COST Comments: It has long been known that higher population densities in US metropolitan areas result in greater traffic congestion. However, the article below notes that Austin has achieved the 4th highest peak hour traffic congestion in 2009 of the nation’s 100 largest metropolitan areas. Only higher density, pre-automobile cities of Los Angeles, Washington DC and San Francisco have greater congestion than Austin which exceeds New York’s congestion level. The higher densities of these large, older urban areas have intensified congestion but Austin is rare in having achieved this high congestion level with relatively low density. This is simply because Austin did not address its roadway needs during continued significant population growth. Austin is now many years behind and has fewer funding options.

This highlights, again, the absolute imperative for the Austin region to prioritize its limited transportation dollars to most effectively serve the mobility needs of its citizens. The wasteful spending of transportation dollars on ineffective solutions such as trolley trains can only further increase overall congestion and degrade citizens’ quality of life.

NEW TRAFFIC SCORECARD REINFORCES DENSITY-TRAFFIC CONGESTION NEXUS

by Wendell Cox, published in newgeography March 3, 2010

Inrix, an industry provider of traffic information, has just published its third annual Traffic Scorecard, which ranks the nation’s 100 largest metropolitan areas based upon the intensity of their peak hour traffic congestion in 2009. The results provide further evidence of the association between higher urban population densities and more intense traffic congestion.

Los Angeles, Again: Not surprisingly, Los Angeles is again the most congested metropolitan area over 1,000,000 population. In Los Angeles, roadway travel takes nearly 34.7% more in peak periods than when there is no congestion. This means that a trip that would take 30 minutes without congestion would take, on average 40.5 minutes during peak periods.

The principal measure used by Inrix is the Travel Time Index, which was developed by the Texas Transportation Institute (TTI), for its congestion reports that started in 1982. TTI’s latest Urban Mobility Report is for 2007. The Inrix measures are developed from actual GPS vehicle readings. This information is also provided to TTI to assist in preparation of its annual Urban Mobility Report.

Measuring Delay: In the new edition, Inrix switches from using the Travel Time Index to what it calls the Travel Time Tax. The difference between the two measures is that the Travel Time Tax measures the percentage of delay, such as 35% in Los Angeles, while the Travel Time Index would state the figure as 1.35. The new method is preferable because differences in traffic congestion are more readily apparent. . For example, a metropolitan area having a Travel Time Tax of 15% would have 50% worse traffic congestion than a metropolitan area having a Travel Time Tax of 10%. This large difference is not as obvious when comparing the Travel Time Index values of 1.15 and 1.10. The “Travel Time Tax” parlance, however, is less than optimal and this article will use “average congestion delay” instead.

Ranking the Metropolitan Areas: The average congestion delay in Los Angeles was much worse than in the other largest metropolitan areas, just as its core urban area density is well above that of anywhere else in the US, including New York (where far less dense suburbs more than negate the density advantage in the core city). It also doesn’t help that a number of planned freeways were cancelled in Los Angeles over the last 50 years.

Among the large metropolitan areas, Washington, DC had the second worst Average congestion delay, at 22.4%, followed by San Francisco, at 21.5%, Austin at 20.7% and New York at 19.7%. Austin may seem to have placed surprisingly high, however this was the nation’s last large metropolitan area to open a full freeway to freeway interchange and has only recently begun to develop a comprehensive freeway system, through the addition of toll roads. Austin’s late roadway development is the result of two factors. Austin was too small in 1956 to receive a beltway under the interstate highway system and an anti-freeway movement delayed construction for decades.

Inrix also develops an average congestion delay for the worst commuting hour. Los Angeles also has the most congested worst hour, with an average congestion delay of 69%. Austin ranked second worst at 55%, while San Francisco was third at 46%, Washington, DC fourth at 45% and New York fifth at 44%.

Honolulu: Almost as Bad as Los Angeles: Smaller metropolitan areas also exhibited intense traffic congestion. Honolulu had an average congestion delay nearly as bad as Los Angeles, at 32.4% and a worst hour average congestion delay of 64%. The core urban area of Honolulu has the highest density of any metropolitan area between 500,000 and 1,000,000 population. New York exurb Bridgeport-Stamford had a worst hour average congestion delay of 63%, with a peak period average congestion delay of 18.0%.

Inrix: Density and Traffic Congestion: Virtually all of the congestion and most of the analyzed road mileage is in the urban areas, rather than in the rural areas that make up the balance of the metropolitan areas. The metropolitan areas with more dense urban areas tend to have worse traffic congestion, as the table below indicates.

• Metropolitan areas with core urban densities (see Note 1) of more than 4,000 per square mile had peak period average congestion delays of 18.4%, which is more than three times that of metropolitan areas with core urban densities of less than 2,000 (5.9%).

• Metropolitan areas with core urban densities of more than 4,000 per square mile had worst peak hour average congestion delays of 37.5%, which is nearly 2.4 times that of metropolitan areas with core urban densities of less than 2,000 (15.9%).

These relationships are similar to those indicated in the Texas Transportation Institute data for 2007.

<
Click to enlarge

Sierra Club Data Also Shows Nexus: Moreover, the association between higher densities and greater traffic congestion is indicated by the ICLEI-Local Governments for Sustainability Density-VMT Calculator, which is based upon Sierra Club research. According to the Calculator, under the “smart growth” scenario, residential housing would be 15 units per acre, as opposed to its “business as usual” scenario at a typical density of four housing units per acre. The density of traffic (vehicle miles per square mile) under the higher density “smart growth” strategy would be 2.5 times as high as under the “business as usual” scenario (Figure).

Click to enlarge

The Inevitable Comparisons: Invariably, analysts (smart growth advocates and me) like to point out relationships between Portland, with its “smart growth” policies and Atlanta, the least dense major urban area in the world. The Inrix data shows Portland to have an average peak hour delay of 12.2%, which is 15% worse than Atlanta (10.6%). Portland is nearly twice as dense as Atlanta, while Atlanta’s traffic congestion is made worse by one of the most decrepit freeway and arterial systems in the nation.

A National Vision: Inrix has also developed a monthly national congestion delay factor. Inrix notes that traffic congestion had been improving as driving declined due to the Great Recession. However, Inrix refers to reduction in driving as “lucky,” and notes that without a “national vision” that “includes addressing congestion as a national priority,” greater traffic congestion will result.

There is indeed good reason to address traffic congestion. As David Hartgen and M. David Fields have shown, there is a strong relationship between the higher levels of mobility that occur with less congestion and greater economic growth. Obviously that relationship extends to higher urban densities, which are associated with economically counter-productive levels of traffic congestion.
But there is more than jobs and the economy. More intense traffic congestion produces more intense air pollution as well as more greenhouse gas emissions. It is well to remember that public health was the rationale for air pollution regulation. Air pollution’s negative impacts are so local that they are measured in the quality of life of individual people, especially those in close proximity to unnecessarily overcrowded roads. It is ironic that the higher density promoted by smart growth advocates exposes urban residents to more intense air pollution.
________________________________________
Note 1: 2000 core urban area (urbanized area) population densities are used in this analysis because there is no later reliable information. The next reliable urban area density data will be a product of the 2010 census. The Federal Highway Administration (FHWA) produces later urban area density figures, many of which are substantially inconsistent with those of the United States Bureau of the Census, which is the primary source of such information. For example, as late as 2005, FHWA reported the Houston urban area to have 1.3 million fewer people than the Bureau of the Census, while reporting a land area nearly 250 square miles larger than the census had measured. Of course, this is a physical impossibility. The result was that Houston’s density was overstated by 45%.

