Category Archives: Transportation

The Demon in the Machine

Chris Spencer

Chris Spencer

By James A. Bacon

On Oct. 25, 2013, Chris Urmson, a leader of Google’s autonomous car project, proclaimed that legal and regulatory problems posed no major barrier to the commercialization of Self-Driving Cars (SDCs). When accidents did occur, he told attendees of the RoboBusiness conference in Santa Clara, Calif., data collected by the cars would provide an accurate picture of exactly who was responsible. He shared data from a Google car that had been rear-ended by another driver. The annotated map of the car’s surroundings clearly indicated that it had halted smoothly before being struck by the other vehicle.

“We don’t have to rely on eyewitnesses that can’t act be trusted as to what happened—we actually have the data,” Urmson said. “The guy around us wasn’t paying enough attention. The data will set you free.”

The very same day, Toyota settled a case in which an Oklahoma City jury had awarded $3 million for a 2005 incident in which a Camry driven by 76-year-old Jean Bookout had accelerated out of control. Bookout had said she tried to use the foot brake and emergency brake to no avail. Toyota lawyers had argued that she must have hit the gas instead. At issue was the performance of an electronic throttle control system that replaced mechanical links between the accelerator pedal and the throttle in older models. Siding with Bookout, the jury bought the story that the electronic throttle was flawed.

Google may have data on its side but accident victims sometimes have judges and juries on their side. Toyota had won all previous unintended-acceleration cases and an exhaustive study by the National Highway Traffic Safety Administration could find no flaw in the brake’s computer code, but the judge instructed the Oklahoma City jury that it could find a product defective even if no defect could be identified.

“It opened the floodgates,” says Chris Spencer, a Richmond, Va., attorney who has represented automobile manufacturers in hundreds of cases, including dozens that have gone to trial and reached a jury verdict. “All a lawyer has to do is get his client to say, ‘I did nothing wrong but something went wrong – it must have been the vehicle’s fault.’”

(Cross posted from the Datamorphosis blog.)

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Over Budget, Seven Months Late… and Counting

Phase 1 of the Rail-to-Dulles project was supposed to be the good phase. For quite a while, it appeared to be running on budget and on time, providing reason to be optimistic that the highly controversial Phase 2 of the project might do so as well. But it hasn’t worked out that way. The story has been chronicled in the Northern Virginia press but has gotten little attention downstate, even though Virginia taxpayers are helping to foot the bill for the mega-project.

The track and stations all have been built but a critical piece of the infrastructure – the installation of radios that don’t meet code — as well as leaky roofs at rail stations and various technical problems have delayed the opening seven months so far. Metropolitan Washington Airports Authority officials say they do not know when the rail line will open. Now, in the latest wrinkle, project manager Pat Nowakowski has announced his resignation, purportedly for reasons unrelated to the delays, according to the Washington Post, making resolution of the issues even more difficult.

When a project of this magnitude runs this late, and property owners in the Tysons area have invested millions of dollars in expectation of a Metro-led surge in demand, this cannot end well. Meanwhile, we have this piece of news: The office vacancy rate in Fairfax County crept another half percentage point higher in 2013 to 14.9%, the highest since the Savings & Loan crisis of 1991. So reports Inside Nova.  And, as I blogged yesterday, population growth in Northern Virginia has slowed markedly.

– JAB

Why San Franciscans Are Thinner than Other Americans

SONY DSCNo, it’s not the bean sprouts and tofu. It’s not even the great year-round climate that encourages people to do stuff outdoors. It’s the hills. The Bacon family has hiked and biked a lot of hills over the past three days and we’ve eaten a lot of food, but the hills won. I swear I have cinched in my belt buckle by a notch.

As I recall, one of the largest concentrations of superannuated (really old) people is in the Caucasus Mountains. The Georgians, Armenians and Azerbaijanis get lots of exercise walking up and down mountains. Living around hills is healthy! I don’t recall seeing a single fat person in San Francisco. (OK, maybe a couple of hefty people but no obese people). I’ve seen more little old Chinese ladies on walkers chugging up the hills in Chinatown than I’ve seen fat people.

Oh, maybe I should add that it’s not just the hills. It’s the hills in combination with the sidewalks. San Francisco is a walking town. The city has great streetscapes and no matter where you are there is an abundance of destinations within walking distance. People walk places, and when they walk, they walk on hills. It’s that simple.

