• Jon, Meet Doug

    Via Jason, I see that one of Richmond’s most thoughtful and entertaining bloggers, Jon Baliles, is backing away from his keyboard to take a job with the city of Richmond. Jon explains his move here:

    …I have been offered and accepted a position within the Mayor’s Office as a Public Information Manager.

    I was not expecting such a position to be proffered and I was even less sure I would take it. It took several days of hard thinking and talking with confidants about the opportunity. Nevertheless, I determined the time was right.

    Putting on a tie and shaving and riding the bus to the same office every day is something I have avoided like the plague for most of my adult life. Yet, awkwardness aside, it is now an opportunity to put forth some of the ideas I have crowed about from this perch.

    It gives me the opportunity to see how the city works from the inside and bring ideas and action and a fresh perspective to the discussion and possibly reality (or the dustbin). It takes away some freedom and independence that blogging allows, but it pays a lot better than the $0 per year I have been making.

    He also notes that he discussed the move with fomer Bacon’s contributor Conaway Haskins (who works for some guy up north, I think).

    This is an interesting move on a number of levels. While I can certainly appreciate the reluctance to wear a tie, Jon’s 90 day experiment (or longer, if things work out)on the inside of the beast he has ridden so hard over the last few years will be more than just an exercise in sartorial splendor, the glories of the GRTC or how one relates to a mayor who can be…mercurial. It will also give at least one blogger a taste of what life is like on the other side of the digital fence — selling proposals and ideas to a cautious, sometimes indifferent, and genuinely irrational public rather than critiquing them from afar. Perhaps the rest of us will be able to learn something from his efforts.

    Best of luck, Jon. And remember: the only person on Doug Wilder’s team is Doug Wilder.


  • Bonds Go Begging

    The state of Virginia is proud of its AAA bond rating. Local governments, like Henrico, are fond of such ratings, too. But what happens when the larger bond market suddenly decides it won’t buy any bonds at all — AAA rated or not?

    We’re seeing some of what can happen right now. Today’s Wall Street Journal has a piece on how one wealthy family told its bankers to stash their cash in the safest investment vehicles available. The results weren’t pretty:

    The Mahers rank among the earliest victims of “auction rate” securities, a once-obscure type of bond now sending shock waves through broad swaths of the U.S. economy. Auction-rate securities — an unusual type of long-term bond that behaves like a short-term bond — have become a keystone of modern finance. They are routinely used to fund everything from college student-loan programs to municipal road-and-bridge projects.

    These bonds became popular with investors looking for cashlike investments, because they offered better returns than traditional money-market investments but were just as easy to buy and sell.

    Recently, however, that advantage has disappeared. The market for auction-rate securities has dried up amid fears about fallout from the subprime-mortgage crisis. This week, New York’s Port Authority saw the interest rate on some of its debt jump to 20% from 4.2% amid disruptions in this market.

    We may not weep for the huge losses billionaires endure (the Mahers are still worth several hundred million dollars each), but the spreading trouble in auction-rate securities means even bigger problems for municipalities and local authorities issuing debt. The Port Authority’s example is truly eye-opening:

    The Port Authority of New York and New Jersey’s interest rate jumped Tuesday to 20% from about 4.2% when bidders didn’t show up at an auction of its securities by Goldman Sachs Group Inc. For the next week at least — until the rate is reset again in the next auction — the Port Authority, which oversees New York-area transportation facilities such as bridges and tunnels, will have to pay close to $390,000 in interest payments to holders of the securities. That is up from $83,611 the week before, said a Port Authority spokesman.

    Yes, the pain may be temporary. But the underlying affliction may take a long time to heal:

    In less tumultuous times, the banks might be expected to step in and buy some of these securities themselves to help smooth the process. But their balance sheets are already stuffed with other holdings — loans to corporate borrowers, lines of credit to customers, mortgage debt and more — so they have decided not to intervene in this market.