Note 2: Inrix also ranks metropolitan areas using an “overall congestion” measure, which is simply all congestion added up. As a result, the overall congestion measure is heavily weighted by population. This is illustrated by comparing Los Angeles and Honolulu. These metropolitan areas have very similar average congestion delays, as noted above. This means that drivers encounter similar traffic delays during peak in Los Angeles and Honolulu. However, Honolulu’s overall congestion measure is 95% less than that of Los Angeles, principally driven by the fact that Honolulu’s population is 93% less. As such, the overall congestion measure is of little relevance to people in their day to day commute or as a comparative measure of the intensity of congestion between areas.

Wendell Cox
Demographia | Wendell Cox Consultancy - St. Louis Missouri-Illinois metropolitan region
Visiting Professor, Conservatoire National des Arts et Metiers,
+1.618 632 8507

www.demographia.com | www.publicpurpose.com | www.rentalcartours.net

Books & Publications
WAR ON THE DREAM: How Anti-Sprawl Policy Threatens the Quality of Life
http://www.demographia.com/wod1.pdf

5th ANNUAL DEMOGRAPHIA INTERNATIONAL HOUSING AFFORDABILITY SURVEY (http://www.demographia.com/dhi.pdf)

THE WAL-MART REVOLUTION: How Big-Box Stores Benefit Consumers, Workers, and the Economy
By Richard Vedder & Wendell Cox

COST Comments: The two articles below are examples of nationwide trends for transit. Transit costs are increasing and ridership is falling. Dallas and Houston are two of several cities in which rail expansions are experiencing billions of dollars in cost overruns while transit ridership is falling. This has created an environment of dramatically rising transit fares and reduced service for those who need it and have no alternative. This, in-turn, reduces ridership further. Austin can avoid this catastrophic negative impact “circle” to taxpayers and transit riders by canceling rail expansion studies and plans and focus on cost effective transit improvements using “smart” planning and advanced technology bus systems.

The recently introduced version of an Austin downtown rail trolley will cost several billion dollars (including bond interest) while dramatically increasing downtown congestion and safety hazards. The Austin city estimate of the cost has already doubled to more than one billion dollars (excluding interest) and they are very early in the engineering evaluation process. This trolley will serve a very small number of people who will be highly subsidized by the vast majority of citizens who will experience increasing taxes and never use the trolley. This trolley will also achieve the exact opposite of that advertised: It will discourage more people from downtown visits and will motivate businesses to avoid or leave downtown. See this site www.costaustin.org for other ‘news articles’ on this subject.

DART ridership falls, despite opening of Green Line

06:52 AM CST on Wednesday, February 24, 2010
By MICHAEL A. LINDENBERGER / The Dallas Morning News
mlindenberger@dallasnews.com

Dallas Area Rapid Transit blamed lower gas prices, rising unemployment and higher fares for a steep decline in ridership in the last three months of 2009, according to a report released by the transit agency Tuesday.

DART’s bus ridership took the biggest hit, but the sagging numbers affected light-rail and commuter rail service as well.

At the same time, senior executives unveiled gloomy revenue forecasts that could significantly delay major rail projects in downtown Dallas and in Irving, where there has been enormous anticipation of the scheduled opening of the Orange Line in phases beginning in late 2011.

“I don’t know how serious this is,” DART president Gary Thomas said, declining to reveal specifics of the short- and long-term sales-tax revenue forecasts, which his agency only recently received. He said the board would receive more details in March about what the numbers could mean for major projects.

Chief financial officer David Leininger said projects already under contract – including this year’s completion of the Green Line to Carrollton and the early phases of the Orange Line in Irving – are safe.

But “any project not yet under contract” will have to be evaluated, he said. “There are some choices the agency will have to make.”

Leininger declined to rule out significant effects on big projects, including the second rail line in downtown Dallas, scheduled to open in 2016, and the final leg of the Orange Line, scheduled to reach Dallas/Fort Worth International Airport by 2013.

The short-term picture is better, but only slightly. Leininger said revenue will probably be $13 million below expectations for fiscal year 2010. “All these numbers are manageable,” he said.

The bad news about the finances – triggered primarily by sales-tax revenues that have slumped in the past 18 months or so and are seen as unlikely to recover quickly – came as the staff produced its quarterly report card on DART’s operations.

That report, which the board did not discuss and which the board chairman said he had not yet seen, painted a somber picture on other fronts as well.

DART’s 674 buses carried 16.9 percent fewer passengers in the final quarter of 2009 than they did a year before. On weekdays, the average number of one-way trips on the Trinity Railway Express commuter service fell 9.9 percent, and even the newly expanded light-rail attracted fewer passengers.

Despite the opening last fall of four new stations along DART’s heavily promoted Green Line, average weekday ridership on the transit agency’s 48 miles of light-rail fell 5.8 percent, to about 66,000 rides. That works out to roughly 30,000 round-trip passengers, including those who make connections from more than one transit vehicle each way.

Overall light-rail ridership fell less steeply, more than 2 percent, probably reflecting the big crowds on October weekends during the State Fair of Texas, which was the first time DART had offered direct light-rail service to Fair Park.

The report also makes clear that DART had a tough quarter across a wide range of performance and financial measures that go beyond declining ridership and falling sales tax revenue. Accidents with buses and trains were more common, buses and trains were more likely to be late, and even as the buses and trains became less crowded, complaints from passengers soared across the network.

Roy Hutt, a 32-year-old nursing student at El Centro College, says DART has been a tremendous help to him as he finishes his degree. “Oh, yeah, I think it’s great,” he said, noting that his train is almost always on time.

State government worker Joe del los Santos of Dallas agreed that the train is on time almost every day but said the buses – which he also rides daily – are not. “They are always late. Always,” he said.

He also said he wished DART would patrol rail cars more frequently, because young “hoodlums” make him feel unsafe.

Security was one of the few bright spots in the report, however. So-called security incidents, which include reports of crimes, were down across the system – on trails and buses and at stations and transit centers.

The ridership slump followed a DART board decision last year to raise fares Sept. 1 to help offset a fall-off in sales-tax receipts. DART’s fiscal year begins Oct. 1, so the report represents a review of the first quarter of fiscal year 2010, a year that DART forecasters had anticipated would bring both ridership and budget difficulties.

DART had taken in about $108 million in sales taxes in the last three months of 2007 and $101 million a year ago. The last three months of 2009 brought in only $97 million. The downward a trend has been offset in the short term by cost-cutting but has become increasingly worrisome for DART’s long-term planners.

The agency is in the midst of the most aggressive light-rail expansion in the country, with the 28-mile Green Line due to open in full – on time and on budget – in December. And, if the schedule holds, the Orange Line is expected to connect directly to Dallas/Fort Worth International Airport in 2013..

But the new sales-tax estimates, which were not shared with the board or the public Tuesday, could make timely completion of projects not already under way difficult.

Houston Transit Ridership and Revenues Plummeting

By Tom Brazan

Houston Metro reported January 2010 Fare Box Revenue again declined, -10.4% from
January 2009.

FY2010 (4 months) Fare Box is -6.11% below the same 4-month
period for FY2009, totaling approximately -$1,353,000.

The Fixed-Route Bus Boardings declined -0.37%, and the
decline for the past four (4) months of FY2010 totals -4.78%, or,
-1,156,000 boardings!

The decline over the past 18 months is -16.15%, or a loss of 20,040,600
boardings.

The MetroRail boardings declined a whopping -12.6% for January. The
METRORail boardings have experienced a four (4) month decline (FY2010)
of -9.88%, or a decline in ridership of -371,500.

The decline over the past 18 months is -5.62%, or, -993,000 lost train trollley
boardings.

