Friday photo: DMU in Trenton

Hello DMU - NJ River Line

Look, an LRV with no catenary! The diesel powerplant in the middle (note the stained exhaust vents) produces its characteristic vibration and noise, and unlike a commuter train, the passenger compartments are all subjected to it. It’s also definitely slower; by one calculation, an electric LRV could do the same route 18% faster. It seemed out of place in the urban centers on either end, but more appropriate in the suburban villages in between.

These might be appropriate for other “interurban” lines with wide stop spacing and relatively low station-area densities. Given that most suburban areas are already arrayed along roads rather than rails, and that the train isn’t much faster than a bus, perhaps this isn’t the panacea for suburban transit.

DC will not become ‘like Amsterdam.’ It’ll be better.

District of Columbia Mayor Muriel Bowser said this week “that the District will not become ‘like Amsterdam,’ as though being ‘like Amsterdam’ would be a bad thing,” says a blog post by the Netherlands Embassy.

The embassy backed up their umbrage with a stylish infographic showing off several metrics where Amsterdam handily surpasses the District — particularly in transportation choices, as Amsterdam offers its current residents more waterways, more bikeways, and more streetcar lines.

For one point, the infographic concedes that the District is bigger and better than Amsterdam: Washingtonians can now legally possess over 11 times as much marijuana as Amsterdammers. But since the Netherlands has more permissive laws regarding the retail sale of marijuana than the United States, many visitors (like, perhaps, Mayor Bowser) instinctively use “Amsterdam” as shorthand for a place with libertine drug laws. (Dutch society has a long history of taking a uniquely hands-off approach to social policy.)

On several other points, though, the infographic shows that although DC isn’t quite there yet, we’re well on our way. DC already has ambitious plans to beat Amsterdam on two points: the Sustainable DC Plan projects another 250,000 Washingtonians, for a total of 868,000 to Amsterdam’s 810,000; and the Move DC plan has plotted out 343 miles of bikeways, including 72 miles of Dutch-style protected bike lanes, which easily beats the mere 250 miles of bikeways in Amsterdam.

DC is also making significant progress in closing the 12-museum gap with Amsterdam. With an evergrowing number of museums here, DC is well on its way to overtaking Amsterdam in this particular metric. (I don’t have statistics handy, but it seems likely that DC has fewer but larger museums, which probably have an edge in terms of collection size and total visitors.)

On two other metrics, though, we have a long way to go. At the current rate of construction, it will be a while until DC manages to build its 16th streetcar line — but note that the Dutch embassy conveniently doesn’t count Metro lines, as DC boasts six to Amsterdam’s five (almost), as construction on their north-south line is almost as delay-prone as our streetcar.

The yawning gap between the two cities’ canal networks is only half as dire as the Dutch say. Yes, Amsterdam has 165, but DC actually has two operating canals, not one: The embassy may have been confused by the name of Washington Channel, which is a brackish waterway built to drain tidal flats and to keep open a shipping channel. In other words, it’s hydrologically far more similar to Amsterdam’s canals than the freshwater C&O.

In any case, I’ll concede that more of Amsterdam is below sea level than Washington. In an era of rising sea levels, though, that’s probably not something worth trumpeting.

Shorts: Critical Masses

Critical Mass I Ching

A few short topics for January, all around the theme of achieving critical mass in three very different markets for metropolitan services.

1. Nathan Donato-Weinstein, reporting for the Silicon Valley Business Journal about Google’s October purchase of buildings along San Francisco Bay:

Google — which like many expanding tech companies is focused on reducing its car and shuttle trips as traffic worsens during the current boom — may be eyeing transit options beyond freeways. Pacific Shores is a half mile from the Port of Redwood City, where a Google pilot project earlier this year tested running ferries from San Francisco and Alameda to the port. The Water Emergency Transportation Authority, which administers the San Francisco Bay Ferry routes, has studied regular public ferry service to Redwood City, with a potential public terminal practically next door to Pacific Shores.
“I know they really liked the ferry and the concept. Their challenge was getting people off a boat and putting them on a bus to Mountain View, and that was taking 25 minutes,” said Kevin Connolly, director of planning and development for WETA. “This might be one way to address it.” […]
A Redwood City terminal would cost about $15 million. But the county doesn’t have ongoing operational funding, Connolly said.
A major built-in user such as Google could help make service pencil out, he said.

