Thursday, March 31, 2011

Thoughts on urban policy to think about

I enjoyed Claude Gruen's New Urban Development.  The author knows the economics and adds the lessons he absorbed as a long-time consultant on urban development.  And the book is short and readable.

Gruen's last chapter discusses his 13 favorite development policy reforms.  #9 is "Vest Tenants of Redevelopment with Rent Differential Subsidies."  In other words, in cases of eminent domain purchases, treat the renters to more than relocation assistance. #10 is "Distribute a Portion of Sales Tax Revenue on the Basis of Population Rather Than Point of Sale."  That would be an antidote to local governments' scramble for new retail development in their cities -- especially in light of Proposition 13-type limits on property tax revenues.  #11 is "A private Alternative to Public Urban Redevelopment."  This is timely as public redevelopment is now even unpopular with the likes of Gov Jerry Brown.  "... private parties who have acquired 80 percent of properties within a blighted project area will be granted the power of eminent domain to acquire the remaining 20 percent."  But there would be additional payments to these former owners from project profits once these are realized.

A recent NY Times Book Review Essay by David Greenberg is titled "Why Last Chapters Disappoint" ("No Exit" in the print edition).  "Why do books on social problems always end with suggestions that are banal, utopian or beside the point?" 

That one hit home.  Many of us should watch what we recommend. 

I would not characterize Gruen's 13 points as "banal" or "beside the point."  But some of them ("Plan and Zone to Add More Development Than Would Be Required by Estimated Likely Demand Growth,") assume a long run forecasting ability that planners simply do not have.

But readers should chew on all thirteen.  They are from a smart man with lots of professional practice experience, which comes across in all of the chapters leading up to the recommendations.

Tuesday, March 29, 2011

Chic to cheat

It's OK to "freeload" (steal) if it's for the environment. Today's WSJ includes "Freeloaders Unite to Fight Subway Fares .. In Scandinavia, It's Chic to Cheat Via Insurance Scheme." It appears that the chic honor-system transit freeloaders in some of the Scandinavian cities subscribe to an insurance combine that pays their fines on the rare occasions that they get caught.

The story mentions that subscribers are also part of a protest movement against rising fares. I guess that it's much more fun to be a protester for good causes if there is insurance for any downside.

The turnstile jumpers (when and if they actually have to jump) are called Plankers and Planka Oslo is the outfit described in the story. You pay less when caught if you can pay on the spot, 750 ($135) kroner now vs. 900 later. A monthly transit pass goes for 570, but Planka dues (premiums) are just 250. Do the math.

This all works until authorities increase fares and/or enforcement. But think of the demonstrations and marches.

Sunday, March 27, 2011

Taking care of itself

We now have 2010 population tallies for all the major U.S. cities. Table 2 in this post lists Wendell Cox's itemization of major U.S. Core Cities. His latest report on head counts shows that most of these places continue to fall behind their suburbs in terms of population growth.

This is old news to some, but perhaps surprising to many who look for (and proclaim) an "urban revival." More than proclaiming, many have worked to put in place a huge number of plans and programs (including public transit) to bring it about.

In his splendid Triumph of the City, Ed Glaeser writes, "Transportation technologies shape our communities and modern sprawl is the child of the automobile." (p. 167)

Here is an even stronger statement from Witold Rybczynski:
“Virtually every technological innovation of the last fifty years has facilitated, if not actually encouraged urban dispersal.” (p. 170)

Yes, agglomeration economies are crucial, but they are available in many places. And suburbs and core cities complement each other. We can network nicely with people who are not down just the street. This is old stuff that bears repeating because no one has yet offered to give me one dollar for every evokation of "regeneration," "renaissance" or "revival" of "the city". Turning back clocks is never simple.

I did not live in New York in the years it was coming apart, but reading Pete Hamill's Piecework gives me an idea how awful it was. New York city's return from those days is amazing. Fred Siegel covers the fall and rise.

But what about the "costs of sprawl?" In my March 12 post, I mentioned that the latest data on commuting indicate that suburban journey-to-work travel times compare favorably with core city times. But those cites referred to all modes of travel and have an apples-and-oranges problem because transit use varies -- and accounts for much slower travel.

The NHTS data make it possible to compare travel via privately-operated-vehicles only, probably the most direct and representative.

In 2001, the average for the "suburbs" was slightly less than for "urban" (NHTS definitions), 20.8 minutes vs. 22 minutes. They had pulled approximately even by 2009, 22.3 minutes for "urban" and 22.8 minutes for "suburbs." The lowest travel time readings in both years were for "second city" (akin to an Edge City), 17.3 minutes in 2001 and 20.9 minutes in 2009.

