Wednesday, March 26, 2008

The Transportation-Land Use Connection

Apparently the transportation-land use connection, which is a difficult to prove idea in the first place, needs to be rethought as a planning goal. In Japan, Toyota Motors is convinced that young people do not want cars. As a reaction to this, they have built a large mall that also has a dealership. This may be the first case of auto-oriented development disguised as transit-oriented development.

Planners argue for greater connection between transportation planning and land use development, but this isn't what they are talking about. Quite frankly, it's a weird idea, but if people can turn away from the personal mobility advantages of cars there may be hope for transit advocates after all.

Monday, March 24, 2008

Network externalities, increasing returns to scale and transportation infrastructure

A new company has launched a product called Dash Navigation that promises to provide real time traffic information to subscribers. This is a great idea, but as a network application it exhibits standard network effects. One of these effects is increasing returns to scale, meaning that the more members there are in the network the better the overall quality and usefulness of the system.

With Dash Navigation, drivers install a GPS device in their cars that transmits travel data back to a central computer. The more drivers there are with the device, the better the overall experience because of better inputs. The idea of harnessing actual information from vehicles rather than infrastructure (such as magnetic loop detectors embedded in roadways) is a promising data set. However, how should this company build the network in order to realize increasing returns to scale? If not enough people sign up the data will be weak and the service will not inspire new customers.

Network development presents challenging ideas about the most efficient way to deploy the system. Typically the infrastructure investment precedes users. This was true with cell phones, cable TV and in many ways the transportation system. One reason Los Angeles has always been dominated by the car is that by the time cars came around LA had a well maintained road system that cars could easily use.

Even the internet required substantial upfront investment in cables, wires and routers to deliver services to those who wanted to pay for it. At this point in the internet's development countries that have nationalized infrastructure development have more extensive systems than countries (like the US) that have private network development.

I think the company is counting on enough people getting fed up with traffic so they will buy the devices. One way they can move ahead is to focus on a few metropolitan areas rather than the entire country. This is a case where higher density of adoption in a concentrated area will benefit the overall system. Another option is to give the devices away or subsidize them (sort of like what Sony did with the Blu-Ray PS3s). This may be something that employers should give away at company picnics.

But like the PS3, user side networks are open to heavy competition that can cannibalize the overall market for a product. Sony won the new DVD war. This is also why satellite radio is consolidating. The classic example is Betamax versus VHS, though the idea the Betamax was superior is wrong. Betamax was only superior at things that consumers didn't put a priority on.

Back to the Dash Navigation, hopefully this will take off, though it is worrisome that cell phones, which are already in most cars, are quite capable of delivering similar information at less cost. We'll see what is VHS and what is Betamax this time around.

Saturday, March 22, 2008

Carbon capitalism: Coasian bargains or efficient rent seeking?

This week's New Scientist talks about paying countries to maintain forest cover. The idea has generated a fair amount of interest, and for good reason. Considering that the world's forests hold 50% more carbon dioxide than the atmosphere as a whole and that maintaining forests costs about half as much (about $10 per ton) as replacement technologies for coal, keeping the forest cover we have seems like a bargain. But who should pay for maintaining the forests? This is a classic free rider problem, and one that is perfect for thinking about Coasian bargains and efficient rent seeking.

Currently, one program buys off the cooperation for maintaining forests. That group is the Coalition of Rainforest Nations and the program is Reducing Emissions from Deforestation and Degradation (REDD). It is a non-governmental organization that pays countries not to deforest. The countries then distribute the revenue to companies. Is this an efficient bargain? At first glance this seems like an assignment of property rights over environmental concerns, namely deforestation and emissions, in a way that allows for contracts and bargains to compensate all parties. In short, a perfect Coasian outcome where transaction costs were internalized (and privatized) and property rights were clearly defined, which in turn limits transaction costs. Yet this may not be the case.

Apparently Indonesia really likes this program. Maybe too much. Indonesia really likes the $3.75 billion it might receive every year from this plan. Is this a case of a Coasian bargain or is it a case of rent seeking? I'm not convinced it matters because the outcome is efficient (though not Pareto efficient) in either case. I think this is efficient rent seeking, where governments act in their own selfish interest. In this case Indonesia is exploiting the global community, but they are ultimately doing what is asked, namely not destroying their forests. In any event, it seems that because property rights have been assigned (in this case by REDD), transaction costs are reduced to the point that a bargain can be reached that achieves everyone's goals. Indonesia is not getting something for nothing (or are tribes along the Amazon). Rather, they are receiving payment as compensation for not being able to exploit their resources as they wish.

Saturday, March 15, 2008

What does Congress have to do with bicycling?

In this election year, it is important to consider what the candidates say about city and transportation issues. Yet quietly Rep. Earl Blumenauer, D-Ore., has introduced legislation aimed at increasing the importance of cycling as part of overall transportation policy. This is a very good idea, as cycling has many benefits that extend beyond trip and modal substitutions. Cycling increases health in the long term (though accidents may diminish some of these gains in the short term), creates better and more pedestrian friendly neighborhoods because of lower speeds, quieter movement and greater ease in stopping and taking part in the community (no need to cruise for parking).

