Eastside Extension of the Gold Line debuts

You can see some coverage here and here (highly recommended for planning students on how to evaluate street amenities) and a foodie guide for places to eat.

You can ride it free today! Zooooooom!

Denver’s overbudgeted rail system and utterly mysterious connections to foreclosures

Arthur Nelson is quoted in this New York Times piece as saying:

“The underlying lesson is that the further out you go, the more vulnerable you are to losing value in your home,” said Arthur C. Nelson, presidential professor of city and metropolitan planning at the university and author of the research. “Locating near transit and near urban centers is the safer investment.”

Nelson is quoting papers he has done at the county level in metro Washington DC and Phoenix. This is not the right scale of analysis for this kind of thing:

Recent studies at theUniversity of Utah, for example, concluded that foreclosure rates in the Washington area were much lower in counties served by the Metro rail system, compared with the next ring of counties farther out, and that home prices in Phoenix had also fallen in direct proportion to the distance from downtown.

But transit doesn’t serve counties. It serves neighborhoods, and it’s unclear to me that the provision of metro rail does what Nelson suggests: rail is just a technology, one that can also lead to population decentralization. You don’t build density or activity with rail, you build density with buildings and land use which you then serve with rail–and land prices have always been connected to activity. Way prior to rail technologies land in urban centers was more valuable than land on the fringe, and access (by rail or by foot or by car) is an amenity, one that in theory should add value until access becomes sufficiently ubiquitous that people don’t want more.

The reporter goes on:

…money committed years ago in economically flush times emerged as if on cue over the last two years, creating thousands of jobs like rabbits from a hat at precisely the moment an economist would summon them.

I love journalism. Utterly unencumbered by evidence. Of course, if we’d recklessly flung away that public money on schools or water infrastructure instead of rail systems, those thousands of jobs would never have appeared like rabbits from a hat. There are funding tradeoffs. So even if we don’t get passengers, building things is good. I guess.

I don’t understand what any of this has to do with the issue with Denver’s rail being overbudget. I guess what Nelson and this scattered reporter are trying to say is that rail is still a good investment even when it goes over budget because they think it stabilizes home values and creates jobs?

I have another colleague who is always saying “no excuses!” I’m not sold on Nelson’s analysis, but more than that, I can’t live in a world where the argument is: let’s support transit no matter how much it costs or how the institutions behave because transit golly sure is fine.

How about we do something sort of neat with rail investment? Like….serve passengers well and manage construction costs better?

Rail projects go over budget; but highway projects also go overbudget. Is Denver out of line? Not yet, not according to the distribution of over-runs we routinely see in major projects. No story.

Warren Buffett and trains

Berkshire Hathaway, Inc–Warren Buffett’s investment machine–recently announced plans to buy out Burlington Northern Santa Fe Corp for $26 billion. The web has been in a flurry: clearly this means that a) the economy is getting better and/or b) railroads are the future.

Buffett is fanning the speculation with his comments:

“It’s an all-in wager on the economic future of the United States,” Buffett, who has been building up his rail holdings for several years, said in a statement. “I love these bets.”

Maybe this is just sour grapes, but I lost my shirt betting on Burlington Northern during the early 1990s; I’m less sanguine. While timing is important in markets, nothing about the existing economy suggests to me that Buffett is going to get back the 31.5 percent over closing that he spent to get it, and while rail freight operations are better than they were, they still aren’t great, and there are infrastructure bottlenecks that keep the US companies from growing anymore. Burlington Northern already does a lot of trailer on flatcar (TOFC) shipping, and while it may be possible to capture more of that comparatively profitable market, one of the key questions will be how much more.

Matt Kahn suggests that Buffett is betting not on railroads but on higher energy pricing through carbon taxes. One of the commenters notes that the coal-rail connection will look a lot different with carbon taxes than the rail looks alone. This point is also made by John Kemp at Reuters: the marginal boost to rail freight could be easily offset by a marginal hit down on coal. Does anybody besides me wonder how big a carbon tax would have to be in order to prompt major shifts? I’m thinking big-ish.

In the end, I rather agree with Andrew Leonard at Salon Buffett likes to play with trains. I think it’s rather more than that. I suspect that Buffett understands and takes seriously his role as a financial thought leader. He is almost 80 years old (good for him). He wants to use his position as a thought leader to inspire hope, as he knows that perceptions matter more than reality in many aspects of investments and markets, and so he is throwing his weight and resources behind what he thinks are meritorious businesses: land in a dying Midwest city, freight associated with a lower carbon footprint industry that has struggled to turn a consistent yield, etc. on the hope that a turnaround will make these undervalued assets more productive again.

