Monday, February 18, 2013

Hipsturbia: The Colocation of Consumption and Housing

The New York Times offered up a new trend piece about "Creating Hipsturbia." The thrust of the piece is that traditionally unhip suburbs such as Hastings-on-Hudson, New York are attracting young families away from traditionally hip places in Brooklyn. As this is a trend piece in the New York Times the entirety of evidence is quite likely a few of the author's friends who have made such a move. But the trend (as it is) described does offer some interesting bits about urban economics and the spatial distributions of activities.

As a bit of background, for all of the interest and cheerleading that cities are revitalizing because people want to live downtown, what is actually happening to metropolitan economies is more complex. Here is one example from this morning's Detroit Free Press about downtown Detroit's revitalization. The DFP story highlights that downtowns across the US are growing (or not) and generating lots of economic activity. Yet there are two distinct forces affecting city regions, which is why downtown areas can be doing seemingly okay while our regions continue to sprawl and any benefits from growth are inequitably distributed. What is happening is that within metropolitan economies forces of production continue to disperse while forces of consumption are concentrating in the center of regions. Production is decentralizing away from urban centers to elsewhere in the region or world to places where firms can minimize land and transportation costs while maintaining access to an adequate labor pool. This is happening with firms, as well, which is known as firm fragmentation. As an example, has been praised as a market leader for moving its headquarters to downtown Seattle, but most of's employment and real estate growth is actually through fulfillment centers and warehouses located on the urban fringe (like this in Texas, more here on distribution centers generally).

Consumption, on the other hand, is concentrating. People of means want certain types of retail, recreation, dining and other discretionary activity bundles. Households value such activity bundles as part of their location decisions along with commuting costs, housing size, schools and other things. What the "Hipsturbia" article highlights, however, is that many of the people who value a "hip" consumption bundle are the same people who produce the hip places. From the story:
“I don’t think we need to be in Brooklyn,” said Marie Labropoulos, who recently moved to Westchester County and opened a shop, Kalliste, selling artisanal vegan soap in Dobbs Ferry. “We’re bringing Brooklyn with us.”
I have no idea how big the market is for artisanal vegan soap, even in Brooklyn. But by bringing Brooklyn with them these migrants are creating new consumption bundles. There are two important aspects of this. First, there are positive externalities associated with opening a artisanal vegan soap store beyond clean people. The store creates a hip vibe that makes other hipsters more willing to move to these places. Perhaps someone will be more willing to open a store that sells only things made of tofu nearby. A virtuous cycle of hipness is created. Second, consumption preferences are valued as part of an overall household budget. A bigger house and better public schools are a trade off for less access to your optimal consumption bundle, but if you bring your store with you commuting costs may not change.

None of these are new observations, and again, no one is claiming that a New York Times trend piece is any evidence of an actual trend. What these anecdotes represent are a confirmation of fairly conventional understandings of household location decisions but with the key differences that consumption preferences and colocation of households and consumption amenities are under considered by planners, economists and researchers. Consumption activities are also quite local in scale (such as retail and dining, though things like museums require a larger market), so individual neighborhoods can become quite desirable while nearby areas remain unloved. More interesting is the potential colocation of households and consumption as many households are also providers of the consumption activities. If what you value is vegan soap or gluten-free muffins or craft beer and it happens that you are in the business of providing those things, then you can pretty much locate anywhere there is a market, including commuter towns on the outskirts of the city. When producers and consumers are one in the same we don't really know (yet) if the decentralization of production or the centralization of consumption will be dominant for location decisions. It may be that the suburbanization of consumption will follow the suburbanization of production.

Friday, February 15, 2013

Privacy Concerns About Black Boxes in Cars are Overblown

The Electronic Frontier Foundation is very concerned about drivers' privacy. The group is strongly opposed to any type of "black box" device in cars according to this story in the LA Times. From the story:

Nate Cardozo, staff attorney for Electronic Frontier Foundation, said that the black boxes track such information as accelerator pedal position, brake pedal position, engine rpms, vehicle speed and acceleration, whether seat belts are connected, whether air bags deployed, and a lot more.
The foundation's concerns include the fact that there is currently no cap on the amount of data collected and there are no limits on the kind of data that will be gathered, Cardozo said.
"The car manufacturers can use that data at will, including location, which has significant privacy implications," Cardozo said, which led to the scenario of a speed jaunt finding its way into the hands of an auto insurance company.
This argument is largely nonsense. Why should drivers be entitled to privacy? Are people who drive special, or do they just engage in enough questionable behavior that they need protection? After all, air travelers and rail passengers have to have al of their movements recorded and logged. Even transit users who use monthly (or season, if you are in Europe) passes have their activity recorded. What does the EFF say about transit? From their website (in full):

Who Controls Data About Public Transportation?

