I’m Traveling Cross-Country to Write a Book on Market Urbanism

batman-hitchhiker-gotham-city
Ever since Adam founded this blog, it has become a great forum for describing how free-market economics intersect with urban issues. But the term Market Urbanism itself has remained under the radar, especially compared to ones that encourage more government intervention for cities, like “Smart Growth.” I’ve always thought that Adam’s term deserved more mainstream cache. So I’m traveling cross-country to write a book about it.

My name is Scott Beyer, and I’m a 29-year-old urban affairs journalist from Charlottesville, VA. This week, I began a 3-year trip that will include month-long stays in 26 major cities, and visits to hundreds of smaller ones. Part of this is to continue work as a columnist for Forbes and Governing Magazine. But mainly it is to write a book that I’ve tentatively titled The Sparks From Within—How Market Urbanism Can Revive U.S. Cities.

My inspiration for this trip dates to my late teens, when I moved to New York City. I quickly become so enthralled with the fast-paced culture and diversity of urban life that I saved up some money to backpack the nation’s other cities. This continued on and off through my twenties, as I visited the nation’s 100 largest, burning through several Greyhound “Discovery Passes,” hitchhiking dozens of rides, and even once hopping a freight train from Jacksonville to New Orleans.

I had first expected that these cities would be as dynamic as New York, but was surprised to find otherwise. On one hand, numerous ones had declined despite decades of U.S. population growth, and now had neighborhoods that would embarrass a Third World country. And even many successful ones lacked a certain gravitas, with downtowns that hollowed out after 5pm.

Why were so many cities like this? That question inspired a research period after I returned home that extended for several years. My main conclusion was that U.S. urban failure did not result only from global forces like deindustrialization, but because of counterproductive government policies. This began with post-WWII federal policies that encouraged suburban flight, such as slum clearance, highway subsidies, and loan programs favoring single-family homes. When this caused industry to leave, many cities, feeling desperate, adopted their own aggressive policies, and have maintained this heavily-centralized model ever since. In most large cities today, powerful bureaucracies—bolstered by regulatory authority and gobs of federal money—dictate where and how growth happens. Rather than enlightened decision-making, this administrative model has produced a comedy of errors, as America’s cities are dominated by high taxes and regulations, political machines, rent-seeking, cronyism, property confiscation, and sometimes plain corruption.

What I also learned through research, though, was that this model had inspired numerous pro-market, small-government reforms for cities. These have included charter schools, defined contribution pensions, one-stop shops for business permits, zoning deregulation, and whatever else liberalizes economies and reduces the dead weight of government. These reforms have been explained in depth by various commentators—mostly on the right—but have always floated around separately. I would like to combine them into a single policy blueprint that would make U.S. cities more competitive in the 21st century. I thought the term “Market Urbanism” was catchy, and because Adam’s blog advocates for these policies, I asked him about expanding the concept into a book.  He told me to go for it.

During the trip, I plan to write about 26 different reforms, using each as a chapter for a given city. These chapters will be divided into 5 sections, dealing with housing, transportation, business climate, public services, and finance. This localized, case-study format will help me explore the details of how each reform would help a specific city—and who now opposes it.

What do I hope to accomplish from this project? I would like to bring the term Market Urbanism into public consciousness, and into direct competition with the moldy prevailing wisdom of America’s cities. For decades, this wisdom—moving from academia on through city hall—is that urban problems must be solved through more government. The point of my book is to explain why market alternatives would solve them better—while making cities denser, faster-growing, more affordable, and more livable.

I would encourage the readers of this blog to follow my project, either through my website, BigCitySparkplug.com, or my Forbes profile. I should also note that every Friday, I’ll be providing updates on MarketUrbanism.com from the road, including links to articles I’ve written that week, research I’ve encountered, or whatever else may be on my mind. I hope over these three years that I can connect with my fellow Market Urbanists, and if I happen to be in your city, please don’t be shy about reaching out, as I prefer learning about places through the locals. But at very least, I hope to bring America’s cities alive for you via the web, as I report on them directly from the streets.

Reach out to Scott about his travels:

Chapter 9 Links

1) Ed Glaeser writes at the Boston Globe on Detroit, “Sensible people don’t incur debts during their peak earning years and then expect to pay the bills when their income starts to fall. Detroit did just that. Detroit’s debt overhang doesn’t just impose overly high costs on the city’s now modest tax base. It also scares off new businesses. What firm wants to own part of that obligation?”

2) I’m on the Cato Daily Podcast talking about Detroit and municipal bankruptcy and writing about how creating a charter city could help the city’s population and economic growth challenges at The Umlaut.

