Austin Contrarian

Did Sao Paulo get what it wanted?

This doesn't have any relevance to Austin, but it's still interesting.

A few years ago, Sao Paulo banned essentially all outdoor advertising.  Not just billboards but virtually any kind of sign.  The Golden Arches are gone.  So are signs painted on the sides of buildings.  Neon signs, too.  Even storefront signs.

The ban was widely lauded at the time.  A blow against "visual pollution" and corporate manipulation of virtuous but sadly suggestible consumers.

The advertising is now gone.   This is a strictly subjective opinion, of course, but the result isn't pretty.  "Cleansing" the city of advertising did indeed focus attention on the underlying architecture.  But, judging from the pictures and videos,  the city's architecture doesn't warrant attention.  It looks drab, blandly utilitarian.  Even seedy.

I wonder what impact this has had on commerce in the city.  Outdoor advertising is actually useful.  All those signs served a purpose.  They provided information, mainly by cutting search costs.  But the ban was motivated in part by anti-commercial sentiments, so I suppose the city's residents got what they wanted.  (Maybe I'm wrong, but Latin American and South American countries seem to have an abiding dislike of markets.)

Judge for yourself.  A few Flickr photos.  Video.  Video.  And a few other photos here and here.  

Parking bombs

The Overhead Wire on the destruction wrought by downtown parking.  The Houston photo is stunning.  

I don't believe, though, that the interstate highways share equal blame with parking for the destruction of American downtowns.

I suppose I should be careful with my definition here:  I mean "Given the construction of a large, nationwide network of interstate highways, the decision to route them through downtowns did not have a material impact on the health of downtowns."  

The typical large American downtown before the 1930s or so developed around a rail, harbor or port.  Manufacturing clumped together near the transportation hub to save the hefty cost of moving heavy things.  Service and government workers -- the only inhabitants of today's downtowns -- located downtown because that's where their customers were.

This model was doomed once the country decided to build a national network of high-speed highways.  It was just a matter of time before manufacturing decamped to cheaper, less congested greenfields.  It didn't matter whether the highways ran around, through or under downtown -- manufacturers weren't going to pay a premium to be down the street from a rail terminal they no longer used.  Downtowns were in for a radical restructuring.

Now downtowns are occupied mainly by service and government workers.  More to the point, they are occupied by service and government workers who purport to service the entire metropolitan area.  A downtown Houston law firm with a large oil-and-gas practice doesn't market itself just to downtown energy firms; it sells itself to firms in the Energy Corridor, too, even though they are a 10-mile drive down the Katy Freeway.  It is easy to run a metropolitan-wide law practice from downtown Houston if it is easy to get to downtown Houston from any point in the metropolis.  A rich network of highways (or of light rail or commuter rail lines -- nothing in this argument depends on the mode of trip) makes the central location more attractive, not less.

Note that this has nothing to do with the impact of highways on housing patterns.  Highways of course have facilitated sprawl.  By lowering the cost (in time) of commuting from land on the periphery of the metropolis, they make that land more attractive for residential development.  But this isn't the dynamic that causes businesses to disperse.  Service firms like to cluster near similar businesses, near their customers, and near their suppliers.  They will do all three if they can.  When they can't do all three, they must choose.  The trade offs are more acute when a downtown has poor access to the rest of the metropolitan area.  In the long run, downtown Austin will suffer for its inaccessibility.

Don't take any of this as an unqualified endorsement of slashing interstate highways through downtowns.  They hurt property values in their immediate vicinity.  They wreck the neighborhoods that are plowed under, barricaded or sundered to make room for them.   But American downtowns would have experienced wrenching change even if highways hadn't been run right through them.  And American downtowns would be more desolate than they are today without the highways.

Parking is another story . . . .

Texas is studying a tax on the number of miles you drive

News to me:  Texas will study a tax on miles driven:

If you don't like gasoline taxes, here's an alternative: a tax on the number of miles you drive in a year.

The Texas Transportation Commission has directed a fresh study of the idea, and it is not alone.  There are pilot projects in other states and nationally to gauge how such a tax would work.