Dangit, so much for the local industry/transit connection this time out

Today’s LA Times features a story about the demise of a contract to build rail cars locally in LA. This is a sad story, actually, demonstrating the huge gap between dream and implementation.

Freight rail destruction of wildlife and ill-advised political metaphors

Republican National Committee Chairman Michael Steele said with regard to health care reform that he’s “the cow on the tracks. You’re gonna have to stop that train to get this cow off the track to move forward.”

Um, yeah. That sometimes happens if you see the cow on the tracks with enough time to stop the train. Otherwise, these types of collisions are always rather one-sided, and not generally in favor of the cow.

See that V-shaped object on the front of this engine? This photo is a rather pronounced version of the object–called, in fact, a cow-catcher–which go on the front of engines specifically to deflect objects to one side or another of the track.

Freight rail destruction of wildlife is a serious issue, just like highway destruction of wildlife. This summary and bibliography give a nice introduction to the problem.

East Yard Communities for Environmental Justice

Several of my favorite Facebook Peeps posted links to this LA Times Story about East Yard Communities–the organization that inspired me to write my dissertation.

I always wonder about this with folks who advocate for shifting more freight to railroads as a means of improving the environment. First, rail freight generally has such a cost advantage if that if you can ship by rail, you already do. And second, it’s not like there aren’t emissions from rail freight. With the much cleaner diesel fuel standards, both trucks and trains should be better. But still.

A Link to East Yard Communities Website

NPR’s series on HSR

I traveled back to LA from DC today, and did a whole bunch of work. So I am tired. I wish you all a safe and happy Labor Day, and leave you with a link to NPR’s series on High Speed Rail, featuring David Levinson, of the Transportationist blog (oh, and he’s a chaired professor of civil engineering and the director of a well-respected research institute at the University of Minnesota with a cv longer than the wait for the Sears Tower elevator, but his blog has much less math than most of his papers, so I’m going with it…*)

*If my dean is reading this and is tempted to draw any specious comparisons between David and me, I should note that the weather is a lot nicer in LA than it is in Minnesota, and David has more reason to stay inside and work than I do. Just saying.

Should option value count in rail benefit valuation?

One of my favorite selections from The Onion:

I am not sure how the Onion puts these things together, and they are often tasteless, but this particular satire so nicely captures the many conundrums for transit policy and planning in the US: everybody loves it, very few people outside of its largest markets actually use it. Let’s take a look:

Now, there are some very good systems in this chart, and yet NYC kicks the cookies out of every body else.

Between 1984 and 2006, transit supply as measured by vehicle miles increased by 35%. Supply of the various rail services increased much more rapidly than bus, with light rail more than tripling. Over the same period transit ridership as measured by unlinked passenger trips increased by 13.5%. This number is often cited as good news for transit. In all cases ridership grew less than service supply, meaning that over the period service productivity declined: unlinked trips per vehicle mile dropped from 2.55 to 2.14, and the share of operating cost covered by fare revenue declined from 39% in 1996 to 33% in 2006. Now some systems, like the DC system, are much higher in fare recoveries, and others lower [1].

There are many potential reasons for productivity decline. We could argue that

a) there is a lot of unproductive transit spending going on;

b) there is a time lag between investment, service quality improvements, and demand responses–otherwise known as a “network effect”–you have to get a critical point in geographic coverage and service quality before demand really solidifies for the system (discussed by Jim Moore, one of my colleagues here [2]);

c) it’s not clear to me that there have been productivity gains in passenger transport in general (highway, airline, or transit); it may be that rising costs throughout the sector (from land acquisition in particular) caused percentage increases in costs to outstrip percentage patronage gains.

Now, part of the reason for increased spending is that regional agencies control more of the planning and programming than they did 30 years ago, and local/regional sources of revenue have also increased. It makes sense that investment in regional systems, like rail transit, goes up under those conditions, even if the spending is less productive than we might hope in terms of overall welfare [3,4].

Nonetheless, the environmental-transit connection has been made convincingly in the democratic imagination if not so much empirically. I suspect that this connection has led, further, to an increase in option value for systems like the HSR and urban rail among those who are unlikely to take it–ever.

Let’s think about what that means in terms of benefits. Let’s compare this from the Onion’s satire:

“Expanding mass transit isn’t just a good idea, it’s a necessity,” Holland said. “My drive to work is unbelievable. I spend more than two hours stuck in 12 lanes of traffic. It’s about time somebody did something to get some of these other cars off the road.”