I’ve written critically about the peculiar geometries (and thus poor economics) of water taxi transit before. Having high-density development built on landfill immediately adjacent to a deep-water port certainly solves some of those problems — but a ferry does need at least two ports. However, most other Bay Area jurisdictions have incredibly restrictive development policies along their waterfronts, and many of the Bay Area’s most desirable residential areas are well inland (and atop hills, in fact).

Perhaps last-mile bus service would supplement a 101-bypassing ferry on one or both ends. That adds in the time and hassle of a transfer; when combined with a lower peak speed (around 40 MPH) and increased susceptibility to inclement weather, it’s tough to see how it would be a faster, more reliable, or more fuel-efficient option. (2008 figures submitted to FTA, as reported by Wayne Cottrell in Energies, indicate that ferry operators in the USA have a median fuel economy of about 10 seat-miles per gallon of fuel.)

2. General Growth Properties plans a $2 billion investment in street retail, ultimately aiming to have 15% of its portfolio invested on high streets in the principal gateway cities of NYC, Chicago, Miami, Boston, DC, SF, and LA. Even in these high-rent areas, GGP sees “assets with significant unrealized growth potential,” with below-market rents and under-used vertical space.

General Growth Properties investor presentation slide

Many office REITs have focused on CBD office, but these properties have historically been neglected by large retail REITs. Adjacencies matter much more with retail than with office, which creates a “commons” problem that undermines streets with fragmented ownership.

GGP has hinted at two approaches to circumvent this. Like Acadia Realty Trust (an exceptional retail REIT that has redefined itself as a high-street owner), it might hope to aggregate enough properties to create its own mall-like ecosystem, and thus internalize the external benefits of its investment. GGP’s first big investment, an equity stake in the Miami Design District, certainly has that advantage. However, the DD is a singular example unlikely to be replicated elsewhere, so it appears that GGP will instead have to rely upon its high-rent neighbors to similarly aggressively upgrade their properties.

This could be a long waiting game, though, since a lot of urban property isn’t owned by others who need the same quick upside that a REIT does. Micah Maidenberg quotes a skeptic in Crain’s:

“The street-retail business, just like luxury hotels and other sorts of high-end projects, tend not to be a quarter-to-quarter-growth kind of business. It’s more of a long-term hold,” says Jeffrey Donnelly, a managing director at Wells Fargo Securities in Boston.

3. Two few weeks ago, I was visiting my parents in North Carolina and feeling under the weather. While looking up my out-of-area health care options, I came across an instructive article in Milbank Quarterly (by Daniel Gitterman, Bryan Weiner, Marisa Elena Domino, Aaron McKethan, and Alain Enthoven) about why Kaiser Permanente’s integrated group medical practice failed in the Triangle — where I’d previously been a satisfied customer.

My main takeaway from the case study was that, while “prepaid group practices” like Kaiser or GHC in Seattle (not to mention vertically integrated government systems like the VA) do offer tremendous cost efficiencies, they also rely on economies of scale that are difficult to set up from scratch.

The article estimates that KP’s break-even point is around 100,000 members in a metro area. That figure would have been a huge ask, given that the Triangle’s population was well below a million at that time, and spread out across a broad area. KP needs that kind of scale to build bargaining power, both:
– on the cost side, when bringing services in-house (the essential feature of their cost-containment model) or bargaining with hospitals and specialists; and
– on the revenue side, when selling their product to employers and employees who have to be sold on a choice that (a) most would find less convenient and (b) involves disrupting the “stay with my doctor” inertia many customers have.

