Category: Politics and Society

New York’s MTA Genius Challenge

I don’t like the word “genius.” When people use it unironically, what I hear is “we haven’t met many smart people, so the first one we meet looks like a genius to us.” Math academia is very good about excising the word from anyone’s vocabulary. It drills you on the idea that you’re not Manjul Bhargava or anyone of that caliber, and if you are, you’re judged by what you’ve proved, not how theoretically smart you are. The tech industry uses the term more often, alongside related terms: rock star, 10x engineer, ninja. Most of it serves to convince coders that they’re masters of the universe, that all of them are above average and half of them are in the top 10% of coders.

New York State just issued a call for proposals for a $1 million grant, dubbed the MTA Genius Transit Challenge. I sent in a request for more information, and haven’t gotten a response yet; when I do, I will probably apply, if the specs and timeframe are within what I can give, but I doubt I will get it. My suspicion is that the state is looking for a tech company to privatize something to. Governor Andrew Cuomo wants someone to tackle one of the following three problems:

  1. Rail signaling, in context of how to maximize the subway’s capacity in trains per hour.
  2. Rolling stock maintenance schedules: the state isn’t saying what the ultimate issue is, but presumably it is reliability.
  3. Cell service and wi-fi underground.

I doubt that the tech industry is capable of doing much on the first two issues, while the third one is a solved problem (as in cities like Singapore and Boston) that just requires installing wires. The first two issues have a lot of potential improvements, but they come from the transportation field, including service planning.

Unfortunately, the panel judging the grant is tilted toward people in the tech industry. Only one has background in rail transportation: Sarah Feinberg, former administrator of the FRA, whose background prior to working at the US Department of Transportation is in politics and tech. Two more are academic administrators, neither with background in transportation: SUNY Chancellor-elect Kristina Johnson, an engineer with background in energy and 3D graphics, and Daniel Huttenlocher, dean and vice provost of Cornell Tech, whose background is in IT. The other five are in the tech industry; one is a professor who studies networks, with some applications to car transportation (congestion pricing) but not to rail. Missing from the panel are people who worked on ETCS, people who have developed driverless train technology, and professionals within the major rolling stock vendors.

The biggest tech fixes in New York area outside the three areas identified by Cuomo. One, train arrival boards, is already in development, with planned opening next year.

But an even bigger fix is speed: the subways in New York have permanent slow orders at some places, not because of deferred maintenance but because of past accidents. There is a railroading tradition, in the US but sometimes also elsewhere, of using slow orders to mask underlying safety issues, even when the accident in question had very little to do with speed. The subways in New York today are getting even slower, for a combination of legitimate reasons (temporary signal upgrades) and illegitimate ones (inexperienced crews assigned at the busiest times).

However, the solutions to these problems often combine many different viewpoints. Speeding up the subway involves ending the slow orders (which involves signaling, but isn’t exactly tech), improving scheduling to reduce delays at merges (which involves service planning), reallocating crews (which involves labor relations), and coming up with ways to reinstall signals with less impact to operations (which is itself a combination of signaling tech and service planning).

American tech industry titans like to think of themselves as omnicompetent; Elon Musk’s bad ideas about transportation, from Hyperloop to elevator-accessed tunnels for cars, stem from his apparent belief that he can understand everything better than anyone else. This is not how good interdisciplinary work happens; the best examples in science involve people who are specialized to the two fields they’re combining, or people in one field collaborating with people in another field. A governor that understood this would empanel people with a wider variety of fields of expertise within the transportation industry: service planning, civil engineering, signal engineering, local labor relations and regulations, rolling stock maintenance. There would be one tech person on the panel (among the existing panelists, the professor studying networks, Balaji Prabhakhar, seems the most relevant in background), rather than one non-tech person.

This sort of self-importance especially appeals to Cuomo. Cuomo is not managing the state of New York; he is running for president of the United States, which requires him to be able to say “I did that” about something. Solving big problems requires big money; reducing costs requires local tradeoffs, such as reducing construction costs by using more disruptive cut-and-cover techniques. That’s how you run a good government, but that’s not how you run a cautious political campaign for higher office, in which the other side will pounce on every negative consequence. As a result, Cuomo is hoping to solve problems using tech innovation without spending much money; but the parameters of his plan seem to guarantee that the panel can only solve small problems, without touching on the most fundamental concerns for people riding the subway.

What Elites Do Instead of Providing Services, Redux

Three years ago, I wrote about how American urban elites propose public monuments in lieu of providing public services. My topical example was an article by Larry Summers, whose proposal to reduce inequality was to invest in nicer-looking airports – per Summers, the rich have private jets, the poor fly commercial. The post overall focused on government projects. But in the last few days I’ve seen two examples in the same direction, involving thinktanks and the private sector, and no government projects at all. One is from a panel headlined by J. D. Vance, which Pete Saunders and Aaron Renn both sat on; I can’t find a link to the video anymore, but here is a recap (update: here is the video). The other is from a Brookings report about Philadelphia. In both cases, the elite speaker (Vance, or Brookings) looks at a region that’s not as wealthy as it would like to be, and proposes everything except better services.

Vance’s panel was held in Cleveland and discussed how Rust Belt towns could grow again. Vance, famous for talking about deep poverty in white Appalachia and for not proposing any political liberal or socialist solution to it, gave his usual spiel: Cleveland needs innovation, entrepreneurs, and venture capital. One of the panelists proposed dropping the name Rust Belt and replacing it with Heartland. It reminded me of how Providence subsidizes smartphone app developers in vain hopes that they’ll make it big and stay in town rather than decamping to Cambridge. Providence, too, went through rebranding attempts: first Renaissance City, and then, when I lived there, Creative Capital.

There is a cottage industry of right-wing pundits who talk about poverty and propose everything except center-left and left-wing (not the same thing!) solutions. Vance is clearly there, but the panel still didn’t discuss the usual center-right and neoliberal (not the same thing, again) solutions. Development economists on the right have a long list of proposals for fighting poverty, mainly in the third world, but with some applications to developed countries as well: give squatters legal title to the lands they’ve developed, make it easier to start a business, reduce occupational licensing requirements, improve capital markets, levy broad-based taxes, avoid industrial policy picking winners and losers. This is not what the panel said. The panel didn’t really say anything concrete, except that more ambition is needed.

The Brookings report about Philadelphia is similar in concept, even if the political and economic context is different. Brookings is center-left (though moderate enough to attract conservative experts like Ed Glaeser), and Philadelphia is not poor, just less rich than New York and Washington. But the list of recommendations, on PDF-pp. 39-40, is an exercise of how not to say anything. Most of the recommendations are nebulous: “appoint an executive director.” The one specific actionable item is to bring in star faculty to the universities; Penn in fact does that periodically, and the results are not always good, with several examples of tenured hires who weren’t as productive as hoped for.

These plans are reminiscent of alchemy. Medieval alchemical texts were never clear about what to do exactly; they couldn’t be, because then readers would try to replicate the results and see the recipe doesn’t work. So they can’t give an exact recipe for how to grow, because that wouldn’t work. Instead, they propose ten nebulous items. A city that succeeds will get praised for how it implemented six of them; a city that fails will get criticized for how it only implemented six and did so in the wrong way.

Nor can these plans offer services. They cannot talk about investing more in education and in hospitals, in improving social services, etc. That’s political. If they do talk about education, they talk about it in the same terms as a self-important tech entrepreneur or venture capitalist: attracting excellence, enterprise universities, global talent, anything to avoid talking about school segregation or funding disparities.

