Tuesday, October 19, 2010

Size matters, HSR, CA vs TX, rail, regs, stats, and more

Before getting to a batch of smaller items, I wanted to mention that I met with Peter Schwethelm for HISD school board district 8 this week, and he had some well-reasoned arguments on how to improve public education.  I don't do official endorsements on this blog, and he and I didn't agree on everything, but he was thoughtful, knowledgeable and open-minded - which is more than I can say for many politicians.  The Chronicle profiled the race in this article today.

On to the misc items this week:
“The history of transportation shows that we adopt new technologies when they are faster, more convenient, and less expensive than the technologies they replace. High-speed rail is slower than flying, less convenient than driving, and far more expensive than either one. As a result, it will never serve more than a few marginal travelers.” 
"Amtrak brags that its high-speed Acela between Boston and Washington covers its operating costs, though not its capital costs. It does so, however, only by collecting fares of about 75 cents per passenger mile. By comparison, airline fares average only 13 cents a passenger mile, and intercity buses (which, Amtrak doesn't want you to know, carry about three times as many passengers between Boston and Washington as the Acela) are even less expensive.
According to the Bureau of Economic Analysis, Americans spent about $950 billion on driving in 2008. This allowed us to travel, says the Federal Highway Administration, more than 2.7 trillion vehicle miles, for an average cost of about 35 cents per vehicle mile. Since the California High-Speed Rail Authority estimates cars in intercity travel carry an average of 2.4 people, the average cost is less than 15 cents a passenger mile."
"The praise for Phoenix light rail reminds me of a home I visited recently that had a $50,000 super-size 100-inch flat screen TV.  That TV was gorgeous.  Everyone who saw it immediately fell in love with it.  It worked flawlessly, and everyone at the party wanted one.   In fact, it was probably the greatest, most sensible and successful purchase of all time … as long as one never considered the cost.  This is exactly how light rail seems to get evaluated."
"The question is, what causes spending to expand well beyond initial projections? Explanations range from subtle psychological impulses when numbers are involved (irrational optimism), to the economic phenomenon known as the winner's curse (projects with rosier estimates are more likely move forward), to outright lying."
I like the proposed solution: an independent agency to validate projections.  Maybe something similar to the Congressional Budget Office?  Texas could certainly use such an agency to validate projections on all sorts of projects before moving forward, from Metro rail lines to TXDoT freeway expansions.  Anybody want to submit a bill to the upcoming legislative session?
After analyzing the statistics, the answer was clear: Cities are like elephants. They get more economical with size. It doesn’t matter whether the city is located in China, Europe, or the American Midwest; every city is simply a scaled version of the same city. In metropolis after metropolis, the indicators of urban “metabolism”—like the per-capita consumption of gasoline or the surface area of roads or the total length of electrical cables—scaled to an exponent of (population)0.8, which is very similar to the biological equivalent of (mass)0.75. This means that a city can double its population without doubling its resource consumption. “One of the basic principles of cities is that it’s more efficient to bring people together,” West says. “You need a little bit less of everything per person. It’s the exact same way in biology. As animals get bigger, they require less energy to support each unit of tissue.”
Bottom line: growth matters, and people who argue against growth are arguing for economic stagnation.
Finally, I'd like to just pass along some recently released random stats on Houston.  Note the higher average income and lower cost of living - that's why the living here is so good.  Also note our lower public transportation and higher carpool shares vs. the nation, which I think is a strong indicator of our decentralized, multi-centric metropolis of many different job centers (rather than everybody trying to get downtown, <7% of jobs), and a good argument for a new and better vision for Metro.  Thanks to the Greater Houston Partnership for these stats, esp. Patrick and Marycruz.