    As a result, well over $10 billion worth of auction-rate securities have been frozen. These included borrowings for Massachusetts prep school Deerfield Academy, Carnegie Hall and California’s De Young Museum, among many others.

    Issuers have said that they were originally drawn to the auction-rate market because it offered them low short-term interest rates on long-term debt. It also gives them an easy way to pay down debt if they become cash rich: simply participate in the auction and take it back.

    Investors have liked them because they have offered slightly higher interest rates than other plain-vanilla liquid holdings, such as Treasury bills. Corporate treasurers often hold them as alternatives to cash.

    Now, they are having second thoughts. Several government and pension funds, some of which sustained steep losses during last year’s credit crisis, are rewriting their investment rules and are adopting more conservative strategies.

    I do not know if any of Virginia’s bond debt, or that of its local governments and other debt-issuing authorities, is caught up in this latest crunch. But until the market works through its current problems, the debt window is a lot less friendly, and a lot more expensive, place than it was even a few weeks ago.


  • The Nichol Resignation Narrative Looks Weaker and Weaker

    The Nichol controversy continues to bubble after the College of William & Mary president submitted his resignation Sunday. Faculty and students have held protests and vigils — Nichol, it seems, was a popular president. Meanwhile, the blogosphere is aflame with accusations that the firing represents a triumph of right-wing, Christian mullahs — a sentiment that Nichols inflamed with his claim that the Board of Visitors refused to renew his contract for, among other reasons, his removal of the cross from the Wren Chapel and his consent to allow a sex workers show to be held on the campus.

    Nichol’s version of events is getting wide play because he’s the only one to speak openly about the reasons for his departure — he wrote a lengthy letter giving his side of the episode, blasting out a campus-wide e-mail describing his version of events. Other than to deny that it acted for “ideological” reasons, the Board of Visitors initially was circumspect. But details of Nichols’ termination are leaking out.
    For starters, the Virginia Gazette reports that the Visitors’ decision not to renew Nichol’s contract was unanimous. That is significant because it is difficult to imagine that the Visitors would have been unanimous had the decision been based upon culture-war issues like church crosses and sex shows. To see why I say that, let’s see who the Visitors are. (I have included the gubernatorial administration in which they were first appointed):

    Officers
    Michael K. Powell, Rector, Fairfax Station; Warner
    Henry C. Wolf, Vice Rector, Norfolk; Warner
    Suzann W. Matthews, Secretary, McLean; Warner

    Members
    Charles A. Banks, Gloucester; Kaine
    Robert A. Blair, Washington, D.C.; Warner
    Janet M. Brashear, Virginia Beach; Warner
    Thomas E. Capps, Richmond; Warner
    John Gerdelman, McLean; Warner
    Sarah Gore, Newark, Del.; Warner
    R. Philip Herget III, Alexandria; Warner
    Kathy Hornsby, Williamsburg; Kaine
    Jeffrey L. McWaters, Virginia Beach; Gilmore
    Joseph J. Plumeri II, Scotch Plains, N.J.; Warner
    Anita Poston, Norfolk; Warner
    John Charles Thomas, Richmond; Kaine
    Jeffery B. Trammell, Washington, D.C.; Warner
    Barbara B. Ukrop, Richmond; Warner
    Only one board member, Jeffrey McWaters, was appointed by Gov. Jim Gilmore, and he was reappointed by subsequent Democratic administrations. While this group very much represents the business, professional and government establishment — Michael Powell, the son of General Colin Powell, ran the Federal Communications Commission for several years — they all belong to the political mainstream, very much in line with Democratic governors Mark R. Warner and Timothy M. Kaine. Nary a right-wing, evangelical nut-job to be found among them.

    After Nichol released his resignation statement via e-mail to the W&M campus, Rector Powell expanded slightly upon the statement that the Board had previously made. Reports Bill Geroux with the Times-Dispatch:

    Though Nichol was an inspiring and charismatic leader, Powell said, the president’s job entails many less-glamorous duties such as operational planning, fundraising, community relations and crisis management, and Nichol had “meaningful weaknesses” in some of those areas.