Cleveland urbanist Alex Baca complains that the Vance panel was overfocused on private-sector solutions and not on public-sector investments. But I don’t think that’s really the problem. Elite institutions and pundits who, to look like they’re above the political fray, propose non-solutions and irrelevant brand-building exercises, come up with both private and public programs. The biggest enduring fad, charter schools, is funded by the public, just not run by it. Brookings and Vance are proposing private programs, and New York and Providence both wasted money on public enterprise programs, but the principle is the same: branding is cool, social services are dirty.

The political problem is that the consultants need to justify their own existence. This requires them to exclude every solution that has a political address. Vance himself hints at his own conservative values (he thinks declining religiosity is a sign of decline), but he makes sure to propose things that everyone can relate to and that peg him as J. D. Vance, independent thinker, and not J. D. Vance, a cog in the religious right’s machine. This does not mean that his proposals are a veneer for the religious right. On the contrary: I think they’re a deliberate attempt to be independent of political partisanship. But the same principle also excludes every social program that orthodox progressives support. A consultant who proposed raising income or sales or property taxes, rather than an opaque TIF deal, would be treated as belonging to the city’s progressive Democrat faction; the same is true of a consultant who proposed raising teacher pay rather than bringing in outside school administrators.

This is not purely self-serving, since urban politics is corrupt, especially in poorer cities. Being treated as an outsider above the fray has legitimate value: a consultant who proposes ideas that are viewed as fresh will get more locals to listen purely for the mystique of outside opinion, regardless of whether those ideas are good. But the self-serving aspect of this kind of self-marketing ensures that there is no quality control, and the consultants who succeed the most at this are the ones who devote the least amount of effort to ensuring their proposals actually work.

I think the ultimate cause of this is the need to be seen to be doing something. If a peripheral city asked me what it could do to be as rich as San Francisco, I’d tell it, nothing. It can tax itself to make its poverty less desperate, it can improve the business climate somewhat, it can have better public transit based on best global industry practices, but it’s not going to be San Francisco, Munich, New York, or Paris. Forget about it. Elite consultants instead overpromise: they tell those cities what they want to hear. And they make sure to pick solutions that a) they will not be held accountable for when they invariably fail, and b) are complicated enough so as to justify those consultants’ own existence. Local urban elites benefit from looking leader-like and implementing a new program; consultants benefit by getting both money and kudos. Everyone wins, except the people who are governed by this arrangement.

Cities Should not Encourage Home Ownership

There’s a discussion on Twitter about home ownership. In the US, there are periodic calls to abolish the mortgage interest deduction on various grounds: it discriminates against low-income renters, it benefits people in higher tax brackets (i.e. the rich), it is a subsidy to the suburbs. Matt Bruenig, one of the strongest voices on the American socialist left writing about policy, makes an anti-racist argument: per a 2015 report from Demos (p. 12), home ownership contributes to a racial wealth gap, since whites enjoy higher returns than blacks and Hispanics.

In this post, I’m going to make a more general point: home ownership is a questionable individual choice, and a bad regional choice. Governments, from the urban to the national level, should not encourage it in any way.

Home ownership as wealth

Real estate, like any other asset, is a source of wealth. People buy it as an investment, which they can borrow against (“second mortgage”), bequeath to their children, or sell in retirement. In this, it’s no different from any other asset. The more down-to-earth use is as a source of savings: retirees who own a house or apartment debt-free, having finished paying off their mortgage, are not at risk of eviction if their pensions are limited. Near-retirees who lose their jobs are in a similar situation – they have lower immediate expenses than if they rented.

The problem is that this form of saving works in reverse for everyone who is of working age. A 40-year-old who loses their job might want to live off of savings while looking for a job of equivalent skill level and pay. If their savings are largely in their house, this is difficult, for two reasons:

  1. The house is less liquid than stocks – it’s hard to sell a quarter of it.
  2. The house is likelier to lose value when the owner needs it the most.

The second point is true to some extent of all pro-cyclical assets (e.g. stocks), but especially of real estate. Workers are more likely to be laid off in recessions, when pro-cyclical assets lose value. Counter-cyclical ones, like sovereign bonds, rise in value, but have lower returns in the long run, creating the familiar risk/returns tradeoff. Housing in that sense is no different from stocks.

However, in one sense, housing is different: it is especially sensitive to the state of the local economy. The American economy today is stronger than it was thirty years ago, but the Detroit economy is not, and people who bought houses in Detroit have had their home values wiped. In this way, home ownership makes people less capable of moving to places with better jobs.

Home ownership and NIMBYism

One of the points made by William Fischel in his writings about zoning and NIMBYism is that the impetus for this behavior comes from homeowners trying to safeguard the value of their investment. Per Fischel, since most homeowners’ entire savings are locked up in one risky asset, they are risk-averse when it comes to any neighborhood change, leading to NIMBYism. Renters are more flexible. So are the richest people, who have a broad array of investments (and often multiple apartments and houses): upper-crust NIMBYism is often the domain of the upper middle class rather than of the top 1%.

It is the general interest of society to have less NIMBYism and looser zoning. This is true even at the level of the individual city. It’s in the interest of San Francisco to be able to build more housing and more office space, even to replace single-family houses in outer areas near Muni Metro with mid-rise apartment buildings. And the higher the level of government, the more upzoning makes sense.

Condos and governance

As Ed Glaeser mentions in a 2011 paper, more than 85% of single-family houses in the US are owned, and more than 85% of apartments in buildings with 3 or more units are rented. Glaeser explains how this turns home ownership incentives into incentives for single-family housing. But it also affects how new multifamily housing looks.

Traditional mid-rise buildings are owned by a single landlord, who rents them to individual tenants. Newer buildings are either rentals or condos. Condos have more complex governing boards, and in extreme cases end up having the same social dynamics of suburbs: people who enjoy telling others what to do make rules about behavior.

Policy solutions

The American practice of making mortgage interest tax-deductible is not common across the developed world. But there are more widespread policies that still treat homeowner wealth preferentially to other kinds of investments. There are no capital gains taxes on real estate appreciation, subject to constraints to make sure individual homeowners are not taxed but large-scale commercial developers are. Most countries also fail to tax imputed rents. Switzerland does tax imputed rents, but is unusual in doing so: Swiss homeowners owe taxes on the rents they’d be getting if they rented out their properties at fair market value.

There doesn’t need to be double taxation. In other words, housing should be taxed as personal consumption (so mortgage interest is not deductible, but there are no imputed rents) or as business expenses (so interest is deductible, but there are imputed rents). But it should be single-taxed, because it is not a state interest to depopulate the cities to create a class of suburban NIMBYs, who affect petty aristocratic manners when times are good but turn into a precariat when times are bad.

Fragile Chinese Democracy to Invest in Anti-Pollution Measures

After a week of raging protests in Beijing and the other major Chinese cities calling for measures to fight corruption, inequality, and pollution, the military moved to arrest Xi Jinping and release several high-profile dissidents from prison. In a statement, the military said it would schedule free elections to the National People’s Congress for the end of this year. Based on statements by leaders of the New Citizens’ Movement, the new government will prioritize building infrastructure and enacting regulations to fight pollution, adding that the measures passed by Xi had too many loopholes and did little to improve public health.

