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¢.) This rate is very similar to the C$30/ton that British Columbia charges.

- 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

No subways for you, rowhouse neighborhoods

Nationals Park View
Maybe for these rowhouses, since they’re in a “Land Use Change Area.” Photo by Mr. T in DC.

Metro’s recently publicized 2040 plan for a new downtown loop line elicited a lot of consternation by many city residents, wondering why the new subway line hewed so closely to the existing downtown. The short answer is: because they won’t need new subways. It ultimately comes down to cost and benefit: new subway construction is so expensive that it can only serve the highest-density neighborhoods. Instead of a plan to connect every rowhouse in the city to a subway, it’s a plan to maximize capacity to and through the regional core at a minimal cost.

As Matt Johnson wrote in a recent GGW post, “Metro’s studies found little need for a new subways outside of downtown based on the expected travel patterns in and density of those areas in 2040.” Ben Ross clarifies in a follow-up: “Why isn’t Metro planning more rail lines inside the Beltway? One big reason is that political pressure and federal regulations require it and other transit agencies to look only at current zoning and master plans… This forecast, in practice, is prepared by cobbling together the master plans adopted by local governments, which are not anyone’s best guess of the future, but mostly reflect the desires of locally dominant political forces.”

WMATA’s staff echo this on their PlanItMetro blog: “Many of you have said that we missed or have asked why we don’t have a line to . As part of this plan, we have analyzed almost every corridor or mode that you have identified.”

A recent Cal study by Erick Guerra and Robert Cervero examined the cost-effectiveness of various rail transit extensions vs. the population and employment density of the areas served, and determined a cut-off aggregate density of 100 persons (residents and jobs) per acre as a cut-off for high-cost heavy rail:

Rail cost-effectiveness & density

In this region, per research from Terry Holzheimer at Arlington Economic Development (full PDF), only downtown D.C. and a handful of high-rise suburban centers surpass that threshold:

Gross land use intensities, 2007

Notably, though, the historic neighborhoods of Georgetown and Old Town — while surprisingly surpassing Edge Cities in intensity — fall well short of that density threshold. Laurence Aurbach calculated per-acre intensities for a few other historic neighborhoods, and of them only Dupont Circle [112.7] achieves downtown-level intensity, appropriate given that it’s chockablock with mid-rise office and hotel. Capitol Hill [44.8] and Logan Circle [57.1] also fall well short of 100 persons/acre.

The DC comprehensive plan gives precious little scope for other non-downtown areas within central DC to intensify much further. Nor do they seem to want intensification: DC neighbors will have a cow over one 6-story building one block from Metro. Contrast that to the 33-story apartment towers next to Metro in olde-timey Alexandria, 15-story office towers surrounding the Metro stations in mostly-rural Loudoun County, and heck, 40-story towers proposed along a Beverly Hills subway that’s at least ten years away. Those transit-supportive densities are impossible to build in the “neighborhood conservation areas” that comprise most of the District’s land area.

Meanwhile, the areas designated for “land use change” (in essence to be annexed to the mid-rise downtown) are NoMa and Capitol Riverfront. Connect those two neighborhoods to Union Station and Georgetown,* via bypasses of the Rosslyn and L’Enfant choke points, and add a few connecting points at the edges of downtown so that people can reach destinations like Union Station without going through Metro Center, and you’ve clearly defined WMATA’s proposed downtown loop subway.

DC comp plan policies map

Another instructive comparison to Paris might be in order: Washington, with its low density and low transit cost effectiveness, has 41 heavy rail stations and single-family rowhouses just one or two miles from the core, whereas Paris has flats stretching to the city limits, lower rail construction/operating costs, and almost 300 heavy rail stations within the city.

* We can perhaps give Georgetown a pass, since the crowds of tourists visiting its shops don’t show up in either the resident or employee numbers.

Shorts: movements

Striding

1. Susan Silberberg et al (via Angie at Streetsblog write that placemaking’s true value stems less from physical transformation than social transformation: “The act of advocating for change, questioning regulations, finding funding, and mobilizing others to contribute their voices engages communities.”

In short, it’s not about the bike, or the parklet: it’s about creating social space for a social movement to free now-privatized but publicly-controlled spaces, returning them to public use.

Years ago, this was a key (and under-appreciated) accomplishment of early Critical Mass rides. The event is just a means to an end, a safe space through which a social movement organized; to this day*, many confuse those ends and means.

* it’s arguably lost its urgency now that there are many other organizing venues.

not a maglev

2. There have been a few proposals to build maglev trains in the USA before, including this cross-Maryland proposal ten years ago. So what’s different about the latest version?

In a meeting with President Obama last winter, Mr. Abe offered to provide the maglev guideway and propulsion system free for the first portion of the line, linking Washington and Baltimore via Baltimore-Washington International Airport, a distance of about 40 miles. – Eric Pfanner, NYT

Those previous plans, however, did not feature Abenomics and its tidal wave of printed yen. As much as I’m skeptical of proprietary technologies, a fast and efficient connection between the two cities would certainly be momentous.

