Detroit’s Financial Future

After flirting with Chapter 9 bankruptcy or a state takeover of its finances, Detroit has reached a deal with the state of Michigan that will allow it to remain independently managed with a requirement for state oversight. The Detroit Free Press reports:

The city has seven days to create the positions of chief financial officer and program management director and 30 days after that to make a hire from a list of three candidates from the mayor and state treasurer. Lewis said the city is compiling a list of candidates.

“We’ve got a lot of requirements that are in the agreement,” Lewis said. “We’ve got a lot of work to do (with the agreement) and then getting to the work of fixing the city. Our focus is on executing the plan and getting the resources here to execute the plan.”

Snyder reiterated that the city “shouldn’t expect” a cash bailout, adding that Detroit is one of many troubled communities in the state. But he said the state would use its resources in a variety of ways to help the city.

Snyder said the agreement assures the things that need to be done will get done, describing it as a “progressive series of steps” that first allow the mayor and the council to make the decisions, and then empowers the project manager to do so if they don’t. “This is a legal document designed to deal with situations when they don’t go right,” he said.

While bankruptcy protection offers the advantage to cities of achieving a more manageable debt load, it doesn’t come without a cost. Bankruptcy would add an additional stigma to Detroit, already known for municipal financial distress, encouraging business disinvestment.

Vallejo, CA filed for bankruptcy in 2008, and as the New York Times explains, the city is still in a difficult financial position. After bankruptcy cities have less room in their budgets to provide public services such as infrastructure, parks, and schools while their tax rates don’t fall accordingly. This contributes to further erosion of the tax base as businesses and residents leave the city.

Municipal bankruptcy is always a two-sided issue involving both revenue and debt. At The Atlantic Cities, Emily Badger covers the equation from the revenue side. While cities often both subsidize and enforce sprawl through road-building, parking requirements, and minimum lot sizes, these policies are detrimental to their property tax equations. She cites the positive example of Asheville, NC as a city that has taken advantage of denser downtown redevelopment to improve its ratio of property taxes to infrastructure costs:

Asheville has a Super Walmart about two-and-a-half miles east of downtown. Its tax value is a whopping $20 million. But it sits on 34 acres of land. This means that the Super Walmart yields about $6,500 an acre in property taxes, while that remodeled JCPenney downtown is worth $634,000 in tax revenue per acre. (Add sales tax revenue, and the downtown property is still worth more than six times as much as the Walmart per acre.)

[. . .]

All of this is also just looking at the revenue side of the ledger. Low-density development isn’t just a poor way to make property-tax revenue. It’s extremely expensive to maintain. In fact, it’s only feasible if we’re expanding development at the periphery into eternity, forever bringing in revenue from new construction that can help pay for the existing subdivisions we’ve already built.

[. . .]

“The thing is it all works fine when you have all this new growth and the new gap is met by all these new permit fees – that’s like free money,” Joe Minicozzi [of Public Interest Projects] says.

Cities should not be in the business of requiring the sort of development that is most expensive for them to support. However, this analysis ignores the debt side of Chapter 9, one that may be even more difficult to tackle politically. Despite the harm that poor financial management causes, local elected officials simply do not have the proper incentives to avoid it.

Politicians operate on election cycles, and during their time in office they generally seek to provide their constituents with the best possible services at the lowest tax rate. This leads them to put off payment on long term debt and liabilities using accounting gimmicks and fiscal evasion techniques to spend more on goods that residents will see in the near term.

A combination of debt and declining revenue has put Detroit in the position it’s in today. Its urban development strategy must be a part of the property tax revenue solution. Perhaps the new officials that the city hires will help with debt management, but as long as elected officials influence municipal accounting, the incentives will be in favor of debt and deficits.

 

Maryland realtors fight to protect their subsidy

This post originally appeared at Neighborhood Effects, a Mercatus Center blog where we write about the economics of state and local policy.

Image via Flickr user Images_of_Money

We’ve already explored Governor O’Malley’s proposal for the Maryland budget here and here, but recently, a perhaps unintended consequence of the budget came to light. By limiting the deduction that residents earning over $100,000 can make on their state income taxes, the proposed budget would limit the size of the mortgage interest tax deduction for many taxpayers.

