Category Archives: Infrastructure

Government Fragmentation and Economic Growth

fragmentation

by James A. Bacon

What are the secrets of successful metropolitan regions? According to conventional economic-development thinking here in Virginia, success hinges upon the ability to maintain a positive business climate, a concept that encompasses everything from tax rates to the tort system, the transportation network to the education level of the workforce. But a new publication by the Organization for Economic Cooperation and Development (OECD), “The Metropolitan Century,” identifies a critical variable rarely discussed in Virginia: the fragmentation of municipal governance.

Metropolitan regions characterized by higher levels of municipal fragmentation tend to experience lower economic growth rates than metros with less fragmentation, contends the OECD report, as seen in the chart above. Metropolitan regions run the gamut in the degree of fragmentation, from the United Kingdom with an average of 0.4 municipalities per 100,000 residents to the Czech Republic with an average of 2.43 per 100,000. All other things being equal, the report says, “For each doubling in the number of municipalities per 100,000 inhabitants within a metropolitan area, labour productivity in the metropolitan area decreases by 5-6%.”

(I would surmise that the number of municipalities in Virginia falls in the “moderately low” category. For example, the 1.7 million inhabitants of the Hampton Roads metropolitan area are governed by 16 jurisdictions, including two in North Carolina, or slightly less than 1.0 per 100,000 population.)

Fragmented government inhibits economic growth through its impact on transportation and land use, suggests the OECD report. The inability to plan regionally can result in “sub-optimal provision of transportation infrastructure” that falls short of its potential to provide the connectivity required by a productive, growing regional economy.

In the context of large urban agglomerations, land use planning and transport planning are often the fields where the need for co-ordination is greatest. … Housing and commercial developments need to be well connected to other parts of the urban agglomeration, and public transport in turn relies on a minimum population density to operate efficiently.

Integrating transport and land-use planning makes it easier to utilize value-capture tools for financing transportation infrastructure. “Public spending for infrastructure increases the price of adjacent land,” states the report. “Often, this price increase provides a publicly funded windfall profit to land owners or developers. Land-value capture tools aim at recapturing these windfalls from developers in order to (partially) fund the infrastructure investment.”

Echoing arguments that EM Risse made on this blog years ago, the OECD report observes that administrative borders in metropolitan areas have not evolved in concert with economic and social patterns.

While good governance structures are no guarantee for good policies, it is very difficult to design and implement good policies without them. … Administrative borders in metropolitan areas rarely correspond to these functional relations. Often, they are based on historical settlement patterns that no longer reflect human activities.

A few decades ago, there was a move in Virginia to consolidate cities and counties in order to achieve administrative efficiencies and economies of scale. There were some notable successes — Virginia Beach merged with Princess Anne County, Suffolk merged with Nansemond County — but the movement petered out.  The OECD report spelled out reasons for resistance to consolidation that apparently apply across the economically developed world:

Common reasons for the persistence of administrative borders are strong local identities and high costs of reforms, but also vested interests of politicians and residents. Even if policy makers try to reorganize local governments according to functional relations within urban agglomerations, it is often difficult to identify unambiguous boundaries between functionally integrated areas.

There doesn’t seem to be any appetite for consolidating local governments in Virginia, but the OECD report does suggest an alternate strategy: Identifying specific functions that can be transferred to regional authorities.

Would it be worth the effort to invest political capital in such endeavors? Take a look at the chart at the top of this post. The big dividing line in economic growth is between medium-low and medium-high fragmentation. Assuming Virginia metropolitan regions fall into the medium-low category — and I do confess that I do not know exactly what the dividing line is — there doesn’t seem to be much of a growth premium from consolidating our way into “low fragmentation” status. Indeed, I would argue that some competition between jurisdictions in a metropolitan area is a good thing — the ability of inhabitants to “vote with their feet” helps keep the politicians honest.

But that’s a shoot-from-the-hip reaction based upon one OECD chart. If Virginia is serious about positioning itself for economic prosperity in the years ahead, our governance structures, rooted in 19th-century settlement patterns, surely need to keep up with economic reality.

“Hacking for Good” Comes to Virginia

Andrew Hyder with Code for America describes the "hack for good" movement spreading across the U.S.

Andrew Hyder with Code for America describes the “hack for good” movement spreading across the U.S.

by James A. Bacon

Michael Kolbe experienced first-hand the power of data-driven election campaigning while working on the 2012 Obama re-election team. He went on to take a job as a strategy analyst for Health Diagnostic Laboratory in Richmond but didn’t discard his idealism. Hoping to harness the power of data to solve social problems, he joined others to bring the burgeoning civic hacking movement to Richmond last year.