3. Thad Hall from the University of Utah (via Washington Monthly & Mischiefs of Faction) graphically shows how the House GOP has marched rightward, using DW-NOMINATE data:

The 50th-percentile average Republican in 1995 (104th Congress) — the red bar — was as conservative as today’s “RINO” moderate. Meanwhile, 1995′s firebrand 90th-percentile revolutionaries (the blue bar) then are *below* average now. The entire bell curve has shifted.

Shorts: getting to the office, and its implications for developers

1. Jonathan O’Connell asks, “With no office tenants and no financing, is the Southwest Waterfront redevelopment in trouble?”

The trouble they’ve had in raising capital underscores the importance of a good phasing strategy. The Wharf needs to start with a big bang for both top line and bottom line reasons:
- the retail won’t pay out without a critical mass of activity on the site; indeed, the 140K sq. ft. proposed for Phase 1 is at the low end for a viable lifestyle center
- the large amount of underground infrastructure (two levels of parking, new seawall, parks) that must be built before the first building pays out would be cost-prohibitive for a smaller project.

2. Earlier from O’Connell, a sign of how much the local market has embraced urbanism (with almost none of this space receiving local subsidies):

Of the 5.5 million square feet of office space under construction in the region, about 4.6 million of it, or 84 percent isn’t just near a Metro station but within a quarter mile of one, according to data from Jones Lang LaSalle, CoStar Group and Delta Associates.

The trouble is that each one of these buildings feeds off of Metro’s positive externality of greater access, but any one building can only make a relatively small contribution towards that transit infrastructure. Even the BIDs and special taxing authorities set up around most of these WUPs focus primarily on low-cost, high-return placemaking projects rather than the much more expensive, long-term work of buliding value with transit. Meanwhile, buildings that attempt a greater level of infrastructure investment, like those at the Wharf, can’t get the running start that they need. Areas with that transit infrastructure in place thus have an edge over those where it remains (and, given scarce funds, will likely still remain) to be built.

Some have taken this to mean that retrofitting suburbia will be necessarily be too expensive a proposition to be economically feasible. On that point, I only half-agree: there are a few cities, primarily in the Rust Belt, where intact and high-quality urbanism is cheap enough to feasibly redevelop. Yet with a growing population — America’s population will grow by about 140 million between 2000-2050, nearly matching the entire 1950 population of 150 million — that’s now concentrated in an entirely different set of cities, retrofitting may well prove to be the cheaper alternative.

3. Michael Andersen in the Green Lane Project notes that it isn’t just Metro access that moves office space:

Kathy Card, the general manager of two office buildings in DC’s fast-changing Chinatown, said last week that she doesn’t ride a bike herself. But watching traffic at the bikeshare station at 8th and H, she said, has convinced her that some of H Street’s four auto travel lanes and two parking lanes should be repurposed for protected bike lanes. Dedicated bike infrastructure is what’s needed, Card said, to help her buildings appeal to the private-sector firms she’s marketing to. “There’s plenty of ability to put bike lanes in,” Card said last week. “Obviously the demand is there.”

4. So perhaps it’s only appropriate that the latest MoveDC plans, leaked via DCBAC, floats the idea of cycletracks on just about every arterial in the city: Independence, Constitution, Connecticut, Massachusetts, Rhode Island, Florida, Bladensburg, Minnesota, Alabama, N Capitol, S Capitol, U, 9th, 14th, etc. — oh, and a bike bridge to Alexandria, too.

5. A generation ago, Joel Garreau wrote in “Edge City” about how one axiom shaped everything about suburban office parks: four car parking spaces per thousand feet of office. Yet today, both numerator and denominator have changed beyond all recognition: the cars are gone and the offices are smaller. As reported by Laura Kusisto, the conversion of Brooklyn’s vast Watchtower printing plant into loft offices proposes a bike parking ratio of 8.3 bikes per 1000′ of office. The resulting indoor garage will house 5,000 bikes — 15-16X larger than dedicated bike stations in Chicago or Santa Monica, and undoubtedly as a result requiring special accommodations like ramps. It would be interesting to know whether bike parking is a way to soak up the dark space in the middle of the floors (that would be convenient) or if they’re warehoused in a basement.

6. Besides, who ever uses that much car parking at their suburban offices? Even the car lobby (!) would rather have cute farmers markets than parking lots:

Brighter isn’t always lighter

Which of these stations is better lit?

Canada Line Station

TransLink system lighting standard for subway platforms: 4 foot-candles

IMG_2524 - Washington DC - WMATA Metro Chinatown Station - After Genesis concert
WMATA system lighting standard for subway platforms: 10 foot-candles

Believe it or not, WMATA hardly has the darkest stations in the business. I was amazed to learn recently that Vancouver’s transit agency specifies platform lighting 60% dimmer than WMATA’s: their standard is 4 foot-candles, vs. 10 foot-candles for WMATA. I usually read when I’m aboard transit, and whereas I have to seek out light on Metro subway platforms, I’ve never thought twice about the brightness on TransLink platforms (admittedly, I’ve spent much less time on the latter, partly due to the automated system’s startlingly low headways).

