Austin Contrarian

Zilker isn't under siege

I fear that this piece in today's Statesman is a prelude to some sort of an initiative by a Council member to put a moratorium on VMU development in the South Lamar area.

This deserves a longer response than I have time for right now.  But whenever you hear a central Austin activist spin fantasies of a looming density doomsday, remember this:

Most of Central Austin is less dense today than it was in 2000.  Most census tracts in South Austin actually lost population between 2000 and 2010, including the neighborhood supposedly "threatened" by the new apartments:

This decline in population is mostly driven by shrinking household sizes in these neighborhoods rather than declining demand.   Given the demographic trends, though, it takes a fair amount of development just to maintain the status quo.  If everything proposed is built, Zilker might show a small gain in population in the 2020 census.  The neighborhood is not in danger of being overwhelmed by people.  

Handwringing over new VMU projects in Zilker is particularly unwarranted because the Zilker neighborhood is severely underzoned for multi-family:   only 11% of the Zilker neighborhood's residential property is zoned multi-family,  and of that, only 2.6% is zoned at the reasonably dense MF4 or MF5 levels.  The VMU designation added some theretofore off-limits commercially-zoned property to Zilker's miniscule stock of multi-family-zoned property.  Given the pent-up demand for multi-family housing in South Austin, it is no surprise, and should cause no alarm, that some is being built and more is being proposed.   

And if the new developments ultimately require us to make improvements to South Lamar or other area streets, so what?  We need to make improvements to South Lamar today.  The street historically was a commuter arterial catering almost exclusively to the automobile.  But it is urbanizing.  South Lamar has seen a lot of positive redevelopment since I wrote this in 2007.   Several small strip malls have been renovated recently.  The street has added restaurants and bars.  We've lost a handful of used car dealerships the last few years, one to an Amy's Ice Cream with a small playground.   The street needs some attention from the  city today, including more stoplights, crosswalks and better sidewalks.   If new vertical mixed use developments force the city to add stoplights and crosswalks, that should be a plus, not a negative, for those of us in the South Lamar neighborhoods. 

(Update: Original map updated with more recent, accessible version.)

Sometimes parking regulations don't matter

I think minimum parking requirements are bad policy.  If I had my way, the City would abolish its minimum parking requirements tomorrow. 

I'm a Shoupie.

But it's worth reminding oneself every now and then that the regulations on the books -- even the bad ones -- don't always matter. Minimum parking requirements don't matter when the market demands (or, at least, the developer perceives the market to demand) more than the minimum.

Greystar's proposed mixed-use project at 1200 S. Lamar (the South Alamo drafthouse site) is a case in point. According to the parking calculations on the site plan, the project will provide almost 60% more parking than code requires.

I'm sure this demand for parking is being driven by the Alamo Drafthouse. Anyone who's been to the South Lamar Alamo -- or tried to get take out from Suzi's China Kitchen -- on a Saturday night knows that the Alamo gobbles up parking.

There is good evidence that parking regulations do matter in general. They can matter a great deal in specific instances. How much extra space do we reserve for empty asphalt thanks to city regulation? We don't know and we can't know unless the city gets rid of its minimums. But it's important not to be seduced into believing that every massive parking garage or expansive surface lot is a manifestation of bad city regulation.

Jaywalking

The City of Austin is enforcing its ban on jaywalking.  Yes, jaywalking sometimes poses a high threat to drivers and the pedestrians themselves.  No pedestrian should cross a high-speed freeway like I-35, for example -- people are really bad at estimating the closing speed of a vehicle traveling the length of a football field every three seconds.  Pedestrians who misjudge traffic not only risk their own lives, but the lives of the drivers who swerve to avoid them.

But if the City really intends to enforce a ban on mid-block crossings of interior, arterial streets, it needs to give pedestrians a reasonable option.  The City leaves them with no reasonable choice on many of its "urban" streets -- unless one counts forsaking the walk altogether and hopping in a car as a reasonable alternative.

Take South Lamar.  It is one of the two main arterials through south Austin.  It is one of the busiest arterials in Austin, with (2009) weekday traffic counts of 36,000-40,000 along the main segment.  It is a major bus route.  It has a dense concentration of businesses both small and large on both sides of the street.  Property owners along the street have been investing in their properties, refurbishing and remodeling old stores or tearing them down for new, more pedestrian-friendly buildings.  New restaurants, bars, barber shops, coffee shops and pharmacies are springing up on either side.