– JAB

Bicycling in Paradise

SONY DSC

One of California’s greatest assets is its climate, and San Francisco, though foggier than nearby locales, is no exception. Climatically speaking, the city is as close to paradise as any location on the planet, which makes it a great place to spend outdoors and a great place to bicycle. As one would expect, San Francisco has an advanced bicycle infrastructure, with some dedicated bike lanes and lots of sharrows. Also bicycling is embedded deeply enough in the transportation system that you don’t feel like you’re taking your life into your hands when you share the roads with cars.

Quite possibly the bike lane with the most awesome views in the world.

Quite possibly the bike lane with the most awesome views in the world.

Having spent only a couple of days here, I cannot profess any expertise on the biking scene, but it seems pretty clear that with all the mass transit — between buses, light rail, trolley cars and cable cars, San Francisco may have more different types of mass transit than any other city in the world — not to mention ZipCar and Uber, anyone can get around perfectly well owning a bicycle instead of a car. The main drawback to establishing a strong bicycling culture here is the hills — they’re not for the weak.

One of the things I like about San Francisco is that, although it is very dense (the second densest city after New York City, as I recall), it is as not automobile-hostile as Manhattan. Owning your own car is not an act of folly, as it would be for most Gothamites. Thus, the city offers the widest possible array of transportation choices. (The way the city handles parking is particularly interesting. I’ll have more to say about that in a later post.)

Clearly, the end product is something that people value highly. Between the superior economic opportunities afforded by the technology- and innovation-economy in the San Francisco Bay region, the divine climate and the quality of human settlement patterns, people have bid up the price of real estate to astronomical levels.

– JAB

Can Virginia Reverse the Stroadification of Rt. 1?

The Rt. 1 area under study. Click for larger image.

The Rt. 1 area under study. Click for larger image.

by James A. Bacon

People living along the U.S. Route 1 corridor in Northern Virginia seemingly desire contradictory things. They want better pedestrian and bicycle safety, they want mass transit. … and they want automobile traffic to flow faster. Alas, designing the corridor to move automobiles faster makes roads less safe, and it discourages the kind of development that would invite the higher-density, mixed-use development that would support mass transit.

Stewart Schwartz, executive director of the Coalition for Smarter Growth, explores the dilemma in a thoughtful two-part series (Part 1 and Part 2on the challenge of re-developing Route 1. His solution, at the risk of over-simplifying, is to switch the perspective from designing the corridor for cars to designing it for people. Planners are scheduled to submit specific recommendations for the corridor by July. If they focus on creating walkable, transit-oriented communities, Schwartz contends and I concur, automobile traffic flow will improve as well.

A few years back, the Virginia Department of Transportation proposed reducing posted speeds from 45 m.p.h. but an uproar ensued. Apparently, too many people depended upon U.S. 1 as a commuter route and imagined that lower posted speeds would translate into lower actual speeds and longer commuter time. But lowering the speed is critical to achieving the goal of walkability, walkability is required to make mass transit economically viable, and viable mass transit is required to reduce the volume of cars on the highway.

The problem is that U.S. 1 fits the classic definition of a stroad, a street-road hybrid. The route started as one of America’s first national highways. But Virginia state and local governments neglected to control access to the highway, with the result that it became cluttered with haphazard development, cut-throughs, curb-cuts and stoplights. Functionally, in Northern Virginia, Fredericksburg, Ashland, Richmond and Petersburg, the highway became a main street. Yet it failed to fulfill the functions of either highway or main street properly. The lanes were too wide and the speeds too intermittently high to create walkability or the higher-end development that is drawn to walkable places. At the same time, Rt. 1 became so congested with local traffic that it failed as a highway.

At some point, the people of Alexandria and Fairfax County must decide whether they want Rt. 1 fulfill its destiny as a highway or a street. It cannot do both.

Rt. 1 should be easier to salvage in Northern Virginia than in points south. There is so much demand in the region for walkable, transit-oriented communities that private investors should be able to re-develop the low-value development that exists now at higher densities fairly quickly. Proffers and/or impact fees, sweetened by higher density allowances, should be available to pay for streetscape improvements to make the corridor more hospitable to pedestrians. Further, there is such a large volume of traffic that the corridor should be able to support mass transit.