Sources within the transitional government say that the hukou registration system will be abolished in the coming days, as will the two-child policy. With rich cities like Beijing and Shanghai expecting a surge in internal migration, there is friction between urban middle-class protesters and migrants over future development policy. Protesters in Shanghai indicated that they would prefer local control over housing development and education policy. The degree of federalism is up in the air and will not be settled until after the election, but most of the freed dissidents believe that the new government should devolve substantial autonomy to the provinces.

Political leaders, including both freed dissidents such as Liu Xiaobo and CCP faction leaders within the National People’s Congress, have said they will work on anti-pollution measures, to be passed after the election. Environmentalist protesters have proposed a national cap on the purchase of new cars, akin to existing policies in Beijing, Guangzhou, and Shanghai, and stricter emission controls on cars. They have also proposed a national program to build more solar plants and retrofit apartments to be more energy-efficient in order to close coal plants; within Beijing, middle-class reformers identified with the political right have proposed ending government subsidies to coal heating.

In the near term, the largest cities plan to continue building out their subway networks at the same pace as before. Planners at the Beijing Subway and Shanghai and Guangzhou Metros said they expect passenger numbers to rise modestly as the abolition of hukou leads to higher population growth, but all three cities already have low car ownership rates, so replacement of car trips by subway trips is unlikely. However, in some other cities, where car ownership rates are higher today, planners expect higher rail traffic in the future. Because there already are plans for rapid expansion of subway service, it is unlikely any city will build out its system faster; however, some long-term plans without a timeline may be accelerated and built in the next decade.

There is some nationalistic element to the proposed infrastructure and environmental policies. Planners at China Railways have expressed dismay that Chinese passenger rail traffic density is not the highest in the world, but ranks second, after Japan. This is part of a broader split between democracy activists who are pro-Western, like Liu, and ones who are not and came to oppose the CCP out of recent concerns about economic and environmental problems. The latter activists take it for granted that China should reunify with Taiwan on its terms; some have proposed an undersea rail tunnel connecting Taiwan with the mainland.

But sources within the Japanese rail industry expressed some pessimism about the ability of the new democratic China to solve its pollution problems via better infrastructure. They note that Chinese urban train stations are poorly located, usually well outside city centers, and urban rail lines lack express tracks, limiting train speeds. Nearly all protesters oppose China’s use of eminent domain to clear areas for new development, making it hard to build more central train stations.

The transitional government said that it would welcome a global climate change agreement and that China would reduce its greenhouse gas emissions provided the rich industrialized countries committed to sharper reductions. Analysts within Europe and Japan believe that this proposal is aimed at the United States, which has substantially higher per capita emissions than the rest of the developed world, and is the world’s second largest emitter after China. A minority of anti-American protesters in China have proposed declaring trade war on the United States until it agreed to combat climate change, but the views of both the transitional government and most growing political factions are that there should not be any change to Chinese foreign policy, outside the issue of Taiwan.

A faction of protesters, currently planning to form a green party and contest the upcoming election, has proposed far-reaching taxes, investments, and regulations, intending to ban cars for non-emergency uses by 2025, and phase out all coal plants by 2025 and gas plants by 2035. Members of this faction have said that this would ensure Chinese supremacy in the realm of green technology, which China could then export to the United States, India, and industrializing African states as it sheds low-value added manufacturing industries. The majority of Chinese reformers do not support those measures, and it is unlikely the conservative factions within the CCP will agree to any further regulation. However, the upcoming green party is likely to be a key component of any reformist coalition, and substantial additional regulations stopping short of a ban can be expected.

Express Airport Connectors are a Scourge of Public Transit

Earlier this month, Andrew Cuomo unveiled a proposal to spend $10 billion on improvements to JFK Airport, including new terminals, highway expansion, and public transit access. I encourage readers to look at the plan: the section on highways proposes $1.5-2 billion in investment including adding lanes to the Van Wyck Expressway and to on-ramps, and has the cheek to say that this will reduce fuel consumption and greenhouse gas emissions. This while the section on mass transit gives it short shrift, only proposing superficial improvements to the AirTrain; in the unlikely the case that this is built, highway mode share will grow and transit mode share will fall. Put in plainer terms, the environmental case for the plan includes fraud.

However, this is not really the topic of this post. That Andrew Cuomo lies to the voters and doesn’t care about good transportation is by now a dog-bites-man story. Instead, I want to focus a little on a throwaway line in the plan, and more on the Regional Plan Association’s reaction. The throwaway line is that almost every major world airport has a one-seat train ride to city center, and by implication, so should JFK.

As an organization dedicated to environment-friendly public transit, the RPA should have made it very clear it opposes the plan due to its low overall transportation value and its favoring of highways over transit. Instead, the RPA immediately launched a brief detailing possible new airport connectors between JFK and Manhattan. The RPA has a lot of good technical people, and its list of the pros and cons of each option is solid. It correctly notes that using the LIRR and Rockaway Beach Branch would compete for traffic with LIRR trains serving Long Island, although it doesn’t mention associated problems like low frequency. The brief is based on prior RPA proposals, but the timing, just after Cuomo came out with his announcement, suggests an endorsement. There are several intertwined problems here:

There is no no-build option

A good study for public transit should not only consider different alignments and service patterns, but also question whether the project is necessary. The US requires environmental impact statements to include a no build option; European countries require a cost-benefit analysis, and will not fund projects with a benefit/cost ratio under 1.2, because of cost escalation risk.

The RPA study does not question whether a one-seat ride from JFK to Manhattan is necessary or useful. It assumes that it is. Everything else about the study follows from that parameter. Thus, it considers entirely express plans, such as the LIRR option, alongside local options. Everything is subsumed into the question of connecting JFK to Manhattan.

One of the alignments proposed is via the LIRR Atlantic Branch and Second Avenue Subway, which the RPA has long believed should be connected. The brief says that it would be slow because it would have to make many local stops; I’ll add that it would serve Midtown, where nearly all the hotels are, via a circuitous alignment. But with all these stops on the way, shouldn’t this be considered as primarily a new trunk line connecting Eastern Brooklyn with Second Avenue? The question of whether the eastern terminus should be Jamaica or JFK must be subsumed to a study of this specific line, which at any rate is unlikely to offer faster service to JFK than the existing AirTrain-to-E option. After all, the most optimistic ridership projection for a JFK connector is maybe 40,000 users per day, whereas the projection for the full Second Avenue Subway is 500,000. I don’t think a Second Avenue-Atlantic Branch connection is warranted, but if it is, the question of whether to serve JFK at the end is secondary.

Express airport connectors are a fetish

I lived in Stockholm for two years, where I went to the airport exclusively using the Arlanda Express, a premium express link running nonstop between the airport and city center. I imagine many visitors to Stockholm use it, are satisfied, and want to replicate it in their own cities.

Unfortunately, such replications miss something important: any air-rail link must go to the areas that people are likely to want to connect to. For locals who wish to travel to the airport, this means good connections to the local transit network, since they are likely to come from many neighborhoods. Not even a small city like Stockholm worries about providing rich areas like Vasastan and Roslag with a one-seat ride. For visitors, this means a one-seat ride to where the hotels are.

Stockholm is a largely monocentric city, with one city center where everything is. (It has an edge city in Kista, with more skyscrapers than Central Stockholm, but Kista can’t be reasonably connected to the airport). The situation in other cities is more complicated. And yet, express air links prioritize serving a big train station even if it’s poorly connected to the transit network and far from the hotels. Let us consider London and Paris.