How should city transit authorities treat independent software developers who make use of public schedule data? What approach results in the best experience for their passengers and customers?
Two models appear to be emerging to answer this question. One, typified by New York City'sMTA and Washington, DC's WMATA, sees schedule and related data as valuable intellectual property, to be zealously protected, licensed and monetized. So far, the results of this approach appear to have been bad press, irate passengers, wasted money and stymied innovation.
The other model, typified by San Francisco's SFMTA and Portland's TriMet, holds that encouraging independent developers to make free use of schedule information can both save the city money and foster innovative applications. As SFMTA San Francisco BART's Timothy Moore told Streetsblog: "We've put BART in front of customers in so many places that we wouldn't be able to do on our own. We basically can't envision every beneficial use for this public data and frankly transit agencies in general don't have the vision. We don't have the time, we don't have the resources."
In 2009, we've seen interesting developments in each of these four cities:
In New York City, developer Chris Schoenfeld created StationStops, an iPhone app that provided schedule information for Metro North, NYC's largest commuter rail system. The app ran smoothly until earlier this summer, when NYMTA contacted Schoenfeld to claim ownership of the schedule data and demand $5,000 in advance "royalties" on Schoenfeld's revenue.
Schoenfeld wisely recognized this as nonsense: Copyright law simply does not apply to publicly-available factual information. But when he declined to pay the licensing fees, NYMTA sent a takedown notice to Apple, demanding that StationStops be banned from the iPhone. Apple, of course, complied.
NYMTA's extortionate actions censored a helpful and perfectly legal use of their data. The results have been bad for their reputation and bad for their passengers. Connecticut's Stamford Advocate put it well: the MTA "should just leave (Schoenfeld) alone and let him make an honest buck by providing a useful service."
In Washington, DC, the Washington Metropolitan Area Transit Authority (WMATA) seems to be working hard to learn exactly the wrong lessons from NYC's example. After an online petition drive by DC transit activists, WMATA reluctantly opened their data to developers earlier this year. But they also allocated $500,000 (yes, that's five hundred thousand dollars,) for a study which they say "will give us a firm idea as to the commercial value of intellectual property like scheduling information."
We'll save them the trouble: While it's possible they may be able to wrench some value from their trademarks (even though this tactic, too, has backfired embarassingly for NYMTA,) there is no economic value in their schedule information. Any attempt to restrict others' use of this data is baseless and counterproductive. They've already opened their schedule data — if they're smart, they'll keep it that way.
Here in San Francisco, the SF Municipal Transportation Agency (SFMTA) has made great strides towards a first-rate open transit data system, and is setting an example that other transit authorities should aspire to. Schedule data has long been available from the SFMTA in the excellent Google Transit Feed Specification format. And websites like SFMTA Labs and theBART Developer Center encourage and help developers to make use of the data.
However, this silver cloud does have a dark lining: While SFMTA itself has refrained from sending baseless takedown notices, a corporation called NextBus Information Services (NBIS)hasn't been so wise. In 2008, developer Steven Peterson created an iPhone application calledRoutesy, which provides passengers with real-time updates of bus and train locations and arrival times. Then, last month, NBIS contacted Peterson, claimed ownership of the real-time arrival data, and demanded that Routesy be discontinued. When Peterson refused, NBIS asked Apple to ban Routesy from the iTunes App Store. Apple, of course, complied.
NBIS, like the NYC MTA, appears guilty of copyfraud. They've been unable to produce any proof that they do, in fact, own the data in question. SFMTA, to their credit, quickly clarified the situation, telling that "Muni owns the data in question and that the public is, of course, entitled to access it." Thanks in part to that statement, Peterson's lawyer was finally able to persuade Apple to restore Routesy to the iTunes App Store. (Though similar skirmishes with NBIS appear to be occuring in other cities.)
Finally, in Portland, Oregon, TriMet was one of the earliest transit authorities in the US to adopt an open data program and encourage independent developers. The result is a healthy and competitive application market that speaks for itself: Over 25 different mobile applicationsfrom different developers make creative use of the data. And, the open data program enabled Portland Airport to display real-time train arrival information at their baggage claims — with no additional work required on TriMet's part. TriMet's Bibiana McHugh explains: "Before, we would have needed to work with a technical team for the airport to make this happen, but with, we just make the information available once and our work is done."
If other government data-sets are any indication, the transit apps we've seen so far are just the beginning of what's possible. Just take a look at the impressive winners of Sunlight Foundation's Apps For America contest.
For reasons both legal and practical, transit authorities should follow the lead of SFMTA, TriMet and the Obama Administration's, and allow independent developers to freely use their data. The results so far have been a better deal for passengers and taxpayers alike.
So public transit users will benefit from making data public, but drivers will be harmed. Sure, schedule data is different from vehicle data, but the data available from transit agencies is partly schedule data but also aggregated rider data, some of which can be traced to individual riders. EFF is right that transit riders deserve better service through innovative use of data. So do drivers! Marginal cost insurance is a good thing, not a bad thing. In addition, black boxes in cars can help assign blame in crashes more accurately so we can stop with the nonsense that a driver killing a pedestrian or cyclist was not the result of criminal driving. More data about usage can--no guarantee here as details matter--improve transport for everybody, including: marginal cost pricing, enhanced safety, lower cost travel for those who impose the least stress on transport systems, better routing and scheduling, stronger commitment to the user pays principle, punitive charges to lunkheads who shouldn't be driving, etc. Lastly, there is scant evidence that people (Americans, anyway) give a hoot about privacy in nearly all cases. How many actually use cash to pay for their EZPass? Put in the black boxes, I say, and make the data public while hiding the user ID. We will all be better off. And it will give researchers like me a lot to do.

