At 4:30 am, alarms on my cellphone and tablet start beeping, just enough out of sync to prompt me to get up and turn them off. By 5:00 am, I riding as a passenger along an unusually sedate New Jersey Turnpike, making friendly conversation with my driver and survey partner to make sure he stays awake. At 5:30am, as most of the city sleeps, we find a drab concrete picnic table outside the bus depot and chow down on our cold, prepared breakfasts. Around us, buses are revving up and their drivers are chatting and smoking cigarettes. At 5:50 am, we find our bus and introduce ourselves to our driver for the day. All of the Alliance drivers seem to be Hispanic. Our run begins. You wouldn’t expect it, but the first run is always the sweetest. The riders trickle on, making it easy to approach them, and unlike the typical 8:00 am rush hour rider they are usually friendly and receptive to my request. I approach them and mechanically incant “Good morning Sir/Ma’am. Would you like to take a survey on your commute today for NJ Transit? It will only take a few minutes of your time.” My partner sits in the front, tallying the boardings, exits, and survey refusals. We will spend the next eight hours zigzagging across the New York City metropolitan area, asking harried riders about their commute.

For the past month or so, this has been my part-time job: surveying bus riders about their origins, destinations, and travel preferences for NJ Transit. The job is just engaging enough that I rarely have time for sleeping or class readings, but has enough slow periods that my mind can wander on the question of bus planning. Although I am not authorized to read any of the surveys that I collect, it is clear that many of the people I am surveying have a tough commute. In many cases, they are disabled and/or evidently quite poor, wearing uniforms characteristic of low-wage service positions. Their circumstances leave them dependent on the bus for access to work. Often they mention how this bus ride, which may run more than an hour, is only one chain link in their broader commute. While the average bus rider is receptive once they find out you are not trying to sell them anything, it is more than clear that they are under a fair amount of stress. The general crumminess of their lot, and the incredible importance of making it better for their sake, often leaves me thinking about how we could improve bus service and transit broadly. For this reason, I decided to pick up and read a bus planning book that is a mainstay in market urbanism book recommendations, Curb Rights: A Foundation for Free Enterprise in Urban Transit. With the book turning 20 this year, it seemed worthwhile to draft up this short summary and review along the way.

Curb Rights, by Daniel B. Klein, Adrian T. Moore, and Binyam Reja, is an attempt to develop a market alternative to status quo bus planning. Published in 1997 by the Brookings Institution Press, the book arrived at a time of great enthusiasm for privatization and deregulation, and the authors’ prescriptions reflect this fact. In the following review, I will broadly sketch out their argument and conclude with a few of my broader critiques. This review is broken out into three broad sections: First, the challenge facing transit today as the authors see it (addressed in Section One of the book). Second, recent attempts to address this challenge through new regulation or deregulation (addressed in Section Two of the book). Finally, the solution proposed by the authors, namely a system of urban curb rights (addressed in Section Three of the book), as well their broader recommendations for transit policy (addressed in Section Four of the book). This review concludes with some critiques of their system and reflections on the continuing relevance of their ideas for 2017, 20 years after its publication.

The Trouble of Transit in an Automobile Dominated World

The key challenges facing transit, as Klein et al. see it, are the now unquestionable dominance of the automobile and the general mismanagement of public transit. Unusual for a book about transit planning, Curb Rights begins provocatively with a chapter titled “The Triumph of the Automobile.”^[i] Early on, the authors point out that in 1990 over 90% of Americans commuted by private automobile. While these numbers have declined somewhat in the intervening 20 years, there is still little question that Americans prefer private automobiles for commuting and personal trips.^[ii] Whatever your personal predilections about travel are—personally, I commute exclusively by bicycle and don’t own a car—it isn’t hard to see why: private automobiles are great for short trips, don’t involve any waiting or transfers, offer door-to-door service, guaranteed seating, and even storage space. Traffic congestion and car crashes notwithstanding, they are also generally reliable, safe, and comfortable.^[iii] As the authors see it, the main drawbacks of the private automobile—traffic congestion and air pollution—could easily be addressed using congestion pricing and pigouvian emission taxes, respectively.^[iv]

While some of this shift from transit to private automobile was likely inevitable, Klein et al. lay a fair share of the decline of transit at the feet of public mismanagement. Most urban transit systems were, after all, privately managed as heavily regulated monopolies up until the 1950s and 1960s. The deal was simple: municipalities would provide private companies with a portion of the right-of-way and a guaranteed monopoly over transit along a specified route, and in exchange private operators would own and operate the transit line subject to heavy public regulation of fares, stops, and frequencies, among other things. While private automobiles siphoned off some riders, the authors point to deferred capital investment due to rationing during World War II, the inability to cut unprofitable lines or frequencies, and the inability to freely adjust fare as important reasons for the wave of private transit bankruptcies in the post-war era.