In London, the five-star hotels cluster around the West End. Only two are at Paddington Station, and only a few more are an easy walking distance from it. This is where the Heathrow Express and the slower Heathrow mainline trains go. No wonder the Heathrow Express’s mode share, as of 2004, is 9%, whereas other Heathrow connections, mainly the Piccadilly line, total 27% (source, PDF-p. 28). The Piccadilly line beautifully passes through the parts of the West End with the largest concentration of hotels, and last time I was in London, I chose it as my Heathrow connection. Nonetheless, the government chose to build the Heathrow Express.

In Paris, the five-star hotels cluster in the west of the city as well, in the 8th arrondissement. The current airport connection is via the RER B, which offers express service in the off-peak when there’s capacity, but not in the peak, when there isn’t. Even so, it is a local commuter rail service, with good connections to the city transit system, and a two-seat ride to the 8th. Because of slow perceived speeds, the state is planning to build an express connector, originally planned to open in 2015 but since delayed to 2023. The express connector will dump passengers at Gare de l’Est, with no hotels within walking distance, no access to Metro lines serving the hotel clusters (Metro 7 does so peripherally, M4 and M5 not at all), and a long walk to the RER for passengers wishing to connect to longer-range destinations such as parts of the Left Bank.

I bring this up to show that the idea of the express air-rail link is a fetish rather than a transportation project, and by analogy, so is the one-seat ride. There is value in faster service and in minimizing the number of transfers, but express airport connectors attempt both even at the cost of building a line that doesn’t go where people want to go.

Ultimately, Cuomo doesn’t care about good transit

Cuomo has many concerns. The chief one is most likely winning the 2020 presidential primary. He has been running for president since the moment he was elected, and many of his policies – gay marriage, the feuds with Bill de Blasio, the desperate attempt to build shiny infrastructure with his name on it – are best viewed through that lens. To the extent that he is not running for president, he has attempted to cement absolute power within the state. He backed a palace coup in the State Senate that secured a Republican(-ish) majority even though the Democrats won most seats; a Democratic majority would be led by a different faction of the party, one more beholden to Democratic interest groups, and might send Cuomo bills that he would lose political capital if he either signed or vetoed them.

This is why I keep giving him as an example of an autocrat in various posts; here is the major takedown, but see also here. Autocrats are always bad for the areas that they govern, which as two separate implications. The first is that their choice of spending priorities is compromised by the need to expand their own power and glory: even if you believe that New York needs $1.5-2 billion in new highway spending, is the Van Wyck really the best place for it?

The second and worse implication is that it is hard for outside groups to convince autocrats to do better. Autocrats don’t have to listen; if they did, they would be democratic leaders. Cuomo happens to be an anti-transit autocrat, and this means that pro-transit groups in New York need to view him as an obstacle and work to weaken him, rather than to ask him to please consider their plans for an air-rail link.

The difficulty is that, precisely because local- and state-level democracy in the US is so weak, it is difficult for issue-oriented groups to go out and oppose the governor. Planners in Democratic cities are hesitant to attack budget-cutting Republican governors like Charlie Baker and Larry Hogan; attacking Democratic governors like Cuomo is a nonstarter. Nonetheless, the RPA needs to understand that it needs to oppose governments hostile to public transit rather than ask them to improve. When Cuomo proposes a bad transportation project, say “no” and move on to more important things; don’t try to work with him, because nothing good can come of that.

Second Avenue Subway Phase 2 to Cost $6 Billion

Since the 2015-9 capital plan, the New York MTA had been including the second phase of Second Avenue Subway in its capital plan, without a clear estimate of its projected cost. The rumors said the cost would be about $5 billion. A new media story finally gives an official cost estimate: $6 billion. The total length of the project, from 96th Street and 2nd Avenue to 125th Street and Lexington, is about 2.7 km. At $2.2 billion per km, this sets a new world record for subway construction costs, breaking that of the first phase of the same line, which only cost $1.7 billion per km. See a compendium of past posts here to look how these projects stack up. For people not interested in combing through multiple old posts of mine, the short version is that outside the Anglosphere, subway tunnels typically cost $100-300 million per km, with outliers in both directions, but even inside the Anglosphere, costs are in the mid-to-high hundreds of million per km.

In some way, the high cost of SAS phase 2 is more frustrating than that of phase 1. This is because 1 km of the 2.7 km of route preexists. SAS construction began in the 1970s, but was halted due to New York’s financial crisis. In East Harlem, some actual tunnel segments were dug, roughly between the proposed station locations at 96th, 106th, 116th, and 125th Streets; Wikipedia has a more detailed list. Construction of phase 2 thus involves just the stations, plus a short bored segment under 125th Street to get from Second Avenue to Lexington, for a connection to the 4, 5, and 6 trains.

Not having to build tunnels between the stations is beneficial, not as a cost saver in itself but as a way to reduce station costs. In phase 1, it appears that most costs were associated with the stations themselves; if I remember correctly, the cost breakdown was 25% for each of three new stations, and 25% for the tunnels in between. The reason is that the stations are quite deep, while the tunneling in between is bored, to reduce surface disruption. Deep stations are more expensive because they require more excavation, while tunnel boring costs depend more on soil type and how much infrastructure is in the way than on depth. Counting the extra expense of stations, bored subways cost more per km than cut-and-cover subways, but create less surface disruption away from station sites, which is why this method was chosen for phase 1. In contrast, in phase 2, most construction is stations, which would favor a shallow cut-and-cover solution.

Unfortunately, according to rumors, it appears that the MTA now judges it impossible to use the preexisting tunnels in phase 2. If this is true, then this would explain the higher cost (though it would justify $400 million per km, not $2.2 billion): they’d have to build underneath those tunnels. But if this is true then it suggests severe incompetence in the planning stage, of the kind that should get senior employees fired and consultants blacklisted.

The reason is that Second Avenue Subway was planned as a single line. The Environmental Impact Statement was for the full line, including the proposed construction techniques. The phasing was agreed on by then; there was only enough state money for phase 1. This isn’t an unexpected change of plans. I’d understand if in the 2000s it was found that tunnels from the 1970s were not usable; this happened further south, in phase 4, where a preexisting tunnel under Chrystie Street was found to be difficult to use. But in the 2000s the SAS studies signed off on using the tunnels in Harlem, and what seems to be happening is that phase 1, built according to the specifications of the same study, is too deep for using the tunnels.

At $6 billion, this line shouldn’t be built. I know that it goes to a low-income, underserved neighborhood, one that I’ve attacked New York before for taking years to equip with bike lanes (scroll down to my comments here). But the ridership projection is 100,000 per weekday, and $60,000 per weekday rider is too much. Phase 1, providing an underrated east-west connection and serving a denser neighborhood, is projected to get 200,000, for a projection of around $25,000 per weekday rider, which isn’t terrible, so it’s a justified project even if the costs could be an order of magnitude lower.

Were costs lower, it would be possible to build subways to many more low-income neighborhoods in New York. A 125th Street crosstown line, extending phase 2 of SAS, would provide Harlem with crucial east-west connectivity. Subways under Nostrand and Utica Avenues would serve a mixture of working- and middle-class neighborhoods in Brooklyn. A subway under Northern Boulevard in Queens, connecting to phases 3 and 4 of SAS, would serve one of the poorest parts of Queens. A network of tramways would improve surface transit in the South Bronx. Triboro Line would connect poor areas like the South Bronx and East New York with richer ones like Astoria. New York could achieve a lot, especially for its most vulnerable residents, if it could construct subways affordably.