However, like many transportation alternatives to private autos, cycling advocates are promoting the idea of new bike lanes and roads. This undoubtedly will increase the attractiveness of cycling for a few people, but two main concerns remain. First, it's not at all clear that the bike trips on the new infrastructure would be substitutes for trips that would otherwise be made by car. It's likely that many of the trips would be new purely recreational trips. Who should pay for these new fitness facilities? We certainly wouldn't advocate for public intervention to subsidize gym memberships, which might result in even greater health benefits (but more driving to and from the gym).

The second problem is the construction of new infrastructure at all. If roads are going to be rebuilt, it may prove better overall to build dedicated bus lanes rather than dedicated bike lanes. In order to improve our transportation infrastructure and investment, we have to consider the potential alternatives and opportunity costs of policy actions. This is the essence of transaction cost economics. If we are going to invest in new transportation infrastructure, we need to choose the most efficient alternative among many. It may well be that bicycle lanes are the most cost effective way to go about reducing auto trips. We just don't know, and the evidence so far suggests that the market for bikes as primary transport is small for a variety of reasons.

Taken together, these two problems are significant obstacles to federal bike policy. Biking is a very localized activity, and the required facilities are relatively inexpensive. I doubt that federal policy towards bikes will ever get past platitudes, but bike planning will be most effective at the local level. Congress could do much for transport alternatives by increasing the flexibility and local autonomy of surface transportation reauthorizations.

Thursday, March 13, 2008

Downtown downturn in Los Angeles

Today's LA Times has a story about the downturn in demand for condos downtown. There are many reasons floated for why demand is soft. Peter Gordon is quoted as saying the demand was overestimated in the first place. Others think the overall housing downturn is responsible. I think both sides are right, and there are other factors.

Downtown residential development is favored by those who want to achieve jobs-housing balance, a popular if outdated planning concept. The problem is, as I pointed out in my earlier post on what is smart growth, most households do not make residential decisions based on employment. Since downtown LA is largely devoid of 'neighborhoody' activities and destinations, it's a hard place to live.

The activities developments downtown have all focused on large scale projects such as the Staples Center, concert halls and other event venues. These are all new construction projects that leave no opportunities for new or start up restaurants or retails shops, and there are only so many Lakers games or Rascal Flatts concerts people are able to go to. As Jane Jacobs pointed out, communities need buildings of all sizes, ages and states of repair in order to attract a diverse array of new and existing businesses. Downtown LA doesn't have many opportunities for start ups. Until there is a "there there" that makes people feel like their neighborhood is their home and they don't have to get in their car and drive everywhere downtown will have a hard time attracting residents. The activities-housing balance is a far better ideal for planners to consider.

Build roads for reckless drivers...

or so says The Onion.

In truth, this may not be a bad idea so long as the reckless drivers pay for it through tolls, users fees and higher insurance premiums. I suppose that if the privatizers got their way and all roads were privately supplied, this would even be an efficient outcome of a Coasian bargain.

In the meantime, we'll have to put up with people who disregard the laws on the regular roads without any compensation.

Tuesday, March 11, 2008

What is smart growth?

In today's LA Times, there is an article about the transformation of office buildings into mixed use developments. This is largely an anecdotal collection of many new developments, some that are adaptive reuse and some that are new construction. In the story, Jim O'Sullivan, the president of the Miracle Mile HOA, is quoted as saying these projects do not amount to smart growth because they do not focus on reducing commute trips:

"All of these projects have what they call ground-floor commercial. What you get is Jamba Juice or Subway or Starbucks. That flies in the face of what the city calls smart growth," O'Sullivan said. "Smart growth is supposed to combine living and office spaces [to cut down on commutes]. No one who is moving into these new apartments is going to go down and work in Jamba Juice or Starbucks."

He and others said the city should encourage more office development on the sites, because those would bring in jobs where new area residents might work.

O'Sullivan should be commended for having such a clear definition of smart growth, but he is the only person to see it so plainly. In any event, he is badly underestimating the share of traffic caused by non-work trips. Commuting accounts for about 20% of all travel in U.S. cities, and there is ample evidence that jobs have decentralized along with population. This leaves 80% of trips as "discretionary", and it is these trips that clog the roads as people are driving to Starbucks, Jamba Juice or to the mall. It is also not as clear if these land uses have decentralized along with jobs and population. While work locational decisions still are important in residential locational decisions, most households choose where to live based on a bundle of factors and where they work is not the dominant factor. Households typically have more than one worker, and due to employment mobility housing tenure often exceeds employment tenure. Put together, these concerns point to discretionary amenities as a better focus of "smart growth" or any evaluations of how effective development is at reducing travel.

