A simple solution to help Houston traffic, our tax-debt-spend problem, HSR bankrupted Japan, Austin builds towards affordability, METRO comedy!
Just a few small items this week:
Charles Blain in City Journal: Saddled With Taxes and Debt - Houston-area leadership is losing touch with the fiscal restraint and pragmatism that made the city an engine of growth.
"I worried from afar that my hometown would meet the same fate as San Francisco, the poster child of the housing shortage and all its associated woes. I feared that Austin would become known as a playground for the rich, a city where displacement and mind-boggling home prices marred the natural beauty that once made it such a draw. In my hand-wringing, though, I'd overlooked one crucial detail: Texas is better at building homes than almost anywhere else in the country.”
There are differences between Austin (and Texas) and San Francisco that, if not changed will continue to make it possible to build in Austin (and Texas) and nearly impossible in San Francisco (and California). Unincorporated county territory in Texas is unzoned. That means that, barring environmental difficulties, developers and builders can build. By contrast, in the San Francisco metro, and virtually all of California, draconian state and local regulations make it very difficult to build on greenfield sites, where land prices would be much lower if the market were permitted to operate."
Caught my eye from Y-Combinator Demo day: XTraffic
What it does: Reduces congestion and accidents with smart traffic lights
Why it’s a fave: Controlling traffic lights with AI sounds like the perfect application of this technology. XTraffic says that it’s already doing it in several cities in Texas. I hope they make it to my town in California, too, because I sure am tired of waiting for the light to turn green when there are no other cars around.
"I would be the first to argue that if an economist claims to know of a cure-all policy — a reliable way to relieve a long list of social ills in one fell swoop — common sense tells you to stop listening.
So it is awkward for me to declare that I know of something close to a panacea policy: one big reform that would raise living standards, reduce wealth inequality, increase productivity, raise social mobility, help struggling men without college degrees, clean the planet and raise birth rates. It’s a sweeping reform that Democrats and Republicans, progressives and conservatives could all proudly support.
The panacea policy I have in mind is housing deregulation. Research confirms that there are large benefits in saying yes to tall buildings, yes to multifamily structures, yes to dense single-family development and yes to speedy permitting. The growing YIMBY (Yes In My Backyard) movement already has high-profile wins in Minnesota, Oregon, California and beyond, but even YIMBY devotees rarely appreciate the scope of the merits of loosening rules on housing.
The economic argument for housing deregulation rests on basic supply and demand principles: allowing more construction leads to lower prices. This is evident in historical data, showing that housing prices were relatively stable before stricter regulations in the 1970s, while rising significantly afterwards.
Housing deregulation would directly improve the standard of living by significantly lowering housing costs, which currently represent a significant portion of the average American's budget.
The distributional effects of deregulation would be impactful in reducing wealth inequality, as rising home values have been a key driver of the growing disparity between the rich and the poor.
Deregulation would enhance social mobility by removing barriers to moving to higher-wage areas. Current strict regulations often make the cost of living in such regions outweigh any potential wage gains, discouraging relocation for many.
Deregulation would create numerous job opportunities in the construction sector, a large and well-paying industry, particularly benefiting men without college degrees, who have faced challenges in the job market.
Environmental protection is a common rationale for restricting construction, but deregulation can actually lead to more sustainable practices by encouraging denser housing in urban areas, resulting in lower carbon emissions.
While concerns exist about homeowner resistance, the bigger obstacle to deregulation is public misunderstanding of basic economic principles, with many believing that increased housing supply will not lead to lower prices.
Neither Democrats nor Republicans have embraced housing deregulation yet. YIMBY activists lean left, but they are only one voice in the progressive coalition. Republican states usually have less housing regulation, but more from tradition than from principle. Yet, given housing deregulation’s many demonstrated benefits, this policy agenda deserves bipartisan support. Democrats should cheer the effects on equality, social mobility and the environment. Republicans should be delighted to see free markets spreading broad prosperity, creating new working-class opportunities and fostering family formation. In a rational world, the panacea policy of housing deregulation would be a done deal. Hopefully whoever wins the next election will agree."
Next big moonshot for Houston? TX will pass CA and HTX will pass LA, auto vs. transit job access and realism
A few smaller misc items this week:
Texas will surpass California, and both DFW and Houston will pass LA in population over the next 40 years. "The American future seems to be more Lone Star State than a Golden one."
Houston Public Media/NPR asks "What could be the next big moonshot for Houston?" Among the answers, clean energy struck me as the most ambitious and most appropriate for Houston (ideally cost-effective carbon capture!). My own suggestion for a Houston moonshot?METRO could aspire to offer half-hour or less express trip times from every park-and-ride and transit center to every major job center and both airports using a network of MaX Lanes. A high goal but very achievable and it would support Houston's growth for decades to come. More on it here.
