Category Archives: infrastructure

The public-housing death spiral

Keeping housing affordable is a problem anywhere, but it’s a particular problem in a city built on a foundation of sustainable urban design.

Portland, Ore., might be North America’s best example of sensible urban planning — compact development, lots of mass transit, etc. — and as such it’s a really desirable place to live. Desirable places to live are really expensive: in 2005, Forbes did some math and found Portland was the third-least affordable American city in which to live, better than only New York City and Seattle. So it’s a natural that the city government would spend a lot of time trying to help poorer people get by, particularly in their housing arrangements.

One of their methods is about to bite them, according to the Portland Tribune, which reports on the desperate attempt to keep rents down in 950 privately owned apartment units. They’ve been subsidized by the federal government, but the subsidy deals are all set to expire by 2013, when the mortgages do — the deal with the Housing and Urban Development Department back in the late ’70s and early ’80s was that the feds would subsidize the rents for that long.

The rent is geared to tenants’ income: they pay 30 per cent of what they make, and the government makes up whatever the difference is between that and the market rent. To get in, you have to be making less than half the median income for a family like yours in Portland.

The Tribune reports that the city is trying to scrape together the money from many sources to buy the buildings before the subsidy deals expire, and the process is a mess:

The funds needed to buy the 12 buildings and pay for any needed repairs probably will have to come from a variety of sources, including private financiers, the state of Oregon and the Portland Development Commission, the city’s urban renewal agency.

The city’s share of preserving the buildings will probably total in the millions of dollars. Although the buildings have not yet been formally appraised, the PDC estimates they are worth anywhere from $1.5 million to $25 million each, depending on the size and location.

“This will be a significant resource issue for the city for years to come. It’s going to cost us some money,” [city housing official Margaret] Bax said.

PDC funds may not be available for all of the remaining buildings, however. Six of them are in existing urban renewal areas administered by the PDC. The rest are not.

Although some members of the City Council have suggested that PDC funds should be available for projects outside renewal areas, the agency is not yet authorized to help finance such projects.

Now, this situation was predictable from the very beginning — everyone knew the subsidies would end, because they were time-limited from the get-go, and everyone knew the tenants living in the apartments when that happened would be screwed unless some other subsidy program kicked in. Now the city wants to make that happen, but doesn’t have the money, and is considering using money set aside for urban renewal projects for non-renewal purposes, just because it’s convenient.

Permanent subsidy programs are just a terrible idea. They always end up like this, one way or another.

There’s no easy, principled solution. The traditional approach is to allow ever-more construction out where land is cheap, but that’s off the table in Portland, where a firm urban-growth boundary constrains budget-eating, environment-killing sprawl.

(My libertarian argument for such boundaries is that it’s reasonable to draw a line beyond which many expensive city services simply will not be provided — you want to live way out there, you’re on your own — and a similar principle applies to justify most elements of ordinary zoning within the boundary.)

Instead, the only viable long-term solution is for Portland to loosen its zoning codes to permit even more compact construction, while spending more on transit to make it easier for people to live farther from expensive destinations and still get where they’re going efficiently. Seems to me that’s a much better investment than sinking tens, maybe hundreds of millions of dollars into buying social-housing buildings so you can take over the rent subsidies forever.

Update: More on the Portland housing situation here.

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What are gas taxes for?

Gaspump2The U.S. federal government is experimenting with ways of replacing some or all of its gasoline tax with a system that would charge drivers according to how many miles they drive, according to North Carolina’s News & Observer. About 450 drivers in its coverage area, which includes some extremely high-tech–savvy folks, will be participating in a technical test of a GPS system that’ll track their driving.

The problem, evidently, is that drivers are switching to high-efficiency cars, and road-construction costs are going up.

Lew Rentel of Morrisville drives one reason our road money is running low — a Toyota Prius.

Rentel, 69, used to drive a hulking Lincoln Aviator that burned up a gallon of gas every 13 miles. With 48.6 cents in state and federal taxes per gallon, he was paying the government 3.7 cents for every mile he drove.