Ok, now this isn’t option value. This is somebody who would, if other people actually use the transit supplied, enjoy congestion reduction benefits. Those we know how to capture. We have cost estimates for carbon emissions reductions, though they vary widely. But we don’t necessarily have option value, which is trickier, and I think relevant to costing out mega-projects like HSR. So what I am asking here: Is it a legitimate benefit to count people’s willingness to pay for HSR, for example, simply because they want the US to have it “just like Japan and Europe”? It’s a symbolic value rather than a use value.

I should be clear about definitions. Option value concerns individual’s willingness to pay for something they may never use, but they like having the option or they like the fact that whatever it is exists. And option value has been calculated and used in economic analysis for a variety of things: one of the notable uses of option value occurred when assessing damages from the Exxon Valdez spill off the coast of Alaska [5] So one cost occurred through devastated fishing; another through lost tourism revenues; and finally, using contingent valuation, a loss to those of us (like me) who have no intention of going to Alaska but who value intact ecosystems in the abstract.

So for rail there would be the direct user benefits/costs, nontraded benefits/costs (emissions, etc), and value placed on option. What do you think?

[1] Giuliano, G. and L. Schweitzer. 2009. “Her Money or Her Time: A Look at Contemporary Transportation Policy from a Gendered Perspective.” Forthcoming for the National Academies of Science Transportation Research Board.

[2] T. A. Rubin, J. E. Moore, II, and S. Lee. Ten myths about US urban rail systems. Transport Policy,
6(1):57–73, 1999 Doi: doi:10.1016/S0967-070X(98)00032-8.

[3] C. Winston and V. Maheshri. On the social desirability of urban rail transit systems. Journal of Urban Economics, 62(2):362–382, Sept. 2007, doi:10.1016/j.jue.2006.07.002.

[4] P. Nelson, A. Baglino, W. Harrington, E. Safirova, and A. Lipman. Transit in washington, DC: current benefits and optimal level of provision. Journal of Urban Economics, 62(2):231–251, Sept. 2007.

[5] R. T. Carson, R. C. Mitchell, M. Hanemann, R. J. Kopp, S. Presser, and P. A. Ruud. Contingent valuation and lost passive use: Damages from the Exxon valdez oil spill. Environmental and Resource Economics, 25(3):257–286, 07 2003.

Service Quality Improvements in Rail

My wonderful colleague, Richard Green, discusses Robert Samuelson and Paul Krugman on whether high speed rail is actually worth what we will pay for it.

Richard Green captures the essence of the problem: he liked the train when he had it, but he is good at math. It is much easier to loudly advocate for high-speed rail if you can’t do math very well. Paul Krugman can, in fact, do math extremely well, and that’s why he cherrypicks the one location in the United States where HSR probably makes sense at this point: the US’s Northeast corridor, which is nothing but pavement from Boston to northern Virginia. It’s possible to look at the numbers, realize they are lousy, and still advocate for the project: we do it all the time. But it hurts your finer feelings if you are an analyst at heart.

One of my favorite colleagues at Berkeley is fond of saying “we don’t evaluate rail merely on cost-benefit analysis.” When pressed, she claims that rail somehow transcends the methodology, that there is no way to quantify how it revolutionizes a metro area. I’m the first to acknowledge that cost-benefit is a limited methodology, but honestly: if I ever hit up against a ready-made excuse for building bad projects, it’s the idea that your mode transcends cost-benefit calculus. Yes, I do think rail can have a powerful effect on urban land and human settlement patterns, but not all of those are positive. Rail makes sense in contexts, and it can set contexts, but it’s not like we can necessarily recreate San Francisco or DC using infrastructure alone. If she argued that we do a bad job costing out cost and benefits? Sure, I’ll buy that. But no; the literal interpretation is that what she wants transcends mere analysis. We’d all like to think that.

It seems to me what advocates are saying is that rail provides service quality improvements, and I do think that these are undercounted in cost-benefit analysis. Note that this does not save bad projects from John Kain [1} or Don Pickerell's [2] infamous critiques: if you are offering service quality improvements and you’re not getting ridership, you don’t get to count the service quality improvement as a benefit (nor your emissions saved, etc etc).**

If it is the case that high speed rail offers service quality improvements, then it should be possible to quantify how much passengers value those service quality improvements by examining the cross elasticities between airfare and trainfare in countries where air and HSR are competitors. I don’t believe the California HSR plan does so, though the business plan suggests fares will be competitive with Southeast.

