Category: Politics and Society

Democratic Versus Elite Consensus

This is part 2 of my series on consensus, following Consensus and Cities.

Early-20th century America was a nation with remarkable consensus about cities. The progressive reformers, the populists, and the environmental movement all agreed that cities were bad, and the only solution to their problem was widespread destruction of slums. It’s this general agreement that gave autocrats like Robert Moses their power. Obviously, this consensus missed one key piece of the puzzle – namely, the consent of the urban dwellers who were being discussed as objects rather than as participants. Thus, a good consensus has to involve everyone, and not just the elites, or else it at best degenerates into elite vs. populist politics, and at worst leads to virtual colonialism.

The distinction between democratic or popular consensus and elite consensus is important, because in places that have only had the latter, including the US, people can form their views of consensus around features that are really special to elite consensus, as represented by insider publications such as the Washington Post, most of the New York Times, and a horde of Washington-area trade journals. For one, elite speech is very measured, and phrased in reasonable-sounding ways: concerned but understanding of limits, haughty-sounding and wonky but still reducible to soundbites for the lay reader, and always phrased in an understated way. Those are Krugman’s Very Serious People, and the National Review’s liberal elite. The US has come a long way since the 1950s and enough people see this elite as a distinct faction rather than as a real national consensus, but many of the elite’s values have percolated and taint the notion of consensus.

In contrast, democratic consensus is a messy affair. What’s happening right now in the Israeli J14 housing protests – or, even more so, what happened a month ago, before the protest became an institution by itself – is exactly the process of consensus-formation. Tents representing all social and ethnic groups in the country are present. The protest began with culturally liberal Tel Avivis, but has Haredi tents; it’s majority-Jewish, but has had Arab speakers in Jewish towns and spread to Arab towns. On the ground, the dialogue is the exact opposite of that of the Washington Post: people yell and argue until the small hours of the night, debating different views of how to improve the housing situation, and listening to one another. They tolerate trolls who maliciously propose settlement expansion as the solution but do not feed them; they have more important things to discuss. The consensus ideas they’ve formed for how to deal with the housing situation involve concerns of all groups – two of the protesters’ demands are specific to Arab and Bedouin minorities, and, unlike the mishmash of demands one sees in the US at ANSWER protests, those demands are relevant to the issue at hand.

In the US, any attempt to discuss things in the manner of J14 rather than in the manner of the Washington Post is immediately lumped together with unserious partisanship. Even people who know how rotten elite consensus is have gotten used to its discourse: thus, Michael Lind exalts the attitudes of what he calls post-consensus America in a hippie-punching piece against public transportation and environmentalism.

Ironically, calls for technocracy are sometimes a reaction against this elite domination, when the elites put themselves on the other side of expert consensus, as they do on climate issues (see Lind’s other piece on the matter, or anything on the subject by George Will), and prefer to talk in terms of platitudes about unpredictability and how scientists may be wrong. There are sizable and growing organizations and pundits criticizing consensus from this technocratic point of view – for one, anything involved in the new atheist movement.

The properties of consensus are orthogonal to those of elitism, and are different from the properties of the combination of both. The most important is listening to people with different points of view without sneering. How messy or orderly the discussions are is not relevant – it speaks only to how different the parties involved are from one another and how much they initially disagree. It’s the process of listening, of forming conversation, that makes for productive and consensus-building debate. How nice people are to one another is only tangentially important. I submit that if you compare a Room for Debate piece on transportation with a thread of the same length on a transportation blog – even a repetitive fight over Altamont vs. Pacheco Pass on the California High-Speed Rail Blog, let alone the ideological arguments about financing on The Transport Politic – you’ll find that the blog is going to be more informative. Lay people talking to each other will beat thinktank fellows and professional pundits talking at each other any day.

The problem with extending this to urbanism is that cities’ power structure makes it very hard to give ordinary people the voice they deserve. People who are not part of the elite, by definition, are less powerful. And being elite by itself changes how one thinks, leading to factional interests different from those of ordinary people, independently of questions such as which social and ethnic groups the elites are drawn from. (Communist Party elites, high-income elites, and racial elites are equally unconcerned with the average person.)