But the street is still signaled as if it were a semi-rural county road.  The 2.5 stretch of South Lamar from Barton Springs to Panther Trail has just nine stoplights, including the lights at Barton Springs and Panther Trail.   Stoplights -- and thus crosswalks -- are spaced an average of 1,650 feet (0.31 miles) apart.  In some places, the lights are spaced nearly half a mile apart:

A pedestrian who wants to make a "midblock" crossing between, say, Hether and Lamar Sq. has a choice:  he can wait for a break in the traffic and dash the eighty feet across the street, or he can walk 1000 or so feet to the nearest light, wait through the signal, and trudge the 1000 feet back.  A 10 second dash or a 6-7 minute, roundabout walk?  It's an easy choice, particularly when its 105 degrees.   For those whose walk would start and end mid-block, a ban on jaywalking is a ban on walking.

The City is spending or plans to spend millions of dollars on grand plans to refashion East Riverside Drive and Airport Boulevard as pedestrian-friendly, mixed-use thoroughfares.  That's great, but it shouldn't irngore the low-hanging fruit.  It needs to begin treating urban arterials like urban arterials.

More:

South Lamar's spontaneous redevelopment (3/22/07)

Baby steps toward new urbanism (4/21/08)

Cops and water lines

As the comments here and here show, discussions of subsidies for suburban development often become entangled with discussions of the relative cost of city infrastructure and suburban infrastructure, and with density's impact on those costs.

I'd like to focus here solely on the dynamic of infrastructure costs.  The distinctions between capital costs, long-term variable costs and short-term variable costs seem to get muddled in the discussion of infrastructure, so let me use police costs as an analogy.  It will help to make some simplifying assumptions.

Imagine a city hiring its first police force.  It has to pay an upfront cost for training the policemen.  But after it makes that investment, its initial yearly labor expense is pretty low.  Young policemen aren't paid much, their health expenses are low, and their pension payments aren't due for many years.

But as the police force ages, it gets more expensive.  The city has to pay higher salaries.  Older policemen need more medical care.  And, eventually, everyone notices the looming, gigantic pension expenses.  The mayor and city auditor and the local newspaper begin to moan about excessive health and pension benefits and shortsighted politics.

Suppose the city's population is constant.  The residents pay the upfront cost of the police either through initial assessments incorporated into home prices or a tax levy.  But the per capita annual cost of the police force is low at the beginning.  As the police force ages, the per capita cost rises if, as we've assumed, the city maintains a stable population.  If the city's residents are in fact sensitive to their tax burden, though, some will move away rather than pay the higher per capita fees.  This will increase the per capita burden on the remaining citizens, which will encourage more to move, and so on in a vicious cycle.   (Something like this has played out in many aging midwestern industrial cities.)

Allowing density to rise breaks this cycle, or at least slows it, as long as the police costs don't rise as fast as the population.  And there's no reason they should -- there are a lot of fixed costs, and it won't take twice as many officers to patrol one square mile if the population of that square mile doubles. 

The same cycle will play out in any other city, including a suburb.  A young suburb in the early part of the cycle might seem to be in a better position -- and in a sense it is, since its day of reckoning is further away.  But it eventually will face the same reckoning.  Its police force, too, will become an ever-increasing burden, and its tax-sensitive citizens will move in increasing numbers -- unless the suburb attracts more residents over time.

Water and sewer infrastructure works almost the same way.  There is a large upfront cost, low initial expenses because young lines don't require much maintenance, but rising costs as lines age and break and water treatment plants wear out.  These culminate eventually in very large charges for digging up and replacing lines or replacing other infrastructure, which lead to a lot of hand-wringing by the mayor and the city auditor and the local newspaper.

A growing population helps with water infrastructure just like it helps with the cost of an aging police force.  A city cannot simply decree that people move within the city limits.  Most central cities don't enjoy a growing population.  But if there are people clamoring to move into the central city, the incumbent residents ought to realize that as a good opportunity to spread spread long-term costs among a larger population.

Why do voters vote for road subsidies?