Texas transportation officials say the study is meant to help give lawmakers information on options ahead of their next regular session in 2011, when they confront a funding squeeze that is expected to drain the highway fund of money for new construction contracts by 2012.  “We need to think differently about how we fund transportation,” Texas Transportation Commission Chairwoman Deirdre Delisi said at a Texas Taxpayers and Research Association forum in November.

Delisi said the vehicle-miles-traveled tax idea is controversial, but should be discussed because revenue from the state's main source of transportation funding, the motor fuels tax, is declining.  The gasoline tax has not been raised since 1991.

The commission asked the Texas Transportation Institute, which is part of the Texas A&M University System, to take the lead on the study.  Commissioner Fred Underwood has emphasized that the commission's goal is to give lawmakers alternatives.

There are good arguments that a gasoline tax is a more efficient tax on externalities.  Heavier vehicles do more damage to roads; heavier vehicles use more gasoline.  Emissions vary with the amount of gasoline used (ignoring vehicle technology).  A miles-traveled tax perhaps better reflects a driver's accident risk to others, but larger vehicles impose a higher risk on other drivers, bicyclists and pedestrians than smaller vehicles.  (Neither accounts for congestion externalities.)

But two drivers who "consume" the same number of miles enjoy equal benefits.  It's fair in that sense to require them to pay the same amount.   A gas tax and miles-traveled tax thus serve different purposes:  a gas tax is a tax on externalities; a miles-traveled tax is a tax on consumer surplus.

Why Clusters of Like Businesses Thrive

In New York, for example, diamond dealers, florists and even chess shops are clumped together.

That's from yesterday's All Things Considered (4:44 podcast).  A very nice explanation of economies of agglomeration.

I liked it mainly because the reporter actually used the phrase, "economies of agglomeration."

"No road we built in Texas paid for itself."

From Streetsblog Capitol Hill:

Over the past two days at the Congress for the New Urbanism Project for Transportation Reform conference, attendees have called for reform at local, regional, and national levels. In a panel debate about the future of transportation funding and the role of regional planning through MPOs, several speakers argued that the foundation of transportation and development funding had to be systematically overhauled.

Mike Krusee, [AC: former] chairman of the Texas House of Representatives Transportation Committee, said that financial problems were more significant than environmental, though they should be tied together in the same discussion.

"The reason there's not a new transportation bill is because there is no money. We've hit the wall of unsustainability on how we finance the transportation system," he said.

Krusee asserted it was urgent and necessary to understand the nature of this broken financial apparatus and to develop solutions to fix it. In Texas, he said that, on average, it cost the state 20-30 cents per person per mile to build and maintain a road to the suburbs, yet drivers only pay on average 2-3 cents per mile through the gas tax, vehicles fees, etc.

"What we found was that no road that we built in Texas paid for itself," said Krusee. "None."

The expense to build roads and utilities further and further from the urban cores not only drove costs to unsustainable levels, it created an imbalance in who paid for growth. Over the past 50 years, Krusee argued, the federal government used tax money that came by and large from cities to subsidize roads to areas without access otherwise.

"City dwellers have subsidized the land purchases and the development costs out in the suburbs," said Krusee. What's more, the gas tax, which city dwellers pay when driving on city roads, but which goes to freeways largely outside of urban cores, is "a huge transfer of wealth from the cities to the suburbs to build these rings."

Krusee said building the interstate system was initially a good thing, because if facilitated interstate commerce and increased the productivity of cities. Now however, because of congestion caused by ever longer commute patterns, system productivity is in peril. "What's happened is the federal government has basically reneged on the deal. By subsidizing highways out to the suburbs, it's no longer efficient for truck traffic, for goods and services and people to move between cities in the United States because those roads have been hijacked by all the commuters."

Krusee, by the way, represented suburban Williamson County.

Krusee's assessment matches TxDOT's own internal assessment.  (This actually should be no surprise since Krusee's committee relied on TxDOT for data.)   TxDOT, for example, concluded that the 15 miles of SH 99 from I-10 to US 290 will cost $1 billion to build and maintain over its lifetime, while only generating $162 million in gas taxes -- just 16% of the total cost.