The decline in Sales Tax Revenue for February was -14.76%. The decline
in sales tax revenue for the four months of FY2010 is -$32,030,208.50.

The sales tax decline for the past 11 months is -9.52%, or -$47,675,000!

Metro reported January 2010 Fare Box Revenues again declined, -10.4% from
January 2009.

FY2010 (4 months) Fare Box is -6.11% below the same 4-month
period for FY2009, totaling approximately -$1,353,000.

The Fixed-Route Bus Boardings declined -0.37%, and the
decline for the past four (4) months of FY2010 totals -4.78%, or,
-1,156,000 boardings!

The decline over the past 18 months is -16.15%, or -20,040,600 fewer
boardings.

The MetroRail boardings declined a whopping -12.6% for January. The
MertoRail boardings have experienced a four (4) month decline (FY2010)
of -9.88%, or a decline in ridership of -371,500.

The decline over the past 18 months is -5.62%, or, -993,000 lost MetroRail trolley
boardings.

The decline in transit Sales Tax Revenue for February was -14.76%. The decline
in sales tax revenue for the four months of FY2010 is -$32,030,208.50.

The sales tax decline for the past 11 months is -9.52%, 05 -$47,675,000!

COST Comments: This article is an excellent summary of issues currently being debated in Austin. It address common misunderstandings and incorrect perceptions including: the exorbitant taxpayer transit subsidies and unsustainable nature of mass transit, the value of the automobile to quality of life, advantages of buses over trolleys, and the fallacies of “Smart Growth.”

It should be noted that the article’s stated transit average of one-third fare box recovery is substantially better than Cap Metro’s less than 10% recovery of operating costs only. Capital costs (buses, trolleys, facilities, etc) further reduce fare box recovery percentage to be almost insignificant. Taxpayers pay most of the costs.

The article’s overrun example dramatically understates this common characteristic of rail transit. There are recent examples of a billion to several billion dollars in projected rail expansion cost overruns in each of these cities: Dallas, Houston, Denver and Seattle. Austin’s much smaller Red Line commuter train had and is projecting cost overruns of several hundred percent in implementation and operations. In addition, many older cities; including Chicago, San Francisco, Washington, DC and New York, each need billions of dollars to replace aging trains, trolleys and equipment and they have little source of funds for these capital replacements. Early light rail cities such as Portland and San Diego will reach this capital replacement point in the next ten years and there is no obvious source for the needed billions of dollars.

by Ed Braddy, published in newgeography, 02/10/2010

The Smart Growth movement has long demonstrated a keen understanding of the importance of rhetoric. Terms like livability, transportation choice, and even “smart growth” enable advocates to argue by assertion rather than by evidence. Smart Growth rhetoric thrives in a political culture that rewards the clever catchphrase over drab data analysis, but often fails to identify the risks for cities inherent in their war against “auto-dependency” and promotion of large-scale mass transit to boost the “sustainability” of communities.

Yet in pursuing this transit-friendly future political leaders rarely confront this inescapable reality: public transportation is fiscally unsustainable and utterly dependent on the very car-drivers transit boosters so often excoriate. For example, a major source of funding for transit comes from taxes paid by motorists, which include principally fuel taxes but also sales taxes, registration fees and transportation grants. The amount of tax diversion varies from place to place, but whether the metro region is small or large the subsidies are significant. In Gainesville, Florida – a college town of 120,000 – the regional transit system received 80 percent of the city’s local option gas tax in 2008. In New York City, the Triborough Bridge and Tunnel Authority diverts 68 percent of its toll revenues to subways and buses.

In addition to local subsidies, state and federal agencies fund transit operations with revenue from gas taxes and other motorist user fees. In 2007 transit agencies received $10.7 billion from the federal Highway Trust Fund, and that is a conservative figure since another $11.7 billion was diverted for vaguely phrased “non-highway purposes.”

In contrast, fare box recovery doesn’t come close to covering operating expenses. Nor can transit pay for its own capital outlay. Last year the Metropolitan Washington Airports Authority moved to dedicate toll revenue and toll bonds to cover half the cost of the $5.26 billion Dulles Metrorail project.

The implications of transit’s auto-dependency are serious. Americans drove 11 billion fewer miles between 2008 and 2009, and for each mile not traveled local, state, and federal taxes were not collected. Without these anticipated revenues, transit systems across the country have suffered and, ironically, those hit hardest are the people who are dependent on public transportation ,that is in most cities, the poor and the young.

In D.C., transit riders are being warned by Metro officials to expect half-hour waits for buses and trains and more crowded rides as they cut services and lay off positions to close a $40 million budget shortfall. Santa Clara County’s Valley Transit Authority has announced plans to reduce bus service by 8 percent and light rail service by 6.5 percent. In Arizona, both Tempe and Phoenix face major cuts that will lengthen wait times and eliminate routes. Even as demand for transit increases in states like Minnesota, the decline in funding is leading to major readjustments in service.

The situation is so dire in New York City – with by far the most extensive transit system in the country – that advocates used students as props to protest service cuts caused by a $400 million budget shortfall. Though transit receives funding from other sources, there can be no mistaking the key role played by motorists.

The decline in driving can be attributed largely to the economic downturn and increased unemployment, but even when the recession ends transit agencies will face an uncertain funding future. New technologies are making automobiles cleaner and more fuel efficient, which will allow people to drive more while paying and polluting less. If auto makers meet new federal standards, cars will soon be achieving 35.5 miles per gallon instead of today’s 27.5 mpg average. Economic growth continues to disperse and there has been a strong uptick in telecommuting.

But perhaps the biggest threat to the future of auto-dependent transit is the very “cause” that seeks to establish it as the preferred travel mode. The planning doctrine called Smart Growth with its rationale of sustainable development is growing in popularity in urban areas across the country. Local officials are enamored with visions of auto-light cities where the buses are full, sidewalks are crowded and there are more bicycles on the road than cars.

Beneath the appealing rhetoric of Smart Growth rests the assumption that automobiles are intrinsically bad and that public policy should be directed at restricting their use. Rarely do policymakers weigh the automobile’s many benefits and the improving technologies that are mitigating its negative environmental impact. Even rarer is discussion of whether transit can realistically match the convenience and flexibility of the automobile for both individuals and families.

Distracted perhaps by pictures of ornate transit hubs and shiny rail cars, many policy makers fail to focus on developing a fiscally sustainable plan for public transportation. They miss the fundamental problem that anything heavily subsidized –particularly in a budget constrained atmosphere – is, by definition, unsustainable. (To the extent roads are subsidized, it breaks down to about a half-penny per passenger mile; transit subsidies are 100 times more than driving subsidies.) Ideally, user fees would cover all expenses of all transportation modes, including driving.

A responsible policy goal should be for transit users to put their fair share in the fare box. However, given the current tax diversion imbalance, local officials should at least target a near-term goal for fare box recovery of 85 percent of costs instead of its current one-third average. This will reduce both their fatal auto-dependency and the instability that comes when external revenue sources are impacted by external factors like an economic downturn.

Transit agencies should also right-size their bus fleets. Despite visions of large 55-passenger vehicles filled to capacity with contented commuters, only a small portion of routes in any urban area can fill these big box buses even during certain peak times. A smaller sized fleet would be not only less expensive but also more flexible, allowing cities to adjust routes and increase headways for greater service. It would also have a smaller carbon footprint.

Finally, responsible policymakers should suspend most of their plans to build rail transit. In addition to routinely running over-budget, rail transit- outside of a few cities such as Washington DC and New York- simply does not carry many passengers relative to automobiles to justify its enormous operating expenses . The Santa Clara Valley Transportation Authority, for example, spent $55.5 million in operating expenses in 2008, recovering just $8.6 million from passenger fares and costing taxpayers an average of $5.88 per trip.