The difference is that TransLink also specifies high-reflectance, light-colored walls and floors, and directs light into occupied areas so that they feel much brighter. With “passive illumination,” it’s not just how much light is used, but also what the space does with that light. Seemingly minor increases in reflectance for surfaces like walls and ceilings (particularly for indirect lighting scenarios) proportionately increase the brightness one can achieve with a given amount of light.

By comparison, much about the classic Metro station design thwarts attempts at improving lighting — and intentionally so, in fact. Our standards of brightness have increased, partly because illumination has become so cheap. Yet the dark material palette chosen for the stations (unpainted concrete walls and ceilings, burgundy tiles, chocolate brown panels, even the bronze railings) absorb both what little light is added and dirt, which further darkens the stations over time.

Metro points to the efforts that it’s taken recently, including regular power cleaning of the concrete station vaults, existing efforts to add fixtures, and a system-wide re-lamping with more modern (and thus brighter and more energy-efficient) equipment. The fruits of these can be seen at stations like Judiciary Square, which does indeed seem like a beacon of light compared to others in the system.

Yet using more reflective materials can also improve station lighting. That’s the gist behind recent changes that Metro announced to the Bethesda station (previous GGW discussion here), like replacing brown metal panels and concrete walls with brushed metal and clear glass. These changes will definitely help, but a more comprehensive approach could look at other changes that can improve lighting without dramatically impacting the stations’ canonical appearance.

  • A clear polymer coat (not paint) could increase reflectance of existing concrete surfaces, reduce porosity and thus the problem of embedded dirt, and make cleaning easier. Painting the station vaults has proven controversial throughout Metro’s history: Zach Schrag’s book The Great Society Subway points to a 1968 disagreement between the designers Harry Weese and William Lam as to whether to paint the vaults, and notes Weese’s “commitment to ‘pure structure in plain concrete’ ” in criticizing a 1990s decision by WMATA to paint some vaults. Yet materials advances now mean that light reflectance surprisingly has less to do with color as one might expect: a darker color with a slight gloss reflects more than a brighter color with a dull finish.

  • The existing fluorescent tubes are recessed within wells that are out of sight, beyond the platform edge or between the tracks. Since these surfaces are so close to the light sources, small changes here will result in big changes throughout. Cleaning and brightening surfaces within these wells, adding reflectors below the tubes to “catch” light that’s currently pointing downwards, moving wire conduits so that they’re below lights instead of blocking them, and replacing bronze-colored diffusers above the between-track tubes with clear plastic diffusers, will all result in more light to reflect upwards into the station.
  • Acoustic panels in coffer recesses can be brighter. These panels cover a surprising amount of the vaults’ surface area, but because they’re literally in the concrete’s shadows, we don’t tend to notice them very much. These, too, accumulate dirt and dust over time, and as they’re replaced their reflectance could be increased. The new Rosslyn entrance has highly reflective panels embedded within its coffers, which I didn’t even notice the first few times I walked through it.
  • Similarly, the drop-ceiling tiles underneath station mezzanines can be replaced with tiles that reflect more light. Given the low ceiling heights in these spaces and the fact that they’re largely hidden from view, a more ambitious upgrade could replace these with ceiling tiles with embedded LED lamps, reducing both shadows and glare in these areas while improving efficiency over the existing can lights. LED ceiling tiles might sound gaudy, but look no different than the fluorescent panels embedded in most office drop ceilings.

Attention to these details can ensure that the maximum possible amount of light is available within Metro’s subway stations, improving energy efficiency, safety, comfort, and accessibility without altering their iconic appearance.

[A version of this is cross-posted at Greater Greater Washington]

Think where, not what, for best results with TOD (BRT or otherwise)

Transit oriented, but...
North America’s largest BRT system somehow isn’t a poster child for TOD.

1. Transit belongs on streets, with the people.

A recent ITDP report made a big splash about transit oriented development, some of which has happened along busways. Some media outlets, e.g., Eric Jaffe in The Atlantic Cities correctly reported the report’s amply demonstrated finding, explained over 56 pages, that good TOD outcomes depend on a lot of “necessary but, in and of themselves, insufficient” pro-development policy factors: comprehensive plans, small area plans, capital investment plans, housing investment, institutional support, a favorable regional economy, and a favorable sub-regional economy.

That last factor is presented curiously absent any discussion of the micro-level geography of the land immediately adjacent to the transit line. Together, though, these factors essentially boils down to the old real-estate adage of “location, location, location” — and seem to explain much of the difference between the different case studies’ different TOD outcomes. In fact, just the urban pattern along the route appears to perfectly* correlate** with the observed TOD outcome via their odd metric of “dollars of development per dollar of transit investment” (see this spreadsheet for details).

The best mass transit alignments go where the mass of people are: connecting a downtown to a strong and promising midtown, along an established mixed-use urban street level corridor. Transit ROWs in highways, freight RR corridors, etc., almost universally perform poorly at generating TOD.

