More fuel for the transit policy fire

Controversy over the construction of high speed rail in California provides a glaring example of the rigidity inherent in using infrastructure projects as economic stimulus. A state study suggests that the Central Valley is not the most efficient location to begin the project’s construction, and that construction should begin in a population center such as Los Angeles or San Francisco. However, US Department of Transportation officials said funding would be revoked with a major change to existing plans because construction must begin by 2012.  The LA Times reports:

Until those issues could be addressed, analysts called on the rail authority to push back its federally required construction deadline and consider relocating the initial segment to a major urban area where there was more potential for trains to run sooner.

Analysts further recommended that the Legislature not spend any more money on the project if the federal government did not allow the changes in the route and construction schedule.

Because the federal funding for the project comes from the American Recovery and Reinvestment Act, the project must be comply with the federal timeframe. However, for the long-run benefit of California residents, the flexibility to adjust plans as the market is reassessed makes more sense than adhering to the stimulus schedule.

Furthermore, many politicians and academics have questioned whether or not the train will be a long-run drain for California taxpayers.  The federal funding is contingent upon $9 billion in state bonds to fund construction of the rail line, but will allegedly be operated at a profit by a private company once construction is complete. In fact, Proposition 1A that voters passed to fund the project forbids subsidies to the train operator. The rarity of profitable high-speed rail systems and the US track record of rail subsidies call into question the feasibility of operating profitably. Will the rails that cost billions to construct sit empty, or will voters pass a new proposition for funding?

Alan Enthoven of Stanford University co-authored a study suggesting that the existing analysis from the California High-Speed Rail Authority likely underestimates the cost of running the line and overestimates the number of riders who will use it.  If Enthoven’s estimates are more accurate than those of the HSRA, the high speed rail project could end up being not only a train to nowhere, but one that requires a steady stream of taxpayer subsidies.

Obama administration sells transit out to protectionists (again)

I’m not sure how I missed this (actually, I have an idea – more on that in a minute), but back in February the Federal Transit Administration issued the following warning about strengthened “Buy America” transit procurement protectionism:

Congress and the Obama Administration asked Americans to provide $787 billion to help avoid an economic catastrophe and restore and modernize America’s infrastructure.  In return, the Federal Government asks recipients of Recovery Act funds to be held accountable to the American public by using these resources to maximize opportunities to put Americans back to work and to support our domestic manufacturing industry.

In order to support this goal, the Federal Transit Administration (FTA) will not consider any requests for a public interest waiver of FTA’s Buy America regulation for Recovery Act projects.  If issued, such waivers would allow recipients of Recovery Act funds to procure steel, iron, or manufactured products, including rolling stock, that are not produced or manufactured in the United States.  I will not waive Buy America for Recovery Act projects because such action would undermine the very purpose and intent of the Recovery Act—to preserve and create jobs in America.  In addition, FTA will continue to carefully scrutinize requests for waivers based on non-availability to determine whether suitable American-made alternatives exist, and if none do, whether the funds can be used in an alternative manner that fulfills the goals of the Recovery Act.  Similarly, FTA will examine requests for cost-differential waivers to determine whether the cost savings justifies the loss of American jobs, especially in critical manufacturing sectors.  By necessity, FTA will extend existing, standing waivers—for products exempted by the Federal Acquisition Regulation, microprocessors and microcomputers, and small purchases—to Recovery Act-funded procurements, although I encourage recipients to use their best efforts to carry out the intent of Congress and the Obama Administration by carefully stewarding their Recovery Act funds in a manner that supports a healthy and robust domestic manufacturing base.

Buy America is a policy dating back to the Great Depression which requires the government to buy goods made in America when at all possible. For transit, it means that 60% of all materials, from steel to streetcars, must be sourced domestically, and final assembly must take place in the US as well. This final assembly requirement sometimes (often?) means that transit vehicles manufactured abroad are disassembled, shipped to the US, and then reassembled by American workers – the modern-day equivalent of paying people to dig holes and then fill them back up. Normally there are waivers if parts and materials would raise the cost by more than 25% and in the nebulous case that applying Buy American “would be inconsistent with the public interest” (seems to me like it’s always inconsistent with the public interest), but it doesn’t look like the current administration will be granting them any longer.

And while I think it’s a dumb policy in all circumstances, I suppose that the stimulus (“Recovery Act”) was intended as a Keynesian jobs program, so I’m not surprised to see Buy America applied very strictly to those funds. This part, though, was not something that I was expecting:

In addition to the above guidance, please note that this heightened standard is not exclusive to the Recovery Act. FTA has raised the bar for all Buy America waiver requests.  All requests will be scrutinized.  Most requests will result in FTA offering technical assistance to develop a solution that will not necessitate a waiver.  Please be cautious about leading your projects down a path where a Buy America waiver will be needed, as it is unlikely to be granted.

