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Monthly Archives: November 2016

Meet the New Secretary of Transportation

By | | News commentary, Transportation
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In what may turn out to be his least controversial cabinet nomination, President-elect Trump has picked Elaine Chao as Secretary of Transportation. Chao was previously Secretary of Labor under George W. Bush and Deputy Secretary of Transportation under George H.W. Bush. She has also served as director of the Peace Corps and worked as a distinguished fellow for the Heritage Foundation.

Chao was born in Taiwan and when she was 8 years old her family emigrated to the United States, where her father ended up founding a major shipping company that owns a fleet of at least fifteen ships. She earned a degree in economics from Mount Holyoke College in 1975 and an MBA from Harvard Business School in 1979.

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America Has Enough Infrastructure

By | | Transportation
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Many people in Washington are talking about infrastructure spending. Infrastructure is a bi-partisan issue, because every elected official is happy to spend other people’s money on projects that will get their names in the paper and contributions to their re-election campaigns.

George Will throws a dose of cold water on the party when he points out that it’s hard to spend money on infrastructure when we’ve thrown up so many roadblocks in the form of environmental reviews. But that’s not the real problem with infrastructure spending. The real problem is that we really don’t need any new infrastructure.

Most writers assume that government spending on infrastructure has a multiplier effect: that every dollar spent will generate more than a dollar of gross domestic product. That worked for early highway spending, which generated a huge amount of new travel and shipping that didn’t exist before. It won’t work for most infrastructure spending today.

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Back in the Air Again

By | | Housekeeping, Housing
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The Antiplanner is flying to Washington DC today to participate in a forum on housing tomorrow, Should Urban Areas Grow Up or Grow Out to Keep Housing Affordable?. The forum will include a broad range of views including Gerrit Knaap of the National Center for Smart Growth Research and Emily Hamilton of the Mercatus Center.

If you plan to attend, please register at the above link. If you are unable to attend in person but would like to view the conference over the Internet, also use the above link to get the live stream.
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The Antiplanner’s presentation will be based on a recent paper on The New Feudalism and additional data showing that increasing densities makes urban areas less affordable, not more.

Happy Thanksgiving

By | | Mission
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The Antiplanner wishes everyone a Happy Thanksgiving, especially the non-elites who made a big difference in the recent election. When I was doing research for my 2012 book, American Nightmare, I realized that land-use regulation and many other things I had been seeing were best understood as a form of economic warfare on the working class. So I am thankful that, this month, the working class scored a point in that war, or in fact 290 of them.

We naturally hope it doesn’t turn out that we’ve been fooled again. One positive sign is President-elect Trump’s offer of HUD secretary to Ben Carson, who understands that the same policies that oppress the white working class harm blacks and Latinos as well.

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Portland to Displaced Blacks:
Have We Got a Deal for You

By | | City planning, Housing
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By driving up land and housing prices, Portland’s urban-growth boundary has accelerated gentrification of low-income neighborhoods, displacing blacks, Latinos, and other families. As the Antiplanner has shown in a recent paper, the number of blacks in Portland actually declined between 2010 and 2014.

Portland promised to find affordable homes for displaced blacks, but for some reason those blacks aren’t too thrilled with the 387-square-foot condos the city has offered them. The city is making the condos available to families earning less than $47,000 a year, with priority given to people displaced by gentrification (which is often subsidized by the city’s urban-renewal agency).

Such people will be welcome to buy these condos for a mere $164,000, or nearly $425 a square foot. Such a deal, especially considering many of the displaced people were living in single-family homes several times the size of the condos, and that such homes in places without urban-growth boundaries would cost half of what the city wants for its “affordable” condos.
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Amtrak’s World-Class Losses

By | | Transportation
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Amtrak issued its F.Y. 2016 unaudited financial results last week with a glowing press release that claimed a “new ridership record and lowest operating loss ever.” Noting that “ticket sales and other revenues” covered 94 percent of Amtrak’s operating costs, Amtrak media relations called this “a world-class performance for a passenger carrying railroad.” The reality is quite a bit more dismal.

Many new high-tech firms attract investors despite losing money, but a 45-year-old company operating an 80-year-old technology shouldn’t really brag about having its “lowest loss ever.” The “world-class performance” claim is based on the assumption that trains elsewhere lose money, which is far from true: most passenger trains in Britain and Japan make money, partly because they are at least semi-privatized.