Only in a city with a completely gated establishment can major media organizations refer to slum dwellers as “a city within a city” when they outnumber people living in formal neighborhoods, and quote researchers as saying crime is a big problem in the slums when it in fact isn’t. Unfortunately, as Robert Neuwirth‘s experience in Mumbai shows, such cities exist.

As mentioned in Part 1 of this series, democratic consensus is possible, by slowly persuading all stakeholders in a community that one’s solution is good and in line with community values. Usually, within a small enough community, the problem of democratic vs. elite consensus is less acute. Some groups are privileged over others – for example, long-term residents versus recent immigrants – but arguably no more so than in citywide politics. Where localism is oppressive is in treatments of minorities in situations with a defined majority group, but when it comes to participatory inclusion, it’s no worse than appealing to the power brokers and hoping for good. In a diverse neighborhood with multiple factions of which none can dominate, this problem is usually quite small. The local elites are not so powerful that one can’t approach them on more or less equal footing.

However, the only way to systematically unleash the power of democratic consensus is via populism, as the example of J14 shows us. It by itself is not purely consensus-based – it comes from a partisan fight between the people and those in power in which the people are acting as one bloc – but the result usually involves a fair amount of consensus, since anything else would lead to divide-and-rule politics. In the US – as well as Israel, and other developed countries I’m somewhat familiar with the discourse of – such populism can come off as polarizing and anti-consensual, because of the misidentification of what are really features of elitism with consensus.

Of course, to many people, populism is not a dirty word. The Tea Party, and its right-wing populist equivalents around Europe, has had many successes precisely because there’s a segment of the US that wants neither consensus nor the current elite. The same can be said of any proto-populism on the left. But there are plenty of people who do want government to work, and do like dialogue, and they can be turned off by what they perceive as unserious attitudes.

The way to create a situation in which both the relatively secure middle class and more radical factions – both ideological and socioeconomic – are willing to cast aside elite values is then to wait until things get bad enough. But it’s easier to imagine such consensus happening today than in 1965, and not just because of reduced racial animosities. It’s as if Marx was right except that, instead of a violent revolution, the dispossessed fight for social reforms that make their economic situation more secure.

The time could already be right. And the process of replacing elite bipartisanship – or hyper-partisan fights between parties that are unconcerned with actually governing – can be pursued on the local level, in parallel, to allow for time to create bottom-up institutions to take a more prominent role in the future. It could be that the US is waiting for its own tents in New York and Washington to lead to nationwide demonstrations.

Consensus and Cities

Note: this is the first post in a series of 3-4 articles about consensus urbanism.

The dominant discourse on cities nowadays focuses on the role of visionary, top-down innovation. Some write about mayors who change paradigms, such as Michael Bloomberg and now Rahm Emanuel. Others write about entrepreneurs and the role of new technology, and invariably portray the change as groundbreaking and unforeseen by all except the dogged inventor. In contrast to this worldview, let me propose a view of urbanism based on political consensus among disparate interests, on forging agreement instead of trying to defeat everyone else.

The current trend toward livable cities, as seen in road diets and bike lane projects, is entirely top-driven. Bloomberg decided to make it his legacy, and Transportation Commissioner Janette Sadik-Khan moves aggressively with little consultation with community interests except those that already agree with her. Rahm Emanuel, infamous for his combative style, followed suit. This caused livable streets advocates, led by Streetsblog, to often identify community consensus with NIMBYism and top-down change with improvement; it’s unavoidable on Streetsblog, though sometimes there are glimpses of support for a more consensus-based policy on other livable streets blogs.