When I last wrote about Buy America provisions hampering transit procurement, I caught some flak from some commenters for calling it Obama’s policy, since it’s been in force for decades – but he owns this one.

Transit advocates are always asking for more subsidies, but they seem remarkably unconcerned about the byzantine tangle of FTA, FRA, and union rules that cause America to have some of the most expensive and inefficient transit in the developed world. Last week I suggested that planners’ reluctance to speak out against cost-increasing union work rules is caused by the ideological affinity between liberal urban planners and organized labor, and I think there’s something similar at play with this recent increase in protectionism. Mass transit boosters waste no opportunity to brag about all the domestic jobs it creates, but all this talk about “green jobs” has its costs.

Clear case of the damages inherent in policy uncertainty

Current policy evolution in Los Gatos, CA demonstrates the power that urban planners have to alter property rights.  The Silicon Valley municipality is currently debating whether or not to upzone a parcel where a developer would like to build 550,000 square feet of office space, replacing 250,000 square feet of an older office park.

The lots, located near the Netflix headquarters, are thought to be the potential site for the company’s needed expansion. However, the Bay Area is already home to ample vacant office space, so the developer would like the alternative option of building multifamily housing in the location. In response to this request for a change in zoning that would allow either use, the planning commission chairwoman said she was “blindsided” by the owner seeking permission for options to use the land in various ways.

In today’s world of master plans that dictate acceptable uses for each parcel of a city’s land, asking for the freedom to build different types of buildings, rather than approaching a commission with a plan in place for a specific zoning change, may seem out of line. In reality the owner is simply seeking permission to put his land to its most efficient use given future uncertainties. Entrepreneurs profit by seeing through these uncertainties to put resources to their most profitable uses, but in the market for land, policies limit their ability to do so.

In curent conditions, in which developers are not building much new office space unless it is pre-leased, the planning commission has the power to determine the land’s expected value by requiring the owner to commit to a plan before moving forward with redevelopment. This is a classic Coasean case of the care that policy makers must take in assigning property rights. Russ Roberts and Richard Epstein did a podcast that clearly discusses the importance of property rights in the market for land here.

The Los Gatos case is an interesting one in which city planning staff has been working with the owner to create scenarios for both office and multifamily developments, but the commission is reluctant to permit such flexibility. At this time, the planning commission has asked for more time to consider the proposal and for further information from the property owners.  Millions of dollars are at stake here, not just for the developer and the owner, but also for the county that currently receives $18 million in tax revenues yearly from Netflix, so it will be interesting to follow the future of this development.

Five union work rules that harm transit productivity

Since Alon’s comment a few weeks ago that union work rules, not wages and benefits, are the real problem with labor unions at America’s transit authorities, I’ve been looking into the matter, which seems to be something that a lot of transit boosters don’t like to talk about. It’s an uncomfortable subject for two reason: 1) urban planners and unions have an ideological affinity, and 2) it’s hard to lobby for increased subsidies for transit when you admit that you’re making poor use of the money you already have.

But despite planners’ reticence to talk about the problem, it needs to be addressed. Throwing money around is what governments do best, and while it might be an easy solution to problems in the short run, the money is running out. Some will surely quibble that we can afford to raise taxes and do more deficit spending, especially for something as vital as transit, but whether or not that’s true, the fact is that voters are increasingly doubting that it is, and so politicians are going to become stingier about doling out money for transit.

Anyway, the most obvious area for savings is in actual wages and benefits, but many mainstream conservative and libertarian publications have written a lot about this issue, so I want to focus on just inefficient work rules. These are rules that are written into union contracts hashed out in a political process, and management doesn’t have the authority to overturn them. I found surprisingly little on the issue in the academic literature, but there’s plenty on it in newspapers, and so here’s a round-up of the major issues that I found with various American transit unions. The list is by no means comprehensive – either of all the cities that have these problems, or even of the different types of problems – and I encourage people to share any knowledge they have on the subject in the comments. (I’m also interested in something that I suspect Alon may know a thing or two about – international comparisons. Do the notoriously union-happy French have these same rules?)