3) Ilya Somin points to the role of eminent domain in slum clearance and urban renewal efforts as a key contributor to the city’s decline.

4) Cost overruns aren’t just for transit. Construction on a Wayne County jail was halted after costs went 30-percent over budget, and the county is now seeking proposals from developers to buy the seven acre site. This is a fortunate development from an urban development perspective because anything a private investor builds will be better for downtown Detroit than a prison.

5) On an uplifting note, Sandy Ikeda writes at Wabi Sabi about the role of cities in the market process:

Living cites and successful markets bring intellectually and culturally diverse people together to their mutual advantage, but they also create conditions in which vast amounts of novel information—about science, technology, religion, music, the arts, and lifestyles—get dispersed very rapidly. That in turn allows all kinds of people, the ordinary and the extraordinary, to experiment and to make new connections among all that information, generating even more diversity and attracting even more people. In this way, cities become “incubators of ideas” and economic growth. The process is highly dynamic, but also very messy and, yes, in a sense inefficient. Most experiments fail. But someone who fails in a city, unlike her counterpart in less-urbanized cultures, need not starve as a result, and there is more likely to be some new opportunity just around the corner.  We see the successes that drive innovation, but the failures are important, too.

Fictional Scandal at the NYC Landmarks Preservation Commission

Stephen’s post on alleged corruption at the New York City Landmarks Preservation Commission reminded me of a great scene from The Bonfire of the Vanities that I wanted to share here. Tom Wolfe describes a scenario in which a black bishop wants to sell his church’s property in order to raise money for the congregation. The fictional mayor’s assistant explains:

“The bishop wants to sell St. Timothy’s to a developer, on the grounds that the membership is declining, and the church is losing a lot of money, which is true. But the community groups are putting a lot of pressure on the Landmarks Commission to landmark it so that nobody can alter the building even after they buy it.”

“Is this guy honest?” asked the mayor. “Who gets the money if they sell the church?”

“I never heard he wasn’t honest,” said Sheldon. “He’s a learned gentleman of the cloth. He went to Harvard. He could still be greedy, I suppose, but I have no reason to think he is.”

The mayor meets with the bishop to discuss the issue of preserving the church and realizes that Bishop Thomas is an ideal connection to improve his approval with the black community. The mayor agrees to prevent the church from being landmarked and the bishop is overcome with gratitude at the benefit selling the property will provide the congregation. Then the mayor tells the bishop that he wants him to serve on a new “blue-ribbon commission against crime.” When the bishop declines because the commission would conflict with his role in the church, the mayor says not to worry about the church remaining without landmark status:

“Don’t worry about that at all. As I said I didn’t do it for you and I didn’t do it for your church. I did it because I think it’s in the best interest of the city. It’s as simple as that.”

When the bishop leaves, the mayor immediately picks up the phone:

“Get me the Landmarks Commissioner.” Presently there was a low beep-beep, and he picked up the phone and said, “Mort? You know that church, St. Timothy’s? . . . Right . . . Landmark the son of a bitch!”

[Tom Wolfe, (1987) The Bonfire of the Vanities, Chapter 27]

While of course Wolfe’s portrayal of the interaction between city hall and historic preservation may not be realistic, he certainly captures the quid pro quo nature of development and the corruption that some accuse the Landmarks Commission of today.

Most of The Bonfire of the Vanities has little to do with urban development, but Wolfe also offers very vivid descriptions of both the Bronx and Park Avenue in the 1980s, so it might be interesting to many of you if you’ve not yet read it.

Before there were stimulus projects

In his new book, Railroaded: The Transcontinentals and the Making of Modern America, Richard White explores the financing of railroads in the American West and the political process behind it. In history books, this accomplishment is often looked on as a heroic feat of engineering and perseverance, but White offers a contrasting perspective of the abuse of tax dollars and manipulation of public opinion. I have not had a chance to read his book yet, but White offered a very interesting interview on Morning Edition. He explained:

Western railroads, particularly the transcontinental railroads, would not have been built without public subsidies, without the granting of land, and more important than that, loans from the federal government … because there is no business [in the West at that time], there is absolutely no reason to build [railroads] except for political reasons and the hope that business will come.

Unlike the railroads of the Northeast where Vanderbilt made his fortune, private financiers were uninterested in the West, where rails would not be making a foreseeable profit. If the expected benefits of an infrastructure project outweigh the expected costs, private financing will be available in the absence of public funding. Only when costs are expected to exceed benefits do infrastructure projects require subsidies. Historically, the argument that infrastructure is a public good that must be paid for by taxpayers has been proven false by private infrastructure projects ranging from highways to lighthouses, canals, and city streets.