In reality, in cities, there are too many interest groups for one to normally dominate: labor, the middle class, multiple kinds of business, organized religion – and in the exceptional cases, such as Singapore, it comes out of autocracy. This is especially true in the US, with its multi-ethnic cities, requiring delicate acts of ticket-balancing. This is easy to paper over in majoritarian political systems, as the US is, but the actual practice of politics in American cities is far from majoritarian. Liberal cities have become cities of primaries – one wins by assembling an ad hoc coalition that can win the Democratic primary. In general, cities have multiple interest groups, even independently of ethnicity: see for example Christof Spieler’s analysis of the 2009 Houston mayoral race. The reason this political process hasn’t led to a consensus-based decision making is that the electoral process – in particular, the authoritarian strong-mayor system – is anti-consensus.

And yet, a consensus-based agenda is possible. As one of the Streetsblog community members explained to me, the way to obtain community support for a project is to talk to all stakeholders in the neighborhood, and understand what their hidden hopes and fears are; it’s important to avoid any situation in which someone later complains “Nobody informed me about this.” Ordinary people are far less intransigent than they can appear in the papers. For example, along Queens Boulevard, the long-term residents are still reeling from plans to turn the street into an expressway, and therefore will support or oppose a livable streets proposal in part based on whether they perceive it as turning the street into more of a highway (closing cross-streets) or less of one (widening sidewalks).

A community so empowered with its own ideas about how to make itself pedestrian-friendlier will of course help if a top-down reformist politician wants to make the city more livable, but it can also convince an apathetic politician to champion its cause if it can demonstrate that this cause is popular. The same is true of many other public projects and contentious issues; support for many of them crosses ideological and partisan boundaries, both the normal national ones and the specific issue of machinists vs. reformists in American cities.

Consensus must be contrasted with its distant top-down cousin, outreach. Outreach is what a partisan or dominant side in a debate does to get the little fish on board. There’s almost no possibility of dialogue. In contrast, consensus implicitly assumes that all stakeholders own the decision, more or less equally even if one side began the push for it and in reality did most of the work. One can imagine a community board agreeing to a development plan put forth by a mayor, and then criticizing the mayor for it after it fails; one can’t imagine the same if the community board is the body that created the plan.

Film critic Pauline Kael, when asked to comment on why Nixon won the 1972 election, refused to comment, saying she couldn’t know because nobody she knew voted for him. (This has been misquoted in conservative circles as her saying that she couldn’t believe he could have won.) Kael’s contrition was unusual; most people are more than happy to generalize based on the few people they know who fit a type, or, even worse, based on stereotypes they’ve heard from others. It’s bad enough in a bipartisan world, but in city politics, the large number of different factions and worldviews is such that no one force can possibly know enough to govern for everyone.

Although the political process of any non-autocratic city forces some cooperation among groups, the practice can be authoritarian enough that many are completely unheard of in the halls of power. This is especially true of recent immigrants and others who have no long-term activist presence, or of racial minorities in cities with a majority race and racist politics. But even groups with some organization and voting power can be shut out by a Bloomberg, an Emanuel, or even a Villaraigosa. The result is that even policy that isn’t malevolent can be destructive; this is the sin of many postwar urban renewal programs, which didn’t have to accommodate the concerns of the neighborhoods they leveled and had no intention of listening to anyone they didn’t have to listen to.

The alternative is to embark on a process that’s slow, but more robust. It’s immune to changes in electoral fortunes, since swings from 52-48 to 48-52 don’t have such a huge impact on policy. The roads movement in the US got everything it wanted from the 1910s to the 1950s, from governing ideologies ranging from Hooverism to New Deal liberalism. It’s important to imitate this one aspect of the roads movement, and ensure as many groups as possible pull in the same direction.

There are always authoritarians-in-making, people who pay lip service to any consensual and democratic concept they need to be seen to support but in reality seek power for themselves and surround themselves with yes-men. Those we need to be watchful of, to make sure that they never have the power to cause permanent damage. Streetsblog has shown glimpses of holding the Bloomberg administration’s feet to the fire on issues on which the city has not been a positive force for livability – for example, the 1st/2nd Avenue bike lanes – but we need to do more than that, and ensure that even if an autocrat has power, we use him more than he uses us.

