Here’s some examples of the typical contradiction many usually-reasonable urbanists are making when arguing for high speed rail-

Ryan Avent in an article plagued with this pseudo-logic:

Government is going to build more capacity. Given that, what is likely to be the best investment, all things considered?

Available alternatives, as it turns out, are not all that attractive. Roads do not appear to pay for themselves any more than railways do. Receipts from the federal gas tax come close to covering federal highway expenditures, but gas is used on highways and non-highways alike, indicating that at the federal level, highways are subsidized.

and:

I respect Mr Cowen very much, but I think it’s long past time we stopped listening to libertarians on the issue of whether or not to build high-speed rail. Who will ask whether road construction remotely passes any of the tests they’re so prepared to push on rail? And if we begin charging an appropriate fee on drivers to maintain existing roads and reduce congestion, what do they all think will happen to land use patterns and transportation mode share?

Some have emailed to ask me why I dislike Randal O’Toole so much.  The main reason is because people like Avent will always be able to point to the government highway-lover from CATO and rashly proclaim all libertarians have forever lost credibility when it comes to transportation and land use.  Of course, Avent’s narrow-mindedness on this topic deserves contempt too.

And Infrastructurist’s take seems to be favored by Avent, Yglesias, and others:

The construction of a high-speed rail line would require a large environmental sacrifice – construction crews would need to shape the land, poor concrete, lay the tracks, and build the stations. This work would release millions of tons of carbon dioxide into the atmosphere. But building a new highway such as Texas’ planned I-69 would require similar work and would almost certainly be just as ecologically damaging. On a somewhat smaller scale, the same can be said for new terminals or runways at airports.

In a rapidly growing state like Texas, though, a serious need for a transportation capacity upgrade is bound to arise over the next decades – especially between the state’s two biggest cities. The construction of this infrastructure would require carbon emissions on a large scale–but since we don’t yet have competing plans for highway or airport capacity expansions if the high-speed system is not built, the most meaningful question for us is the rail system’s environmental effects in operations rather than construction.

So, in other words, building either of the options, roads or rail both require “a large environmental sacrifice”, but all other options must be kept off the table, so let’s just sweep that under the rug.  Yet, there is an other option to consider for those who really think something should be done about carbon: STOP WASTING MATERIAL AND ENERGY ON CONSTRUCTION OF INFRASTRUCTURE BOONDOGGLES THAT SUBSIDIZE TRANSPORTATION!  That still goes double for roads and airports, where congestion and carbon emissions could be reduced through revenue-generating measures such as congestion tolling.

To me, the high-speed rail logic just doesn’t sound much different from what O’Toole might say (just interchange some words and continue to ignore facts):

Not only did the Interstate Highway System cost much less and move much more than our visionary rail network is likely to do, interstate highways have the virtue of being 100 percent paid for out of user fees. The rail system would require subsidies for pretty much all of the capital costs, most or all of the periodic rehabilitation costs, and at least some of the operating costs.

In the Infrastructurist article quoted above, Yonah Freemark smear’s Ed Gaeser’s back of the envelope critique of high speed rail (I admit, a little sloppy) with a hand-waving claim sounding eerily similar to the type Mr. O’Toole is so often criticized for making, “High Speed Rail Pays For Itself”.

He backs this bold claim with a calculation that shows how a hypothetical Dallas-Houston high speed corridor would cost $810M annually for construction and maintenance, while providing $840M in benefit.  Surely, we will see many more people use this analysis as evidence to back claims that high speed rail is good without proper scrutiny.  However, this analysis doesn’t even pass the O’Toole-level test of credibility, because it claims it pays for itself with 150M annually in carbon savings.  I can understand making the case for analyzing carbon savings as a “benefit” to society, but one must compare against all other options for use of cash to reduce carbon emissions – at least against a no-build + congestion toll option.  Just think of all the alternatives one might consider with a $810M annual budget for carbon reduction. At say $20/ton, that comes to 40 million tons a year.