Rubber tire transit is more efficient compared to rail as a service to those needing public transportation. Santa Clara’s operating expenses per vehicle revenue mile were 25 percent less for bus than for light rail. Additionally, bus transit is far more flexible, easier to expand and less disruptive in the construction phase.

Essentially, policymakers need to see transit as a service with an important but limited role to play in most urban regions. With jobs and more activities spreading to the suburbs and exurbs – a process often accelerated by economically disruptive urban policies, cities should focus transit on a limited number of central core commuters as well as those people who cannot drive. Unfortunately, such goals are too modest for planners who envision transit as the catalyst for large scale social engineering and who have little concern for their regions’ economic bottom line.

The dirty little secret remains that public transportation would collapse without the automobile. It will remain unsustainable as long as it remains dependent on that which public policy is trying to discourage. Smart Growth rhetoric makes for great campaign literature but not for smart decision-making. Responsible officials should question the underlying assumptions about automobiles and begin reconsidering the fiscal calculus that underlies transit policy.

Ed Braddy is the executive director of the American Dream Coalition, a non-profit public policy organization that examines transportation and land-use policies at the local level. The ADC’s annual conference will be held this year on June 10-12 in Orlando, Florida.

Rebuttals

In my guest column over at NewGeography.com yesterday, I wrote in the first paragraph: “Terms like livability, transportation choice, and even ’smart growth’ enable advocates to argue by assertion rather than by evidence.”

My first critic, after first inquiring as to who my corporate backers might be, responded to my essay by claiming I was promoting a Big Oil future, which he says is ignorant (and I would agree … if that is what I was arguing for, which I was not. So portlander-in-exile says, “However, I do not believe that you are ignorant. I believe that you are being deceptive, in a deliberate fashion.”

My second critic, —–, also claims that I’m promoting a future that, in fact, I am not. He adds, “Who could possibly be for that but…real estate speculators, libertarian ideologues, and CATO funded flat-earthers?”

The obvious observation is that, in addition to pathetic ad hominem attacks, neither critic argues by evidence but merely by assertion … which is exactly the point I made up front in my essay.

Thanks for proving my point, guys!

Date: February 12th, 2010 @ 09:24
Author: Ed Braddy

COST Comments: The following article reaffirms the solid findings in many cities that land use and other regulations, generally called “Smart Growth,” have a major negative impact on housing affordability. Austin’s current trend is in the direction of increased regulation and reduced cost effectiveness for essential infrastructure which will give Austin the same increasingly unaffordable housing costs as many other cities are experiencing.

The Heavy Price of Growth Management in Seattle

by Wendell Cox
Published in Newgeography.com - Economic, demographic, and political commentary about places

Posted: 18 Feb 2010 09:30 PM PST

The University of Washington Study: Economist Theo Eicher of the University of Washington has published research indicating that regulation has added $200,000 to house prices in Seattle between 1989 and 2006. Eicher told the Seattle Times that “Seattle is one of the most regulated cities and a city whose housing prices are profoundly influenced by regulations.”

Not surprisingly, this caused consternation in the planning community, which would prefer to minimize or dismiss any negative consequences of planning regulations on housing affordability.

The Washington Chapter of the American Planning Association (W-APA) published a response. Admitting that “land use regulations do add costs to housing”, it criticizes the Eicher study for focusing “solely on cost” and ignoring how land use regulations add to the quality of life. (Note 1). A recent Washington Policy Center report provides a detailed critique of the W-APA report. This article evaluates Seattle housing affordability trends using basic price and income data and the Median Multiple (median house price divided by median household income), a standard affordability measure that has been recommended by both the World Bank and the United Nations.

How Growth Management Raises House Prices: It has been established that overly prescriptive land use regulation (called growth management or smart growth) raises house prices. As the former governor of the Reserve Bank of New Zealand Donald Brash has pointed out the affordability of housing is overwhelmingly a function of just one thing, the extent to which governments place artificial restrictions on the supply of residential land.

However, the mere adoption of growth management or smart growth polices does not increase housing costs. Where, for example, an urban growth boundary (a favored strategy of growth management) is drawn far enough from the urban area, there may be little interference with developable land values. This was the case in Portland, for example, in its early growth management days. However, as land was developed and the urban growth boundary was not moved sufficiently outward in response, land became more scarce and land prices were driven up, leading to Portland’s severe housing unaffordability.

How Growth Management Drives Up House Prices: Land prices are driven up as market participants perceive scarcity. When government policies constrict the supply of land, developers purchase “land banks” to ensure that they have access to land inventory. Without growth management, developers and builders can purchase land when they need it, because governments have not placed artificial restrictions on its supply.

In the more prescriptive environment, property appraisals rise and sellers are able to obtain higher prices because development is prohibited on most land. In short, sellers face less competition and can command much higher prices.

Sometimes growth management proponents claim that their communities have sufficient land available for building. However, the interplay between land buyers and sellers creates a rigged game that leads to higher land prices. This is obvious in everywhere from Seattle and Portland to California and Florida. In these markets, there is not a sufficient supply of “affordable land” for building. A New Zealand government’s “2025 Taskforce” found the price of comparable land to be about 10 times as high if it is inside an urban growth boundary rather than outside (essentially across the road).

Seattle’s Lost Housing Affordability Decade: During the decade of the housing bubble (1997 to 2007), the median house price increased from $169,000 to $395,000 in Seattle. In 1997, Seattle’s housing affordability was rated “moderately affordable,” with a Median Multiple of 3.3 (median house price divided by median household income). By 2007, the Median Multiple had escalated to 6.2, indicating housing unaffordability worse than any major metropolitan area between World War II and 1997. (Figure 1). Of course, other markets, particularly in California, became even more unaffordable after 1997.

Click to Enlarge

In Seattle and other more prescriptive markets, house prices exploded during the housing bubble. At the same time, many other markets experienced only modest house price increases. The easier money and profligate lending practices thus produced very different results. In more prescriptive markets, like Seattle, both underlying and speculative demand drove prices to unprecedented heights. In the more responsive markets, the generally higher underlying demand was accommodated by planning systems that permitted sufficient new housing to be built on affordable land and price escalation was far more modest (as were subsequent price losses).

New House Example: The role of Seattle’s growth management in driving up land and house prices is obvious. According to W-APA, approximately 62% of the cost of a new house in 1999-2000 was in construction costs. A new house in 1997 costing the same as a median house price would have involved approximately $105,000 in construction costs. Based upon subsequent house cost increases and the decline in house construction costs relative to the rest of the nation in Seattle, construction costs on the same house should have risen $40,000 from 1997 to 2007 (Note 2). At the same time, the median house price in Seattle increased $225,000. Less ss than 20% of the cost escalation could be attributed to construction cost inflation. Nearly $185,000 was due to other factors, principally higher land prices.

Comparing Seattle to Dallas-Fort Worth: Things were very different in more responsive markets, as is illustrated by Dallas-Fort Worth (Figure 2). Dallas-Fort Worth, now the nation’s fourth largest metropolitan area, trailing only New York, Los Angeles and Chicago has grown more than twice as fast as Seattle (21.2% from 2000 to 2008, compared to 9.6%). Dallas-Fort Worth’s underlying demand has been even greater relative to Seattle, as indicated by its net domestic migration. Dallas-Fort Worth has added more than 10 times as many domestic migrants (260,000 versus 23,000) and more than 5 times its 2000 population (5.0% v. 0.8%). Moreover, and perhaps surprisingly, the Dallas-Fort Worth urban area (along with Houston) is more compact (read “sprawls” less) than Seattle (Note 3). Finally, the share of sub-prime mortgages was higher in Dallas-Fort Worth than in Seattle.