* The one exception is Phoenix, which has weathered an economic depression since its light-rail opened.

** This thesis could be empirically tested through GIS analysis, as well (looking at block sizes, parcel sizes, or land use mix adjacent to the transit lines), but I’ll leave that to someone else. Aggregating data from that many cities takes more time and computing power than I can spare now.

2. The report’s fundamental flaw, and what it didn’t say (regardless of what you’ve heard).

Okay, now a pointed criticism of the report and subsequent reporting. Sadly, many other media outlets fell for a much more simplistic reading of the report, zeroing in solely on the report’s unsubstantiated, and actually never clearly stated, claim that buses are a superior value to trains in spurring TOD. The “dollars of development per dollar of transit investment” metric relies entirely on hearsay for both its numerator and denominator, rendering it useless. The footnotes mention an attempt to standardize the cost figure (denominator), but not the numerator, and ultimately local transit agencies got to define both figures as they pleased.

Euclid at PlayHouse Square
Besides hospitals, much of the purported TOD along the HealthLine consists of major investments in downtown, where rail transit is also available, and substantial capital improvements at Cleveland State University just outside downtown.

This results in a table that compares the incomparable. Many headlines have focused on how the Cleveland HealthLine handily bests all contenders on that particular chart. I haven’t found an updated breakdown of the “$5.8 billion in TOD” since the initial 2009 Plain Dealer tabulation (yet the figure keeps growing), but half of what the PD counted consisted of hospital, university, and museum buildings that were completed or planned before the HealthLine opened. In the PD’s reckoning, over $1B of the purported TOD benefit of the HealthLine stems from major expansion projects just at the Cleveland Clinic, which certainly would have happened regardless of transit. Correlation is not causation, and transit advocates of any stripe don’t do themselves any favors by ignoring this most basic rule of social science.

parking deck
Pretty uninspiring to call this BRT-OD. The BRT runs in a trench just to the left.

East Liberty is an equally puzzling case study to profile: much of the development “credited” to the BRT happened decades after the BRT opened, some is auto-oriented to traffic sewers running through the neighborhood, and much of it exists just because the old streetcar hub of East Liberty was the only reasonably flat site for big-box retail in the middle of Pittsburgh’s hilly East End. And Pittsburgh was careful to build equally isolated rapid transit lines to the west (BRT) and south (LRT) sides, neither of which spurred any TOD because they didn’t reach promising “midtown” nodes. (Neither did the East Busway, really, until the Oakland-Shadyside midtown spread north to touch said busway.)

The same chart also most definitely does not deem BRT a better investment than rail, as the Portland & Seattle streetcars do very well on the same chart. The report also clearly states that transit service quality, as judged by their “BRT Standard,” seems to have little to do with the quantity of TOD spurred. And yes, I consider myself relatively mode-agnostic, and curious enough about BRT to specifically travel to Ottawa, Cleveland, and Pittsburgh to take the BRT photos above.

3. Counting hospital spending is particularly disingenuous

Cleveland doesn’t even lay claim to the largest transit-adjacent medical investment in the country. New Orleans has $2B in new replacement hospitals under construction vaguely near a streetcar line, and Dallas also has $2B in new hospitals under construction next to a circa-2000 commuter rail station. I certainly applaud efforts to ensure that hospitals — which are major job centers in almost all metros — are not just accessible by, but oriented to, transit. However, hospitals have spent a lot on development just about everywhere: hospital spending almost doubled over the 2000s.

(Speaking of midtowns, IDA’s new Defining Downtowns report does a nice job of showing how midtown areas, often surrounding medical facilities, are often almost adjacent to their respective downtowns.)

4. But if you’re really gung-ho on BRT, I’ve got a Magic Road to sell you…

It turns out that there’s an even bigger champion in the BRT TOD sweepstakes that didn’t get mentioned in the ITDP report. A major U.S. city built a magical BRT Bronze busway that subsequently spurred the adjacent development of:

  • 5,000 new market-rate apartments
  • 4.5 million square feet of new office
  • 1.2 million square feet of new retail
  • 2,000 new hotel rooms
  • $575 million in new cultural facilities for museums and performing arts
  • $1.3 billion in new public parks & recreational facilities
  • …plus a giant $4 billion new mixed-use development right outside one terminus
  • …and other new infrastructure improvements that I’m not including here, including a monstrous convention center annex (with another one just proposed! Obviously another fruit of BRT TOD) and new lakefront enhancements
  • All of which total $226.74 in corridor “TOD investment per dollar of transit investment,” or twice the amount that the “champion” Cleveland HealthLine supposedly generated

This magical $43 million busway is so magical, in fact, that the city’s leaders slyly smile and guffaw whenever they call it The Magic Road. There’s one minor detail: the McCormick Place Busway is not even open to the public. Only buses for visiting conventioneers, not buses for transit, can travel upon it. Never fear, for evidently the BRT-TOD magic is so powerful that even a closed busway can still manage to single-handedly spawn a resurgence in Chicago’s Loop.* After all, that’s exactly what the HealthLine did, right?

