Tuesday, May 10, 2022

Metro's pretty good Inner Katy BRT plan, Ashby's corrective ordinance, induced demand from freeway expansion isn't bad, housing policy failure and success, urban exodus

I attended Metro's public meeting last week on the Inner Katy BRT+Express Bus elevated lanes and was fairly impressed with the plan. One-seat Silver line BRT ride from downtown to uptown. Easy access for 290 and I10W HOV express buses without a transfer. Uses Purple/Green LRT lanes downtown so no new lanes are lost. Good destinations like Memorial Park, POST, Theater District, GRB convention center, and Eado/PNC Stadium.  One downside: HOV/HOT vehicles won't have access, and will lose access to existing elevated HOV lanes into and out of downtown. But TXDoT is planning to build their own to extend the Katy managed lanes all the way downtown. Seems a little duplicative to me. I sent this official public comment to Metro: 

Just attended the public meeting and am overall impressed with the plan, but non-transit HOV vehicles losing access to the CBD ramp to downtown is problematic and could generate public blowback (I use that ramp myself quite often). As you know, that ramp bypasses a significantly congested traffic bottleneck downtown. Engineering should be possible to allow those vehicles to share the lanes on the portion between the Studemont station and downtown (with ingress and egress just east of Studemont) without significantly impacting the bus service. Or if not, please coordinate closely with TXDoT to facilitate access for those vehicles with an alternate route/lanes, maybe with a shared structure/ramp/bridge? 

and got this response:

"Dear Mr. Gattis: Thank you for contacting Metro and thank you for participating in our latest public meeting. METRO is currently working with TxDOT concerning the Katy CBD Ramp. As mentioned during the virtual public meeting, TxDOT plans to tear down the Katy CBD Ramp (one lane in each direction) as part of TxDOT’s North Houston Highway Improvement Project (NHHIP). TxDOT then plans to replace the Katy CBD Ramp with managed lanes along I-10 (two lanes in each direction with shoulders) that would accommodate non-transit vehicles. 

These managed lanes would go to the east side of downtown and have connections in and out of downtown to the west. During the interim of these projects (TxDOT’s NHHIP and METRO’s METRORapid Inner Katy Project), METRO and TxDOT are looking into the timing and what can be feasibly done during the time gap between these projects. As TxDOT progresses with their projects in the I-10 corridor, they will also hold public meetings in the future to provide additional information concerning the Katy CBD Ramp.

Please visit TxDOT’s meeting schedule here for more details.

METRO appreciates your feedback regarding vehicular access and will take this into consideration during our coordination efforts. If you have any additional comments or questions, please contact us at crm.RideMETRO.org or visit RideMETRO.org/InnerKaty for more information. Thank you for contacting Metro."

Interested to hear your thoughts on it in the comments...

Moving on to a few smaller items this week:

  • From Wendell Cox: "The Australian Financial Review (the nation's equivalent to the WSJ) ran a piece suggesting that housing may be the most important policy failure in the nation" (based on our URI/COU Demographia International Housing Affordability Survey). I'd flip that and say housing may be Texas' and Houston's most important policy success!
"All the research suggests housing is a critical determinant of well-being and good community functionality and has long been considered an essential part of the “Australian dream”... Econometric analysis has shown that in some places in Australia, planning restrictions are responsible for 67 per cent of the cost of housing." (!!!)

“Induced demand isn’t necessarily bad or wasted VMT. Being able to get to a better job or access venues that offer better choices and lower costs isn’t bad. Businesses having access to a bigger labor pool and potential customer and supplier bases isn’t bad. Making those supply chains work better isn’t bad. Getting emergency vehicles where they need to go, faster, isn’t bad. Pulling cut-through traffic out of neighborhoods isn’t bad. Using infrastructure to shape development or improve economic competitiveness of given geographies isn’t bad."
"it seems less likely that those who purchased homes in the suburbs and exurbs during the pandemic, motivated in part by new remote work options, will be selling and moving back to cities."