While the Urban Mass Transit Act of 1964 provided local governments with funds to take over private transit companies, the situation only worsened in the decades to come.^[v] The share of commuters using transit fell from 12.6% in 1969 to 5.1% in 1990.^[vi] During this same period, operating costs per passenger trip have increased by a startling 175%, largely owing to increases in labor compensation.^[vii] Between 1960 and 1990, transit management transitioned from mild unprofitability to heavy dependence on subsidies, with over 70% of revenue coming from public coffers.^[viii]

Why has public management been so ineffective at turning around the fortunes of transit? Here Klein at al. offer two major critiques of public management: the Hayekian Critique and the Public Choice Critique. The heart of the Hayekian Critique is as follows: it is difficult, if not impossible, to efficiently centrally plan a multi-faceted and constantly changing system like urban transit.^[ix] As the economist F. A. Hayek observed in a different context, relevant knowledge related to consumer route, speed, and comfort preferences, and the price tradeoffs these consumers face, is widely distributed among riders and is not easily accessible to planners.^[x] While the survey project I am involved in is one such attempt to address this issue, a 25-question survey can only gather so much information, and only that information that planners already see as important. Every few surveys, a respondent will tell me something valuable that wasn’t asked about on the survey—often their perceptive ideas about how to improve the service. I nod and listen and promise to pass the information along, but in reality, this information is lost.

There is simply no way that a single agency could collect and integrate such knowledge about unique and changing local conditions. To collect and use this knowledge, as the economist Israel Kirzner explains, we require a process of competitive entrepreneurial discovery.^[xi] That is to say, we need a system in which easy entry and exit and the profit motive allow and incentivize entrepreneurs to collect local knowledge about what commuters need and test this knowledge in a competitive marketplace. While it is easy to observe the lack of incentives facing public transit agencies, these agencies are almost certainly doomed to provide less than optimal service given their inability to exploit the knowledge produced by the discovery process that is a byproduct of trial-and-error entrepreneurial activity.

Even if we assume that public transit agencies could collect perfect knowledge about the needs of consumers and opportunities for optimization, they may face conflicting incentives that lead them to produce suboptimal service. The authors refer to this as the Public Choice Critique.^[xii] Consider: what is the purpose of a public transit agency? To enhance intercity mobility? To renew and maintain certain neighborhoods? To connect suburbs? To minimize environmental impact? Vague comprehensive plans and idealistic transit advocates often muddle these purposes, leading to poor results toward any given end. Compare this situation to the singular incentive of private operators: to turn a profit by efficiently serving customer needs.

Even where policy makers provide their transit agencies with a clear goal, internal and external special interests may further meddle with the operation of the public transit agencies. As William Niskanen observed, the personal goals and poor incentives facing leaders within public agencies often lead to overprovision of the service in question, inflated costs, and reduced efficiency.^[xiii] Then, of course, there are the conflicting purposes of powerful external groups, including public sector unions, manufacturers, and developers, which often conflict with the actual needs of local residents. Together, the Hayek Critique and the Public Choice Critique paint a picture of public transit agencies that are in many cases unable and/or unwilling to efficiently provide riders with the best possible service.

Failed Attempts at Creating a Competitive Transit Market

Before setting out their proposal, Klein et al. turn to failed attempts to address the declining status of transit through expanding markets. The authors examine three alternatives to the status quo: jitneys, edge transit services, and bus privatization.^[xiv] Jitneys, essentially informal taxis, burst onto the scene in 1914, picking up waiting riders from streetcar stops in a process known as interloping.^[xv] During their heyday jitneys functioned as a competitive private transit market, operating along routes but without schedules. This dramatically reduced streetcar revenues, prompting municipal officials to prohibit them. At the time of publication in 1997, jitneys and informal taxis were still common, particularly among low-income migrant communities. The descendants of jitneys live on today as commuter shuttles and carpooling services, although these services are often heavily regulated and strictly limited.^[xvi] Today, ride-sharing services like Uber and Lyft almost certainly fill many of these functions. But any attempt to reintroduce traditional jitneys—following a route but without a schedule—would need to contend with the problem of interloping, which could bankrupt scheduled services, and the threat of jitney cartelization, which would eliminate the benefits of a competitive jitney market.

The authors also turn to the mixed results of bus privatization and deregulation in the United Kingdom. The 1985 Transport Act privatized and deregulated all bus lines in the UK outside of London, allowing bus lines to use any stop they choose so long as they post and adhere to official schedules.^[xvii] While this change lowered operating costs, dramatically scaled back tax expenditure on transit, and expanded service access, it also failed to reduce bus fares as intended. What kept fares from falling? Given that bus lines didn’t have exclusive access to riders at certain stops, new companies could schedule their stops minutes before competitors, stealing their riders in a process known as schedule jockeying. This prompted a tit-for-tat process of schedule changes that undermined the customer experience and led to administrative waste. In response to this threat, bus companies would often temporarily operate high, inefficient frequencies to keep out competitors, a process known as route swamping. This unhealthy competition over riders lead to greater consolidation and waste, which undermined fare reductions. In a prelude to their titular prescription, the authors point out that possessing rights to the riders at certain stops during certain times of day, or curb rights, could have avoided this issue.