Transportation planners could help by reallocating right of way, in effect converting the former in-name-only highway from a stroad to a street. Reducing lane widths from 12 to 10 feet would free space for bicycle lanes and make the “highway” easier for pedestrians to cross. Yes, narrower lanes would slow the peak travel speed of thousands of commuters to Fort Belvoir. But if the narrower lanes were accompanied by less automobile traffic, lower posted speeds could be offset by shorter waits at traffic lights, less stop-and-go.

All urban Virginians should follow the Rt. 1 experiment with great interest. If Northern Virginia can find a workable solution for the old Jefferson Davis Highway, there is hope for the rest of us.

Tech Insurrection

AnthonyTownsendSmart cities, says Anthony Townsend, will be forged by geeks, activists and civic hackers through bottom-up technological innovation.

By James A. Bacon

Anthony M. Townsend, a research scientist at New York University, has made a big splash with his book, “Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia,” in which he makes the case for a bottom-up, technology-driven transformation of the world’s cities.  But he’s not satisfied with preaching from his academic perch on how a grassroots movement of civic hackers is rewriting the social contract between citizens and government. He is taking active part.

As audacious as it may sound, Townsend hopes to build a peoples’ wireless telecommunications system on the New Jersey coast in place of the ATT and Verizon networks that failed during Hurricane Sandy. He is one of a group of citizen volunteers in the Hoboken area who are patching together a distributed wireless network at very little cost. Paralleling the municipal Wi-Fi movement of a decade ago, each participant contributes a piece of the network. The trick is to tie all the pieces together.

“For $60 we can configure a radio that someone can take to their house and point to our rooftop tower,” he explains. The devices discover one another and, in the fashion of a bucket brigade, pass packets of information from one to another. “We’re putting a network together with our bare hands and spare change.”

The reward will be reliable, almost no-cost Internet service that should have enough redundancy built in to withstand another hurricane. Elevating the network to a level of performance on a par with the incumbent providers will be a challenge, Townsend admits.  There will be gaps in their system. But the plug-and-play, distributed nature of their system will cost a tiny fraction of what the telecoms spend on cell towers, infrastructure and other overhead. “It’s very cheap and easy to build,” he says. “We’ll be a lab to test it in the real world.”

Imagine the same kind of technological disruption applied to the electric grid, mass transit, paid transport services, parking, municipal lighting, water and sewer, education and other municipal systems. Then imagine technology applications that no one in municipal government or the Fortune 500 companies are even thinking about – like citizens collaborating to monitor the environment. Municipal government could become unrecognizable. Indeed, it’s no exaggeration to say that, if Townsend’s vision pans out, institutions for providing utilities and local government services will be reinvented on a scale not seen since the early 1900s.

The agents of disruption likely will not be municipal governments themselves, nor even the big technology companies and management consulting firms peddling efficiency and productivity solutions to local governments, says Townsend. The innovators will be tech-savvy citizens – civic hackers – who exploit the rapidly declining cost of sensors, microchips, wireless connectivity and networking technologies to conduct lots of experiments, learn rapidly and disseminate best practices around the globe. Already, he says, “The really transformative things are built by hackers, artists and entrepreneurs that are very end-user focused.”

Needless to say, there is some very smart money – with very deep pockets – that says Townsend is wrong. Tech giants like Cisco and IBM see local government, utilities and infrastructure as an emerging multitrillion-dollar market. At the 2014 Consumer Electronics Show, Cisco CEO John Chambers forecast cumulative revenue and productivity gains for the government sector globally to reach $4.6 trillion by 2020. Big Tech promises the ability to monitor things that have never been monitored, collect unprecedented volumes of data and crunch the numbers to identify patterns and anomalies that municipal managers had not noticed. By reducing leakage from water pipes, improving police response times, coordinating traffic signals and reducing power usage by street lights, technology companies promise billions of dollars in savings. Equally ambitious, IBM markets a “decision support system” that accesses vaults of under-utilized municipal data to analyze the interaction between everything from building permits to high school drop-out rates, housing vacancies to commuting times, to help managers and elected officials understand how investing money in one government sector will reverberate through the system to impact other sectors.