It’s not a coincidence that prepaid group practices are best established in markets where either government employees or unionized employees bulk-purchase healthcare services. But HMOs are beginning to re-emerge now that the Triangle is bigger and denser, the ACA exchange has made the health insurance market less fragmented, and more doctors have organized into group practices linked to specialists via electronic health records. One new option in this year’s ACA marketplace for North Carolina (and especially valued, since last year only NC Blue Cross participated in the marketplace) is Coventry’s CareLink HMO, which uses Duke Medicine’s primary care network as the in-house practice.

Majority rule, minority rights — or Moses and NIMBYs

Terror alert

I snarkily wrote up a little headline last Monday: “Belmont Bypass’ Immediate Neighbors Slam Outreach, Will Vote On Keeping Bottleneck.” Then Daniel Kay Hertz wrote a somewhat fuller reponse, pointing out that a few people would vote on a project that impacts rail service for hundreds of thousands.

(Not surprisingly, the referendum failed, with 583 votes against. In June 2014, the three rail lines that would benefit from the bypass carried 6,353,313 passengers.)

Many broadly beneficial, but locally detrimental, projects are subject to being torpedoed by hyper-local concerns. As with any Locally Undesirable Land Use (LULU), the benefits are broadly distributed but the costs are highly focused. Many will gain a bit, but the benefits are in the distant future and somewhat speculative, so the issue has soft salience to the majority. On the other hand, a few will lose a lot, so those loss-averse few have a strong incentive to fight tooth and nail against threats to their homes. It’s just human nature.

Later comments directed at both Hertz and I raised the specter of Robert Moses bulldozing East Tremont for the Cross-Bronx Expressway. Yes, there are some surface similarities: properties expropriated for a transportation improvement. Yet these projects differ incredibly, not just in what is being done, but more importantly in how they are done.

A new highway arguably fails a cost-benefit analysis once social costs are calculated: It exacts leviathan costs, from destroying communities to contributing mightily to destabilizing the planet’s climate. (This probably even applied in Moses’ era, before thousands of miles of highways were built, subjecting further investments to the law of diminishing returns.) A new transit connection has a much better balance sheet. The Belmont Bypass has particularly high leverage, since it finally unleashes the bottlenecked potential of the miles of four-track structure beyond it.

More important is how the project is executed. In a democracy, the majority rules with respect for the basic rights of the minority. Moses infamously low-balled property owners when seizing land, and paid tenants (and rent-controlled tenants in an era of high housing inflation arguably hold a claim resembling property) almost nothing; such expropriation is clearly contrary to the Fifth Amendment or to the UDHR‘s Article 17.

Several property owners stand to lose their property to the Belmont Bypass. In such a high-profile situation, which public opinion broadly in their favor and multimillion-dollar properties on the line, I imagine that this group will receive just compensation — quite unlike the residents of East Tremont, who were largely ignored by the press, whose cries for help went almost entirely unheard by their legislators, and who lacked funds to file lawsuits.

Yes, a slightly larger population will be inconvenienced by construction for a few years, and this crowd appears to have provided most of those damning 583 votes. While pollution, even non-toxic pollution such as carbon, can justifiably be construed as violating others’ right to life, the noise and dust from construction can be mitigated to a significant extent.

In short, the substantial benefit that the majority will derive can justly be seen as outweighing the relatively minor rights claims in this instance, and the comparison to Robert Moses is spurious.

Of course, it’s rare for citywide transit agencies to make decisions at the hyperlocal level. Yet it’s absolutely typical for decisions to be made about permitting additional housing at almost a parcel level; in that case, the marginal benefit to other regional residents is so marginal as to be doubted entirely. Yet affordable rentals, in particular, are a LULU that local NIMBYs have successfully engineered the regulatory regime to discriminate against. Ryan Avent writes in the Economist: “The benefits and costs of population growth occur in a way that practically guarantees highly restrictive building rules.” Michael Lewyn takes the view that “cities cannot be trusted to weigh the citywide interest in new housing against neighborhood concerns… the chances of abuse are simply so high that a higher authority must step in.”

Industrial change created a peaking problem for Chicago transit

[An entire month without blogging — let’s fix that. This post started with a Twitter conversation about the unusually low peaks in how Montreal schedules its Metro trains, perhaps because it’s not as 9-5 as other cities. A note about the charts: it turns out that I can’t embed Datawrapper charts on, so the ones below are screen caps. Just click on the chart to go the original chart and see the source data.]