Reviving Transit Markets Through Curb Rights

In the final third of the book, Klein et al. turn to the question of how learn from the mistake of the past to stimulate a private competitive bus market. In characterizing the challenges facing bus transit, Klein et al. draw a conclusion that is key to their proposed solution: attempts to create a competitive market of transit entrepreneurs through unsophisticated jitney legalization or bus deregulation can eliminate or seriously hinder the ability of private bus operators to offer scheduled, route-based service. The missing ingredient, as the authors see it, is a system of publicly and privately managed curb rights.

The key investment made by route-based, scheduled bus operators is in their bus stops. Beyond buses and staffing, a major cost for any bus operator is to make prospective riders aware that if they stand at a specified location at a specified time of day, they will receive comfortable and efficient transportation to a designated location. The goal is to create a level of service such that, when a bus comes through, there will be enough customers waiting to make the line profitable. However, in an under-regulated market, jitneys can easily come along and take those waiting riders and their fares, essentially expropriating the returns to the bus operator’s investment. In thick markets, where even with jitneys interloping there are still enough customers for bus lines to break even, this isn’t an issue. But in thin markets, where buses are drawing just enough passengers to break even, jitney interloping can kill scheduled bus routes. This in turns leads to fewer customers waiting at what were once bus stops, in turn killing the jitney market and reducing mobility overall. As in the case of UK bus deregulation, competing private bus lines can also have the same effect.

Once we realize that these the passengers standing at a stop are the results of investments made by bus operators, the need for curb rights becomes clear. Without them, rational bus operators won’t invest in high quality service, information dissemination regarding route schedules and fares, or high quality bus stops, knowing that jitneys or competing bus lines can come in and snag the returns to their investment. In short, the authors envision these curb rights as the exclusive right to pick up passengers at certain locations at certain times of day. These curb rights on public right-of-ways would be administered by public officials and would be auctioned off, encouraging bus operators to do the difficult work of finding the most efficient curbs for their routes and rearranging themselves as local conditions change. Separate “jitney commons” would offer curbs on which jitneys could freely pick up waiting passengers. This would keep competitive pressure on bus operators and provide greater choice for customers, without the standard problems related to interloping.

Beyond this basic framework, the authors are forthright in their agnosticism about the details of how the system would work. How far would curb rights zones need to be from each other? How would public officials prevent bus monopolies? Would bus operators or traffic police enforce curb rights? The authors leave these questions to be resolved by a distributed process of municipal trial-and-error. Klein et al. conclude by suggesting eight further policy suggestions.^[xviii] They include general deregulation of transit services, privatization of public transit agencies, ending federal involvement in transit, keeping transit planning local, creating curb rights systems, instituting highway pricing, using individualized rider vouchers for equity goals, and reforming taxi regulation.

Concluding Thoughts

In some ways, the transportation landscape in 2017 is dramatically different than it was in 1997. The introduction and subsequent explosive growth of ride-sharing companies like Uber and Lyft has led to something of a jitney renaissance. This has in turn led to the relaxation or gradual elimination of twentieth century taxi regulation in many cities, making door-to-door transit easier than ever. Unlike the jitneys of yore, today ride-sharing does not depend on interloping and may in fact support transit by providing “last mile” service.^[xix] Further, unlike in 1997, many more people are living in cities, bicycling, and working from home in 2017.^[xx]

In other ways, the transportation landscape in 2017 still looks very much the same as it was in 1997. Road tolling and emissions taxes remain uncommon in the U.S., and congestion taxes are virtually non-existent, meaning that commuting via private automobile remains underpriced and thus disproportionately popular. While some states and cities are exploring mileage-based fees and congestion taxes, these proposals are still only in their early phases.^[xxi] Transit ridership has effectively remained flat during this entire period and in many cases may be falling.^[xxii] Finally, against the suggestions of Klein et al., many cities continue to heavily regulate and/or prohibit private transit options, including route-based jitneys, private buses, and commuter shuttles.^[xxiii]

I came out of the book feeling like the authors slightly overplay their hand. Yes, proper pricing of private automobiles, a competitive transit market, and vouchers for select groups could obviate the need for public transit services in low- and medium-density cities. But what about the needs of high-density cities? While open to being surprised, I remain skeptical that competitive bus markets alone can service the high job densities seen in many legacy cities. How would this competitive market interact with publicly managed rail? How could rail be integrated into a private transit market? What is the role of bus rapid transit? The authors leave these answers largely answered, beyond calling for the full privatization of all public transit.

On the other hand, I admire the authors’ creative attempt to develop a “property rights” approach to stimulating private transit markets. It is evident that we underprice private automobile use, especially in heavily congested areas. Getting this right could lead to an influx of commuters into transit, an influx that public transit agencies today simply aren’t equipped to handle.^[xxiv] Even without this influx, it is clear to my mind that the riders who I encounter while surveying deserve the greater choice, improved service, and lower fares that are only likely to come from the introduction of a competitive transit market. Toward this end, I appreciate the project of Curb Rights and hope to see more creative, economically literate thinking of this kind among transit planners and entrepreneurs.

