HDR Seeks TIF Subsidies

HDR, an engineering consulting firm that has been behind many of the nation’s streetcar plans, wants to build a new headquarters in Omaha. The firm is very familiar with tax-increment financing (TIF), since TIF played a role in funding many streetcar projects and developments around those projects. So, naturally, it asked the city of Omaha for nearly $21 million in TIF subsidies to support its new building.

Omaha’s city council eagerly agreed to give HDR the subsidy, but for some reason that plan fell through. Now it has a new headquarters proposal for which it is seeking $15 million in TIF subsidies.

The amount isn’t smaller because HDR had a pang in conscience. The original proposal was to build the headquarters in downtown Omaha, while the latest plan is to put it more than five miles away from downtown, where it would probably pay less property taxes. Since TIF effectively returns the property taxes back to the developer, lower taxes mean less TIF.

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Driving Alone to Work without a Car

The share of American workers who live in households with no vehicles yet nonetheless drive alone to work grew from 20.4 percent in 2014 to 20.9 percent in 2015, according to the latest American Community Survey. This growth came at the expense of slight declines in carpooling, transit, work-at-homes, and “other” (taxi, bicycle, motorcycle), while walking to work increased slightly. No one knows for certain how people with no cars drive alone to work, but most probably use employer-supplied vehicles.

You can download 2015 commuting data by numbers of vehicles in the household for the nation, states, and counties, cities and other places, and urbanized areas. For comparison, 2014 data for the nation, states, and counties, cities, and urbanized areas are also available.

Only 4.5 percent of American workers live in households with no vehicles, a share that remained stable from 2014 to 2015. Nearly a third of them are in the New York urban area. Outside of the New York area, the only places with double-digit vehicle-less households tend to be in the Boston, San Francisco-Oakland, and Washington, DC urban areas.

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The Feds Regulate Self-Driving Cars

The Department of Transportation says that it plans to issue a series of rules for self-driving cars that will potentially preempt state laws and regulations. This comes after lobbying by Google, which was disappointed when a state law that Google had supported led the California Department of Transportation to issue rules that forbade the use of cars that didn’t allow human drivers to override. Since Google was planning cars that didn’t have steering wheels and other controls that drivers could use, the state rule conflicted with Google’s goals.

The Antiplanner has urged against federal regulation, fearing that the feds would be as likely to get it wrong as the states, whereas if the states were left to regulate, at least a few states would get it right and the others would emulate their examples. Federal regulation wouldn’t be bad if the rules were perfect, but how likely is that?

For a more detailed free-marketeer’s view of the Department of Txansportation’s proposal, see Marc Scribner’s analysis. Here, I want to focus on one thing: the debate over fully autonomous vs. semi-autonomous vehicles.

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Housing Affordability in 2014

For the United States as a whole, the value of a median-priced owner-occupied home increased from 2.7 times median family incomes in 2013 to 2.8 times in 2014. The 2014 numbers are from the 2015 American Community Survey, which estimates both home values and family incomes for the year before the survey. In the survey, median family incomes are found in table B19101 while median home values are in table B25077.

You can download my spreadsheets combining data from these two tables from the 2015 survey (which, remember, are for 2014) for the nation, states, and counties, urbanized areas, and cities and other places. For comparison, data for 2013 (from the 2014 survey) can be downloaded for nation, states, and counties, urbanized areas, and cities and other places.

In places where land for new housing is abundant, value-to-income ratios tend to hover around 2. Value-to-income ratios above 3 suggest real or artificial limits on the ability of homebuilders to meet the demand for new housing. While the national ratio of 2.8 is worrisome, many states are well under this ratio.

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2015 Commuting Data

The share of commuters driving alone to work grew from 80.0 percent in 2014 to 80.3 percent in 2015, according to the Census Bureau’s American Community Survey. This increase came at the expense of carpoolers; the share of people taking transit, walking, and cycling remained the same.

The Census Bureau posted 2015 data early this month, giving data junkies lots of information to play with. The bureau has conducted the American Community Survey every year since 2005 based on surveys sent out to about 3.5 million households each year. This makes it far more reliable than a typical poll, which usually surveys only a few hundred people. However, the data should still be used with caution for small categories, such as the number of Latinos living in households with no cars who walk to work in Buffalo, New York.

To save you time, the Antiplanner has downloaded journey-to-work data, table B08301, for the nation, states, and counties, urbanized areas, and cities and other places. For comparison, I’ve also posted the same raw data for 2014: nation, states, and counties, urbanized areas, and cities and other places.

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Is Mobility a Right or a Privilege?