Along the lines of “the best transportation plan is a land use plan,” sometimes land use changes can impose huge costs upon the transportation system. As an example, let’s examine how industrial change in central Chicago triggered vast, and costly, shifts in how the CTA arranges its services.

Chicago skyline in 1970


Chicago skyline in 2010 (slightly narrower view)

Popular perception understandably saw downtown Chicago as a boomtown: Enough skyscrapers were built to house all of downtown Philadelphia’s offices, plus all of Glenview or Moline’s residents. Within the high-rises, private-sector office jobs (in business services and finance) grew by 53%. Yet the total number of jobs in Chicago’s Central Area (source) grew surprisingly little in the 1980s and 1990s — by just 10.4%.

The growing skyline masked a sharp decline in nearby industrial jobs. Together, the manufacturing, transportation/utilities, and wholesale sectors lost 42% of their center-city workforce. This bifurcating job market, common to many deindustrializing American cities but occurring on an leviathan scale in Chicago, exacerbated the city’s social divides, plunging some neighborhoods into despair and richly rewarding areas just blocks away.

This tremendous economic shift remade the paths of Chicagoans’ daily travel, and to a large extent demanded a reconstruction of the city’s transit system. Despite the Loop’s triumphant skyline, everyday Chicago was for many years a collection of factory towns stitched together along streetcar seams. The factories lined up along the various rail or river routes leading into the city, and the high-level services they required were provided downtown, but their workers came from all over. Terry Clark writes in the essay “The New Chicago School”: “immigrants naturally lived in neighborhoods where they could talk, eat, relax, and worship with persons of similar national background. They would commute even to distant factory jobs to preserve this neighborhood-cultural-ethnic heritage.”

Since so much employment was at three-shift, all-day factories, service levels were remarkably consistent throughout the city and the day; that combined with the city’s grid to create the gridded bus network we all know well. The comprehensive transit system even worked overnight: The 1957 route map lists 69 surface routes and nine elevated lines running all night. Yes, the “L” system did its work of shoveling people into the congested Loop, but even there it only carried 25% of all transit passengers — even to downtown, 75% arrived via the surface lines.

Just like manufacturing, transit is also a capital-intensive enterprise, and having steady ridership all day/all night makes sure that the equipment (and labor) is optimally used. There’s no need to buy streetcars and pay drivers just to shuttle one giant crowd in at 8 AM — and then keep the fleet parked until they leave at 5 PM. Also, it’s all-day transit, not peak service, that enables urban life: as Jarrett Walker writes, “Low-car or no-car lifestyles, in turn, mean that transit has to be available for many of life’s purposes, not just the peak commute.”

The deep spiral of deindustrialization that I mentioned above also changed where and how Chicagoans commuted. Instead of dispersing themselves across the city at all hours of the day — a flow that became better suited to driving anyways — people began piling onto Loop-bound trains for 9-to-5.

Commuter trains always ran highly “peaked” service, with many more vehicles during rush hour, but these services’ peaks have dramatically grown. The commuter line from Hyde Park to the Loop used to run a 2:1 ratio of peak : midday trains in 1939; now that’s a 7:1 ratio.

Bus ridership, particularly crosstown, dropped off — setting off a vicious cycle of cuts (chronicled by Joshua Mason and Graham Garfield) that reduced crosstown bus service to a shadow of the former streetcar empire. Today’s route map counts a mere 17 all-night surface routes; three-fourths of the corridors that used to have nighttime transit now don’t.

Yet parking buses overnight is relatively easy to do, even though idle capacity is expensive in the long run. What’s been much more difficult, and costly, is adding new capacity to accommodate the ever-larger rush hour crowds, particularly for the growing (Loop-centric) rail system and commuter express buses. Already, CTA spent $530 million on the Brown Line Capacity Expansion Project, which increased train lengths by one-third, and more recently spent over $1 billion on a train order that increased its fleet by 17%. Many of its other planned capital projects, like rebuilding the North Side Main and untangling Clark Junction, will also sink huge sums into upgrading the system to accommodate rush hour crowds.