But in a world in which subways cost $60,000 per weekday rider and $2.2 billion per km, New York cannot extend the subway. If it has money in its budget for investment, it should look into things other than transportation, such as social housing or schools. Or it could not borrow money at all to pay for big projects, and in lieu of the money spent on interest, reduce taxes, or increase ongoing social spending.

Given persistent high costs, I would recommend shelving SAS and future rail extensions in New York, including the Gateway tunnel, until costs can be drastically cut. There’s no shortage of worthy priorities for scarce budget in New York, both city and state. Health care in the US is too expensive by a factor of 2, not 10, and transfer payments have near-100% efficiency no matter what; it’s possible to exhaust the tax capability of a state or city just on these two items. Perhaps the need to compete with other budget priorities would get the MTA to cut waste.

Sewer Socialism, or Sewer Neo-Liberalism?

One of the most fundamental questions in urban and transportation governance is the role of ideology. There’s inherent tension between trying to run a government or a government program according to the tenets of socialism, liberalism, conservatism, or any other ideology, and trying to run it pragmatically. I wrote some early posts criticizing the latter tendency, for example here and here; an emergent view coming from the corpus of my political posts here in 2011-2 is that instead of removing ideology from transit politics, ideologues should instead learn best industry practices and use them in the service of their chosen political philosophy. In this post, I’d like to present a more nuanced view about whether this is feasible. Ultimately, I think the situation is unstable: the need to run public services well softens ideologues, while attempts to run ideology-free government involve assumptions that breed outside populist movements.

A few months ago, Sandy Johnston called for a revival of a US tradition called sewer socialism, associated with Socialist Milwaukee mayors Emil Seidel (r. 1910-12), Daniel Hoan (r. 1916-40), and Frank Zeidler (r. 1948-60). The Milwaukee socialists boasted of the municipal sanitation system that they’d built, and were notably corruption-free. This was while they remained in good standing in the Socialist Party, which was orthodox Marxist; Seidel was Eugene Debs’ running mate in the 1912 presidential election.

The problem with the sewer socialist tradition that Sandy cites is that it inevitably makes the sewers more important than the socialism, and soon, the socialists turn into technocrats. This happened to European social democrats starting in the 1930s and 40s. Out of power, and even early in power in the 1920s and 30s, they talked about replacing capitalism with socialism. After years of power, they built public housing for the working class, comprehensive education, and national health care systems, and abandoned revolution; within the US, Zeidler was influenced by Debs and identified as a socialist but explicitly rejected Soviet communism.

The people who passed the laws creating public works, social welfare schemes, and public services were usually committed to social and economic equality, but the people running them would be promoted and rewarded based on competence rather than ideology. A politician could succeed in a social democratic party by showing ability to implement a government program rather than by showing ideological commitment. Sewer socialism turned into sewer big-tent center-left politics, and subsequently into sewer neo-liberalism.

Neo-liberalism is the Great Satan of leftist writing today, and has no agreed upon definition other than “what the leftist writer who uses this term opposes.” Few positively identify as neo-liberal, and the most prominent exception I can think of, Brad DeLong, is someone who specifically enjoys needling the left. For the purposes of this post, I’m going to define neo-liberalism around the following points:

  • Neo-liberals philosophically think in liberal, especially classical liberal, terminology.
  • Market-based solutions to most problems, with the remaining problems cordoned off into areas without political interference, such as central bank independence, and (for neo-liberals more on the left) universal education and health care.
  • A belief in pragmatic, non-ideological governance, to the point of preferring solutions that appear to be reasonable; as a result, few of the people most leftists would identify as neo-liberal are climate hawks, since climate hawks, whatever their other political views, definitionally want aggressive action to mitigate climate change.
  • An attempt to incorporate outsider critiques rather than oppose them heads-on, hence neo-liberal attempts to come up with internal solutions to problems of poverty, inequality, and unemployment.
  • Anti-populism, leading to conflict with not only left-populists but also traditional interest groups such as unions.
  • A positive attitude toward the intellectuals, experts, and technocrats within each field, most famously economics but also the other natural and social sciences.

The populist left today defines itself in diametric opposition to some subset of the above points, and this requires defining itself against the notion that competence in governing is important. This is unmistakable in Jacobin, the most important magazine of the American far left today. Here’s founder and editor Bhaskar Sunkara, in an early interview:

Liberalism has always been an inchoate, diverse ideology. You have some who are more or less operative social democrats; they are pro-union and trying to get back to that golden age of the welfare state. In other words, “class-struggle liberals.” Then you have technocratic liberals, your Ezra Kleins, who also have a very long intellectual tradition. You see it in the history of the press, where we went from a partisan, even ideological press to people like Walter Lippman who made liberalism part of a wider “clean cities, clean government” movement. In the 1960s these technocratic liberals were some of the people cleaning up white racist urban machines. Now they are attacking teachers’ unions and what they see as new city machines, which are predominantly made up of people of color—the people who have mainly benefited from public employment. History has cruel ironies like that.

Or see Sunkara in this extended rant, calling Ezra Klein and Matt Yglesias less than human. Klein is “a technocrat, obsessed with policy details, bereft of politics, earnestly searching for solutions to the world’s problems through the dialectic of an Excel spreadsheet.” Per Sunkara, political success comes not from understanding policy but from emotional appeal, as in the Reagan Revolution, which, he concludes, “wasn’t a policy revolt; it was a revolution.”

There is a reason why ideological movements reject the notion of policy knowledge, of competence. They know that it leads to moderation. Sunkara is educated in the history of socialism and socialist movements, and knows what happened once social democrats had to govern. Even less educated socialists know this on some level, which is why the 1960s’ and 70s’ icon for young leftists was Che Guevara, forever a revolutionary, and not any leader who had to spend any time in power, such as Fidel Castro or even Ho Chi Minh.

While the bulk of this post is about socialism, the same rejection of competence can be seen on the right. Paul Krugman loves to needle the Republicans about it, for example here: for economic analysis, American conservative thinktanks rely on Stephen Moore, Larry Kudlow, and Arthur Laffer, none of whom is a respected economist, rather than on such right-leaning experts as Greg Mankiw, Ed Glaeser, or John Taylor. European mainline conservatives have avoided this, by moderating to the point of accepting the EU, the welfare state, and the advice of the intellectuals. In their stead, right-wing populists have grown in power, taking rejection of any expertise almost as a badge of pride, since they associate expertise with eurocrats; for example, in the Netherlands, the Party for Freedom (PVV) is climate denialist, in the developed country most vulnerable to climate change.

The far left is no more interested in governing than the far right, leading to weakness even on issues the left is supposed to be strong on. In the UK, the current Labour leader, Jeremy Corbyn, got his position on the strength of ideological purity rather than any governing experience; most candidates with government experience are tainted with Blair’s policies, especially the Iraq War. The left is supposed to support transit because it is green and friendly to the poor, and in Britain, the privatization of railroads is now unpopular with the broad public. YouGov proposes that a leader more trusted than Corbyn would be able to turn renationalization into a vote winner. But as related by the then-shadow minister of transport, Corbyn botched a very good opportunity, namely the UK’s annual fare hike, to attack the Cameron administration on rail fare hikes and propose renationalization and reregulation.

I stress that this is not about individual incompetence. The far left does not have a deep bench of people who can run a socialist state well; the people who run socialist programs successfully get accolades from the more numerous moderates and surround themselves with technocrats who are usually not committed to left politics. Corbyn’s opportunity to attack Cameron on rail fares came with the support of Labour’s bench, but his relationship with the rest of the party was always uneasy, and completely unraveled after the Brexit vote; fundamentally, it is not easy for a committed far-left leader to trust a more politically diverse bench.

