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Building A Better BART

In 2016, voters in San Francisco, Alameda and Contra Costa county approved a $3.5 Billion dollar bond to keep BART moving. Funds from the bond will be used to replace aging infrastructure throughout the system, but even three and half billion dollars will scarcely keep us running in place. Maintaining what we have long term—and eventually improving on what’s already in place—means finding a sustainable revenue stream for the system and reimagining how we fund transit in the Bay Area. Hong Kong vs the Bay Putting BART on permanently firm financial footing doesn’t mean reinventing the wheel. Commuter rail systems in East Asia figured out how to run profitably decades ago. And there’s no better example of what BART could be than the Metro Transit Railway Corporation (MTRC) in Hong Kong. The MTRC operates 130 miles of track (roughly equivalent to BART). It transports over 5 million passengers a day (about 10x BART’s daily ridership). And it posts a 99.9% on time rate (let’s just say…way the hell better than BART). MTRC System Map   The MTRC is able to maintain its first-in-class service levels because it doesn’t skimp on the upkeep. It employs approximately 5,000 technicians who physically inspect every inch of track once every three days. The rolling stock is given a similar level of attention. And the entire system is overseen from a state-of-the-art control center where management can identify problems in real-time. The result of all this preventative care is a transit system that reliably performs at scale and sets the global standard for commuter rail. All told, the MTRC spends an impressive US $700 million a year on maintenance and improvements. But perhaps the most amazing thing is that this $700 million comes out to less than 40% of the MTRC’s yearly revenue. Value Capture Finance […]

Towards A Liberal Approach To Urban Form

It is because every individual knows little and, in particular, because we rarely know which of us knows best that we trust the independent and competitive efforts of many to induce the emergence of what we shall want when we see it. — Friedrich Hayek, The Constitution of Liberty Imagine the perfect city. If you have a clear picture in mind, you’re not alone. Tsars, emperors, and prophets have been trying to build perfect cities for millennia. With the emergence of the field of urban planning and modern social science, everyone from stenographers to industrialists to independent architects have joined in. For Ebenezer Howard, the perfect city was the Garden City, a corporate-owned residential satellite on the outer edge of town. For Le Corbusier, it was the Ville Radieuse, full of “skyscrapers in the park” and elevated highways. For Frank Lloyd Wright, it was Broadacre City, a dispersed anti-city full of single-family homes on one-acre lots. Each reflects a distinct vision of urban life, and each seems to have as many opponents as it does proponents.   Thankfully, few of these plans have ever been implemented in full on a mass scale. Yet “perfect city” thinking—the view that one particular vision of urban form should be imposed by planners—has manifested itself in small ways in cities around the world through the construction and enforcement of specific theories of how a city should work. This approach to urban form involves expanding urban planning beyond prudentially managing infrastructure and mitigating destructive negative externalities and toward enforcing and preserving particular lifestyle and aesthetic preferences. Consider: while Ville Radieuse was never built, many cities bulldozed traditional urban neighborhoods to construct the urban elevated highways of Le Corbusier’s dreams. While Broadacre City never moved beyond the model stage, many suburban communities still zone minimum lot sizes […]

The Other Broken Window

My first article for TheFreemanOnline dealt with the “broken window fallacy.”  But in the literature on social theory, there’s actually another important idea that also uses the metaphor of a “broken window.” In his comment on The Freeman’s Facebook page, Flavio Ortigao raised this point when he wrote: …I do not quite follow the putative analogy with broken windows theory. In many case[s] “broken windows” has been used as an analogy for the necessity of not allowing the degradation of public space/utilities. Inferring that there is a psychological effect that compounds the problem. I think [it] is very important that cities do not surrender to vandalism. This has little to do with the situation of Haiti, struck by a natural disaster. Mr. Ortigao is right.  The idea to which he refers does not directly relate to the Haitian earthquake or to other situations in which destruction is supposed to create wealth.  That’s a different “broken window.” The typical way to commit the broken-window fallacy is to argue that a natural disaster, war, or economic crisis is actually good for an economy. The idea is that if the event causes an increase in spending on infrastructure or war materiel or what-have-you, the “new” demand will stimulate the economy and create more wealth than there would have been otherwise.  But that’s not what Mr. Ortigao is referring to. One of the articles I assign to my students is George L. Kelling and James Q. Wilson’s “Broken Windows” (1982) in which they say:  “…one unrepaired broken window is a signal that no one cares, and so breaking more windows costs nothing.”  This would also apply to trash left on the sidewalk or drunks sleeping on benches, that sort of thing.  And because “disorder and crimes are inextricably linked,” a community that tolerates minor […]

