Should Voters Have Full Information When Voting on Transport Projects?

Voters are asked to vote on all kinds of transportation projects. In part this is because of declining federal support for projects, and local tax increases require voter approval. Elected officials are also hesitant to promote new taxes to fund projects without clear direction from the electorate. Usually new taxes for transport spending are passed. Yet there are many referendums on specific projects where taxes are proposed for particular investment. Without making any claims about the value of any of the individual projects, it is worth considering when projects violate the spirit and letter of the votes taken. I highlighted some examples pertaining to value capture previously, including the downtown Los Angeles streetcar, which may double in cost and provide less service than promised to voters. Califonia's high speed rail has also been criticized for not adhering to the specific systems and costs spelled out in the statewide 20008 referendum to raise a share of the cost of the project. See Lisa Schweitzer's piece in the LA Times for some details.

This isn't just a problem for transit projects, either, though maybe it is a problem that is worse in California because of a variety of populist legislative requirements. Here is another Golden State example. Today's LA Times reports that the 405 toll road project is in trouble politically. There are a few causes described:

At a meeting this month, crowds packed an Orange County Transportation Authority board meeting to denounce the lanes, which have been supported by Caltrans. City leaders expressed worry that the project would push traffic onto their streets, or that motorists traveling in the toll lanes would find it too difficult to pull off the highway and patronize local businesses.
The political shift over toll lanes has several causes. Some of Orange County's toll roads have struggled to attract drivers and each of the major corridors has been forced to refinance its debt to avoid possible default.
There has also been the sticker shock: Riding the 91 Express Lanes can cost nearly $10 each way at the most congested hours, an investment even for Lexus drivers. If the 405 toll lanes are built, the priciest one-way toll would cost $9.91.
As for the 405, much of the anger stems from what Orange County Supervisor John Moorlach called a "bit of a bait and switch." When voters approved a countywide half-cent sales tax, they were told funds would go toward adding one general purpose lane in each direction at a cost of $1.25 billion.
Instead, the proposal before the OCTA would add one free lane and one toll lane in each direction — but it would also convert an existing carpool lane in each direction into a second toll lane, with the added $220-million price tag paid through bond sales that in turn would be paid off by tolls.

So the project as implemented is not what the voters approved. It is substantially different, in fact. I have written about credible commitment as a barrier to road pricing before, but what is happening with these experiments in direct democracy are a bit different. Rather than voters opposing new taxes or fees because they don't believe the revenues will be used as promised the votes for specific projects are not held as binding. 

There are many problems associated with these types of direct democracy for allocating scarce resources. When voters vote on a project, be it rail, transit, roads, etc., they should have complete information. Since transportation infrastructure projects tend to go over budget frequently, which affects the scope of the projects, it is difficult for voters to accurately assess their support or opposition. Also problematic is the absence of recourse the voters have. By pushing tax and spending decisions to the ballot box elected officials insulate themselves from the severe problems that tend to arise. After all, it was the voters who approved the project, not Rep. So and So. 

Issues of representation, credibility and voter information have not been well examined in the context of local transport finance. As the federal role in transport finance is declining in the US, we need to figure out better ways of raising money for and spending on the infrastructure that we want and need. The experience in California is not encouraging for experiments in direct democracy for transport investment.

Big Week in Taxi and Jitney News

There was lots of stuff the past few weeks about taxis and jitneys. Here are a few links to the action with brief comments below each:

"All-Borough Taxis (Like Yellow, But Green) Hit the Streets" NY Times
(Anyone see one of these out in the wild yet? I will post if I see one in northern Manhattan)

"Ending the Jitney Menace" NJ.com
(There are a lot of calls for jitney reform as an 8-month old was killed with one recently. Sounds like the Federal Motor Carrier Safety Administration may get involved. See next link.)

"Bayonne Police Have Issued Jitney Buses 200-plus Tickets in Last 18 Months" NJ.com
(However, enforcement doesn't seem to be the problem. The driver that crashed and ultimately caused the death of infant was on the phone at the time, it seems. Perhaps this is a problem specific to jitneys, but I suspect the real problem here is with letting people drive.)