McCormick Place Busway Northern Entrance at Lower Randolph Street Under Millenium Park

* The Loop’s recent growth was quantified by the local BID, with areas multiplied by average sales prices found in the report to quantify total investment. I took care to not double-count Lakeshore East, and to not count investment in the West Loop or River North. And yes, I did do a cursory evaluation of the ITDP BRT Standard with regard to the MPEA busway, which does have one very nice station and lots of scheduled service during conventions.

A glance at Hong Kong MTR’s retail results

Mall entrance

An attempt to answer a recent Twitter exchange ran over the 140 characters, so here it is. I have another post underway about MTR’s unusual value-capture business model and its implication on stations, so this is useful background research.

Per analysis of MTR’s 2012 annual report, the typical MTR mall is ~100KSF (median 85KSF, avg 130KSF), which is certainly a neighborhood or community scale retail center. The report lists 19 held investment properties in retail use, accounting for 79.6% of the investment properties’ area; another 15.3% is in office. The “Property and Other” business unit also includes property management, Octopus, etc.

Three malls qualify as regional retail, with over 300,000 sq. ft. of leasable area (a typical million-foot regional mall in the USA will have about 300,000 leasable, with the rest tied up in various owned parcels like department stores): Maritime Square at 316,779, Telford Plaza at 640,245, and Elements at 498,762. Most serve a local market, as evidenced by the Chinese-language-only MTR Malls directory, but with Hong Kong’s density that market can be surprisingly deep. Elements, atop the airport express rail station and adjacent to the new high-speed rail terminal, certainly aspires to a higher-end audience with its Madison Avenue-caliber roster of haute couture — and English-first website.

55.4% of MTR’s total 2012 profits stemmed from property and in-station commerce: 36.1% from rents and management income and 19.3% in for-sale development. Profit margins on the property businesses are certainly healthy: 81.6% on investment property and 89.2% on in-station commercial, vs. 46.1% on Hong Kong transport and just 4.7% on the emerging international transport businesses. A near-90% margin practically qualifies as minting money. (In fact, it’s much better than minting money: the U.S. Mint cleared only 21% seigniorage on circulating currency in 2012.)

Note that in-station commercial offers the richest margins; over half of this business unit’s revenues come from in-station retail, with the rest from advertising and telecom fees within stations. MTR collected US$276.4 million on 608,729 square feet of in-station retail, for an unbelievable-for-the-US (but not for HK) average rental rate of $454/foot, well over twice the rents garnered per foot of investment property above the stations. Averaged across MTR’s 84 heavy-rail stations, that’s 7,247 square feet of retail per station.

A few facts that surprised me:
1. Retail accounts for most of ongoing income; office is just a sideline, and rental residential miniscule.
2. In-station retail rents for substantially more than the flashier malls above.
3. Aside from a few properties (of leviathan scale: Telford Gardens has almost 5,000 apartments; Elements is the retail portion of a Canary Wharf-sized, 12-million-foot mixed-use complex), the scale of station retail centers is usually fairly modest, although admittedly Hong Kong makes very good use of every available square foot.
4. Residential activities are almost all for-sale, unusual in a city that’s about evenly split between owner-occupiers and renters. However, its government owners probably want to focus housing development within HKHA/HKHS.
5. Margins on the core transit business are much stronger than I expected, particularly relative to the industry average.
6. Operating margins on the property business are generous, but comparable to REITs Stateside. Although net operating income (NOI) and operating margins aren’t GAAP measures, since different companies allocate costs like general operations or capex very differently, a quick review of three retail REIT financials (FRT, GGP, HHC) show the best with net operating margins in the low 80%s. The in-station retail’s 89% doesn’t sound much higher, but it implies operating costs half as high on a percentage basis, perhaps explained by the combination of higher rents, lower wages, lower taxes, and division of expenses between the property and transit businesses.

Transit creates value, case study: Las Vegas

Las Vegas Monorail (1851)

Years ago, I dissed the Las Vegas Monorail, which eventually did flame out in a spectacular bankruptcy. Per Howard Stutz in the LVRJ: “a two-year-long bankruptcy reorganization wiped away more than 98 percent of the transit system’s debt.”

Yet the monorail is still up and running — it’s worth more that way than as scrap* — now that it doesn’t have to pay back its capital costs (which no transit system could feasibly do just from operations). Management can now think more strategically about how the monorail adds value. Far more than just a novelty ride, the system “has relieved traffic congestion on Paradise Road when large conventions are in town,” and as such “[CEO Curtis] Myles said the monorail company is hopeful for more Strip support.” In other words, even in Vegas, the usual economics apply: transit doesn’t make money for the people who run it, it makes money for the people around it (landowners and people traveling in the corridor regardless of mode), whether or not they’re actually paying for it. If those people aren’t paying into the system through taxation, they’re free-riding (so to speak).