I stand by my earlier argument that reducing deductions for only one group of people is not a step in the direction of fairness, but a reduction in the mortgage interest tax deduction may be a positive side effect of an otherwise bad policy. From a limited-government perspective, the obvious downside of a reduction in the mortgage-interest tax deduction is that this represents a revenue-positive change in Maryland’s tax code in a state that already has one of the highest tax burdens in the country. Overall though, I think reducing this tax expenditure is a positive change because the policy has many negative consequences.

While the causes of the financial crisis were many, by subsidizing investment in homes, the mortgage interest tax deduction played some part in the overvaluation of housing stock. Aside from the poor incentives that this tax expenditure creates in financial markets, it amounts to favoritism of suburbs over cities. In Triumph of the CityEd Glaeser argues that the deduction leads many people to abandon renting in a city center for homeownership in the suburbs. However the Federal Reserve Bank of Boston provides evidence that the policy is more likely to lead people to buy larger homes than they otherwise would rather than trading renting for buying a home. Richard K. Green and Andrew Reschovsky write:

If one set out to design a policy to encourage homeownership, it would make sense to target the
largest subsidies to the households least likely to be homeowners, while providing little or no subsidy to
households likely to become homeowners even without a subsidy. Data from countries that do not
subsidize homeownership (such as Canada, Australia, and Japan) indicate, not surprisingly, that
homeownership rates rise with household income. This suggests that a policy to encourage
homeownership should give the largest incentives to households with modest incomes and no subsidies
to high-income households.

The MID, however, does exactly the opposite. For low- to middle-income taxpayers, the mortgage
deduction provides little financial incentive to abandon renting for homeownership. For those
purchasing modestly priced houses and facing the lowest marginal tax rate (currently 10 percent) the
benefits of the mortgage deduction are small. In fact, for households with low state income taxes, the
mortgage deduction may be of no value at all, because the mortgage deduction, even when combined
with other itemized deductions, may be smaller than the standard deduction.

For most high-income taxpayers, the tax savings resulting from the MID are a minor influence on
their decision to become homeowners; these households are likely to own a home regardless of the tax
treatment of housing. Rather than encouraging homeownership among high-income households, the
MID provides an incentive to buy a larger house and to take out a bigger mortgage. Economists have
long argued that the result is an inefficient pattern of investment, with too many resources invested in
housing and too few resources placed in more productive investments in factories and machinery (Mills,
1989; Poterba, 1992).

This analysis ignores that those at the margin of being least likely to be homeowners are likely the riskiest loan candidates and those most likely to foreclose, but they do make a strong case for why the MID leads to larger homes. Regardless of whether the deduction primarily increases homeownership or leads to larger houses, it results in a subsidy for suburban sprawl and its negative side effects of traffic congestion and demand for public services across a wider geographic area.

Unsurprisingly, the Maryland Association of Realtors is strongly opposed to a budget that would lead to lower tax expenditures on housing. The current policy directly subsidizes their industry. The Washington Post reports:

The Greater Capital Area Association of Realtors says that mortgage interest and property taxes account for almost 70 percent of total itemized deductions in Maryland, and they argue that the proposal, if passed, would further harm the area’s housing market, which has struggled to recover.

WAMU interviewed a leader among MD realtors on the issue:

Jim Scurvin, past president of the Howard County Realtors Association says it’s just wrong to jeopardize an industry responsible for 49 percent of revenue that goes to state and local government

“When someone buys a house, on the average you employ two people, and you put $60,000 into the economy right then and there,” he says. “Real estate is the lead when it comes to getting the economy moving again. We have the wind in our sails, the last thing we need is someone to knock the wind out.”

Scurvin, however, is acknowledging only the visible impact of the tax expenditure. As Frederic Bastiat artfully explained, all policies have unseen consequences. In this case, the unseen impact is that the mortgage interest tax deduction fuels malinvestment in housing at the expense of other, more productive sectors of the economy. While Governor O’Malley’s budget proposal has many negative features, the potential for reducing the state subsidy to housing could be its silver lining. Unfortunately as Maryland realtors demonstrate, eliminating tax expenditures is a painful and politically difficult process.

Tea Partying at Planning Meetings

At the Atlantic Cities, Anthony Flint writes on recent Tea Party activism in urban development arena. Tea Party groups across the country have spoken out against all manner of urbanist plans, from CAHSR to Smart Growth in Florida. Flint opines:

What’s driving the rebellion is a view that government should have no role in planning or shaping the built environment that in any way interferes with private property rights.