Some of us get swept up in the rhetoric sometimes, but roads aren't unmitigated evils.   Obviously, we need roads.  Just as obviously, I think, we will continue to need new roads.   But new roads should be built only where drivers are willing to pay for the new capacity.   And the only way to gauge that demand is to price existing roads properly; the revenue they generate will tell us when it is time to add to add that capacity.

Aragon

Mueller gets a lot of criticism -- see the grouchy comments to this entry -- much of it unfair.  I like Mueller.  I do agree, though, that it is not a model mixed-use, New Urbanist development.  Among other things, there is  too much segregation of single-family and multi-family/commercial.

So let me offer an example of a model New Urbanist development.   Aragon is an infill development in Pensacola designed by Michelle MacNeil (who happens to be my cousin).   It's several years old, but I got my first tour in August when we visited her during a trip to the Gulf Coast.

One of the most significant features of Aragon is its location.  Many New Urbanist developments are suburban greenfield developments or massive redevelopments of abandoned industrial land or airports (Mueller and Stapleton, for example).

No

I agree with Ryan Avent that this WSJ piece makes a bizarre argument against congestion pricing:

By requiring car drivers to pay a fee to drive in a city at peak hours, congestion pricing reduces traffic and raises money that can be used to support public transit—both worthy goals.

Yet congestion pricing has dubious environmental value. Traffic jams, if they're managed well, can actually be good for the environment. They maintain a level of frustration that turns drivers into subway riders or pedestrians.

The author contends that by improving traffic flow, congestion pricing induces more driving, which in turn increases environmental damage:  "If reducing it merely makes life easier for those who drive, then the improved traffic flow can actually increase the environmental damage done by cars, by raising overall traffic volume, encouraging sprawl and long car commutes."

Ryan makes the right arguments.  I think Owen's got the economics flat wrong, which I'll elaborate in another entry.  He's wrong because congestion pricing does not induce more traffic and because congestion pricing encourages more compact cities rather than sprawl.

But Owen's also got the environmental impact wrong.  He ignores that traffic jams impose a cost -- a significant cost -- not imposed by free-flow traffic.  That's health.  Traffic jams concentrate particulate emissions in one location.  High levels of particulate emissions are bad for people.  They cause all kinds of health problems -- asthma and other respiratory illness, obviously -- but also higher risks of infant mortality.

If you need evidence, read this spanking new paper (h/t Matthew Kahn).  It compares infant mortality rates near toll plazas to infant mortality rates after the toll plazas were replaced with an EZ pass system.  They found that the EZ pass system "reduced the incidence of prematurity and low birth weight among mothers within 2km of a toll plaza by 10.8% and 11.8% respectively."  Because toll plazas are notoriously congested and highways with an EZ pass system are not, this is a good proxy for the health effects of traffic bottlenecks.

Environmentalism is not only about carbon emissions.  The wellspring of the movement was Rachel Carson's crusade against environmental contaminants that (allegedly) made people sick.  Any calculation of environmental cost that omits the costs of making people sick is not just a bad cost-benefit analysis, it's bad environmentalism.

Bag fees

I hate airlines' practice of charging to check bags even though I rarely check bags.  But I understand the economics.  Strangely, Matthew Yglesias does not:

I have to say I’m not really very sympathetic to this sentiment, or with the current Southwest Airlines ad campaign slamming bag fees.  If you figure an airline is going to believe it can acquire a given amount of revenue per passenger from a given route, the bag fee doesn’t actually alter this level, it simply redistributes it from those traveling with no checked bags to those traveling with multiple bags.  Nobody is made worse off on average by this.  But at the margin bag fees do encourage people to pack less stuff which reduces the weight of the plane and thus reduced fuel consumption and carbon emissions.

The economics of charging checked bag fees is pretty simple.   The fees lighten plane load but encourage passengers to carry on more luggage.   That means a longer boarding time as more passengers stop to load bags in the overhead bins and hunt around for empty bin space.   Charging for checked bags thus can make everyone worse off:   those traveling light (usually business passengers) must spend more time boarding the plane and waiting for take off in cramped seats; those traveling with checked bags must pay more to fly.

