The theory behind stimulus spending is that when private spending and investment fall short of expectations, government can step in and make up the difference. Things like temporary payroll tax cuts, extending unemployment benefits, and grants for states to keep teachers in schools are great examples of ways the federal government can assist individuals, businesses, and cities, but they differ from infrastructure spending in a key way: while most stimulus measures are only needed as a response to recessions and shortfalls in consumer demand, investing in infrastructure and maintenance is something we need to do--but haven't--in booms as well as busts. What they share, however, is that recessions (and their recoveries) are always the best time to make these expenditures.
Why is this the best time to spend on infrastructure? Contracting is very cheap right now since construction companies are so desperate for business. Borrowing costs for the federal government are so low that investors are willing to accept a year-over-year loss on their bond purchases, after inflation (which is also exceedingly low). Unlike during a boom, we can be confident that public expenditures won't be crowding out private investment. And, of course, more people will have construction jobs, which lowers the unemployment rate directly as well as indirectly when those newly-employed workers start spending their money in the broader economy.
But for those who choose to believe that "stimulus" is just code for big government, socialism, etc., or that it doesn't actually boost the economy, infrastructure--particularly maintenance--is still a sensible way to spend our money. As has been widely reported, including on this blog, the U.S. has an estimated $2.2 trillion infrastructure backlog. Whether we choose to spend that money now or later, it's going to be spent. The longer we wait the worse the degradation and the more expensive each of those repairs will be, and the more it will cost us in vehicle wear-and-tear, lost productivity, and injuries and lost lives as pipes burst and bridges crumble. If we've got to make the investment either way, let's do it now, while the costs are least and the benefits greatest.
Thursday, December 20, 2012
Tuesday, December 18, 2012
With driverless cars on the way, smarter transportation investment is needed
Even though driverless cars have only been popular in the news for a few years, it's looking increasingly likely that they're the future of personal vehicle travel. Already, California and Nevada have taken steps to approve the use of Google's model, and Google co-founder Sergey Brin believes autonomous vehicles will be commercially available within a decade. The advantages to driverless cars are numerous and significant, but they raise serious questions about how we invest in infrastructure as the technology matures. In particular, are we wasting billions on highway capacity that will soon be obsolete?
There's a lot to like about autonomous vehicles. There's great potential for them to be operated much more safely than manually-driven vehicles, and if this bears out it'd be justification enough to make the switch. They would also reduce the need for parking directly adjacent to destinations, since the car could drop you off and find a space further afield. It'd also be easier to save a lot of money by getting rid of your own vehicle, instead taking advantage of a massive fleet of cheap, robotic vehicles.
Then there's congestion. According to a recent study by Columbia University's Patcharinee Tientrakool, a highway populated exclusively with driverless, communicating vehicles could increase its efficiency by up to 273%. In this scenario almost four times as many cars could travel through a corridor, safely and quickly, as are currently able to do so. This is mainly thanks to the decreased following distances required by autonomous vehicles--about 100 feet at 60 mph for humans, compared to less than 20 feet for computer-driven vehicles--and their ability to coordinate speeds, merging, etc. Although not absolutely equivalent, fully adopting driverless cars would be akin to more than tripling the number of lanes of every highway in the country.
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| Patcharinee Tientrakool, Columbia University. |
Whether that transition takes twenty years or fifty, it's coming. (And if it doesn't, it will be because of some other revolutionary technology that solves the problem even more effectively.) Given that reality, and with vehicle miles per capita on the decline, continuing to invest scant transportation dollars on increased capacity is a monumentally wasteful practice. According to a Congressional Budget Office report [PDF], we spent about "$146 billion to build, operate, and maintain highways in the United States," about two-thirds of that paid for by state and local governments, in 2007 alone. Not all of this is capacity expansion, but you can count on the fact that a great deal of it is. This is at the same time as the American Society of Civil Engineers is telling us that we've got a $2.2 trillion infrastructure backlog, and the longer we wait to make these necessary repairs the more expensive they'll become.
