Pricing the Chevy Volt: Sorry Toyota

Pricing for the Chevy Volt was announced yesterday. The cars will sell for about $41,000, minus a $7,500 tax credit. So the actual price is closer to $33,500. That tax credit was the subject of substantial lobbying from General Motors, especially once the company realized that they had to price the car over forty grand.

The trick to these types of tax credits is that the companies lobbying for them want the credits for their products only. To ensure that other electric and hybrid vehicles wouldn't be eligible for the credits, GM argued for the credits allocated by battery size. The larger the battery the larger the credit. Here is how the GM Volt blog describes the credit:

Sweetest for future Volt buyers is what’s called the Transportation and Domestic Fuel Security Provision.

This provision provides a tax credit for buyers of plug-in electric vehicles. It provides a base of $2500 plus an additional $417 per kwh for batteries greater than 4 kwh. For the Chevy Volt, that works out to $7500 per car, a number GM had lobbied for.

Because the Volt has a 6kwh battery, the car gets the full amount of the credit. Toyota's Prius only has a 1.5 kwh battery, so they don't even qualify for any part of the credit. As you might expect, Toyota isn't happy about this.

A last point is that the lease available for the Volt seems like a good deal. You can lease the car for $350 per month. For every lease, GM gets the $7,500 tax credit. That's why GM is pushing leases. They will get paid by the US government for each car, have their customers pay for the depreciation, then get the cars back in two years to sell again. It's a good deal. It's not a nefarious situation, but rather I point all of this out because the pricing has been predictable for sometime. In a counter-factual situation, I expect that in the absence of the tax credit the cost of the car would have been about $33,500.

UPDATE: Matt Kahn discusses other strategies about the Volt pricing here.

Happy birthday to LA's Metro Rail

Los Angeles has now had a rail transit system for twenty years. Has it lived up to the promises made by boosters? Not necessarily according to people quoted in this LA Times article:

Rather than bolster ridership, these experts say, the emphasis on rail has come at the expense of the MTA's vast network of buses and may have cost the agency at least 1.5 billion passenger boardings from 1986 to 2006.


"Overall, the push for rail has forced transit ridership down," said Tom Rubin, a veteran transit consultant and former chief financial officer for the MTA's predecessor. "Had they run a lot of buses at low fares, they could have doubled the number of riders."

Officials from the MTA were oddly not available for this story, so they didn't respond to this critique. But here is what the paper explains:

Rail transit advocates contend that it is premature to judge urban rail's performance because the local systems are not fully developed and have yet to substantially benefit from being part of a broad rail network.

In the future, it is possible that more high-density housing and commercial centers will be built near light-rail and subway stations, which could boost ridership. Advocates say that mounting traffic congestion and an aging population also will increase demand.

There is no doubt that it is possible that "more high-density housing and commercial centers will be built near light-rail and subway stations, which could boost ridership." Lots of things are possible in the future, and these are in the range of possibilities. But how long is reasonable to wait for the benefits? The rail system is 20 years old. The population of the region has increased 20% since 1985 yet fewer people ride transit in Los Angeles than in 1985. There is still lots of congestion. Do we need to wait another 20 years to evaluate the benefits of rail in the area? If some of the benefits are delayed because of the incompleteness of the system, what scheduling choices and priorities should have been made years ago to speed up the process? How should we pay for transportation investments that don't return benefits until long after the bills are paid? Would stronger regional planning have improved the outcomes? Mayor Villaraigosa is thinking about some of these issues with his 30/10 plan, but there are many more issues to resolve.

Greetings from nutzo-ville: crazed adventures in eminent domain

It's pretty rare for zoning and development issues to become national topics, but a proposed Muslim community center in lower Manhattan has become an exception. Oh, some people are calling the proposed center the "Ground Zero Mosque." Apparently because it is in the neighborhood of the World Trade site. Anyhoo, this is pretty simply a local land use issue. The relevant questions are things like: Does the proposed building and use conform to the zoning code? Does the community approve of the project?

Not to be out-crazied by outsiders, New York gubernatorial candidate Carl Paladino promises to make the situation much, much worse if elected governor by invoking eminent domain to stop the project. Eminent domain is an imperfect and very often problematic tool used for land assembly. The idea that eminent domain can or should be used to block perfectly legal and constitutionally protected uses and rights is a bizarre and dangerous position, and it is absurd that someone would run for governor on the platform that he will strip private property owners of their economic rights if he disapproves of a proposed use. The community center is clearly a local land use issue and should be left that way. The politics of planning are bad enough without such additional headaches.

How much is a parking space really worth?

Cities are lousy with parking spaces. Most of the spaces are required through the zoning code, even in Manhattan where parking requirements were enforced until 1982. Even before parking requirements New York City was planning for automobiles into lower Manhattan. For these and other reasons, there are plenty of parking structures in Manhattan. To park in these spaces is expensive--upwards of $1,000 per month in some places--but is parking an efficient use of the space?

To help think about this, the Wall Street Journal has a story about a converted parking garage that is now apartments. The apartments rent for $12,000 per month for a two-bedroom. That's a lot of money! Since the apartments are about 1,500 square feet, that's about $8 per square foot per month. Monthly parking in the same area starts at about $450, or about $1.50 per square foot per month! Even with the improvements that make these spaces apartments that's a pretty big difference. There is far more value in living spaces than parking spaces.