"Taxi hailing apps off to slow start in New York, but could still accelerate" The Verge
(This isn't surprising. The apps will allow taxis to find new markets, not serve existing ones, so it will take time to develop. You don't need an app to find a taxi in Midtown, which is where the Yellows are already. People and drivers in areas where Yellows are not pervasive will ultimately benefit.)


These next links are all about ride-sharing and the legal  and economic challenges that must be overcome. There is a lot here. The status quo is untenable but a fully deregulated environment isn't likely to work, either. I think part of the problem facing cities and planners (and entrepreneurs and others) is that few have a firm understanding of the intent of regulations within the taxi/ride-sharing industry. We've been regulating these services so long that the purpose of regulation is not clear. Regulations don't appear in a vacuum. Somebody wants them, designs them and fights for them. Now, many are fighting to keep what we have while others want to tear them down. It seems that this has caught many planners and regulators off guard, and we need new models of how to think about transport supply and regulation. I actually think the California utility model is promising and can maybe be expanded to bus services and conventional transit agencies.

"City Taxi Systems Struggle with Change" Governing.com

"Taxi drivers sue, claim monopoly" Atlanta Business Chronicle

"Proposal Offered for County to Take Over City's Taxi Regulation" Milwaukee Journal Sentinel

"Seattle's ride-sharing debate reaches it's boiling point" Crosscut.com

"Sharing economy drives into trouble with ride-sharing arrests" Guardian.com

"In California, They're Not Taxis, They'e "Transportation Network Companies"" WNYC

"California's New Rules Could Change Rideshare Game" NPR

Federalism in Action: Two States' Approach to Electric Cars

California and North Carolina are quite different in many ways, and now we can include their approach to electric cars. California has launched an aggressive subsidy program to get motorists to to rethink the internal combustion engine. From the LA Times:

Want to pay $7,000 for a $37,000 electric car?

It's not a trick question. For the first time, through the magic of subsidized leases, electric vehicles can now compete on price with comparable gas-powered cars — indeed, they are cheaper once you factor in gas savings.
Honda announced this week that it would drop the lease on its Fit EV from $389 to $259 a month. That price includes collision and vehicle theft coverage, maintenance, roadside assistance, even a charging station at your house. Factoring in the state rebate, that's an all-in, three-year ownership cost of less than $7,000 — maybe the cheapest $37,000 car in history.
...
If you're looking to buy, state and federal incentives can shave as much as $10,000, nearly a third of the sticker price on a typical model. But automakers and most consumers have turned to leases to ease fears about uncertain long-term maintenance and resale values.
Credit California's tough pollution laws for the EV price war. The California Air Resources Board has mandated that zero-emissions vehicles must constitute 15% of all new vehicle sales by 2025, up from less than 1% now. That has automakers scrambling to get consumers into a set of green wheels, even though they are losing money on every car.
The goal is to boost consumer demand in the nation's largest auto market, hoping that bigger sales can spur research and development to lower the technology's cost.

Meanwhile, in North Carolina:

RALEIGH—North Carolina drivers who use hybrid cars could end up paying for it in the long run.
State lawmakers in the Senate have proposed drivers pay an additional fee if they drive a hybrid or electric car.
They are the car industry's answer to going green. Gas prices are a big reason the hybrid cars have become more popular but if you own one in North Carolina it could cost you.
"The old system of collecting money for our roads is outdated. If this is the best way that we can do that then we're going to be in some trouble for a very long time," said NC Sierra Club Communications Director Dustin Chicurel-Bayard.
One item in the Senate budget calls for drivers to pay an additional fee when they renew their car registration. For hybrid cars the fee would be $50, electric cars the fee would be $100. Since hybrid cars use less gas supporters say the fees would help the state collect that money they lose from the gas tax back in order to fund road projects.