So, without further ado…

1. Mandatory eight-hour workdays and no part-time hiring. This one may surprise some since the eight-hour workday is one of organized labor’s most prized achievements, and indeed it works out well with most workers. But transit isn’t “most work,” and trying to force an eight-hour workday on it is problematic. Transit service has huge peaks during the morning and evening rush hours, so when transit agencies are forced to schedule workers for eight-hour shifts (or longer with overtime), some people end up sitting around doing nothing for part of each day. With train and bus operators, this leads to them doing nothing during the middle of the day when there aren’t as many routes to run. (At San Francisco’s Muni, there are apparently six divisions where drivers spend more time waiting for assignments than they do actually working.) With maintenance workers, it means people being scheduled for work during at least one rush hour per shift, during which they don’t have access to tracks and can’t really work. And of course management often isn’t allowed to hire part-time workers to solve this problem. [Berkeley Planning Journal, SF Bay Guardian, SF Weekly, NY Daily News, City Journal]

2. Seniority. Unions are run on seniority, and people who have been with the union longer often get to pick what work they do. A commenter from Portland explains:

Here in Portland, being a train operator (MAX or Streetcar – WES is staffed by employees of the shortline railroad on whose tracks the service run, not by TriMet employees) is considered a “senior” position; one that bus drivers with seniority may aspire for. Given that operation of trains is a different set of skills than operation of a bus – does this state of affairs make sense? By the same token, it’s frequently the case that experienced bus drivers (with lots of seniority) get to choose the easiest assignments – and frequently will pick suburban social-service routes; leaving the inexperienced drivers to haul crushloaded inner-city busses through rush hour traffic. Easier work assignments are frequently considered a “perk” of seniority. In the (nonunion) private sector one frequently observes the reverse – more experience and skill (and more pay) implies more difficult assignments. [Market Urbanism comment]

And then of course there are the infamous problems with escalator repair in DC’s Metrorail stations, which according to Unsuck DC Metro’s three-part series, are also the result of a seniority system. The “pick” system lets the most experienced employees choose which escalators they work on (or at least the general area), and they often pick the stations whose escalators are in least need of repair, leaving the really bad escalators to the less-experienced workers.

3. Tons of time off and little-to-no advanced notice required. Here’s someone who claims to be an operator with Muni, San Francisco’s public transit authority, who’s actually defending Muni workers’ sick day allowances:

I wonder where the one shift in six missed numbers come from. I am a Muni operator, and I certainly don’t miss that much time. I don’t have enough sick or vacation hours! I also wonder if that includes training/retraining time. The absenteeism rates are higher than for office workers, but there are some crucial reasons. As my wife (a high school teacher) pointed out, if she goes to work with a cold, she can still function. She can give her students desk work and try to relax a bit. If I work with a cold, an unexpected sneeze can kill someone. Working in transit ops requires full attention every second you’re moving. There isn’t an opportunity to zone out, massage your temples, take a coffee break. So our sick policies are a little looser than office workers are. How loose? I can call in sick three times a quarter (Jan-March, Apr-Jun, July-Sept, Oct-Dec), up to five days at a time, for a total of ten days a quarter without consequences. Mind you, I don’t have forty days of sick time a year! If I go over any of those limits, then I have to have doctor’s notes clearing me to come back to work and I can’t work any RDO (regular day off overtime). I have never been on the sick abuse list, and most of the operators I know who have been were there because of some family emergency.

We are expected to show up for work. All this reminds me of the miss-out kerfluffle from several years ago. (Muni operators don’t have to call in – they just don’t show up!) What the public wasn’t told was that I could (and still can) be charged with a miss-out if I am one minute late to work! I start today at 11:43 am. If I’m there at 11:44…

In addition to the unusually large amount of sick days, the way that the work rules handle operators missing work is problematic. Because workers don’t even have to notify management when they’re sick, the run is often delayed, and when someone is finally called in to do the job, they have to be paid overtime to do it. [Streetsblog SF]

4. Cross-utilization of labor not allowed. Some of the aforementioned problems (especially the constraints of the eight-hour work day) could be mitigated if workers were allowed to do other tasks, even menial ones, when they’re not needed with their primary job, but union contracts generally disallow this. Drivers can’t take tickets or work in information booths while they’re not driving, and maintenance workers can’t do either of those things or operate trains when they’re not able to work on the tracks. [Berkeley Planning Journal]

5. Overtime abuse. Overtime is already given out very liberally to unionized transit employees compared to private sector jobs, but one trick that they use at Muni to “monetize” their overtime is to call in sick on a day you’re scheduled and then work a day you’re not scheduled, for overtime pay, which you get even though you haven’t worked 40 hours that week. In the case of DC’s Metro employees, pensions are calculated based on the highest four years of income, which gives workers incentives to wrack up tons of overtime in order to boost their (already very generous) pensions. [SF Weekly, GGW]

…so, there you have it. Are there any work rules that I missed? How common are these rules – did I just find some isolated instances, or is this a deep, systemic problem?