—

^[i] Klein, Daniel B., Adrian T. Moore, and Binyam Reja. Curb Rights: a foundation for free enterprise in urban transit. Washington, D.C.: Brookings Institution Press, 1997. p. 7

^[ii] Passenger Travel Facts and Figures 2016. Report. Bureau of Transportation Statistics, U.S. Department of Transportation. 2016. 20.

^[iii]  Klein et al., Curb Rights, 9.

^[iv] Ibid., 8.

^[v] Ibid, 11.

^[vi] National Transportation Statistics. Report. Bureau of Transportation Statistics, U.S. Department of Transportation. 1995.

^[vii] Baumol, William J. “Macroeconomics of Unbalanced Growth: The Anatomy of Urban Crisis.” American Economic Review. 57 (June). 415-426.

^[viii] Office of Management and Budget. “Guidelines and Discount Rates for Benefit-Cost Analysis of Federal Programs.” Circular A-94. 1992.

^[ix]  Klein et al., Curb Rights, 17-21.

^[x] Hayek, F. A. “The Use of Knowledge in Society.” American Economic Review, XXXV, No. 4; September, 1945. 519–30.

^[xi] Kirzner, Israel M., Peter J. Boettke, and Fre?de?ric E. Sautet. Competition and Entrepreneurship. Indianapolis, IN: Liberty Fund, 2013.

^[xii] Klein et al., Curb Rights, 22-29.

^[xiii] Niskanen, William. Bureaucracy and Representative Government. Chicago; Aldine-Atherton. 1971.

^[xiv] Contracting out bus service is also very briefly discussed.

^[xv] Klein et al., Curb Rights, 33-46.

^[xvi] Klein et al., Curb Rights, 47-61.

^[xvii] Ibid., 62-72.

^[xviii] Ibid., 119-125.

^[xix] “Last Mile (Transportation).” Wikipedia. September 16, 2017. Accessed October 21, 2017. https://en.wikipedia.org/wiki/Last_mile_(transportation).

^[xx] US Census Bureau. “Biking to Work Increases 60 Percent Over Last Decade.” May 08, 2014. Accessed October 21, 2017. https://www.census.gov/newsroom/press-releases/2014/cb14-86.html.

^[xxi] Pevto, Mary, Bob Sallinger, and Adriana Voss-Andreae. “Portland Leaders Have a Choice: Increased Congestion or Courageous Leadership (Guest opinion).” OregonLive.com. September 15, 2017. Accessed October 21, 2017. http://www.oregonlive.com/opinion/index.ssf/2017/09/portland_leaders_have_a_choice.html.

^[xxii] Walker, Jarrett. “Researchers! Why is US Transit Ridership Falling? — Human Transit.” Human Transit. March 18, 2017. Accessed October 21, 2017. http://humantransit.org/2017/03/researchers-why-is-us-transit-ridership-falling.html.

^[xxiii] Berliner, Dana. “How Detroit Drives Out Motor City Entrepreneurs.” Institute for Justice. January 1997. Accessed October 21, 2017. http://ij.org/report/how-detroit-drives-out-motor-city-entrepreneurs/.

^[xxiv] Smith, Max. “Metro Ridership Drops 12 Percent; $125 million Revenue Shortfall Projected.” WTOP. February 21, 2017. Accessed October 21, 2017. https://wtop.com/tracking-metro-24-7/2017/02/metro-ridership-drops-12-percent-125-million-revenue-shortfall-projected/.

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Last week, Nick Josefowitz unseated a multi-decade incumbent for a spot on the BART board of directors. Normally I don’t pay too much attention to elections, but Mr. Josefowitz might actually have some good ideas.

For everyone outside the Bay Area, the BART (Bay Area Rapid Transit) system is a commuter rail line that constitutes the vital transportation link between the East Bay and San Francisco. On a typical weekday it provides 400,000 rides and that number is increasing as the regional economy continues to boom. Suffice it to say that BART is a big deal to a lot of people who rely on it every day (myself included).

While Josefowitz’s campaign website talks about cleaning up dirty stations and increasing late night train availability, I had the privilege of hearing him outline an interesting proposal during a private, small group discussion some months ago.

According to Josefowitz, BART sits on a substantial amount of real estate in the form of station parking lots. His proposal was to repurpose some of this space as high density housing. This would help with the region’s housing shortage and support BART ridership by clustering population around the system’s stations and the lost spots could be offset by building parking structures on the remaining lot space (many BART parking lots are ground level only as opposed to multi-level parking structures). This sounded a lot like Hong Kong’s integrated rail-property development approach which has proven to be an unqualified success, so my interest was definitely piqued.

As always, there’s plenty of which to be skeptical. The fact that the proposal was brought up in a private discussion, but isn’t listed on the campaign website may say something about where it falls in Josefowitz’s priorities. Also, it’s difficult to tell how effective the incoming director will be in pitching new ideas to the incumbent directors on the board. And finally, any plan to build housing on BART property will be sure to include some kind of “affordable” housing requirement, the beneficial effects of which remain questionable to say the least.