Thursday, February 14, 2013

The Kansas City Experiment on Transport Infrastructure Investment

Kansas City (the Missouri one) presents an interesting natural experiment on the effect of transportation infrastructure investment and economic performance. There are two main investments occurring with each investment focused on a very different technology. First, the city is aggressively pursuing a streetcar system with the hope of encouraging downtown development. Second, Google is installing Google Fiber, an ultra high speed Internet service. These two strategies represent two very different approaches to economic development, and figuring out which approach has a greater (if any) effect on the local or regional economy can help guide future public and private investment decisions.

The streetcar project is a two mile, $102 million rail line mostly along Main Street. Last December voters of a special downtown streetcar district approved a 25 year property and sales tax increase to help fund the project:

Voters approved, 351 to 198, a 1-cent sales tax increase, and 344 to 206 property tax increases to help pay for a $100 million, two-mile streetcar system. It will run from River Market to Union Station, primarily on Main Street.
The tax increases, authorized for 25 years, will apply only within the defined boundaries of a downtown streetcar district. That covers roughly River Market, the Central Business District, the Crossroads and Crown Center.
Yet already, Jackson County Executive Mike Sanders is floating the possibility of a broader countywide transit tax that might alleviate some of the burden on downtown.
Wednesday’s results occurred in an unusual mail-in election and involved only registered voters living within the streetcar district.
The city hopes to begin construction next year and start running the streetcars in 2015.
 Local officials are extremely optimistic about the outcome:

“This is going to be a game changer for our city, especially our downtown,” City Councilwoman Jan Marcason said.
“It will be historic,” Mayor Sly James said. “This is only a beginning.”
Supporters emphasized that just running streetcars through two miles of downtown was never the goal. They hope Wednesday’s results springboard a more extensive system of streetcars running to the Plaza and the University of Missouri-Kansas City, and along east-west corridors such as 12th Street or 18th Street.
To place downtown Kansas City in a bit of context, here is Strongtowns' Charles Marohn explaining current traffic and pedestrian conditions in Kansas City:

Looking at the Google project, here is a description of the service:
Google Fiber is a project to build an experimental broadband internet network infrastructure using fiber-optic communication[1] in Kansas City, Kansas, and Kansas City, Missouri; the location was chosen following a competitive selection process.[2] Over 1,100 communities applied to be the first recipient of the technology.[3] On March 30, 2011, Google announced that Kansas City, Kansas will be the first community where the new network would be deployed.[4]
After building an infrastructure of the network, in July 2012, Google announced pricing for Google Fiber. The service will offer three options. These include a free broadband internet option, a 1 Gbps internet option for $70 per month and a version that includes television service for $120 per month. The internet service includes 1 terabyte of Google Drive service and the television service includes a 2 terabyte DVR recorder in addition to the Google Drive service. The DVR will record up to eight live television shows simultaneously. The television options also includes a Nexus 7 tablet that will act as a remote control for the system. In addition, television service will also stream live program content on iPad and Android tablet computers. Neighborhoods that receive the service will be selected through demand from Kansas City area residents and Google has set up a website to pre-register for the service.[5]
Early anecdotes and media stories suggest that the Google Fiber service is already having an impact on the local economy. Here is one article, and here is another. From the latter:
Soon no one will snicker when Kansas City residents proudly refer to their city as the “Silicon Prairie.” As the Associated Press reports, the presence of Google’s (GOOG) high-speed fiber network has turned Kansas City into a major attraction for tech startups that want to take advantage of the fastest Internet connectivity in the United States. According to the AP, “several startup-friendly locations… have sprouted up in Kansas City in recent months” in residential buildings that give entrepreneurs room for “working on their ideas for the next high-tech startup.”
These news stories should not be treated as rigorous evidence any more than stories promoting streetcars. Yet it is the case that these two transportation infrastructure investments are both expected to be transformative for the local and regional economy. I have my own ideas about which one is more likely to prove a successful investment, but the Kansas City experiment should be closely followed to help inform what types of investment in new transport networks should be made in the upcoming decades.

Read more here:

Read more here:

Monday, February 11, 2013

Roy Benson is Right but the Wrong Guy to Ask

This story from OPB about a proposed bus rapid transit line in Eugene, Oregon quotes Roy Benson, an opponent of the investment, stating his business will not realize any additional customers:

It's a really poor use of public funds."
Roy Benson owns the Tire Factory, an automotive store along the planned route. As a business owner, he doesn't see any benefits of the new line.
"I'll probably never have anybody come here on the bus, and then buy four tires and get back on the bus to go home," Benson says. 
Roy is right about this. People aren't going to ride the bus to buy new tires for their cars. But it is silly to ask him about the project as his response isn't surprising or offer any insight as to costs associated with the project.

Part of the overall investment strategy for urban transport--transit in particular--is that there should be an associated sorting of economic activities that occurs as a result of new infrastructure and service. Roy Benson will likely consider moving his auto-oriented (and dependent) tire business to a location that offers better auto access, while businesses and developers that value pedestrian and transit access will gladly pay rents that reflect transit and pedestrian access. This type of retail and commercial sorting is not costless, but is expected and a reflection of a healthy market.

Friday, February 8, 2013

Transport Finance without the Feds: The Canadian Model

Transport planning and policy in the United States is dominated by the federal gas tax. Currently 18.6 cents per gallon of gas and 24.6 cents per gallon of diesel, federal gas taxes are used to guide preferred transport investment across the country. For the past forty or so years, the federal gas tax has, in the words of Lisa Schweitzer, been buying everyone’s lunch. Yet all is not well. The federal gas tax hasn’t increased in 20 years, reducing the absolute and relative buying power of the revenue. Increased federal regulations and interest groups limit what the gas tax can be used for, and a steady stream of other people’s money (federal dollars) creates incentives to spend on transport projects that offer few benefits. At an extreme, transportation projects are developed and financed by federal monies withouteven bothering to claim any transportation benefits.

The declining share of federal money for transport finance has many people worried that transportation policy and finance will devolve to the states. Such devolution of authority is viewed as a necessarily lousy outcome, especially by progressives. (Richard Florida even wants a cabinet position for a Department of Cities. We didn't get urban renewal right the first time, so let’s try again, but with even more authority.) From my perspective, the status quo for transport policy and finance cannot be objectively defended as a success. Looking at the period of about 1971 (the year Amtrak was formed is a good marker of the beginning of the current era of federal policy, but just about any year between 1964-1974 works) to present US transport systems declined in nearly all measures of productivity, economic performance, social welfare, or just about anything else you care to measure. For whatever occasional successes US policy has had, the nation has received an extremely poor return on investments made. We can do better.