    The board had tried to work with Nichol to clear up those problems, Powell said, but Nichol’s contract was coming up for renewal, and “sometimes at the end of the day you can’t make a fit.”
    Lending credence to Powell’s statment is a press release that the Board of Visitors issued on Sept. 28, 2007, regarding Nichols’ status at the university:

    One of the most critical responsibilities of the Board is to evaluate the performance of its chief executive. Conscious of our duty, the Board has developed a structured, objective and thorough review process. The Board intends to abide by its established process before reaching any decision. Pursuant to the terms of the President’s contract, the review will examine achievements as measured against goals and objectives presented by the President to the Board as well as other metrics. Additionally, our appraisal will include a 360 degree review, which is a feature of the best appraisal systems. Once this process is complete and we discuss the matter with the President, a final decision will be made solely on the best interest of the College. That decision should be expected in the spring of 2008.

    In other words, it has long been known that the Board has had concerns about Nichol’s operational performance, and it had developed an evaluation procedure that would be comprehensive, balanced and objective — a wise precaution, given Nichol’s volatile behavior.

    Whose version of events, then, do we believe: Nichol’s or the Board’s?

    Nichol listed four reasons for the termination of his contract: (1) removal of the Wren cross, (2) refusal to ban the sex workers art show, (3) implementation of the Gateway scholarship program, and (4) efforts to increase diversity and internationalization.

    While the Wren cross issue was unquestionably controversial, Nichol does not describe exactly how it might have played a role in the BoV’s decision. He implies that the Board’s objection to his handling of the situation was ideological. We are expected to believe that on his say-so. But it is entirely possible that the Board disapproved of the action less than the decision-making process, and the lack of consultation, that was behind it.
    The controversy over the sex workers art show popped up only in the past few weeks. There is no reason to think that it was a factor back on Sept. 28 when the BoV initiated its contract review process. The Visitors clearly were troubled by Nichol’s management style before the sex show controversy became a public spectacle.

    As for the Gateway scholarship program and efforts to increase diversity and internationalization, Nichol presents no evidence whatsoever that the BoV had any problem with them. Indeed, according to the Daily Press, Powell stated that the university plans to continue many of Nichol’s policies, particularly the emphasis on increasing diversity at the school.

    In other words, there is ample reason to believe that Nichol substantially mischaracterized the reasons for the BoV’s decision not to renew his contract. If that suspicion proves to be the case, then Nichol’s performance has been utterly hypocritical and contemptible. While taking on the mantle in his resignation letter of one who loves the College, he actually has defamed it by misrepresenting the cause of his resignation, portraying the institution as ruled, in effect, by mullahs and troglodytes, and resigning in such a way as to garner maximum attention — sending out a campus-wide e-mail with his tendentious version of the story.
    Combine this behavior with the suggestion leveled by Del. Bob Marshall, R-Manassas, that Nichol refused to yield important documents when presented with a Freedom of Information Act request (see “More to the Nichol Story at Wm & Mary“), and it looks like Nichol is neither someone who can be trusted with the truth nor someone who holds the interests of the College above his own.
    The Visitors have been dignified and restrained in responding to Nichols’ calumnies. I wish they would go public with Nichol’s performance evaluation and detail his deficiencies as a college president. Of course, they can’t: They are bound to keep personnel matters confidential. Nichol knows that he can say anything he wants, and they cannot. But that does not mean the public has to suspend its critical judgment and believe him.
    (Photo cutline: President Gene Nichol… Oops, sorry, that’s Nicholson, not Nichol.)

  • Adventures in Broadcasting

    Last night, I had the privilege of joining Shawn Smith at Richmond’s NBC affiliate, Channel 12, for a night of blogging, webcasting and commentary. Having not been in front of a camera for more than a decade, it was somewhat intimidating to think that my ugly mug would be beamed into unsuspecting households in central VA.