Moreover, a close look at the unaudited report reveals that Amtrak left a lot of things out of its press release: passenger miles carried by Amtrak declined; ticket revenues declined; and the average length of trip taken by an Amtrak passenger declined. The main reasons for Amtrak’s positive results were an increase in state subsidies (which Amtrak counts as passenger revenue) and a decrease in fuel and other costs.

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Still Unreliable After All These Months

By | | Transportation, Urban areas
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When Denver’s new airport rail line experienced severe glitches shortly after it opened, including malfunctioning crossing gates and a lightning strike that shut down the entire line for seven hours, among other problems, transit officials assured the public that they were just getting the bugs out of the system. But now, more than six months after it opened, the bugs are still thriving.

The crossing gate problem is so severe that the Federal Transit Administration has threatened to shut down the line until it is corrected. The contractor that built and operates the line tried to claim the lightning strike was an act of God, so the contractor shouldn’t be held responsible, but Regional Transit District officials responded that they had pointed out the company’s design was vulnerable to lightning as early as 2013, yet the company did nothing to fix the flaw. Meanwhile, the system continues to perform unreliably.

Now RTD has been forced to admit that two other lines being built by the same company won’t open on time. RTD claims that it saved money by entering into a public-private partnership for the line in what is known as a “design-build-operate” contract. In fact, it saved no money at all, but was merely getting around a bond limit the voters had imposed on the agency. If the private contractor borrows a billion dollars or so and RTD agrees to pay the contractor enough to repay the loan, the debt doesn’t appear on RTD’s books. Taxpayers will still end up paying interest in the loans, which actually makes it more expensive than if RTD had stayed within its debt limit.

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Portland: Still the Model for Unaffordability

By | | Housing, Urban areas
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The Census Bureau estimates that the city of Portland is growing by more than 10,000 people a year while the Portland urban area is growing by more than 40,000 people a year, or more than 100 people a day. Despite, or more likely because of, hundreds of millions of dollars spent on growth planning, the region is doing a very poor job of producing the housing those people need to live in.

Metro, Portland’s regional planning agency, brags that not only is the region following most of the advice recently offered by the White House for making housing more affordable, it actually pioneered several of the techniques. Yet according to the Federal Housing Finance Agency, Portland-area housing prices are currently growing at 13 percent per year.

Metro has an article describing some recent housing developments that inadvertently reveals just why housing is getting so expensive. Continue reading →

Back in the Air Again

By | | Travels
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There’s fresh snow in Santiam Pass, about 15 miles from the Antiplanner’s Oregon home. Unfortunately, the Antiplanner has to fly to Hawaii, where the temperatures are expected to range between 72 and 82 degrees for the duration of my visit. It’s a tough life, but someone has to do it.

Santiam Pass yesterday just before sunset.

I’ll be speaking in Maui on Thursday about Hawaii’s housing crisis, which is pretty much like California’s housing crisis and a lot worse than Portland’s and Seattle’s housing crisis. If you are lucky enough to be in Maui on Thursday, I hope to see you there.

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Trump’s Trillion-Dollar Infrastructure Plan

By | | News commentary, Transportation
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On the campaign trail, Donald Trump promised to spend twice as much on infrastructure as whatever Hillary Clinton was proposing, which at the time was $275 billion. Doubling down again in a speech after winning the election, Trump now proposes to spend a trillion dollars on infrastructure over the next ten years.

President Obama had proposed to fix infrastructure with an infrastructure bank, though just where the bank would get its money was never clear (actually, it was perfectly clear: the taxpayers). Trump’s alternative plan is for the private sector, not taxpayers, to spend the money, and to encourage them he proposes to offer tax credits for infrastructure projects. He says this would be “revenue neutral” because the taxes paid by people working on the infrastructure would offset the tax breaks. In short, Trump is proposing tax credits in lieu of an infrastructure bank as a form of economic stimulus.

America’s infrastructure needs are not nearly as serious as Trump thinks. Throwing a trillion dollars at infrastructure, no matter how it is funded, guarantees that a lot will be spent on unnecessary things. As Harvard economist Edward Glaeser recently pointed out in an article that should be required reading for Trump’s transition team, just calling something “infrastructure” doesn’t mean it is worth doing or that it will stimulate economic growth.

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