Readers naturally interpreted this post as a criticism of suburban development.  I in fact believe that we over-subsidize suburban development through road construction, but I mainly wrote the post for two other reasons.  First, it is rather obvious evidence that those who claim drivers pay the full cost of roads are wrong.  And, second, there are a few central Austinites who claim that infill development actually imposes more costs on local governments than suburban development.  The County's subsidy is some evidence they are wrong, and in the comments Shawn hits on some other reasons they are wrong.

The proposed bond package and its likely approval raise an interesting question:  Why do central city voters -- and, for that matter, suburban voters who already have the roads they need -- vote to subsidize suburban roads?  It's a puzzle if we assume voters are rational and vote according to their perceived self-interest.   (I always start with that assumption rather than simply assume voters are dumb.)

It's not obvious.  The bond package, because it is a true subsidy, is a wealth transfer from the average voter to a relatively small group of property owners.  Subsidies like this also hurt central city property values because the improved roads make the suburbs relatively more attractive.  Enticing more people to the suburbs hurts other suburbanites, too, because it puts more cars on the suburban arterials, increasing congestion. 

Yet voters still vote for them. 

I don't know the answer, but one possibility is that voters think population growth is good.  Each new resident increases demand for doctors, dentists, restaurants, etc., which is good for doctors, dentists, restaurants, etc.  Population growth is good for property owners.  It is even good for downtown because it increases the pool of workers.   I agree that the "Texas jobs miracle" is mostly population-driven.  A larger population also sustains a greater variety of stores and restaurants. 

Another possibility is the expectation of reciprocity.  Perhaps there is an implied compact that I will support road subsidies for you if you support road subsidies (or bicycle lanes or parks) for me when it's my turn.  I'm a bit more skeptical of this explanation but I throw it out there.

Maybe someone has a better explanation.

N.B.  Note that voters don't have to believe that population growth is good per se.  It might be enough if they believe that population decline relative to peer cities is bad.  If that's true, then lots of road building by peers would spur more road building here.

See the comment by Jim below, however.  He's got a much more sophisticated, empirical analysis.

We really do subsidize suburban growth

There's not much direct subsidy of suburban subdivisions -- developers pay for all interior roads and sidewalks, sewer and water hookups to City lines, and drainage and water retention facilities.  They pay steep fees for City reviews and inspections.  Depending on the size of the project, the City might require the developer to build on-site facilities like wastewater treatment plants.  The City charges impact fees on top of these costs, and also can make developers pay the cost of off-site improvements that are roughly proportionate to the development's impact.

The real subsidies are the large amounts of money we spend to construct and improve the arterials that serve the suburban developments.  Travis County has just proposed another such subsidy -- $133 million in bonds, mostly for new and expanded roads in the City's suburban fringes, particularly the rapidly developing northeastern part of the county: 

"Precinct 1 is where most of the action is occurring, and it has the greatest need," said Steve Manilla , county executive for transportation and natural resources. "Typically what happens is that development moves in, they do minimal improvement to the roads and then all hell breaks loose. We're trying to get ahead of the game."

The bond projects, which would be built over the next seven years, include six new roads and the design of a seventh; widening of seven other roads, typically from two lanes to four; rehabilitation of three aging bridges; and raising several other roads and low-water crossings to make it less likely that water will overtop the pavement.

The Statesman's graphic makes the point more vividly:

It is theoretically possible that these improvements could pay for themselves.  The roads will increase property values in these areas; higher property values mean higher property taxes.   But Travis County collects just 47 cents per $100 of assessed value.  Using reasonable assumptions, the present value of the future stream of county taxes generated by $100 assessed value is $9.4.  Thus, the roads must increase property values by around $1.4 billion to pay for the cost of construction.  But that doesn't include the annual cost of maintaining these roads.  If we assume the lifetime cost of maintenance equals the cost of construction, these roads must generate a net increase of $2.8 billion in property value to pay for themselves.  That's the equivalent of 15,000 $180,000 homes that would not be built but for the new roads.

According to a rigorous analysis I conducted by staring at the ceiling with my eyes closed, these roads won't yield anything close to that value.  This means the roads won't pay for themselves and the average Austine will be kicking in money to make up the difference.  I.e., a subsidy.