See? Those of you who can do math are trying to rough out how even a $34 billion project (let alone an $84 billion project) is going to retire its bond debt at $100 a ticket, and you’re getting a dull pain behind your left eyebrow, because even if you value carbon emissions savings at $200/ton, you don’t actually get a revenue stream from saved carbon emissions. This is what I mean. We all like trains–that’s not the issue. It’s that dull pain behind the eye you can’t get rid of.

I think one of the reasons why we haven’t done service quality calculation: we would have to be frank about the fact that HSR is high-end, luxury service way more like air travel than taking the car. People like me who have money are on planes (and HSR in Europe) all the time: people like Joe the Plumber (yeah, I know, I know) are not. And it’s not smart at this point of the HSR debate to be upfront of what we are proposing to build here: an expensive service for people like me rather than people like my mother in Iowa who never go anywhere and who would faint at the $350 ticket price it would take to get them to Chicago, where they would faint at the prices.

**And one of the irritating things about light rail and heavy rail is that ridership past a given point degrades service quality. One of the reasons I love the Gold Line in LA is that I can always get a seat. Great for me. Bad from an operations standpoint.

Manuscripts that informed this post:

[1] J. Kain. Deception in dallas: strategic misrepresentation in rail transit promotion and evaluation. Journal of the American Planning Association, 56:184–196, 1990. Journal Article.

[2] D. H. Pickrell. A desire named streetcar: fantasy and fact in rail transit planning. Journal of Transport Economics and Policy, 19(3):385–482, 1992. Journal Article.

[3] B. Flyvbjerg, N. Bruzelius, and W. Rothengatter. Mega-Projects and Risks: An Anatomy of Ambition. Cambridge University Press, 2003. Book, Whole.

[4] Theodore M. Porter. Trust in Numbers: The Pursuit of Objectivity in Science and Public Life., Princeton, N.J.: Princeton University Press, 1995. 311 pages

Ed Glaeser on high-speed rail

You know those “Most Interesting Man in the World” commercials that end with “Stay thirsty, my friend.” Whenever I see them, I think of Ed Glaeser.

He IS pretty interesting. And he was wrong once.

Anyway, he takes up high speed rail here. And he’s dead right about one thing, for sure: John Kain is sorely missed.

HT to David Levinson, the Transportationist.

High Speed Rail on the Freakonomics Blog

Eric Morris on the Freakonomics blog takes up the issue of high-speed rail and offers a reasoned, and unique to the public debate, focus on the limitations of the mode’s promised environmental benefits.

There are so many things to think about here, it’s hard to know where to begin. First, the very fact that we have consultants even doing lifeline environmental analysis of rail is a step forward for the discourse around rail. Yes, it has environmental costs, too, especially something like high-speed rail which fragments habitats, for instance. Back in the day, this is something that was never raised surrounding rail, much to my irritation.

What’s my expert opinion on high-speed rail? From my perspective, changing intra-regional travel to lower impact modes, like walking, is a much more pressing and cost-effective climate change strategy.

While I do not deny the very real evidence of climate change, I am terrified when I look at the data for actually intervening in climate change. It is the elephant in the room for those worried about climate change: if we admit it looks futile, then nothing will get done and it will, in fact, be futile. But all our hoping for best and advising for the best does not mean that changing things still won’t be futile. The power of positive thinking here has to meet reality. Maybe the economic downtown will dampen population growth a bit, but still. Given population figures, I tend to favor strategies that have high potential co-benefits and lower costs. HSR has some of the former and just way too much for the latter.

David Levinson’s estimate for HSR comes in at $80 million. Last year, I had my students cost out the HSR, and the estimates ran from $110 billion to $81 billion. That’s more than Obama has set aside for foster kids for the entire country. Do you know what we could do for foster kids with $80 billion? Bus riders? Schools? No, these are not separate issues no matter how various sector advocates and institutions would have us think of them. Fiscal capacity is finite.

If we are really talking about saving car trips, the bigger potential markets are likely to be intra-regional, not inter-regional, like HSR. To be metaphorical for a second, HSR is a gold-plated response to climate change when we should perhaps be thinking about stainless steel. It’s like insisting that we have a $2K tiara when we can’t afford pants.