Michael Lind, a co-founder of left-leaning New America, is urging the federal government to create universal mobility accounts that would give everyone an income tax credit, or, if they owe no taxes, a direct subsidy to cover the costs of driving. He argues that social mobility depends on personal mobility, and personal mobility depends on access to a car, so therefore everyone should have one.

This is an interesting departure from the usual progressive argument that cars are evil and we should help the poor by spending more on transit. Lind responds to this view saying that transit and transit-oriented developments “can help only at the margins.” He applauds programs that help low-income people acquire inexpensive, used automobiles, but–again–thinks they are not enough.

Lind is virtually arguing that automobile ownership is a human right that should be denied to no one because of poverty. While the Antiplanner agrees that auto ownership can do a lot more to help people out of poverty than more transit subsidies, claiming that cars are a human right goes a little to far.

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San Diego Boondoggle Funded

Thirty-five years ago, San Diego kicked off the light-rail fad when it opened the San Diego Trolley, the nation’s first modern light-rail line. The city paid $18.1 million for the right of way and $87.5 million to build 13.5 miles of rail line. Two years later, they double-tracked the line bringing the total cost, including right of way, to $137.35 million, or just slightly more than $10 million a mile. In today’s dollars, that would be $23 million a mile.

Now San Diego is planning a new light-rail line that will cost a mere $2.17 billion for 10.9 miles of line, or slightly less than $200 million a mile–and that’s only if there are no cost overruns. That’s more than eight times the cost per mile of the first line. Ridership is likely to be no greater and probably less than the first line. Despite the high cost, the Federal Transit Administration has agreed to fund half the cost.

What is it about transit planners that they see nothing wrong with this kind of cost escalation? Transit advocates claim that transportation spending has multiplier effects that generate net benefits for the economy. But considerable academic research suggests that the government multiple is negative (or, depending on your formula, less than one), meaning every dollar of government spending translates to less than a dollar of additional gross national product (or national wealth). The truth about the multiplier effect probably depends on what the government spends its money on, but billions spent on low-capacity rail lines almost certainly have negative multipliers.

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Not Just Economists

A few months ago, the Antiplanner listed more than a half-dozen papers by economists showing that growth constraints make housing less affordable. Yet many planners still deny that relaxing those constraints will make housing more affordable.

Now a paper by law professor Michael Lewyn makes exactly the same point, and responds directly to arguments made by advocates of growth constraints. Lewyn is far from a free marketeer, having written articles about controlling sprawl, encouraging walkability, and supporting infill development. But he apparently puts affordability above the fuzzy environmental goals of smart-growth planning.

Lewyn’s paper uses different terms than I would use, blaming land-use regulation on NIMBYs instead of urban containment. I think that NIMBYism is a result, not a cause, of the kind of comprehensive planning that leads to unaffordable housing. But that’s merely a quibble; the significance of Lewyn’s paper is that more people–and not just economists–realize that urban containment is a morally unacceptable policy.

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The Who-Gets-to-Decide Crisis

“There is now a consensus that the United States should substantially raise its level of infrastructure investment,” writes former treasury secretary Lawrence Summers in the Washington Post. Correction: There is now a consensus among two presidential candidates that the United States should increase infrastructure spending. That’s far from a broad consensus.

“America’s infrastructure crisis is really a maintenance crisis,” says the left-leaning CityLab. The “infrastructure crisis is about socialism,” says the conservative Heritage Foundation. “There is no widespread crisis of crumbling infrastructure,” says libertarian Cato Institute. “The infrastructure crisis . . . isn’t,” agrees the Reason Foundation.

As Charles Marohn, who classifies himself as a traditional conservative, says, the idea that there is an infrastructure crisis is promoted by an “infrastructure cult” led by the American Society of Civil Engineers. As John Oliver noted, relying on them to decide whether there is enough infrastructure spending is like asking a golden retriever if enough tennis balls are being thrown.

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Asking the Right Questions About Infrastructure

“The American economy is a growth Ponzi scheme where we try to . . . generate a short-term illusion of wealth by having our cities, neighborhoods and families take on enormous long term liabilities,” says Strong Towns founder Charles Marohn in an interesting article about the so-called infrastructure crisis. What he calls the “Infrastructure Cult” leads the nation to go deeply into debt building more and more infrastructure without ever asking “why do these investments not generate enough productivity — enough real return — to be sustained?”

Marohn and the Antiplanner have had our differences in the past. Marohn thinks the suburbs are dead. He thinks most urban arterials, which he derisively calls “stroads,” should be designed downwards in ways that will vastly reduce mobility.

When addressing an issue such as infrastructure, it is important to ask the right questions. So far as I’ve quoted above, Marohn has done so. However, I fear he will miss one important question, which is: How should we measure whether particular infrastructure investments generate enough productivity to be worthwhile?

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