Click to Enlarge

Yet, despite this huge demand, housing affordability has remained below the historic Median Multiple norm of 3.0. In 2007, the Dallas-Fort Worth Median Multiple was 2.7. The median house price increased $32,000 from 1997 to 2007 and more than 70% of the change was due to construction costs.

In 1997, the Seattle median house price was $54,000 higher than in Dallas-Fort Worth. By 2007, the price of a median house in Seattle had escalated to nearly $250,000 more than its counterpart in Dallas-Fort Worth (Since 2007, house prices have dropped $90,000 in Seattle and $5,000 in Dallas-Fort Worth, illustrating the more intense price volatility of tightly regulated markets. Even so, Seattle housing affordability remains materially worse than before).

Driving Households out of the Home Ownership Market: If 1997 housing affordability (using the Median Multiple) had been retained, 50% of Seattle households would have been able to qualify for a mortgage on the median priced house. However, by 2007 only about 20% of Seattle households could have qualified for a mortgage on the median priced house in 2007 at present FHA underwriting standards (Note 4).

Impact on Minority Households: The highest price, however is being paid by Seattle’s minority households (Figure 2).

§ The share of African-American households able to qualify for a mortgage on the median priced house declined nearly 70% compared to 1997 affordability (Median Multiple). At 1997 housing affordability, more than 25% of African American households would have been able to qualify for a mortgage on the median priced house in 2007. In reality, by 2007, less than 10% of African-American households could have qualified for a mortgage on the median priced house.

§ The share of Hispanic households able to qualify for a mortgage on the median priced house declined more than 70% compared to 1997 affordability (Median Multiple). At 1997 housing affordability, more than 35% of Hispanic households would have been able to qualify for a mortgage on the median priced house in 2007; by 2007 than number had plunged to less than 10%.

The High Price of Growth Management in Seattle: The 10-year trend of house prices increases in the Seattle metropolitan area supports Eicher’s analysis. We readily admit to the charge of evaluating housing affordability “solely on price.” There is still the dubious W-APA claim that land regulation adds to the quality of life. But whose quality of life? As housing affordability declines, the quality of life may be raised for some, but only by keeping others down.

——————————————————————————–

Notes:

(1) The W-APA report makes the common error of presuming that land use restraints were not a factor in the house price escalation of Phoenix and Las Vegas. In fact, the Brookings Institution ranks both metropolitan areas as toward the more restrictive end of the regulatory spectrum. These overly prescriptive regulatory environments are exacerbated by the fact that in both metropolitan areas much of the developable suburban land is owned by government, and is being auctioned, though at a rate less than demand. These factors combined to drive auction prices per acre up nearly 500% in Phoenix and nearly 400% in Las Vegas during the housing bubble. Despite their high building rates, these land restrictions denied sufficient affordable land for development to keep house prices from rising rapidly. Further, W-APA refers to Phoenix and Las Vegas as having “relatively unfettered sprawl,” yet both are more compact than Seattle. In 2000, the Las Vegas urban area (area of continuous urban development) was 62% more dense than Seattle and the Phoenix urban area was 28% more dense than Seattle (calculated from US Bureau of the Census data).

(2) There are no reliable sources for median new house prices at the metropolitan area level. Generally, however, US Bureau of the Census data indicates that in the West, the median priced new house costs have averaged 6% more than the median priced house in the 2000s. Construction cost escalation (national and Seattle) is calculated from R.S. Means Residential Square Foot Costs (1997 and 2007 editions).

(3) In 2000, the Seattle urban area had a density of 2,844 persons per square mile. Dallas-Fort Worth had a density of 2,946 and Houston had a density of 2,951. All three were relatively close to Portland (3,340), but well behind Los Angeles (7,069), which is the most dense major urban area in the nation.

(4) Estimated assuming a FHA “front end ratio” of 29%, (mortgage, property tax and homeowners insurance divided by gross annual income) and a 10% down payment. Calculated using 2007 American Community Survey income data for the Seattle metropolitan area.

——————————————————————————–

Wendell Cox is a Visiting Professor, Conservatoire National des Arts et Metiers, Paris. He was born in Los Angeles and was appointed to three terms on the Los Angeles County Transportation Commission by Mayor Tom Bradley. He is the author of “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life.”

COST Comments: The article below is a good summary of options to replace the current ‘per gallon gas tax’ system which has served to finance this nation’s roadways for more than 50 years. The curret system is not adequate to serve future needs as vehicle miles-per-gallon efficiency and the use of alternative fuels/power sources have and continue to reduce income necessary to construct and maintain roadways.

Racking up miles? Maybe not.

By Ashley Halsey III
Washington Post Staff Writer
Sunday, February 7, 2010

Within a few years, a driver who pulls up to the gas pump may pay two bills with a single swipe of the credit card: one for the gas and the other for each mile driven since the last fill-up. That may be the result of what many transportation experts see as an inevitable revolution in the way Americans pay for their highways. The flow of the gas tax pipeline that has poured cash into one of the world’s premier highway systems has slowed as some people drive less and others choose more fuel-efficient vehicles. Maintaining that aging network and tackling the rush-hour congestion afflicting most cities will require billions of dollars. As gas tax revenue dwindles, federal and state lawmakers have an option created by innovative new technology: charge the nation’s 201 million drivers for every mile they travel.

That prospect was raised last year by a congressional commission, a Brookings Institution report and a highly regarded nonpartisan transportation research group.

In 2008, then-U.S. Transportation Secretary Mary E. Peters warned a Senate subcommittee that the “fuel tax is unsustainable in the future.”

“Virtually every economist who has studied transportation says that direct pricing of road use, similar to how people pay for other utilities, holds far more promise . . . than do traditional gas taxes,” she said.

But getting the public and its elected officials to accept that idea may be a tough sell.

It is a change that could spark more debate than health-care reform, as federal and state policymakers weigh the use of pioneering technology against expected opposition from those who fear an invasion of their privacy and view paying per mile of road use as a form of taxation.

“Technology is not the limiter,” said Ginger Goodin, a senior research engineer at the Texas Transportation Institute who did a major study on pricing. “The decision is in the policy arena. It’s entirely up to lawmakers and their constituents.”

On the road to change

The need for transformation in the way Americans pay for highways is in large measure the result of what they drive and how much.

Pennies per gallon paid at the pump have provided much of the tax revenue that states and the federal government have used to build and repair 8.5 million lane miles of roadway. Since 1993, the federal government has collected a tax of 18.4 cents per gallon, while state rates range from 8 cents in Alaska to 46.6 cents in California. When the two taxes are combined, Americans pay 46.9 cents on average.

If fuel consumption drops 20 percent by 2017, a goal set by President George W. Bush, gas tax revenue will drop as well. But it could fall far faster. President Obama mandated that new cars get even better mileage — 35.5 miles on average per gallon — by 2016, and he designated $2.4 billion in grants for companies developing car battery and hybrid technology.

“As vehicles become more fuel-efficient, revenue from gas taxes falls,” said a Brookings Institution report co-authored by Alice M. Rivlin, former director of the Congressional Budget Office. “A more sustainable solution . . . is road-use pricing.”

Hybrids coming on the market soon are expected to get more than 100 mpg, and even-lighter vehicles in the near future may reach more than 200 mpg. And the plug-in Chevy Volt, expected in showrooms later this year, can go 40 miles on batteries alone. Why 40 miles? Because two-thirds of Americans drive less than that distance each day. For plug-in drivers, daily gasoline consumption will drop to zero.