New Geography: Auto vs. transit job access ratios for the top 50 metro areas (hat tip to Bill). Essentially comparing how many jobs are accessible by car within 30 mins (the typical commute) vs. by transit. A Houstonian can access 97.3 times (!) as many jobs by car than by transit within the same commute time. Even in NYC with excellent transit a car can still reach 9.7 more jobs than transit in the same time. The conclusion is compelling:
Where for Transit from Here?
With this minimal transit use relative to the auto and especially in view of the huge transit market share losses since the pandemic, it would seem useful to rethink the role of transit.
Transit does well for work trips to the largest downtown niche markets (New York, Chicago, Philadelphia, Boston, Washington, and San Francisco), though pre-pandemic market shares are unlikely to be replicated in the future because of the popularity of hybrid and remote work, lower office occupancy and the likely improvement in virtual meeting technology.
The reality is that transit is not a substitute for the auto and there isn’t enough money to make it one. Professor Jean-Claude Ziv and I found that making the auto a genuine alternative to transit could be prohibitively costly, annually requiring the entire metropolitan area gross domestic product in some cases. This would leave nothing else for anything else.
It would be foolhardy to suggest that transit is an alternative to the auto (despite this having sbeen implied by federal, state, and local policy for decades of decline), In a non-utopian world, no reasonable increase in subsidies could make it so.
It may be best to identify the small areas within metro areas where transit could actually be an alternative to auto. This would be in neighborhoods where automobile ownership is particularly low, which, in most metros are also areas of greater economic need. Investing billions more to coax middle class commuters off the roads seems a daft approach given the realities.
METRO+DART Ridership Update: summer slump and Beryl erase spring gains
This week we have another great analytical guest post from Oscar Slotboom. Dallas DART's extensive and expensive light rail strategy is looking more and more like a total failure as suburban cities try to reduce their tax subsidy to DART.
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When I last reported on Metro ridership in April, ridership had reached a post-Covid high in February, down only 14.7% from the 12-month pre-Covid average. An upward bump in April pushed ridership to another post-Covid high at only 13.5% below the pre-Covid level. Summer months are usually low ridership months, and Hurricane Beryl caused Metro service outages during the week of July 9-12. July ridership was 22.3% below the pre-Covid average. However, in spite of the substantial service outages due to Beryl, July ridership was only slightly lower than June. So we can probably expect a strong rebound, especially since September and October are normally the highest ridership months.
In Dallas, June ridership (page 55) was 23% below the pre-Covid baseline. As the plot shows, ridership has been flat in the last 9 months, appearing to end the four-year trend of slow recovery. It's interesting to note that the image shown below mentions that on-demand services are included in the ridership data, but a version of this plot presented one month earlier (page 4) without any mention of on-demand services showed ridership down 28%.
Multiple member cities of DART, including Plano, are attempting to reduce their tax subsidies to DART.
Nationally, public transit ridership is down 25% compared to pre-Covid levels and appears to be holding steady with little or no upward trend. Of course, there are wide variations in performance by city and Houston is above average.
Bill Reeves sent me a great link to a Marginal Revolution blog post by Tyler Cowen arguing that mobility has been more important than density in shaping American history and its future, which I 100% agree with. It highlights the historical importance of mobility in the US and challenges current urbanist trends favoring density. He makes some key points:
America's success is attributed more to advancements in transportation and infrastructure than to population density.
Historical examples range from horses and ships to modern aviation, showing a consistent focus on movement and connection.
Urban density is linked to lower fertility rates and the potential replication of undesirable political climates.
Mobility, on the other hand, is seen as fostering a stronger national defense and better immigrant assimilation.
Low-speed options like bicycles are viewed as impractical and even dangerous - "low-speed transport is a poor country thing"
The future lies in high-speed, affordable, and eco-friendly transportation solutions, such as self-driving vehicles and improved aviation.
Mobility is one of the secret sauces to Houston's success. In Jane Jacob's world, mobility was fixed and limited but density was variable. In today's world, density is fairly limited (by cars and higher living standards in terms of living space per person), but mobility is highly variable. My own thoughts on this:
"In other words, if we eliminated every passenger automobile in the U.S. in favor of a transit alternative and use completely unrealistic assumptions, the total estimated reduction would be barely out of the margin of error for total estimated GHG emissions. ...
I believe we need an efficient and effective transit system as part of the basic social safety net. Providing some mobility for those who cannot afford to own and operate their own vehicle and those who are physically not able to operate one is the right thing to do. It also helps the local economy by providing a way for employees to get to their jobs.
But transit does little to relieve traffic congestion and virtually nothing to improve air quality. We need to start having an honest conversation about the purpose of transit and what we can reasonably expect it to accomplish. And we need to stop lying to the public and voters about fanciful, non-existent benefits."