A small countervailing trend has more recently emerged, though. The city as an entertainment destination — as a site of 24-hour consumption, rather than production — has pushed the system to slightly extend evening hours. That said, the efforts will always pale in comparison to the overnight network that once existed, serving not the few who partied all night, but rather the many who worked all night.

Lumpiness: in cities’ property values, and in metro structure

Two only tangentially related thoughts on lumpy growth:

1. Richard Florida in The Atlantic Cities was one of the few major outlets to cover a report from the Demand Institute (a collaboration between Nielsen and The Conference Board) called “A Tale of 2000 Cities.”

The top 10% of American cities account for more housing wealth than the next 90%. The gains in the 2000s were tilted towards the already wealthiest communities.

The report includes an extensive look at a typology identifying nine types of American communities primarily by the strength of their local housing markets, post-recession. In keeping with the name, the results show a striking divergence, with a select handful of healthy markets sweeping up much of the gains — and leaving half of American cities and towns “currently facing fundamental economic pressure.” The report’s summary says: “In today’s global economy, nothing is more important than the strength and sustainability of the local labor market, regardless of whether employers are serving customers in Chicago, Chile, or China.”

If anything, today’s telecom-centric, information economy has resulted in the geography of opportunity getting lumpier, not more diffuse as earlier expectations had predicted — “reports of the ‘death of distance’ have been much exaggerated.” We telecommuters haven’t all decamped to mountaintops. The most valuable places are becoming even more so: they account for not only an outsized share of wealth but also the gains of recent years.

The underlying economic reality, that human capital is what drives most prosperity today, is why I differ from my colleagues who believe that “investment ready places” can thrive based on previous investments in capital goods like housing.

(I’ll have more thoughts in a later post about how macroeconomic changes, and in particular greater economic inequality, have left their mark on “gateway cities.” In the meantime, I highly recommend Ryan Avent’s ‘The Spectre Haunting San Francisco,’ which ties in man-of-the-moment Thomas Piketty as well.)

On another note, the report also has a good omen for suburban retrofits in “favored quarter” suburbs, in the form of an interesting but familiar disconnect between housing supply and demand in “Affluent Metroburbs.” 58% of housing stock in these communities is detached, “but fewer than half [of those seeking to move] say they are seeking a detached single-family home, compared with a national average of 60 percent.”

Among residents of “historic skyline cities,” a broad category that includes both healthy and less-healthy cities, there isn’t exactly a stampede to the exits. 54% of those who intend to move still “intend to stay in an urban area,” and “nearly one in five” wants to move for better schools (hardly the unanimity some cry about).

2. Alon Levy has a great post about how, on a macro scale, the gridded West has a suburban layout that fosters high-coverage bus networks, whereas more organically settled Eastern suburbs have a dendritic, hub-and-spoke layout that lends itself to commuter rail. (Yes, he points out that Johnny-come-lately Washington has, through Metro, grown into the latter pattern.)

This might go some way towards explaining “the Western Paradox” in Brookings’ findings regarding transit access to jobs. In short, Western cities (particularly in the desert southwest) had a strange spread: many jobs were technically accessible by transit, but low transit-to-work mode shares. The highest mode shares were found in older eastern cities, where a large fraction of suburban service jobs are inaccessible by transit.

How would a carbon tax affect DC?

Nature's fuel

The right thing in climate policy for all the big countries is a carbon tax, which is simpler and less vulnerable to fluctuations in emissions than cap-and-trade schemes.” – The Economist

A recent discussion spawned the idea of implementing a carbon tax within DC, and so I wrote up this brief.

What and whom would a carbon tax affect?
A carbon tax, technically a tax upon the carbon content of energy and fuels, would primarily affect electric generation, gasoline & diesel, and heating fuels (natural gas, fuel oil). A narrower tax could affect only fuels, or electricity. The UK’s carbon tax, for instance, taxes various energy sources at differing rates.