Not surprisingly, research by Daniel Chapman and Robert Nolan on the value of transit finds that it spins off significant value from agglomeration economies. Transit moves people, to be sure, but more importantly it creates places: all transportation is ultimately a means to an end, but transit enables the creation of super-profitable large agglomerations, throughout a metro area: “A 10 percent expansion in transit service (by adding either rail and bus seats or rail miles) produced a wage increase between $53 and $194 per worker per year in the city center. The gross metropolitan product rose between 1 and 2 percent, too.”

Joel Garreau said as much in Edge City (!) all those years ago, that transit can, at the margin, add just enough population to push a mediocre agglomeration of offices into the realm of a “nice” place. What we didn’t know then was just how much more profitable that “nice” factor was.

* Interesting tidbit: even in the midst of WW2, when scrap metal prices were at what must have been a relative record, disassembling the ruined Tacoma Narrows Bridge cost more than the scrap metal was worth.


In local news, Daniel J. Sernovitz at WBJ covers what might genuinely be a historic parking spot, worthy of commemoration but perhaps not preservation (I mean, a parking spot is a parking spot).

The river flooded my walk shed (2)

Large station footprints (covered earlier) pose a particular problem for surface transit modes with wide geometries: as with the expressway-interchange station I ridiculed then, the infrastructure grows to a scale so large that it dwarfs pedestrian circulation to/from the station.

Wide geometries particularly hurt the utility of water taxis, which rarely prove truly practical in modern cities. Boats have very wide geometries and require deep-water docks far from shore, usually half of the walk shed is wasted on water, and high-intensity land uses and high-capacity transportation connections are usually set far back from flood-prone shorelines. Thus, even North America’s busiest transit ferry (Vancouver’s SeaBus) is separated from the street by 300m (~1000′) of walkways:

today's office view

Thus, the ferry’s 400m/five-minute walk shed is limited to just one block beyond the station itself:

Water taxi 5-minute walkshed

David Alpert recently suggested Vancouver-style ferries along the Anacostia, but the geometries of both the ferries and the waterways make this difficult. Even though I probably live closer to a water taxi dock than just about anyone else in D.C., I have yet to come up with an occasion to take the existing water taxi service — it’s super slow and doesn’t go anywhere useful.

Water taxi 5-minute walkshed

Because of Greenleaf Point (Ft. McNair) and Hains Point, the distances between the docks are much further via water than they are via land: the Wharf has an enticing waterfront, but it’s on the nautical equivalent of a cul-de-sac, 1.5+ miles away from the main stem of the Potomac. Thus, Wharf-Georgetown is twice the distance by water as by land, and thus it’s much faster to walk or bike between all of the water taxi stops. Even once riverfront sites like Buzzard Point, Poplar Point, and Reservation 13 get developed, the Anacostia Riverwalk Trail will be much more important as a mode of transit: it’s that much closer to land-side destinations, and available on-demand, 24 hours a day.

What’s more, the landside transportation capacity isn’t really there most anywhere along local rivers. The walk shed from any ferry extends only 1-2 blocks inland (see the 400m walk sheds from Georgetown waterfront and Kennedy Center docks), and along most of the Potomac or Anacostia that space is taken up by highways, parkland (in the shallow tidal rivers), or steep hills (in the Potomac Gorge north of Roosevelt Island). Even in Alexandria, the quintessential port town, and at National Harbor, most of the activities and transport connections are set well back from shore. Just because a lot of things exist vaguely near the Potomac doesn’t matter, if the last-quarter-mile connections are awful. Already, we have lots of local examples of under-used transit that gets you sort of close to things, but not door-to-door.

Water taxis come closer to being time-competitive in situations like in Chicago, where land traffic congestion is appreciable and major activity centers like the railroad stations are within 200′ of the river — but where the river usually sits well below the (elevated) level of the streets around it. I’m hard-pressed to find many other examples in the USA where similar conditions exist, though.

Help, the station ate my walk shed (1)

Part 1. How 400 meters becomes 100 meters

Armitage

When I lived on West North Avenue (the namesake of this blog), I could walk out my front door, hear an “L” train approaching from behind the apartment, dash across the street and around the block, and catch said train at the station a block away. When I recently asked Chicago friends about how much time it took for them to travel through their “L” stations, the responses were quizzical: “Uh, seconds?” “Less than a minute on either end. Perhaps you should be measuring in seconds.”

Wheaton Metro escalator

The Washington Metro might have record-smashing escalators and awe-inspiring cathedral ceilings in place of the L’s humdrum wooden platforms, but the sheer size of its stations hurts its usability for short trips, writes Ian Rasmussen:

“You’ll almost never hear about how long it takes to get from the street to the platform when people are telling you how long a transit trip is going to take… [I]n the context of systems designed to attract longer trips (30, 40 minutes), it hardly matters. But in the case of shorter trips, such as those in the urban core where the system is intended to act as a circulator, the issue cripples the system… just think of how you feel waiting to get off an airplane when you are about to miss your connecting flight.”