The transcontinental railroad, the largest public works project of its time, marked a shift toward American policy of relying principally on federally funded infrastructure rather than on entrepreneurs to supply these goods. In the 20th century, the Federal Highway Act of course dwarfed the scale of the transcontinental railroad, and today publicly provided infrastructure is claimed to do everything from creating jobs to allowing for long run economic growth. Without a market mechanism to guide infrastructure construction, we are left with the clumsy political process to determine the amount and distribution of money spent on transportation.

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.

transit worker

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 threepart 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?

Amtrak’s utter incompetence

by Stephen Smith

There’s a lot to be said for Amtrak’s mismanagement, but a lot of it is technical and inaccessible to the layman. This, however, is unconscionable: Amtrak still does not offer wireless internet – either free or paid – on any of its trains. Megabus and Bolt Bus (whose tickets between DC and NYC are about $20), however, have had wireless for about two years, and I’m pretty sure some Chinatown buses have had it for longer. Amtrak’s normal tickets on the Northeast Corridor are about four times the cost of tickets on Bolt Bus and Megabus. Tickets on the Acela are about eight times the cost of bus tickets, and the service is heavily marketed towards business travelers who put a high price on their time. But no internet. It’s apparently coming to Acela in about six months and the rest of the Northeast Corridor by the end of 2010. Had intercity buses and airlines not introduced wireless internet, I seriously doubt Amtrak would have ever had the business sense to do it.

Originally posted on my blog.

Block vs Poole: The Public-Private Partnership Debate

The Orange County Register’s Freedom Politics website (check out my rent control article FreePo published in March) features articles discussing two differing takes on road privatization from notable scholars Walter Block and Robert Poole.

In Robert Poole’s article, he discusses the merits of the increasingly popular use of Public-Private Partnerships (PPP) to fund and operate roadways:

Four potential benefits are particularly important:

  1. Fewer Boondoggles: Elected officials often champion projects that yield political benefits but have costs greater than their benefits. But with PPP toll projects, nobody will invest unless the benefits exceed the costs to the extent that they can project a positive return on their investment. That’s a powerful safeguard against boondoggles.
  2. Avoiding “Big Dig” Disasters: Large-scale “mega-projects” like Boston’s notorious Big Dig are prone to large cost over-runs and schedule delays. In a well-structured PPP project, those risks can be transferred to the private sector, shielding taxpayers from those costs.
  3. Cost Minimization: Traditional highway projects are built by the lowest-bidder, which often means they are built cheaply and need lots of expensive maintenance over their lifetimes. But a PPP toll highway must be maintained for decades at the private company’s expense. Hence, it has every incentive to build it right to begin with, to minimize total life-cycle cost.
  4. Sustainable Congestion Relief: If you add ordinary freeway lanes, they tend to fill up and become congested. But today’s urban toll lanes use variable pricing (as on the 91 Express Lanes) to keep traffic flowing smoothly on a long-term basis.

In contrast, Walter Block takes a more principled stand for complete privatization:

Public – private partnerships (PPP) are thus part and parcel of both fascism and socialism; they constitute a partial state ownership of the means of production. As well, they are emblematic of fascism, and government is the senior partner, and its regulations still determine the actions of these public – private partnerships.

Block has dedicated a chapter in his new book, The Privatization of Roads and Highways: Human and Economic Factors to a critique of Public-Private Partnerships.  I haven’t read it yet, but hope to share some of the insights when I do.

This is a concept I have been debating in my head for a while.  Are public-private efforts towards privatization really a step in the right direction towards liberalizing the transportation system, or are they just a form of corporatism that enable governments to bail themselves out of their fiscal crises?  Should we hold out for Block’s ideal, yet unlikely, complete private overhaul, or hope for gradual, yet inevitably incomplete liberalization with PPPs as the first necessary step?

What are your thoughts?  Have any readers read Block’s critique of Public-Private Partnerships?  (a pdf version of the book is offered free from the Mises Institute)

What Would Moses Do? (Robert Moses, that is…)

(Map of Robert Moses’ unbuilt proposals via “vanshnookenraggen.”)

Sandy Ikeda blogs:

If Moses were around today I don’t think he’d waste any time getting every major project he could think of “shovel ready” for hundreds of billions of stimulus money. While he’s no longer with us, I do fear that, with the incentive structure of the stimulus legislation and the knowledge problems that will accompany such massive and hurried construction, we’ll soon be seeing many incarnations of Moses rising up in cities around the country.

So, not only will we have to live with ill-conceived mega-projects for decades to come, we’ll be subsidizing the birth of who-knows-how-many local despots who’ll be guiding urban policy for the foreseeable future.