Category Archives: Urban areas

A Streetcar Named Liar

Everything you’ve heard from the city of Portland about its streetcar lines is a lie. That seems to be the conclusion of the latest review of the operation by the city of Portland’s own city auditor.

Portland Streetcar, the private organization contracted to run the streetcar for the city, claims to have met the city’s on-time goals. The audit finds that it hasn’t. Portland Streetcar claims to have increased ridership by 500,000 riders in fiscal year 2014. The audit finds that that Portland Streetcar overstated ridership by 19 percent and actually ridership was 1.1 million trips less than claimed.

The auditor is also unimpressed by claims that the streetcar has generated billions of dollars worth of economic development. “Based on studies [Portland Bureau of Transportation] provided to us,” says the audit, “we conclude this research has yet to describe a causal relationship of how streetcars may affect economic development.” In other words, it’s just another fabrication.

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Portland Housing: Density at Any Cost?

Portland’s regional planning agency, Metro, recently released its 2014 Urban Growth Report, which projects that the region will gain 300,000 to 500,000 new residents between 2010 and 2035. The report suggests that it may not be necessary to expand the region’s urban-growth boundary to house those new residents because people are willing to live in smaller homes on smaller lots.

That’s an extremely distorted view of the future, says Gerard Mildner, an associate professor of real estate finance at Portland State University’s Center for Real Estate. In a paper titled, Density at Any Cost (which was also published in the Center for Real Estate’s quarterly report), Mildner argues that Metro’s report “distorts economic data and will lead the region to make decisions that will harm economic growth.”

Not only will Metro’s vision make single-family housing more expensive, says Mildner, it will increase the cost of rental housing. Contrary to claims that more people want to live in smaller quarters, achieving Metro’s goals will require “multi-billion dollar unfunded mandates on local government to subsidize housing and transportation projects.” Nor will Metro’s plans be good for the environment, since they will just lead a lot of people to move “from our region to places in the southeast and southwest United States where carbon emissions will be higher” because those places require more air conditioning and use more fossil fuels to generate electricity.

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Oregon Office of Economic Ignorance

The Oregon Office of Economic Analysis recently published a four-part economic assessment of the “Portland housing bubble.” Written by an economist named Josh Lehner, the assessment looks at a lot of data but misses the elephant in the room, which is how land-use regulation has affected Portland housing.

Housing prices have risen to pre-financial-crisis levels, says Lehner, and Portland’s rental market has an inordinately low vacancy rate. New construction of both single- and multi-family homes is mostly at the high end. Lehner looks at these facts with alarm, but it never occurs to him that there is a simple remedy: end all of the land-use restrictions.

Land-use regulation not only makes housing more expensive, it makes housing prices more volatile, that is, more prone to bubbles. This is because, when supply is limited, a small increase in demand translates to a large increase in price rather than an increase in supply. Conversely, a small decrease in demand translates into a large decrease in price.

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Portlanders Unhappy with Portland

Debates over Portland-area rail transit and land-use issues typically pit city residents against the suburbs, with urbanites favoring more transit and land-use restrictions and suburbanites opposing them. But a recent poll by Portland’s city auditor reveals that even city of Portland residents are becoming increasingly disillusioned about Portland’s policies.

The complete survey is here. The same survey has been made for each of the last five years, and support for Portland’s land-use and transportation policies in particular has steadily eroded during that time.

The survey found that satisfaction with the city’s policies in general had fallen from 52 percent support in 2010 to 47 percent in 2014. Dissatisfaction was greatest with regard to transportation policies. Where 38 percent thought the city was doing okay on street maintenance in 2010, just 29 percent did in 2014. Where half of the city residents felt they could live with existing levels of traffic congestion in 2010, just 41 percent did in 2014.

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A Model for the Rest of the Country?

Portland doesn’t need to apologize for spending more than $1.5 billion on a 7-mile light-rail line, says Secretary of Immobility Anthony Foxx. “Cities, counties and state need to have bold visions, not be unapologetic about them, and explain them to the public,” he was quoted as saying. Presumably this quote was garbled; otherwise the Department of Transportation is in even worse trouble than the Antiplanner thought.

Let’s see how well Portland is doing as a model for the nation:

  • Its streets are falling apart even as it plans to build 140 miles of streetcar lines at a cost that would be enough to repave all 5,000 miles of streets;
  • Portland doesn’t even have enough money to maintain city-owned office buildings;
  • The general manager of Portland’s transit agency says it will have to reduce all rail and bus service by 70 percent between now and 2025 in order to meet all of its financial obligations;
  • Despite all the money spent on Portland transit, transit is so unpopular that, of 50,000 new workers gained between 2005 and 2012, fewer than 100 take transit to work;
  • For the Portland urban area as a whole, there were 124,000 new jobs between 2005 and 2012, of which about 700 took transit to work.
  • Thanks partly to money stolen from schools by TIF-addicted planners intent on subsidizing TODs, Portland high schools have some of the largest classroom sizes and lowest graduation rates in the nation;
  • The “creative class” of young people who have been attracted to Portland (most likely by the city’s 50 brew pubs) do so little work that they have reduced Portland’s per capita incomes, relative to the rest of the country, by 10 percent;
  • Portland has funded only half of its pension obligations and just 4 percent of its health-care obligations, giving it one of the worst records of any city in the nation.