By one estimate, cited in a Federal Highway Administration report, hybrids may account for 30 percent of the new cars sold within two years, and they are projected to make up 75 percent of the market by 2025.

If half of America switches from a 20-mpg car to a 50- to 100-mpg car in the next 20 years, much of the tax revenue now used to build and rebuild highways will evaporate.

The most immediate solution to the prospect of declining revenue is to increase gas taxes, but legislators need look no further than last year for evidence that when gas prices rise, people drive less. They’re also more motivated to trade sport-utility vehicles for smaller, fuel-efficient cars.

A study in Texas determined that the state might need an eightfold increase in its fuel tax to keep up, and another estimate projected that the state will face a $146 billion shortfall in 20 years unless it finds a fresh source of revenue.

A congressional commission concluded last year that the Highway Trust Fund, into which federal gas taxes flow, “faces a near-term insolvency crisis, exacerbated by recent reduction in federal motor fuel tax revenues.” After considering more than two dozen revenue options, including higher fuel and tire taxes, a federal vehicle sales tax, a driver’s license surcharge and a general federal sales tax, the commission recommended that the nation transition from a fuel-tax-based revenue system to one “measured by miles driven.”

The dramatic need to revitalize the Highway Trust Fund comes as many of the roads built during the suburban boom years four and five decades ago cry out for major overhaul. Five years ago, the U.S. Chamber of Commerce estimated that $222 billion a year was needed to maintain the surface transportation system and that annual funding was falling about $45 billion short of that amount.

‘We have the technology’

If the confluence of plummeting revenue, good roads going bad and traffic gridlock resembles the perfect storm, technology may provide an escape route.

The wizardry to switch the highway funding formula from a per-gallon tax to a per-mile tax exists.

A new device linking the technology of a cellphone with a global positioning system unit and a car’s on-board computer could be deployed within a few years, experts say.

The first big hurdle that advocates of the transition will face is selling the American public on the belief that a per-mile levy is a replacement for the tax on gasoline rather than a new tax burden.

“Most people don’t even know what they pay in gas tax or even what the gas tax is,” said Goodin, the research engineer in Texas.

With powerful interests engaged, including civil libertarians and the oil and automotive industries, this debate may become as fierce as the one over health care.

Privacy may be the single biggest issue. Even as Americans think warily about “full-body scan” technology at airports that reveals what’s beneath their clothing, many may be leery of technology that would create a record of where they drive.

Existing and developing technology gives the policymakers in Congress and state legislatures many design options, among them the pay-at-the-gas-pump model.

The easiest and most private way to tax people for the miles they drive is to check odometers. The driver knows that the count is accurate, and no one else knows where he has driven.

But there would be no way of knowing which state was owed the tax money. Washington, where commuters routinely cross state lines, is the best example. Such a move also would raise questions of fairness, because heavier vehicles use more gas and are harder on the road.

“People will ask whether a Hummer and Prius should pay the same rate,” said Martin Wachs, director of the Transportation, Space and Technology Program at the Rand Corp.

And it would defeat something called congestion pricing — the notion that people who opt to commute at peak hours or in special lanes should pay more than those who do not. Two examples are the high-occupancy toll lanes being built on the Beltway in Virginia and the variable pricing planned for the Intercounty Connector linking Montgomery and Prince George’s counties.

Another option would use a car’s on-board computer unit of the type that has been installed since 1996. The unit would keep track of a vehicle’s travels, sending the information to a government billing center either in real time via roadside beacons (they might be cellphone towers) or through regular electronic downloads.

Rates for use of different roadways and traveling at peak or off-peak hours of the day would be computed at the billing center. Use of the data also would ensure that each state received revenue for miles driven within its borders.

Customers would be able to review the accuracy of their charges on detailed bills. This approach would eliminate the expense of checking the odometers for millions of vehicles. And if data were streaming in real time, they could be used for additional features, like matching traffic signals to the flow of traffic or providing drivers advisories to help them avoid congestion.

Privacy concerns

A third option — call it the gas pump model — would have the on-board unit handle everything but the bill. The OBU would collect data, calculate the amount owed and then transmit that information. It might send it to a government billing agency or just talk to a computer in the gas pump.

“We found there was a preference for that because that’s more like what we’re doing now,” said Goodin, who has conducted focus groups on highway pricing.

The approach would provide far greater privacy, but it wouldn’t give the details that would reassure the driver that the bill was correct. It also would require that the OBUs be updated regularly as rates change or more roadways begin billing per mile.

Goodin said her focus group data suggest that some Americans might be more ready to trust a private company with their travel history than the government. In this model, that company would receive the data, provide drivers with an accounting to review and forward only the billing information to state and local taxing agencies.

Those private companies might also market additional services to customers.

“People might say, ‘I’ll take one of these units if it will give me real-time traffic info and it can be used to pay for parking, and, then, okay, I’ll pay for mileage at the pump too,’ ” Goodin said.

© 2010 The Washington Post Company

COST Comment: The article below is one of many examples demonstrating the shallow thinking of passenger rail supporters. Their logic and knowledge seems to have major gaps. This is not a solid basis for spending many billions of dollars at any time but particularly at this critical juncture in the Nation’s economy.

West can’t support high-speed rail scheme

By Vincent Carroll in denverpost.com Opinion
Posted: 12/16/2009 01:00:00 AM MST

Why in the world is the Denver Regional Council of Governments wasting time and resources on an enterprise as thoroughly deluded as the Western High Speed Rail Alliance, which formally announced its existence last week?

The brainchild of public agencies in four states — Arizona, Colorado, Nevada and Utah — the rail alliance believes “the future mobility of people and freight in the West depends on high speed rail lines.” Yet in supporting this dubious thesis in their opening press conference, officials misstated so many elementary facts as to cast doubt on whether they’d studied the issue at all.

An introductory video contained the first whopper. After explaining that in the future, “most of the fastest growing states will be in the West” — true enough — the narrator went on to claim that “for nearly a half century the primary focus for passenger rail has targeted the development and funding of Amtrak’s Eastern corridor, an area losing population.”

Says who? According to the Census Bureau, the only states that lost population this decade (through July 1, 2008) were North Dakota and Louisiana, the latter because of a natural disaster. People have been fleeing Michigan since 2005, too, but it’s not exactly in the Eastern corridor. New York and New Jersey together boasted a joint gain of more than 750,000 residents this decade, and New York still is home to more people than the total population of the four member states of the alliance.

To compound the demographic muddle, the general manager of the Regional Transportation Commission of Southern Nevada, Jacob Snow, told reporters that “our densities here in the West are very high and probably much higher than those areas referenced in much of the rest of the country.”

Seriously? The most recent Census data on densities appear to date from 2000, but they can’t have changed that much. And while Snow is right that Las Vegas’ population per square mile surpasses that of a number of cities in the booming West and Southeast, it doesn’t come close to those of old-line urban centers such as Boston or Washington, D.C. — let alone places like Manhattan, Brooklyn or Hoboken. Meanwhile, Phoenix and Salt Lake City — two of the major destinations in the alliance’s scheme — are low density by anyone’s reckoning.

High-speed rail between Denver and Salt Lake, given the geography, would probably be the most expensive project of its kind ever built and require many billions of dollars in public subsidies. Yet when asked about the economic viability of their plans to link cities in the four states, Snow blithely mentioned the profits of the Central Japan Railway Co., which serves one of the densest, highly populated corridors in the world. Sure, that’s relevant! If Snow and his colleagues are so confident that operators here can count on similar profits, why are they fixated on federal money to study the corridors?