These are averages, but standard deviations were small in each case; coefficients of variation were always below 1.0.

There are also data for miles instead of minutes. What do they show? Coefficients of variation always greater than one.

Commuters care most about time costs and manage to find job and home location matches that preclude crazy commutes. Planners worry over "jobs-housing" balance (and what they can do about it), but it seems to be taking care of itself.


Ed Glaeser explains his surprise at the New York numbers.


Here is more re New York from Wendell Cox.

Saturday, March 26, 2011

It's the inputs

Perhaps it's not so weird that heads of state in China, France, the UK and elsewhere have jumped on the happiness bandwagon. GDP has lately become a little hard to manage (and is easy to criticize, anyway). So why not switch sports?

Besides, if the GDP idea is complex and controversial, why not tackle something much more difficult?

Today's WSJ includes a nice summary by Carl Bialik, "Happy? Statisticians Aren't Buying It." The piece is self-recommending.

Jefferson wanted a state that made it possible for each of us to pursue happiness. Period. This is one area where measuring the inputs rather that the outputs is the way to go. Are leaders here there and everywhere making our pursuits possible? If so, very good. All the rest is way beyond them.

I know, that never stops them.


Here are reports that exercising self-control can be aggravating. Happiness will always be fun to talk about, but self-management is no picnic.

Wednesday, March 23, 2011

Getting past big-is-bad

About a dozen years ago, Richard McKenzie wrote Trust on Trial: How the Microsoft Case is Reframing the Rules of Competition, which argued that modern technology and its applications had overtaken anti-trust law and that the application of the law simply favored rivals who had been left behind.

Yet, the big-is-bad idea is a standard. I listened to a couple of radio-news commentators on the drive home yesterday who fretted over the market share that the AT&T-T-Mobile entity would get. They signed off saying, "the politcians will have to get involved." They will, of course. But they were never not involved.

The spectrum (available to radio, wireless, etc.) has long been likened to real estate, best allocated by market competition. But the FCC likes to do the land use planning (along with pals from Congres and their pals from K-Street). We get the demands of technology moving much faster than the FCC can possibly keep up with.

The Justice Department lost the Microsoft case, but innovation and falling prices continued anyway. In fact, both keep accelerating. I believe that we can take away the lesson that it would be best if the FCC loses this fight too -- if it chooses to fight.

Monday, March 21, 2011

Coase and apps

Ronald Coase famously suggested that mutually satisfactory agreements and property rights allocations would follow property rights clarity when and if accompanied by low transactions costs. He could not have foreseen the power of his insight in light of the internet and smart phones and apps. But these days countless new services and transaction opportunities routinely become available each day. In fact, many of them are "free" or very inexpensive, paid for by linked offers and available upgrades.

Brad Hill points us to whereby instant carpools can be formed. Parker.streetline can find vacant curbside parking spaces. Today's WSJ reviews apps to help us stay fit, eat less, etc.

In fact a Letters to the Editor correspondent (Joe Szeles of Colorado Springs) to today's WSJ joins the criticism of the new Consumer Financial Protection Bureau, noting that, "We already have a consumer financial protection bureau. It's fast, efficient, requires no funding with taxpayer money, has no employees, no unions, no pensions to fund and no health-care expenses. It's called Facebook and it has a back-up system called Twitter."

Sunday, March 20, 2011

Good news

My favorite diversity is not the politically correct set-piece photo arrangements that universities, businesses, and others carefully assemble for image purposes. Rather it involves people freely choosing spouses and partners across "racial" lines because they are color-blind and more interested in the contents of the partner's character.

The March 19 NY Times includes "Black and White and Married in the Deep South: A Shifting Image". This may be better than even Martin Luther King had dared to dream.

I am old enough to have seen the old South and am always happy to see good news like this. We will never resolve differences of opinion on whether the changes we see are remarkably swift or too slow. Perhaps it helps to note that tribalism is as old as humanity and seeing it recede in our lifetimes is nothing but good news.

Friday, March 18, 2011

Never say "never"

It is March 18, 2011, and the LA Times' lead editorial (very carefully) endorsed peak-load pricing on selected high-occupancy-vehicle (HOV) lanes on local freeways. These would become high-occcupancy/toll or HOT lanes. Time-of-day tolling just may be an idea whose time has come -- which many had thought was ages ago.

I'm making a big deal of this because back in the day when the Times could have been influential, its writers beat the drums for every dunder-head rail transit proposal (and tax) that local planners and politicians could come up with. We now know that all of these projects have had no effect except on the cost side. So we now have have rutted roads and highways -- that are as congested as they were when this rail craziness in LA began.

It is March 18, 2011, and never say "never".