Once one understands this, it's easy to see why legacy carriers charge bag fees and Southwest does not.  Southwest's business model relies on quick turnaround.   Its planes may stop at a gate for just  25-30 minutes.  Southwest has determined this is worth more than the marginal savings in fuel cost and handling costs.   So Southwest does not charge bag fees and trumpets this policy as a concern for its customers.

The legacy carriers don't even attempt Southwest's quick turnaround; they allow 30-40 minutes just to board, which usually isn't a big deal to them because their planes sit at the gate for so long.    The legacy carriers charge bag fees because the fees save them money on bag handlers, save some fuel, don't hurt their turnaround times and -- one presumes -- are actually passed on to their customers rather than being absorbed in the ticket price.  This means, of course, that bag-checking passengers actually pay a higher net price.  But even if business travelers see a corresponding reduction in their ticket prices, this does not mean that the bag fees are cost-neutral, as opposed to revenue-neutral.  They pay an off-the-books cost by having to endure more congestion.  The bag fees are cost-neutral only if the business ticket prices fall enough to compensate business travelers for that extra congestion.  I doubt that's the case.

The bag fees are analogous to charging tolls on a lightly-traveled road in order to force drivers onto a congested road.   That evidently makes sense in the bizarro world of airline pricing, but it doesn't make the policy cost-neutral.

Parking math

One of the things I enjoyed about The High Cost of Free Parking was the way Shoup explains the practical effects of parking requirements.   For example, requiring one parking space per X square feet is equivalent to setting a cap on building coverage.

Take Austin.  For most retail, it requires one parking spot per 250 sf.   According to Shoup, a parking space requires a minimum of 325 sf  (and I've been told by some architects that the minimum is actually higher).   Austin's parking requirement is thus equivalent to mandating 1.18 sf of asphalt for every one square foot of building.   It ensures that building coverage will always be less than 50% of the lot.   Much less when one counts front setbacks and a 25' rear, no-parking setback when single-family homes are close by.  Although retail zoning districts theoretically allow a 1.0 floor-to-area ratio, the parking requirement ensures that the floor-to-area ratio will always be much less than that.  And so we get buildings relegated to the rear of lots, segregated from sidewalks by a swath of parking.

Most ridiculous are the parking requirements for cocktail lounges.   The ordinance requires one space per 100 sf for the first 2,500 sf, one space per 50 sf for the next 7,500, and one per 25 sf for anything over that.   Hence, a 5,000 sf bar must be surrounded by nearly 25,000 sf of parking.  

Another way of putting the city's parking requirement for cocktail lounges:  "Sure, you build a bar, but only if you guarantee each patron that he can drive there for free."

Yet another entry about high-speed rail

The national bloggers continue to debate the feasibility of a high-speed rail link between Houston and Dallas.  Up to bat:  Megan McArdle.

I think reasonable people can disagree about the feasibility of HSR, especially since we're just trading  back-of-the-envelope calculations of HSR's costs and benefits.  Although I've argued HSR opponents underestimate the benefits to business-class passengers, in the interest of fair and balanced coverage, let me point to Richard Green's discussion of a more rigorous effort to tote up the costs and benefits.  The authors of that particular study give HSR the thumbs down.

And while I'm in a contrary mood, let me suggest one other potential cost of a Houston-Dallas line.

Everyone agrees that in order for such a line to succeed, it must draw airline passengers to rail.  Lots and lots of airline passengers.  If the airlines lose, say, half of their Houston-to-Dallas traffic, they will have to cut the number of flights between Houston and Dallas.  Obviously.  Many consider that a feature, not a bug.

But what about the effect on other routes?  American is able to offer service from Dallas to virtually every American city because of the huge number of passengers flowing into DFW every day.  Cutting that inflow will reduce the economies of scale that support so many flights.  Ditto with Southwest out of Hobby.    Houston is a huge feeder for DFW, if the number of Bush-to-DFW flights is any indication.  Similarly, Love is a huge feeder for Hobby, judging by the 24+ daily flights.  Networks can be delicate things.  Shrinking one route could sicken other segments. 

HSR could very well make it easier to get from Houston to Dallas and vice versa.  But it could very well make it harder to get anywhere else.