Misinterpreting the heritage tree ordinance

As I implied here, the Planning Commission should have conducted a cost-benefit analysis before denying a permit to remove the Bowie Street heritage tree.  Under any reasonable cost-benefit analysis, the tree should go.  Ignore the environmental benefits of denser development downtown, the spillover benefits to the neighbors in a rapidly emerging downtown neighborhood, the goal of promoting a more walkable downtown.  Ignore the hit to the property owner, who must now find another buyer who almost certainly will pay him less money.

Just consider lost tax revenue.   Endeavor agreed that something eventually will be built on the property, but it will be smaller, and it won't be built by Endeavor.  Denying the tree permit will delay the development of the property.  We have a developer, today, willing and ready to move.  It could take months or years before another developer steps forward. 

Even a six month delay will cost local governments a bunch of money.  If we assume that whatever is built will have an assessed value of $100 million, then each year of delay will cost local governments more than $2 million.  Even a six-month delay -- a wildly optimistic assumption -- will cost taxpayers over $1 million.  How many people will state, on the record, that The Tree is worth $1 million?  Or, more to the point, $1 million more than the mitigation offered by the developer -- replacing the tree with 20 five-inch trees in Duncan Park, repairing and pruning stressed trees in the park, and kicking in money for a downtown tree survey?  The pecan tree is big and healthy, but otherwise nondescript; it is not fully visible from any vantage other than a driveway entrance off Bowie; it does not shade any sidewalks. 

But PC approved the tree because at least three members believed they had no choice but to deny the permit.  As they read the ordinance, the property owner was required to show that the tree prevents every reasonable use, and it is undisputed (including by the developer) that a fairly tall residential development is possible even with The Tree.

These PC members misread the ordinance. 

What's "The Tree" worth?

This story has generated a lot of buzz and twitter.  On Tuesday, Austin's Planning Commission denied a variance to remove a big tree on a downtown property at Bowie and W. 5th.  The denial might -- and likely will -- obstruct the construction of a tall, dense residential or office tower on a piece of property that City Council just zoned for a tall, dense residential or office  tower.  

The backup packet for the PC agenda item (TP 10617196 Bowie Street (311, 313, 315)) is here (pdf). 

I'll have more to say about this issue in later posts.  But for now, I'd like to focus on just one question:  What's The Tree worth?  We put an implict value on a tree every time we insist the tree be preserved or allow it to be removed.  Insisting that a tree be preserved means we deem the tree's benefit to the community outweighs the cost to the community of lost tax revenue and positive spillovers from the development.   And vice versa. 

It's not obvius how one should value a "protected" or "heritage" tree.  I think the valuation is intrisically subjective, which is one of the problems with the heritage tree ordinance.  But there's no way to avoid implicitly pricing the tree.   The Planning Commission implicitly valued The Tree at more than $90,000 $70,000 because it rejected the developer's offer of $90,000 $70,000 for "mitigation costs."

I'd like to hear from readers what you think The Tree is worth.  How much do you think the City should be willing to pay to buy The Tree outright?  What is the maximum amount of tax revenue the City should forego to preserve The Tree?  If the City were to sell the right to remove The Tree, what minimum price should it demand?  The three questions should yield the same answer.

I'm not interested right now whether you think the project is feasible with The Tree in place, or your estimate of the lost tax revenues, or whether you think PC has the authority to consider a tree's benefits when weighing a variance, or whether you think PC's decision complied with the heritage tree ordinance criteria.

The Tree is a pecan tree.  It is approximately 60 years old.  It is 57' tall and has a roughly symmetrical canopy with a 55' diameter spread.  It has a 32.0 inch diameter at breast height.  The City arborist rated The Tree in "good" condition, and the developer did not dispute that The Tree is healthy and in good condition.  It is set back 90' or so from Bowie Street and approximately the same distance from W. 5th St.

Here are some photos.

These photos were taken from the driveway entrance to the property.  This is the only street-level vantage from which The Tree is visible from root to crown.  I'm sure some residents of the Monarch high-rise just across Shoal Creek have a full view.

Here are a couple of closer shots:

Here is aphoto of the property looking south from the other side of W. 5th.  The small buildings lining W. 5th are not part of the property at issue and would not be torn down to build the project.

What say you?