But he ditched the luxury SUV for what he called patriotic reasons: to help fight global warming and cut our need for foreign oil. Now with a thrifty hybrid that gets 44 miles per gallon, Rentel has cut his tax payments to barely a penny per mile.

He realizes that people like him are doing less to help pay for the roads.

“Something’s going to have to be done,” said Rentel, a retired UPS executive. “You’re either going to tax by the mile, or you’re going to tax some other way.”

According to the News & Observer, the gap is so great that the federal Highway Trust Fund, which depends on gas taxes, is expected to go from an $8.9-billion surplus this year to a deficit by 2009. According to the Congressional Budget Office, it’s actually worse than that — a report from last March (PDF) seems to say pretty plainly that the fund has been in deficit since 2000 and is down to $9 billion, which in highway-construction terms is like being down to whatever cash is in your wallet right now.

So they’re trying to figure out what to do, and finding ways to make people pay by the mile is at the top of the list.

The Iowa researchers will outfit volunteers’ cars with computers and satellite gear to record where and how far they drive. Each month, the volunteers will receive sample bills for how many miles they have driven. Their mileage fees will be compared to the per-gallon taxes they pay now. Congress is considering a call to boost new-car fuel efficiency standards by about 40 percent, to an average of 35 mpg, by 2020. By then, some Americans will be driving cars that use no gas or diesel fuel — and pay no fuel taxes.

Taking gasoline consumption as a proxy for road usage was always questionable, though it was certainly convenient for quite a while there. The taxes have always sent a mixed message, though, particularly since gas taxes are always thrown into the “sin tax” category with liquor and cigarette taxes. Are they taxes on sin or user fees for the roads? What if the money goes to mass transit (as some of the trust fund actually does)? What, precisely, is the rationale behind the tax? If you’re a legislator levying a tax and you can’t give a specific answer to that last question, you’re eventually going to have problems.

This is a variation on the problem with giving hybrid cars access to high-occupancy vehicle lanes even if there’s only a driver in them — are HOV lanes a congestion-fighting measure or a way to reward the environmental benefits of carpooling? Don’t know? Better figure it out, or else your policy on who gets to use them isn’t going to make any sense.

It’s never made sense to charge people buying gasoline for their lawnmowers a fee to go for highway maintenance, just as it doesn’t make sense that cyclists get to use the roads for free (or at least only for the portion of their income and other taxes that go for road maintenance). These have been minor evils in a system whose efficiency has overriden those considerations, though. It hasn’t mattered till now, when a whole lot of people are looking for ways to use the roads in ways that happen to involve not paying for them, based on the system we’ve set up.

I think the lesson applies to another great big policy question: carbon taxes. I’m still vacillating on the usefulness of carbon taxes versus the other measures that are available for controlling greenhouse-gas emissions, but this gas-tax problem seems like a worrisome parallel: If using gas consumption as a proxy for road usage gets us into trouble eventually, what problems might we be setting ourselves up for if we use the purchase of carbon-based fuels as a proxy for greenhouse-gas emissions?

One is that if I’ve already paid a zillion bucks in tax for the coal that powers this generating plant I own, I don’t have a lot of incentives to sequester the carbon dioxide the thing emits. Heck, I’ve already paid for all that stuff, so why would I pay extra to keep it contained?

Unless there’s some separate incentive system — rebates on the tax if I sequester the carbon — in which case it seems to me that a carbon tax’s key selling point, its simplicity, is right out the window.

(Via Planetizen. Photo credit: “Gas pump,” Flickr/romulusnr.)

The Russians are coming

This sounds like a nightmare waiting to happen on the shores of the St. Lawrence at Quebec City.

The big-picture point is that Gazprom, Russia’s state-controlled energy conglomerate, is promising to supply natural gas to other energy companies all around the world, in exchange for ownership stakes in the terminals that will receive it.