In urban areas it costs tens, sometimes even hundreds of millions of dollars per mile to add new highway lanes--and in as little as a generation we're going to be forced to to tear them right back out. It's been said again and again, but it really is time to turn the corner and start investing more in the maintenance and repair of our ailing transportation system, and directing funds toward projects that do more for promoting health, sustainability, and economic productivity. It's understandable, if not acceptable, that the threat of increasing population and traffic congestion has made it difficult to focus on simply maintaining what we already have. It's increasingly clear, however, that this is no longer a question of useful expansion vs. useful repair. Only one choice makes sense for our future. We can do better, and we're running out of excuses for failing to do so.
In urban areas it costs tens, sometimes even hundreds of millions of dollars per mile to add new highway lanes--and in as little as a generation we're going to be forced to to tear them right back out. It's been said again and again, but it really is time to turn the corner and start investing more in the maintenance and repair of our ailing transportation system, and directing funds toward projects that do more for promoting health, sustainability, and economic productivity. It's understandable, if not acceptable, that the threat of increasing population and traffic congestion has made it difficult to focus on simply maintaining what we already have. It's increasingly clear, however, that this is no longer a question of useful expansion vs. useful repair. Only one choice makes sense for our future. We can do better, and we're running out of excuses for failing to do so.
Sunday, December 16, 2012
Are our programs working? Do we even want them to?
In light of all the talk about limiting and eliminating certain tax deductions I wanted to address them in a bit more general way than I did in my post about the mortgage interest tax deduction. Once a tax expenditure like the MITD is in place we tend to go to great lengths to study its effects and to ensure that it's achieving its goal(s), but rarely do we revisit whether that goal is actually worth pursuing. It's now taken for granted, for example, that the MITD has the effect of increasing homeownership rates to some degree; only recently, however, have we begun to question whether pushing those rates up at the margins is actually an economically or socially beneficial outcome. In the case of the commuter tax benefit, we're still not seeing much discussion outside of transit advocacy blogs and organizations about why we're giving car drivers a more valuable benefit than transit users (currently, $240 vs. $125). It's a policy that's completely contrary to the economic and environmental goals of our country, giving cars an arbitrary financial advantage over transit, and yet it persists.
Employer-based health insurance is probably the most significant example of this. (At $131 billion per year, it's certainly the biggest.) Logically, getting your insurance through your employer makes very little sense. It cedes the decision of what insurance company you use to the business owners and/or HR staff, as well as which programs they'll offer within that insurance company's suite of coverage options. Even more importantly, most businesses are fairly small so their bargaining power is extremely limited--even in the case of a massive corporation like Boeing or Microsoft, their leverage is insignificant compared to that of an entire state, or the federal government. This means higher costs for smaller businesses, and even for the bigger businesses costs can never compare to those of national programs like Medicaid and Medicare. We've enshrined the value of employer-based health insurance despite these and other faults, not because it's superior but because it's simply the way things have always been. We look at the system and see that it generally works okay, but by what standard? Relative to any other country's system of health care provision it fails on nearly every metric.
Nationally we're at record lows in terms of government revenue, and this has many causes. Partly it's been a giveaway over the last decade to the most well-off among us. Everyone though, not just the rich, has had their tax burden reduced, so there's more to it. Businesses are also contributing a smaller and smaller share of GDP to government revenues. I strongly feel that we need policy changes that result in increased revenue, but I'm willing to resist that impulse for some sensible revenue-neutral reform. We spend about $250 billion a year on employer health insurance, mortgage interest, and property tax deductions, and there are many other smaller deductions that make just as little sense from a social engineering perspective (and make no mistake, all tax expenditures are social engineering--and that's okay). We need to do something about them.
