Austin Contrarian

I forgot about Cap Metro's interests

Last week, I concluded that the plan to add two tolled lanes to MoPac would make everyone better off than either maintaining the status quo or adding two free lanes.  But it occurred to me that I haven't considered everyone's interests.   Cap Metro's, specifically.  Isn't it likely that Cap Metro will be worse off?

As I noted last time, congestion-pricing will be a boon to bus riders.  They will get much shorter, more predictable rides.  But these buses run from the stations (Leander and Lakeline) that provide the bulk of Cap Metro's morning boardings.  Cap Metro is to some extent competing against its own buses for its rail riders.   (Cap Metro's surge in rail ridership last year occurred after it scaled back its express bus service from Leander and Lakeline.  The reduction in bus service might not have been the sole cause of the bump in ridership, but it surely played a part.)  

The shorter, more reliable bus trips will inevitably attract some current rail riders.  What's more, Cap Metro will be under a lot of pressure, I predict, to expand express bus service when the tolled lanes open.  The benefits for express bus riders are one of the big selling points of congestion pricing.  Free-flowing lanes will make it possible to offer reliable express bus service during the very the peak of the peak of the morning commute.  Cap Metro will be in the difficult position of either providing great, new express bus service at the cost of its rail ridership or refusing to provide great, new express bus service to preserve its rail ridership.

Perhaps it's not useful to frame this in terms of Cap Metro's interests.  Cap Metro's mission is to provide quality, cost-effective public transit.  If changes occur to the transportation network that allow Cap Metro to provide better public transportation, then we should count that as a win, even if it puts Cap Metro in a difficult position institutionally. 

So perhaps this is a better way to frame the point:  adding congestion-priced lanes to MoPac will put more pressure on the Red Line.  Cap Metro is running the Red Line today at an unsustainable subsidy of $33.98 per rider.  I don't know how Cap Metro plans to reduce that subsidy to a reasonable level.  I'm pretty sure, though, that improved bus service on MoPac will make the path more difficult. 

The Freeway Congestion Paradox

I've gotten some pushback on my claim that adding two congestion-priced lanes to MoPac will increase capacity more than adding two free lanes.

This is the Freeway Congestion Paradox:

Chen and Varaiya, in their article entitled "The Freeway Congestion Paradox," have demonstrated that, once freeway vehicle density (measured in vehicles per mile) exceeds a certain critical number, both vehicle speed and vehicle flow (measured in vehicles per hour) drop precipitously.  They have demonstrated the phonemenon with actual data from a section of westbound I-10 in Los Angeles.  Until 5:10 am, a flow of 2,100 vehicles per lane per hour is maintained, at a speed of 58 mph.  As density increases after 5:10 am, speed steadily drops, until at 7:00 am speed is a stop-and-go 15 mph, and flow decreases to 1,300 vehicles per lane per hour.

The Federal Highway Administration commissioned a study in 2008 that looked at data from Washington, DC freeways.  From the summary:

Highway studies have determined that once traffic volumes exceed the capacity of the roadway, the system can rapidly "break down" to the point where all traffic slows markedly, and the capacity and throughput of the roadway drops precipitously.

They produced neat graphs depicting the drop in capacity caused by stop-and-go traffic, like this one:

This chart pairs vehicle speed and total volume carried (see pp. 15-16 of the report for more discussion).  The dots are connected in temporal sequence, so it's possible to follow the evolution of the traffic jam.  The graph has a a random-walk component, but basically it confirms two things.  First, low throughput volumes are associated with low speed (i.e., stop-and-go traffic).  Second,  after the critical threshhold is passsed, it takes traffic a long time to recover. 

Here is the same chart, except I have drawn over some of the line segments in red.  This shows that once the tipping point is reached, traffic speeds and volumes drop and take a long time to recover.   (Just trace the red line segments starting at "A").

Congestion pricing would have prevented congestion from reaching the tipping point, effectively increasing the highway's capacity.

Rush-hour traffic on MoPac today is the stop-and-go 15 mph type.   Adding a new, free lane would probably shorten the period when the highway is clogged, but it would still be clogged for long stretches of time.  During these periods, a new, free lane would carry less traffic than a tolled lane.

When congestion is not bad, the toll should be low.  That's one of the attractive features of variable congestion pricing -- the price, in fact, should be zero when the marginal cost of congestion is zero.  (According to the Statesman, CTRMA might charge a nominal amount like a quarter to avoid confusing people.  Which confuses me.)  Put differently, the new lane should "act" like a free lane when traffic is not bad.