Gazprom is the entity Russian President Vladimir Putin used to shut off the gas to Ukraine — and put intense pressure on western Europe in the process — when he got annoyed with Ukrainian President Viktor Yushchenko as 2006 began. Essentially, it’s part of the Russian government and a lever for exerting Russian power. It is most definitely not a source of natural gas that Canadian consumers should want to come to count on.

According to the Globe and Mail, the terminals in Canada it might acquire some of include proposed liquefied-natural-gas ports in Lévis (across the river from Quebec City) and downriver at Gros-Cacouna (near Rivière-du-Loup).

The Canadian partners in the two projects — Gaz Métro and Enbridge Inc. at Lévis, Petro-Canada and TransCanada Corp. at Gros-Cacouna — are private enterprises. Why they would even consider climbing into bed with Gazprom is beyond me. Sure, Gazprom is a moneymaker, but that’s not a motivation its associates can count on in figuring out what kind of partner it’s likely to be.

On the up side, the Globe quotes an industry-watcher saying the guaranteed supply contracts Gazprom is reportedly dangling are a joke:

[A]nalyst Elena Herold of PFC Energy said any company that is counting on Gazprom’s Baltic project for LNG supplies could well be disappointed. “It’s ridiculous – more talk than a real project,” said Ms. Herold, who covers Russian energy for the Washington-based consultants.

Ms. Herold said Gazprom has no dedicated natural gas supply to feed the Baltic project, and that it makes more sense to ship the gas by pipeline to Europe than liquefy it and send it by tanker to North America.

Also, during my little spin around Quebec City last week, I was almost distracted by the number of posters I saw tacked up opposing the proposed terminal at Lévis. They might all have been put up by one guy with a staple gun, but the project does not seem to be a done deal, even if the proprietor (a consortium called Rabaska) intends to start operations by 2011.

The private companies involved are, of course, free to make deals with whatever suppliers they want. Consumers should be striving to make deals like these, which invite authoritarian foreign governments into important roles in critical and sensitive infrastructure, unnecessary.

Overpass collapses in Oakland, traffic improves

I’d wait a few weeks before drawing any firm conclusions about whether the closure of part of Oakland, California’s “MacArthur Maze” thanks to a fiery tanker-truck crash will have lasting positive effects on local traffic, but local experts sure do seem surprised by how smoothly everything has gone.

“It doesn’t seem like travel times were getting worse; in fact, in some cases, they actually seemed to be getting better,” said Karl Petty, an engineer who heads the company.

Petty said a small percentage of drivers staying off the roads can make a huge difference in lowering traffic congestion — not just at the freeway collapse site, but around the region. This week’s changes by a few drivers along key routes seemed to make a big difference, according Caltrans data from thousands of buried freeway sensors.

On Monday and Tuesday, the number of miles traveled by Bay Area drivers dropped very little — about 1.7 percent, according to state traffic data. But along the affected routes the decreases were much higher.

Usually on weekday mornings, about 30,000 cars pass along the section of Interstate 580 going toward the MacArthur Maze. That westbound stretch is unaffected by the freeway collapse. On Monday morning, nearly 7,000 fewer cars passed through that stretch — a drop of 22 percent. The volumes dropped by 15 percent on Tuesday and 11 percent on Wednesday, according to data from Caltrans’ Freeway Performance Management System.

“Getting rid of 10 percent of the traffic can totally eliminate the congestion,” Petty said.

It seems that rather than risk traffic chaos in one of the busiest traffic interchanges in the United States, a lot of people who usually drive were parking their cars and taking public transit, or possibly finding longer and less congested routes to get where they’re going. The San Francisco Chronicle reports record ridership on the Bay area’s rapid-transit system.

Jane Jacobs disciples have argued for years that widening one particularly congested road or interchange usually solves the problem there while worsening traffic everywhere else — all the roads feeding into and fed by that particularly troublesome spot. If this pattern holds up, there’ll be some extraordinarily strong proof of the intuitive theory.