Switching from a fundamentally authoritarian booster mentality to consensus governance has no hope of getting us demolition of low-performing or city-splitting freeways, or Hong Kong-style traffic restraint, at least not until the far future. It will take a long time to overturn preexisting anti-urban biases – even longer than necessary, since it will be based on consultation with many groups that oppose gentrification and find what’s happening to American cities now a bad thing. It requires letting go of many proposals that are currently too expensive, and focusing on making the process friendlier to good transit and walkability and less so to boondoggles and pollution. It requires sitting down with people we may find abhorrent on other issues. Its saving grace is only that, in the medium and long runs, it works.

Special Interests and the General Interest

Via Market Urbanism, I learn that the Obama administration’s latest push for jobs is to subsidize manufacturing batteries for electric cars. The New York Times article about it lets us know that manufacturing in America is bleeding and needs this support:

We may marvel at the hardware and software of mobile phones and laptops, but batteries don’t get the credit they deserve. Without a lithium-ion battery, your iPad would be a kludge. The new Chevrolet Volt and Nissan Leaf rely on big racks of lithium-ion battery cells to hold their electric charges, and a number of new models — including those from Ford and Toyota, which use similar battery technology — are on their way to showrooms within the next 18 months.

This flurry of activity comes against a dismal backdrop. In the last decade, the United States lost some five million manufacturing jobs, a contraction of about one-third. Added to the equally brutal decades that preceded it, this decline left large swaths of the country, the Great Lakes region in particular, without a clear economic future. As I drove through the hollowed-out cities and towns of Michigan earlier this year, it was hard to tell how some of these places could survive. Inside the handful of battery companies that I visited, though, the mood was starkly different.

While it’s true that the decline of the US auto industry has hollowed out Michigan, it’s not true that it’s a general feature of manufacturing. The recession barely hit Upstate New York and Pittsburgh, two regions with heavy, non-auto manufacturing; even prior to the recession, those regions had much faster per capita income growth than both the US as a whole and their respective states’ primate coastal cities. Even Providence, with unemployment that was at one point in the recession higher than Michigan’s, managed to eke out good income growth numbers. Not every Rust Belt region is Detroit.

But industrial policy in the US is decidedly auto-focused, and if it’s not, it’s based on hi-tech. Car batteries, offering both, can unite two different special interests, ensuring those industries will retain their government support.

Fundamentally, the US attitude to transportation is unchanged from the 1950s, when a former GM CEO tapped to serve as Secretary of Defense could tell the Senate that “For years I thought that what was good for our country was good for General Motors, and vice versa. The difference did not exist. Our company is too big. It goes with the welfare of the country. Our contribution to the nation is considerable.” Sprawl is good, not for the average American who’s forced to spend thousands per year on cars, but for favored industries; thus, the federal government has no interest in stopping it, and local governments merely use the zoning tools handed down by the federal government.

Although the original good roads movement was about transportation, and was fueled in part by populist anger at railroads and concentration of wealth in the cities, from about the 1920s on it featured collusion between government and industry: for example, Bureau of Public Roads chief Thomas MacDonald created a pseudo-scholarly Highway Education Board, funded primarily by the auto and tire industries, featuring such essay contests as “How Good Roads Help the Religious Life of My Community.” By the postwar period, the US had no coherent transportation policy, just an industrial policy. The Interstate network was partly the culmination of the 1920s and 30s’ efforts and partly fiscal stimulus in a recession; everything since then has been about preserving the status quo for the benefit of the relevant industries, which can buy Congress more cheaply than they can make good cars or diversify their products. Even public transit investment is essentially about preserving the status quo of the early 1960s in the big cities, which goes to explain why APTA’s culture is so wedded to keeping things as they are and avoiding policies that would benefit transit at the expense of cars.