But, if Josefowitz is serious about the proposal and he manages to find support amongst the other members of the board, it could be a step in the right direction. More housing would be better than less in the supply constrained Bay Area and allowing for greater density around BART’s stations could contribute to a more sustainable regional transit system.

For the record, I did not vote in this election and this post does not equate to a political endorsement of any kind.

The post BART, Josefowitz, and Mass Transit in the Bay appeared first on Market Urbanism.

Coordination Problem

Most attempts at transit-oriented development in the U.S. involve multi-party negotiations. The agency responsible for the transportation system haggles with different developers interested in undertaking projects along the line. Instead of implementing a unified plan, the transit agency has to negotiate specific agreements with each developer. And, because the priorities of the transit agency and the developers are never perfectly aligned, development agreements become subject to second-best compromises. Further, any disputes that arise once significant capital has been committed are costly to resolve.

This arrangement makes leveraging land values difficult as well. Developers frequently get tax breaks as an incentive to undertake projects. Whether abatements on property tax or straight-forward rate reductions, tax incentives typically preclude the use of land values to help fund transit. And, even without special incentives, major property owners who stand to benefit from proximity to a transit system have every reason to resist tax increases of any kind if there’s a chance of free-riding.

The MTR, on the other hand, uses the integrated rail-property development  approach which combines the two roles of landlord and transit developer. The MTR owns the right-of-way as well as the surrounding properties. This removes the necessity of extended negotiations, having to settle for second best solutions, and the potential downside of disagreements partway through a project.

By combining the functions of landlord and transit developer, the MTR is also able to internalize land values. The rail line drives up the value of the MTR’s properties and that value covers the capital costs of the MTR’s rail lines.

Coase On Mass Transit

In 1937, the economist Ronald Coase asked why, if market exchange is such a good way to allocate resources, do firms even exist?

The short answer? Transaction costs.

Participating in a market comes with a price, and in some instances, the cost of participation is more than it’s worth. When transaction costs are too high, firms avoid them by internalizing specific functions and allocating resources at the discretion of management. This is not unlike the way in which socialist command economies deployed resources, albeit on a much smaller scale, and within an organization that’s actually responsive to external price information.

In many industries, falling transaction costs have brought about a wave of decentralization, supplanting the old paradigm of Fordist vertical integration. Younger companies now specialize in a narrower range of core competencies and outsource the rest. Apple, for example, is really a design firm that uses a global network of manufacturing and logistics partners to get its products into consumer hands.

In the case of transit development, however, transaction costs remain high. Technological innovation hasn’t made construction much less capital intensive or shortened time horizons for investment. This means that the costs of coordinating transit and property development mentioned above have remained persistent. What the integrated rail-property development model suggests in theory, and the MTR demonstrates in practice, is that a little centralization could bypass these costs entirely. To paraphrase Coase, there’s a price to pay for using prices; and in the case of transit development, that price may still be far too high.

Part 2 of 2 covering the policies and institutions behind mass transit in Hong Kong

The post How Hong Kong Pulls Off Transit Oriented Development appeared first on Market Urbanism.

The Mass Transit Railway (MTR) is a rail system in the city of Hong Kong, currently managed by the Mass Transit Railway Corporation Limited (MTRL). The system opened in 1979 and now operates over 135 miles of track as well as more than 152 stations in Hong Kong. The average trip costs somewhere between .50 cents and $3 USD, and the system makes back 186% of its operational costs on fares alone.

Much of the system’s success can be attributed to urban density. Denser development means people live, work, and play in smaller geographic areas, meaning that more people are travelling between a fewer number of points. This is a huge plus for a fixed-route system like a railway. The MTR, however, hasn’t been a passive beneficiary of its environment.

The MTR owns real estate around each station in the system and integrates rail and property planning so that the development of one supports the development of the other.

Construction around each MTR station is incredibly dense, so it can put as many potential riders as close to a station as possible. Over 41% of the population in Hong Kong (2.78 million people) lives within a half-mile of a station. Additionally, the company’s real estate strategy emphasizes walkability; some residents of MTR owned properties can walk from their homes to a station entrance without ever even going outdoors. Clustering potential riders around each station–and making sure passengers have an easy time getting there–helps support high levels of ridership.

While fares cover the costs of operations, it’s really property development that pays for maintenance and expansion. The rail line, in turn, increases the property values of parcels adjacent to each station. This augments the land rents which are siphoned off to cover capital costs.

Ultimately, building effective mass transit is all about embedding the system within a friendly urban environment. High-density, mixed-use development is a must, but so is the ability to leverage land values as a means to finance capital investment and outlays.

Part 1 of 2 covering the policies and institutions behind mass transit in Hong Kong

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Does this look a city whose biggest problem is a lack of parking?