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Monday, May 02, 2022

Houston's mini-kaihatsu, sinking false alarm, annexation history, shrinking population, school choice, and more

 Several smaller items this week:

Mini-kaihatsu, Houston
"The concept is the same, and it’s no coincidence that both arise in places with light regulation, strong demand, and little public streets funding. As I wrote about Houston:

Houstonians achieve privacy by orienting many new townhouses onto a share courtyard-driveway, sometimes gated, which creates an intermediate space between the private home and the public street… 
The courtyard-driveways also provide a shared play space, as evidenced by frequent basketball hoops. Despite what Jane Jacobs may have told you, city streets are not viable play spaces for 21st-century children. But cul-de-sacs can be. Houston’s courtyard-and-grid model may be the ideal blend, unlocking the connectivity of a city while delivering the secure sociability of a cul-de-sac to a large share of homes."

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Monday, April 18, 2022

Silliness of induced demand arguments, Austin and Denver rail fails, NZ MUD troubles, TX is the future, and more

 A lot of smaller items this week:

"Some organisations even sent staff to Houston to watch the system at work, and a pilot of it effectively took place in Auckland with Fulton Hogan and its Milldale project.

What came out of all this broad political consensus was a new piece of legislation: the Infrastructure Funding and Financing (IFF) Act, which allows councils to set up Texas-style Special Purpose Vehicles (SPVs). It passed in 2020 with the support of every political party in Parliament, showing just how broad the surrounding consensus had grown.

Megan Woods says she is expecting three special project vehicle initiatives to come across her desk this year.

In the Houston Business Journal, Urban Reform Institute fellow Tory Gattis said: “if all goes well, there should be a tremendous increase in New Zealand housing supply in coming years which will help to ease prices.”

“Texans and Houstonians should be proud to serve as a model to the world for market-based approaches to affordable homeownership.”
  • Banner week for getting quoted: yours truly gets quoted at the very end of this Reason Surface Transportation Innovations newsletter on the silliness of the induced demand anti-freeway-expansion argument. As taxpayers we *want* government to invest in infrastructure where there is demand! (as opposed to so many new rail lines these days)
“We want government to invest in infrastructure that gets a high utilization (as opposed to roads to nowhere). If they built a new airport runway and it filled up with flights, people would sing the praises of such a great investment. Yet if we invest in additional freeway capacity and it fills up, it was wasted money? How does that make sense? It means the government built mobility infrastructure exactly where people needed it—where there was unmet demand—and isn’t that exactly what we want them to do as taxpayers?”
—Tory Gattis, Urban Reform Institute
"RTD took on a lot of debt during its rail-building push. Now, the fiscally-struggling agency is paring back planned rail expansion, while looking toward less costly projects that benefit core riders: bus-only lanes and bus system reorganization."

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Monday, April 04, 2022

With low ridership, should Metro's huge excess cash pile go to flood control?