It’s common to attribute the failure of American transportation policy to uniquely American features such as new urban design or low density, but when the same policy was tried elsewhere, it produced the same result. For example, compare Puerto Rico to Antigua and Barbuda, Barbados, and Trinidad and Tobago, which have comparable density and income: Puerto Rico has Interstates, the rest have no freeways; Puerto Rico’s car ownership is higher than in most European countries, and twice that of the other middle-income Caribbean nations.

Much like its richer, better-known tiger neighbors, Malaysia has had fast economic growth in the last few decades, involving heavy industrial policy. But unlike in South Korea, Japan, Singapore, and Taiwan, in Malaysia one of the industries chosen to be winners in the crucial period of early motorization was the car industry; to encourage the spread of this industry, the Malaysian government built highway infrastructure and let transit wither through benign neglect and overregulation, effectively turning Kuala Lumpur into a guinea pig for industry. Unsurprisingly, Malaysia’s car ownership is high for its income, and Kuala Lumpur’s transit mode share is 16%, compared with figures higher than 50% in richer East Asian cities.

The best source is Paul Barter’s thesis, comparing traffic policies in Tokyo, Hong Kong, Seoul, and Singapore on the one hand, and Kuala Lumpur and Bangkok on the other. The first four cities engaged in traffic restraint early in their motorization: they imposed sin taxes on cars or on gasoline, or in Tokyo’s case required car owners to purchase off-street parking space before being allowed to buy cars. Hong Kong has had no industrial policy, but the other three are in countries with heavy government involvement in industry. But Singapore has no auto industry, and the Japanese and Korean auto industries were late entrants to their respective countries’ export-fueled growth. In contrast, Kuala Lumpur and Bangkok imposed no such controls on traffic, and on the contrary built large urban freeway networks; if you’ve ever visited Bangkok, you’ve seen the double-decked freeways and the traffic cops with face masks.

Similar special interests dominate even in pro-transit policy in the US, since it’s so unused to having transportation policy whose primary purpose is to provide good transportation to users. I’ve already mentioned APTA, which is more interested in funding than in ridership, but the same can be said about development-oriented transit, which is judged based on its use to developers and ribbon-cutting politicians. A cleverer solution, due to Michael Moore, is to develop a domestic rolling stock industry from the carcasses of the auto industry – in other words, convert a special interest that promotes pollution into one that opposes it. But this won’t work, either, not when rolling stock is an order of magnitude cheaper than the cars it replaces; most of the costs of transit are local construction and operations rather than manufactures. An America that chooses transit over cars is an America that doesn’t need Detroit.

In a one-to-one match, special interests always win: they’re invested in their side and often fighting for survival. Detroit needs the rest of the US to keep driving much more than the rest of the US needs to reduce its sprawl. The gas and oil interests are more invested in their own existence than consumers are in rooftop solar panels. Corn farmers need ethanol subsidies more than people who aren’t corn farmers need the money for healthy food.

The reason general public interests can succeed is that while individual special interests are popular, the idea of special interests isn’t. The special interest-ridden politics of the Gilded Age led to the progressive movement – a movement that had its own special interests (including driving and suburbanization as the solution to social ills!) but somewhat cleaned up governance. Today the oil industry is unpopular in the US, even if its lobbyists are everywhere. The ideas of transit and clean energy are popular – in the few polls done on the subject, solar and wind power polls at the minimum in the 70s and often in the 80s, and “subway, rail, and bus systems” poll in the 60s, even higher than fuel-efficient cars.

The correct political strategy is therefore to keep hammering on the distinction between the general interest in good transit and walkability and special pollution and old-time practice interests. The general interest is what transportation policy is, as opposed to industrial policy. Some individual issues are too difficult and NIMBY-ridden, especially on the local level, but on the national level, policies promoting good government and a mode shift do not have those obstacles. Few politicians want to have to face entrenched special interests, but even fewer want to be branded as being for bad government.

Why Smartphones’ Effect On Transit Is Overrated

The spread of smartphones, with their apps for maps and transit schedules, is leading the usual tech boosters to claim that the world is on the cusp of revolution and transit and urbanism must change to accommodate. This video by Gensler Architects is a typical example, rightly excoriated on Human Transit for trying to replace fixed-route public transit with glorified taxi-share and calling it “liberated transit.” What this could be called is smartphone-oriented transit, and it’s rarely good transit.