His first “hackathon” fizzled, Kolbe concedes. The goal was to create a “where’s my school bus” app for the City of Richmond schools, adapting open code developed elsewhere. Despite initial enthusiasm, school officials “went radio silent” and Kolbe and his compatriots didn’t have a strong enough team to push the project through. “It just fell apart.”

Learning from that inauspicious beginning, Kolbe tried again. The results of his efforts could be seen Saturday in Code for RVA’s code-a-thon held at INM United’s warehouse-chic office building in Richmond’s Scott’s Addition. This time, more than 60 participants worked on a half-dozen projects to make local government data more accessible and useful to citizens.

This time Kolbe had time to build an organization and line up sponsors and alliances. The Richmond hack-a-thon was held as part of a national CodeAcross event organized in dozens of cities across the United States by San Francisco-based Code for America. Code for America dispatched a team to help organize the Richmond event. Socrata, a Seattle-based open-data company, created a portal to which the Richmond hackers could add their data. Code for RVA also found a local champion for its open-government projects in Andreas Addison, a self-described “civic innovator” for the City of Richmond.

“This meeting wouldn’t have happened two years ago,” said Addison, who has led the effort to bring data analytics to City of Richmond decision making. “Things are changing.”

Even the governor’s office is getting on board. Zaki Barzinji, deputy director for intergovernmental affairs in Governor Terry McAuliffe’s policy shop, said the administration hopes to work with Code for America, Virginia universities, state agencies and local Code for America “brigades” like Code for RVA to organize a statewide conclave with the goal of driving open data and cultural change in state government.

Most of the projects undertaken Saturday were simple, aiming to make existing data more accessible to the public. One team worked on creating RVA Answers, a Web resource providing answers to most frequently asked questions. Another team tackled the goal of making data about city boards & commissions more readily available, including information on how to apply for a position. Yet another group worked on improving the display of city crime data.

The most ambitious project, long in the works, is an initiative to address the spread of STIs (socially transmitted infections), especially among the city’s poor and young. The city has pulled together a multi-disciplinary team to organize and analyze existing data, supplemented by insight gleaned by interviewing poor people and shadowing government health workers. The mission is to encourage people to get tested for STIs and to direct them to locations in their neighborhoods where they can do it.

This initiative will not likely wither on the vine — Danny Avula, deputy director of the city health department, is pushing the project forward. “A lot of people in government don’t get it,” Avula said, speaking of the use of data analytics. “But there are advocates now.”

Open data sounds great in the abstract, but civic hackers often face indifference or resistance. When the McAuliffe administration launched its open data portal last year, said Barzinji, it encountered a tendency among state agencies to keep their data to themselves.  The administration started small, asking each agency to share at least one data set. Once the value of public data can be demonstrated, he said, he expects the agencies to loosen up.

Never under-estimate the role of simple bureaucratic inertia. Mike Walls, IT strategy manager for the City of Richmond, noted that government IT departments are focused on the core mission of “just keeping the lights on.” Top priorities are making sure payroll is met, bills are paid and basic functions work. “You can’t have the network go down. You can’t have the emergency dispatching software crash. It creates a very cautious mindset.”

In his experience, Walls said, IT bureaucrats aren’t opposed to releasing data to the public as much as they are overwhelmed by their existing responsibilities. They see the task of opening up data as more work. “When your day job grinds you down, it’s hard to find the enthusiasm.”

Another issue, said Walls, is that data can’t just be dumped willy nilly into public databases. When data reveals information about individuals, public access may raise privacy issues. Often there are technical issues as well. Data is typically compiled to the standard of “good enough for the intended purpose,” not for a purpose someone might dream up later. As a consequence, mashing up, say, land use data calibrated to difference levels of accuracy might lead to absurd results like fire hydrants appearing in the middle of a street.

But civic tech advocates expressed optimism that the obstacles can be overcome. Small victories lead to larger victories. Said Barzinji: “First what we need is the proof of concept.” Then the push for legislation and executive action can follow.

Closely Watched Trains?

wva oil trainBy Peter Galuszka

The small town of Pembroke in southwest Virginia is used to seeing endlessly long unit trains of coal cars rumbling past. But last week, it got an unexpected surprise – trains of similar length hauling crude oil from North Dakota’s Bakken fields started going by.