Today we have an excellent analytical guest post with some fantastic charts from Oscar Slotboom (highlights mine).
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Metro's 2021 annual report, for the fiscal year ending September 30, recently became available.
Fiscal year 2021 is the first annual report entirely affected by Covid (see chart 1). As expected, metrics for ridership and cost per trip became much worse. However, more concerning are Metro's long-term trends prior to Covid, as the plots below will show.
In spite of ridership being cut in half due to Covid, Metro's financial position became stronger than ever due to a huge influx of federal grants, a total of $714 million in Covid relief in 2020 and 2021.
Chart 1: Fiscal year 2021 shown on the ridership trends. (Source: Metro ridership reports)
Data source for the charts is Metro's annual reports. Inflation adjustment uses the official CPI calculator.
Chart 2: Boardings and operating expense since 2001
The first impression from this chart is that both trends are going in the wrong direction! Prior to Covid-19, inflation-adjusted operating expense was up 77.5%, from $514.2 million in 2001 to $912.5 million in 2019, while ridership was down 11.7%. Ridership peaked in 2006 at 102.8 million boardings, and by 2012 had declined 21.2% due to the Great Recession. By 2016 ridership had recovered to 90 million boardings, down 12.5% from the peak, where it held steady until Covid-19. 2021 ridership of 45 million was down exactly 50% from 2019.
Chart 3: Cost, subsidy and average fare per boarding since 2001.
Of course, the cost per boarding goes up with rising operating expense and declining and/or flat ridership. Cost per boarding is calculated by (operating expense)/boardings, and subsidy per trip is (operating loss)/boardings. Prior to Covid-19, the cost per boarding in 2021 dollars was up 101%, from $5.05 in 2001 to $10.14 in 2019. The inflation-adjusted subsidy per boarding in the pre-Covid period rose 119%, from $4.27 in 2001 to $9.25 in 2019. In 2021 the cost per boarding was $17.57 and the subsidy per boarding was $16.98. Stated another way: in 2021 taxpayers handed over $16.98 every time someone stepped on a Metro bus or train.
Chart 4: Total fare revenue and average fare per boarding since 2001.
Inflation-adjusted fare revenue was generally flat in the 11 years prior to Covid, varying between $79 and $88 million, with the average fare per boarding between $0.89 and $1.03. The base Metro fare is $1.25 but many riders qualify for discounts. In 2021, fare revenue dropped to $26.7 million and the average fare per boarding was $0.59.
Chart 5: Fare revenue as a percent of operational expense per boarding.
With fare revenue generally flat and operating expense increasing 77.5% between 2001 and 2019, the percent of operating expense covered by fares has steadily decreased. It was 15.3% in 2001, and then held steady around 12% from 2003 to 2014. (The increase in fares in 2009 was offset by increased operational expense per boarding due to the ridership decrease caused by the Great Recession.) The percent was flat around 9% from 2016 to 2019, and dropped to 3.4% in 2021.
This low farebox cost recovery was the reason Tory advocated consideration of eliminating fares entirely, which was subsequently studied by Metro but found to be infeasible. Metro recently approved spending $48.3 million to modernize its fare collection.
Chart 6: Major budget line items in 2021 dollars. Grants include both operational grants (such as Covid relief) and capital grants.
All previous plots were based on Metro's operating budget, but that's only part of Metro's overall budget, which includes infrastructure assistance (also called general mobility funding) and federal grants. In this chart we can see that Metro received a massive financial windfall from federal Covid relief. 2020 farebox revenue was down $32.5 million compared to 2019, and Metro received $248.8 million in Covid relief. While Metro sustained some extra costs relating to Covid, the 2020 operating budget of $847.4 million was actually below the 2019 budget of $854.4 million. 