Category Archives: Transportation

Questions about Bidding War for FBI HQ

Rendering of proposed new FBI headquarters

Rendering of proposed new FBI headquarters

There’s a bidding war between Virginia and Maryland to snag a planned, 2.1 million-square-foot Federal Bureau of Investigation headquarters campus. Maryland Governor Larry Hogan is in for $317 million in state and local funds, according to the Washington Business Journal. Governor Terry McAuliffe is in for $120 million. In both cases most of the money would be applied to make transportation improvements near the proposed sites.

The Virginia location would be in the Springfield area, and the funds would be used to mitigate the transportation impact of relocating thousands of employees from Washington, D.C., to Northern Virginia. There are many interesting angles to this story:

  • Would the $120 million McAuliffe proposes spending benefit mainly the FBI and its employees, or would the contemplated improvements benefit others in the Springfield area as well?
  • Where would the money come from, and what alternate uses are there for that money? What other projects would be deferred?
  • How would the move alter commuting patterns? Would a significant number of employees be “reverse commuting” from Washington, D.C., to Virginia? Will the relocation ease or stress Northern Virginia’s transportation problems?
  • What would be the economic benefits of bringing the FBI to Virginia? Presumably, as a federal facility, the headquarters would generate no real estate tax revenues. Would a Virginia location inspire many FBI employees to move to Virginia — and, given the lack of property tax revenue, would they represent a net gain to the state and local governments and their taxpayers?
  • Who owns the Springfield site for the new headquarters? How much would the property owner stand to benefit from this deal and resulting investment in transportation improvements?

— JAB

A Once-in-a-Century Opportunity to Get Transportation Right

Photo credit: Wall Street Journal

Photo credit: Wall Street Journal

by James A. Bacon

Take the Uber revolution of summoning rides with a smart phone. Then add driverless cars, which eliminate the expense of paying someone to drive the car. Then overlay the emerging business model of Transportation As a Service, in which people pay for rides when they need them rather than buy cars that sit idle 90% of the day, often incurring parking fees in the process. Shared self-driving cars could take up to 80% of all vehicles off the road, according to a Massachusetts Institute of Technology study noted in a Wall Street Journal thought piece by Christopher Mims.

How would the impact of such an eventuality ripple through the rest of the economy? While acknowledging that such things are impossible to predict, Mims speculates that shared, self-driving cars will spur “suburban sprawl.”

Nearly everyone who has studied the subject believes these self-driving fleets will be significantly cheaper than owning a car…. With the savings you will be able to escape your cramped apartment in the city for a bigger spread farther away, offering more peace and quiet, and better schools for the children.

As for the putative preference the Millennial generation has for living in the city, writes Mims, it’s a myth. “Not only do 66% of millennials tell pollsters they want to live in the suburbs, they are moving there, as population growth in suburbs outstrips growth in cities.”

I don’t agree with Mims’ conclusion, but these are ideas worth exploring. I’m most intrigued by the MIT forecast that the shared, driverless-car future will take 80% of all vehicles off the road. For purposes of argument, let’s say that shared, driverless cars take only half of all vehicles off the road. That’s still an astounding number.

My first question is this: Will the streets, roads and highways in a world of shared, driverless cars be less crowded? To answer that, we must distinguish between the number of vehicles and the number of trips taken. Unless people take fewer trips, they still will need means of conveyance. If everyone rides solo cars, the country may need fewer cars but there will not be fewer cars on the road. Only if people share rides — either in conventional cars, vans or micro-buses like the one pictured above — will there be a need for fewer cars on the road. I think it’s possible that we’ll see fewer cars on the road, but no one can make such a prediction with any confidence.

Here’s what we can predict: A shift to shared, driverless cars will reduce the number of vehicles needed to serve the population. To the extent that fleet operating companies maximize the asset value of their fleets by running them 24/7, most cars will be on the streets (or in maintenance garages or recharge stations) instead of sitting in parking lots and parking decks. The most confident prediction we can make is that America will need fewer parking spaces.

Shrinking acreage dedicated to parking will have a profound impact on human settlement patterns. While it will free up some land in densely settled urban areas — putting a lot of parking garages out of business — the biggest impact will be in the scattered, low-density areas we think of as suburbia. Millions of acres of parking lots across the country will become redundant and unnecessary.