Subsidizing sprawl

That government subsidies meant to attract large employers also appear to contribute to sprawl should come as no great surprise. If you’re looking for a place to put your business and a critical feature is that the place be cheap, you’re going to want land that’s as inexpensive as possible, architecture that’s as inexpensive as possible (what’s cheaper than a one- or two-storey building with concrete tilt-up walls?), and a bare minimum of amenities for your employees and their community (a couple of acres of surface parking should just about do it. Of course you’re going to locate as far as you can from an urban core.

Here’s Neal Peirce of the Washington Post Writers Group:

Of 86 subsidized corporate relocations in Minnesota between 1999 and 2003, involving 8,200 jobs and more than $90 million in government payouts, four-fifths were outbound from the Minneapolis-St. Paul urban core. People of color and transit-dependent workers lost out; more affluent, less racially diverse areas gained, registering increases in jobs that were five times that of the central cities.

The map of subsidized job shifts in the Twin Cities area, says Greg LeRoy, Good Jobs First’s founder-leader, resembles an “evacuation plan.”

Good Jobs First, which provided Peirce with his data, is on an excellent campaign to tie subsidies like this to requirements that companies receiving subsidies like free land or buildings or waived development charges locate their operations near transit or on brownfields or in troubled but inhabited districts.

As they point out, there’s absolutely no point giving a company a one-shot subsidy to move into your town if its arrival puts permanent pressure on your infrastructure that eats up any financial benefit it delivers.

In many cities, it’s a dirty secret that growth doesn’t pay for itself even if it’s not subsidized. So why on earth would a thoughtful government use taxpayers’ money to make things even worse?

(Via Planetizen.)

Bloomberg’s congestion charge: a step toward fairness

Brooklyn BridgeOn the heels of the New York City Parks Department’s effort to put a value on its trees comes a massive new sustainability plan out of the office of Mayor Michael Bloomberg. Here’s the mayor’s speech introducing the thing, on Earth Day 2007. In a nutshell:

Our strategies focus on the five key dimensions of the city’s environment: land, air, water, energy, and transportation, so that we can absorb the coming growth – while continuing to strengthen our economy, our public health, and the quality of life in our neighborhoods.

That’s our vision: a city that finds creative solutions to the need for more housing and parks. That has much cleaner air – the cleanest of any large city in the nation that protects the purity of its drinking water – and opens virtually all of our rivers and creeks and coastal waters to recreation.

“Plan” is probably the wrong word, though it’s officially called “Planyc” (“Plan Y-C,” I think it’s pronounced). Despite the acres of text and graphics emitted by Bloomberg’s office, and the sweep of his speech, almost everything in the plan amounts to a promise to do all the things that the city government is supposed to do but doesn’t — or at least doesn’t do very well — because they’re hard and expensive. Consider the bullet points of the subsection of the plan for housing:

  1. Pursue transit-oriented development
  2. Reclaim underutilized waterfronts
  3. Increase transit options to spur development
  4. Expand co-locations with government agencies [that is, share municipal office space with the state and federal governments]
  5. Adapt outdated buildings to new uses
  6. Develop underused areas to knit neighbourhoods together

and so on to 11. You get the idea: all fine principles, with many, many devils slouching around in the details.

So it’s no wonder that the thing everybody’s grabbed hold of is the single most concrete of the dozens of points in Planyc, the plan to charge an $8 congestion fee to enter the southern half of Manhattan between 6 a.m. and 6 p.m. on weekdays. New Yorkers outside the affected area, fearing that there’ll be traffic jams and new demand for parking lots on the edges of “the Zone,” are less than thrilled.

But an important component of the plan is that the congestion charge is to be deducted from the tolls commuters pay to drive the bridges and tunnels onto and off Manhattan, which vary quite a bit but are generally either about $6 one-way onto the island or about $4.50 each way. Commuters taking a toll bridge or tunnel are to pay only the difference between the toll and $8, effectively just raising the tolls to $8 everywhere.

