Should TIF Pay for Transportation Projects?

The Antiplanner is no fan of tax-increment financing (TIF), which was supposed to rehabilitate blighted neighborhoods but more often is used for crony capitalism and social engineering. The Colorado legislature was considering a bill to expand the use of TIF to allow cities and counties to use incremental sales tax revenues to pay for transportation projects to “underserved areas.”

An article on Monday argued against such an expansion, saying that it was likely to be abused to support projects that probably would not truly generate new economic growth (and thus no new taxes to pay for the projects). Fortunately, the bill died in the state house of representatives yesterday.

The article didn’t say so, but transportation projects should be paid for out of user fees, not out of imaginary economic growth. The transit industry makes a big deal of the “rate of return” on transit spending, when in fact that rate is negative. Transit advocates say that transit increases property values, but what they don’t say is, when this is true at all, it is a zero-sum game: any increase is balanced by a decrease (or slower rate of increase) elsewhere in the urban area.

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Transit’s Share of Urban Travel in 2014

Transit carried 16.6 percent of motorized travel in Honolulu, more than in any other urban area in the country. New York is second at 11.9 percent, followed by San Francisco at 7.9 percent, Chicago at 4.0 percent, State College PA at 3.7 percent, Seattle at 3.5 percent, Lompoc CA at 3.3 percent, and Boston at 3.2 percent. Philadelphia, Salt Lake (but see below), Portland, Baltimore, Los Angeles, Louisville, and six smaller urban areas are between 2 and 3 percent, and 35 urban areas are between 1 and 2 percent. Transit’s share in the remaining 350 or so urban areas is less than 1 percent.

The Antiplanner calculated these numbers using the newly posted table HM-72, “Urbanized area summary,” from the 2014 Highway Statistics, and from my summary spreadsheet of the 2014 National Transit Database. The National Transit Database has annual passenger miles of transit use by agency and designates which urban area is served by each agency; my summary spreadsheet totals the numbers for each urban area. Table HM-72 has daily vehicle miles of travel by urbanized area.

To convert daily vehicle miles to annual passenger miles, I multiplied daily by 365–unlike the transit people, the highway agencies use the average of all days in the week, not the weekday average–and then by 1.6 to account for vehicle occupancy. I calculated the 1.6 based on the share of urban travel by car, motorcycle, truck, and bus from table VM-1, using 1.55 for short wheelbase vehicles, 1.84 for long-wheelbase light-duty vehicles, 1 for motorcycles and heavy trucks and 11 for buses. There’s a slight bit of double counting as slightly less than 1/2 of a percent of urban vehicle miles is buses, and most of those are transit buses, but this won’t change the numbers much.

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Few American Cities Need Busways

The Antiplanner’s recent visit to Turkey allowed me to observe the Istanbul Metrobus. Buses from several different routes use two dedicated lanes in the median of a freeway for parts of their journeys. The forty-five bus stops on the 31-mile route have overhead walkways allowing patrons to cross the freeways.


An Istanbul Metrobus pulls out of a station.

Most buses are articulated and can comfortably carry at least 100 people. Buses operate as frequently as every 14 seconds in each direction; that’s more than 250 buses per hour. While they operate “only” every two minutes after 1 am, over the course of a 24-hour day, they still manage to run buses an average every 28 seconds over parts of the route. Each bus stop is long enough to serve at least four buses at a time.

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Washington Metro Promises to Disrupt Commutes for Months

On the heels of a National Transportation Safety Board (NTSB) report that found that Washington Metro “has failed to learn safety lessons” from previous accidents, Metro general manager Paul Wiedefeld will announce a plan today that promises to disrupt service for months in an effort to get the lines safely running again. While ordinary maintenance can take place during the few hours the system isn’t running every night, Wiedefeld says that past officials have let the system decline so much that individual rail lines will have to be taken off line for days or weeks at a time to get them back into shape.

The Washington Post blames the problems on “generations of executives and government-appointed Metro board members, along with Washington-area politicians who ultimately dictated Metro’s spending.” That’s partially true, but there are really two problems with Metro, and different parties are to blame for each.

First is the problem with deferred maintenance. The Metro board recognized that maintenance costs would have to increase as long ago as 2002, when they developed a plan to spend $10 billion to $12 billion rehabilitating the system. This plan was ignored by the “Washington-area politicians who ultimately dictated Metro’s spending” and who decided to fund the Silver and Purple lines instead of repairing what they already had.

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The Dishonorable Nevada Land-Grab Act

The federal government owns so much of Nevada–nearly 85 percent–that it has put a crimp in the state’s economy. The Antiplanner has designated it, along with Alaska, a remnant of the “Old Feudalism” in which the government or a few private parties own so much land that it is hard for individual residents to own land and conduct business.

Still, there is something wrong with a bill proposed in Congress with the peculiar title of Honor the Nevada Enabling Act of 1864 Act. The bill’s premise is that Congress failed to convey to Nevada lands that it gave to 38 other states at statehood, so Congress should immediately give the state 7.2 million acres of its choosing, with more acres to be given to the state later.