You may or may not agree with either of these approaches to electric and hybrid cars. The goals from each state are very different, which is what we should expect with localized decision making. I suspect those most concerned with the environment will appreciate California's subsidies (some subsidies come from the automakers). Those concerned with how to pay for transport infrastructure may favor the North Carolina model. Both sets of policies have positive and negative attributes, but these are examples of how policy targets will vary across states as (more accurately: if/when) the federal role in transport finance declines.

My Letter to the California APA in Support of AB 904

The California Chapter of the American Planning Association opposes reform to minimum parking requirements as required under proposed legislation AB 904. You can read about the legislation here on Streetsblog LA, here is the text of the bill, here is a Market Urbanism post about this issue, another brief explanation of the bill, Curbed LA coverage, and a story from the California Planning and Development Report.

Here is support for the bill from the Infill Builders Association. Below is the text of my letter as sent:

June 23, 2012
Dear Mr. Snow,
I am writing to express deep concern about California APA’s opposition to reforming minimum parking requirements through AB 904. I have studied parking regulations as part of my research for over a decade, half of which time I was in California. It is without question that minimum parking requirements are an egregious failure of planning, and the California APA’s position seems to suggest that, despite decades of evidence to the contrary, they know precisely how much parking should be supplied. The California APA’s position is troubling, to say the least, and actually reinforces the circular logic that got our cities into such trouble in the first place.
Minimum parking requirements increase the cost of housing, increase the amount of land needed for development, and represent the single largest subsidy to drivers. I will not dwell on these effects as the California APA’s letter of opposition suggests that you are aware of the need for reform. Parking reform should be at the top of any planner’s priorities for building better cities. I do want to challenge some of your reasons for opposing AB 904, and show why your concerns are unfounded.
In the basic issues section and in the specific concerns section you are worried that the proposed reduction in required parking minimums is not based on data. To quote your letter:

“Page 4, S. 65200 (a).  It is not apparent how these parking minimums were determined.  They appear to be based on no specific data.  Of chief concern is the requirement for one parking space per thousand square feet of any non-residential project regardless of use.  Given that most jurisdictions use 3-5 parking spaces per 1000 square feet for uses that require the most parking, such as grocery stores, stadiums, park and ride lots, and medical offices, this assumes that up to 75% of those using the project would be using transit.  That is a huge leap of faith and one likely to detrimentally impact projects surrounding these facilities.”

 This quote suggests that existing parking requirements are based on something other than a huge leap of faith. They aren’t. No one knows the right number of parking spaces, and no one knows how many parking spaces are already built. Just because most jurisdictions require 3-5 spaces per 1,000 square feet does not mean they are correct. As a telling example of how supposed “correct” parking requirements have performed, consider that the amount of required parking built in the United States allows researchers to estimate retail sales by looking at images of parking lots taken from outer space. Remote Sensing Metrics, a company that specializes in counting the number of cars parked in commercial and retail lots using satellite images, correctly predicted that the 2011 holiday shopping season was going to be a success because 39 percent of parking spaces were occupied at shopping malls. We live in a world where 60 percent of parking spaces are vacant during good times. I do not see how this indicates that cities know how to set parking requirements. It does suggest that we build too many spaces. I agree that the proposed minima in AB 904 seem a bit convenient, but so are existing requirements. However, the proposed changes aim toward planning for people, building better places, and achieving a broad set of planning goals. By maintaining the status quo, the existing parking requirements make it easier and cheaper to drive.
 Another concern expressed is the definition of transit-intensive areas, and you suggest that only areas with existing transit service should be included. California is heavily investing in new transit systems, and these systems take a long time to plan and build. Reducing required parking now will make these areas better for transit when the transit arrives. Requiring lots of parking in areas where transit will be built will reduce the utility of the investment. We should build transit in areas that are not dominated by automobiles because those are the types of areas where lots of people will use transit! Lower required parking standards strengthen the relationship between transit and land use.
 Reforming parking policy is difficult, but also presents opportunities for building a new regulatory framework that supports good planning and flexibility for accommodating future needs and uses. Maintaining the status quo hampers California’s ability to pursue creative policies that are more equitable and economically viable and that promote vibrant communities. I hope you will reconsider the APA California position.
  Regards,
   David King
Assistant Professor of Urban Planning
Graduate School of Architecture, Planning and Preservation
Columbia University
  Cc:      Kevin Keller
            Sande George

Here is a link to the letter.