Five years ago, when I talked about the split in US transit activism between politicals and technicals, I said that both groups were on average slightly left of center, but politicals clustered there, where technicals ranged from far left to reform conservatism (e.g. Reihan Salam) and Rothbardian libertarianism (i.e. segments of Market Urbanism, including Stephen Smith). Yonah Freemark would talk about the dangers and failures of neo-liberalism; in comments, Richard Mlynarik would reference Maher Arar’s extraordinary rendition in discussions of airport security theater, and so on.

Today, the situation has changed. It’s been center-left media outlets like Vox that have talked the most about high US rail construction costs and bad regulations. Among moderates and conservatives, interest never took off, with a handful of positive exceptions like Aaron Renn and again Reihan Salam; City Journal’s Nicole Gelinas remains more interested in cutting wages than in improving efficiency (this post of mine is partly inspired by Gelinas’s claims about wage scales). Most libertarians and many reform conservatives have found dreams of driverless car-share services and view transit as old-fashioned, now as in the 1950s. The growth of US right-populism and its attack on urban intellectuals has also limited concern for reforming transit in publications that should be friendly to this message; The American Conservative is publishing Strong Towns’ Charles Marohn, but overall a rural-dominated radical right is uninterested in either urban infrastructure or pragmatic solutions. Finally, on the far left, the message that political support, even rabblerousing, matters more than cost control, has played well with the growing zeitgeist. By now, the technicals are solidly center-left in practice.

The result is that, as happened to the Milwaukee socialists and to the social democrats on this side of the Pond, any modern-day sewer socialists are necessarily going to moderate. Once moderated, they will not get the support of more radical socialists, who will screamingly accuse them of betrayal. The socialists today know that this is going to happen – unlike in the 1940s, there’s historical precedent for this – and this is leading to the new political split. This is not a resolvable tension. At best, individual center-leftists and leftists who succeed in pushing technical reform can tweak it in ways that help rather than hurt the poor, but collectively there is no way to force reform to be more sewer socialism than sewer neo-liberalism.

Safer Streets: Design is Better Than Enforcement

As some American cities are attempting to reduce the number of car accident fatalities, under the umbrella of Vision Zero, the growing topic is one of traffic enforcement. Streetsblog has long documented many instances in which the police treats any case in which a car runs over a pedestrian as a no-fault accident, even when the driver was committing such traffic violations as driving on the sidewalk. In addition to enforcement, there’s emphasis on reducing the speed limit in urban areas, from 30 to 20 miles per hour, based on past campaigns in Europe, where speeds were reduced from 50 km/h to 30. Unfortunately, street design for lower speeds and greater traffic safety has taken a back seat. This is not the best way to improve street safety, and is not the standard practice in the countries that have reduced car accident rates the most successfully, namely the UK and the Scandinavian countries.

On high-speed roads, one of the most important causes of fatal accidents is the combination of driver fatigue and sleepiness. For some studies on this problem, see here, here, and here. The second link in particular brings up the problem of monotony: if a road presents fewer stimuli to the driver, the driver is more likely to become less vigilant, increasing the probability of an accident. One study goes on and shows that higher speed actually increases monotony, since drivers have less time to register such stimuli as other cars on the road, but this was obtained in controlled conditions, and its literature review says that most studies find no effect of speed. I emphasize that this does not mean that lower speed limits are ineffective: there’s evidence that reducing highway speed limit does reduce accident rates, with multiple studies collected in a Guardian article, and lower accident rates in France since the state installed an extensive system of speed cameras.

But while speed limit reductions offer useful safety benefits, it is important to design the roads to be slower, and not just tell drivers to go slower. Road monotony is especially common in the United States; per the second study again,

While comparing self-reported driving fatigue in the US and Norway, Sagberg (1999) suggests that the higher prevalence of self reported drowsy driving found in the US may be due to differences in road geometry, design and environment, as well as exposure. He argues that the risk of falling asleep is higher on straight, monotonous roads in situations of low traffic, where boredom is likely to occur. This type of roads is more common in the US than in Norway.

The studies I have consulted look primarily at highways and rural roads; I have not found comparable literature on urban roads, except one study that, in a controlled simulation, shows that drivers are better at gauging their own alertness levels on urban arterials than on rural roads. That said, urban arterials share many design traits that lead to monotony, especially in the United States and Canada:

  • They are usually straight, forming a grid rather than taking haphazard routes originating from premodern or early-industrial roads.
  • They are wide: 4-6 lanes at a minimum, often with a median. Lanes are likely to be wide, closer to 3.7 meters than the more typical urban 3 meters.
  • Development on them usually does not form a strong enclosure, but instead commercial developments are only 1-2 stories, with setbacks and front and side parking lots.

Such roads are called stroads in the language of Charles Marohn, who focuses on issues of their auto-centric, pedestrian-hostile nature. Based on the studies about monotony, I would add that even ignoring pedestrians entirely, they are less safe than slower roads, which prime drivers to be more alert and to speed less. It is better to design roads to have more frequent stimuli: trees, sidewalks with pedestrians, commercial development, residential development to the extent people are willing to live on top of a busy road.

Regarding lane width, one study finds that roads are the safest when lanes are 3-3.2 meters wide, because of the effects of wider lanes on driver speeds. A CityLab article on the same subject from two years ago includes references to several studies that argue that wide lanes offer no safety benefit for drivers, but are hostile to pedestrians and cyclists.

This approach, of reducing speed via road design rather than enforcement, is common in Scandinavia. Stockholm has a few urban freeways, but few arterials in the center, and many of those arterials have seen changes giving away space from cars to public transit and pedestrians. Thus, Götgatan is partly pedestrianized, and Odengatan has center bus lanes and only one moving car lane in each direction; the most important of Stockholm’s streets, Sveavägen, has several moving car lanes in each direction, but is flanked on both sides by medium-rise buildings without setbacks, and speeds are rarely high.

When enforcement happens, the great successes, for example in France under the Sarkozy administration, involve automation. Red light cameras have a long history and are controversial, and in France, Sarkozy lowered the speed limits on many roads and stepped up speed camera enforcement. The UK has extensive camera enforcement as well. Human enforcement exists, but is less common than speed cameras. Thus, the two main policy planks Vision Zero should fight for in the US are,

  1. Road redesign: narrower lanes, wider sidewalks, trees, and dedicated bus and bike lanes in order to reduce the number of car lanes as well as provide more room for alternatives. Zoning laws that mandate front setbacks should be repealed, and ideally so should commercial height limits on arterials. In central cities, some road segments should be closed off to cars, if the intensity of urban activities can fill the space with pedestrians.
  2. Lower speed limits in the cities, enforced by cameras; fines should be high enough to have some deterrent effect, but not so high that they will drive low-income drivers bankrupt.

It is especially important to come up with solutions that do not rely on extensive human enforcement in the US, because of its longstanding problem with police brutality and racism. The expression “driving while black” is common in the US, due to bias the police in the US (and Canada) exhibits against black people. In Europe, even when bias against certain minorities is as bad as in the US, overall police brutality levels are lower in the US by factors ranging from 20 to 100 (see for example data here). In my Twitter feed, black American urbanists express reluctance to so much as call the police on nonviolent crime, fearing that cops would treat them as suspects even if they are the victims. When it comes to urban traffic safety – and so far, Vision Zero in the US is an urban movement – this is compounded by the fact that blacks and other minorities are overrepresented in the cities.