If localities are intelligent enough to eliminate minimum parking requirements, retailers would have every incentive to convert acres of land into something useful — offices, townhouses, apartments, parks, whatever. So much land would be freed up from redundant parking lots that there would be no need to develop another acre of greenfield land for another generation. Localities that anticipate this opportunity by revising their comprehensive plans and zoning codes will enjoy a huge advantage over the laggards in attracting new development.

Now, back to Mims’ observation that Millennials prefer “the suburbs” by two to one over “the city.” That’s a meaningless statement. True, young families may prefer so-called “suburban” jurisdictions with quality school systems, but the operative factor is the quality of the schools, not the low-density and auto-centric design of the communities. Other research shows that Millennials also prefer walkable, bikeable communities. The preference for good schools may be stronger, but that doesn’t mean the Millennials wouldn’t jump at the chance to live in a community that offered both good schools and walkable-bikable places.

In contrast to Mims, I do not think that shared, driverless cars will spur more of the scattered, disconnected, low-density that we call “suburban sprawl.” To the contrary, I believe it will stimulate the redevelopment of low-density, auto-centric communities into walkable urban places.

Localities across Virginia will enjoy a once-in-a-century opportunity to convert parking lots into taxable development without incurring the offsetting liability of needing to upgrade the transportation infrastructure to support the denser population. But this will happen only if they stop mandating parking lot requirements and revise their comprehensive plans and zoning codes to accommodate the new possibilities.

Likewise, the Commonwealth of Virginia, which once again (and as predicted) finds itself short of dollars to fund the roads, highways and rail systems, needs to re-think the twenty-year future. The transportation infrastructure of the 21st century will be Uber-fied. Throw out all long-range traffic projections! Rather than sinking hundreds of millions of dollars into expensive new highways, light-rail rail and Bus Rapid Transit systems, we need to start thinking what kind of investments will expedite the coming of shared, driverless cars.

States and localities that work out the solution first will be winners. Those that stick to the current transportation paradigm will lose.

Let’s Prepare for the Next Uber Revolution

Graphic credit: Morgan Stanley

Graphic credit: Morgan Stanley

by James A. Bacon

Uber and Lyft, known mainly for providing taxi-like services, may find sprawling Sun-Belt cities to be the most hospitable markets for their new car-pooling services. That’s one of the conclusions arising from a new Morgan Stanley report on the proliferation of Uber- and Lyft-style services across the United States. The logic: Sun Belt cities have low-density human settlement patterns that will not support mass transit but have congested roads that could benefit from carpooling.

I can’t find the study itself on the Web, but a number of media outlets have reported on it, including this article by Myles Udland published for Business Insider and re-published in Slate. Writes Udland:

Uber and Lyft could have the biggest impact in the South. Instead of getting in your car and driving to work, or replicating the Northeast commuting experience of driving or walking to a train and heading into the city, more sprawling metros could enact large-scale, commuter-targeted versions of what is basically Uber Pool — Uber’s “carpool” option where you set a pick-up and destination and your driver is able to make pick-ups and drop-offs along the way.

In Uber own estimation, the implications of UberPool are “profound.” “On average, uberX already costs 40% less than taxi. Imagine reducing that cost by up to another 50%! In San Francisco, how about $6 to Uber from the Castro to the Financial District? Or $10 from Sunset to SOMA? At these price points, Uber really is cost-competitive with owning a car, which is a game-changer for consumers.”

But as Morgan Stanley observes (and Uber overlooks in its example) the metros most likely to benefit from UberPool and competing services are those that, unlike San Francisco, lack mass transit alternatives. Further, suggests Morgan Stanley, those cities would be well advised to invest in building networks of ride-sharing services rather than commuter rail. (I’m not certain what carpooling infrastructure would look like — perhaps dedicated locations analogous to bus stops where car-pooling cars and vans can pick up and drop off passengers without disrupting traffic flow.)

According to the Morgan Stanley metrics, as visually summarized in the map above, Virginia metros are not prime candidates for Uber-like carpooling. Yet I have long argued that Uber-like ride sharing services are exactly what our metros need. Outside the urban core served by METRO much of Northern Virginia could use UberPool. Richmond and Hampton Roads, with much weaker mass transit backbones, would be even more suitable.