In a recent online debate with Townsend organized by the Economist magazine, Irving Wladawsky-Berger, a VP emeritus with IBM, argued against the proposition that “smart cities are empty hype,” insisting that top-down governance could work. “Digital technologies and the many data services they are enabling will significantly transform cities and make them smarter,” wrote the IBM executive. “These are highly complex projects, requiring considerable research and experimentation. As is generally the case with disruptive technologies, it is all likely to take longer than we anticipate, but the eventual impact will probably be deeper and more transformative than we imagine.” Not surprisingly, Wladesky-Berger sees the big corporations playing a major role.

Taking the position that smart cities are hype, Townsend raised the specter of tech companies creating proprietary “urban operating systems” and ecosystems of software vendors that extract royalties for “shuttling our money and data around smart cities.”  Worse, he said, “once ensconced, these firms will be nearly impossible to dislodge.” Read more.

(Cross posted from the Datamorphosis blog.)

Columbia Pike Streetcars: Delving Deeper into the Value-Capture Scenario

by James A. Bacon

Last week, I made the case that the best way to finance construction of the proposed Columbia Pike street car line in Arlington was to set up an improvement district along the route and impose a real estate tax surcharge on property owners to pay off the bonds. (See “A Second Opinion on the Columbia Pike Streetcar.“) “If the property owners are willing to go along, it’s probably a good idea. If they balk, it’s probably not.”

In response, I received an email from Eric Balliet, a communications specialist with Arlington County. His email is worth reproducing in full:

Your concern that the County is not asking the primary beneficiaries of streetcar – property owners along the streetcar line – to pay for these improvements is not completely accurate. Local funding for the streetcar will come from the Transportation Capital Fund, which is used for major investments in transportation infrastructure throughout the County. The Fund is supported by a commercial real estate tax rate of $0.125 per $100 of assessed value. This tax rate applies to all commercial and industrial properties – including those along the streetcar line. Before the General Assembly provided this funding mechanism for jurisdictions to improve transportation infrastructure, the County used limited general tax revenue for that purpose, including for development of Metrorail in the Rosslyn-Ballston and Route 1 corridors.

The County also has established tax increment financing (TIF) to capture the property value created by redevelopment to fund streetcar and other priorities. The Crystal City-Pentagon City-Potomac Yard TIF is helping to pay for infrastructure improvements such as streetcar in support of the Crystal City Sector Plan. The new Columbia Pike TIF will dedicate up to 25 percent of tax revenue growth generated by new development and property appreciation in the commercial and multi-family residential revitalization districts to affordable housing along the Pike. This ensures that some of the money generated by streetcar will help meet our goal of preserving existing affordable housing along the Pike as property values and rents increase.

One final note – regarding the capacity of streetcar versus bus: Today on Columbia Pike, nearly 600 bus trips per weekday carry more than 16,000 passengers daily. Buses already come every 2-3 minutes in rush hour. Based on updated regional population projections and County-adopted plans, we need transit capacity of 38,000+ daily on Columbia Pike by 2035 to ensure it doesn’t become gridlocked. There is not enough street capacity for buses alone to accommodate that many passengers. A streetcar vehicle can hold 100% more passengers than a regular bus and 40% more than an articulated bus. Accommodating more people in fewer vehicles is key to keeping traffic moving.

I thank Balliet for educating me about the mechanisms being used to finance the street car line, of which I had been unaware. This information enrichens the debate. I must give the Arlington Board credit for recognizing that commercial interests would be major beneficiaries of the county’s roughly $300 million streetcar investment and for creating mechanisms that would capture some of the value created by that investment to lessen the burden on general taxpayers. That alone puts Arlington’s streetcar proposal way ahead of downstate mass transit projects, such as Bus Rapid Transit in downtown Richmond and a light rail extension in Virginia Beach, which have no value-capture elements of any kind. So, I toff my hat to the Arlington Board.

That said, while preferable to funding the entire county share from General Fund revenues, Arlington’s financing mechanism is still deficient. First, by imposing what amounts to a real estate tax surcharge on all commercial and industrial properties, the board is creating what might uncharitably be termed a slush fund for transportation projects which, by their very nature, benefit some commercial interests but not others. While the mechanism is fair to residential taxpayers, it is not necessarily fair to commercial property owners. Second, using tax increment financing (TIF) to tap 25% of the growth in property tax revenue generated by new development is largely a cosmetic measure. Columbia Pike property owners enjoy the blessings of higher leases and rents but don’t pay any more under this scheme.