What good is form-based zoning when you just keep everything the same?

“Form-based zoning” is something that I’ve never entirely understood. It’s always explained to me as regulating form not use, and generally the example given is that form-based zoning will require certain design aesthetics but not dictate whether something is used as a residence or a place of business or whatever. And instead of setbacks, FAR requirements, etc., it will dictate overall size (I guess with a height limit?). But while it seems marginally more pleasant to mandate parking lots go behind buildings, it doesn’t seem to me like zoning by “form” is inherently better than the status quo American planning tools. A planner can use a Euclidean designation to accomodate high-density development just as easily as he can use a form-based code to force suburbia on an area. In other words, the devil’s in the details, and just moving to a form-based code doesn’t really change anything if you don’t also allow for more growth overall

After reading this paper (abridged ungated version as a .pdf here) on parking in Miami’s new form-based code – “Miami 21,” implemented in 2009 – I fear that I was right, and that form-based codes will probably end up looking just like the old ones:

In general, there are minimal parking requirement changes in the Miami 21 form-based code. Lower minimum requirements or the establishment of appropriate parking maximums in existing, compact urban neighborhoods would protect the existing character of these areas and encourage the development of context-sensitive development that promotes walkability. Yet the proposed parking requirements in the Miami 21 form-based code still include relatively high minimums, even in the more urban transects

This is partially a critique of DPZ’s SmartCode, which does not reduce parking requirements signi?cantly even in the more urban transects. Considering the level of public transportation service in its urban core and the rapid construction of multiple high-rises in its downtown, parking requirements in at least the urban core (T6) transect for Miami could be lower. In particular, fewer parking spaces in the urban core would support market-level parking pricing, public transportation, and walking. This requirement would reduce greenhouse gases, air pollution, and the urban degradation that results from parking lots creating characterless voids and increasing automobile use, which deteriorates urban street life

The Miami 21 “form-based code” doesn’t even actually drop the use-based zoning – commercial use is not allowed in the “suburban transect” and part of the “general urban” one. In fact, the authors found that the development patterns allowed by the new form-based code are generally pretty similar to what was allowed by the old code – they just translated it into the new “form-based” language. And whereas the old code exempted small buildings from parking minimums, Miami 21 doesn’t give any exceptions for size. It does appear to drop the parking minimums entirely for development within 1,000 feet of a rail station, but only for residential and only in the densest two zones, which, based on their names (T6-60 and T6-80), sound like only the very core of the skyscraper district.

And that DPZ SmartCode the authors mention? That’s the Duany Plater-Zyberk SmartCode, written by Andrés Duany, leader of the New Urbanism movement. The Miami 21 code has some unfortunately high minimums, but I was shocked to see that even the downtown minimums in Duany’s SmartCode are higher than the minimums that Miami had before the form-based revision. In other words, Miami’s old code was in some ways more transit- and pedestrian-friendly than the New Urbanist ideal.

“The Joys of Staying Put,” or “The Joys of Rent Control”?

The New York Times is unusually good at ignoring economic forces at play in land use and transport markets, but I think this piece called “The Joys of Staying Put” by Constance Rosenblum takes the cake. Here’s a quote:

New Yorkers typically move a lot. Prompted by the arrival of a partner or a child, or money that buys more space or a nicer neighborhood, or simply an appetite for change, some New Yorkers move house every year or two. According to census estimates for 2009, 650,000 New Yorkers lived in a different house or apartment within the city than in the previous year.

But a few stay put, immune to the call of a larger apartment or a swankier neighborhood. They plant themselves in the same place for decades or for their entire adult lives. Some have been in the same apartment since graduating from college. Shortly after sinking roots in the city, they find a place that suits them and don’t budge.

Are they really “immune” to anything, or did they just make a good call a couple decades ago by not moving out of their rent-stabilized unit and are now responding rationally to price incentives? While the author does admit that a lot of the people have rents fixed by law (“you hear the words ‘rent-stabilized’ a lot”), the whole implication seems to be that there’s something about these people beyond the rent controls, like they’re some sort of special breed of über-New Yorkers. And while anyone who knows anything about real estate will realize that the places she’s describing must be rent stabilized (under $1,000/mo. for a 1-bedroom in Greenwich Village, for example), she never mentions anyone in particular as being rent stabilized.