There is no one-size-fits-all transportation solution for Virginia. And, while I prefer a Smart Growth vision for future development and re-development, I acknowledge that not everyone shares my refined urban sensibilities. I also acknowledge that it takes decades and billions of dollars to transform suburban sprawl into communities that can support mass transit. In the meantime, Uber-inspired carpooling may be the most cost effective way of meeting the transportation needs of millions of suburban Virginians.

Frustrated by Government? FOIA Is Your Friend

I-66by James A. Bacon

The Virginia Department of Transportation’s plan to toll solo drivers on Interstate 66 inside the Capital Beltway seeks to address a complex transportation problem with no easy answers. Among the groups that have taken an interest in the project is the McLean Citizens Association (MCA), which is concerned that the tolls might divert commuters from I-66 onto McLean neighborhood streets.

“As you are aware, so-called ‘cut-through’ traffic on local McLean streets is already significant in volume and is a major concern of the community,” wrote James A. Robertson and James S. Phelps, co-chairs of MCA’s transportation committee, in a letter to Helen Cuervo, administrator of VDOT’s Northern Virginia district.

The committee had not taken a position on the controversial toll proposal but wanted to better understand the logic behind it. Accordingly, Robertson and Phelps asked for copies of any VDOT or VDOT-sponsored studies of predicted driver reactions to tolls, dynamic tolling and toll increases, including analyses of driver sensitivity to price changes. A seemingly simple request.

About three months later, Cuervo wrote back, providing a brief description of the toll proposal and the justification for it. She concluded:

VDOT has studied potential impacts on a number of surrounding local roads and does not anticipate negative traffic impacts on traffic flow as a result of the I-66 Inside the Beltway Project. Our team currently is in the process of updating our traffic analysis to include the eastbound widening plans, and plan to release this additional study to the public in fall 2016. As we move forward with this effort, public input will continue to be a top priority. We look forward to continuing to work with you in order to keep your community informed.

That was it. No studies. No documentation to back up the statement that VDOT anticipated no negative impact on local roads. I love the part about working with the MCA to “keeping your community informed.”

My correspondent, known to readers of the blog as TMT (short for Too Many Taxes) was not pleased. “Why won’t VDOT release the price elasticity information or state it didn’t use any?  This is another reason ordinary people have trouble trusting government and why we see phenomena like Sanders and Trump.”

TMT, I sympathize. Welcome to the world that journalists deal with every day — getting non-responsive answers to requests for information. But I have a much better solution than voting for Trump or Sanders. File a Freedom of Information Act request! There are many advantages to going the FOIA route: (1) VDOT cannot dodge, duck or weave; it must respond; (2) VDOT cannot wait three months to get back to you; it must comply within 30 days (as I recall); and (3) you don’t have to explain why you want the information; just ask for it.

FOIA isn’t just for journalists. Citizens can use it, too. Check out The Document Project in which citizens made aggressive use of FOIA to lay bare the cronyism in Virginia Beach real estate development. Indeed, not only can you obtain formal reports or studies, a FOIA report can scoop up any email discussion relating to traffic diversion onto local streets. Go for it!

NoVa Legislators Balk at Bailing out Metro

by James A. Bacon

Eleven Virginia legislators from Northern Virginia say they would block any “new dedicated funding stream or tax increases” to fund Metro repairs expected to cost $60 million.

“We cannot in good conscience ask Virginia taxpayers to bail out years of mismanagement, negligence and wasteful spending,” stated a letter signed by House Majority Caucus Chairman Timothy Hugo, House Majority Whip Jackson Miller, Del. David Albo and Del. James LeMunyon.

Washington Metropolitan Area Transit Authority Chairman Jack Evans called the letter “ludicrous.” Channel 4 Washington quotes him as saying, “The fact of the matter is, Metro has a $300 million operating shortfall, an $18 billion capital shortfall and a $2.5 billion unfunded pension liability. And we have to address it some way.”

Wrote the legislators:

Virginia has more than met its funding commitments to WMATA. In 2007, Virginia committed $50 million per year for 10 years to fund capital improvements for Metro. In 2013, the General Assembly passed legislation to increase funding for transportation, providing $300 million for the construction of the Silver Line and generating about $80 million per  year for the Commonwealth’s Mass Transit Fund. The General Assembly also provides an annual operating subsidy to WMATA of about $100 million, Virginia has delivered over and over again.