To my mind, there are two important benefits to a strict value-capture financing scheme. One is that it is fairer, requiring beneficiaries of the public improvement pay for the improvement. Second, it creates an objective and non-political mechanism for weighing the risk-adjusted rate of return on the improvement. Let’s imagine that we set up a special Columbia Pike Streetcar District and tell property owners in that district (picking numbers for purposes of illustration), “We’re going to add a 25% surcharge to cover the full cost of financing construction of the streetcar and pay for operating costs not covered by fares. In return, you will get a streetcar system which, by our calculations, will bolster your rents and leases by 10% over time. There are uncertainties in all these numbers but we think we’re pretty close. Would you vote for or against this idea?”

If presented with this choice, the property owners would engage in a vigorous debate over the merits of streetcars and the assumptions embedded in the proposal, leavened by their own intimate knowledge of business conditions and property values along the route. Unlike planners, politicians and pontificators, they would have skin in the game. They would have the most to gain if the streetcar is a hit and the most to lose if it’s a bust. They, unlike politicians, would be likely to base their preference not on ideology but upon a keen awareness of the bottom line. They would be far less likely to engage in wishful thinking. If a significant majority of property owners agreed — as they did when they set up the special tax district to finance U.S. 28 improvements near Washington Dulles International Airport — then the public can have far more confidence that the project makes sound economic sense. That’s no guarantee, of course; businesses often bet wrong on investments. But they bet wrong a lot less frequently than do politicians playing with others peoples’ money.

One last note: Regarding for the carrying capacity of buses versus street cars, there is a lively discussion on an email thread initiated by Rob Whitfield. Has anyone considered the economics of running double-decker buses along Columbia Pike?

How North Carolina Halted a Bridge Boondoggle

mid-currituck_bridge

Map credit: Lochner MMM

by James A. Bacon

Many Virginians know the agony of driving to vacation in the Outer Banks at the peak of the summer season. Heading south between Chesapeake and Kitty Hawk, you follow four-lane roads jammed with as many as 50,000 cars on Saturdays. Then, if you’re staying in Duck, Whalehead or Corolla, you have to head back north through more congestion. It sure would be nice to have a bridge across the Currituck Sound directly to Corolla.

As it happens, the state of North Carolina was planning to build a seven-mile span from Coinjock to Corolla. The Mid-Currituck Bridge, expected to cost $411 million in its most recent incarnation, could save an hour’s driving time. The project worked its way through the traditional North Carolina project-approval system and, at one point, construction was expected to begin in 2012 and to be open to traffic in 2013.

I’m sure there are a lot of vested interests in the Outer Banks that would love to see new transportation capacity that would make it easier for even more visitors to come rent cottages, rent kayaks and go surfing. But North Carolina has instituted a system that we’re still working on here in Virginia: a methodology for ranking proposed highway projects according to cost, saved travel time, congestion relief, safety and economic benefits. According to the Virginian-Pilot, the Tarheels have scored some 1,284 projects and plans to release results for another 500 in May.

The result for the proposed Currituck Bridge: a score of 23.4 points out of a possible 100, giving it a rank of 178th in importance to North Carolina. It doesn’t look like the bridge will get state funding any time soon.

I have a problem with over-development of the ecologically fragile spit of land that originates in Virginia and extends almost unbroken all the way to Hatteras. The Outer Banks are a national treasure. Federal flood insurance subsidies are already encouraging excessive building on sand that could literally wash away with the next hurricane. The state of North Carolina doesn’t need to be subsidizing over-building as well.

That concern aside, I have a suggestion for the county officials of Currituck County who have been lobbying for the bridge. Don’t ask the citizens of North Carolina to pay for your bridge. Figure out how to pay for it yourself.

Issuing 30-year, tax-free bonds to cover the cost of $411 million bridge would require roughly $30 million a year in revenue. Could the bridge generate enough value for the tourism industry in the Northern Outer Banks to pay $30 million in financing costs and have local businesses come out ahead? If so, enact the needed legislation and get the deal done. If not, then the bridge, which is needed to accommodate peak traffic that occurs 13 or 14 Saturdays out of the year, would destroy economic value, not create it, and should never be built.