NB.  Because valuations like this are intricially intrinsically subjective and personal, there are no right or wrong answers.

Another NB.  The Tree cannot be moved to another site because its roots are too deep, if that affects your valuation.

What's a "road" project?

CAMPO met last night to approve a list of transportation projects.  Among the projects it approved is a bicycle bridge on MoPac (a limited access highway) acrosss Barton Creek.

Ben Wear took a potshot at this project on Monday: 

The people who make transportation policy for Central Texas will decide tonight how to divvy up $132 million from the Legislature and Uncle Sam.

If they go with a list of projects that has bubbled up from the Capital Area Metropolitan Planning Organization over the past few months, bike, pedestrian and transit projects will get almost 40 percent of the money.  That includes almost $5 million for a bicycle bridge on MoPac Boulevard (Loop 1) at Barton Creek taken from funds that, by state law, are supposed to go only to road improvements.

And the list, if approved, would represent a departure from the CAMPO board's longtime policy on what percentage to spend on bike and pedestrian projects.

Ben clearly doesn't believe that a bicycle bridge qualifies as a "road" project: 

Almost all of the Proposition 12 projects on the proposed CAMPO list clearly are for roads, including $11 million to improve congested intersections on Loop 360, $14.4 million for studies on putting toll lanes in the medians of U.S. 183 in Northwest Austin and MoPac south of the river, and $13.8 million to widen FM 685 near Hutto.

But the $4.9 million for that MoPac bike bridge, at the least, stretches the definition of a road project.  The City of Austin proposed it a few years ago, hoping to create an alternative for cyclists who brave the heavy and fast-moving traffic on that bridge before returning to the frontage roads north and south of the creek.

Ben concludes:

Building the bridge might be a good thing.  It could encourage a lot more Southwest Austinites to cycle to Central Austin for work or play.  But is it a road project?

Ben meant this to be a rhetorical question, and I agree that it is, but it's rhetorical the other way.

There are a couple of ways to approach this.  The first is that we should not equate "road project" with "projects that benefit only vehicles."   Roads are used by vehicles, bicyclists and (sometimes) pedestrians.  Roads can be improved to benefit motorists, bicyclists, pedestrians or all three.   Road improvements that benefit solely pedestrians or bicyclists are still "road" improvements. 

Although this plan calls for adding a separate, parallel bridge, that's a distinction without a difference.  We could add a reserved bicycle lane to the MoPac bridge but that would probably be more expensive than adding a separate bicycle bridge.  The bicycle bridge should be thought of as a more cost-effective way to widen the MoPac bridge than actually widening the MoPac bridge.

I'm sure I'm in the minority here.  But there's another way of thinking about this particular project.  CAMPO intends to convert the existing southbound lane from a shoulder used by bicyclists to a vehicle lane.  The road improvement will improve vehicle traffic at the expense of bicycle traffic.  Even if we postulate that "road improvements" means "improvements solely for the benefit of vehicles," it's still fair to require that road projects include money for mitigating their impact.

Suppose that the road project were instead the widening of a street in central Austin that required the elimination of existing sidewalks.  Wouldn't replacing the existing sidewalks count as part of the "road project?"  (Rhetorical question!)  Wouldn't restriping the bicycle lane on the widened street count as a "road project?"  (Ditto!)

The harm a road "improvement" can cause bicyclists and pedestrians is just one type of negative spillover.  A more general point is that the government builds roads for vehicles without accounting for their full costs.  It's a truism that taxpayers who don't use roads much subsidize roads for those who do.  But subsidies aren't the only issue.  Road "improvements" often impose very serious costs -- real financial losses -- on others.  TxDOT routinely replaces at-grade streets with elevated highways and frontage roads and bars abutting property owners access to the frontage road.  That's a big deal when the property was worth something only because it had highly visible, convenient access to the at-grade street.  But the Texas Supreme Court has a distinguished history of concocting reasons to let TxDOT off the hook .  (For example, loss of access is not compensable merely because the project requires "increased circuitry of travel."  Ask a store owner what happens to business if his customers suddenly have to drive two miles out of their way.)