According to Reuters, Pembroke is one of many Virginia towns that are being affected by CSX’s derailment and explosion of oil tank cars filled with Bakken oil a few miles east of Montgomery, W.Va.  on Feb. 16. The massive blast sent fireballs hundreds of feet in the air and forced the evacuation of nearby residents including a college. It also stopped all rail traffic on a major, east-west CSX line for days.

A similar derailment involving a CSX oil train happened last April in Lynchburg on the same rail mainline. Several tank cars caught fire down causing a fire and a spill into the James River.

So, after the West Virginia incident, CSX got in touch with rival Norfolk Southern to see if it could reroute oil trains on some of its lines.

This brings up another issue – who should be informed when new railroad trains hauling potentially explosive or otherwise hazardous cargoes suddenly show up in your backyard? Do they have to tell you so you can get the flashlight, thermos and sleeping bag ready for your immediate evacuation if necessary?

CSX says it has informed appropriate public safety officials of such route changes, but is loath to let the general public in where it is sending unusual trains. Security and proprietary information, you understand.

CSX needs to keep its tank cars rolling to big oil terminal in Yorktown near the Chesapeake Bay. That site had been an Amoco refinery for years but the refinery shut down and was switched to an oil water terminal now owned by Houston-based Plains All-American.

The facility receives Bakken shale oil cars and loads the crude on barges that are then pushed or towed to East Coast refineries, notably in the Philadelphia area. Presumably, if petroleum exports from the U.S. start again, the Yorktown site would be excellent embarkation point.

So, instead of having tank cars with Bakken crude trundling from Charleston, W.Va. through the New River Gorge and on to Lynchburg, they will go on more southerly NS lines through places like Pembroke and Roanoke. Then they will be switched at Petersburg to CSX lines and go north to Richmond and east to Yorktown.

It looks like Richmond could potentially get it either way. On the usual route, oil trains pass by downtown on an elevated bridge which would be quite a mess if a derailment happened there. According to the Forest Ethics Website, all of downtown Richmond to about one half of a mile on either side would have to be evacuated if a major derailment with fires and explosions came.

With the temporary rerouting, Richmond would still be in serious jeopardy in case of a derailment. If I’m reading the map correctly, trains would still pass through the city.

So, you have to ask yourself – why does CSX get away with keeping all this secret? They claim they let “appropriate” public safety officials know, but the Richmond Times Dispatch last year quoted a Richmond fire officer in charge of hazardous situations as saying he had a hard time learning from CSX what a “worse case” scenario would be in the event of a Richmond derailment.

Part of the problem is PR. Bakken shale oil comes from controversial hydraulic fracturing. The uptick in production has turned America’s energy picture on its head. It has also made for big jumps in oil rail traffic. Another problem is that Bakken oil tends to be more explosive than other types.

According to the Association of American Railroads, oil shipments by rail jumped by 9,500 carloads in 2008 to 500,000 shipments last year. Accidents are way up. In 2013, tank cars carrying Bakken crude somehow got loose in Lac-Megantic, Quebec. They rolled through the small town, derailed and exploded. The blast killed 47 and wiped out half of downtown.

According to a recent probe by the Associated Press, a federal study predicts that oil shipments will rise to 900,000 shipments this year. The study predicts that trains hauling petroleum will derail 10 times a year over the next two decades. They could possibly cause $4 billion in damages and kill hundreds of people, the AP reports.

What to do? Build pipelines, I guess, but that’s been highly controversial as well as the experience with Dominion Transportation’s efforts with a $5 billion gas pipeline through the state and the controversy over the Keystone XL show.

Better, newer, safer tank cars? Maybe, but the West Virginia and Lynchburg derailments both involved new “1232” models. The same type also caught fire recently in Timmins, Ontario.

Federal rules require railroads to tell local officials where they are carrying Bakken crude, which is more explosive than other types. Railroads like CSX claim the information is proprietary, according to Reuters. That’s rather pointless. If the goal is to keep “proprietary” information from competitors, Norfolk Southern, CSX’s biggest competitor, already knows about it because it has agreed to let CSX use its rail lines.

And don’t ask some public officials. West Virginia officials have gone along with keeping much of the information secret. Mountain State officials responded to an Freedom of Information Act request by redacting much of the data they finally gave out.

Not only do the railroads need to clean up their act, they should be forced to be more forthcoming about where the next evacuation might be.

Land, Density and Resilience

Flood-prone areas of south Hampton Roads. Source: Virginiaplaces.org.