The solution to funding Metro’s safety needs and on-going operations lies internally. WMATA’s financial problems are, in our view, largely self-inflected. Metro must get labor and operations costs under control. WMATA’s labor cost increases in recent years have exceeded ridership increases and …. benefits for WMATA employees are significantly than the norm among big city transit agencies. WMATA also has a $2.5 billion unfunded pension liability.

Bacon’s bottom line: The legislators’ numbers don’t include subsidies from Arlington, Alexandria, Fairfax County and Falls Church, or revenues from the Tysons special tax district and toll increases on the Dulles Toll Road to help pay for completion of the Silver Line to Dulles International Airport.

At the end of the day, Virginia has no choice but to help bail out WMATA. A collapse of the flailing giant would cripple Northern Virginia’s economy. But Virginian legislators need to drive the hardest bargain they possibly can to bring accountability to the organization or it will become a veritable fiscal black hole. It looks like senior Republican lawmakers in the General Assembly are willing to bargain hard. I have every confidence that downstate legislators will back them up.

(Hat tip: Tim Wise)

MidTown Tunnel to Open this Summer

Construction zone of Midtown Tunnel. Photo credit: Virginian-Pilot

Construction zone of Midtown Tunnel. Photo credit: Virginian-Pilot

A rare piece of good news on the infrastructure front: The new Midtown Tunnel between Norfolk and Portsmouth will open early this summer, months ahead of its scheduled December completion. Officials with Elizabeth River Crossing said they had made “significant progress” on construction, and expect both lanes of the second tube to be fully open by late summer, reports the Virginian-Pilot.

The financing of the Downtown/Midtown Tunnel project embroiled Hampton Roads in controversy over the timing and size of the tolls. The McAuliffe administration has largely defused the issue, but the flap led many to question the value of using public-private partnerships to build and operate transportation mega-projects.

While private financing, ownership and operation of transportation assets raises many prickly questions, ERC’s performance with the enormously complex Midtown Tunnel project supports the argument that outsourcing design and construction to private entities can be a viable way to limit state exposure to delays and cost overruns.

— JAB

Siding with the Least Greedy Bastard

Tesla Model S -- roughly $30,000 in subsidies per car sold.

Tesla Model S — roughly $30,000 in subsidies per car sold.

by James A. Bacon

Elon Musk has a gift for spinning fabulous visions involving super-cool technology — everything from solar energy and rocket ships to high-speed rail and electric cars. But he has also mastered the art of scrounging money from government. According to a year-old Los Angeles Times article, his enterprises had racked up some $4.9 billion in government subsidies.

So it is with mixed feelings that I read that Tesla is applying to open a second store in Virginia, this one in the Richmond area, against the opposition of the Virginia Automobile Dealers Association. The auto dealers fought Tesla’s application to open a store in Fairfax a couple of years ago on the grounds that long-standing state law prohibits automobile manufacturers from owning dealerships in most cases. Musk won that round — I’m not sure upon what grounds — and now he hopes to win again.

Whom does one root for — the big, fat, out-of-state crony capitalist or Virginia’s little, skinny home-grown crony capitalists?

On the one hand, I oppose laws prohibiting auto manufacturers from selling their own cars directly. Such restrictions benefit a select class of multimillionaires — local auto dealers — from competition, probably at the expense of the consumer. Therefore, I think, let Musk open his second Tesla store.

On the other hand, I think, dude, haven’t you benefited enough from manipulating the government? Isn’t $4.9 billion enough? Back away from the trough and leave something for the smaller piglets! Writes Phil Kerpen in National Review:

Every time a Tesla is sold, we witness a transfer of wealth to a rich hobbyist (most Teslas are their owners’ third or fourth car), while average Americans are on the hook for at least $30,000 in federal and state subsidies. Tesla is more a regulatory arbitrageur than an auto manufacturer.

This increasingly represents how the U.S. economy is organized. There are so many subsidies, tax breaks, regulations and exemptions that almost every business benefits from government-provided preferences somehow. If a company doesn’t work the system, then some predator will come along with its lawyers and lobbyists and campaign contributions and put it out of business. You’ve got to lawyer up just to stay alive.

In such a world, I suppose my sympathies go to the least greedy bastards who fleece me the least, whose kid goes to school with my kid, who supports the same local causes that I support, and who circulates his wealth in the local economy, patronizing local law firms, advertising agencies and the like. I suppose I root for the automobile dealers…. although I do so with little enthusiasm.