The right question is, "Is the bicycle bridge worth the cost?"  Even though it counts as a "road" project, it might not be worth building.  That's a topic for another time, but I'll note for now that the MoPac bridge is the only access for bicyclists traveling from the 360/MoPac interchange to William Cannon, Oak Hill and points south without a several-mile detour up 360 to South Lamar and then back down the frontage road to Brodie Lane or MoPac.   That's not really a practical alternative.

The Downtown Austin Plan would indeed penalize density

The Downtown Austin Plan's most controversial proposal is not to make the 2008 intermim "density bonus" program permanent, but to eliminate CURE zoning.  (CURE stands for "Central Urban REdevelopment").   The recommendation provoked a sharp debate at the City Council's August meeting and it will provoke another one when the City Council takes up the Plan again in October.  City staff has now recommended that the City keep a modified CURE option, validating what I and many others have contended for years:  implementing a density "bonus" program while simultaneously eliminating CURE zoning would penalize density. 

A bit of background.  The City does not impose height limits in the Central Business District outside the Capitol View Corridors, but it does arbitrarily cap floor-to-area ratios ("FAR").   The City caps both height and FAR in Downtown Mixed Use districts.  Most of west Sixth Street between Lavaca and South Lamar -- an area experiencing rapid densification -- is zoned DMU rather than CBD, so the height and FAR caps have particular bite there.

The City for years has had a process for increasing FAR and height limits downtown, namely CURE zoning.  CURE combining districts are allowed to redevelop buildings that are at least ten years old or to develop vacant lots.  Because the CURE regulations do not specify what benefits a property owner/developer must offer, the process results in a lot of ad hoc negotiation between the City and developers.  A developer typically agrees to participate in the Great Streets program and kick in money for parks or affordable housing.

In 2008, the City adopted the interim density bonus program.  The main provision requires developers who want to build residential space in excess of the allowable FAR either to devote 10% of the extra space to affordable housing or pay a per-square-foot fee on 100% of the extra floor space.  Commercial developments must pay half of the fee on the extra floor space.

The Downtown Plan proposes eliminating CURE as an alternative to the density bonus program.  I and others have argued that this will raise the effective price of extra density, which is bad policy because extra housing and office space downtown produces many spillover benefits.  Raising the price might not eliminate all requests for additional density, but we should expect it to have an impact at the margin.

Proponents of the mandatory density bonus program, however, have argued that it is better than the CURE process because it provides developers and property owners a cheap (a relative term in Austin), predictable, administrative approval, as opposed to the ad hoc, expensive and unpredictable CURE zoning process.   The mandatory density bonus program, in other words, effectively lowers the price of density, or so these advocates have claimed. 

The market has proved the proponents wrong.  In the three-plus years since the interim density bonus program was adopted, no developer has sought extra height or FAR under the density bonus program.  Every developer who has sought additional entitlements has used the CURE process.  If developers consider the density bonus a cheaper alternative than CURE zoning, then they would use it.  They don't, which implies that making the bonus program mandatory would raise the price of density.

City staff more or less agrees with this view.  City staff now recommends that the City keep the CURE process for now.  Staff notes that no project to date has sought additional height or FAR through the density bonus program.  Instead, all have opted to do so through CURE combining districts.  It proposes that the CURE program be modified to require the developer to show that it has provided the density bonus program benefits to the maximum amount feasible.  This would require developers to show which provisions could be met by the project and to demonstrate that compliance with certain elements of the project would make it financially infeasible.

Staff understands that CURE is useful as a benchmark for measuring the real cost of the density bonus program.  Or, as staff puts it, keeping CURE zoning would provide "useful information on the economic and financial realities of compliance with the Downtown Density Bonus program." 

Staff also recognizes that raising the price of density might discourage housing or office space at the margin.  Specifically, it states:

One of the charges made against a density bonus program (when CURE is not an option) is that it unduly "penalizes" projects.  If, in fact, a density program did do that, and if CURE was not available, then no project would seek additional density -- and no community benefits would be achieved.  

That is equivocal enough, but when combined with its recommendation that the City retain CURE zoning in some form, it is an admission that the density "bonus" program might indeed discourage density.

My view, of course, is that we should allow unlimited FAR and height (outside the view corridors) as a matter of right, and impose reasonable design guidelines to ensure that new development contributes to a pedestrian-friendly, authentically urban environment.

I've argued some of these points before here and here.

More coverage by Wells Dunbar and Community Impact News.