Who consumes energy in D.C., and how?
The EIA reports that DC’s total energy consumption is 70.5% imported electricity, 18.7% natural gas, 7.9% gasoline, and 2.7%fuel oil. 66.3% of energy is consumed by the commercial sector (i.e., offices), 19.9% by residences, 12.1% by transportation (i.e., cars & trucks), and 1.6% by industry.

Of carbon emissions within DC proper in 2010, natural gas was 54.6% and petroleum 45.2%. Because DC imports all of its electricity, it has the least carbon intense economy among the states, emitting 91.6% less CO2 per dollar of GDP than the US average. This does not, however, include fuel burned for electricity used by DC end users; 59.2% of DC electricity originated from fossil fuel generators.

Have carbon taxes been implemented elsewhere?
Yes, several jurisdictions have. Finland and Sweden were first, in 1990 and 1991. In North America, the provinces of British Columbia and Quebec have carbon taxes, as does the city of Boulder (on electricity only). Dozens of multinational corporations, including most oil majors, use an “internal carbon price” to evaluate corporate decisions: ExxonMobil’s is $60/ton.

How have these fared?
British Columbia’s carbon tax, unique in its broad reach even though the province works within the framework of a high-carbon-emitting country, “has been remarkably effective in reducing fuel use, with no apparent adverse impact on the province’s economy,” according to a University of Ottawa study. GDP growth paralleled Canada’s, income tax rates fell to the lowest nationwide, and fuel consumption fell by 17.4% per capita.

Have carbon taxes been proposed in U.S. states?
A bill has been introduced in the Massachusetts legislature, and a ballot measure is currently collecting signatures. In Washington state, Governor Jay Inslee has specifically directed a legislative commission to study a carbon tax, and an NGO has proposed draft legislation.

What level of tax would be appropriate?
An easy guideline for measuring the impact of a carbon tax is that a tax of $1 per ton of CO2 results in just less than 1¢ in tax per gallon of gasoline. DC’s current gas tax rate of 23.5¢ per gallon thus implies a tax rate of $27.98/ton of carbon dioxide. (Maryland’s gas tax is now 27.1369¢, equal to a $32.31/ton carbon tax.) This rate is very similar to the C$30/ton that British Columbia charges, and near the midpoint of the $5-65/ton “social cost of carbon” price suggested by the White House.

Where do proceeds of carbon taxes go?
In most cases, as in British Columbia, carbon taxes are a “tax swap,” whereby other taxes — notably on income, capital, etc. — are reduced. Some bills, like that proposed by Citizens Climate Lobby, feature a “dividend,” or direct rebate back to taxpayers. Sometimes, climate actions are funded with a portion of proceeds as well; the Massachusetts bill, for instance, directs $90 million in revenue towards transportation debts and 10% to clean energy. In DC, ambitious plans have been launched, but not yet funded, for transit expansion (by WMATA and DC) and for cutting emissions, and a carbon tax would be one way of funding implementation of those plans. (Boulder’s tax was implemented to fund its climate action plan.) In addition, DC currently pays its annual operating subsidies for both WMATA ($275 million in FY2014: $58M bus, $42M rail, $22M paratransit) and DDOT transit out of general funds, and a carbon tax could be a stable, dedicated source of transit operating funds.

Who are winners and losers?
A carbon tax that includes electricity would have a much broader base and thus wider impact. It would primarily affect the office sector, and as such mostly commuters, but it might also attract Congressional attention. A carbon tax solely on fuels would mostly impact building heating/cooling; again, this would largely fall on offices, but also on DC residents’ heating bills.

Although a carbon tax typically is somewhat regressive, there are many ways to design a carbon tax to mitigate impacts on lower income consumers. In particular, a DC carbon tax could use targeted measures to offset higher home heating costs for low income residents: income tax credits, weatherization or LIHEAP assistance, and transit improvements.

Further reading
Sightline Institute: Carbon Tax Fact Sheet
Resources for the Future: Carbon Tax FAQs
Citizens Climate Lobby: DC Chapter