The executive director of the Denver Regional Council of Governments didn’t help matters. Jennifer Schaufele told reporters that high-speed rail will “particularly reduce congestion in major metropolitan areas.” Is she confusing it with light rail? Is she under the impression that congestion in metro Denver is substantially caused by travelers on their way to DIA or to cities in Utah and Nevada?

The entire press conference had a surreal quality, as officials praised high-speed rail for intercity travel in a region that simply lacks the population base to support it without massive construction subsidies and, probably, ongoing ticket support, too.

With Washington sinking in red ink and metro Denver still awaiting rail lines that RTD can no longer deliver at the promised cost, the last thing this region should be touting is another project with “Financial Sink Hole” written all over it.

E-mail Vincent Carroll at vcarroll@denverpost.com

COST Comments: For many years, Portland has been pursuing a “sustainable,” high tax strategy; trumpeting trolleys, light rail trains and high density living as the approach to make Portland more livable and more prosperous. They have, finally, awakened to the fact that people and businesses have been fleeing this vision of urban utopia. It is not business friendly and people are unable to afford the dramatic increase in housing costs. Portland’s median home price is 29% higher than Austin’s as of the 3rd quarter of 2009 and the median household income was slightly less than Austin’s $59,200. Portland’s lack of affordable housing has resulted in public school enrollment declining to almost one-half of its peak. Portland’s peak enrollment was about the same as Austin’s current public school enrollment of over 80,000.

Below is an excerpt from a Portland Development Commission Request for Proposal (RFP) work statement soliciting consultants’ proposals to help them better understand why their predictions have not been achieved and why they are, instead, in a “melt down.” Major reasons for this Portland situation seem rather obvious when compared to other cities with similar fantasies of “Smart Growth”: draconian land use controls designed to force high density drive up development and housing costs; and, wasteful spending of billions of transportation dollars on ineffective trolleys and light rail trains degrade overall mobility. Quality of life suffers as it is directly linked to mobility and housing affordabilityj.

We hope Portland hires a consultant which tells them the truth and not the typical consultant in this area which tells you what they want to hear.

From Portland’s RFP:

3.2 CONTEXT AND PROJECT BACKGROUND

The city of Portland, Oregon (the “City”) recently completed an Economic Development Strategy1 (the “Strategy”) guiding business development for the next five years. The Strategy is meant to inform investments and guide strategic initiatives related to business attraction, retention and growth. The overarching theme of the Strategy is one of sustainabiity, with the ultimate goal of creating the most sustainable economy in the world.

The Strategy makes clear that while Portland has excelled at creating an enviable quality of life, it has lagged in economic growth. The structure of Portland’s economy causes it to be more vulnerable to declines in consumer spending, business investment and international trade than the nation as whole, and lags peer cities such as Seattle and San Francisco in job creation and wages. Portland’s unemployment rate exceeded 12% in Maech 2009, far above the national average of 8.5 percent, and the number of unemployed persons has more than doubled, from 60,000 to 140,000 over the past year.

Even during periods of strong regional employment growth, the city consistently lags in jnh creation; and the job growth occurring in the region happened outside downtown Portland. Between 1998 and 2006, the percentage of regional jobs located more than 10 miles from downtown increased from 23.8% to 29.4%. Over the same period, the percentage of regional jobs within three miles of downtown decreased from 27.4% to 23.4%. With the region’s workforce expected to grow at 2.4 percent annually — about six times faster than in the nation as a whole, even in the face of job declines - the need for job growth will become even more pressing.

Through the course of developing and implementing the Strategy it has become increasingly clear that entrepreneurship is a key driver of the local economy, and has the potential across industries to play an even greater role in job creation. Over 95% of Portland’s businesses have less than 50 employees, and the majority of new jobs are created by small firms either opening or expanding. Measured by new business formation, the Portland metropolitan region is ranked sixth nationally for entrepreneurial activity2.

Understanding the dynamics of the entrepreneurial community in Portland can help inform policy and initiatives for maintaining and growing the city’s status as a pioneering place for business. In particular, it is important for the city to identify and track entrepreneurial activity so that it can effectively respond with the proper planning and resources for continued entrepreneurial vibrancy.

To better understand the factors influencing entrepreneurship in Portland, through this RFP, PDC is commissioning a study to detail the state of entrepreneurship in the region (the “project”). The project is intended to inform and energize the conversation about entrepreneurship in Portland and detail how the City, through its economic development efforts, can better support entrepreneurial development and activity. The project should include appropriate data to demonstrate the impact of entrepreneurship on the Portland economy, and serves as the ——–

1. See http://www.pdxeconomicdevelopmentcom/docs/Portland-Ec-Dev-Stratesv.pdf
2. The US. Small Business Administration ranked the Portland MSA 6thin the nation among large MSAs for entrepreneurial activity (Entrepreneurship in Silicon Valley During the Boom and Bust, Small Business Research Summary, SBA Office of Advocacy, March2007).
_____________________________________________________________________________________ RFP 09-28 Page 5 of 26

Below is a letter, by Jim Skaggs, to the Editor of the Austin Chronicle

Dear Editor,

I applaud Lee Nichols’ article: http://www.austinchronicle.com/gyrobase/Issue/story?oid=oid%3A940810
Can’t Get There From Here” [News, Jan. 22]: Cap Metro’s misguided direction has made a mockery of Austin’s stated objectives for social equity/justice. The commuter train decision was a disaster because it diverted massive resources to serve 1,000 daily train riders who mostly have cars, while degrading service for 40,000 daily bus riders, who mostly have no choice.

The high cost of the commuter train also deferred implementation of a network of Rapid and Express bus routes which should be running now, according to Cap Metro’s “All Systems Go” promises. The first Rapid Bus (North Lamar-South Congress) alone would have substantially improved transit for up to 10 times as many people as the commuter for a fraction of the cost. In fact, many commuter train riders are better served by the Express bus routes which have existed for years.

Considering Cap Metro’s massive cost overruns on the train’s implementation and operations, taxpayers will subsidize every daily, two-way rider on the train by an average of $15,000 per year and a rider from Leander-Austin by about $30,000. This is 10 times the subsidy of a bus rider. There are no societal benefits from this and a negative net impact: Congestion and pollution are increased, hazards are created, flexibility is greatly diminished, and social equity suffers as overall transit is degraded with increasing fares and reduced service.

Some people would be embarrassed, but it would clearly be better if Cap Metro stopped the commuter now, avoided bankruptcy, and focused on providing the most effective transit for available resources. There is a limit to tax dollars and dollars spent unwisely cannot be spent to serve the community’s greater good. Cap Metro’s 10-year trends of decreasing ridership and increasing costs are not sustainable and will lead taxpayers, transit riders, and transportation to further suffering.

Jim Skaggs

Coalition on Sustainable Transportation

The following letter was mailed to Senator Kay Bailey Hutchison on February 3, 2010.

Gerald Daugherty and Jim Skaggs
Austin, TX

Senator Kay Bailey Hutchison
961 Federal Building
300 East 8th Street
Austin, TX 78701

February 2, 2010

Dear Senator Hutchison:

We share respect for your dedication and many accomplishments in your long service representing Texas as US Senator. It was a great disappointment that your campaign chose to substantially misrepresent and distort the characteristics and value of toll roads, casting them as liabilities to society rather than positive assets which have proven to be one of the important elements in addressing our growing mobility needs. Increased mobility has been directly related to improved quality of life for many hundreds of years. Today, mobility is vital to many aspects of our daily lives including access to affordable homes and greater opportunities.