NO TAV: Anarchists Debate the Merits of High Speed Rail

This past weekend I was in Milan, Italy and I saw lots of the this image:

It is the work of the NO TAV movement, which is a social movement opposed to the proposed high speed rail line between Turin and Lyon. I saw similar images in Lyon, France last summer. Here is a summary of the movement. This is the crux of the opposition:

The simple principle behind the movement is that a new high speed railway line in the Valley is completely useless and not needed, its only purpose being the profit of the many private companies that have shares in it. The NO TAV think that the current railway line between Piedmont and France is more than sufficient, considering that traffic in the area has never been incredibly high. More importantly, the construction of the line would utterly and irreversibly destroy a huge part of the Susa Valley, causing not only an environmental but also an economic and social disaster, with businesses closing down and villages being completely disfigured or disappearing.

High speed railway lines in Italy are considered to be of “strategic interest”, which translated from political bullshit language means that the law allows this type of works WITHOUT consulting the local population and institutions whatsoever. At a time of economic collapse such as Italy is going through, the works require billions of Italian taxpayers’ money, at the expense of primary services like education and health. It would mainly be construction and other private companies profiting from it, but when finished and in use, the low demand for the line would end up making it a loss-making burden on the taxpayers. Like in Rossport, Ireland, the locals’ concerns and proposals are being completely ignored in the name of the only Modern God: money. 

The NO TAV came up with their own plan for the area which would include:
- changing the production and distribution processes to decrease transport of people and goods, especially on long distances
- supporting local sustainable trades instead of big industries
- creating or improving local means of sustainable and green transport for workers and students
- supporting and incrementing the use of the already existing local railway line

This is where thinking about political spectrum as a circle rather than a line is useful. NO TAV is opposition of high speed rail from the left, but they recently were joined in protest by neo-fascists. Then, of course, some anarchists started having a debate about the relative merits of high speed rail. I am not trying to send trolls their way. I want to highlight the odd politics of property rights, high speed rail, opportunity costs and other factors that are rife across all political persuasions when it comes to high speed rail. Support for and opposition of HSR is not because of one's politics, but rather a host of other reasons. Where European opponents are convinced that it is big money forcing HSR on people, in California supporters are convinced that opponents are on the take (while the train is on the dole). In truth, support or opposition is about values and priorities. But let's leave any fascists out of transport policy.

Why Public Choice Analysis is Important

There are a few recent stories that highlight the value of public choice theory. Public investment in large projects is challenging for many reasons. In many cases, public investment is justified and worthwhile, and public agencies are perfectly well suited to carrying out the work. In other cases, the public interest is badly matched with the project at hand. Of course, in all cases the role of individuals and institutions matters, which is why public choice theory is so useful. Public choice theory provides a framework that helps understand the factors that influence public choices, and accounts for self-interested public servants. It is an important frame of analysis but one that is underutilized. (Key scholars of public choice include William Niskanen, James Buchanan, Gary Becker and Elinor Ostrom.)

Just this week there are two examples in transportation policy that beg for rigorous public choice analysis. First, the California High Speed Rail project is getting a congressional investigation. Second, New Jersey Governor Christie is criticized for his rationale and justification for cancelling the ARC tunnel between New Jersey and Manhattan. (Christie pushes back here.) Either of these projects will make a fine case study through the lens of public choice. In both cases the public actors are not acting in the public's (their constituents) best interest, or if they are it is not clear how. (I am making no claims about the value or merits of these projects individually. I am only considering the actions of officials.) These two projects involve large complicated budgets and bureaucracies that span across multiple governments. The presence of federal funds in each project changes the desirability of each project for the local actors (federal money is a plus for California officials and viewed as a minus by Christie).  Understanding the politics of these projects is not straightforward, but is both cases the real and perceived costs and benefits of the projects are subject to political considerations.