An experiment devolving transport policy and finance to the states is likely to improve overall performance of all aspects of transport. For evidence we can look to out chilly northern neighbors in Canada, which does not have anything equivalent to the U.S. Department of Transportation. Transport policy is the responsibility of the provinces, and transit policy is the responsibility of the cities. So how do Canadian cities compare?
The table below is drawn from Paul Mees’ work. The city regions are sorted by transit mode share. Every major Canadian region has higher transit mode share than US cities except New York, Chicago and San Francisco. The simple correlation between density and transit share is .48, so density does not adequately explain the differences. (Paul Mees wrote the book on this issue.) Canadian transit systems also have much higher farebox recovery ratios than in the US. The Toronto system has to maintain greater than 70% farebox recovery is order to receive subsidy for the balance.

Last week a new report on Toronto area transport finance was published that explains the financing structures in place there and potential future monies. Here is a link to the report. The authors promote many taxes and fees, all of which are economically sound and focus on raising money for transport by charging those who benefit from a well-functioning transport system. Essentially, if the Greater Toronto Hamilton Area needs new transport investment to maintain and improve economic competitiveness then they can and should raise the money locally.

 Local control can also lead to service innovations. David Levinson highlighted TransLink in Vancouver. Here is how he described the agency’s service:
TransLink is the multi-modal transportation organization for Greater Vancouver, BC, and it is unlike what we see in the States. It is in fact, closer to the idea described in Enterprising Roads, a transportation utility with autonomy constrained by oversight.One of the key points to consider is that metropolitan Vancouver has a transit mode share of 21%, comparable with much larger Toronto and Montreal (though behind metro New York's 30%, it is well ahead of Seattle's 9%), despite ranking 34th in population. Some of that has to do with institutional factors and governance.

In addition to service innovation and the ambitious expansion plans in Toronto, British Columbia instituted a carbon tax a few years ago, though this may not survive a scheduled vote in May. There are certainly problems with the decentralized system. Some Canadians want a national transit agency. Fragmented governance in regions makes coordination difficult, and perhaps a stronger regional agency is needed. Most difficult, perhaps, is that many cities forego transit service all together.* However, eliminating unproductive transit so that resources can be used elsewhere is actually good policy. But by nearly every measure Canadian transport policy outcomes are superior to US outcomes. Whether US transport finance and policy devolves to the states remains to be seen, but it certainly isn’t something that should be dismissed as inferior to what we have now. It may well be better.

*This sentence was removed as it is incorrect (I had bad info on this case, but the larger point remains):"The city of Guelph, for instance, has 120,000 people but no bus service. "

Monday, February 4, 2013

The LA Red Line is 20 Years Old: Is it a Success?

Los Angeles opened the first phase of the Red Line subway system 20 years ago. Here is a story from The Source about it. A midst the celebrations, how should the success of the rail investment be judged? Here are a few data points to consider.
Source: KCET

The above image is of transit ridership in LA County. These data include all transit modes. Overall ridership is about where it was in 1984 in absolute numbers. During the period of about 1996-2008 transit ridership grew faster than population growth, but overall ridership is not an obvious success story from rail investment. As the KCET story notes, and many scholars have confirmed, investment in bus ridership is critical for overall ridership numbers. The period of ridership increase in the above image is also when the LA MTA was required to improve bus service through a federal consent decree. See here for an overview.

So if ridership isn't a clear success, then what about development and land uses? Los Angeles finally got around to rezoning the area near Red Line stations last year. This can certainly be viewed as a failure of the city to not coordinate zoning codes with transit development, and maybe the city missed out on potentially dense development. This is far from certain, however, and it is more likely that the demand for rezoning came from regional growth pressure rather than simply transit access. If transit access were the primary influence on rezoning it would have occurred long ago.

As we celebrate the 20th year of Red Line service the clear successes are scarce. Transit ridership is falling below population growth, and transit service is supplied inequitably in too many areas of the county. Land development has not happened magically even though the population and economy expanded. Yet there are certainly anecdotes where positive outcomes exist, and perhaps in another 20 years it will all seem worthwhile. Of course, we probably shouldn't have to wait 40 years for the pay off from these types of investments.