2021 farebox revenue was down $48.6 million and Metro received a mind-boggling $465.6 million in Covid relief. The 2021 operating budget was $789.2 million, well below 2019 and 2020. The formulas for relief disbursement may have been designed for other cities which are more dependent on fares. Or, it was political payoff to Democratic-led large cities. Metro's 2021 total revenue of $1.425 billion shattered the previous record high of $1.279 billion (2021 dollars), which was unusually high due to grants for MetroRail expansion. Total revenue for 2021 was $636 million above the operating expense of $789 million. Of course, these excessively large payouts to transit agencies was piled on the $30 trillion national debt.
Chart 7: Infrastructure assistance
A major line item in Metro's budget is infrastructure assistance, which is also called general mobility funding. This budget feature has existed since 1988 and has returned around 25% of sales tax revenue to cities subject to Metro's 1% sales tax. These funds are used for streets and other infrastructure improvements. Infrastructure assistance fluctuates substantially year-by-year, as the chart shows, but has been in a general downward trend in the last 10 years, and was $187 million in 2021 which was 22.2% of sales tax revenue. This downward trend may be due to adjustments approved in 2012.
Chart 8: Metro employees
This chart shows the number of Metro employees, which has been between 3356 and 4106 in the last 20 years and had a noticeable upward trend in the 2010s. Metro had its lowest headcount of 3356 in 2006, the year of its peak ridership. Headcount in 2021 was 3848.
Observations
Most of us would like to see government steadily improve its efficiency and productivity. But in the case of public transit, the money flows in and gets spent, regardless of any performance metric. Prior to Covid, Metro's key metrics deteriorated due to both increased costs and generally flat/declining ridership (although there was an upward trend after the Great Recession ridership loss). And then Covid hit, totally wrecking performance metrics.
For context, it would be useful to compare Metro's statistics to comparable agencies such as Dallas, Phoenix or Atlanta. (That could be a topic for a future post.) We can easily compare Metro's operating expense to national averages reported by APTA, which publishes a spreadsheet which includes tab 73 reporting operating expense per unlinked passenger trip (i.e. a boarding). Metro's 2019 operating expense per boarding of $9.50 (actual value, not the inflation-adjusted $10.14 in the chart) is far above the industry average of $5.39 for bus, $5.14 for light rail and $5.20 overall. (It is not known if accounting standards are identical for the APTA and Metro numbers, and APTA numbers may be skewed by high-volume agencies like New York City.)
Public transit ridership was in a downward trend nearly everywhere in the 2010s, even in cities which were spending much more heavily on public transit. I recently reported that transit-focused Los Angeles sustained a 22% drop in ridership between 2013 and 2019. While Houston Metro ridership was better than most agencies in the 2010s, mainly due to the bus service improvement program, it appears to have been achieved at a high cost in increased boarding subsidies.
Improvement in key performance statistics of cost and subsidy per boarding is mostly dependent on a recovery in ridership, since government agencies generally don't shrink to match lower demand and Metro's spending may resume an upward trajectory due to MetroNext. So the question is: How much of the Covid-induced ridership loss can be recovered? How long will it take?
2021 ridership was down 50% compared to 2019. The first five months of fiscal year 2022 are running at about 55% of 2019, and there is an upward trend visible in chart 1, so getting back to 60% in FY 2022 is plausible. Metro is also better positioned than many transit agencies, since severely-hit commuter ridership was only around 12% of overall ridership and Houston's regional population growth is among the highest in the country. Looking at the recovery from the ridership loss caused by the Great Recession (see chart 2), there was a slow recovery which took six years, and the ridership plateau from 2016 to 2019 was 12.5% below the 2006 peak.