Both Flint and the Tea Party members that he’s writing about are seeing right past an essential property right.  Don’t landowners have a right to employ their property as they see fit without explicit approval from their communities? Smart Growth tends to limit the right to build sprawl although its historic presercation component creates competing objectives. Traditional land use planning limits property owners’ right to build too though.

In an article all about the Tea Part and land use, Stephanie Mencimer at Mother Jones quotes a Tea Party activist who said, “”We don’t need none of that smart growth communism.” I love this as a stand alone quote, but this activist is ignoring the other side of the issue. Traditional planning, at least as top down as Smart Growth, has shaped his or her presumably suburban neighborhood. How about, “We don’t want these socialist setback requirements,” or “Down with pinko minimum lot sizes?”

Property rights in land use are, of course, a contentious and debatable issue. Charlie Gardner offers a summary of the court decisions that have led to a world where municipal governments are permitted to take away property rights without compensating land owners for these takings by limiting the density and uses that they are allowed to build.

The suburbanist side of this debate is that property rights include the right to control a certain degree of land use for the land adjacent to your property. These tend to include the to free and easily available parking, the right to see a green lawn in your neighbor’s yard, and the right to limit building heights.

As I see it though, these rights do not come with landownership. Those Tea Party activists who identify as libertarians presumably support John Stuart Mill’s harm principle. This principle was captured perhaps most concisely by Zechariah Chafee, Jr. who said, “Your right to swing your arms ends just where the other man’s nose begins.” I cannot ask government to intervene just because I think your behavior is weird or doesn’t fit with my preferred lifestyle so long as you aren’t violating mine or anyone else’s person or property.

As I see it, the harm principle extends quite straightforwardly to land use; your right to build and conduct business ends where your neighbor’s property line begins. For those who wish to live in a regulated community, the market provides plenty of HOA’s that should meet their needs just fine without relying on government land use restrictions. For commercial land uses, Business Improvement Districts can likewise provide a regulated built environment through voluntary private contracts.

Book Review of Instant City: Life and Death in Karachi

I’m reviewing Instant City: Life and Death in Karachi by Steve Inskeep as part of a TLC Book Tour. Other bloggers are also reviewing the book throughout October, and you can find links to their reviews here. I received a complimentary copy of the book, and I’d like to send it to a reader if anyone who’d like to read it doesn’t mind a copy with some underlining and margin notes. If you’d like it, just comment saying so by Wednesday, November 2nd. If multiple readers would like it, I’ll pick one at random.

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In a manner that is rare for non fiction, Instant City is really a page turner. Inskeep takes us through the history of Karachi from Pakistan’s independence in 1947 through the present, stringing personal stories of social entrepreneurs, politicians, activists and real estate developers together to tell the city’s story. He revolves the historical accounts around a 2007 bombing, in which unknown perpetrators bombed a procession that was part of a Shia religious holiday. Following the bombing, rioters burned down blocks of wholesale retail buildings. Despite the arrests of four suspects, many of the city’s residents are so distrustful of the city’s MQM government that they believe that city officials caused the bombing and subsequent fires in order to clear out the neighborhood’s current tenants to make way for more glamorous businesses. While the city’s mayor passionately denies that city government had any involvement with burning its citizens’ property, that residents have so little faith in their government demonstrates how absent the rule of law is in Karachi regarding property rights to land.

In with the history of the city’s history, growth, and conflict, Inskeep covers land use in Karachi in considerable detail. To me, “Groundbreaking” is the most interesting chapter, where Inskeep details the experience of slum clearance in the city during the 1950s. Karachi had become home to millions of refugees, predominantly Muslims from India who moved there either by choice or by force, who had settled in camps downtown. City leaders wanted to move these refugees to the outside of the city and hired the Greek urban planner Constantinos Doxiadis to create a plan for relocating these people.

Doxiadis approached the problem through gathering as much local knowledge as possible. He designed the homes in a traditional South Asian style, taking advantage of shade and building homes so that breezes would help keep them cool without air conditioning. These homes would be occupied by low-income people as part of a rent-to-own program, so he designed them to be small and efficient, keeping the needs of the intended residents in mind. Throughout the process, however, Doxiadis realized that the plan had a major flaw. While these residents lived in informal settlements, they lacked adequate shelter, but they lived close to their jobs. By forcibly removing them to Levittown-style suburbs in North Karachi, well-meaning urban planners inadvertently made poorer the very group they were trying to help by saddling them with difficult and expensive commutes to job opportunities. For these people who were already living in poverty, this unintended consequence of urban planning could literally be the difference between life and death.

