Here's a core problem with rail that really undermines the economics. When you build a road between two cities, it serves both people and cargo between those two cities, as well as all points in between and the entire road network beyond (i.e. going north on 45 from Houston can take you to any city on the way to Dallas, to Dallas, or beyond Dallas). When you build a multi-billion dollar airport, it can serve flights to just about every other airport in the world. Both of those lead to very high utilization and lots of passengers to spread the costs over. Now think about rail between two cities like Houston-Austin or Houston-Dallas. If you put many stops along the way, it really slows the net speed, so it doesn't really serve points in between (esp. since they're low population). And if your final destination is beyond that city, you're probably going to either drive or fly - so you don't get the network effects/benefits. So, at the end of the day, those very expensive tracks (and trains) only really serve people going specifically between those two cities, which vastly limits the number of passengers to spread the costs over. The only scenarios where trains really work economically is when there are a linear string of population centers relatively close to each other so the tracks can serve multiple origin-destination pairs, like the DC-Baltimore-Philly-NJ-NYC-CT-RI-Boston corridor, or the country of Japan.
CA has vastly more people than TX in a nice linear city configuration, but is struggling to figure out how to justify cost estimates that have soared north of $100 billion. I agree there is a productivity boost for riders, but 1) would it be for enough people? and 2) will they pay for it? Would you pay $100 each way to visit Austin? Especially if you could pay $30 on a luxury bus with wifi and get the same productivity boost? Or if you could just drive and improved voice recognition in your phone could keep you productive? (it's coming fast) And the environmental benefits are only good if the trains are reasonably full. That usually means reduced frequency, which further inhibits ridership. Buses get the same or better environmental benefits and can perfectly tailor capacity to demand while keeping up frequency (because of the smaller capacity increments than trains).
There's also technology risk: what happens to rail ridership when we have very high MPG, self-driving Google-cars in a decade? I'm not sure when the self-driving will be really reliable on local streets, but I have no doubt they'll get it pretty solidly reliable on long-distance suburban/rural interstates.
Another thought experiment. Two options to connect two cities. Option 1 goes 200mph and requires billions of dollars of infrastructure between here and there, including cutting through landowners and making absolutely sure no vehicles or cattle/large animals can ever get in the way - or, for that matter, that any terrorist can sabotage the route (catastrophe), a challenge similar to securing our border. Option 2 goes 500mph and requires no new infrastructure (it already exists), nothing at ground level to cut through landowners or provide a safety risk. Security is only needed at the endpoints. Framing it that way, the answer seems obvious.
I'm not saying rail doesn't have a definite cool factor (and it does work well in certain parts of the world). I'm just saying the alternatives, costs, network limitations, and technology trends leave it with too small of a niche market to make economic sense in most of the U.S., including Texas.
Three different items to share this week with a common theme of getting realistic about mobility improvements. The first excerpt is from a Wall Street Journal op-ed on "California Declares War on Suburbia":
The love affair urban planners have for a future ruled by mass transit will be obscenely expensive and would not reduce traffic congestion. In San Diego, for example, an expanded bus and rail transit system is planned to receive more than half of the $48.4 billion in total highway and transit spending through 2050. Yet transit would increase its share of travel to a measly 4% from its current tiny 2%, according to data in the San Diego Association of Governments regional transportation plan. This slight increase in mass transit ridership would be swamped by higher traffic volumes.
Higher population densities in the future means greater traffic congestion, because additional households in the future will continue to use their cars for most trips. In the San Diego metropolitan area, where the average one-way work trip travel time is 28 minutes, only 14% of work and higher education locations could be reached within 30 minutes by transit in 2050. But 70% or more of such locations will continue to be accessible in 30 minutes by car.
(sidebar: more on California in yesterday's WSJ interview with Joel Kotkin "The Great California Exodus", #1 most read, emailed, and commented WSJ story this weekend)
I've said it before and I'll say it again: any urban area that did most of it's growth in the post-WW2 automotive era is simply not going to be transit friendly, and that cannot be substantially changed. Yes, you can create a few New Urbanist neighborhoods around a light rail line, but they will always be trivial in the overall context of the metro area.