    But hey…I’m far less scary than some (where’s Will Vehrs when you need him?) and it turned out to be both great fun and educational.

    Initially, I thought we might actually be on television. Mercifully, that turned out not to be the case. Instead, we were webcasting several segements where, lead by Gene Lepley, Shawn and I poured over the returns, gave trenchant analysis and even tossed in a joke or three. There are a number of kinks to be worked out before the experiment is repeated in November (more lead-ins from the news readers would be nice, and tell folks where to look for the video link, willya?). But the general format seems to hold a lot of promise, both for broken down old bloggers like me, and for network affiliates looking to tap into the new media.

    I also learned a few key lessons:

    1. Get to the station even earlier, otherwise all the pizza will be gone.

    2. Remember where the men’s room is…this is key.

    3. Park on the other side of the building (and remember that the gate opens automatically).

    4. Smile more.

    5. Stop mixing metaphors.

    6. Keep a weather eye on Gene Cox.

    And most of all, find a way to capture the video of our discussion so it can be replayed later…purely for betting purposes, of course.


  • The Smartest Reporter in VA Is Blogging Again

    The NV Daily’s Garren Shipley has always been one of my favorite political reporters. Unlike some of the show horses at the capitol, he breaks stories and follows leads that actually deliver (gasp) useful, timely news.

    Garren blogged for a time at the NV Daily Depot, but that got scratched for business reasons. Now, it seems the business climate has changed, because he’s blogging once again at the aptly titled “View from the Cheap Seats” (with bonus photo of our intrepid reporter…truly a face made for print!).

    Welcome back to the online fray, my friend.


  • The 21st Century Railroad Revolution

    Today’s Wall Street Journal is touting a multi-billion dollar investment spree by United States railroads — the biggest in literally a century — as the dawn of a new railroad era. And much of the activity, the Journal notes, is taking place in Virginia. Indeed, a map on the WSJ front page suggests that Virginia, along with Alabama and Texas, stands at the epicenter of the railroad revolution.

    The last major railroad investment binge took place before World War II. Railroads stagnated between the two world wars, then lost massive market share to trucks after the war, thanks in large part to the construction of the Interstate highway. For decades, railroads consolidated, downsized, shrank routes and abandoned tracks. But since 2000, railroads have spent $10 billion to expand their tracks, and they have $12 billion more in upgrades planned.

    The WSJ quotes Norfolk Southern CEO Charles “Wick” Moorman IV: “The railroad industry is finally making some money. And we’re pumping that money into our infrastructure.”

    Railroads are getting a political boost from an unexpected source: environmentalists who see rail transport as more energy efficient than truck transport. Norfolk Southern has adopted their arguments as justification for government support. Reports the Journal:

    Norfolk Southern is seeking public funding to accelerate rail-corridor projects, arguing that they provide a public benefit by limiting fuel use, traffic congestion and air pollution. The idea is gaining backers.

    One of those backers is Virginia. The WSJ highlights Norfolk Southern’s upgrade of the “Heartland Corridor,” which runs from Hampton Roads through Virginia to the Midwest, and the Crescent Corridor, which runs from New York City through Virginia to New Orleans. Trucks made four million to 4.5 million trips annually along Interstate 81 on the Crescent Corridor. Norfolk Southern envisions a route with enough speed and capacity to displace about one million truck trips a year — and it wants $2 billion to do it.

    I applaud the revitalization of the railroad industry. And I totally agree that railroads are well positioned to capture container traffic from trucks, reducing traffic congestion, fuel consumption and air pollution. Here’s the question: Should government, whether the federal government or the states, help pay for something that it may be in Norfolk Southern’s best interest to do on its own?