In one of the many incidences of violence detailed in the book, an activist who worked for an organization that seeks to protect Karachi’s open space was murdered the day after he called a press conference to explain that he felt city officials were encroaching on  a national park by building settlements. The park’s borders had been drawn and re-drawn over the years, so whether or not the settlements lay inside the park is a matter of ambiguity. Property rights are so uncertain that landowners and city planners must build projects as quickly as possible before others encroach on the land where they plan to develop, and open space stands a low chance of remaining undeveloped. While no conclusive evidence supports the conclusion that the MQM government arranged the activist’s murder, Inskeep writes:

Whatever legal cover the city council may have provided, the new construction led to an ethnic battle, which the MQM’s rivals also failed to restrain. Protests ended in gunfire, criminal charges were filed, an officer of the court was threatened at gunpoint, and activists were eventually killed…. Politicians pushed all the buttons of a volatile area, and the situation exploded. Absent more evidence, Karachi’s dominant political party could deny responsibility for the assassination of Nisar Baloch and his successor, Nader Baloch. But the MQM could not avoid responsibility for helping to create a deadly situation.

While the book focuses on Karachi, Inskeep uses it to analyze the trend of other instant cities, including Lagos along with Tokyo, Shanghai, Sao Paulo, and others. For me, the book provided a meaningful introduction to Pakistan’s history and development, a topic about which I’m not nearly as informed as I should be. As a journalist, Inskeep tells a fantastic story, and draws a compelling and, I believe, correct conclusion about urbanization around the world:

[Migrants from rural areas] represented the most powerful force in the instant city: the desire of millions of people–simple, quiet, humble, and relentless, no matter what the odds–to make their lives just a tiny bit better than they were.

Sometimes the most discussed aspects of instant cities include violence, crime, disease, and squalor, which of course are horrible realities that  Karachi’s social entrepreneurs and businessmen alike seek to improve. But the unseen side of instant cities is what drives people to move from subsistence lifestyles to cities where they and, perhaps more importantly, their children will have opportunities for a higher standard of living. Cities are growing because many different types of research have demonstrated what new city residents already know: dense urban cities allow for people to do better for themselves (and others in the process) compared to the relative isolation of small towns or rural areas.

All in all, Inskeep has succeeded with a gripping book that helps convey the importance of urbanization for the global community. I appreciated that he identified many of the problems that come from government failure in Karachi from the perspective of many different types of citizens and provided so much information about the city’s past and present in a fascinating and accessible work. Inskeep makes just one major point that I disagree with. He suggests that a stronger metropolitan planning authority is what Karachi needs to allow for more stable land use policy. I tend to think that instead, a legal system that supports the rule of law and protects property rights is what would help the city’s development rather than a master plan to enforce permissible land uses.

Alon Levy on the Suburbanization of Poverty

Over at Pedestrian Observations, Alon Levy has a typically well-written and researched post on the gentrification of poverty. He explores the well-researched trend that low-income Americans are increasingly moving to the suburbs as gentrification is driving up rents in inner cities. He hypothesizes that this “current” trend has really been happening for the past fifty years:

Both the inner and the outer limits of poverty are pushed outward. What we saw last decade was just a tipping point in which the expansion of the gentrified core was by itself enough to offset the wealth loss coming from the expansion of the ghetto.

Levy suggests that this trend is largely due to the typical pattern of poverty moving outward in a “donut” pattern, but today the center of the donut is in the suburbs. He writes:

In general, a similar story played out in the first-ring suburbs of many Rust Belt cities, especially in ill-favored quarters: the places that people used to flee the city to are now cities that people flee.

His post sparked two thoughts:

1) Could part of the reason that wealthy and middle income residents are moving to inner cities have to do with the demand for time? As we as a society are becoming wealthier, the value of time — the ultimate finite resource — is increasing. So as the price of free time rises, people may be moving to places where their commute times are shorter. In many cases, they are trading off quality of public schools and public safety to enjoy shorter commutes. When they move to Jacobian mixed-use neighborhoods, they could enjoy the added benefit of shorter travel time when running errands and seeking out entertainment. I think this pull toward inner cities helps explain gentrification, in addition to the push away from suburbs that are no longer as desirable as they used to be.

