Last December, Honolulu’s rail transit project was estimated to be $700 million over budget. Now they are saying it is closer to a billion. Never fear, however: the state legislature just agreed to extend a half-percent excise tax, which was supposed to expire in 2022,
indefinitely for five years to pay for the rail and its cost overruns.
Due to many sinkholes and other soil problems, the elevated Honolulu rail line looks to be a bumpy ride.
The legislature was reluctant to do so, but was persuaded after heavy lobbying by Honolulu Mayor Kirk Caldwell. Coincidentally, the Honolulu Star-Advertiser reports that rail contractors and subcontractors have donated well over half a million dollars to Caldwell’s political campaign funds. This doesn’t include sub-subcontractors, which are so numerous that even the transit agency doesn’t know how many there are, much less who they are. (The story is behind a paywall, but it says prime contractors and their principals and employees have given the mayor nearly $324,000 while subcontractors have given nearly $243,000.)
Last week, economists at the Fermanian Business & Economic Institute released a report estimating that government regulation increase San Diego housing prices–for both buyers and renters–by an average of about 40 percent. The report says that only 16 percent of San Diego County has been developed (the 2010 census says 18.5 percent), and almost all of the remaining land is off-limits to homebuilders. Yet, the report notes, a significant portion of that land “is geographically suitable for development.”
Although the land shortage is responsible for much of the regulatory cost, there are other costs as well. “The time involved in what is often a prolonged and complicated process . . . can add 15% or more to the price of a new house,” or more than a third of the total regulatory cost, says the report. This process can take 12 years or more before developers can start building a single home. Of course, the Antiplanner has argued that cities can only get away with imposing such an onerous process if they have shut off most vacant land from development through urban-growth boundaries and other regulatory tools.
Voters in the Spokane, Washington area appear to have rejected a proposed 50-percent increase in the sales tax used to support transit by a small margin this week. At the latest count, the vote was 50.5 percent against the tax and 49.5 percent in favor of it.
Click image to download the “public education” flyer distributed by Spokane’s transit agency.
A few hundred votes remain to be counted, but almost all of them would have to favor the tax to turn the election around. The measure lost despite the fact that the transit agency used taxpayer dollars to promote the measure with a one-sided “information mailer” distributed to voters. Tax proponents vowed to bring the tax back to the voters, saying that those who supported the tax did so with “a strong majority.”
Lafayette, Louisiana would seem to be the last place in the world that you would expect to adopt a smart-growth plan. Yet the city adopted one recently and is now beginning to implement it by revising its zoning code. The Antiplanner believes that this code will make housing and other developments more expensive and slow the economic growth of Lafayette.
I suspect the problems can be traced to a decision made a couple of decades ago to consolidate the city and parish government. The argument at the time was that most people lived in one of six Lafayette cities and towns, and the few people scattered across the rural parts of the parish couldn’t afford to maintain the roads and other infrastructure. Consolidation was supposed to fix that.
Today, the roads are in worse shape than ever, both in the city and the parish, and congestion is a major local problem. When the parish asked for a tax increase to improve roads, the parish council at that time refused to guarantee that the money would actually be spent on roads, so the voters rejected the increase.
An insanely expensive light-rail project in Minnesota just got more insane. The cost of the Southwest light-rail line, which had previously been estimated at $1.65 billion for 15.7 miles, or just over $100 million a mile, is now estimated to cost $341 million more, or just shy of $2 billion. That’s $126 million a mile, or more than seven times the inflation-adjusted cost of the initial San Diego Trolley, the nation’s first modern light-rail line.
Considering that freeways with many times the capacity of a light-rail line can be built for about $10 million a mile, spending more than $100 million a mile on light rail makes no sense at all. The only way people could support it is if they have no understanding of numbers, which explains why many politicians do support it. The good news is that some in Minnesota are having second thoughts about the Southwest line, including Governor Mark Dayton (who professed to be “shocked and appalled,” though he doesn’t say why he wasn’t appalled at the previous price) and Metropolitan Council chair Adam Duininck.
As the Antiplanner has previously noted, Eden Prairie, the destination of this line, is one of the wealthiest suburbs in the Twin Cities area. In order to provide “transit equity,” regional transit planners have promised to build a few bus shelters in poor neighborhoods. That’s so equitable.