Today's LA Times reports "L.A.'s bus service faces major cuts .. Changes come with push forward on ambitious plan to expand rail network ..." This speaks for itself.

Wednesday, March 16, 2011

Black swans

More than a black swan a year. Here is the compilation from just the last 10 years from Barry Ritholtz.

BTW, he has one of the funniest one-liners ever. He mentioned that he saw the movie, but "what happened in production?"

Hilarious for those whoe also enjoyed the book.


"Assume a black swan" That's from this very funny spoof by the WSJ's Holman Jenkins.

Those knowledge problems

I greatly enjoyed Arnold Kling's Unchecked and Unbalanced. The author writes about the financial crisis and finds serious culpability in Washington as well as on Wall Street. As always, when these two hold hands, we have problems. It's that old crony capitalism and both political parties practice it.

Kling also writes about the ratio of governors to governed. He likes the ratio in Switzerland better than ours. One canton has more elected officials but fewer people than Kling's home county in Maryland. It's always a stretch to believe that elected officials can possible know enough to fully understand all the problems they presumably want to "solve." So it's Fatal Conceit all over again.

The March 28 Forbes included "Ban Bulb Lunacy"
Next year the federal government begins the phaseout of traditional incandescent lightbulbs, giving us yet another enlightening example of politicians short-circuiting free markets. The 100-watt bulb will be banned on New Year's Day, and all the rest by 2014.

This prohibition of the standard lightbulb is justified on the grounds that it will save energy. Well, if that were true, don't you think consumers would figure it out for themselves? The chief replacement is the compact fluorescent lamp (CFLs)--those things that look like frozen pasta. They will cost six to ten times the amount of the old bulbs, but Washington politicians assure us that consumers will ultimately save money because CFLs will last longer.

But they might not. Warns expert Myron Ebell of the Competitive Enterprise Institute: "Cost savings are exaggerated. First, the [new] bulbs are tested under ideal conditions. Some household uses approximate these ideal conditions. Most do not. For example, if you turn a light on and off a lot, such as a bathroom light, you will save very little electricity because CFLs use a lot of electricity to start up. Second, CFLs tend not to last as long as advertised. Therefore, you end up replacing CFLs before they have achieved the savings needed to make up the [cost] difference [of the old-fashioned bulb]."

There's an even bigger problem: mercury, a poison. Heaven help you if you break one of these things. The EPA has numerous instructions on what you're supposed to do when this happens.

It also goes into detail on how to handle vacuuming carpeting or rugs:

- The next several times you vacuum the rug or carpet, shut off the H&AC system if you have one, close the doors to other rooms and open a window or door to the outside before vacuuming. Change the vacuum bag after each use in this area.

- After vacuuming is completed, keep the H&AC system shut off and the window or door to the outside open, as practical, for several hours.

The EPA also has bulletins on what to do when the bulb burns out.

You can't make this stuff up. ...
How likely is it that the millions of pages of rules and regs in the Federal Register are much better than this?

Tuesday, March 15, 2011

Working at home

The 2010 census data are just arriving, but I did not know that considerable working-at-home data are available from the Survey of Income and Program Participation, the latest for 2005.

In that year almost 8 percent of those working worked at home at least some of the time. Almost a third of these reported a "mixed" schedule, whereby they also spent some time at a traditional workplace. Both groups came from the higher income and more educated respondents.

Of those who reported being wholly home-based, 53 percent were self-employed and the rest were employees. Both of these groups were about evenly divided between males and females.

Of the three groups (only at home, mixed, and traditional workplace), the mixed group averaged the most hours worked per week.

Surprisingly (to me), the majority in both of the work-at-home respondents said that their schedule was a "requirement of the job". Only 5 percent mentioned better child care.

There is much more and we'll soon see how these numbers developed in 2010.

Is less face time with colleagues a plus or a minus? Which group will be most productive? Those with the "mixed" schedules? Many questions remain to be addressed.

Saturday, March 12, 2011

Conventional wisdom wrong again

It is an article of faith for almost anyone with any exposure to economics (basic and beyond) that government policy makers should come to the rescue when markets "fail".

Tom Rubin recently presented commuting travel time data (from the 2005-2007 American Community Survey) for the 74 U.S. Urbanized Areas with more than 500,000 population in 2007. For the group, the average commute times (one-way, all modes) were just over 26 minutes for "central city" residents, but just under 26 minutes for suburban residents. To be sure, these are overall averages and the various urbanized areas differed as to where the average commutes were of shorter duration, but they were always quite close.