2) In DC with its uniquely terrible height restriction, the city has never achieved the typical inner city growth pattern with the tallest buildings and densest office space is in the center. Instead, skyscrapers have to be built in parts of Silver Spring, Roslyn, Tysons, and other suburbs. Is this development pattern shaping gentrification in these areas?

The Price of Parking in India

In Triumph of the City, Ed Glaeser offers a very insightful analysis of density restriction in India, home of some of the fastest growing cities in the world. He explains that while land use regulations are detrimental to economic growth in the United States, the consequences are much greater in developing countries. In particular he examines the strict FSI (floor space index, equivalent to FAR) limits in Mumbai and the ramifications for business there.

This week at India Lives in her Cities Too, Karthik Rao-Cavale offers and in-depth analysis of the impact of parking requirements in India. In New Delhi’s Khan Market, one of the most upscale shopping destinations in India, business owners are fighting against fees for parking, which the Environmental Pollution Authority has mandated. The case is currently at the High Court, and could have significant bearings for the future provision of parking in India.

The Times of India reports on the specifics of the case. The New Delhi Municipal Council that owns the garage wants to begin to start charging for use of the garage, but the traders at the market propose they could begin compensating the council to maintain free revenue for their customers. The court has ruled that parking will remain free for customers for now, with the market’s businesses paying a fee to the NDMC.

Currently, parking mandates play an important part in new development in India’s cities. The Urban Development minister supports requiring parking for all new buildings. This is on top of the extreme FSI limits in some Indian cities (1.33 in Mumbai for new construction).

Rao-Cavale suggests that instead of providing parking at no cost, the NDMC should sell its garages:

The task of providing parking primarily belongs to the private sector. The government can permit paid on-street parking where the street space is not required for any other purpose (by street vendors, for example). But the government should not be involved in construction and maintenance of off-street parking lots.

As Glaeser explains, the extreme development restrictions in India could have potentially life or death consequences. Previously discussed in-depth here, parking requirements can have many of the same results that density restrictions do. Given the sprawling development in many Indian cities, driven in part by FSI limits, cars and the space required to park them, parking spots are at a premium in many Indian cities. By giving away parking spaces in any of its garages, the NDMC is reducing opportunities for the growth that cities attain when they permit density of people and commerce.

 

Irrational, or responsive to incentives?

In the Washington Post Brad Plumer editorializes on the choice of many Americans to accept longer commutes by car in exchange for larger homes far from their workplaces. He says that consumers are unable to accurately calculate the cost of their commutes, including time spent driving, leading them to make “irrational” choices about where to live. However, Plumer downplays the policies that encourage consumers to buy homes rather than rent and that allow them to partially externalize the costs associated with driving.

Plumer asserts that when buying a house, consumers think they will value additional space more than they do, but he gives no convincing reason that their subjective valuation of home size is incorrect. If in fact if consumers did undervalue the time they spend commuting in relation to home size when they purchased a home, he gives no reason why they would not eventually realize this error and improve their situation by moving to a smaller home closer to a city center.

His piece is written in response to Congressman Earl Blumenauer’s recent report on the topic of shielding Americans from volatility in the oil market. Blumenauer does credit the policy environment dating back to the 1944 Federal Highway Act for shaping the car-centric culture that many Americans live in today, and he supports policies that provide incentives for decreased reliance on cars.

Blumenauer asserts, “For too long, the Federal government has disproportionately subsidized highways at the expense of other modes, reducing consumer choices.” Rather than moving away from determining transportation and urban development through legislation, he provides policy prescriptions at the federal, state, and local level to decrease consumers’ dependence on oil.

For example, Blumenauer suggests that mortgage lenders should be encouraged to take transportation costs into account, making it easier for those living close to their workplaces to get loans. If the recession has taught us anything, it should be that government involvement in lending markets is dangerous. Banks could easily access data on the risk of loaning to consumers who live far from where they work, so if in fact these mortgagees are at increased risk of foreclosure, banks could freely factor this information into their interest rates.