Market Urbanism Is Still Underrated

New data keeps coming in that shows that increases in housing supply tend to be followed by declining rental rates, even in the cities facing the highest demand. After a boom year for apartment construction in 2016, rents are falling in New York City, San Francisco, and Washington, DC. Median rents for one-bedrooms across New York City fell by 9.1% in the past year. Even in San Francisco — the most productive city in the country — a burst of new supply in 2016 has led to falling rents. Estimates put rent year-over-year decline in prices at 1% to 9%. Rising vacancy rates and quarter-over-quarter declines in Seattle’s rental rates are a sign that it’s leaving a period of double-digit annual increases. A decade of increasing construction rates in DC has leveled off rent prices. Los Angeles has not seen the apartment boom that has benefitted renters in other expensive cities, and its rental rates are the fastest rising in California. Scott points out the striking correlation between housing construction and house prices in in-demand cities. This trend of declining rents is some very preliminary evidence against Tyler Cowen’s claim that densification in expensive cities will result in economic growth, but not falling rents as more buildings draw in more business activity and talent. A New York developer echoes Tyler’s view: “There are so many units, but then they all get eaten up. That is the way New York works.”

Market Urbanism MUsings March 24, 2017

1. Announcements I’ve posted a link on the homepage giving more info on the Market Urbanism programming at the upcoming FEE Conference, which is in Atlanta, June 15-17… The YIMBY party announced it will hold its 2nd annual conference, occurring this year in Oakland, July 13-16… And recently another YIMBY group popped up: YIMBY Denver! 2. This Week at Market Urbanism Michael Lewyn wrote Where the permits are & The “Foreign Buyers” Argument A common argument against new housing supply is that in high-cost cities such as New York, demand from foreign buyers is so overwhelming as to make new supply irrelevant. A recent study (available here) by two business school professors suggests otherwise. Emily Hamilton Conflicting Affordable Housing Policies Recently I presented on a panel at Chapman University on the future of housing in Orange County. Our panel highlighted the tensions between housing programs designed to help low-income and homeless households and those designed to help middle-income households. Sandy Ikeda wrote Addressing Local Knowledge & a book review on The Future Once Happened Here & Of Maps and Modernism In a sense, it may seem silly to criticize a map for being abstract, since, well, that’s what maps are supposed to do or else they would be useless.  But there is such a thing as being too abstract.  Maps should not abstract from what is essential to its purpose, which is to facilitate travel. 3. MU Elsewhere Emily‘s speech at Chapman University can be found at the 19:30 mark of this link Nolan Gray’s piece last year on Houston’s partial embrace of Market Urbanism was republished on FEE.org. He also published a to-do list for HUD secretary Ben Carson at Forbes. Carson could direct HUD officials to craft and disseminate model zoning reform legislation to the states. As urban history geeks may know, conventional “Euclidian” zoning […]

The Future Once Happened Here: New York, D.C., L.A., and the Fate of America’s Big Cities

There are many ways to tell the story of urban-policy failure. Economists have shown how rent control creates housing shortages, sociologists how welfare programs destroy poor communities, and urbanologists how urban planning can debilitate cities. In his book The Future Once Happened Here, historian Fred Siegel has added a new and insightful chronicle of modern liberalism’s influence on social policy in New York, Washington, D.C., and Los Angeles over the last 30 years. Siegel identifies racial tension as a main force that has driven urban policy since the 1960s. He lucidly and engagingly describes how that policy, informed by “riot ideology” based on liberal guilt and fear, transformed some major American cities from communities of tolerant strangers and great incubators of ethnic integration into rolling riots and sinkholes of federal largess. Associated with the riot ideology is what Siegel terms “dependent individualism,” the idea that each person has an absolute right to his “lifestyle,” at public expense and regardless of the consequences for social cooperation. Those consequences have been a “moral deregulation of public space,” which has eroded the trust that urbanologist Jane Jacobs identified as the lubricant that permits great cities to work well. The largest part of the book is devoted to New York City. Siegel explains how Mayor Fiorello La Guardia’s success in getting federal aid from FDR’s New Deal in the 1930s set the pattern for fiscal irresponsibility in New York for the next five decades. Consequently, New York became dependent on an artificial, make-work economy, based on federally funded jobs and welfare bolstered by dependent individualism and the riot ideology. Nevertheless, its productive sector was still so large that both New York City and the state of New York have regularly sent more taxes to Washington than they have received in transfers. Surprisingly, supporters of […]