NYT: Olympics Precautions Failed to Halt Rail Sabotage. One of the issues I've pointed out in the HSR vs. planes debate is the near impossibility of securing hundreds of miles of HSR rail from sabotage or terrorism.
WSJ: The Smart, Cheap Fix for Slow, Dumb Traffic Lights - Most cities can’t afford smart traffic signals. Fortunately, data from new cars—and even drivers’ smartphones—can make old-fashioned traffic lights work a lot better. "the system yields a 30% reduction in stop-and-go traffic at intersections" Can we get this for Houston please?!?
NYT: Colorado’s Bold New Approach to Highways — Not Building Them. I really disagree with this. Studies have shown that highways are the great enabler of opportunity and upward social mobility for the working class to get access to better jobs and newer, more affordable, higher-quality housing in better school districts. Massive transit expansions, like LA, have not increased rideshare and don't work. Environmental solutions focused on reducing vehicle miles traveled (VMT) will be an economic disaster. Instead, gas stations should be required to charge at the pump for the necessary carbon capture to offset the gas, currently ~$1 per gallon.
Judge Glock has a very sobering piece in the City Journal on "How Debt Ate Chicago - Mounting liabilities are the greatest threat to the city’s survival." Chicago is a few decades ahead of Houston on the urban maturity curve, but it's critical that Houston act now to make sure we don't end up on the same path to stagnation (which is almost impossible to stop once momentum builds). Some key points to indicate just how screwed they are, some of which I think you'll recognize as starting to happen in Houston as well:
Chicago faces a severe police shortage, with over half of high-priority 911 calls going unanswered due to a lack of available officers.
The city's financial woes stem from a massive debt burden, reaching $43,000 per taxpayer, the second-worst in the nation, further compounded by Illinois's own high debt load.
Chicago's tax burden is among the highest in the nation, with combined city and state taxes exceeding 12% of a median family income, placing a heavy strain on both residents and businesses.
Chicago's economic fundamentals are weakening, with downtown office vacancies reaching record highs and companies relocating due to high taxes, leading to a shrinking population and a decline in median household income.
Newly elected Mayor Brandon Johnson, a former Chicago Teachers Union member, has pledged to increase spending on progressive initiatives, including a "Green New Deal" and expanded social programs, despite the city's dire financial situation.
Johnson's plan to raise revenue through taxes on the "ultra-rich" and a "mansion tax" has faced resistance and has been deemed impractical or politically unfeasible.
Chicago's financial woes are exacerbated by a high percentage of its budget being dedicated to fixed costs like pensions and bond interest, leaving little room for flexibility.
Chicago's pension debt is particularly concerning, reaching $34 billion, with assets covering only 25% of obligations, placing a significant burden on the city's finances.
The city's complex governance structure, with overlapping agencies and bodies like the school district, park district, and county, further complicates the debt situation and adds to the financial burden on taxpayers.
Chicago has a history of using debt to finance political projects and social causes, leveraging its financial distress to push for progressive agendas, leading to concerns about the long-term sustainability of its financial strategy.
Concluding:
"Chicago has been bailed out by miracles before, but its current problems are structural and seem to have no clear solution. That doesn’t mean that the city will necessarily suffer Detroit’s fate and find itself in bankruptcy. The dangers of insolvency are real, but, just as with the exploding federal debt, too much focus has been put on the possibility of a single disaster and too little on the more obvious cost: deepening decline. Chicago could keep paying off its bondholders and retirees by bleeding public services, hiking taxes, and driving out still more residents, but it would become a shell of its former self. A debt-ridden Chicago wouldn’t be the first, or last, great American city to become a byword for lost possibilities."
"What Councilman Pollard, nor anyone else at Council, nor any of the media coverage, addressed was whether the extension actually makes sense from a cost-benefit analysis. ...
Metro estimated the cost at $220 million, which is almost certainly a gross underestimation. The most recent estimates for the University and Inner Katy BRTs are now right at $100 million per mile. So, this project would likely be closer to $400 million. ...
The bottom line is that the capital acquisition cost of each new rider would likely be well above $100,000, before we even start looking at ongoing operating costs. At this cost and with anemic ridership, it is highly unlikely the FTA would provide any funding.
The proposed alignment would also create a nightmare on Chimney Rock from Westpark to Gulfton. ...
But what is most disappointing to me is that City Council has increasingly turned into a performance stage for councilmembers to audition for their next office when they are term-limited, instead of a serious deliberative body that tackles the difficult challenges our City is facing."
I will note that this is a major growing challenge at all levels of politics, and why I prefer mayors and county judges at the end of their careers focused on their legacy rather than using those positions as stepping stones to potential higher-level state and federal positions.
An open dialogue on serious strategies for making Houston a better city, as well as a coalition-builder to make them happen. All comments, email, and support welcome.