Blumenauer also says that the federal government should provide an index of transportation costs associated with living in various places. Plumer promotes this prescription, writing that it would improve transparency in the housing market. In reality, however, no government body could come close to accurately representing the transportation costs for each individuals’ commute; rather, they could provide averages that may be far from household’s actual costs. Individuals can calculate their own commuting costs across different homes much more accurately than any centralized authority could.

All policies come with unintended consequences. Today in the United States we can see clearly the unintended consequences of policies that subsidize driving and prevent high-density housing — sprawl, congestion, and long commute times, along with the pollution that comes with cars. However this does not mean that the smart growth policies that Plumer and Blumenauer suggest will not come with their own unintended consequences.

We should assume that consumers act rationally given the incentives that they face. Repealing the policies that have shaped current behavior such as undervalued public parking, density restrictions, and tax breaks for homeowners will result in people moving closer to their work places and driving less. Rather than seeking to create a new vested interest that will support  mortgage incentives for those who live in smart growth communities, Blumenauer should work to raise awareness of the costs of mortgage interest tax breaks and driving subsidies that are currently borne by taxpayers.

No ARC without TOD

A lot of fuss has been made by urbanists about how important the ARC transit tunnel under the Hudson is to curbing sprawl in North Jersey, but frankly I’m not convinced that more commuter rail into Manhattan is the cure for what ails New Jersey. The state’s fundamental problem is its reliance on two cities outside its borders for providing jobs to its people, and it’s used the existence of New York and Philadelphia as excuses to remain a sprawled, suburban oasis in the middle of a dense Northeast Corridor, which can’t continue once it runs out of land and money.

Commuter rail in post-WWII America has never quite lived up to transit activists’ hopes, and the NJ Transit service and the ARC tunnel will be no different. Instead of viewing suburban train stations as smaller versions of city stations, locals like to think of them as their own personal portals into downtown business districts. Suburbanites don’t want transit-oriented development – they want lots of parking so they have access to the station, since most of them don’t live within walking distance.  Increased density and less parking might benefit future residents who would move in to new developments, but they don’t show up to zoning board meetings and don’t get a vote.

As an example of how many towns waste their transit, I grew up in Bryn Mawr, a suburb of Philadelphia, and a town which has better transit access than the Upper East Side. It’s part of a string of towns collectively known as the “Main Line,” after the train tracks that run through the area, there’s a light rail line that runs south of the main commuter line, and there are a few bus lines (both SEPTA buses and private college shuttles) that connect the towns. Despite its intense connectedness and the relative frequency of rail service, the areas around the train stations are woefully underdeveloped – one sidewalk near the Villanova station ends not a block away at the edge of the university’s campus. Some shops with apartments on top that were built earlier in the century around the stations still stand, but most new development along the main commercial drag is not mixed use, and is set back in a sea of parking. New apartment buildings are not allowed in the commercial zone where the train stations are located, but rather are pushed back to a busy street north of the train line with no commercial development, where they are less accessible and desirable. Along the light rail line there is even less development, with large free parking lots taking up much of the prime real estate around stations. (Perhaps the most shocking irony is that the parking lots taking up prime real estate around stations are owned by the transit authorities themselves.)

Because of the underdevelopment around commuter rail lines, they attract relatively few riders and require ever-larger subsidies (in Philadelphia’s case, at the expense of inner-city lines) to maintain the systems for the few, wealthy commuters (in New Jersey’s case, Wall Street bankers) who still use them. And it is this low ridership and revenue that makes projects like the ARC tunnel such a tough sell for politicians.  Many lines run infrequently outside of peak hours as a result, and sometimes not at all on weekends, further limiting their usefulness.  Anti-density land use policies, so popular with suburban constituents, rob transit systems of the fares they need to be self-sustaining, or even, god forbid, profitable.

If New Jersey wants billions in federal subsidies to funnel even more commuters into Manhattan, it should have to make transit more than just a subsidy to the rich and an excuse not to develop North Jersey. There are plenty of cities, like Newark and Jersey City, that are ripe for expansion and densification – something that wouldn’t require a new rail link, and could be done at a fraction of the cost.  But unfortunately for transit-oriented development, funding decisions are made based on political clout rather than real need, and allowing for dense development around stations is never a prerequisite for continuing to receive subsidies. It’s easy to throw money at the ARC project, but unless North Jersey becomes something other than New York City’s suburb, it will never truly have enough bridges and tunnels.