That said, there's a lot that can be done to make simple bus transit much more attractive in these urban areas (and it's already dramatically more affordable than rail), as this Salon article "It's time to love the bus" describes:
But one thing is certain: When it comes to improving mass transit, there’s a lot of low-hanging fruit on the humble city bus. The vital connective tissue of multi-modal transit systems, the bus could be an efficient — nay, elegant — solution to cities’ mobility woes if only we made it so.
And yet we rarely do. Streetcars are replacing bus routes in cities across the country, and billions are thrown at light rail while the overlooked bus is left to scream “Marsha, Marsha, Marsha!” “If you decide that buses don’t merit investment, you’re going to miss a lot of opportunities to help people get where they’re going, and to expand their sense of freedom of movement, just because you don’t like the vehicle they’re riding,” says transit consultant Jarrett Walker.
The article goes on to list a litany of potential improvements, including better bus design, BRT, sidewalk bulbing, frequency, real-time information, mobile phone alerts, better maps, better bus stops, bike racks, wi-fi, electrical outlets, and more. Unfortunately, most transit agencies are totally focused on overpriced rail projects and ignore easy, affordable improvements to the bus system.
Finally, completing our theme of realistic mobility improvements, here's a clever intersection design for busy arterials when grade separation is either too expensive or not an option. In fact, this one is a simulation of our own Highway 6 - Westheimer intersection, before and after a potential conversion to turn-right-to-go-left (RTL). Average delay/vehicle is 46.5 sec less with RTL. If you're interested in learning about more types of clever and unconventional intersection design, check out the video here from the HGAC YouTube channel. Let's hope Houston adopts more of these in the future.
Update: apologies for the bad formatting - a side effect of bad html cut-and-pastes. No easy way to fix it in Blogger without losing all of my links.
Free Hobby!, mobility's economic boost, Jane Jacobs for car-based cities, top rankings
This kind of Chicago corruption coming to Houston is so depressing I don't really feel like posting this week (evidently United has contributed to all of the City Council members re-election campaigns), but I will press on. Please don't forget to sign the petition and share it with all of your social media channels. The City Council really must feel the pressure from the voters or they will just fall in line with what United tells them to do.
On to some of the ever-growing stack of smaller items.
Several years ago in this newsletter I reported on the work of economists Remy Prud'homme and Chang-Woon Lee. Using data on travel times and labor productivity from cities in France and South Korea, they found a robust relationship. The effective size of an urban region's labor market is bounded by how long it takes to make a typical journey to work. When shorter travel times increase the size of the labor market by 10%, the productivity of the metro area increased by1.3%. In the United States, Robert Cervero of UC Berkeley found that a 10% increase in commuting speed in the San Francisco Bay Area increased economic output by 1%. And more recent studies by David Hartgen and Gregory Fields, using data for eight U.S. metro areas, found similar effects—specifically, that the ability to go 10% farther in a commuting time of 25 minutes would lead to a 1% increase in regional economic productivity.
I recently came across another study addressing basically the same question, using a different methodological approach. The paper is "Does Traffic Congestion Reduce Employment Growth?" by Kent Hymel, then at UC Irvine and now at Cal State University Northridge. It appeared in the March 2009 issue of the Journal of Urban Economics. Hymel employs an econometric approach drawn from the city growth literature, which focuses on the economics of agglomeration. He sets out to assess whether there is empirical evidence for the hypothesis that congestion reduces employment growth in a metro area. This turns out to be more complicated than it sounds because, as he notes in the introduction to the paper, the two variables interact: employment growth leads to more workers, who generate congestion, and congestion then "discourages [further] employment growth by raising workers' reservation wages and increasing shipping costs for goods." So he comes up with a number of clever methodological approaches to deal with this problem. Since I am not an econometrician, I will not attempt to summarize them for you, but will skip to his conclusions.