On top of that, Freemark ignores all the other opportunity costs Randal O’Toole conveniently omits when claiming roads pay for themselves.  These omissions include:  opportunity cost of investment capital, opportunity cost of right of way land used, legal costs of eminent domain and related delays, inevitable cost overruns, accounting for optimism bias, and interest on bonds.  In my opinion, the largest of these is the opportunity costs of investment capital, which I would guess at over 15 percent compounding annually (vs a non-compounding 5% generously assumed by Glaeser and Freemark) for all costs during the 10 years (just a little optimistic?) of construction, and 8-10 percent once ridership is stabilized.  Responding to Matthew Yglesias’ hasty endorsement of Freemark’s analysis as “A real cost-benefit analysis of HSR”, Tyler Cowen similarly noted:

I’m not sure what discount rates he is using but even if we put that problem aside this screams out: don’t do it.  Given irreversible investment, lock-in effects, and required hurdle rates of return, this still falls into the "no" category.  And that’s an estimate from an advocate writing a polemic on behalf of the idea.  I’m not even considering the likelihood of inflation on the cost side or the public choice problems with getting a good rather than a bad version of the project.  How well has the Northeast corridor been run?

The urbanist in me would love a vast high speed rail network – it would centralize density at rail nodes and aid agglomeration.  But it just won’t be viable until government first stops wasting money subsidizing automobile and air travel.  In the meantime, HSR advocates commit an intellectual fraud similar to ones Randal O’Toole and his ilk make regarding roads when they make claims that HSR can pay for itself. 

If Ryan Avent is expecting to keep any credibility on infrastructure spending using these words:

In this country, we do not build transportation infrastructure for profit. Perhaps this is upsetting to the libertarians among us, but that’s how it is and how it should be.

Then, perhaps he should think twice next time he thinks of laying into Randal O’Toole for attempting to reconcile infrastructure spending using similarly shoddy arguments. Otherwise, similar to O’Toole, all the HSR advocates are saying is, “Never mind billions of dollars that must be appropriated from people of future generations. Never mind that most of those footing the bill will never ride high speed rail if they’re not fortunate enough to afford a ticket or don’t live in one of the chosen cities. Never mind the drastic effects of the construction on the environment. High speed rail would be a pretty neat thing for some cities, so ‘build baby build’.”

The post HSR Urbanists: “We Are All O’Tooles Now” appeared first on Market Urbanism.

A couple days ago, Matthew blogged about regulation of neighborhood retail, quoting a DC blog:

“In DC, zoning laws make that idea [mixed-use retail] prohibitive, and what the zoning laws don’t cover ANC and neighborhood groups do in their zealousness to protect residents from interspersing residences with commercial activity.”

….

I really and truly wish libertarians would spend more time working on this kind of issue. And I also wish that ordinary people would think harder about these kind of regulations.

Yes!  More, please?   But then, the next sentence leaves me saying, “huh?”:

I’m a big government liberal. I believe business regulations are often needed. But still, there ought to be a presumption that people can do what they want.

So, I really don’t understand what this post has to do with libertarians anymore – why even mention them. It seems logically inconsistent to presume people can do what they want, while presuming a big government can regulate their economic choices.

Now, on to today’s post:

Randall O’Toole is a relentless advocate for highways and automobile dependency in the United States. Consequently, I don’t agree with him about very much.  But the thing I consistently find most bizarre about him, is that the Cato Institute and the Reason Foundation have both agreed to agree with O’Toole that his support for highways and automobile dependency is a species of libertarianism.

then…

Central planning, of course, is the reverse of libertarianism. So if promoting alternative transportation is central planning, then building highways everywhere must be freedom! But of course in the real world building highways is also central planning. The Long Island Expressway is not a free market phenomenon.

Alright!  This fits in with our recent discussions at Market Urbanism! (and here)  But, of course he concludes:

It’s just a field that, intrinsically, requires a lot of planning. The question is about what kinds of plans to make.