Flood-prone areas of south Hampton Roads. Source: Virginiaplaces.org. (Click for detail.)

One more takeaway from the Resilient Virginia launch conference yesterday: All other things being equal, more compact communities are more resilient communities.

Like Bacon’s Rebellion, Cooper Martin, program director of the Sustainable Cities Institute, is a big fan of Joe Minicozzi and his maps and graphics showing how dramatically land value-per-acre varies between core urban areas, suburbs and the countryside. Densely settled urban cores have land values that are literally a hundred times higher per acre than low-density shopping centers and large-lot subdivisions.

In my commentary, I have focused mainly upon the fiscal folly of building disconnected, low-density development. The infrastructure — the roads, utilities, sidewalks and other amenities — are more expensive per household to maintain. But Martin added a new dimension when addressing the Resilient Virginia conference yesterday. Low-density development makes it more expensive to harden homes and businesses against disruption and catastrophe. When the taxable value of land is high, it’s easier to support expensive investments to protect that land than when the value of the land is low.

So, to take Hampton Roads, which I have written much about recently, resiliency planners need to take into account not only which areas are flood-prone, but which urbanized areas have land values high enough to make them economically justifiable to protect.

It’s going to be gut-wrenching and agonizing, but local officials must come to grips with the reality that much of the development that has taken place is fiscally indefensible. The region cannot possibly afford to protect every low-density subdivision in every flood-prone region — much less the roads and bridges providing connectivity for them — no matter how loudly unhappy homeowners howl at the prospect of being abandoned. The sooner local officials begin making these determinations, the sooner developers will stop building in indefensible areas and the fewer the naive homeowners who will be harmed.

As a practical matter, Hampton Roads municipalities will have to evolve to a pattern of denser development on higher land. Where development exists in flood-prone areas, there will have to be sufficient density to justify spending millions of dollars on protective measures. Fortunately, this is a slow-motion problem. The region has decades to adapt. But it needs to begin now — when complex and painful decisions must be made, decades can slip away in no time at all.

– JAB

Resilience and Competitive Economic Advantage

Flooded Honda factory in Bangkok, 2011 -- what you might call a serious business continuity issue.

Flooded Honda factory in Bangkok, 2011 — what you might call a serious business continuity issue.

by James A. Bacon

If you were a manufacturing company contemplating an expansion to Hampton Roads, you would take into account traditional criteria such as proximity to customers and suppliers, access to a skilled workforce, transportation connections, prevailing wage levels, taxes and so on. But as corporations become increasingly sensitive to the issue of business continuity in the face of disruption or disaster, you also might consider the region’s vulnerability to flooding.

Outside of New Orleans, Hampton Roads is the lowest-lying metropolitan area in the country. It is notoriously prone to flooding now, and the region’s vulnerability will only get worse as the sea level rises. You may or may not believe the McAuliffe administration’s predictions that the sea level will be 1 1/2 feet higher by 2050, but the risk that the forecast might prove accurate would have to factor into your calculations. Logical questions would arise: Would flooding disrupt rail and highway access to your facility? Would it hamper the ability of employees to get to work?

Perhaps the most important question is this: Do state and local governments have a plan to cope with recurrent flooding that will likely only get worse in time? How resilient is the region — not just one particular jurisdiction but, given the connectedness of transportation arteries and commuter flows — the entire region?

The resiliency movement is gaining momentum around the country, driven mainly by worries about climate change. Whatever your views on that polarizing issue, however, there are sound reasons to engage in planning on how to make your community less vulnerable to natural or man-made catastrophes (see “The Non Global Warmist’s Case for Resiliency Planning.”) The fragility of Hampton Roads is obvious for all to see. But every community has vulnerabilities of some kind. The integrity of the electric grid and water supply, for instance, are things everyone should worry about.

Every community should know its risk profile. In Hampton Roads the big concern is flooding. Western towns and cities worry about forest fires. Plains localities lose sleep over tornadoes, while others fear blizzards or terrorist attacks.

The insurance industry pays close attention to some of those risks, which are reflected in insurance rates (unless government policy distorts the price signals by subsidizing rates, as it does with flood insurance.) But, as Cooper Martin, program director for the Sustainable Cities Institute, observed at the Resilient Virginia launch yesterday, insurance covers less than half of total losses. States and localities don’t have insurance for washed out roads and bridges, for instance. There’s no insurance policy that covers the aftermath of a forest fire when rain washes ash into the water supply. “Who pays for uninsured losses?” he asks.