Another thing is this article worth mentioning is that all of the adaptive reuse projects are possible only because the office buildings were built with minimum parking requirements. This is not to defend parking requirements, rather it needs to be pointed out that many buildings along Wilshire are not viable for redevelopment because they do not have adequate parking. By waiving parking requirements for adaptive reuse around transit stations, the city could go very far towards breaking the car dependency that LA is famous for. I think that all else equal, LA is not as adverse to transit as people think, it's just that the transit system is poorly designed and does not deliver people to where they want to go. Lastly, transit oriented development is undersupplied, so those who want to live somewhere without a car still have to pay for their parking spaces. The new developments along Wilshire will certainly deliver more choices to residents. Who knows if there will be any behavioral changes because of it or if people who want to live without cars will simply relocate to those locations. In either case it seems we are better off.

Friday, March 7, 2008

Road rage is bad. Cell phones while driving are bad. Lying about road rage because you were using your cell phone while driving is worse.

Recently, there was an incident in the Twin Cities where a woman claimed that she was hauled from her car, had her phone smashed and then she was thrown into oncoming traffic on a freeway, all because she irritated some guy. She spent some time in the hospital and the whole story sounded awful. It was suspicious, but she repeated her claims to the cops and the paper. Now, it turns out she was lying. The real story is she was on her cell phone and made a u-turn into traffic that caused the other driver to swerve off of the road to avoid hitting her. The two then pulled over, the guy who swerved yelled at her, then she followed him back to his car and acted like an ass. Eventually the guy could leave, and he did, and the woman's cell phone was broken somehow.
She may have been medicated when she was driving, which is bad, but she was definitely on her cell phone when she made a u-turn into oncoming traffic on a divided four-lane freeway. She's lucky no one was killed. She should be put in jail.
As for the future, she should have her cell phone privileges taken away by the state. Cell phones are not a constitutionally protected right, and neither is driving. Use both responsibly or don't use them at all.

Wednesday, March 5, 2008

Cell phones should not be allowed when driving

There is another study out that points to the risks of using cell phones while driving. In this study the Carnegie Mellon researchers estimate that just listening to someone on the other end of a cell phone conversation diminishes the ability of the driver to process information. The upshot is cell phone use is potentially as damaging as drunk driving (this conclusion is supported by nearly all studies of cell phone use while driving). I suspect the total social and direct costs of cell phone use are higher than drunk driving because most drunk drivers are on the road at night when there are fewer vehicles to crash into. Cell phones are used during peak hours (and at night), which means that driver distraction is likely to lead to more crashes. Of course, the cell phone caused crashes may be more likely to occur at lower speeds than late night speeders and not result in such terrible car-to-car collisions. But daytime cell phone users probably hit far more bicyclists and pedestrians. The personal costs to injury are probably comparable.

I don't see a MADD type organization emerging to fight cell phone use by drivers, so I have little hope for useful policy to get passed. But it would be nice.

Tuesday, March 4, 2008

Veto power, community groups and environmental protections

In Los Angeles, the Mayor is pressing forward with a plan to convert Pico and Olympic Boulevards into one way streets in order to speed east west traffic between the ocean and downtown. This plan is problematic for many reasons, but the biggest threat to the success of the conversions is that many neighborhoods are opting out of the scheme.

The City of Santa Monica will not have any part of it, and to the east, other council districts have taken a pass, so the new traffic plans end at Fairfax. At that point, drivers will confront a bottleneck and many will have to switch from a Pico to Olympic (or visa versa). Unfortunately, Fairfax is a four lane road-with only two effective lanes due to parking- at this point and is already gridlocked through much of the day. More traffic at this point is going to make a bad situation much worse, and this will likely eliminate all of the travel time savings accrued.

There are also groups on the Westside who don't want the plan to move forward and they are not getting any help from their local elected officials. So they've sued. From the LA Times this morning:

Mayor's traffic plan is delayed

The city has agreed to delay for three weeks a plan to try to speed traffic on Olympic and Pico boulevards on the Westside, according to the office of the city attorney. Implementation of the plan, proposed by Mayor Antonio Villaraigosa, was supposed to begin Saturday.

Two groups filed individual suits last week to stop the plan, which they allege was not properly studied under California environmental law. The groups -- the Westwood South of Santa Monica Boulevard Homeowners Assn. and the Greater West Los Angeles Chamber of Commerce -- fear that the plan will actually put more cars on both streets and affect businesses and residences.

The city's plan is to synchronize traffic signals to give an advantage to westbound traffic on Olympic and eastbound traffic on Pico.

In addition, the city wants to eliminate most street parking on both streets during the morning and afternoon rush hours to give an extra lane to vehicles.

There are two important points to note about the lawsuit. First, the homeowners association is a form of private government and is filling a void. That void is the residents do not feel their elected officials are responsive to their needs. This goes beyond just maintaining landscaping and facades. This action relates to how the neighborhood manages traffic and relates to the greater city. The second issue are the grounds for the law suit. Environmentalism has produced cleaner, more livable cities, but it also gives a powerful veto to small groups. I doubt that these homeowners are that concerned about direct harm to the environment. But suing for environmental reasons is their best option for stopping this traffic plan moving forward. The environmental veto is a common and under appreciated tool that local groups use to shape cities.