Houston Metropolitan Statistical Area¹ 2009 ACS Highlights include:
  • Population was estimated at 5.865 million and households at 2.004 million.
  • The median age of the region’s residents was 32.9 years, compared to 36.8 nationwide.
  • The percent of the population age 25 and over with a bachelor’s degree or higher was 27.9, the same  as the nation.
  • In Houston, the labor force participation rate for those ages 16 and over was 68.5 percent. Nationwide, the rate was 65.3 percent.
  • The mean travel time to work in Houston dropped from 28.9 minutes in ’08 to 27.6 minutes in ’09. In the nation, mean travel time also fell, from 25.4 minutes in ’08 to 25.1 in ’09. 
  • In Houston, the percent of workers using public transportation to commute to work totaled 2.2 percent, while 78.8 percent of commuters drove alone and 12.1 percent carpooled.  Nationwide, 5.0 percent used public transportation, 76.1 percent drove alone, and 10.0 percent carpooled.
  • Real median household income was $54,146 in Houston, compared to $50,221 nationwide.
  • The median value for owner-occupied homes in Houston was $139,800, compared to $185,200 in the  nation.
  • The median gross rent was $848 in Houston and $842 in the nation.
  • Nationwide, 84.9 percent of the civilian noninstitutionalized population had insurance coverage, compared to 75.4 percent in the Houston.
  • 1.278 million residents in the region were foreign born, representing 21.8 percent of the population, compared to 12.5 percent nationwide. The percent of foreign born in Houston increased from 21.5 percent in ’08 to 21.8 percent in ’09.
¹ The Houston Metropolitan Statistical Area includes the following counties: Austin, Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, San Jacinto and Waller.

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At 9:56 PM, October 19, 2010, Blogger Alon Levy said...

Speaking of rail, remember how you said that Houston is building the lower-performing LRT lines first so that it can guarantee that the full system will be built? Well, it turns out LA is doing the same with its 30/10 projects: it's building the Crenshaw Line first and postponing work on the Wilshire subway until later.

At 10:21 PM, October 19, 2010, Blogger Tory Gattis said...

Arg! That is so frustrating. Only in government does it somehow make sense to build the lowest priority items first. It's like 1950 Houston deciding the next freeway project should be a segment of the Grand Parkway...

At 9:48 PM, October 20, 2010, Anonymous Anonymous said...

Yes, it does make you lose even a little more faith in government.

Tory, check this out re Houston: http://en.wikipedia.org/wiki/List_of_metropolitan_areas_in_the_United_States_by_GMP

At 9:50 PM, October 20, 2010, Anonymous Anonymous said...

That didn't work as well as I'd hoped. Trying again: http://tinyurl.com/3azlade

At 10:23 PM, October 20, 2010, Blogger Tory Gattis said...

That is very interesting. I'm surprised we beat DFW (more people) and DC, Boston, SF (more higher-earning college degreed people), and really smoke similar-population areas like Atlanta, Philly, and S.Florida. Thanks for the heads up.

At 11:00 PM, October 20, 2010, Blogger Alon Levy said...

Bear in mind, GDP includes the profits of corporations headquartered in your region, regardless of whether the dividends go to locals or not. It can be skewed upward in areas with a large concentration of HQs, such as Tokyo Prefecture or Ireland. Per capita income captures the local standards of living and economic output better.

You can find income data here. Houston, as you can see, not only overperforms (and is near the top when adjusted for living costs), but also has had steady economic growth. In contrast, most peer Sunbelt regions, including Atlanta and Dallas, had zero or negative real per capita income growth over the last business cycle.

At 9:09 AM, October 21, 2010, Anonymous Anonymous said...

Alon, you're right about potential skewing. I think it's noteworthy that even with lower population or lower % with degrees, etc., the headquarter effect - among other factors - was stronger.
It's also worth noting that DFW would get the headquarter effect for Exxon, the #2 company in the U.S. though Houston has by far the most employees. Similarly, Chevron has a lot more employees in Houston than in San Ramon, but the San Francisco would get the credit for the GDP on that.

At 10:12 AM, October 21, 2010, Anonymous Anonymous said...

I'm also curious to see how the drop in oil prices affected Houston's ranking in 2009. Oil averaged $100/bbl in 2008 but only $62/bbl in 2009.
Was the drop in oil prices here a more significant factor than Houston's relatively strong economy, and relatively soft landing from the real estate bubble?

At 10:42 AM, October 21, 2010, Blogger Tory Gattis said...

I don't think we'll know until the 2009 data comes out. Given govt spending trends, I would not be surprised if DC moves ahead of us.


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