Sounds like a model for other cities of what not to do.


“Equity” Is a Word We Want to Use in this Press Release

Advancing its “regional transit equity” plan, the Twin Cities Metropolitan Council issued a press release last week announcing it has received a $3.26 million federal grant to build or “enhance” 140 bus shelters. This money is matched, on a one-to-four basis, with $815,000 of local funds, meaning each bus shelter will cost a whopping $29,000.

Meanwhile, the Met Council is twisting the arms of city officials to gain support for a $1.7-billion light-rail line extending from Minneapolis to Eden Prairie, which is probably the Twin Cities’ wealthiest suburb. Three (out of 13) members of the Minneapolis city council voted against the project, partly due to concerns over transit equity.

“If we think equity means maybe we might build some heated bus stops in north Minneapolis sometime in the future that we can’t promise or guarantee and we won’t tell you where they’ll be, then good for us for standing up for equity,” one of the councilors who voted “no” sarcastically stated.

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More Light-Rail Critiques

Sorry about the light postings this week, but I’ve been pretty busy talking with people about light rail. Here is my presentation about light rail in Pinellas County (St. Petersburg), Florida, and here is my presentation about light rail in Austin, Texas.

These are large files–Pinellas is 18 MB, Austin is 24–and they don’t include the videos I used for those presentations. If you want the videos, which are self-driving cars, click here to download a 44-MB zip file with three videos that I used in both presentations.

Next week I go to Denver for the 2014 American Dream conference, so postings may be light then as well. The week after that I’ll be back in Minneapolis to debate Myron Orfield over land-use regulation and density. That should be fun.


Making the Poor Subsidize the Rich

Utah Transit Authority executives are overcompensated, the agency has underfunded its high rail maintenance costs, its bus service has suffered due to financial constraints, concludes the Utah State Legislative Auditor. Moreover, as reported in the Salt Lake Tribune, the agency’s fare structure makes the poor subsidize the rich, which the agency has signed cushy deals with developers that sometimes financially benefit agency board members.

Sounds like a typical rail transit agency. Naturally, the agency claims (in an appendix to the report) that it is innocent of any wrongdoing. However, it cannot deny that bus service (as measured by vehicle revenue miles) declined nearly 20 percent between 2009 and 2012, years in which the agency spent close to #1 billion on commuter trains that, as of 2012, were carrying fewer than 3,200 round trips per day.

The American Public Transit Association recently named Utah Transit the transit system of the year. But it’s clear from past awards that APTA admires agencies that are best able to con taxpayers out of their money, not ones that provide the best service to transit riders. UTA, which is proud of spending more per capita than any other transit agency, seems to have done a good job of conning taxpayers. Let’s hope audits like this one will open their eyes.


No One’s Riding Light Rail, So Reduce Fares and Build More

Planners predicted that Norfolk’s Tide light-rail line, which opened in 2011 60 percent over budget and 16 months behind schedule, would stimulate economic development along its route. But little development is taking place, so the Virginian Pilot has come up with a grand idea: reduce fares by two thirds. That, the paper’s editorial writers guesstimate, should attract 1,000 more riders per day, which they hope will generate the development planners promised.

Looks fast, but the schedule indicates it takes 26 minutes to go 7 miles for an average speed of 16 mph.

There are a lot of problems with this proposal, not least of which is the fact that rail fares in Norfolk are already the second-lowest in the country, after Houston’s. Though the nominal fare is $1.50, which the Pilot proposes to cut to 50 cents, actual fares collected in 2012 averaged just 50 cents a ride, compared with 35 cents in Houston but $1.39 in Denver. The national average for low-capacity rail is 98 cents, while the average Hampton Roads bus rider pays 91 cents.

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Pinellas Transit in Trouble

The Pinellas Suncoast Transit Authority (PSTA) has been illegally using FEMA money to illegally advertise in favor of a ballot measure to build light rail in St. Petersburg, Florida. Last week, the Federal Emergency Management Agency sent a letter demanding that PSTA return a $354,000 grant it received that was supposed to be used to ward of terror threats, but was used instead to advertise for light rail. FEMA warned that, even if PSTA returned the money (which it has), it would still be under investigation for criminal charges for misuse of federal funds.

The double use of the word “illegal” in the first sentence above refers to the fact that, not only did PSTA misuse the FEMA grant, it shouldn’t be spending any money at all promoting the light-rail ballot measure. In the 1990s, most rail transit ballot measures lost, but in the 2000s, more have won, mainly because transit agencies began using taxpayer dollars to promote the measures start with the Utah Transit Authority in 2000.

As a pro-rail web site notes of the Utah measure, a “key to success was that the agency had put great effort into maintaining a strong, positive public reputation prior to launching the campaign. TV ads were already regularly appearing reminding the public of the benefits of the service provided by UTA. When it came time to initiate the electoral campaign, early outreach efforts had already paved the way.”

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