Along these lines, Mike Giberson at Knowledge Problem has a nice post about why public projects cost so much and how we measure success. He argues that too often projects are judged based only on how much they cost:

In general, in public policy analysis, you’d like to judge ultimate success or failure of a program by its net results, by actual benefits less the costs involved in achieving those benefits. Admittedly sometimes benefits are hard to measure, but ultimately the point of a policy change is to bring about some improvement in something somewhere. Ultimately it would be nice, once a program is done, to try to find and measure that improvement.

What we often get instead, however, is an attempt to infer a benefit based on the expenditures on the program: how much money was spent, how many people were employed, how many miles of ditches were dug, and so on. This is, more or less, what we see this week from the U.S. Department of Energy in the study it commissioned from the National Renewable Energy Lab on the impact of the Section 1603 Treasury Grant Program.

...

The DOE asked NREL to estimate the effects of the 1603 program on jobs and economic expenditures. In NREL’s report they explicitly state that their work is an estimate of “gross jobs, earnings, and economic output.” This means that they don’t consider any private sector crowding out, any disincentives from the taxation needed to support the program, any consequences from duplication of other government incentive programs, and so on. They simply treat the federal resources as if it were manna falling from the heavens, and the jobs, capital, and industries that became involved in building renewable power plants would have otherwise sat idle. (Note that I’m not criticizing NREL in performing just a piece of the overall analysis, they just did the work that DOE asked for and paid them to do.)
But note that this is primarily a study which just measures the expenses of the program and a part of what the expenditures bought. So, it is a partial study of the costs of the Section 1603 program, and not any kind of estimate of any of the benefits of the program.

Nonetheless, in the DOE press release accompanying publication of the study, they said the study found “the program has been a huge success.” How does it justify its claim of success? By noting how much was spent, how many people were employed, and how many things were subsidized by the program. 

In transportation policy and planning, projects are good if they cost a lot in part because more money means more jobs. But for the California HSR and  the ARC tunnel the high costs, which some actors view as a benefit, are problematic and threaten (or killed) the projects. Hopefully in the future we can develop honest measures of success for evaluating projects. Privatization is not the obvious answer as private agencies are also subject to Machiavellian impulses.

By This Logic, Perhaps the Whole Thing is Flawed

The California High Speed Rail project has dropped Anaheim from the latest business plan. Two things to note about this. First, the Anaheim hub was, at one point, supposed to host more travelers annually than New York City's Penn Station, which is the busiest transit hub in the Western Hemisphere. Seems odd to just drop it, unless it really wasn't all that central. (In fairness, connecting the train to Disneyland is a good thing to do in the context of the project.)

Second, Rail Authority Chairman Dan Richard explained omitting Anaheim based on the cost of travel time savings:

Electrifying and improving the Los Angeles to Orange County route would cost $6 billion and save only 10 minutes of travel time, said rail authority Chairman Dan Richard.

"Why would we do that, pay $600 million per minute?" he said in an interview Friday.

Let's do the math here. The project is justified on travel time savings, and the Chairman has now said that $600 million per minute is too high a cost. At about $70 billion, the current project needs to save more than two hours (116 minutes) to justify the expense if each minute is worth $600 million. Yet Richard says $600 is too high, but by how much? The current (new) business plan offers about 2 hour and 40 minute service from San Francisco to Los Angeles on some routes. (How travel times didn't increase with the blended plan is still a bit of a mystery.) So, can you get from Union Station to San Francisco in less than or equal to 4:40 under current technologies? Yes you can. Flying is faster, even with airport hassles (Try Burbank to Oakland!). Driving is a bit longer, but is much more likely to get you exactly to your destination resulting in similar door to door times.

Using the Chairman's logic that $600 million is too expensive to save a minute, the whole project is too expensive. Time savings do not justify the current business plan.  I am legitimately curious how much is the right amount to save a minute. This is a major issue for transport planning, since nearly all new projects are based on increasing travel speeds and saving time.