Perhaps the most unappreciated risk of catastrophe is to is a region’s brand, Martin said. Increasingly, a willingness of communities to identify systemic risks, develop plans to deal with them and maintain the financial commitment to carry out the plans will be a big differentiating factor. Corporations that place a premium on business continuity will pay close attention.

The Non Global-Warmist’s Case for Resiliency Planning

hampton_roads_flooding2

by James A. Bacon

The key to building a strong resiliency movement — making communities more adaptable in the face of natural and man-made disasters — is finding common ground. So argued Steven McNulty, director of the U.S. Department of Agriculture Southeast Regional Climate Hub, in addressing the launch event of Resilient Virginia this morning.

Fear of rising temperatures, droughts and sea-level rise is a major impetus behind the increasing emphasis that all levels of government are placing on resiliency. But political views about climate change are highly polarized, McNulty said. “Are you a fear monger, or are you a denier? We need to get beyond that.”

Most climate scientists believe that man-made climate change is a cause for concern. But the forestry land managers McNulty deals with do not. In a recent survey, he said, “only 10% of Southeast foresters thought that climate change is man-made and real. The agricultural community is almost as disbelieving.” As it happens, their perceptions are not without basis, he added. Rising temperatures in the Southeastern U.S. have been far less pronounced than anywhere else in the country.

It’s hard to mobilize people who don’t believe in catastrophic man-made global warming to change the way they do business. “Don’t talk climate change; you’ll lose a lot of folks,” said McNulty. But flip the issue to climate variability, and the conversation takes on a different tone. Everyone acknowledges that temperatures and precipitation fluctuate, and everyone would like to protect themselves from those fluctuations. “You don’t need global warming to have big disasters.”

McNulty was one of several speakers Thursday morning who made the case for resiliency planning. The resiliency issue hasn’t made big inroads in Virginia but Resiliency Virginia, a non-profit group of state and local government officials, environmentalists and private companies, hopes to change that. The group has a mission of educating the public, sharing best practices and encouraging people to take action.

In Virginia, the most pressing resiliency issues are in the low-lying Tidewater region, especially the Hampton Roads metropolitan area where thousands of people and millions of dollars in private buildings and public infrastructure are exposed to flooding. As Brian Moran, secretary of public safety and homeland security, told the gathering, a one-and-a-half foot sea level rise would inundate 82 square miles of dry land in Virginia, 15 miles of interstate highway, miles of railroad track and significant port acreage.

While there is plenty of controversy over how rapidly the sea level is rising in Hampton Roads — not everyone accepts the prediction that the sea level will rise 18 inches by 2050 — few would deny that between subsidence (partly caused by the draw-down of aquifers, partly by the shift in tectonic plates) and the slow-but-steady sea level rise seen over the past century unrelated to man-made climate change, flooding will become increasingly severe.

Flooding in low-lying areas is not the only potential disruption to Virginia communities. Flash flooding is an issue in urban areas where the ground has been covered by asphalt and the ground has lost is capacity to absorb rain water. Ice storms, snow storms and drought are recurrent concerns. Some worry about the impact of massive solar flares that could overwhelm the electric grid. There are man-made issues as well, such as potential terrorist strikes against critical infrastructure, particularly the electric grid.

In Chicago urban flooding is a significant issue, said Cooper Martin, program director for the Sustainable Cities Institute. When city officials began mapping where the insurance claims were occurring, they expected them to cluster in the flood plains. The traditional response to flooding had been to bring in the engineers, build some levees and build some dams. But close analysis showed that many claims were occurring outside the flood plains. “All that concrete has created a new ecosystem, creating flash flood hazards,” said Martin. “The way we’ve built this community is fundamentally non-resilient. More concrete is not the answer. Taking out some of the pavement may be the most productive thing to do.”

Another problem is rampant developing in vulnerable coastal areas. An analysis of 77 counties along the Gulf Coast (not including Florida) showed $2 trillion in asset value. “Even without climate change,” said Martin, “the way we’re building our communities, we’re creating risks where we didn’t have them before.”

People have a lot of ideas of how to prepare for another Katrina-scale hurricane, said Martin. But which options offer the greatest protection for the least cost? Building up beaches offers a high payback, as do building codes mandating construction standards to withstand higher winds. (Sixty percent of Katrina’s damage came from winds, not flooding.) Mandating higher home elevations is on the borderline of being economically justified; other proposals offer a very low return. As long as coastal communities continue to permit development, they need to address these issues.