This means that, in the special conditions of US policing, it’s crucial to prevent Vision Zero from becoming yet another pretext for Driving While Black arrests. As it happens, it does not require large changes from best practices in Europe, because those best practices do not involve extensive contact between traffic police and drivers.

Recall last year’s post by Adonia Lugo, accusing Vision Zero of copying policy from Northern Europe and not from low-income American minority communities. As I said a year ago, Adonia is wrong – first in her belief that foreign knowledge is less important than local US knowledge, and second in her accusation that US Vision Zero advocates copy European solutions too much. To the contrary, what I see is that the tone among US street safety advocates overfocuses on punitive enforcement of drivers who violate the speed limit or break other law. Adapting a problem that in Europe is solved predominantly with street design and technology (speed cameras don’t notice the driver’s skin color), they instead call for more policing, perhaps because mainstream (i.e. white) American culture is used to accepting excessive police presence.

Public Transit Unions

In this post, I would like to explain an observation: public transit workers are unionized even in countries where few workers belong to a union, such as the US and the UK. Attempts by management to win concessions from the unions have often led to prolonged strikes, for example the 108-day strike by SEPTA workers in 1983. This is not just the public sector: the private railroads in the US are unionized, and in 1964 the Florida East Coast Railway had a year-long strike. Nor is this because the public operators and private railroads have a unionized legacy: many private bus shuttles used by Bay Area tech firms to get workers from San Francisco to Silicon Valley offices have unionized drivers, including Facebook and Google, even though the tech industry as a whole is predominantly non-union. Public transportation workers, especially on-board crew, are in a position of strength, and I would like to explain why.

First, let us recount how unions work. At their heart is collective bargaining: the union negotiates wages and benefits for the entire membership. An individual worker who is paid too little can quit, which is unlikely to cause the employer much concern; a union can launch a strike, thereby getting higher wages and better work conditions than each individual worker could obtain alone.

In order to be able to collectively bargain, there needs to be a collective in the first place, which means two separate things:

  1. Politically, there needs to be a sense of solidarity among the workers. The workers need to see each other as comrades, or as colleagues, and not as competitors. They need to feel like the union represents their interest. This is unlikely to happen in industries where there is substantial competition for promotions to managerial roles, but easier in industries with clear separation between line workers and managers. It is also unlikely to happen in industries with rapid turnover of employees.
  2. Economically, there needs to be a reasonable way to set a uniform wage scale. This means that the work done by the various employees in each category must be interchangeable, or close enough to it that wages can be made equal. In turn, this requires that the job not have a strong sense of merit, in which some workers are persistently much more productive than others. Productivity differences should be related to seniority, or easily worked into wage agreements (for examples, sales agents can collectively bargain for a uniform commission structure). It’s fine if there is differentiation into several job categories, but then it’s best if this differentiation is rigid, so that workers in each group do not often have to do the job of workers in other groups.

Conversely, if the union goes on strike, management has tools to fight back, including the lockout, or more commonly hiring strikebreakers. To deter management from doing so, the union can exercise peer pressure on people not to scab (condition 1 above), but it also union needs to also fulfill a third condition:

  1. The job must be skilled enough that it is hard for the employer to hire and train strikebreakers quickly. On a nationwide basis this makes unionization easier in a tight labor market, hence socialist support for monetary policy that prioritizes full employment over price stability. But on a per-industry basis, this condition requires some difficult pipeline that workers must go through: a degree, long training, apprenticeship, or bespoke familiarity with the project at hand.

Conditions 2 and 3 are in tension, since skilled jobs are more likely to involve workers with different levels of productivity. For example, retail workers fulfill condition 2, but are easy to replace if they go on strike and the labor market is not tight. In contrast, programmers easily fulfill condition 3, in the sense that if the entire development team on a project quits, it will be difficult for the company to find a new one and get it up to speed, but because there is a wide range of productivity levels, it makes little sense for programmers to all be paid the same. Silicon Valley’s business culture, in which developing a product fast is more important than establishing a business culture, and turnover is encouraged, also makes it hard to establish meaningful solidarity among software developers.

In the intersection between these three conditions lie a set of job descriptions in which there is a strong sense of professionalism, to meet condition 3, but a weak sense of merit, to meet condition 2. These jobs are typically static in the sense of not changing too much over the years, which makes it ideal for a person to do the same thing for their entire life, learning to adopt new technologies gradually as they are introduced but not having to change their entire skillset. Often, the industries these jobs are in are static as well, whence they are more easily done by the public sector, or by large conglomerates that have been around for generations, such as the private US railroads.

Commercial drivers – of buses, trucks, trains, planes – are a major example of people who satisfy all three conditions. One racecar driver can be better than the next by being faster, but in the commercial sector, speeds are determined by the equipment, the schedule, and the safety standards. A train driver can be better than another on the margins, by responding more quickly to an obstacle on the tracks, or paying attention to the posted schedule better, but both of these aspects depend more on external factors, such as the signal system, than on driver skill. Train schedule padding, accounting for suboptimal driver behavior such as beginning to brake too early but also for propagating delays and passengers who take too long to board or alight, consists of a few percent of total travel time: in its peer review of California High-Speed Rail, JR East proposes 3-5% (PDF-p. 10); and a Swedish study for high-speed rail mentions a 0.9-2.3% discrepancy in energy consumption based on driver behavior (PDF-p. 12) and a total schedule pad equal to about 7% of travel time (PDF-p. 24). The productivity difference, or in other words individual merit, is too small to challenge the logic of a uniform wage scale.

Instead of individual merit, commercial drivers have professionalism. A train driver is expected to fulfill certain criteria to ensure safety first and punctuality second, which requires considerable study of the route of the train, the signal systems, the dispatching codes, the correct way to respond to various unforeseen circumstances. Unlike individual car drivers, commercial drivers are not permitted to take small risks in other to go faster, and learning how to pilot a vehicle safely takes some time; all of this is true manifold if the vehicle in question is a plane, leading to arduous certification requirements. In this setting, even in an environment of absolute control by management, there’s little reason to have different payscales – at most, management can penalize workers who make mistakes.

For the same reasons that train drivers have standards of professionalism, it is easy for them to form a cultural group with internal solidarity. They have their own knowledge set and jargon, as anyone who has tried reading threads on railfan forums knows. The transportation industry changes slowly enough, in terms of both travel demand and technological progress, that most train drivers can expect to work for the same company for decades. Even bus drivers, in an industry that’s less dependent on physical plant, can expect to move between bus operators.

The other major category of public transportation workers, maintenance workers, is not as clear-cut. There is certainly a difference in merit – some people just fix things faster than others. But at the same time, the importance of safety is such that giving financial incentive to working faster can lead to shoddy work. Instead, there are extensive regulations, developed by national safety authorities as well as internally by rail operators, specifying which tasks need to be performed and at what intervals.

Unlike train drivers, maintenance workers aren’t interchangeable – they have more specific job titles. But these job titles often lend themselves to easy categorization, such as electricians and welders. Those have their own standards, and the potential for major accidents encourages uniformity of credentials and of wages, while the complexity of the machinery these workers operate ensures that they must be skilled. This leads to the same presence of professionalism without differential individual merit seen in the case of train drivers, and ensures all three conditions facilitating unionization are present.