There are at least three potential financing mechanisms: tolls, value capture and excise taxes.

Tolls: A harried dad with antsy kids in the back seat would gladly fork over $10 or more to shave an hour off his drive to Corolla or points south. A toll could generate millions of dollars in revenue each summer to pay off the bonds issued to build the bridge. Indeed, before the project was put on hold, the Mid-Currituck Bridge project would have charged tolls. However, the North Carolina legislature envisioned the need to spend $28 million a year in gap funding, according to the News & Observer.

Value capture. Major beneficiaries of a bridge would be the owners of hotels and rental property. A bridge that cut driving time and made Currituck destinations the closest to Northern markets would allow owners to raise rents and generate more revenue. Set up a special district to impose a property tax surcharge to capture some of that added value and use it to pay off the bonds.

Resort meals tax. Other beneficiaries include owners of restaurants, shops and other beach amenities. Create a special resort tax district that collects an extra penny per dollar on retail sales. Apply that to pay off the bonds. Continue reading

Sprawl’s Hidden Subsidies

perverse_citiesby James A. Bacon

If planning and regulation were the answer to sprawl, then the Toronto metropolitan region ought to be a smart growth paradise. Toronto has a sophisticated, multi-tiered planning process, starting with an regional plan, plans for 30 upper-tier municipalities, and plans for 241 lower-tier municipalities (towns and townships, mostly). Yet outside the city of Toronto itself, which is undergoing a condo boom, there isn’t much to show for it.

The various municipal plans, which are comparable to Virginia’s comprehensive plans, define urban boundaries, control densities and show where growth should take place. The goal is for 40% of all new residential units to be built in already-urbanized areas. “That’s not happening,” says Pamela Blais, a city planner and principle of Toronto-based Metropole Consultants. “All the plans said all the right things. … [But] the regulatory approach isn’t sufficient to bring about the change.”

The failure of regulation to halt sprawling, auto-centric development was the basis for Blais’ 2010 book, “Perverse Cities: Hidden Subsidies, Wonky Policy and Urban Sprawl.” She had researched and written the volume to figure out how the planners’ plans had gone awry. If smart growth made so much sense, and if planners had the power to bring it about, why weren’t developers and home builders doing what they were supposed to do? Something else had to be going on, she reasoned, something that was not commonly recognized.

pamela_blais

Pamela Blais

As she delved into the subject, Blais found that real estate development is guided by massive hidden subsidies that shift costs from inefficient, land-intensive development to efficient, compact development. These invisible subsidies work at cross purposes to the regulations. As it turns out, developers follow the dollar.

Blais describes herself as a pragmatist. “It’s not an ideological argument I’m making,” she told Bacon’s Rebellion. “I’m interested in getting better cities. I’m happy to talk to everybody on the whole spectrum.” But her approach to urban development is one that fiscal and free-market conservatives can appreciate. The system for pricing public goods such as roads, water, sewer, electricity and public services bears little relationship to the cost of providing those services, she argues, with the result that a tangled skein of hidden subsidies incentivizes low-density development.

“Everybody thinks [sprawl] is the the invisible hand of the market. It’s a highly distorted market,” she says. “I’ve been arguing, let’s remove the distortions and take it from there. Remove the distortions and you’ll get a different development pattern. That should be the starting point.”

That is very much the argument that I have made in Bacon’s Rebellion, based largely on the work of EM Risse in his work, “The Shape of the Future” and essays published on this blog several years ago. Risse argued that charges do not reflect their “location-variable costs,” a succinct phrase that captures the spirit of Blais’ argument. In my reporting, I have focused mainly on one set of costs — transportation — but Blais carries the analysis to charges for utilities, municipal services, housing, parking and development charges as well. In “Perverse Cities,” she exhumed an impressive body of research to document her thesis across the board.

When you subsidize sprawl, you get more of it. When you penalize smart growth, you get less of it. To achieve smart growth objectives, Blais argues, what the United States and Canada need is not more regulation, which can create distortions of their own, but prices that reflect the underlying costs of development. 