Bacon’s bottom line. As I’ve made clear repeatedly on this blog, I’m not convinced that human-caused climate change is a cause for alarm, much less an excuse to re-engineer the economy. But you don’t need to be an apocalyptic environmentalist to value resiliency. Disasters happen. They always have, always will. We don’t protect ourselves from disaster by burying our heads in the sand and pretending they can’t possibly happen. We protect ourselves by anticipating possibilities, weighing probabilities and setting priorities. That kind of thinking is making inroads in Virginia, but we have a long way to go. I applaud Resilient Virginia for highlighting the issue. Check out the Resilient Virginia blog here.

Propping Up Coal at the Taxpayers’ Expense

W._Va._coal_mine_1908By Peter Galuszka

It’s always curious when big business and their bankrolled politicians complain about how the government and its regulations stymie the “magic of the free market.”

Then they turn around and keep protectionist policies that give certain industries big favors such as tax credits.

That’s what the General Assembly has done with a bill that would have reduced tax credits doled out to utilities that burn coal mined in Virginia. The original proposal backed by Gov. Terry McAuliffe was intended to help fill a $2.4 billion gap in the state’s biennial budget.

The idea quickly ran afoul of Dominion Virginia Power and the Virginia Coal & Energy Alliance. The original idea was to scale back tax credits but cap coal tax deductions at $500,000 in any given year. But after the utility and the coal industry lobbyists got involved, a bill to retain the tax credits was quickly approved setting caps at a more generous $7.5 million in a given year.

The credits stem from a law passed in 1999. Its purpose is to make it easier for big utilities like Dominion to choose thermal coal mined in Virginia over product mined elsewhere.

Coal production peaked in the state at 46 million tons. It’s now about 22 million tons or less. Coal employment has likewise dropped sharply over the years.

Much of the coal mined in Southwest Virginia is of high quality and some can be used either to generate electricity or make steel. The problem is its cost. Many of the seams in the state have played out and coal is increasingly thinner and is in  harder to reach areas. The cost of mining it has gone up.

For years coal maintained a price advantage over alternatives such as natural gas but thanks to hydraulic fracturing, that is no longer the case. Utilities like Dominion have been converted facilities to gas or are building new plants that use gas. Its last coal-related plant is a hybrid near St. Paul.

What’s causing this shift away from coal? High production costs and cheaper alternatives. Out West, in the Powder River Basin of Wyoming and Montana, coal is cheap and easy to mine. It does well. In other words, the free market is affecting  the declining Virginia coal industry  yet the General Assembly wants to prop it up at the expense of taxpayers and the budget.

By the way, Dominion and coal giant Alpha Natural Resources in Bristol are among the biggest political donors in the state.

The Self-Inflicted Infrastructure “Crisis”

Gravel roads look a whole lot better if you're paying for them yourself.

Gravel roads look a whole lot better if you’re paying for them yourself.

by James A. Bacon

We continually hear about an “infrastructure crisis” in the United States, a malady from which Virginia has not been spared. Talk of pot-holed streets, tottering bridges and crumbling highways invariably moves to talk about the need to spend more on infrastructure, which morphs into raising taxes — never by talk about paring back infrastructure that has outlived its economic usefulness.

However, there is a growing body of commentary suggesting that the problem may not be too little infrastructure but too much — too much of the wrong kind of infrastructure in the wrong place. The drum-bangers for more infrastructure spending ignore a fundamental reality: The more infrastructure you build, the more you have to maintain. The more maintain, the more you spend on maintenance. The more you spend on maintenance, the less there is to spend on new stuff.

Writing in New Geography, John Sanphillippo focuses on the disproportionate resources devoted to paving and maintaining subdivision roads in New Jersey. Based on his description, New Jersey should rename itself from “the Garden State” to “the Asphalt State.” The New Jersey Highway Trust Fund is near bankrupt, he writes. Unless the gas tax is raised, all revenue will go exclusively to debt service. And we thought we had problems in Virginia!

Consider the dynamics in the historic Water Witch subdivision near Sandy Hook. The Home Owners Association maintains gravel subdivision roads. Writes Sanphillippo:

When people believe their property tax money entitles them to certain things they often have high expectations. They tend to have a very different attitude when they know they’re going to be writing a check directly for the level of service they ask for. This difference in who pays for the roads leads to different outcomes.