So for example we hear about Esther Cohen, who’s paying “just about $1,000″ for a two-bedroom on the Upper West Side “overlooking the American Museum of Natural History”:

Ms. Cohen found a roommate named Harry, and at one of many parties held in the apartment — Ms. Cohen was wearing a blue wig and Harry had made blanquette de veau — she met a filmmaker named Peter Odabashian. Nearly four decades later, Ms. Cohen can still remember what his face looked like in the shadowy hallway. Within days Mr. Odabashian moved in, and the two have been together in the apartment for 37 years. Their son, Noah, whom they adopted from Chile in 1986, is currently living under the family roof, sometimes with his girlfriend, Chesray Dolpha, a student at New York University.

Ms. Cohen, a writer, acknowledges that the kitchen and bathroom are in need of renovation and that the rooms are small and sometimes dark. But good karma keeps her rooted.

Uh, good karma keeps her rooted? You sure it’s not the law that compels her landlord to offer her, her Emmy-winning filmmaker husband, and her offspring an ever-more-valuable apartment at 75% off in perpetuity? It doesn’t even sound like she has a job – but then again you wouldn’t want to brush up against that $175,000/year income limit, would you!

This article reminds me of a Woody Allen quote told to me by Cap’n Transit: “What do years matter, particularly if your apartment is rent controlled?”

NYC tries to fine its way out of the laws of supply and demand

Having failed to deregulate New York City’s highly restrictive taxicab market, it looks like City Council and Bloomberg are opting for the populist reaction to NYC cabdrivers’ frequent refusal to take you anywhere outside Manhattan and, if you’re lucky, northwest Brooklyn: fines. Quoteth the Wall Street Journal:

The bill passed Wednesday increases the fine for a cabbie’s first offense from $350 to $500. If he gets caught again within the next two years, he’ll have to pay $1,000—double the current fine. The bill also adds a $1,000 fine for the third offense, on top of the license revocation already required.

Unfortunately for New York, I think it’s gonna take a lot more than a few hundred more dollars in fines to have any effect on this problem. And if it does somehow work, then I fear that it will actually be counterproductive and encourage cab drivers to discriminate. They won’t even bother pulling over for people think aren’t traveling within Manhattan for fear of either having to take them or be fined – in other words, it will become even harder for people of color, who are less likely to live in Manhattan, to hail cabs.

And then there’s this gem from the hack union, which reminds me of David Yassky’s “the city should be circumspect about substituting its judgment for the judgment of business people” comment:

Bhairavi Desai, the director of the Taxi Workers Alliance, a drivers’ group, said she was disappointed in the vote.

Drivers sometimes refuse to take people to faraway places because they’ll get stuck in traffic before they can get another fare, she said. She said the city should find an “economic solution” to the problem.

“Otherwise, you’re just scapegoating people,” Ms. Desai said.

It’s interesting that she even admits that there is even a problem – I guess cabbies’ disregard for the anywhere-in-the-five-boroughs rule has gotten so bad that even she can’t pretend it doesn’t happen. And though by “economic solution” I’m sure she means raising cab fares, I can think of at least one “economic solution” that she probably wouldn’t be too pleased with.

A fresh rejection of commerce from Metro

Stephen has previously written on DC Metro’s potential to make money by leasing its valuable real estate to vendors, but Metro officials have now further entrenched the organization against making efficient use of its property. WMATA denied a weekend farmers market use of the parking lot at the Naylor Road station. The Washington Post reports, “Angela Gates, a Metro spokeswoman, said it is against WMATA rules to allow the sale of food and drink on its property.”

In this instance, it sounds as if the Temple Hill, MD residents who proposed the market were not intending for vendors to pay Metro to use the parking lot; however, suggesting a user fee for the parking lot space could have made much more sense than outright prohibiting potentially profitable endeavors on Metro property.

The Post continues:

Officials say the market falls in line with the transit-oriented development envisioned for the area.

Renee Sprow, director of the Maryland Small Business Development Center Network, said the group has not given up. Informal discussions continue. And Funn said a formal request for reconsideration will be submitted.

Assuming that Metro remains opposed to vending in stations, WMATA could at least revisit the issue in its parking lots given its dire fiscal condition. Riders often shop for food adjacent to stations and carry food purchases onto trains in other locations around the city. At the Clarendon Metro, a farmers market already operates directly outside Metro escalators.

While Metro remains completely opposed to using its valuable real estate to benefit its finances and its customers, the Chicago Transit Authority is taking the opposite approach. Recently, CTA hired Jones Lang LaSalle as a property manager to undertake improvements at its vacant properrties available for lease. In the last two years, CTA made about $32 million from leasing its retail and office space.

Given WMATA’s staggering operating deficits, the agency should look to imporving profitability without harming riders in any way it can, particularly with solutions that could draw increased ridership.