Blais doesn’t oppose all subsidies. But she thinks they should be transparent and a subject of public discussion. “Right now, we’re not even having those discussions. People aren’t aware those cross subsidies are happening.” Here is a sampling from her book of how hidden biases are built into the system:

Water-sewer. Water-sewer charges typically are applied uniformly across a service area, regardless of how much it costs to provide the service. Sometimes charges vary by the volume of water; sometimes they do not. But charges rarely vary by the capital cost of extending water-sewer pipe longer distances to serve scattered, low-density housing, nor the operating cost of pumping water those greater distances. As a consequence, homeowners living in compact urban areas where the service is inexpensively supplied wind up subsidizing homeowners living in low-density areas where it is more expensive. Those subsidies could be avoided by breaking water charges into two components: a charge based on the volume of water consumed and a location-based charge that reflects the cost of building and maintaining the pipes. Continue reading

A Second Opinion on the Columbia Pike Streetcar

by James A. Bacon

This is exactly what we need in the debate over Arlington’s proposed $284 million streetcar system for Columbia Pike: close scrutiny from local citizens.

Arlingtonians for Sensible Transit (AST) has issued a paper listing 15 reasons why the streetcar would be a waste of taxpayers’ money. ”The consultant has collected its $100,000 fee by doing a shameless whitewash of the County Board’s desired outcome,” the paper concludes. “The losers are the County’s taxpayers who have not only paid for another worthless study, but may have to pay $310 million for a slow, uncomfortable, disruptive, hazardous, unattractive and inflexible system.”

The paper is a rejoinder to a report issued by HR&A Advisors last week that concluded a $284 million investment (in 2014 dollars, $310 million in future dollars) in a Columbia Pike streetcar system would generate significantly higher economic benefit than a far less expensive investment in an upgraded bus system. My quick-and-dirty analysis found the main conclusions to be supportable, although I suggested that if the benefits were as great as HR&A says they are, perhaps the city should finance the project by means of setting up a tax district to pay off the bonds. For property owners, the increase in leases and rents would more than offset the higher taxes.

Arlingtonians for Sensible Transit raises a number of issues that I had not considered. Some are unpersuasive but several of them give me pause. They bear a closer look.

  • The reason the proposed streetcar system could carry more riders than the proposed enhanced-bus alternatives is that the streetcars would have fewer seats and more people would be forced to stand: 28 sitting and 126 standing versus 60 sitting and 34 standing. “This is pure sophistry: Take essentially the same-sized vehicles, make the vast majority stand in one, and then claim that only that vehicle can meet capacity needs.”
  • While the HR&A study says the streetcars would run almost as fast as buses, AST cites a study to suggest that buses average speeds twice that of streetcars.
  • HR&A argues that streetcars are needed because an upgraded bus system would be over capacity by the year 2035. “Beyond the irrationality of spending hundreds of millions now based on speculation more than 20 years in the future, the consultant completely ignores the simple solution of increasing the number of [Bus Rapid Transit] buses.”

AST also assails HR&A’s impact on leases, rents and property values in the streetcar corridor. While I am not convinced — I think property values could rise — there is no denying the uncertainty associated with any such forecasts. Even the consultants conceded in an earlier report that streetcar impacts on property values can vary widely, depending upon a number of contextual factors.

It’s difficult for open-minded citizens who don’t have  time to pore through endless studies and documents to appraise the conflicting assertions and counter-arguments. And I would argue that we shouldn’t have to. There is a simple acid test: Structure the financing so that the chief beneficiaries of the improvements — property owners along the streetcar line — pay for those improvements through a special tax levy. If the property owners are willing to go along, it’s probably a good idea. If they balk, it’s probably not.

If streetcar service makes properties so much more valuable that tenants are willing to pay 10% more in leases and rents (say, $5,000 annually for a property), then a surcharge increasing the property tax (by, say, $2,500 annually) should be easy to bear. In that case, why wouldn’t the County Board want the prime beneficiaries to pay for the improvement rather than dunning taxpayers generally? If the deal cannot be structured to yield such a win-win outcome, or if property owners are reluctant to assume the risk associated with trading higher taxes (a certainty) for higher rents (speculative), that should be a warning that the risk-adjusted economic value created does not justify the investment. Continue reading