    Normally, I support a strict-user pays approach to transportation. However, I’m open to the idea (not fully persuaded, mind you, just open) that public support for Norfolk Southern could be justified if it offers the Virginia Department of Transportation a superior Return on Investment of its limited transportation dollars — i.e. more vehicles off the road, more congestion relieved, less gasoline consumption, less air pollution.

    (Map credit: Adapted from the Wall Street Journal.)


  • More Nuke News

    The state Senate has signed off on a bill to study whether uranium can be safely mined in Pittsylvania County. (You can find coverage by the Lynchburg News & Advance here.) This is a good thing: The Pittsylvania uranium deposits are among the richest in North America. Uranium mining could stimulate a major new industry for Southside Virginia, but uranium mining has the potential to do devastating environmental harm. Rather than stick our heads in the sand, we need to update ourselves on both the latest uranium mining techniques and the evidence for the harm that could result.

    Meanwhile, the Senate has sidetracked a companion bill calling for a broader study of the nuclear industry in Virginia. SJ100, submitted by Sen. Ken Cuccinelli, R-Fairfax, would establish a joint subcommittee that would (1) address all aspects of the production of nuclear power, including the mining of uranium; (2) examine the economic development potential of nuclear power; (3) consider whether the General Assembly should take action to support the development of additional nuclear power facilities in the Commonwealth.

    What the resolution does not explicitly say, but I would urge upon the Commonwealth: Virginia needs to study the prospect for building upon the presence of Dominion and its nuclear power plants, the Pittsylvania uranium deposits and nuclear services companies in Lynchburg and Newport News. We need to know: Does the potential exist to build a world-class nuclear power cluster — uranium mining, uranium processing, nuclear power plant design, nuclear power plant operation, nuclear power services — here in the Commonwealth?

    I don’t pretend to understand the legislative workings of the General Assembly, but it appears that Cuccinelli’s bill has been incorporated into SJR133, sponored by Sen. Donald McEachin, D-Richmond, which would study the disposal of low-level nuclear waste. True, the two bills do contain the words “nuclear,” but otherwise they have virtually no overlap whatsoever. It appears that McEachin bill is getting kicked around from committee to committee, going nowhere fast.

    I’m surprised that legislators from Southside and Central Virginia haven’t jumped on the chance to build a major new industry — a very high-paying one, I might add — in their region. Why are they letting Cuccinelli, from Northern Virginia, do the heavy lifting on this?


  • Can We Panic Yet?

    In late December, senior legislators with the House Republican caucus expressed their unease with Gov. Timothy M. Kaine’s revenue forecasts for the current fiscal year and the two years following. They urged him to reconvene a meeting of the Governor’s Advisory Council on Revenue Estimates to update the forecasts based on the latest economic figures.

    Kaine declined to do so. At the time, Spokesperson Delacey Skinner responded as follows: “Calling a special meeting would send a message to the public that we’re panicked, and that would be an unwise message to send.” (See “More Budget Rumbles.”)

    So, now we know officially what everyone knew unofficially two months ago: that an ailing economy has clobbered state revenues worse than previously forecast. Yesterday, Gov. Kaine confirmed that the revenue shortfall, which he had estimated at $618 million in December, had increased by $340 million.

    Can we panic yet?

    By refusing to send that true but “unwise” message in December, the Kaine administration ensured that budgetary discussions during the intervening period were based on the wrong numbers. By waiting until the last minute to drop this bomb, Kaine left legislators precious little time to make the needed adjustments. Lawmakers may well have little choice but to accept his recommendations — including a controversial draw-down of the Rainy Day fund — on how to close the gap. Could that have been what the Kaniacs were planning all along?

    Read the press release announcing the budget shortfall here and his recommended budget cuts here. Read the response of House Appropriations Chair Lacy Putney, I-Bedford, here.


  • More to the Nichol Story at Wm & Mary

    Delegate Bob Marshall inquires why Nichol shouldn’t be dismissed totally instead of reduced from President to tenured law professor – because he allegedly lied.