Pengyu Zhu has combed the 2001 and 2009 National Household Travel Surveys (NHTS) and also found that "suburban" average commute times were less that "urban" average commute times in both surveys (22.3 minutes vs 26.7 minutes in 2001; 23.6 vs 24.4 minutes in 2009; also one-way, all modes). ACS and NHTS use slightly different definitions, but the results are consistent.

With electronic transponders, transactions costs of time-of-day tolling are now very low. Ignoring the tolling option and letting crowding be the default rationing mechanism is then a policy failure.

But the travel times that we observe undermine the standard traffic doomsday talk. They also upend the "worsening traffic is a cost of sprawl" trope.

Employers and employees are (for the most part) finding ways to co-locate in ways that avoid both concerns.

Land markets (such as they are) are coming to the rescue of a policy failure.

Thursday, March 10, 2011

"Density" again

"Density" is a favorite among almost anyone who thinks about cities. Most people agree that it's a "good thing" and also that there is not enough of it in a world of "sprawl".

I have often blogged about all this with the view that (1) yes, it's a "good thing", but often defined much too vaguely; city-wide average density measures are not adequate; (2) there are enclaves of creative activity in high-density Manhattan as well as in low-density Silicon Valley -- and many other places like it; (3) as the 2010 census data become available, we see continued suburbanization; (4) there is enough suburbanization around the world, to cause us to doubt that it is an artifact of peculiar U.S. policies.

Today's WSJ includes their annual list of "Top 50 Start-Ups". Precise addresses are not given, but I count eight in "San Francisco" (am guessing the city because start-ups located in its suburbs are labeled by their suburban locations) and I count three in "New York" (am assuming Manhattan because another firm on the list is placed in "Brooklyn"). Thirty-nine of the top-fifty start-ups are in places decidely less dense.

Tuesday, March 08, 2011

Sad story, but a great case study

Fred Siegel and Sol Stern explode the Mayor Michael Bloomberg bubble in this piece in the March Commentary.

The electorate includes (i) those who never vote; (ii) those who do vote, but on the basis of paper-thin due diligence and sophistication (hence the value of glitzy TV ads); and (iii) those with something tangible at stake (New York's public sector unions and many others who could be bought with gobs of Bloomberg money in the Siegel-Stern story).

The Mayor could orchestrate all of this beautifully -- until he muffed snow removal in the recent snow storms. There was also that business about the recession and declining revenues accruing to New York City government.

Read the article. It is apparently non-gated. It belongs in the next local politics case study compendium.

Saturday, March 05, 2011

Freedom? Austerity? Naw!

Once people have enough money, they want a car. This is an international story. Dargay and Gately have been documenting it for some years. People do like the freedom that goes with amazing range and mobility.

As a result, cities keep suburbanizing. Wendell Cox has been keeping an eye on 2010 U.S. Census data which show that the trend continues.

Paul Krugman thinks that it's all a huge mistake. People are actually freer when they choose trains.

George Will notes that trains are not really chosen by many people any more, but those who know better want to make that choice for them.

In fact, the State of Florida had to go to the State's Supreme Court to be allowed to turn down the Obama Administration's (one not yet bitten by the austerity bug) generosity towards helping that State get going on high-speed rail.

It is becoming very hard to resist Will's interpretation.

Thursday, March 03, 2011

Good coffee

For some of us, the best coffee we drink is the stuff we do not brew ourselves. And the more likely we are to look for third place venues, the more of these there will be, the more competition and the better the coffee.

So it's no surprise that readers of Travel and Leisure rated Seattle, Portland and San Francisco as America's top three best-coffee cities. (H/T Planetizen)

There was a time, not long ago, when visitors from abroad would scoff at American coffee. But when the timing is ripe, there will always be a Julia Child or a Howard Schultz or a Robert Mondavi who are the first to figure it out -- and act on their intuition.

Tuesday, March 01, 2011

Hard work

Central planning is very hard work. Here is a piece of archival research by USC Prof Mike Gruntman (H/T Jim Moore) on the troubles of fixing compensation for the first Soviet cosmonauts. Here is an excerpt:
Imagine the communist rulers of
a superpower pondering questions of
how many ties and socks should be
allocated to Yuri Gagarin or underwear
sets to his wife. Later they would struggle
with the similar challenges of determining
the number and types of head
scarves, underwear sets, stockings, and
blouses for the first woman cosmonaut
Valentina V. Tereshkova.
This stuff could not be left to standard military procedures (as in the U.S.) nor to (gasp!) the market in the event of a private space program.

There is always the old voyeuristic fun from examnining the compensation packages of "stars" -- whether in business, entertainment, sports, etc. But this story of how the Soviets did it is serious. How to balance proper rewards to national heroes with egalitarian politics? Not simple at all.