Chart 9: Possible range for future boarding subsidies for recovery scenarios
This plot shows some likely future scenarios. Since operating expense tracks sales tax revenue (reference chart 6), the medium option for sales tax revenue in the 2021 annual report page 20 is used to estimate the operating expense. A slow, 5-year recovery is assumed since transit ridership is recovering very slowly everywhere. Using estimated ridership recovery between 75% and 90% of 2019, the boarding subsidy is in the range of $12 to $15, compared to $9.25 in 2019 and $16.98 in 2021. Recovery to 85% of 2019 ridership, somewhat optimistic but plausible, has a subsidy around $13 per boarding in 2027. Note that there is no inflation adjustment on future values. Simple math dictates that getting back to the 2019 subsidy requires a 100% ridership recovery with the same operating expense, and lower ridership requires a lower operating expense.
Questions
  • Was Metro's pre-Covid operating expense of $9.50 per boarding excessively high?
  • What is a tolerable level for subsidy per boarding? Should Metro have a goal of getting it back below $10 per boarding? Or is a future range of $12 to $15 acceptable?
  • If ridership is permanently reduced due to Covid and associated societal changes, mainly work-from-home and hybrid arrangements, should Metro operating budgets be lowered to match the actual ridership?
  • In the last 10 years, boarding subsidies have been increasing and infrastructure assistance has been decreasing. Should infrastructure assistance continue in a downward trend, especially with the forecast of increasing sales tax receipts?
  • Harris County is diverting hundreds of millions in toll funds to flood control, initially $300 million in 2020 and an expected $90 million per year in future years as part of the Harris County Flood Resilience Fund. Metro's current assets, basically cash and liquid investments, grew from $591 million in 2019 to $1.204 billion in 2021 (reference 2021 annual report page 82). Since Metro is swimming in money with its strongest financial position in its history, how about increasing infrastructure assistance (from sales tax receipts) with the incremental increase earmarked for flood control? (Tory: even if Metro is not legally allowed to directly fund flood control, they could fund City and County street infrastructure through increased infrastructure assistance/general mobility transfers so those entities could free up budgets for flood control while keeping overall street infrastructure budgets the same. It can certainly be argued that flood control is a much higher priority for the region than adding capacity to an already severely underutilized transit system!)
Appendix: Tabular data
This is the data used in the plots. Source is the annual reports. CPI=consumer price index inflation adjustment factor. CPI is for September of the year, to align with the end of the fiscal year.
Operating Expense millions $ Operating Loss millions $
Year Boardings CPI Actual 2021 Dollars Actual 2021 Dollars
2001 101,914,157 1.538 334.3 514.2 282.8 434.8
2002 97,704,392 1.515 373.4 565.7 322.2 488.1
2003 97,740,511* 1.481 395.6 585.9 348.3 515.8
2004 96,428,515 1.444 435.9 629.4 384.7 555.5
2005 94,959,198 1.379 430.4 593.5 380.3 524.4
2006 102,827,629 1.352 435.7 589.1 381.5 515.8
2007 101,310,353 1.316 459.6 604.8 406.4 534.8
2008 100,348,037 1.254 496.5 622.6 442.7 555.1
2009 88,517,657 1.270 558.6 709.4 491.5 624.2
2010 81,158,905 1.256 562.6 706.6 498.0 625.5
2011 81,032,075 1.209 570.5 689.7 501.8 606.7
2012 81,020,887 1.185 573.5 679.6 506.6 600.3
2013 84,266,386 1.172 591.9 693.7 519.1 608.4
2014 85,389,587 1.152 641.8 739.4 565.5 651.5
2015 86,089,171 1.153 694.8 801.1 620.1 715.0
2016 89,970,895 1.136 783.2 889.7 711.2 807.9
2017 89,940,735* 1.111 807 896.6 734.2 815.7
2018 90,156,382 1.086 811.1 880.9 736.3 799.6
2019 89,951,217* 1.068 854.4 912.5 779.0 832.0
2020 66,069,965 1.054 847.4 893.2 804.6 848.0
2021 44,914,325 1 789.2 789.2 762.5 762.5
*Discrepancy in values in different years of annual reports. Discrepancies are small and don't affect plots.