I'd like to see these programs reduced and revised in a way that redirects more money toward useful government programs or reduces the deficit, but completely offsetting these deductions with tax rate reductions would be a step forward, at least, and probably more politically palatable. Without raising any new revenue we'd be simplifying the tax system and removing distortions, encouraging people to use their money in rational ways, not just those that are preferred by their government. Some people would pay more, of course, but it would level the playing field such that everyone received some benefit, rather than just those who chose to accept the government's soft coercion. (Or, as is often the case, those who needed no encouragement and are essentially being handed free money in exchange for doing what they were going to do anyway.) This streamlining would also almost certainly increase productivity and encourage economic growth that actually did increase revenues faster than baseline.
If any of that's ever going to happen, though, we need to stop worshiping at the altar of the familiar and traditional. Until we do we'll continue to be beholden to these wasteful programs whose goals are no longer aligned with our values, and probably never were. There are plenty of worthwhile tax expenditures, we just need the courage to evaluate them on their merits and not their history or constituency. In each case, need to decide whether targeting deductions at special groups (health insurance consumers, homeowners, car drivers) is superior to lowering costs for everyone. Where the answer is no, we need to shed these burdensome expenditures and move on to a more simple, sensible system.
*Note: I changed the title because no one got the reference to the Bushism "Is our children learning?"
Saturday, December 8, 2012
Downtown Brooklyn considers reducing parking requirements, but not enough
The New York Times recently noted the glut of parking found in Brooklyn right now, a result of the requirement that developers provide parking for 40% of households. Just about anywhere else in the country, a minimum of 0.4 parking spaces per household would be a huge step forward. But in downtown only 22% of households own a car, mostly thanks to the "13 subway lines and 15 bus routes in the area." To their credit, the city is paying attention and considering reducing the parking requirement to 0.2 spaces per household and, even more admirably, cutting the requirement for parking in subsidized housing entirely.
While this is certainly the right direction, it's clearly not enough. Reducing the parking requirement to current levels of car ownership is too little, too late, and does nothing to reduce the current oversupply. The article notes that one 600-unit building built slightly more than 250 parking spaces (almost certainly at a cost of tens of thousands of dollars each), and only about a third of them are occupied. Resetting the parking requirement to 20% doesn't resolve the existing wasted space, it just ensures that no more space is needlessly wasted at great cost. And even that's only true if current car ownership levels hold steady at 22%, an unlikely proposition in a neighborhood that is growing quickly and becoming more bikeable and walkable by the day, and in a city that is presumably trying to minimize automobile use.
What really bugged me about this article though was Brooklyn Councilwoman Letitia James' comments. In response to the suggestion that some existing garages might be redeveloped to more productive uses, she asserted that it wouldn't result in any more affordable housing or community space. Instead, “[t]hey would turn it into more luxury housing." To which I respond, "so what?" We're not talking about tearing down a historic building or bulldozing a park to put up a new residential tower. This is a situation where the city mandated that developers build thousands of empty concrete spaces in the middle of some of the most valuable real estate in the world, and now we might actually be able to turn them into something that people actually want to use. Whether that's subsidized housing or ten million dollar apartments is completely beside the point--either way it's a boon for those new residents, the developer, and the city. Suggesting that you might kill the project just because developers might not perform some miraculous act of charity isn't just irresponsible, it's exactly the kind of destructive classism that President Obama is wrongly accused of so frequently. It serves no purpose besides sowing division.
If anyone has a right to dictate the terms of redevelopment besides the developers themselves, it's the people who currently live in buildings that were forced to overbuild their parking supply. You can be sure that the cost of constructing these superfluous garages was borne on the backs of the renters and owners of these units, and it wouldn't be unreasonable for them to demand a reimbursement for that cost if the garage they helped pay for is partially redeveloped. Everyone else should just get out of the way.
