcome of these processes can well be that regions become divided into a high-technology urbanized core and a less developed "periphery".

Let's look back to what he's said on transit...

But none of it amounts to much. For example, some major public transit systems are excited about ridership gains of 5 or 10 percent. But fewer than 5 percent of Americans take public transit to work, so this surge of riders takes only a relative handful of drivers off the road.

Any serious reduction in American driving will require more than this — it will mean changing how and where many of us live. To see what I’m talking about, consider where I am at the moment: in a pleasant, middle-class neighborhood consisting mainly of four- or five-story apartment buildings, with easy access to public transit and plenty of local shopping.

It’s the kind of neighborhood in which people don’t have to drive a lot, but it’s also a kind of neighborhood that barely exists in America, even in big metropolitan areas. Greater Atlanta has roughly the same population as Greater Berlin — but Berlin is a city of trains, buses and bikes, while Atlanta is a city of cars, cars and cars.