Congestion, envy and equity

The Central Texas Regional Mobility Authority plans to add two lanes to MoPac between Lady Bird Lake and Parmer Lane.  The cool part of the plan is that it intends to use dynamic congestion pricing -- i.e., the toll will fluctuate as necessary to keep traffic in the the tolled lanes flowing at 50 mph.   The six existing lanes will remain free.

This is how we ought to add new capacity.  It will make everyone better off.   The people who choose to pay the toll will be better off because they value the time savings more than the cost of the toll.  Bus commuters will be better off -- they might be the biggest beneficiaries, in fact -- because they will get a suddenly much shorter commute for (I presume) the same bus fare.  Drivers who continue to use the free lanes will endure slightly less congestion, even if it's just a narrower period of peak congestion.  Finally, taxpayers, if not better off, will be no worse off because they won't have to pay for the extra capacity.  The capacity will be paid by those who value and use it.

Everyone will not only better off compared to the status quo, but . . . and this is the key point . . . they'll be better off than if the two new lanes were free.   Adding two free lanes would reduce congestion, too, but they would reduce congestion less than two new tolled lanes.  Tolling congested lanes increases their capacity.  A congestion-priced lane can handle 1,800-2,000 cars per hour; an unpriced lane during peak congestion will handle less than half of that.  Somewhat counterintuitively, perhaps, charging for a congested lane is a sure way to get more cars through it.

Obviously, drivers happy to pay the tolls to skip congestion would be worse off if the new lanes were free rather than tolled.  Bus riders who would lose out on a faster commute would be worse off if the new lanes were free.  Taxpayers stuck paying for capacity that they might not value would be worse off if the new lanes were free.   But, because tolling lanes increases their capacity, even the drivers who would not use the toll roads anyway would be worse off if the new lanes were free.  They would have to contend with more congestion.   

Congestion pricing is a no-brainer.  So I was puzzled when Ben Wear raised the equity angle in a companion column.   After pointing out that all drivers would benefit from the congestion reduction from the new lanes, he concluded:

Undoubtedly however, those with money will be able to use the variable-price lanes more often than those on a budget.

It may become something of a spectator sport for those caught in MoPac congestion to count the number of Lexuses, Mercedeses and Escalades that fly by in the express lane.

It ain't necessarily fair. But in the words of John F. Kennedy (who certainly could have afforded to use this lane), life is unfair. And it will help pass the time.

It's strange to complain about fairness when everyone will be better off with new tolled lanes than new free lanes.  

But it's especially strange to complain about fairness because, once the lanes open, the only people on MoPac who will be causing a net social loss will be the drivers in the free lanes.

 This is basic congestion theory but most people still don't get it.  When you enter a congested highway, your mere presence inflicts a cost on everyone else.  Every car behind you is delayed just a little bit, maybe only a few seconds each, but the delay affects a bunch of cars.  Getting in everyone else's way imposes a social cost.

There's not a lot a driver can do about that today.  We can't even say for sure what cost each driver is imposing on everyone else.  But once the toll lanes are built, we'll know.  We'll know because the congestion cost each driver imposes on his fellow drivers will be approximately equal to the price of driving in the congestion-free lane.  That's one of the quirks of the economics of congestion -- it turns out that the cost of congestion a driver imposes is equal to the congestion-clearing price.

Once the toll lanes are built, drivers will have a choice.  The people who enter the tolled lane will be precisely the drivers willing to pay the cost of their congestion.  The toll lane will allow them to pay that cost and get out of the way of everyone else.

The people who don't pay the cost are people for whom, say, 15 minutes in time savings isn't worth the $3 toll or whatever it turns out to be.  That's most people, presumably.  But saving 15 minutes is worth something to them.  If you value the time savings at $1, you would incur a $2 loss by taking the tolled lane.  But you will impose a $3 loss on your fellow drivers if you stay in the free lanes, because we know the cost of your congestion is equal to the toll.  Staying in the free lanes produces a net social loss of $1.

Congestion is socially-sanctioned selfishness.  It's ok only because everyone does it.  But if we'd get used to thinking in terms of costs we're inflicting on everyone else, there'd be less moaning about those paying for the cost they're imposing while we mooch our way down the free lanes.  

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)

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.

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.

Urbanists should care about taxi cartels

They really, really should.