HSR is being sold on environmental benefits, as usual with rail, but the reasons why its backers love it so much because they see dollar signs. Federal capital subsidies, right now, and more subsequent growth in inter-regional tourism and economic activity, particularly for Central Valley communities. All good things. But worth the money not spent on other things, like schools or inter-city transit? Ehhhhh. The assumption among its environmental proponents is that HSR will cut out air travel and auto trips. It may do so, in the short term, but in the end it will, like most new supply, provide capacity for additional travel between SF and southern California. These additional trips will be in a mode that has fewer emissions than the other two, great, but the other two are not going to reduce appreciably in the long term with growth in overall demand. There is a difference between disciplining demand for dirtier modes entirely and simply providing extra capacity in a cleaner (and jollier) mode. The first is a stick; the second is a carrot with no stick. In transport policy, we are addicted to the latter.

If we are worried about carbon emissions and we want HSR because we want the travel option, the way to get this system built is to apply a carbon tax to fuel consumption across all modes and then use the money to juice up transit provision in general, as quickly as possible. But instead, we continue to do what we have always done: throw money at big systems up front, taking the money from everywhere else to pay off bond obligations rather than presenting travelers with the real prices of their travel consumption choices. Then we ply them with carrot after carrot. This strategy means politicians get to stand in front of big projects and say they have Struck A Blow for the environment, environmental NGOs get to to do the same, and the cost is carried by socially devalued services (like education–3.1 billion in cuts, any one?) and unpopular minorities (like poor people who rely on public education.)

We can talk about whether fuel taxes “tax the poor off the road” another day. As for predictions, this is going to be California’s Big Dig. It will set records for costs and over-runs. It will be a beautiful and wonderful service when it is done. And I (and a whole bunch of other people) will get a book out of it.

A New Green Transport Blog

Alexene Farol, one of the extremely gifted students in PPD at USC, has started up her own blog on transportation, “Lex Rail.” The young are so adventurous! She’s already posted about high-speed rail, which I haven’t worked up to.

Alexene is wonderful for a bunch of reasons, and the fact that she might might be becoming one of us—the transport crowd–is doubly thrilling to me for selfish reasons. I taught her in a class that is basically an intro to the city, and you have to accept in teaching that class that you will get students from real estate only marginally interested in the city and students in management who are adamantly (proudly) a-spatial and think urban planning is simply a derivative of their much more lofty aspirations to “manage.” Let’s just put it this way: Alexene opted to read Milton Friedman for the class, and she really read it and worked at it.

With that class, I always want my brightest students–and Alexene is one of the brightest I’ve ever had–to become planners, largely because I worry that my field is clogged with ideologues and solutions advocates and not thinkers. This is a problem she hints at with this post. Planners are well-intended, and some are very gifted thinkers indeed. These are the best of us, these philosopher-kings. Other of us are merely king wannabes, who think that if planners shape cities we will change human behavior and human society like clay in the hands of potter, and they follow various city “recipes” like they can create utopia through sidewalks.

To some degree, they are right: the material life of the city, just like the material environment of your home, is important to how you use and enjoy the space. So sure, let’s put in some sidewalks, that would be lovely, but we probably shouldn’t conclude based on this that we’ve taken millions of car trips off the road or prompted somebody to lose 100 pounds. Providing a place to walk, while not as heroic-sounding as “saving the planet” or “fighting the war against obesity,” is actually probably accomplishment enough. Sidewalks are good.

But social and environmental change is complicated. It requires not just a vision of an artful streetscape and colored pencils but an understanding of science, managing money, social change and sometimes adversarial human interaction, and all of these require leadership. So yah, for bright people in planning, among whom Alexene is one.

If Alexene actually stays focused on transport, though, that’s even better. It’s not like there aren’t bright people in transport. This particular part of planning has not suffered from a wont of analytical capacity–if anything, it has sometimes suffered from the unity of its vision. Having bright, analytical, creative people like Alexene join the field is just wonderful when it happens because she has the whole enchilada: she’s a good and creative thinker, a good writer, a strong sense of social commitment, and leadership charisma. And, as her grappling with Milton Friedman suggests, she’s not afraid to work.

So I am keeping my fingers crossed.

Rethinking passenger rail safety

Rail advocates have been quick to come forward both after last year’s Metrolink tragedy and yesterday’s DC Metro accident that commuting by rail is far safer than commuting by car.

These kinds of statistics aren’t very useful, as Lee Clarke points out in Worst Cases. He shows that while it is safer to travel by car when you measure per mile, it’s safer to travel by plane when you measure in per hour of exposure. I suspect that it is true rail commuting is measurably safer regardless what person-level measure of exposure you use.

What concerns me, however, isn’t the comparison: it’s what the Metro crash suggests about rail congestion (yes, there is such a thing, and DC is looking at it) and what that rail congestion means objectively for rail safety. I suspect that it is getting worse, and that that is itself a problem regardless of whatever risks are associated with cars.