CNN thinks you should stay calm and keep your eyes closed while driving

CNN has a story about "righteous rage" where they oddly relate getting mad at other drivers with Mel Gibson's loony-tunes outbursts, missed bar mitzvas and Carlos Zambrano. It's a weird and aimless story, only made weirder by the caption under the lead photo of a man yelling out of his car window while driving (photo above):

Close your eyes and think of something calming if anger is flaring up, experts say.

I'll go out on a limb and say that if you have a bad case of road rage you really shouldn't choose that time to close your eyes and think calm thoughts. Be sure to pull over first.

Revisiting the bad old days of the NYC subway

(WSJ piece via Streetsblog)

In light of the new proposals from the New York MTA to raise fares--including raising the caps on unlimited ride monthly passes, which benefit higher income riders--the Wall Street Journal revisits one of their articles from 1988. The late 80s were a period when transit use and overall population in New York were in decline. The subway system was perceived as dirty (it was) and dangerous. Here is the beginning of the story where the problems and improvements are described:

To most people here, the New York City subway system is a cesspool — a dark, dangerous, filthy place where homeless people live and others venture because they must. Stations and platforms smell. They are used as latrines, in part because the city has padlocked most public restrooms. New Yorkers will tell you that train service stinks, too.


So it’s easy to understand, then, why Charles Marto was rather confused when he descended into the dimly lighted subway station at noon one day recently and figured he had walked into yet another transit screw-up.

Trains were passing through the station thick and fast. “I thought there had been a breakdown and the trains were backed up,” says Mr. Marto, a legal assistant in mergers and acquisitions at a Wall Street law firm. He certainly didn’t expect to see all those trains in the middle of the day.

The astonishing thing he was witnessing was an improvement in service, one of the many always-surprising changes for the better in the subway system. Mr. Marto had happened onto “MidDay Business Service,” the Metropolitan Transportation Authority’s effort to persuade New Yorkers of a certain age and median income to take trains instead of taxis between Wall Street and midtown Manhattan as they go about the city on business. Promoters think it’s the perfect way to get to a power lunch. And they’ve spent a million dollars since the end of February touting the idea.

In these days of shrinking budgets and expensive capital improvements, I think it is important to remember how far the transit system has come in the past 25 years. Many New Yorkers have no recollection of the bad old days of the subway. Without careful management and planning, transit can decline substantially in terms of usage, service and reliability. It has in the past, and will likely again in the future just because these things often are cyclical to a degree.

Of the many things that sparked NYC's renaissance in the 1990s, perhaps improved transit service in the form of increased reliability, safety and service plus improved transfers and fare policy from the Metrocard is an under-appreciated causal effect. Improved transit service improved accessibility and made the city safer and more livable. That probably had a larger effect on most New Yorkers than a cleaned up Times Square.

Unlike most cities, New York had little choice except to improve existing services. In most US cities, transit improvements focus on new infrastructure and capturing new riders rather than making the existing service better. Even though NYC is unique with regard to density and subway provision, perhaps there are broader lessons to learn about investment priorities for better transit choices and city desirability.

Removing freeways to build community

There is growing interest in removing the Sheridan Expressway in the Bronx according to the NY Times. As the paper reports:

For more than a decade, a plan pushed by some South Bronx residents and transportation advocates has sat on the fringes of the State Transportation Department’s to-do list, in part because it would be a radical undoing: tearing down the Sheridan Expressway.

Although the plan has no real precedent in New York, advocates recite the benefits. They say it would ease traffic, improve neighborhood life and right a decades-old wrong committed by the master planner Robert Moses of building an unnecessary highway.

Later in the article the author does manage to cite a precedent in New York:

The last major removal of a New York City highway was of elevated portions of the West Side Highway, most of which were removed in stages from 1976 to 1989. (In 1973, a truck fell through the highway at Gansevoort Street.)

So maybe a collapsed freeway isn't the best comparison. The Sheridan Freeway did get a $27 million fix six years ago, so it is in good shape. I'm not sure I agree that we are rolling back the freeway system, as John Norquist argues:

“We’re rolling back the freeway system,” said John Norquist, president and chief executive of the Congress for a New Urbanism, a group based in Chicago that promotes walkable cities. He pointed to Portland, Ore.; San Francisco; and Milwaukee, where he was mayor, as cities that have removed highways running through urban areas.

Transportation networks, freeways included, expand and contract all the time. The do so slowly and because the investment is so high it makes news when it shrinks. There seems to be more interest in keeping freeways but covering them than removing them entirely.

Here is another quote that I generally agree with but think the causality of why cities are rethinking roadspace is different:

“This proposal is really rooted in the environmental justice battles that low-income communities have been fighting for decades,” said Joan Byron of the Pratt Center for Community Development, a member of the campaign to remove the Sheridan. “If you look at globally competitive cities, they’re all looking at the spaces they gave over to highways decades ago, and they’re rethinking those decisions.”

Eliminating a major thoroughfare without making other transport improvements is problematic. The globally competitive city of Seoul, Korea, for instance, has converted quite a bit of roadspace into parks and other non-auto uses. But the city simultaneously expanded their bus rapid transit system in order to capture displaced drivers. The early evidence is that Seoul was successful in their endeavor.

I'm not sure why only globally competitive cities would rethink roadspace, but I'll argue that cities are thinking about congestion, environmental concerns, financing infrastructure and other transportation issues that play into quality of life and economic competitiveness. Rethinking highway space is an outcome, not an initial condition.