This is historically inaccurate. Only 30 states, including Nevada, received federal lands on statehood, not 38 as claimed by proponents of the so-called Honor bill. Nevada was made a state in 1864, and was among those states created between 1849 and 1896 that were offered two square miles of land out of every 36 square miles in the state–that is, sections 16 and 36 out of every township.* That would have been 3.9 million acres in Nevada. These lands were to be used to help fund schools.

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Happy Birthday, Jane Jacobs

As noted in today’s Google doodle, today is Jane Jacob’s 100th birthday. No doubt many people will write positive things about her. However, as the Antiplanner has noted before, her book, The Death and Life of Great American Cities, is overrated.

Jacobs made two points, one of them right, and one of them wrong. Her correct point, which is celebrated by many libertarians, is in recognizing that urban planners don’t understand the cities they claim to be designing. The hubris of planners writing 50 year plans when they don’t even know what’s going to happen five years from now would be amusing if the consequences weren’t so expensive.

Jacobs wrong point, which is celebrated by many urban planners today, was in thinking that she did understand cities. She thought she understood her neighborhood, Greenwich Village, New York, but she didn’t understand it very well. She reduced her understanding to four simple “conditions” that she said all cities needed: mixed uses, short blocks, a mixture of old and new buildings, and density of residents and jobs. Her application of these oversimplified conditions to all “great cities” made her just as guilty of hubris as the planners she criticized.

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Antiplanner’s Library: Who Owns the World

While doing research for my map of the New Feudalism, I found this 2010 book by Irish journalist Kevin Cahill. Despite the shrill cover rhetoric, the book is basically a nation-by-nation (and, in the United States, state-by-state) inventory of land ownership patterns. There are a lot of question marks about some countries, but it helps to fill in some of the blanks in Eastern Europe on my map.

Click image to find booksellers offering this book through abebooks.com.

Cahill’s thesis is that “the main cause of most remaining poverty in the world is an excess of landownership in too few hands.” The book is a follow-up to Cahill’s 2002 book, Who Owns Britain? Cahill makes much of Britain’s claim that the crown is the ultimate owner of all the land in the United Kingdom, and goes further and claims the Queen owns all of the land in Canada, Australia, and two-thirds of Antarctica. In fact, 60 to 70 percent of families in Australia, Britain, and Canada have fee-simple title to their land, which is just as valid as the titles Americans have to the land they own.

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APTA Tinkers with the Deck Chairs

Your largest member has just quit, complaining that your organization doesn’t do enough to help it and other large members and that they are underrepresented on your organization’s executive committee. And, oh, by the way, you’re paying your chief executive officer too much.

So what do you do? If you are the American Public Transportation Association, you fire the CEO. That’s not really going to solve any problems, but after 4-1/2 years of getting paid nearly $900,000 per year (see page 17), he probably has enough to retire on. There’s no word yet on whether his replacement will get a similar salary.

A salary and benefits of close to a million dollars a year might make sense for a company that earns billions of dollars in annual revenues. It makes a little less sense for APTA, which uses its $20 million in annual revenues to lobby Congress to get billions of federal dollars funneled to its members. It makes even less sense since the federal funds going to APTA members did not significantly increase during the reign of the newly retired CEO, part of whose qualifications are that he once drove the bus for the Indiana University basketball team coached by Bobby Knight. It is particularly galling to outsiders since taxpayers are the ultimate source of the funds used to pay him.

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Hillsborough County Commissioners Vote No

Tampa-area voters will be spared the expense of having to go through another campaign to build an obsolete transit system in the city thanks to a 3-to-2 vote against the project by Hillsborough County commissioners. Voters already rejected the light-rail project once in 2010, and voters in neighboring Pinellas County voted against a connecting rail project in 2014.

In the end, it was a close thing. The swing vote on the county commission, Victor Crist, said he made his decision during a three-hour public hearing at which half the witnesses favored the project and half opposed. But to get a realistic look at the reality of urban rail transit, Crist and his fellow commissioners need only look at their neighbor to the south, San Juan, Puerto Rico.

As the Antiplanner noted the other day, Puerto Rico is $70 billion in debt, and one of those billions is for the Tren Urbano, a rail system that opened in 2004. Not only are local residents having to repay that $1 billion, they have to spend nearly $50 million per year to keep it operating, partly because ridership is less than half of what was projected.

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Why the Dollar Works and the Euro Doesn’t

The Greek debt crisis led some people to wonder why a common currency works in the United States but not in Europe. Then came the Puerto Rico debt crisis. Yet what happened in Puerto Rico actually shows why the dollar works when the euro doesn’t.

Normally, a country that finds itself with unsustainable debt can devalue its currency. This reduces the standard of living for the country’s residents but makes it easier for the government to pay off whatever debt it owes in the local currency.

Neither Greece nor Puerto Rico have that option since their currency is shared with other nations or states. As a member of the euro zone, Greece can threaten to leave, destabilizing the entire system, unless other members put up with its profligate spending. Greece isn’t the only one: Portugal, Italy, Greece, and Spain–the so-called PIGS–all seem to have unsustainable debts that threaten the euro.

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