Back in the late 1980’s I was privy to HOA meeting debates where some members demanded that the roads be paved. They were tired of the ruts, mud puddles, and problems of snow removal. The dirt roads were one of the things that had kept property values depressed for decades. So a consulting engineer was brought in and explained exactly what it would cost to pave the roads. It would be many millions of dollars divided by the forty-two homes in the community. That conversation came to a halt instantly. So much for paved roads at Water Witch. The compromise was to maintain the gravel roads to a slightly higher standard with annual adjustments that were far more cost effective.

When government pays for subdivision roads — or bridges, highways or mass transit — people tend not to care about cost. After all, someone else is paying for it. When confronted with the reality of paying themselves, they have a very different attitude.

Here in Virginia, people get frustrated by traffic congestion, which costs them considerable time and inconvenience. They demand that “government” fix the problem — just don’t raise their taxes. Someone else should pay. When it comes down to forking over their own money, people display a remarkably high tolerance for congestion. If they have to pay for it, they’ll usually opt to plug in their iPod and put up with an extra ten minutes of driving.

This reality — that people always want more of something if someone else is paying for it but will settle for less if they have to pay for it themselves — suggests that we should apply an acid test to transportation projects whenever possible: Can the project be paid for with tolls or user fees? If there’s enough demand, the project should be built. If the demand isn’t there, it shouldn’t be.

Questions we should be asking ourselves: Why should the public be asked to pay to maintain non-through subdivision roads? Why should the public be asked to pay for rural roads that carry barely any traffic? What percentage of Virginia’s maintenance spending is consumed by lightly traveled subdivision roads and country roads — and how many more miles of each do we continue to build year after year? In other words, how much of our infrastructure “crisis” is entirely self-inflicted?

U.S. 29… The Saga Continues

VDOT rendering of proposed Rio Road interchange

VDOT rendering of proposed Rio Road interchange

The battle over the Charlottesville Bypass may be over, but the battle over what to do instead is heating up. After pulling the plug on the super-controversial, $240 million bypass early last year, the McAuliffe administration dusted off a plan to upgrade the U.S. 29 commercial corridor north of Charlottesville by investing in a series of spot improvements, parallel roads and grade-separated interchanges. Now the community is up in arms over the proposal to put an $81 million grade-separated interchange at the intersection with Rio Road.

Last week, “hundreds” of citizens attended an open house meeting to voice their opposition to the interchange, which would eliminate a major bottleneck along the clogged commercial corridor, which also serves as a U.S. highway. (See WVIR’s coverage from last week.)

The most steadfast opposition comes from businesses located near the proposed interchange, whose access to major thoroughfares would be diminished by the new configuration of the Rio Road/U.S. 29 intersection. The businesses have been joined by citizens who worry that construction will cause detours and other inconveniences.

Clearly, there are no perfect, painless solutions. The concerns of those who will be negatively impacted by the project are legitimate. The question is whether those concerns should outweigh the general good stemming from the proposed package of improvements. U.S. 29 is, after all, a U.S. highway, whose primary function is to provide connectivity between cities, not to serve as a local main street.

From what I can glean from local media accounts, pieces of the $200 million corridor improvement package are uncontroversial — a $54 million extension of Berkmar Drive parallel to U.S. 29 and a $51 million widening of U.S. 29 between Hollymeade Town center and Polo Grounds Road. Both projects offer tangible benefits and should go forward.

Here’s the question: Could the $81 million allotted to the Rio Road interchange be invested usefully in other improvements? If so, would the economic return on investment — as measured by congestion mitigated and traffic accidents reduced — come close to the benefits of the Rio Road interchange? If so, perhaps the Virginia Department of Transportation should consider reallocating the funds to other projects. However, if the Rio Road project offers a demonstrably superior return on investment, then VDOT officials should not be dissuaded by the public opposition.

I don’t know the numbers, so I can’t make a judgment. But I do have faith in Philip Shucet, the former VDOT commissioner drafted by the McAuliffe administration to devise a reasonable solution to an intractable problem. If opponents want to make the case that the interchange shouldn’t be built, they should demonstrate how $81 million could be invested to greater effect elsewhere.

Update: Shucet responded to my suggestion that the Rio Road interchange could be hived off from the other improvements: “To make the Berkmar – Hillsdale parallel road network work, you have to grade-separate Rio.  It would be irresponsible to construct Berkmar and Hillsdale and somehow believe that it’s ok to wait and see how Rio fairs in the future. ”

The latest traffic numbers say 107,500 cars, a mix of local traffic and vehicles traveling through the region, will be traveling through the intersection by 2040. The grade-separated interchange (GSI) will allow the through traffic to pass through without conflicting with local traffic.

