Paying for a Tesla, Getting a Scion

The city of Portland has agreed to contribute $6 million towards the cost of a high-rise, mixed-use complex because the building is supposed to include 60 units of “affordable housing.” “That’s like paying for a Toyota and getting a Tesla in return,” Portland Mayor Ted Wheeler enthused.

No, Mr. Mayor. It’s more like paying for a Tesla and getting a Toyota. A very small Toyota, also known as a Scion.

The building in question is supposed to make innovative use of cross-laminated wood to form one of the tallest wooden buildings in America. Normally wood is not allowed for high rises due to fire danger, but the Oregon wood products industry has been trying to boost the use of this material and claims it has overcome the fire problem. The project developers, coincidentally called Project (technically, Project^, but pronounced “project”), are so enthused that they are willing to put up $1.2 million of their own money towards the $29 million structure. Continue reading

Denver Mayor Demonstrates Insanity

As Albert Einstein didn’t say, “the definition of insanity is doing the same thing and expecting different results.” Someone points out that this is actually the definition of perserveration. Whatever you call it, Denver Mayor Michael Hancock is doing it.

“Shockingly, 73 percent of Denver commuters drive to and from work in cars by themselves,” says Mayor Hancock. So, he plans to serve the people by working to “dedicate more travel lanes as transit only and make bus service more accessible to everyone.”

Hancock is behind the times, as the share of Denver commuters who drive alone to work hasn’t been 73 percent since the early 2000s. According to census data, it was 71 percent in 2000, but grew to 74 percent in 2006 and was 76 percent in 2016. Continue reading

Will Taxing X Make X More Affordable?

This week, Oregon voters are receiving their mail-in ballots for a special election whose purpose is to see just how stupid Oregon voters really are. The election is on a ballot measure whose supposed goal is to make health insurance more affordable. To reach this goal, the measure calls for taxing health insurance.

This is right in line with the policy, popular in Portland, of making housing more affordable by taxing housing. Let’s see how well that’s working. Oh, my; it doesn’t seem to be working at all.
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I don’t want to influence any voters here with my use of the word “stupid.” Maybe you want to make health insurance more expensive by taxing it. But if you want to make it more affordable, Oregon’s ballot measure is the wrong way to go.

Economic Freedom & Property Rights

Libertarians and other free-market advocates agree that protection of private property rights is essential for economic liberty and prosperity. Yet none of the various freedom indices take property rights into account when comparing economic freedom in one country, state, or province to another.

For example, the only measure of property rights in the Fraser Institute’s index of world economic freedom is the “regulatory cost of the sale of real property.” But that doesn’t begin to scratch the surface of property rights. What about the regulatory cost of the use of real property? What about regulatory limits on such use? What about the ease with which government can take property by eminent domain? All of these are much more important than the cost of selling property, yet are ignored by the index.

Last month, the Fraser Institute released its latest index of economic freedom for North America, comparing U.S. and Mexican states and Canadian provinces. Like the world index, this one does not measure property rights. Instead, it focuses on the size of government, taxes, and labor markets. The results are sometimes very different from an index of property rights. Continue reading

Throwing Good Money After Bad

Publicly funded transit projects are not the only ones that overestimate ridership and underestimate costs. The casinos that own the Las Vegas Monorail, which started operating in 2004 and went bankrupt in 2010, wants to borrow $110 million to extend the line about 0.8 miles. That’s a lot of money for a system that carries less than 13,000 riders per day.

Flickr photo by James Cridland.

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DOT Threatens Hudson River Tunnel

The Hudson River tunnel project, which was started in 2009, then killed, then revived, now has been killed again by the Trump Administration, at least according to an article in Crain’s business journal. It would be more accurate to say that Trump’s Department of Transportation has challenged the project’s financing plan.

Originally projected to cost $2.5 billion, the project to replace tunnels used by Amtrak’s Northeast Corridor trains was killed by New Jersey Governor Christie when it inflated to $8.7 billion. The resurrected project is projected to cost $20.0 billion yet now has Christie’s support, probably because he doesn’t expect New Jersey to have to pay for much, if any, of it.

Most federally supported transit projects are funded on a 50/50 plan, where the federal government pays up to 50 percent of the cost of the project while state and local government pay the rest. The states of New York and New Jersey had agreed to a 50/50 plan for the Gateway project (as the Hudson River tunnel project is now known): 50 percent paid for with federal grants and 50 percent with federal loans. Continue reading

Best Wishes for 2018

In retrospect, 2017 wasn’t entirely a terrible year, and in some ways it was a great one. The economy is growing about twice as fast as the population. Driverless cars are about to transform the world.

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Let’s hope 2018 proves to be even better. Have a safe holiday.

2017: Year 1 of Driverless Cars

This year may be remembered as the year that driverless cars became real. This is because Waymo has officially started operating driverless cars, without back-up drivers, in a public ride-sharing service in several suburbs of Phoenix, Arizona.

Driverless cars are legal in most states so long as a licensed driver is at the wheel ready to take over if there is a problem the computer can’t handle. Without the back-up driver, they technically aren’t legal anywhere. But the governor of Arizona, Doug Ducey, has promoted a “rules-free environment” for driverless car experimentation.

This past year was also a record year for Amtrak. This puts the lie to transit-agency claims that low fuel prices are the main culprit behind recent ridership declines. An interviewer asked five transit executives what their most important challenges were and not one of them mentioned competition from ride-sharing companies. Like transit, Amtrak must compete with modes that benefit from low fuel prices, but so far it doesn’t have to deal with ride sharing. The fact that it is doing fine shows that ride sharing, not low fuel prices, are the most important source of transit woes. Continue reading

2017: The Year on Fire

Amazingly, a large wildfire is still burning in California as the year nears its end. Supposedly the largest California wildfire in recorded history, the Thomas fire has burned nearly 300,000 acres and more than 1,000 homes and other structures.

A firefighter looks at the Thomas Fire on Christmas day.

While the Thomas fire is not quite 100 percent contained, any additional acres it burns will not much change the year’s total of 9.6 million acres burned, which is almost 50 percent more than the previous ten-year average of 6.5 million acres. The extent of burning in California (more than 1.2 million acres) and the Pacific Northwest (more than 1.0 million acres) fueled controversies over public land management in general. Continue reading

2017: The Year in Transit

The year 2017 has been a nightmare for transit agencies across the nation. Transit carried fewer riders in the first ten months of 2017 than in the same months in 2016 in 46 of the nation’s 50 largest urban areas.

According to the latest data posted by the Federal Transit administration, the transit industry carried 1.4 percent more transit riders in October, 2017 than in the same month the year before. However, most of this growth was due to a 6.6 percent recovery of transit ridership in the New York urban area; subtract New York and national ridership fell by 2.3 percent.

After New York, the five largest urban areas–Los Angeles, Chicago, Miami, Philadelphia, and Dallas-Ft. Worth–all saw continued declines in ridership. Houston ridership grew by 8.1 percent, possibly indicating that Houston’s 2015 bus reforms are still paying off but perhaps also because so many automobiles were destroyed by Hurricane Harvey. Seattle ridership grew by 5.3 percent, Detroit’s by 6.4 percent, and small gains were also posted in the Washington, Boston, San Francisco, Portland, and a few other urban areas. But October ridership declined in 36 of the top 50 urban areas. Continue reading