The last table in the paper provides results for the 10 most-congested metro areas in 1990 (based on data from the Texas Transportation Institute's Urban Mobility Reports. For each of them, he provides an elasticity of congestion with respect to freeway capacity and an elasticity of employment growth with respect to congestion. This allows him to compare actual employment growth from 1990 to 2003 with two counter-factuals—a 10% increase in freeway capacity and a set of congestion tolls that would reduce congestion by 50%. For Los Angeles—then as now the most congested metro area—estimated employment growth would have been 8% greater if there had been a 10% increase in freeway capacity. Even more impressive, if congestion pricing reduced congestion by 50%, employment growth would have been 23% greater.
I get frustrated when elected officials tout infrastructure projects because of "jobs, jobs, jobs"—by which they generally mean short-term construction jobs (which could also be generated by building pyramids or by digging holes and filling them in again). By contrast, productive infrastructure investments are those which make an economy more productive, generating an increased gross regional product. Hymel's findings join those discussed above in bolstering the case for investing wisely to reduce commuting time in urban regions.
I find the Customs and Border Protection argument disingenuous, given the pressures already in the customs hall and the growth projections that are already part of the IAH Master Plan and the fleet growth plan of United, insofar as I can guess what it is from the Boeing order book.
It’s the customers who have the most to gain from a Hobby expansion gateway. And as a customer, I’ll bet on Southwest working in my interest before I’ll bet on the “new” United.
But here's the smoking gun that just devastates United's argument: Ft. Lauderdale (in the Miami metro) has vastly expanded discount international flying with airlines like Spirit and JetBlue, among others, yet over the last six years American has doubled the number of departures from its Latin America hub at Miami (source).
Definitely a lesson for Houston here. United’s threats to cut service are a smokescreen. Profits may drop, but service will only increase and fares will drop for the citizens of Houston.
"United says it will hurt its traffic, and that could result in the city losing service. It also says that this will take away customs and immigration resources from Intercontinental, making for a worse experience for travelers there. Oh please.
These are always the arguments used to fight competition. American used even more ridiculous ones in the Love Field fight, so this shouldn’t be surprising. And it isn’t.
Really, if you’re United, wouldn’t you fight this? I mean, you certainly don’t want more competition, so you should put some effort into trying to keep it out. But in this case, it should be a losing battle. Hobby should get a customs facility, and I imagine that’s what we’re going to see happen."
"In the full list of the richest and poorest metropolitan economies, only Houston finished in the top 20 among both the richest and the fastest-growing metros. That's a remarkable accomplishment for the Texas energy hub"
If you're interested in the ongoing expansion plans for the 290 corridor (including the Hempstead toll road), check out this comprehensive video by HGAC. Some good visualizations make it easier to understand all the improvements. They also discuss the financial crunch that TXDoT is facing with the gas tax not being adjusted for inflation. They only have funds to fix bottlenecks at 610 and Beltway 8, but they need a lot more to implement the plan throughout the entire corridor, which is one of the most congested in the city and the state. Now it looks like the plan might be shifting somewhat (Chronicle story), with toll lanes in the center of 290 instead of the Hempstead corridor. This is probably not a bad intermediate term plan, as long as those lanes could be converted to free lanes down the road when the Hempstead tollway becomes more viable.
Finally, if you'd like to hear my thoughts on the present and future of education, I was recently interviewed by Larry Payne on the HCC TV show "Dialogue Houston". He interviewed me because of an education technology startup I'm working on, but because that's still somewhat in "stealth mode", he attributes me to the blog, although education is not a common topic here. If you'd like to learn more, email me - tgattis (at) pdq.net.
The video can't be embedded (as far as I can figure out), so to watch it, go here, click on episode 189, and then zoom ahead about 31 minutes in. The segment is about 12 minutes.
One last note: apologies for the unpredictable blog posting schedule the last few weeks - crazy schedule, hoping to be back to a regular night soon (probably Sunday or Monday evenings).
It's time for the Winter 1Q12 quarterly highlights post. These posts have been chosen with a particular focus on significant ideas I'd like to see kept alive for discussion and action, and they're mainly targeted at new readers who want to get caught up with a quick overview of the Houston Strategies landscape. I also like to track what I think of as "reference posts" that sum up a particular topic or argument; and, last but not least, they've also been invaluable for me to track down some of my best thinking for meetings or when requested by others (as is the ever-helpful Google search). They're not quite as useful as they were when I was still doing multiple posts each week, but still have some value (at least for me).