While this is certainly the right direction, it's clearly not enough. Reducing the parking requirement to current levels of car ownership is too little, too late, and does nothing to reduce the current oversupply. The article notes that one 600-unit building built slightly more than 250 parking spaces (almost certainly at a cost of tens of thousands of dollars each), and only about a third of them are occupied. Resetting the parking requirement to 20% doesn't resolve the existing wasted space, it just ensures that no more space is needlessly wasted at great cost. And even that's only true if current car ownership levels hold steady at 22%, an unlikely proposition in a neighborhood that is growing quickly and becoming more bikeable and walkable by the day, and in a city that is presumably trying to minimize automobile use.
What really bugged me about this article though was Brooklyn Councilwoman Letitia James' comments. In response to the suggestion that some existing garages might be redeveloped to more productive uses, she asserted that it wouldn't result in any more affordable housing or community space. Instead, “[t]hey would turn it into more luxury housing." To which I respond, "so what?" We're not talking about tearing down a historic building or bulldozing a park to put up a new residential tower. This is a situation where the city mandated that developers build thousands of empty concrete spaces in the middle of some of the most valuable real estate in the world, and now we might actually be able to turn them into something that people actually want to use. Whether that's subsidized housing or ten million dollar apartments is completely beside the point--either way it's a boon for those new residents, the developer, and the city. Suggesting that you might kill the project just because developers might not perform some miraculous act of charity isn't just irresponsible, it's exactly the kind of destructive classism that President Obama is wrongly accused of so frequently. It serves no purpose besides sowing division.
If anyone has a right to dictate the terms of redevelopment besides the developers themselves, it's the people who currently live in buildings that were forced to overbuild their parking supply. You can be sure that the cost of constructing these superfluous garages was borne on the backs of the renters and owners of these units, and it wouldn't be unreasonable for them to demand a reimbursement for that cost if the garage they helped pay for is partially redeveloped. Everyone else should just get out of the way.
Monday, December 3, 2012
Improving the downtown driving experience is impossible
Downtown Seattle--as with most central districts in most medium-to-large cities--can't expand its network of roads. Everything that isn't a building, a park, or a parking lot is already devoted to road space or pedestrian space, and even if you wanted to do so you couldn't take away enough sidewalk to provide an extra lane anywhere. On top of that, any congestion relief that new lanes added would quickly be eaten up by the incredible demand for driving to business district destinations; induced demand and the Tragedy of the Commons at work. So even if extra car lanes magically appeared, traffic would be no better off in the long run. You'd just have more cars.
You simply can't win with cars in dense areas: once a terrible-but-just-barely-acceptable level of congestion is reached, equilibrium sets in and the number of cars entering the district doesn't change much. Logistically it can't increase (there's no more room), and it won't decrease because the hassle of dealing with that equilibrium level of traffic is still a fair trade for many people compared with the conveniences of driving. Look at any large city and you see the same thing. Terrible traffic is a staple of big cities because downtowns contain far more destinations than there are roads to facilitate driving to them, and that's not going to change. We've accepted that dense cities are valuable economically, socially, environmentally, and culturally, and we need to accept that as long as this is true traffic will accompany it. The best thing we can do is to provide alternatives to driving that are actually appealing to the average person.
These facts regarding driving downtown are important because of how they contrast with transit use downtown: by dedicating more space to buses, streetcars, and light rail we are actually able to improve the quality of transit trips, something we can't achieve for cars. With the recent advent of bus rapid transit (BRT) in Seattle, we've seen very clearly the price we pay for our decision to force buses to share lanes with cars. That price, of course, is consistent congestion and delays that effectively negates the entire purpose of BRT. This is what we're seeing with the D Line traveling from Ballard to Downtown, and plenty of other popular lines--particularly those that travel along permanently-congested corridors like Denny, or just about any area in downtown.
And back to cars, just as increasing car lanes wouldn't improve traffic downtown, decreasing them wouldn't worsen it. Instead, it would change the equilibrium level of cars entering and leaving the central business district. It would change the congestion vs. convenience equation for enough people that transit ridership to and from downtown would increase and single-occupant vehicle driving would decrease, but traffic congestion in general would remain relatively unchanged. Except for transit riders! There are real gains that we can make on behalf of those who choose not to commute by car, or can't afford to. They're the only real gains available to us, and we should seize them.