In a healthy company, technology progresses as fast as it can given the requirements of the industry, and the union rules are reasonable. Wages and benefits are higher with collective bargaining than without almost by definition, but they cannot be massively higher – those are skilled workers, who are not easily replaceable. In environments where the rules are unreasonable – perhaps the certification requirements are more onerous than necessary, perhaps labor-saving technologies are not used, perhaps the work rules are not suitable for a modern operation – management cannot easily force the union’s hand. Even when three people do the job of one, as in the case of US commuter rail operations with conductors and assistant conductors, labor is in a position of power, and reform-minded managers cannot easily hire strikebreakers.

A Theory of Zoning and Local Decisionmaking

This weekend there’s a conference in the US, YIMBY 2016, by a national network of activists calling for more housing. I am not there, but I see various points raised there via social media. One is a presentation slide that says “NIMBYism is a collective action problem: no single neighborhood can lower prices by upzoning; might still be in everyone’s interest to upzone at city/state level.” I think this analysis is incorrect, and in explaining why, I’d like to talk about a theory of how homeowners use zoning to create a housing shortage to boost their own property values, and more generally how long-time residents of a city use zoning to keep out people who are not like them. In this view,zoning is the combination of a housing cartel, and a barrier to internal migration.

For years, I’ve had trouble with the housing cartel theory, because of a pair of observations. The first is that, contra the presentation at YIMBY, zoning is driven by homeowners rather than by renters; for an overview, see the work of William Fischel. The second is that restrictive zoning typically correlates with local decisionmaking, such as in a neighborhood or small city, while lax zoning typically correlates with higher-level decisionmaking, such as in a city with expansive municipal boundaries or in an entire province or country; see below for more on this correlation. These two observations together clash with the housing cartel theory, for the inverse of the reason in the above quote from the YIMBY presentation: it’s more effective to create a housing shortage in a large area than in a small one.

To a good approximation, land value equals (housing price – housing construction cost)*allowed density. If a small municipality upzones, then as in the quote, housing price doesn’t change much, but allowed density grows, raising the price a homeowner can get by selling their house to developers who’d build an apartment building. In contrast, if a large municipality upzones then housing prices will fall quite a bit as supply grows, and depending on the price elasticity, land value might well go down. If x = housing price/housing construction cost and e = price elasticity for housing, i.e. price is proportional to density^(-1/e), then maximum land value occurs when x = e/(e-1), provided e > 1; if e < 1 then maximum value occurs when x is arbitrarily large. Price elasticity is much higher in a small municipality, since even a large increase in local housing supply has a small effect on regional supply, limiting its ability to reduce prices. This implies that, to maximize homeowner value, small municipalities have an incentive to set density limits at a higher level than large municipalities, which will be seen in faster housing growth relative to population growth.

What we see is the exact opposite. Consider the following cases, none a perfect natural experiment, but all suggestive:

1. In the Bay Area, we can contrast San Francisco (a medium-size urban municipality), San Jose and generally Santa Clara County (San Jose is medium-size for a central city and very large for a suburb), and San Mateo County (comprising small and medium-size suburbs). San Mateo County is by far the stingiest of the three about permitting housing: over the last three years it’s averaged 1,000 new housing units per year (see here); in 2013, the corresponding figures elsewhere in the Bay Area were 2,277 new housing units in San Francisco and 5,245 in Santa Clara County. Per thousand people (not per housing unit), this is 2.63 in San Francisco, 2.73 in Santa Clara, and 1.31 in San Mateo. In Alameda County, comprising medium-size cities and suburbs, with a less hot housing market because of the distance from Silicon Valley jobs, growth was 2,474 units, 1.51 per 1,000 people. In small rich Silicon Valley municipalities like Palo Alto and Menlo Park, NIMBYs have effectively blocked apartment construction; in much larger and still rich San Jose, the city has a more pro-growth outlook.

2. Among the most important global cities – New York, Paris, London, and Tokyo – Tokyo has by far the fastest housing stock growth, nearly 2% a year; see article by Stephen Smith. In Japan, key land use decisions are made by the national government, whereas in Paris, London, and New York, decision is at a lower level. London builds more than New York and Paris; its municipal limit is much looser than Paris’s, with 8.5 million people to Paris’s 2.2 million even though their metro areas have similar populations. New York has a fairly loose limit as well, but the development process empowers lower-level community boards, even though the city has final authority.

3. Canada has a relatively permissive upzoning process, and in Ontario, the planning decisions are made at the provincial level, resulting in about 1.3% annual housing growth in Toronto in the previous decade; in the same period, San Jose’s annual housing growth was about 1% and San Francisco’s was 0.9%.

4. France has recently made a national-level effort to produce more housing in the Paris region, especially social housing, due to very high housing prices there. Last decade, housing production in Ile-de-France was down to about 30,000-35,000 per year, averaging to 2.6 per 1,000 people, similar to San Francisco; see PDF-pp. 4-5 here and the discussion here. With the new national and regional effort at producing more social housing, plans appear to be on track to produce 30,000 annual units of social housing alone in the next few years; see PDF-p. 6 here. With 7,000 annual units within city limits, Paris expects to build somewhat more per capita than the rest of the region.

In France, the combination of a national focus on reducing housing burden and the observation that higher-level decisionmaking produces more housing makes sense. But elsewhere, we need to ask how come homeowners aren’t able to more effectively block construction.

My theory is that the answer involves internal migration. Consider the situation of Palo Alto: with Stanford and many tech jobs, it is prime location, and many people want to move there. The homeowners are choosing the zoning rule that maximizes their ability to extract rents from those people, in both the conventional sense of the word rent and the economic sense. Now consider decisionmaking at the level of the entire state of California. California can raise housing prices even more effectively than Palo Alto can by restricting development, but unlike Palo Alto, California consists not just of residents of rich cities, but also of residents of other cities, who would like to move to Palo Alto. In the poorer parts of the state, there’s not much point in restrictive zoning, because there isn’t that much demand for new housing, except perhaps from people who cannot afford San Francisco or Los Angeles and are willing to endure long commutes. On the contrary, thanks to the strength of internal migration, a large fraction of prospective residents of Palo Alto live elsewhere in California. Nor do people in poor areas, where houses aren’t worth much as investments, gain much from raising house prices for themselves; the ability to move to where the good jobs are is worth more than raising housing prices by a few tens of thousands of dollars. This means that the general interest in California is to make Palo Alto cheaper rather than more expensive. The same is true of Japan and Tokyo, or France and Paris, or Ontario and Toronto.

While superficially similar to the point made in the presentation quoted at the beginning of this post, my theory asserts the opposite. The issue is not that individual municipalities see no benefit in upzoning since it wouldn’t reduce rents by much. It’s that they see net harm from upzoning precisely because it would reduce rents. It is not a collective action problem: it is a problem of disenfranchisement, in which the people who benefit from more development do not live in the neighborhoods where the development would be taking place. High-level decisionmaking means that people who would like to move to a rich area get as much of a vote in its development policy as people who already live there and have access to its amenities, chief of which is access to work. It disempowers the people who already have the privilege of living in these areas, and empowers the people who don’t but would like to.

Individual rich people can be virtuous. Rich communities never are. They are greedy, and write rules that keep others out and ruthlessly eliminate any local effort to give up their political power. They will erect borders and fences, exclude outsiders, and demagogue against revenue sharing, school integration, and upzoning. They will engage in limited charity – propping up their local poor (as San Francisco protects low-income lifelong San Franciscans via rent control), and engaging in symbolic, high-prestige giving, but avoid any challenge to their political power. Upzoning is not a collective action problem; it is a struggle for equal rights and equal access to jobs regardless of which neighborhood, city, or region one grew up in.