    “February 12, 2008

    The Honorable Michael Powell
    Rector, College of William & Mary “

    “Dear Mr. Powell:

    I have just learned that the e-mail that former president, Timothy Sullivan, sent to then-President, Gene Nichol in December of 2006 regarding James McGlothlinโ€™s withdrawal of a $12 million pledge, has been publicly released by the College of William & Mary.

    In a Freedom of Information Act (FOIA) that I sent to you dated March 22, 2007, I requested any e-mails or other documents relating to alumni suspending or withdrawing financial pledges to William & Mary (see attached). I was given information by the Freedom of Information Officer but the e-mail in question was not included, nor was it even mentioned. Neither was the letter by McGlothlin to Nichol of December 2006. I donโ€™t know what else might not have been supplied to me that are in the records requested. There were no claims of privilege raised with me by the FOIA Officer and the information I received was supposedly a complete record of contact with the college on this issue.

    I would like an explanation of why my FOIA request was deliberately not honored by the College in violation of state law? I would like to renew my FOIA request as stated in the attached letter and hope that this time it will be correctly fulfilled and the law upheld..

    Additionally, former President Nichol told me at a lunch that we had in early 2007 that he didnโ€™t know about Mr. McGlothlinโ€™s pledge withdrawal until late February 2007. In light of the release of the e-mail which clearly shows that former President Nichol knew that this pledge was being withdrawn in December 2006, I would also like to request a copy of Gene Nicholโ€™s contract to review.

    I would suggest that this intentional and calculated misrepresentation of the truth constitutes failure of duty and gross malfeasance in office which are grounds for his complete termination from the College of William & Mary. It is my understanding that at this time he will be allowed to continue to serve as a professor of law. I cannot believe that a person who would deliberately create such a fabrication in the midst of such turmoil on campus can be an asset in any way to the college.

    Please answer these questions at your earliest convenience.

    Thank you for your time and consideration. If you have any questions please feel free to contact me at” xxxx

    “Sincerely,

    Delegate Bob Marshall


  • Flash: Gene Nichol Resigns from W&M

    Gene Nichol has resigned Sunday as president of the College of William & Mary. When the Board of Visitors decided not to renew his contract, he resigned immediately. He issued this statement today:

    I was informed by the Rector on Sunday, after our Charter Day celebrations, that my contract will not be renewed in July. Appropriately, serving the College in the wake of such a decision is beyond my imagining. Accordingly, I have advised the Rector, and announce today, effective immediately, my resignation as president of the College of William & Mary. I return to the faculty of the school of law to resume teaching and writing.

    In his resignation statement, Nichol offered a vigorous defense of his administration, including his controversial decisions to remove the cross from the Wren Chapel and to permit an itinerant show of sex workers to perform on campus. But he conceded, “I have sometimes moved too swiftly, and perhaps paid insufficient attention to the processes and practices of a strong and complex university.”

    While Nichol praised William & Mary as an institution, he was less charitable to the Board of Visitors, noting that he and his wife had been offered “substantial economic incentives” if we would agree โ€œnot to characterize [the non-renewal decision] as based on ideological grounds.โ€ He rejected the offer, he said, because it would have required him to “make statements I believe to be untrue and that I believe most would find non-credible. Iโ€™ve said before that the values of the College are not for sale. Neither are ours.”

    The Board also issued a statement, contending that the decision was not based upon ideology or any one of Nichols’ decisions. Indeed, the board statement was fulsome in its praise for Nichol, and criticized those who made “uncharitable personal assaults” upon him. The statement never quite gets around to saying why the Board declined to renew Nichols’ contract, however. This is as close as it got:

    After an exhaustive review … the Board believed there were a number of problems that were keeping the College from reaching its full potential and concluded that those issues could not be effectively remedied without a change of leadership.

    Del. Tim Hugo, R-Centreville, who was one of his more vocal critics, summed it up this way: “His tenure has seen an unending string of political controversies. He is a nice man, but, I do not believe that he ever made the successful transition from political activist to college president. I wish him well in his future endeavors.”