When combined with shameful 20-minute headways, the two or three minutes* it takes to descend to, or emerge from, a Metrorail platform add up to a substantial fixed time penalty on short trips within the core. It isn’t just the flowing mezzanines and interminable escalators, either: even in dense residential neighborhoods, stations often empty into meaningless plazas rather than seamlessly meeting the neighborhood. Over time, buildings will grow towards the station (as at Columbia Heights), but this process takes decades and has often been stymied by poor planning decisions.

Potomac Ave

This is not to absolve Chicago: it arguably invented the expressway median transit line and thus spawned places like Rosemont — which Yonah Freemark called “the Land of Missed Opportunity” for its uniquely awful transit-adjacent development pattern. The town of Rosemont** obviously understands that its “L” access gives it a valuable advantage over more distant suburbs. However, its station area pedestrian experience is just monumentally bad, with an uncharacteristically lengthy “L” station emptying out into a bus parking lot in the middle of an interchange. The net result: absolutely nothing, besides said bus terminal, is within the five-minute walk shed (below). Rosemont has attempted to compensate by subsidizing all-day circulator shuttles to feed its new retail/entertainment hub, but no shuttle can match the spontaneity of a quick lunchtime walk.

Rosemont "L" walk shed

Expressway median stations suffer from a triple whammy of poor geometry:
1. The geometries of the surrounding environment are often defined by the 70 MPH cars swirling around them (particularly since the busy streets that make sense for station entrances also make sense for land-gobbling interchanges), rather than the 3 MPH pedestrians within;
2. Much of the walk shed is wasted crossing the freeway itself, much less interchanges;
3. The adjacent land uses either want to shy away from the freeway’s noise and smoke, or surround themselves with moats of parking and limited access routes, or both.

The same geometric problem is hardly intrinsic to rail. Bus rapid transit, which essentially is the interface between a highway for heavy buses and pedestrians, faces exactly the same problem. Here’s the award-winning system in Guangzhou:

Guangzhou

The service had better be really fast, and really frequent, to be worth braving all that just to get to the bus stop. This sort of grade separation (also seen in Ottawa) is unusual; cost containment usually leaves pedestrians running in front of buses at grade, as in Cleveland:

Euclid at PlayHouse Square

Many of the inexpensive freight-rail alignments used for recent light-rail projects suffer from a similar (although less extreme) distance from the urban fabric. The north end of Baltimore’s light rail line runs in the former Baltimore & Susquehanna (B&S) Railroad ROW north to Timonium, alongside a stream valley, separated from adjacent development by buffers, grade changes, woods, and (to the east) the Jones Falls Expressway.

P1080461

The LRT corridor passes many major activity centers on the north side of Baltimore, including two campuses of Johns Hopkins University, parks encompassing the stream valleys and adjacent hills, the Woodberry area of redeveloped mills, prosperous neighborhoods like Hampden and Roland Park, and at the northern end the backs of retail and business complexes facing York Road in the northern suburbs. However, historically development of residential and retail uses focused on the hills above the stream valley and freight railroad; the only uses directly fronting onto the railroad today are station access uses and some renovated mills. Jeff Wood notes that Minneapolis is about to embark on a similar mistake with its Southwest LRT project.

In short, to genuinely intertwine transit with city life, it has to be as close & convenient as physically possible. Don’t cheap out on an inexpensive but inconvenient alignment, don’t over-engineer stations, and seek the smallest possible station footprints that will do the job. These principles should seem obvious, but too many new transit projects still don’t get this interface right. I’ll explore some more examples in two future posts.

* Times measured at Rosslyn and Court House.

** For those unfamiliar with Chicago, Rosemont has leveraged its unique location surrounded by the city’s transport links (airport, freeway, beltway, transit) to suck “profitable” airport-adjacent offices & hotels from a city that warehouses its low-wage workforce. Therefore, it’s the quintessential parasiticaffluent job center.” [OK, slightly strange link, but I couldn't find any other summary of Myron Orfield's Metropolitics suburban-town typology that was in HTML rather than PDF.]

The Metro Way to more of Arlington & Alexandria

A few weeks ago in class, some classmates and I made this firmly tongue-in-cheek PowerPoint in support of the Metro Way bus rapid transit system that will launch soon in Arlington-Alexandria’s Route 1 corridor.

Jokes and !!!!!!!s aside, one useful idea contained therein makes BRT a particularly compelling idea for this half-dedicated-ROW corridor: its extendibility. Metro Way not only has its dedicated ROWs within Crystal City & Potomac Yards, but also relatively free-flowing limited-access roads at its north end. Thus, limited-stop route extensions can connect Crystal City to numerous transit interchanges:
- North to the Pentagon bus interchange
- North along 110 to Rosslyn, which might make up for lost Blue Line service between Pentagon and Rosslyn
- North along Washington Blvd. to Clarendon, if demand warrants an Arlington crosstown express
- Southwest along Shirley Busway to Shirlington, perhaps through-routing with future Shirley Busway BRT service through Shirlington to Beauregard

In addition, extending the routes several blocks south from Braddock Road would bring BRT service to either Old Town/Market Square or King Street Metro — the latter a connecting point not just to DASH but also the Richmond Highway express bus.