To illustrate the absurdity of travel time savings, I put together this table of needed time savings for various costs pr minute. I used $600 million as the upper bound, since we know that's too high. I also assume that the project cost is already fixed as are travel times, and use the recent total cost from the business plan.

What this table shows is that as the cost per minute declines, the more minutes you have to save in order to justify the project. The proposed high speed rail project cannot be justified through time savings except when the project spends over half a billion dollars per minute saved.  Based on the Chairman's value of a minute at somewhere south of $600 million, I don't see how the SF-LA project is any better than the LA-Anaheim leg. His stated preference of value of time at less than $600 million per minute is belied by his revealed preference for a value of time of about $600 million per minute for the balance of the project.

UPDATE: The table didn't show up when I first posted this, so I added it. To be clear of my point with this post, the entire project costs about $600 million per minute saved, so I don't know why that should prevent continuing to Anaheim. A broader point is that travel time savings is a suspect way to justify a project, but it is the primary way to do so. If Chairman Richard thinks $600 million per minute saved is too much, then the overall cost of the project still has to come down because the time saved will not be sufficient to justify the expense.


UPDATE 2: The data presented in the table assumes that travel time and project cost are held constant (I mentioned this).  Since the rail will save about two hours, depending on various factors, the cost per minute of travel time savings is about $600 million, which is said to be too high. Table 2 illustrates what the project should cost at various values of saving one minute. The train will save about 120 minutes. If it is worth $400 million to save a minute of travel time, the project should cost $48 billion. This is a more straightforward way of thinking about the value of time.

Why Didn't California Propose a Faster, Cheaper and Better High Speed Rail Project in the First Place?

California's High Speed Rail Authority has come up with yet another business plan, and this one really is faster, cheaper and better. Or so they say. U.S. Secretary of Transportation Ray LaHood says this plan will:

"deliver the economic benefits of high-speed rail faster and more affordably."

Saying that this project, now at $68 billion for a blended approach, is "more affordable" is similar to saying that a slightly used Ferrari is "more affordable" than a new one. Sure, it is. But it's still awfully expensive.

More to the point, however, is that to me it seems that cutting the price of the project by a third ($30 billion reduction) and claiming that it is now a better project makes it seem like the Authority doesn't have any idea what it is doing. (I know the new head of the Authority is well respected and this is his new business plan. One of the things he is trying to do is establish credibility with the Authority, and perhaps this plan will help. We'll see.)Any proposal that reduces costs by one-third and promises greater benefits makes me suspicious as to why it wasn't the original proposal. With California High Speed Rail it is especially weird because lots of people have been thinking about and planning this project for over forty years. Over the past year this project has tripled in cost, seen the size reduced, added an additional decade of construction time, had the cost reduced by a third, time for construction reduced and benefits increased. It just seems that no one has been minding the store since Proposition 8 passed. Here are the new benefits touted by the California High Speed Rail Association in their new business plan (Page ES-6):

• Accelerated delivery of advantageous investments
• Expanded early benefits for rail passengers
• Reduced costs
• Greater cost-effectiveness
• Fewer construction and operating impacts on communities
• Coordinated planning and investments among state, regional, and local agencies
• Improved transportation and reduced congestion in metropolitan areas
• Reduced air pollution, including greenhouse gas emission

Without being snarky, I will point out that "reduced costs," "greater cost-effectiveness" and "coordinated planning" are not benefits in the absolute sense, and most of these are what should be reasonably expected for any project. Claiming as benefits that a publicly funded project will cost less than $100 billion and will be managed professionally should not be reassuring to anyone, regardless of their support for this project. Also keep in mind that jobs are a cost, not a benefit, so a $30 billion reduction in costs dramatically reduces any plausible employment gains.

Ultimately, all of the business plans, wild swings in price and size, and dubious claims of benefits leave me with the feeling that no one knows what, exactly, this train is supposed to accomplish. We can optimize transportation networks for various purposes, but I don't see any evidence that the California HSR project is being optimized for any reason other than to prove that it can be built, at any cost.