  • Ban Smoking, Increase Drunk Driving

    Since the Governor remains committed to the idea of banning smoking hither, tither and yon, it might be worth considering a very bad, unintended consequence (via Tyler Cowen):

    A rigorous statistical examination has found that smoking bans increase drunken-driving fatalities. One might expect that a ban on smoking in bars would deter some people from showing up, thereby reducing the number of people driving home drunk. But jurisdictions with smoking bans often border jurisdictions without bans, and some bars may skirt the ban, so that smokers can bypass the ban with extra driving. There is also a large overlap between the smoker and alcoholic populations, which would exacerbate the danger from extra driving. The authors estimate that smoking bans increase fatal drunken-driving accidents by about 13 percent, or about 2.5 such accidents per year for a typical county.

    A statewide ban might skirt some of the problem, except that it might make the Key Bridge more of a death trap than it is now. Almost sounds like a job for new and improved abusive driver fees (Dave Albo, call your office!).


  • The Malthusian Tendency

    For those who believe our unsustainable civilization’s collapse ought to happen in 3…2…1…now, Reason’s Ron Bailey peeks out of the survival bunker and decides, hey, we’re not so bad off after all:

    The Malthusian meme always insists “things just can’t go on like this.” Of course, if “things can’t go on like this,” then they don’t. Humanity changes course and things get better. At least that has been the story of the last two centuries and the evidence is that it will be the story of the 21st century as well.


  • RIGHT ON CUE

    Jim Bacon did a find job of pointing out some of the problems with innovation in shared-vehicle systems in his lead column this week. “The Innovation Gap.”

    Right on cue, METRO demonstrated how right he is.

    In todayโ€™s WaPo it is reported that METRO is considering running some Blue Line trains through the underutilized Yellow Line Potomac tunnel. We will not bother with the details, except to say it is a good idea.

    It is such a good idea that over 25 years ago, while working to increase the capacity of the Orange line we suggested this very same move.

    Most of the ideas that became the Backgrounder “It is Time to Fundamentally Rethink METRO and Mobility in the National Capital Subregion” https://www.baconsrebellion.com/ surfaced in white papers by EMR and reports by the Fairfax County Chamber of Commerce Transportation Committee. (FCC of C Trans Comm was one of the seven large Enterprise-backed Organizations EMR chaired / served on from the mid 70s to the late 80s.)

    The initial feedback from staff at METRO was positive on the ideas including the Turquoise Line. Later we learned that they were vetoed by senior staff. “We are going to complete the 101 mile system before we make any changes,” and “it would cost too much to reprint all the maps” were the only specifics that we ever heard.

    So Jim is right. To understand why he is right read Supercapitalism by Robert Reich.

    The problem is now that the settlement pattern in most of the urbanized area within R=23 to R= 25 is not suitable for METRO-like shared-vehicle systems (aka, Heavy Rail). That means citzens must morph the settlement patterns and come up with new technology.

    We focus on these critical issues in column after column on Rail to Dulles. See “Who Killed Rail-to-Dulles?” and “Why METRO-to-Tysons Is a Mess.”

    In a comment yesterday, Larry Gross noted interest in Personal Rapid Transit. For years the advocates of PRT including our friends who started the Advanced Transit Organization have said that PRT can better serve dispersed origins and destinations.

    We have reservations. Those interested in PRT search “PRT” in the back columns at https://www.baconsrebellion.com/

    Vocabulary is also an issue here as it is everywhere in the real world. As long as shared-vehicle systems are called “mass transit” few will be interested in the topic.

    EMR


  • The Coldest Vote

    Given the hype, I expected a long line at the Tuckahoe Elementary polls in Henrico this morning. But that wasn’t the case. There were a few signs waving in the chilly breeze, no poll workers and only a few folks ahead of me — all taking the red, Republican ballots (this being one of the most Republican areas in the county).