Conflicting Affordable Housing Policies

Inclusionary zoning allows a few people to live in desirable, new construction buildings for much less than market rates. But it also carries with it a slew of perverse consequences. Because it’s a tax on construction, it reduces supply. Inclusionary zoning also leads developers to build higher-end buildings than they would otherwise, further squeezing out lower- and middle-income tenants. While inclusionary zoning makes life easier for a few middle- and high-income residents lucky enough to secure below market-rate units in expensive cities, it also contributes to the regulatory mess that constrains housing supply in general. This in turn drives up the cost of housing. The effects of these supply constraints fall hardest on low-income residents who can least afford artificially high housing costs. By placing further constraints on housing markets, inclusionary zoning makes it so that resources dedicated to providing housing for the truly needy don’t go as far as they could in a less regulated market. Subsidies to middle-income residents come with the unfortunate side effect of making it more difficult for non-profits and government programs to make housing accessible to the truly needy. Recently I presented on a panel at Chapman University on the future of housing in Orange County. Our panel highlighted the tensions between housing programs designed to help low-income and homeless households and those designed to help middle-income households. While my talk focused on regulatory barriers that make housing unaffordable for people across the income spectrum, Maria Cabildo — a former non-profit developer for low-income housing — talked about her experiences building housing for the homeless and very-low-income families. Maria pointed out that market-rate housing is too expensive for minimum wage earners in every single county in the country. In expensive markets, policies designed to subsidize housing for middle-income people drives prices even farther out of reach for low-income […]

Where The Permits Are

Thanks to Stephen Smith, I recently ran across an interesting database: HUD data on building permits by municipality.   So I decided to find the number of permits per 1,000 for a wide variety of cities, focusing on (1) multifamily permits (because rising rent is a bigger problem in most places than rising home costs) and (2) during 2015 and 2016 (because isn’t two years of data always better than one?).  Here’s what I found for the places I bothered to look up: Growing high cost cities permits per 1000/mean price for units with 5 or more structures  in thousands Seattle 29.4 Denver 19.5 Washington 13.7 Boston 12.5 Portland 12.2 Brooklyn 11.5 Manhattan 10.1 San Francisco 8.8 San Diego 7.6 Los Angeles 6.7   Growing low cost cities Atlanta 28.7 Dallas 15.3 Nashville 14.6 Austin 13.2 (not sure whether this counts as a low-cost city- really its kind of borderline) Charlotte 12 Columbus 7.4 Houston 6.8 Indianapolis 2.3   Low demand (i.e. declining) cities Chicago 5.4 St. Louis 3.6 Cincinnati 2.3 Milwaukee 2.2 Baltimore 2.1 Detroit 1.4 Another fun fact: suburbs of expensive cities lagged behind even the low-demand cities.  Nassau and Suffolk Counties had 0.3 and 0.2 multifamily permits per 1000 respectively, Marin County outside San Francisco 0.7, Orange County outside Los Angeles 4.7. Some takeaways: 1.  Low-demand cities generally had less building than even the most restrictive cities. 2. Within the high-cost city group, it seems to me that there is a strong correlation between permits and prices: Seattle and Denver are certainly cheaper than San Francisco or Los Angeles. 3.  On the other hand, there were some low-cost cities that didn’t have a lot of new construction, like Houston and Indianapolis.   But this weirdness can be explained away by looking at new single-family construction: Houston had more than […]

Of Maps and Modernism

This year, for the first time since 1979, New York City has revamped its subway map.  A quick glance shows a change in the background tinge from light tan to light green – most pleasant.  To my relief, however, on closer inspection nothing essential has changed from the last version.  Thank goodness it still doesn’t look anything like the map of London’s Underground. London’s map has been touted as the path-breaking paradigm of subway maps, the object of widespread acclaim and imitation.  Indeed, most major cities’ transit systems have adopted the map’s efficient symmetry, which was created by Harry Beck back in 1931 during the heyday of high modernism. Here it is (pdf). It’s easy to see why it has won praise.  It’s beautiful, looking like a two-dimensional version of a uranium molecule or the lattice of some fantastic crystal.  The same could be said for the maps of the underground systems of Paris and Tokyo. It’s about Usefulness As you’ve probably already guessed, however, I don’t like it.  And it’s not about aesthetics.  Here’s the problem: I’m just one person, of course (although here’s another guy who seems to agree with me), but when I’m in London I find myself constantly frustrated when I try to get from place to place using that map.  The problem is that I need two maps: the Underground map to tell me how to get from, say, Paddington to Notting Hill Gate, and a street map to tell me exactly where the heck Notting Hill Gate is in relation to Paddington.  The former abstracts from so much street-level detail that, unless you’re already familiar with the layout of London, the map, rather increasing the efficiency of travel via mass transit, actually makes it more cumbersome. New York City’s subway map on the other […]

The “Foreign Buyers” Argument

A common argument against new housing supply is that in high-cost cities such as New York, demand from foreign buyers is so overwhelming as to make new supply irrelevant.  A recent study (available here) by two business school professors suggests otherwise.  The study does show more foreign involvement in the NYC market than I expected: just over 13 percent of Manhattan buyers, and 5 percent of all regional buyers, come from outside metropolitan New York.  Even this share is less than in some lower-cost markets: the study notes that 17 percent of Las Vegas buyers are from outside the city. However, the impact of “out of town” buyers is pretty small:  the authors conclude that out-of-town buyers “cause an increase in house prices of 1.1% and an 39 increase in rents by 1.6% in both zones.”

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