Signals across the urban archipelago

City DOT commissioners panel

A recurring theme that I keep hearing about in 2013 is that cities — linked together through national and global networks — must assert a leadership role in conceiving and implementing the policy changes necessary to adapt to the 21st century. Not only have these changes become too great to ignore, but the federal government that led America through the last great era of socioeconomic upheaval (the consolidation of the United States into the world’s industrial superpower) is mired in deep paralysis. Although states are meant to be the “laboratories of democracy,” they suffer from the same hyper-partisan paralysis and an institutional bias against metropolitan regions.

As a recent Economist editorial put it: “the rest of the country is starting to tackle some of its deeper competitive problems. Businesses and politicians are not waiting for the federal government to ride to their rescue… Pressed for cash, states are adopting sweeping reforms as they vie to attract investments and migrants… creative policymaking is being applied to the very problems Congress runs away from, like infrastructure spending.”

Taking a cue from a sharply partisan 2004-election postmortem by Dan Savage and the editors of The Stranger, we live in an era of The Urban Archipelago:

If Democrats and urban residents want to combat the rising tide of red that threatens to swamp and ruin this country, we need a new identity politics, an urban identity politics, one that argues for the cities, uses a rhetoric of urban values, and creates a tribal identity for liberals that’s as powerful and attractive as the tribal identity Republicans have created for their constituents… We’re going to demand that the Democrats focus on building their party in the cities while at the same time advancing a smart urban-growth agenda that builds the cities themselves.

This approach was plainly evident in the closing panel at NACTO’s Designing Cities conference, where as Angie Schmitt reports, “transportation chiefs from Boston, Philadelphia, San Francisco, Chicago and New York all talked about the progress their cities have made and shared their frustration at the lack of attention to cities and transportation in the state and national political arenas.”

“Why aren’t state governments and Congress keeping up with cities? Chicago DOT Commissioner Gabe Klein proposed that it’s because city residents — especially younger residents and entrepreneurs — expect their mayors and city governments to move at a much, much faster pace. City governments have to be much more creative and nimble to respond to these demands or else risk losing the residents and businesses that power their economies.” Yet, that agility doesn’t extend to the federal level: as Randy Neufeld said, “the disconnect seems to be Congress being out of touch with the good stuff happening on the ground.”

At the conference’s opening keynote, USDOT secretary Ray LaHood bemoaned that he would have preferred to do even more to support local government innovation, but that Congress had always “taken care of our infrastructure needs — right up to this moment in history.” Indeed, he singled out “this particular Congress” as having a peculiarly awful track record at passing transportation legislation.

The bond analysts at S&P concur that devolution of authority from the federal government will continue, reports Ashley Halsey in the Post: “The burden to finance infrastructure projects will fall more heavily on local government entities or users in the form of higher rates or tolls.”

A natural follow-up to the NACTO meeting came at TRB a few months later, where Bruce Katz addressed a substantially similar crowd at the Transportation Issues in Major Cities committee meeting. In summing up his forthcoming book, he strenuously argued that federal government are paralyzed by dysfunction, states refuse to adapt to the new metropolitan reality (and indeed, many state legislatures are backsliding), and need to be bypassed if cities are to successfully adapt to new global realities. The good news is that cities are in fact stepping up — even though they usually haven’t been empowered to do so.

(This comes with a huge caveat: ultimately, even a paralyzed state is a sovereign unit — quite unlike a city, whose municipal charter [particularly in a Dillon's Rule state] may be tremendously limiting. And it is much more difficult to do a 50-state campaign, or even a 20-state campaign, than a single national campaign.)

How can citizens and local government officials respond? We can set up peer-to-peer innovation networks so that innovations can spread more quickly and easily between cities. States and national governments can no longer be counted on to scale up innovations, but we also no longer need them to do so.

We won’t be able to innovate our way out of every intractable problem — but with a fresh understanding of the problems, we may be able to find new resources to bring to bear. For example, Janette Sadik-Khan summed up her department’s super-effective work in three broad steps:
1. Leveraging existing assets: a holistic approach to street space manages to do more with less; “back to basics” means that feet come first; local & state governments already spend $2 in general funds on transportation for every $1 in road user fees and should expect greater accountability
2. Working nimbly: in times of austerity, we can’t afford not to work smarter, not harder (echoed by Rina Cutler from Philadelphia as “we cannot not fix” urban infrastructure, and by Gabe Klein, who contrasted the old capital-intensive approach with new ways that resemble “marketing, change management, public relations, and sales”)
3. Transforming the city: Mayor Bloomberg noted that the city has surpassed records for population & GRP, but has experienced the safest five-year period in its history and has successfully directed all new travel demand onto transit.

(About the title: a friend of mine grew up in Windward, the collection of damp suburbs east of Honolulu. There, TV and radio signals from Honolulu, just five miles away, are blocked by a mountain range, so instead residents watched TV from Maui, a hundred miles away across the flat ocean. Such is life in an archipelago: sometimes we have more in common with people far away than those just on the other side of the ridge. Our cities have more to learn from one another than from their hinterlands.)