FasTracks off the Track?

According to Kevin Flynn of the Rocky Mountain News, Denver’s Regional Transit District (RTD) has admitted that it can’t build the FasTracks system that it promised when it asked voters for a tax increase in 2004. Even after cost-cutting measures, such as smaller stations and less security, the agency has previously admitted that the project that was supposed to cost $4.7 billion will actually cost $6.1 billion.

But Flynn expects the latest estimates, due to be made public next month, will be “substantially” higher. On top of that, the sale tax revenues that were expected to pay for FasTracks are coming in well short of predictions. As a result, RTD says it will have to either ask voters for more money, take more time to build the system, or cut back on the length of some of the lines.

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Eminent Domain Case Calls Zoning into Question

Denver’s transit agency, RTD, has generated lots of controversy by planning to take people’s land by eminent domain. But in a recent case, RTD may have bitten off more than it can chew.

RTD proposes to take some land near downtown Denver to use as a maintenance facility. The owner is not some small business but a major development company that took out full-page, color ads in major Denver papers to protest the taking.

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The Dog That Didn’t Bark

“Planning-induced housing bubbles not only threaten individual families and local economies,” the Antiplanner wrote in Best-Laid Plans, “they threaten the world economy.” Those threats are being realized today.

The federal government seized another big bank last week. Fannie Mae and Freddie Mac are on the verge of collapse and the fed is likely to announce a major bailout this week. More banks are expected to fail soon. “This is a very serious banking crisis,” says a former president of the American Bankers Association.

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Housing, Poverty, Crime, and Light Rail

A recent article in The Atlantic indirectly sheds some light on Portland’s light-rail crime wave. The article notes several research studies have shown that demolition of major housing projects, such as Chicago’s Cabrini Green, was soon followed by suburban crime waves. Residents of the housing projects used section 8 vouchers to move to lower-middle-class suburbs and, in some cases, brought the crime with them.

Moving poor people from public housing to private rental housing was supposed to help them get out of poverty, meaning children would be more likely to graduate from high school and adults more likely to get a job. But a reanalysis of the research on which this claim was based found that the sample size was small and that people who moved actually worked less in their new homes than when they lived in the projects.

Portland did not have high-rise public housing projects, but it did have a concentration of low-income people who were pushed out of their neighborhoods by urban-growth-boundary-induced gentrification. Portland planner John Fregonese puts a positive spin on this, saying that “segregation is breaking down in Portland.” While it is soothing to think that Portland is getting more integrated, it does not necessarily mean the lives of the people forced out by gentrification have improved.

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New Orleans: A Vanilla City

After Hurricane Katrina, New Orleans Mayor Ray Nagin famously promised that New Orleans would remain a “chocolate city.” (He later apologized to anyone who took offense at the remark.)

I interpreted his promise to mean that he would make sure that low-income people who had been driven from their homes by the flood would be able to return. He hasn’t kept that promise. According to the latest report, low-income people who have been receiving section 8 rental assistance say they aren’t allowed to return to New Orleans because New Orleans is considered a “higher rent” city and they won’t be allowed to get rental assistance there.

Were it not for the planners, this neighborhood might have been rebuilt already.
Flickr photo by Ed Yourdon.

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Yes, Smart Growth Caused the Mortgage Meltdown

Wendell Cox, one of the Antiplanner’s faithful allies, argues in a new paper that “smart growth exacerbated the international financial crisis.” Of course, the Antiplanner has said this at least since last December (and The Best-Laid Plans predicts such an outcome), while some of the Antiplanner’s loyal opposition remains skeptical.

Skeptics probably won’t be persuaded by Cox, simply because his arguments are similar to those previously made here. “Excessive land-use regulation,” says Cox, led to artificial housing scarcities. This drove up prices and led people who would otherwise have been able to afford a mortgage at prime rates to turn to subprime loans. Of course, the loosening of the credit market contributed, but without smart growth, we would currently have a “subprime mortgage problem” rather than a full-blown international economic crisis.

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The Boom That Wasn’t

The New York Times say the economic boom of the past eight years really wasn’t much of a boom, as American median incomes in 2007 were actually lower than they had been in 2000. So how was it a boom?

The Times implies that the rich got richer while the middle and lower classes got poorer. “We’ve never had an expansion in which the middle of income distribution had no wage growth,” it quotes a Harvard economist as saying.

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$82 Million Per Mile Is Cost Effective?

Last week, the Twin Cities’ Metropolitan Council approved a new light-rail line between downtown Minneapolis and downtown St. Paul. As approved, the 11-mile line will cost $909 million, or more than $82 million per mile.

Socialist light-railism in Minneapolis.

The Met Council’s original proposal, which was projected to cost $990 million, was rejected two years ago by the Federal Transit Administration. Under cost-effectiveness criteria that the FTA established in 2005, any project that cost $24 or more “per hour of transportation system user benefits” would be ineligible for federal funding. The $990 million Central Corridor line was projected to cost $26.05 per hour; cutting the cost to $909 million would improve this to a mere $23.80 per hour.

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Agricultural Planning Disasters

A great op ed in Saturday’s New York Times illustrates some of the dangers of government planning with a story about farming. The author of the article, a Minnesota farmer, made the naive mistake of responding to the market demand for local fruits and vegetables by converting 25 acres of corn fields into watermelons, tomatoes, and other vegetables.

Don’t try to grow watermelons here.
Flickr photo by Beggs.

It turns out that the U.S. Department of Agriculture forbids farmers from growing most fruits and vegetables on “corn base” lands. The farmer had to pay a stiff fine, equal to all his profits, for daring to grow watermelons instead.

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Rail Transit: Pay Now, Pay Later

Denver’s 119-mile FasTracks rail transit project, approved by voters in 2004, will cost at least $1.4 billion more than voters were told, according to the project’s 2007 annual report. Moreover, a revenue shortfall means that Denver’s Regional Transit District’s (RTD) ability to sell bonds to pay for construction will fall $400 million short of expectations.

Although RTD blames rising steel prices for the overrun, in fact a large share of the additional cost is due to RTD’s own inane decisions. The original plan called for running Diesel-powered trains from downtown to the airport, but RTD decided to spend another $400 million electrifying the route. RTD also changed routes on the North Metro line, adding at least $100 million to its costs.

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