It’s been a few months since longtime Moscow mayor Yury Luzhkov was fired, so I figured it would be a good time to check in on the city. In spite of Moscow’s infamous traffic and “perversely-sloped” population density gradient, the former mayor’s plan to build 100 km of new metro tracks and over 350 km of new railroad tracks was rejected just a few weeks before his ouster as too expensive.

So now that the new mayor, Segrey Sobyanin, has announced his plan to untangle Moscow’s Gordian knot of traffic, how does it measure up? Well, put quite simply, it’s probably the worst urban plan I’ve seen since Paul Rudolph’s plan for the Lower Manhattan Expressway.

Increasing the amount of parking by building large lots on the outskirts of town seems to be the most prominent proposal. Like the author of this Bloomberg article which claims that parking spaces in the city “meet 30 percent of needed capacity,” Muscovites don’t seem to recognize that all cars obviously already have places to park, and that increasing the amount of parking is only going to increase the ease of owning a car, and hence the amount of people who choose to do so. Russian urban planners seem to be stuck in the 1950s, too – here is the president of the national planners’ guild claiming that Moscow needs to more than double the surface area it dedicates to roads.

The plan also seems to operate under the assumption that public transportation is the problem – their promises to expand mass transit ring hollow when they’re also contemplating banning trolleybuses from the city center and banning the private fleets of jitneys, known as marshrutki, which provide higher quality and more expensive service than the city’s decrepit buses.

A kiosk slated for destruction in the name of "beautification" and alleviating traffic jams

Some of the elements of the plan seem just too ridiculous to be true. Are they really going to “[ban] most ground-level pedestrian crossings,” as the first Moscow Times article suggests? Or forbid all new commercial construction inside of Moscow’s Third Ring Road, which means essentially everywhere within five miles of the city center? (I can’t tell if the latter point is incorporated in the official plan, but it is apparently what Mayor Sobyanin himself wants.)

While we can at least hope that none of these “reforms” will come to pass, Sobyanin has begun to take action on at least one element of his plan: killing street life. He’s already shut down 15% of all street kiosks in the city, and plans to do away with the rest that remain in central Moscow.

Various Russian regimes have been at the forefront of stifling innovation for a century now, so none of this should come as a surprise. But still, I did hold out a little hope that Medvedev would at least bring some sanity to the slightly-less-political aspects of the Russian government and that Luzhkov’s departure might be a good thing for Moscow, but I guess I was wrong.

The post Sobyanin’s horrific plan for Moscow appeared first on Market Urbanism.

The airport connector is a special beast of a rail-based transit system that’s a relatively recent phenomenon outside of transit-dense regions like Western Europe and Japan. So manifestly wasteful that it generates more animosity towards mass transit than it does riders, it’s a project that only politicians and unions could love. Unlike more integrated networks where the airport is just one station on an otherwise viable route (like Philadelphia’s Airport Line or DC’s proposed Silver Line), airport connectors generally serve only the airport and one local hub. With no purpose other than to get people in and out of the airport, they provide neither ancillary transit benefits nor TOD opportunities.  Oftentimes they don’t even reach downtown, acting instead like glorified park-and-rides.

The most egregious example in the US would have to be BART’s proposed Oakland Airport Connector. The rail line will extend for a little more than three miles, replacing what is now a bus routes.  The $3 fare will double, along with the half billion dollars that it will cost the government. Like the current bus route, it will only connect Oakland’s airport to the nearest BART station with no intermediate stops. It’s opposed by transit activists, who would rather convert the bus into a dedicated BRT lane and spend the rest of the half billion elsewhere. Its support seems to lie entirely with unions eager for the work, and one commissioner actually called it “too big to fail”…as an endorsement of the project! Even the feds knew better and took back their $70 million in funding, citing its impact (or lack thereof) on Oakland’s low-income population. Still, the city is pressing froward with the guaranteed boondoggle and is continuing to allocate funds for it, though transit activists vow to keep fighting it.

"Rhode Island can't build its way out of traffic congestion," said one parking garage-cum-rail station backer

Oakland is hardly alone, with the Rhode Island DOT recently reaching a deal on its $267 million “Interlink” project, which entails building a station at the airport on an existing line, along with a commuter parking garage and a rental car facility. The station is only expected to see six trains a day initially, which is probably for the best since Providence’s T. F. Green Airport isn’t exactly O’Hare. No word on whether any additional density is being allowed around the new station, but something tells me the answer is no.  New York’s five-destination Stewart Airport could also snag a rail line, as might a couple of other airports if Obama’s high-speed rail plans ever see the light of day – and I doubt they will, but that won’t stop consultants from being paid to consider them.

America, however, has no monopoly on ineffective government, and like all forms of excess, the Chinese have perfected the genre with their maglev airport connector in Shanghai. It literally levitates above a track through a system of magnets, and with only air friction it can achieve speeds of up to 268 mph. The Chinese government can acquire land at zero cost and labor is cheap, so it only cost $1.3 billion to build, but it makes up for its low cost in utter uselessness: in addition to being too expensive for ordinary Chinese to ride, it doesn’t even take you downtown – “it virtually goes nowhere,” as the Asia Times puts it. The project can be seen in the broader context of Shanghai’s misguided rivalry with Hong Kong, where it seeks to copy the trappings of the wealthy city-state while avoiding the attendant economic liberalization.