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Friday, April 01, 2022

TXDoT and Harris County reach deal on 45N NHHIP rebuild

After years of back and forth trying to find a mutually acceptable compromise on the 45N NHHIP rebuild plan - including a lawsuit by Harris County - TXDoT and Harris County finally came to a historic agreement today that will reshape Houston mobility for decades to come.  The breakthrough came when TXDoT agreed to award the $9 billion dollar contract to Elevate Strategies run by Democratic strategist Felicity Pereyra, the company previously tagged to manage an $11 million Covid outreach contract over UT Health.  Even though TXDoT independently scored long-time road builder Williams Brothers at 100 and Elevate Strategies at zero, County Judge Lina Hidalgo expressed confidence in the one-woman firm's ability to come up to speed quickly on managing a $9 billion, decade-long freeway rebuild.

"Felicity is an absolute wizard at acquiring and distributing funds in creative ways," said Hidalgo.

The exact details of the revised project have yet to be worked out, but some broad outlines were given conforming to the City's Vision Zero (traffic deaths) and climate change carbon reduction plans:

  • 5 bike lanes in each direction
  • 17mph light rail down the middle
  • Remaining general-purpose lanes limited to 35mph electric vehicles with traffic-calming speed humps every 100 feet

In unrelated news, the campaign to re-elect Judge Hidalgo received an unexpectedly generous $50 million contribution from an anonymous donor.

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Hope you enjoyed this year's April Fools post ;-D 
Here are previous years if you missed 'em and would like a chuckle:

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Sunday, March 20, 2022

How to Fix American Capitalism

One of the common mistakes I make with this blog happens when I come across a really good, important, long article that I want to discuss more in-depth than my usual bullet points, because I usually set it aside to get back to later when I have more time, and sometimes later ends up being a year and a half, as is the case this week (apologies). It's a City Journal piece by Ed Glaeser titled "How to Fix American Capitalism - End insider privileges by renewing the freedoms to build, to work, to sell, and to learn." His opening:

"February 2019 Harris poll found that roughly half of younger Americans would “prefer living in a socialist country.” Millennials may not fully grasp the consequences of the government owning the means of production, but they certainly don’t like how American capitalism is working for them. They have a point. Over the past 40 years, insiders have increasingly captured the American economy—from homeowners opposed to new housing construction near them to incumbent firms that benefit from the overregulation of employment to interest groups that have transformed the federal government into the equivalent of a pension system with a nuclear arsenal. The young are usually outsiders; the bill for the insiders’ triumph has been laid in their laps. ...

What many young people today don’t realize is that socialism is a machine for empowering insiders. Few insiders have ever been rewarded more assiduously than the nomenklatura of the Soviet Union. Few governments have been as gray—in every sense of the word—as the Brezhnev regime. A vast expansion of the American government, as imagined by today’s Democratic Socialists, would create its own privileged elite.

From its inception, by contrast, capitalism was designed for outsiders. Its original apostles, such as Adam Smith, argued that entrepreneurs needed freedom from the royal regulations that limited trade and the formation of new enterprises. When the government controls decisions to work or to start a business, political pull becomes a prerequisite for success. The whole point of economic freedom is that all people—not just the connected—can use their talents to help themselves and, potentially, to change the world.

These days, capitalism’s advocates often focus more on defending the status quo than on promoting outsider opportunity. If capitalism is to win over the young, that must change—and a new freedom agenda can help make that happen. In January 1941, Franklin Roosevelt announced his four freedoms (of speech and worship, from want and fear) that helped frame his objectives for World War II, which the nation would enter before the end of that year. Our contemporary outsiders would benefit from a renewal of four key freedoms: to build, to work, to sell, and to learn. The young need fewer land-use restrictions that make it tough to provide affordable housing in productive areas. They need fewer employment rules that limit their ability to find work, as well as fewer business regulations that suppress entrepreneurial energies. And—even before these other important things—they need new educational options that liberate them from underperforming educational monopolies.

In 1981, the social scientist Mancur Olson published his magisterial The Rise and Decline of Nations: Economic Growth, Stagflation, and Social Rigidities... His thesis: nations lost dynamism when insiders managed to stack the rules against disruptive outsiders."

His classic example is how well Germany and Japan have done since their society went through a complete reset after WW2, while Great Britain has been much more stagnant. Glaeser then proceeds to focus on onerous land-use regulation wielded by NIMBYs, often with the cover story of environmentalism or historical preservation:

"As Olson suggested, collective action takes time and skill, and better-educated suburbs have proved particularly effective at blocking development. To succeed, though, antidevelopment groups need rallying cries that go beyond self-interest, and green causes have frequently provided them....

 Because areas like lower Manhattan and Berkeley have enjoyed enormous economic growth, limiting construction there means that fewer people can benefit from that growth. In the past, Americans could move to booming places because it was easy, for instance, to put up cheap balloon-frame houses on the frontier or erect tenements on the Lower East Side of Manhattan. Today, starter homes in Silicon Valley go for more than $1 million, while townhouses in Greenwich Village, a neighborhood that preservationists fought to keep pristine, now routinely sell for $5 million and up."