    I asked one of the workers whether he’d been busy. Yes, he said, steady traffic and lines all morning. I suppose compared to any other primary, that was probably true. I hesitated for a moment on seeing Fred Thompson still listed, and almost touched the screen for him. But I didn’t, instead tapping the screen for Johnny Mac, if only to tweak the righty talk radio gods.

    Saw Del. John O’Bannon on the way out, but didn’t stop to chat — it was just too chilly for idle pleasantries.


  • Proffers and Housing Prices: What’s the Connection?

    An interesting debate has arisen over the Watkins bill to cap proffers and impact fees: To what extent do proffers and fees contribute to higher housing prices? Sandhya Someshekhar and Anita Kumar in the Washington Post report that Home Builders Association of Virginia officials said the bill “would stabilize the market and slow the double-digit percentage increases in housing values. Opponents argue that rising housing values have little or nothing to do with proffers.”

    The article does not specify which individuals are making these claims, but it strikes me that both sides are blowing smoke. You can make theoretical arguments for both positions, but no one is presenting any data. Everyone, it appears, is making unsubstantiated claims.

    I don’t have any hard facts that would shed any light, but perhaps I can provide some conceptual clarity. Let us start with a point so obvious that it requires no supporting data. If a developer negotiates a $30,000-per-dwelling proffer with Prince William County, to pick an example, he will incorporate that expense into the selling price of the house. Only an utter fool would commence building a house knowing that he will sell it for less than what it cost to build and pay off a $30,000 proffer. No, not even a fool could get away with such a thing — his banker would stop him.

    Admittedly, it’s possible that the builder will miscalculate. The supply and demand equation can shift, as has happened in the aftermath of the sub-prime mortgage debacle, and the builder can wind up selling speculatively built houses at a loss under distress conditions. But no builder will start construction of a new house knowing up front that he will lose money! Thus, insofar as cost establishes a base price at which houses will sell under normal conditions, proffers and impact fees undeniably contribute to higher selling prices. For foes of the legislation to assert that “rising housing prices have little or nothing to do with proffers” is simply ludicrous.

    But that doesn’t make the home builders entirely right: The price of housing is set by the interplay of supply and demand. In Northern Virginia, where debate is the most intense, the problem over the past decade has been twofold: (1) insufficient supply of new housing in locations where the demand is greatest, and (2) speculation and easy credit driven by the mortgage bubble. Local government policies continue to restrict the development of housing supply in locations where demand is the strongest (closer to the urban core), but a decisive change has occurred in real estate markets in the past year: The mortgage bubble has popped, speculation has subsided and real estate prices are falling.

    Thus, the home builder argument that the legislation would stabilize the market and “slow the double-digit increases in housing prices” is specious. Housing prices have already backed off from double-digit increases! Proffer/impact fees are only one factor among several that influence prices. I don’t know of a single economist who believes that housing prices will resume their double-digit climb. Many believe that housing prices, after settling into a new equilbrium, will track the slow but steady growth in consumer buying power.

    The real issue, in my appraisal, is the mismatch in supply and demand in regional sub-markets. Demand for housing is greatest in or near the urban core, but it is exceedingly difficult to increase the supply there. Too many people raise too many objections, and the cost of getting land rezoned for redevelopment can be prohibitively expensive. It is simply easier for developers to move to the metropolitan periphery and build on open fields — where expensive infrastructure must be built from scratch. Now, even counties on the metropolitan fringe are erecting barriers to growth. Long term, the restriction of housing supply in growing metro areas will exert a upward effect on housing costs. Trouble is, nobody is talking about that problem.

    Breaking the logjam requires two things: (1) Finding a formula for requiring new development to “pay its own way,” and (2) Relaxing local government policies that inhibit new development in more balanced, more cost-efficient human settlement patterns. Otherwise, we’ll be arguing until the cows come home…. And, given the rapid disappearance of farmland in Northern Virginia, the cows may never come home.