There may be a limited place for short airport connectors in large, transit-rich cities like New York City, but many of the projects turn out to be far too expensive for the limited service that they provide. They are often a sort of cargo cult urbanism that seeks to emulate the frills of good transit systems isn’t willing to make the hard decisions necessary to actually build a robust network and allow the density to fill it. In the case of the the Providence airport, lawmakers said they hoped the station would attract international service to the currently domestic-only airport – as if Providence can acquire the amenities of a big city without allowing itself to become one. Airport connectors instead are often little more than highly inefficient subsidies to the airline industry, wealthy frequent fliers, and construction unions – which, now that I think about it, might explain why legislators love them so much.

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Among liberals in the planning profession today, the story of the Great American Streetcar Conspiracy is widely known. There are more nuanced variants, but it goes something like this: Streetcars were once plentiful and efficient, but then along came a bunch of car and oil companies like General Motors and Standard Oil, and they bought up all the streetcar companies, tore out their tracks and replaced the routes with buses, and ultimately set America on its present path to motorized suburban hell. Although the story dates back to a 1950 court conviction and was retold by academics and government employees throughout the ’60s and ’70s, the theory leapt into the public consciousness in 1988 with both a 60 Minutes piece and a fictionalized account in the movie Who Framed Roger Rabbit?. Even today it resonates with liberals – The Atlantic casually mentions it as the reason America abandoned mass transit, The Nation wrote a whole article about it a few years ago, Fast Food Nation discusses it, and in the last week I’ve seen two references to the theory in the planning blogosphere.

Though the story has embedded itself in the liberal worldview, it has little basis in reality. A cursory look at transportation history shows that motorization was already well underway by the time National City Lines – the holding company backed by GM, Firestone Tire, and Standard Oil, among others – started buying up transit companies in 1938. Other factors, often championed by progressives, had already driven the industry into decline and it was really only a matter of time before buses took over. Although General Motors and other car-centric companies were certainly lobbying the government in their favor, the progressive tendency to vilify private transit companies had already turned the public against streetcars, and local governments were already heavily predisposed towards motorization by the late ’30s. It is perhaps because of this progressive complicity in streetcars’ demise, along with continued loyalty to state ownership and regulatory power, that the modern liberal narrative omits the true reasons for the decline of streetcars in America.

By the time the automobile really hit the scene, the streetcar had been around for about as long as the car’s been around today. First powered by horses in the 1830s, later by steam-powered cable systems, and finally by electricity, it’s fair to say that the streetcar was a deeply entrenched mode of transit by the beginning of the 20th century. But while the streetcar gained in popularity, the industry also attracted a cruft of regulation and corruption that dogged it till its dying day. Bribery was endemic in the awarding of service franchises, and their exclusive monopolies (often granted by the government) didn’t do much to endear them to the public, either. Ironically, though, it was these exclusive contracts that eventually brought streetcars down. Eager to receive guarantees on their large up-front investments, streetcar operators agreed to contract provisions that held fares constant at five cents and mandated that rail line owners maintain the pavement around their tracks. These rules made sense in the 19th century – inflation was a relatively minor phenomenon until World War I, and horses were rather destructive to the cobblestone streets – but as the next century dawned, these provisions grew increasingly anachronistic and would soon lead to the streetcar’s downfall.

The five-cent fare became a birthright to early 20th century voters and was a third-rail to politicians, not unlike toll-free roads today. Even when wartime inflation eroded the value of the nickel to half its prewar value, local governments would not release streetcar operators from their obligations to charge the uniform fare for all trips, no matter the distance. (Some have argued that this absence of zone pricing, which was so common in Europe, was itself sprawl-inducing, as it made living in far-off suburbs no more expensive than living closer to the city center.) The paving requirements, too, turned out to be poisonous to the industry. When automobiles started arriving in cities, their roads were literally being paid for by the competition, despite the fact that horses had long been phased out, and electric streetcars ran on dedicated tracks and didn’t touch the pavement. Organized labor also took its toll on the streetcar, driving up wages in a heavily labor-intensive industry where the competition – jitneys, municipal buses, and automobiles – had much fewer labor restrictions (not to mention lower or nonexistent tax burdens). In San Francisco, unions managed to convince the city government to forbid the operation of streetcars by just one person, ostensibly on safety grounds, but more likely to encourage employment of union members. Companies were also required to continue to provide service on all the routes they owned, and in many cases were actually required to modernize them, regardless of profitability. In addition to draining the corporations of funds, this also explains why they opted for cheaper buses on routes that were no longer profitable, but had to be maintained by law.