Next, he gets into how onerous local licensing laws restrict small business and entrepreneurship.

"One of the most egregious ways that government favors insiders is occupational licensing, typically presented as a way to protect consumers. Economists Morris Kleiner and Alan Krueger documented that, in the late 1950s, less than 5 percent of American workers needed some form of occupational license. Licensing in fields with a real public-health impact—pharmacy, say—may protect some consumers, but it’s hard to see why the person selling you flowers or your eyeglass frames needs certification.

Licensing can deter someone from starting a new job or experimenting with new occupations. If you think that you might like to be a florist, you could just try it out, in a free environment. If floristry requires a long process of certification, though, you’re more likely to stick with your current job. Occupational licensing also makes it harder to move across states to seek work, since licensing requirements vary."

His next biggie is employee unions, especially public ones, as well as public entitlements that resist reform:

"Private-sector unions have weakened, but public-sector unions remain strong—and they protect older and established insiders....

Twenty-four percent of the national budget now goes toward Social Security, and another 8 percent funds benefits for retired public workers, including veterans. Another 15 percent is spent on Medicare. Altogether, spending on the elderly now makes up 47 percent of the federal budget.

Some form of old-age pension system is a matter of basic decency, and no one wants to see the elderly on the streets without decent health care. But the political might of older voters—who live disproportionately in the crucial swing state of Florida—has been strikingly effective at blocking sensible reforms that could reduce the cost of the system for younger voters. When Social Security began in 1935, American life expectancy was 61, and only 7.8 million Americans were over 65. Today, life expectancy is 79, and 49.2 million Americans are over 65. Raising the retirement age would obviously make retirement benefits more financially sustainable. Yet older voters’ power has made such a change almost impossible....

Younger Americans see the massive flow of public spending toward the old, and they understand the difficulties facing reform. They thus find themselves attracted to politicians, like Bernie Sanders, who promise more spending on them. Visions of Medicare for All seem far more plausible to young voters than proposals to cut benefits already enjoyed by the elderly. But America needs policies that will empower the young, not make them a new generation on the dole."

And the final biggie at the foundation of it all and my personal reform passion, education:

"Insiders’ power to block change has been a steady feature of the education-reform wars over the last 20 years. "

And finally, his solutions:

"An effective alternative to the status quo and social democracy must, I believe, focus on empowering outsiders... To build a political agenda around the four freedoms of learning, working, selling, and building, four specific policies would provide a good start. 

Start with the right to learn, which precedes the other freedoms. Insider control over traditional K–12 education is, at present, too strong to achieve any radical reform within existing schools. Charter schools sadly remain a niche product, so pushing for their expansion—and for greater school-choice options more broadly—is necessary. Another alternative that could open up new education opportunities would be vocational training that bypasses the school system entirely. Washington could pay for programs inculcating marketable skills—from plumbing to computer programming. These programs could be competitively sourced, meaning that labor unions and community colleges and for-profit entrepreneurs could compete to offer them. But providers would get paid only if students learned real skills. Access to vocational vouchers could go not only to teenagers but also to displaced workers, or to anyone without a solid job. 

Second, we should establish a stronger right to work. All employment regulations should undergo rigorous cost-benefit analysis and have automatic sunset provisions. The Social Security system should also be made friendlier to the young. The payroll taxes that fund Social Security could be eliminated for those under 30 and phased in later in life. Younger workers and their employers would initially pay nothing into the system. That shift would eliminate a large tax-related barrier to hiring the young and make it more financially attractive for young people to work. That reform would reduce revenues, true; but raising the age of retirement could offset the lost funds. 