We understand you may be influenced by your campaign’s perception of “political” necessity. However, you are highly regarded and your misrepresentation and influence will mislead many people. This will degrade or impede the future progress of many who have worked so hard to improve mobility in our communities. Contrary to your TV ads, the current toll roads in Central Texas are not converted tax roads and do not represent “double taxation.” In many cases, toll roads are funding additional “free” road lanes which are substantially improving mobility for both those who choose to use toll roads and those who choose to not use toll roads.

To a great extent, Mobility throughout the US has been dramatically degraded by governments at national, state and local levels continuing to divert greater portions of highway fund dollars to other uses. At the national level, some 20% of the highway gas tax funds are diverted to public transit and earmarks. At the Texas State level, about 50% of gasoline tax revenues are diverted to other uses such as education. Clearly, it would be more constructive to apply all highway funds to highways and to more directly address the funding issues of other needs.

These fund diversions and the continuing decline of gas tax revenues per passenger mile, due to greater vehicle efficiency and alternative fuel/power, coupled with no increases in per gallon gas tax amounts, have reduced roadway funding to an unsustainable level that cannot support needed mobility infrastructure.

As we have seen here in Central Texas, government and privately funded toll roads have played vital roles in partially filling the gap created by depleted roadway tax funds. These toll roads have dramatically improved the quality of life for hundreds of thousands of people. Citizens have voiced their acceptance by acquiring toll tags for more than 50% of the registered vehicles residing in toll road served areas.

It would seem ill-advised to prohibit foreign investments from supporting needed mobility improvements if this is the most cost-effective alternative available and U.S. firms choose to not bid, or, are not competitive. If sound contracts are constructed to protect US toll road users, competent companies headquartered in many foreign countries are acceptable to provide the needed capital investment. The foreign firm leases the land or the right to operate the toll road but does not own a single square foot of the American roadway. For many years, the US was a dominant provider of foreign infrastructure in major industries throughout the world. Boeing is the top US exporter and maintains a major share of the world commercial aircraft market. Should foreign customers have rejected the US?

We urge you to assure campaign statements regarding mobility are accurate and that they support mobility improvements which are so vital to all citizens.

Sincerely,

Gerald Daugherty Jim Skaggs

In some corridors, ‘high-speed’ rail won’t be much faster than trains in the 1930s.

Published in Wall Street Journal, Online Opinion Journal
REVIEW and OUTLOOK JANUARY 31, 2010, 7:16 P.M. ET

By WENDELL COX

On Thursday the Obama administration awarded $8 billion in stimulus funds to plan and build high-speed rail projects in California and Florida, and for other routine passenger-rail projects masquerading as high-speed rail. This is a political plum to the states that will receive the money.

It is also a dream come true for fans of bullet trains in Japan and Europe and the faster, greenhouse gas-belching Mag-Lev (magnetic levitation) lines. But this is not money well spent.

Supporters say high-speed rail is a cost-effective, “green” solution to airport and highway congestion. In reality, it is costly to build and operate and has a negligible impact on highway and airport traffic. High-speed rail is driven by little more than a romantic notion to confer a European ambiance on American cities.

Proponents also claim that high-speed rail is profitable, but this too is off the mark. Internationally, only two segments have ever broken even: Tokyo to Osaka and Paris to Lyon.

Ridership in these markets has been bolstered by high gasoline prices and one-way highway tolls of $40 and $100, respectively. These and other foreign routes have attracted much of their ridership from a strong core of rail passengers that does not exist in the U.S.

The administration is giving California $2.25 billion for trains that are expected to reach 220 miles per hour between Los Angeles and San Francisco. The cost of building this rail line is now estimated by the California High Speed Rail Authority to be more than $40 billion and could be $60 billion or more.

Even after adjusting for inflation, the projected cost of the system has increased by half over the original cost in the past decade. Ridership projections have also fluctuated wildly, from as low as 32 million annually to nearly 100 million; now the rail authority estimates the train will carry 41 million passengers each year.

High-speed rail does little to unsnarl traffic jams because most highway congestion is within urban areas, not between them. It also has negligible impact on airport congestion. The world’s strongest high-speed rail market, Tokyo to Osaka, is also one of the world’s largest airline markets. Even with high-speed rail, there is still frequent air-shuttle service between Paris and Marseille.

Environmental claims are misleading. Using California High Speed Rail Authority’s data, Joe Vranich and I estimated that the California system would reduce the emissions of greenhouse gases, such as CO2, at a cost of $2,000 per ton. The Intergovernmental Panel on Climate Change estimates that we should be able to meet its greenhouse gas targets by spending $50 or less per ton.

The administration is planning on giving Florida $1.25 billion to build a Tampa to Orlando high-speed rail line. The train on that route is expected to hit speeds of 160 mph and to make a trip between the two cities in about 45 minutes.

This will be helpful if you happen to live in the Orlando Station and have business in the Tampa Station. But most travelers will be better off driving.

It’s about 90 minutes by car, though it can be less depending on your home and destination. Once you factor in the time it would take to travel to the station, park, walk to the platform, and wait for the train to depart and also pick up a rental car on the other end, driving would probably be faster.

Other rail projects aren’t much better. One project involves a line connecting Portland, Ore., and Seattle, Wash. The administration wants to spend $600 million on the line to shave about 10 minutes off of a three-and-a-half hour trip (which it would do by raising average speeds to 51 mph, from 49 mph).

In the other corridors where the administration plans to spend money—such as Charlotte to Raleigh and Chicago to St. Louis—projected train speeds won’t be much faster than what the fastest trains in the 1930s were able to do. Some trains then topped 80 mph. As a result, car trips will normally be as fast door to door, and they will be far less costly than taking the train and then renting a car.

There is no need to subsidize intercity travel. Flyers pay for virtually all of the costs of running the airline system, including airports and air traffic control. Gasoline taxes and highway tolls built and maintain intercity roadways, and they also support mass transit with $10 billion in subsidies annually. Intercity buses require no taxpayer funds.

Only rail requires heavy subsidies. At the end of the day, the great danger is that true high-speed rail could cost taxpayers even more than the tens of billions in subsidies that have been paid to Amtrak since the 1970s.

Mr. Obama said in Tampa last week that we are “falling behind” other countries in high-speed rail. With a record budget deficit, it makes sense to fall behind in spending on high-speed rail that we don’t need with money we don’t have.
———————————————————————————

Below are comments in addition to the WSJ article above:

OPPOSITION TO HIGH SPEED RAIL GROWS
by Wendell Cox 02/02/2010

The St. Louis Post Dispatch characterizes high speed rail as a “bridge to the 19th century,” in noting its opposition.

Significant community opposition is developing. Within the last 10 days there have been community and neighborhood protests against new high speed rail lines in France, Italy, Spain and Hong Kong. Further, opposition to the greenhouse gas belching Mag Lev (magnetic levitation) extension from Shanghai to Hangzhou (China) has blocked that project. There is a burgeoning opposition to the swath that high speed rail will cut through the communities on the peninsula south of San Francisco.

*A traveler using high speed rail from Orlando to Tampa who gets caught at a rental car counter line might not save any time over driving even if the train reached the speed of light.

The biggest problem with high speed rail is that it requires huge expenditures of public funding in a market (intercity passenger transport) that does not require subsidies. Much of the impetus comes from generous donations to political campaigns by vendors who live off public funding and by a naive cadre of virtual sheep who believe anything that runs on rails walks on water.

Mr. Cox is principal of Demographia, a consulting firm based in St. Louis. He served on the Amtrak Reform Council from 1999-2002 and is co-author with Joseph Vranich of the 2008 Reason Foundation study. “The California High Speed Rail Proposal: A Due Diligence Report.”