As the century wore on, “traction magnates,” as the titans of the streetcar industry were known, became the Wall Street bankers of their day. Progressive Era and New Deal reformers reacted against the Gilded Age elites, and the owners of streetcar networks were some of the wealthiest people around. The Nation was, by 1920, editorializing against density and subways (they “make a slum out of a suburb”), and the progressive New Dealer mayor of New York Fiorello La Guardia deemed trolleys to be “as dead as sailing ships” in 1935. Franklin Delano Roosevelt’s own Works Progress Administration was tearing up streetcar tracks in Manhattan years before National City Lines began doing the same in far less transit-worthy places.

Beyond local governments’ direct attacks on private transit companies, all levels of government contributed to rail’s demise by offering the vast majority of roads to consumers free of charge. While the status quo’s more libertarian-minded backers will point to the gas tax as a user fee, the highway funds are hardly adequate to cover the true costs. Though state and federal governments do now cover most of the capital and operating costs of the highways, local roads are still paid for almost entirely out of general revenues. And when you consider the forgone taxes and opportunity costs, roads start to look severely under-priced – to say nothing of the last hundred years of subsidized road building (the mainstay of FDR’s WPA), eminent domain, anti-urban federal home tax breaks and lending programs, positive feedback loops, and density-limiting zoning and parking policies. Private streetcar companies didn’t get the benefit of government-financed, tax-free tracks in their day, and in fact they paid the automobile’s subsidies directly in some cases, as with the aforementioned paving requirements, and indirectly in others, through local property taxes.

But if the suburban bug had infected America long before 1938 and failures of government were the real culprit, then why is the narrative of the Great American Streetcar Conspiracy so pervasive? Martha Bianco has pointed to the universal desire for a clear villain/victim dichotomy in her study of the myth, but I think the real reason is that politicians and progressive academics have too much at stake in the status quo explanations. American politicians have hitched their wagons too tightly to suburban homeowners to admit that it was a mistake. Progressive economists, historians, and planners, on the other hand, have invested so much intellectual capital into the idea of state regulation and control that they cannot admit that the urban planning profession in America is rotten to the core, and that the mere granting of these powers to government was the original sin. With car-borne constituents and an economic ideology to defend, modern day liberals have apparently found their own culpability in the rise of the suburbs too tough a pill to swallow, and so they’ve settled on General Motors, Standard Oil, and Firestone Tire as scapegoats. But just because they can’t face their history doesn’t mean that we shouldn’t.

Academic references

1. Bianco, Martha. “Kennedy, 60 Minutes, and Roger Rabbit: Understanding conspiracy-theory explanations of the decline of urban mass transit.” [source]
2. Bond, Winstan. “The flawed economics and morality of the American uniform five-cent fare.” [source]
3. Lurie, Melvin. “The effect of unionization on wages in the transit industry.” [source]
4. Schrag, Zachary. ” ‘The bus is young and honest’: Transportation politics, technical choice, and the motorization of Manhattan surface transit, 1919-1936.” [source]

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In response to an article I posted yesterday about protectionism in public transit procurement, frequent commenter Alon Levy left this great comment about the history of rolling stock procurement in the US:

What happened in the 1970s was that the rolling stock market shrank, leaving American transit agencies with just a few US vendors. St. Louis and Pullman were fully protected by Buy American. As such, New York City Transit had no choice but to buy trains from them; the trains turned out to be defective, leading to breach of contract lawsuits that bankrupted both companies. Since then, NYCT has bought from foreign companies, following Buy America to the letter but not to the spirit. The first order after the St. Louis and Pullman disasters was imported from Kobe, as Reagan cut all federal funding, and went without a hitch. Subsequent orders required the vendors to establish US plants, but often only the final assembly is done in the US. In the most recent order, the car shells were made in Brazil.

Buy America does the opposite of leveling the playing field for foreign firms. It favors big players, which can land big contracts and establish US plants. The same is true for the regulatory structure: the various globally unique [Federal Railroad Administration] rules benefit companies that are big enough to be able to modify trains for the American market. Just recently, Caltrain’s request for an FRA waiver involved consultation with just the largest companies in the industry. There are a lot of smaller manufacturers that are shut out of the US market; they don’t have the capital to establish new overseas factories or pay lobbyists to write rules in their favor. Those include Switzerland’s Stadler, Spain’s CAF, the Czech Republic’s Skoda, all Chinese firms, and all Japanese firms other than Kawasaki. Those can occasionally land a US contract, but are usually unable to compete with Kawasaki, Alstom, Siemens, and Bombardier, whose US market shares far exceed their global market shares.

I should add that although I didn’t excerpt this part in the other post, the investigation that eventually revoked CAF’s contract in Houston started with a complaint by Siemens, which fits perfectly into Alon’s narrative. Like he says, even companies that aren’t domiciled in the US can take advantage of American protectionism by establishing plants here and then using that to restrict smaller firms that don’t have the resources to waste on Potemkin factories.

Thanks to Alon Levy for this great comment, and thanks to all the other commenters for your contributions – I very much enjoy reading the comments, and find them to be of much higher quality than the comments on most other blogs I read.

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