(People who get it in the shorts are those who live north of 86th Street, the northern edge of the Zone, and have driven south for free. Of course, people who do that are in the best position to take transit — the ones who are really screwed are those who live in the Zone and drive out of it for work. Not that there are likely a lot of them; Bloomberg’s supporting documentation says only 4.6 per cent of New Yorkers drive into the Zone for work, and doesn’t even mention that there’s anyone who drives out.)

Despite the objections, a congestion charge is the only policy option that makes sense when you have roads that are absolutely crammed full and no prospect for widening them. (Widening a road is just about always a bad idea, but apparently it takes densities like those in the densest part of New York City to convince people that widening is literally not possible.) Access to a smooth-flowing road is a good not everyone can have, so it’s only fair to restrict it to the people to whom it’s worth the most. The New York City plan contends that delivery drivers, for instance, will spend less time in traffic and will make more than $8 a day in improved business. And the proceeds, which Bloomberg’s office estimates at a stunning $400 million a year, are to be plowed into public transit.

Indeed, if someone could come up with a system for doing it that didn’t collapse under its own complexity, charging for access to any public road would be the fairest way to distribute access. What we have now is a peculiar form of rationing, in which everyone who pays taxes kicks in to build and maintain roads, but access is restricted to those who can afford cars. Doesn’t really make sense. Bloomberg’s congestion fee is just a first gross-scale step in the direction of fairness.

Photo credit: Flickr/Squeaky Marmot.

What not to fix

Here’s a practical problem with trying to predict the effects of climate change and turn them not just into a bleak newspaper story but actual coherent government policy. The Canadian Press says that the full report of the UN’s Intergovernmental Panel on Climate Change will go into some details about what different parts of the world can expect:

The UN study will identify coastal areas sensitive to sea level rise and cite Charlottetown as an example of a city vulnerable to increased flooding and storm surges, [Canadian scientist Gordon] McBean said. It will outline the risk of water shortages on the Prairies and of a sharp drop in Great Lakes water levels that could interfere with navigation.

The study will also highlight the risks to infrastructure in the North and in coastal areas, said McBean.

“The major railway line that connects Halifax with the rest of Canada runs along about a foot above sea level along the Bay of Fundy.

“We should be now doing the investments to make those critical transportation facilities less vulnerable by moving them inland.”

He goes on to say that the Tories have stopped funding research that would have guided climate-change adaptation strategies. We’ll see whether that gets restored in Environment Minister John Baird’s climate-change blueprint (due in the next week or so), like so many Liberal environment projects.

Hard-core research into what ought to be our top priorities for public infrastructure and how else Canada can expect to be affected is extremely important — stuff much more detailed than an international report could offer — because we can’t afford to do everything we theoretically might do to prepare and adapt. Rerouting a rail line along the Bay of Fundy is a fabulously expensive proposition (even if it’s only by the water at a couple of spots). Building levees around Charlottetown is even more so (and even then, how high should they be and to what standards?). We cannot do it all.

Publicly funded science should help differentiate between what ought to be public priorities and which ones ought to be private responsibilities and which ones ought not to be done at all.

We could easily spend ourselves into the poorhouse to head off catastrophes that never become reality, or that turn out not actually to be catastrophes. What if we spent billions on irrigating the Prairies with fancy technology to suck water vapour out of the air, only to find that warmer, drier conditions are perfect for some newly prized plant? In fact, in my fantasy example, we shouldn’t spend billions irrigating the Prairies at all, if they become irretrievably unsuitable for agriculture as it’s practised in 2007.

I suspect we’re in for decades of people demanding public subsidies to compensate for permanent changes in the weather, either in the form of straight subsidies for activities that don’t make economic sense or in public spending on infrastructure to support such activities — spending that’ll never be paid back. It’s going to be really, really, really hard for politicians to say no.