The main constraint on denser commercial and retail on streets like South Lamar is not traffic, but parking.  An architect friend told me that a surface parking space needs a minimum of 325 sf.  That's a lot.  It's so much that many of the small strip malls on South Lamar wouldn't be redeveloped even if parking minimums were eliminated.  (The City imposes other significant hurdles to redevelopment, of course.) 

If every trip is by car, then we need more parkings spots per car.  The right way to think about taxis is not as an alternative to a car trip, but as an alternative to parking. 

Taxis are also important to people who want to go car-free.  These people need a range of travel options.  Buses and bikes aren't enough.  Car2Go and more traditional rentals fill a niche.  But taxis are important, too.  Some trips don't warrant renting a car but are too cumbersome to make by bus.

So a healthy urban environment needs reliable taxi service at reasonable cost.  The City makes taxi service less reliable by making taxis scarcer, and it makes the rides more expensive.  It thereby encourages more parking, albeit indirectly.  Urbanists ought to care about this.  They ought to complain.

Austin's taxi cartel

The Austin City Council restricts the number of city taxi permits (to 668) and restricts who can get them (just three companies).  It thereby enforces a taxi cartel.  The City Council just received the report of its taxi consultant, Ray Mundy, whom it paid $50,000 to advise it on (1) how to strengthen the cartel, and (2) how to divvy up its spoils.  Most of the debate in town has centered on (2).  Apparently, there is no public consensus on how to divide the surplus profits generated by a cartel-- probably because in most industries, cartel members go to jail once the cartel is discovered, which makes them reluctant to conduct public discussions of cartel profits. 

The nascent pedicab industry in downtown Austin must be cutting into taxicab profits.  Or maybe not.  Perhaps Mundy simply spotted a free market in need of old-fashioned price fixing and market allocation schemes: 

As for pedicabs, Mundy said Austin has too many companies offering the service, an uncertain fare "system" and a good number of unsafe vehicles.

He suggested that the city stop issuing permits to new companies and somehow encourage that industry to consolidate.

Mundy also said that the city should allow only pedicabs specifically manufactured as a unit, banning the makeshift type in which a passenger cart is attached to a regular bicycle with some sort of bar. And the city should set a minimum fare, with tips possible, rather than the current Wild West situation where drivers basically charge whatever the market of the moment will bear.

I'm flabbergasted.  I'm flabbergasted by the brazenness of the report, and I'm flabbergasted by the public's apparent indifference.  Cartels are bad for everyone who is an industry outsider.  They are bad for would-be entrants into the market, and they are bad for consumers.  This timely post by Matt Yglesias on Milwaukee's cartel is directly on-point:

The city of Milwaukee capped the number of taxi permits at 321 way back in 1992, and consequently the price of a permit on the secondary market has risen to $150,000.  That’s excellent news for people who made well-timed investments in Milwaukee taxis, but obviously it’s bad news for would-be taxi entrepreneurs who’d like to get into the market. Fewer permits means fewer jobs for cab drivers, and it means less access to taxis in the city.  Dynamics of who uses taxis, what they cost, and where they’re available differ a lot from city to city and I’m not familiar with Milwaukee so I can’t say who in particular is disadvantaged by taxi scarcity but it’s not the sort of thing that helps a city’s quality of life or economy.

I'd add that taxi-rigging is also bad for the city's culture.  It fosters, if not outright corruption, then a constant suspicion of corruption, since it gives Council the  power to hand outsized profits to a favored few.   Not suprisingly, both taxicab companies and taxicab drivers (who believe the cartel should consist of incumbent taxicab drivers rather than incumbent taxicab companies) poured tens of thousands of dollars into the last city council elections.

I think that if it is a crime for pipefitters and vitamin makers to fix prices and allocate market shares, then it should be a crime for city councils to do the same on behalf of taxi companies.  It is not a crime, though; the market-rigging merely provides a nice fund-raising opportunity.

Eliminating the antitrust exception for government action would do wonders for municipal governance. 

NB.  Some people misinterpret me to advocate the elimination of licensing.  I do not.  Taxi drivers should be required to show the necessary state-issued licence (Class C?), provide their driving history, etc.   The City can and should establish minimum qualifications.  The City should not use a licensing regime to limit the number of drivers or their rates, though.

Commenters have suggested all sorts of hypotheticals in which dishonest taxi drivers fleece hapless riders or do other bad things.  Why this is a particular concern with taxi drivers escapes me.  In any event, the City can always pull the licenses of drivers who rip off customers or otherwise break the law.