Hampton Roads Transit, which serves Norfolk, Virginia Beach, and Newport News, is having a difficult time. Ridership for the first seven months of fiscal 2015 (which began in July) is down 9 percent from 2013, and 2013 ridership wasn’t so hot in the first place. Financial records show that the revenue per rider, at 98 cents per trip, is 8 cents more than the agency’s target, but the cost per rider, at $5.41 per trip, is 73 cents less than targeted, so fares are only covering 18 percent of operating costs.
Click on the image to go to the page where you can download the draft environmental impact statement–comments due May 5.
What to do in this situation? For any transit agency, the solution is obvious: build more light rail. The region’s one light-rail line opened 16 months late and cost 60 percent more than projected. It was supposed to carry 10,400 riders per weekday in its opening year; it actually carried less than 4,400. While it was up to 5,500 in 2013, the 23 percent drop in light-rail ridership so far in 2015 suggests that the average this year will be even less than in the opening year.
Portland is “going to look like San Francisco in 10 years,” predicts real estate broker Douglas MacLeod. That’s because people like him are buying homes, demolishing them, and replacing them with two, three, or four skinny houses–houses as narrow as 15 feet in width but (unlike row houses) with around ten feet of space between them.
This continuing process has enough Portlanders upset that the city council recently voted to require developers to notify nearby homeowners at least 35 days before they begin demolition of a home, not that the homeowners will be able to do much about it. It has also led the Oregonian to commission these interactive graphics showing where homes have been replaced and how fast they are being demolished.
Of course, few are willing to discuss the real answer, which is to abolish or at least greatly enlarge Portland’s urban-growth boundary. The 2010 census found that Oregon is 98.8 percent rural, and more than 80 percent of its residents are confined to the remaining 1.2 percent that is urbanized.
The Washington Metropolitan Area Transit Authority (WMATA) is increasingly dysfunctional. DC’s subway system is designed to run eight-car trains but due to lack of equipment two-thirds of the trains operating during rush hour have only six cars even though they are packed full of people. WMATA has asked Virginia, Maryland, and DC for nearly $1.5 billion so it can purchase new equipment and upgrade its system to allow a return to eight-car trains.
The Maryland secretary of transportation, Pete Rahn, says the state is reluctant to give hundreds of millions of dollars to an agency as poorly run as WMATA. As an example of poor management, Rahn pointed to a dispute among the agency’s board over what kind of person should replace the agency’s general manager, Richard Sarles, who retired from his $366,000 a year job in January.
Some on the board wanted to hire a “turnaround expert” who could restore the agency’s fortunes. Others wanted to hire someone with more experience in the transit industry. The dispute became so serious that the mayor of Washington proposed to dismiss board member (and last year’s board chair) Tom Downs, who favored hiring someone with more transit expertise, because he disagreed with the mayor’s desire for a turnaround expert. In response, three candidates who were being considered for the job withdrew their applications.
The Antiplanner was in Spokane yesterday where the local transit agency is asking voters for a 50 percent increase in the sales tax that funds most of the agency’s operations. Much of the new money will go for various capital projects that will do little to increase ridership.
$1.2 million will buy you a bus that can go 170 miles on a single charge of batteries. The bus has 60 seats, which is just what is needed in Spokane, where the average bus carries just 9 people.
Spokane Transit previously persuaded voters to double the sales tax in 2004. The improvements made with that money led to a small increase in per capita transit ridership from about 25 trips per person per year to 27. Based on this, it doesn’t seem likely that another 50 percent increase in funding will do much to boost ridership.
The Antiplanner once wrote that “the definition of a socialist is someone who doesn’t understand that subsidizing something is not the same thing as making it affordable.” New York Mayor Bill de Blasio has often been called a socialist, and seems to fit the mold, proposing to make some housing “affordable” by confiscating money from others.
Specifically, de Blasio’s administration has demanded that, in order to get a permit to build a new school building, Collegiate School–a private school that traces its roots back nearly 500 years–must contribute enough money to build 55 units of “affordable housing.” Worse, those 55 units are estimated to cost at least $50 million (nearly $1 million per unit is affordable?), and if they cost more, Collegiate has to pay the difference. (If they cost less, the city pockets the difference.)
Even if the housing cost far less than $1 million per unit, 55 units of affordable housing aren’t going to have any influence on the affordability of New York City housing. Nor is it likely that whoever ends up living in those housing units falls into a conventional definition of the truly needy. Instead, like many of the beneficiaries of New York’s rent control and other housing laws, they will probably be middle- or upper-middle-class people who happen to be friends with the right people.