As for local business’ loss of roadway access, Shucet says, Albemarle Square will lose only one of four points of access, and Fashion Square only one of six. Furthermore, the construction plan limits disruption to 103 days.

– JAB

Let Richmond Be Richmond

Virginia Museum of Fine Arts gallery. Artsy fartsy, it's who we are. Get over it. Embrace it.

Virginia Museum of Fine Arts gallery. Artsy fartsy, it’s who we are. Get over it. Embrace it.

I delivered this speech last night to a gathering at the Branch House in an event hosted by the Virginia Center for Architecture. — JAB

Buffalo, N.Y., a metropolitan region about the size of Richmond, is debating how to pay for a new $1 billion stadium complex for the Buffalo Bills National Football League team. The City of Richmond is debating how to pay for a $56 million stadium for the Richmond Squirrels AA baseball team. I don’t know if Buffalo will ever find the money, but it really doesn’t matter. If professional sports is your yardstick of metropolitan prestige, Buffalo is running – maybe I should say stampeding — Richmond into the dirt.

But, objectively speaking – assuming this audience can be objective – where would you rather live? Let’s look at some commonly used metrics:

  • The Richmond metropolitan region has a lower unemployment rate than the Buffalo metro – 4.8% compared to 5.8%.
  • Richmond has a lower poverty rate – 11.6% compared to 14.4%.
  • Richmond has a higher median household income — $55,300 compared to $46,400.

I think we can safely and objectively say that big league sports is no guarantee of metropolitan prosperity.

While Richmond can’t seem to get a minor league baseball stadium off the ground, consider VCU’s Institute for Contemporary Art. The community managed to raise $33 million through private philanthropy with no angst whatsoever.

Pro football or contemporary art. What do our choices tell us about the Richmond region? Richmond is an artsy fartsy kind of town. And that’s OK. In fact, I’m going to argue that artsy fartsy is a good thing as we reinvent ourselves for the 21st-century Knowledge Economy.

It is commonplace today to observe that the biggest challenge for any metropolitan region is recruiting and retaining the highly skilled, highly creative citizens – scientists, artists, educators, entrepreneurs – who drive innovation and contribute disproportionately to economic growth. Somewhat more controversially, I would argue, those desirable citizens are more likely to want to live and build a career in a region that has vibrant arts & culture than one that has big league athletics.

If you accept that proposition, then it tells you a lot how we ought to be investing our civic capital. For the billion dollars it would take Buffalo, N.Y., to build a bigger, better stadium for the Buffalo Bills, we could make Richmond the arts capital of the Southeastern U.S.!

The urban geographer Richard Florida made a big splash thirteen years ago when he published the book, “The Rise of the Creative Class.” His argument, boiled down to its essence, is that Americans, young Americans especially, were increasingly likely to choose where to live based on the attributes of the region rather than because that’s where they could find a job. He turned economic development on its head. Instead of recruiting corporations, we should be recruiting the creative class. Corporations will follow the creative in order to gain access to employees with the higher-order skills and aptitudes that are in short supply.

If we embrace that perspective, we need to ask two fundamental questions: (1) What does it take to attract young professionals to RVA? and (2) What does it take to keep them here? In other words, how do we do a better job with recruitment and retention?

Richmond has a relatively stable population. We don’t get a huge flux of people moving in or moving out. Fortunately, we do seem to attract more people than we lose — we experience net in-migration. Between 2013 and 2014, the Internal Revenue Service recorded the influx of nearly 32,000 new “tax returns” into the core Richmond region – by which I mean Richmond, Henrico, Chesterfield and Hanover. During the same period, those four localities experienced an out-migration of 29,000 tax returns. That represented a net gain of about 2,800 tax-paying households in a region with about 300,000 tax returns – or a gain of not quite one percent. That’s not bad. But it could be better: We’re not in the same league as national talent magnets like Austin or Raleigh, much less Silicon Valley.

Interestingly, two-thirds of the in-migration came from other locales in Virginia, only one-third from outside the state. Pending closer analysis of the numbers, I would conjecture that that RVA functions as a regional magnet for talent, as opposed to a national magnet, drawing mainly upon the hinterland of smaller Virginia cities and towns. Many could come from the many fine colleges and universities in the state. But we really don’t know. There’s a lot we still need to learn. Continue reading