Don't forget we offer an email option for the roughly once/week posts - see the Google Groups subscription signup box in the right sidebar. An RSS feed link is also available in the right sidebar. As always, thanks for your readership.
And don't forget the highlights from the first few years. For what it's worth, I think the best ideas are found there, often in the first year (I had a lot "stored up" before I started blogging) and most definitely in the 5th birthday retrospective.
In a stunning development, the City of Houston announced today that it will begin the process of closing Hobby airport, while shifting control of Intercontinental to United, which will further enable the closing of the city's aviation department yielding substantial savings to taxpayers. The new plan emerged from discussions with United regarding Southwest's request to allow competing international service at Hobby. United pointed out that competition from Southwest would reduce the obscenely profitable fares they charge Houston residents on most international nonstops from Houston, meaning they might have to reduce some service. The City, easily convinced by this argument, asked if they might get more international service if they removed international competition at IAH from carriers like British Airways, KLM, Air France, and Emirates. United assured them they would. The City, intrigued by this possibility, asked if the same would be true for domestic service. United assured them that it also would, although the competition from Southwest at Hobby would limit the potential for additional domestic service. To maximize the potential, Hobby would need to be closed too.
So a plan was developed to close Hobby and turn over complete, exclusive control of IAH to United. Giving United a monopoly franchise on all air service to Houston will allow United to substantially increase the size of their hub here. As an added benefit to the citizens of Houston, the "very modest" fare increases that United expects will reduce the crowding on flights, allowing even half-empty flights to be profitable for the airline. Residents that can afford the $700 fares will enjoy their roomy, comfortable flights to Dallas.
Spokespersons for both the City and United called the landmark agreement a "win?-WIN!!!" for both sides.
Hope you enjoyed this year's April Fools post (after I skipped a few years). Here are previous years if you missed 'em and would like a chuckle:
Getting serious, Kuff's wife has a great analysis of the United vs. Southwest controversy over internationalizing Hobby. My own thoughts: The bottom line is that this will lower fares for Houstonians, and that's a good thing. Yes, United will no longer be able to gouge the locals with the only nonstops to a few nearby destinations - it will mildly hit their profitability. But they have no other hub even remotely as well positioned to serve the Latin America market, and as the world's largest airline, they have to serve it just for the sake of their network. So they're not going anywhere. And I do want to see them continue to do well and grow here, but I think they burned their goodwill here when they moved the HQ (both executive and operations) to Chicago. On the other hand, Southwest has plenty of other options to connect people to Mexico, Central America and the Caribbean, including Orlando, Ft. Lauderdale, Atlanta, Austin, or San Antonio. It will definitely be our loss if we turn them away. In fact, I can't really believe this is up for serious debate. If city council does anything other than heartily endorse Southwest's generous offer to fund their own international expansion at Hobby, I will be sorely disappointed. It would mean that United has successfully exported Chicago's infamous government corruption back to Houston.
Social Systems Architect, consultant and entrepreneur with a genuine love of my hometown and its people. I cover a wide range of topics in this blog - including transportation, transit, economic development, quality-of-life, city identity, and development and land-use regulations - and have published numerous Houston Chronicle op-eds on these topics. I also co-authored the Opportunity Urbanism study with noted urbanist Joel Kotkin and others, creating a city philosophy around upward social mobility for all citizens as an alternative to the popular smart growth, new urbanism, and creative class movements. I am a native Houstonian, 6th-generation Texan, attended Rice University for my BSEE and MBA, and a former McKinsey consultant and adjunct faculty member with Leadership Houston. I have had a long career in information technology, and am currently the founder and president of OpenTeams, a web-based collaborative software company that emphasizes openness and transparency inside large organizations. CONTACT EMAIL in no-spam format: tgattis (at) pdq.net - send me an email if you would like to receive these posts via email, or see the Google Groups signup box below.