Time and The New York Times Get It Wrong

Writers for both Time and The New York Times have recently pontificated on the need to rebuild American cities so as to stop “sprawl.” The authors of these articles completely fail to understand recent housing markets and urban trends.

Writer Bryan Walsh, who has previously written on environmental issues for Time, claims that “The American suburb as we know it is dying,” which is a good thing because the suburbs “left our nation addicted to cars.” (Which, of course, is backwards: cars allowed more people to live in the suburbs.)

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New London Redevelopment

In June, 2005, the Supreme Court infamously decided that cities could condemn peoples’ land to give to private developers provided the government had written an economic development plan for the project. In response to arguments that many previous such plans had failed, the Supreme Court merely said that “we decline to second-guess the City’s considered judgments about the efficacy of its development plan.”

Susette Kelo, who fought New London’s plan for her Fort Trumbull neighborhood.
Flickr photo by cereza juana.

Three years after the decision, no one had to second-guess the city’s judgments. Instead, it was clear that they were wrong. The homes of Susette Kelo and her neighbors have all been torn down or removed. But, except for the remodeling of one government building into another government building, virtually no new development had taken place in the Fort Trumbull district by May, 2008.

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Sydney Transit Disaster

Congratulations to New South Wales for showing the world that it, too, can waste a lot of money building ridiculous rail lines. The Australian state’s Labour government had planned to spend $1.4 billion (all figures in this post in Australian dollars) building a 16-mile line from the suburbs of Chatswood to Parramatta. But local residents protested the line’s routing through a park, so planners decided to put the rail line underground, greatly increasing the cost.

The original plan: Parramatta to Chatswood.

The line now under construction from Epping to Chatswood is only about 8 miles long and the cost is nearly $2 billion. (The $2.3 billion cost quoted in the papers apparently includes interest.) The other 8 miles were postponed because they would cost $1.2 billion and add only 15,000 new riders to the system.

Under construction: Epping to Chatswood.

How many new riders will the $2.0 billion segment add? 12,000. So how does that make sense?

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Financial Meltdown

Note: Updated in response to Monday’s news and opinion columns.

Last week’s excitement seemed to take many by surprise, yet it was in fact predicted by many. Start with Charles Morris, who began writing his 2007 book, The Trillion-Dollar Meltdown, in 2005.

“The whole world economy is at risk,” said The Economist, also in 2005. “It is not going to be pretty.” In 2004, the magazine-that-calls-itself-a-newspaper estimated that two-thirds of the world’s housing (by economic value) was “a potential housing bubble.” By 2005, it was calling it “the biggest bubble in history.” And, as it noted in 2003, “soon or later,” bubbles always burst.

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High-Speed Rail Part 9: Conclusions

The Antiplanner is an unabashed rail nut. My office walls are filled with pictures of trains and rail memorabilia. I’ve traveled at least a quarter of a million miles on Amtrak and Canada’s VIA. When I’ve visited Europe, Australia, and New Zealand, my preferred method of local travel has always been by train. I helped restore the nation’s second-most powerful operating steam locomotive, and my living room has the beginnings of a model railroad.

There is no doubt that, if high-speed rail worked, I would be the first to support it. But my definition of “works” is somewhat different from that of rail advocates, one of whom once told me that he considered a rail transit project successful if it allowed just one person to get to work a little faster — no matter how much it cost everyone else.

For me, “works” means that a project is cost-effective at achieving worthwhile objectives. “Cost-effective” means that no other projects could accomplish the same objectives at a lower cost. “Worthwhile objectives” might include reducing traffic congestion, air pollution, or energy consumption. Though high-speed rail advocates are gleeful about the prospect, I don’t consider shutting down competing air service to be a worthwhile objective.

This series of posts on high-speed rail has revealed at least twelve important facts.

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Reason Foundation on High-Speed Rail

The Reason Foundation just published its analysis of California’s high-speed rail plan. The full study is also accompanied by a series of policy briefs on the effects of high-speed rail on congestion, greenhouse gases, and California finances.

“The current high-speed rail plan is a fairy tale,” says Adrian Moore, Ph.D., Reason’s vice president of research. “The proposal suggests these high-speed trains will be the fastest ever; the most-ridden ever; the cheapest ever; and will convince millions of Californians they no longer need to drive or fly. Offering up a best-case scenario is one thing, but actually depending on all of these miracles to happen simultaneously is irresponsible public policy.” Moore also has an op ed on the subject in today’s Orange County Register.

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High-Speed Rail Part 8: Alternatives to California’s HSR

The 2005 environmental impact statement for California’s high-speed rail includes two alternatives to building rail: a no-action alternative and a “highway-air” alternative that proposes major expansions of both freeways and airports in the rail corridor. The highway component alone of this alternative was projected to cost twice as much as high-speed rail, allowing rail proponents to claim that rail is cheaper than roads (page 4-1).

But this alternative was a “straw man” designed to make high-speed rail look good. One reason for the high cost is that the alternative proposed to expand every freeway along the rail route, even highways that are not expected to be congested in the rail project’s time horizon. For example, the alternative adds one-third more capacity to freeways in the Central Valley that are expected to operate at only 92 percent of capacity in the no-action alternative (page 3.1-12).

On top of that, the highway-air alternative is more than five times as effective at relieving congestion than the rail project. Where high-speed rail is expected to take 3.8 percent of cars off the road, the highway-air alternative reduces congestion by more than 20 percent (page 3.1-12). This suggests that an alternative that costs only one-fifth as much as the highway-air alternative, or about half as much as the rail alternative, would be more comparable to rail.

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Paulson: Housing Is the Root of the Problem

“I’ve consistently said that when we looked at our financial institutions,” Secretary of the Treasury Henry Paulson said Monday, “the root of the problem lies in this housing correction.” Housing prices went up — and banks and other financial institutions invested in mortgages. Housing prices went down — and banks and other financial institutions failed.

Why did housing prices go up? Because of supply constraints. We know that home builders can meet almost any demand if there are no constraints on land. We know that because, as the latest home price indices reveal, the fastest growing metropolitan areas in America — places like Dallas and Houston — did not suffer from housing bubbles and are not now suffering any serious correction.

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High-Speed Rail Part 7: The Benefits of California HSR

The costs are exorbitant and rising. The risks are staggering. And the benefits? Even if you believe the Authority’s optimistic assumptions, you pretty much need a magnifying glass to see them.

What are the benefits claimed for the rail network? Less traffic congestion, less energy consumption, less air pollution and greenhouse gas emissions, economic development, and, of course, saving people’s time.

Congestion: With or without rail, the EIS predicts that highway congestion will be far worse in 2020 than it is today. With rail, highways parallel to the rail lines will have an average of 3.8 percent less traffic than if rail is not built (p. 3.1-12). Rail will do most on the L.A. to San Diego route (which will probably be one of the last segments to be built), taking 7.9 percent of cars off the road. It will remove 6.6 percent of cars on the Bay Area-to-Central Valley portion. Elsewhere the relief will be less than 3.5 percent.

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High-Speed Rail Part 6: The Risks of California HSR

Yesterday’s post on the costs of California high-speed rail discussed the likelihood that this megaproject will cost more than projected and the likelihood that taxpayers who pay for construction will have to pay again to rebuild the system every thirty or so years. Such costs are not so much a risk as a certainty. But there are many other risks involved with high-speed rail, some of which could unexpectedly drive up construction costs even more, and others affecting operations.

Some of these risks were identified in the senate oversight report on high-speed rail, including right-of-way, safety, and ridership risks. One important rish that was not brought out by the senate report is the risk that competing technologies will render high-speed rail obsolete.

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