Third, Americans need greater freedom to sell and to launch new businesses, especially of the non-digital kind. The Internet’s platforms may make it easy to sell goods these days, but services and experiences are provided live and thus are often highly regulated. The next generation’s entrepreneurs should be able to create abundant opportunities outside of eBay—above all, in poorer areas. The path to liberating physical entrepreneurialism is clearer in cities, since more customers are clustered together for creative local service providers. But starting a business should be easier everywhere. 

The need to ease business regulations is particularly acute as America attempts to recover from the economic dislocation caused by Covid-19... 

As with employment regulations, a top-to-bottom review of business regulations, subjecting them to ruthless cost-benefit analysis, would be welcome, but that could take years. A speedier approach might be to experiment with entrepreneurship districts. They could combine one-stop permitting with shared maker spaces and targeted training programs. The permitter could be made accountable for the speed of the process. 

Fourth, we need more freedom to build. Since the Clinton administration, I have regularly interacted with officials at the Department of Housing and Urban Development, and they’ve always wanted to reduce the local barriers to building that push up prices. Their wishes have had almost no influence, largely because land-use decisions at the local level are not easy to control from Washington—and the notion that HUD would preside over local building permits is a little scary, anyway. State legislatures are the natural intermediate institutions that can push localities to build more. In many cases already, state governments have reduced the power of local land-use controls. The best federal approach in this area would be to deploy financial incentives to encourage state legislatures to do the right thing. Federal transportation spending is partially meant to build the infrastructure needed by new construction. If a state isn’t allowing any construction in high-demand areas, shouldn’t the federal government reduce its infrastructure support? Use money to nudge states—and let states nudge communities. 

Today, capitalism seems unattractive to the young because it is stacked against them. America’s current outsiders will have far better lives in a free system, however, than in any new socialism, which would invariably privilege connected apparatchiks (among the other failings it would bring). The cause of freedom will need to present itself as a radical break with the status quo to win the hearts and minds of a new generation.

Even with these extensive excerpts, I'm not really doing the piece justice - I really recommend taking the time to read the whole thing. I can't think of a more important agenda for America.

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Monday, March 14, 2022

Outsider observations on "drivable urban" Houston, 12 no-plan benefits, our affordability, the case for suburbia, and more

 This week we have a few pretty cool items:

'“Car-oriented” and “sprawl” aren’t the same thing: the word “sprawl” is imprecise. But it surely does not apply to heavily urbanized areas where office towers mingle with multi-story apartment buildings. Easterners are accustomed to a dichotomy between “walkable urban” and “driveable suburban”. Much of Houston’s core is “driveable urban.” 
...

Inspired: As a market urbanist, I was already a fan of Houston in theory. But the visit made me significantly upgrade my evaluation of Houston as a place. It is far more interesting than Austin, for one thing. And although it is automobile-oriented, it is definitively a city, with all that implies.'

'there are a bunch of ways in which the city totally (and unintentionally) came out ahead in the whole “the plan is there is no plan” deal.'
“After Uptown officials spent $192 million rebuilding the street to develop the line, operated by Metro, to carry 12,000 riders per day, bus drivers are ferrying fewer than 800 on many work days.”
“It’s 26 percent cheaper to live in Houston compared to the 20 biggest cities in the U.S."
Finally, if you missed our URI/COU webinar last week on "The Case for Suburbia", you can check it out here. Great panel, and yours truly gets a mention for my work on MUDs.


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Sunday, March 06, 2022

The Case for Suburbia webinar Tues March 8, 2022 at 12PM CST

Our think tank, The Urban Reform Institute - A Center for Opportunity Urbanism, is hosting a webinar this Tuesday at noon CST in collaboration with The Breakthrough Institute and the Cicero Institute on The Case for Suburbia

"The seeming success of compact cities and the supposed dangers of sprawl to the climate have led to pushback against sprawling, car-dominated cities. Join us as we discuss the environmental case for suburbia."

Register for the Zoom here and I hope to see you there! 


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