So, libertarians should agree with you, but they’re wrong anyway?

Either Yglesias has some hidden respect for free-markets and has to add caveats to maintain his progressive street-cred, or he has some kind of chip on his shoulder and has to call out the hypocrites in circles he doesn’t respect anyways…  (the latter, I would interpret as a rational fear of the potency of free-market philosophy – at least not the impostor brand)

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Also check out c4ss:  Libertarians Against Sprawl:

Fighting sprawl isn’t a matter of imposing new government mandates.  It’s a matter of scaling back existing restrictions on mixed use development, and prying the mouths of the real estate industry and the automobile-highway complex off the taxpayer teat. It’s not clear that can be done without abolishing government completely.

The post Yglesias Has My Head Spinning… appeared first on Market Urbanism.

The distributive impact of parking minimums is to redistribute income from people who don’t own cars to people who do own cars—not to shift income from poor to rich. A rich family will probably have at least one car for every family member who’s at least 16 years old. A family of more modest means will probably own fewer vehicles.

More generally, while I’m obviously not a hard-core free marketers, it does make sense to consider a free market position our default position. Mandating the construction of extra parking doesn’t reduce harmful environmental externalities. Rather, it generates them. It doesn’t help the neediest members of society, it makes it more difficult for them to afford housing. It doesn’t correct important information deficits—people are perfectly capable of asking whether or not a house they’re considering buying or renting comes with a reserved parking space.

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Update: here’s a follow up.

The post Redistribution appeared first on Market Urbanism.

For whatever reason, we’re not built to naturally internalize negative externalities. When riding on a crowded highway, no one (no non-economist, at any rate) curses the government for not making the road more expensive; they demand more capacity — fewer traffic lights, higher speed limits, more lanes, more roads. And when free parking results in no available parking, no one demands market pricing for spots; they ask why the lot’s so small and the garages so scarce, and they get angry about those two new developments that just went in, bringing new residents who unsurprisingly use the valuable, yet free, parking spots when they’re open.

We see a shortage of a public good, and we think more, not more expensive. And as a result, the failure to price public goods appropriately leads to an inefficient use of existing resources, and an inefficient allocation of new resources. We don’t use existing roads well, and we spend too much valuable capital building new roads. We don’t use existing parking well, and we spend too much valuable capital building new parking OR we allow shortage concerns to undermine good investments.

This type of anti-market bias which seems to be the natural default in humans creates unhealthy positive-feedback loops such as the highway -> development -> congestion -> widen/extend highway, etc. loop. But in that light, we should be glad modern society has been able to overcome so many of its anti-market biases such as making profits, charging interest, and trade between strangers. Hopefully, as society adapts to deal with issues of scacity of land, resources, and time, it will overcome the unhealthy biases it needs to shed to sustain growth.

The Bellows post also refers to a post Matthew Yglesias wrote about the Chicago parking meter privataization, where he said:

In general, the market price of street parking should be very similar to the market price of garage parking. Since a garage is more secure and protected from the elements, that has certain advantages. But a street spot might be more convenient. So you’d be looking at rough similarity. And in parts of the city where there’s no viable market in garage building, that’s a market signal that parking demand is low and therefore street parking should be very cheap. But where garages are charging a lot, street parking should also be expensive. Among other things, that would reduce the need for new construction to be accompanied by expansive parking garages.

Perhaps more important, it would reduce the tendency for conversations about any new development to become immediately dominated by people’s fear of parking shortages. The whole shortage phenomenon is (as shortages tend to be) a symptom of bad pricing policy. Chicago is a big city with a vibrant downtown and tons of economic activity. Space is limited and expensive. Unless you charge more than a quarter for it, you’ll get shortages.

Still, the privatized meter pricing will remain highly regulated (to satisfy the anti-market bias of political constituents), preventing the full “market price” efficiency to be achieved.

The post Irrationality Towards Shortages appeared first on Market Urbanism.