We have three choices. First is to stick with the status quo, which no one really likes. It's not good for anyone. It sucks to drive in Seattle, and it sucks to take the bus. Our second option is to take away what few lanes are currently dedicated to transit and turn them over to cars, and to expand road space for cars wherever we can, however little space there may be for it. This won't improve things for current car commuters because of the reasons discussed above, and will leave transit users worse off. Third is to take some lanes (some lanes--a tiny minority of the total road space) away from cars in order to vastly improve the reliability and speed of some of the most vital transit lines in the city. Some car drivers will be forced to find another way to get into downtown during rush hour, yes, but quite a few will also be happy to start taking the bus with it's newly-improved service. And those who continue to drive won't notice much difference, because traffic can only get so bad and we're already there.
There's plenty of complaining in the news about cars being picked on, but I don't hear much constructive criticism about how things can actually be improved, whether it be for cars, transit users, or both. The status quo is untenable, and we can't devote any more space to cars. What else can we do? I choose option three.
You simply can't win with cars in dense areas: once a terrible-but-just-barely-acceptable level of congestion is reached, equilibrium sets in and the number of cars entering the district doesn't change much. Logistically it can't increase (there's no more room), and it won't decrease because the hassle of dealing with that equilibrium level of traffic is still a fair trade for many people compared with the conveniences of driving. Look at any large city and you see the same thing. Terrible traffic is a staple of big cities because downtowns contain far more destinations than there are roads to facilitate driving to them, and that's not going to change. We've accepted that dense cities are valuable economically, socially, environmentally, and culturally, and we need to accept that as long as this is true traffic will accompany it. The best thing we can do is to provide alternatives to driving that are actually appealing to the average person.
These facts regarding driving downtown are important because of how they contrast with transit use downtown: by dedicating more space to buses, streetcars, and light rail we are actually able to improve the quality of transit trips, something we can't achieve for cars. With the recent advent of bus rapid transit (BRT) in Seattle, we've seen very clearly the price we pay for our decision to force buses to share lanes with cars. That price, of course, is consistent congestion and delays that effectively negates the entire purpose of BRT. This is what we're seeing with the D Line traveling from Ballard to Downtown, and plenty of other popular lines--particularly those that travel along permanently-congested corridors like Denny, or just about any area in downtown.
And back to cars, just as increasing car lanes wouldn't improve traffic downtown, decreasing them wouldn't worsen it. Instead, it would change the equilibrium level of cars entering and leaving the central business district. It would change the congestion vs. convenience equation for enough people that transit ridership to and from downtown would increase and single-occupant vehicle driving would decrease, but traffic congestion in general would remain relatively unchanged. Except for transit riders! There are real gains that we can make on behalf of those who choose not to commute by car, or can't afford to. They're the only real gains available to us, and we should seize them.
We have three choices. First is to stick with the status quo, which no one really likes. It's not good for anyone. It sucks to drive in Seattle, and it sucks to take the bus. Our second option is to take away what few lanes are currently dedicated to transit and turn them over to cars, and to expand road space for cars wherever we can, however little space there may be for it. This won't improve things for current car commuters because of the reasons discussed above, and will leave transit users worse off. Third is to take some lanes (some lanes--a tiny minority of the total road space) away from cars in order to vastly improve the reliability and speed of some of the most vital transit lines in the city. Some car drivers will be forced to find another way to get into downtown during rush hour, yes, but quite a few will also be happy to start taking the bus with it's newly-improved service. And those who continue to drive won't notice much difference, because traffic can only get so bad and we're already there.
There's plenty of complaining in the news about cars being picked on, but I don't hear much constructive criticism about how things can actually be improved, whether it be for cars, transit users, or both. The status quo is untenable, and we can't devote any more space to cars. What else can we do? I choose option three.
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