In reality, technological progress is slow and painstaking, and does not offer many good reasons to reinvent the wheel. Consider clockface schedules: one would expect that in an environment in which everyone has a smartphone and could look up schedules in an instant, there’s no need for an easily memorable timetable. One would expect the benefits of clockface schedules to evaporate, and agencies with arbitrary schedules to have sharp ridership increases, as if they suddenly adopted such timetables.

However, this is not observed. We haven’t seen outsized ridership increases in the last few years in takt-less regions imitating the ridership gains coming from a memory schedule. See, for example, the anemic ridership gain on the MBTA commuter rail in the 2000s. It turns out that being able to know when your train is coming without consulting software is still worth something, just as it was worth something to not need to consult a printed timetable.

For another example, consider good service maps, including a listing of route frequency. Google Transit will tell you when the bus is expected to come, but not delve into which routes are more frequent and reliable than others. Thus separate listing of frequent buses remains important – in fact, it’s gradually being adopted in American cities now, without any fanfare from urban visionaries.

Since smartphones don’t have that big of an effect on transit, there are two questions that naturally follow. First, why do some agencies, such as New York’s MTA, constantly plug their growing body of transit-related apps? And, second, if smartphone-oriented transit doesn’t work, what technologies do meaningfully affect transit use, and how?

The answer to the first question is that it comes from ideology. If you think like an American entrepreneur, or like a Friedmanesque booster who likes American entrepreneurs, this attitude is understandable. Smartphones were invented in North America; apps are written by upstart members of Richard Florida’s creative class. It’s much easier for people with such a mentality to get the role of the software superstar than to get that of the transit planner. If a transit planner gets fame from such quarters, it’s for doing bold, individualist, technological things, which are almost never best industry practice. Former MTA chief Jay Walder’s ideas about smartcards are a good example: his idea of how to speed up commuter rail ticket-checking is to equip conductors with smartcard readers but still require them to go through the entire train every single time. Proof-of-payment is for light rail and European bureaucrats; true American entrepreneurs use hi-tech solutions.

A related issue is one of competence. The MTA is bragging about everything, since it’s under criticism about everything and there’s no progress about costs; apps are one of several things to brag about, to make it look as if lemons are actually lemonade. This is not ideological, but it’s closely related to reformism and boosterism. Since part of the Friedmanesque ideology is that progress comes from individualists, good government does not really come into play, except when it encourages individualists to make apps. If government is inherently incompetent, then there’s no need to engage in good design or follow best practices; the app developers will take care of everything.

The answer to the second question is that smartphones do make transit more convenient – the map is right there – but are not a game changer. The technology most relevant to transit is the kind that makes it possible to run more smoothly, cheaply, punctually, and quickly. Recent examples include improved TBM designs, regenerative braking, guided buses, articulated train interiors, 100% low-floor buses and trains, DMUs that can be maintained in bus shops, hybrid and electric buses, more aerodynamic vehicles, and catenary-free light rail. None is a game changer; all taken together make transit much more efficient and convenient than it was in 1950, all else being equal. Of course, comparable technological improvements also made cars more convenient, and the spread of cars has made transit less useful, but the vehicles themselves are a huge improvement.

It’s easy to think of technology as a series of gamechanging innovations, but it really isn’t. The assembly line was a gamechanger, but it took multiple decades for mass-produced cars to remake society in their image, and every step of the way it was intimately related to such preexisting trends as urban renewal and anti-railroad populism. It should be thought of as a painstakingly long process of growth, which is nothing more than employing more resources and employing them more efficiently.

The upshot is that everything that was important for good transit in 2000 is important today. Although it may dismay some reformers with too much vision, it’s actually a good thing for riders: it means that the last few decades’ knowledge of how to run trains and buses is still relevant. The wheel is a familiar, well-studied technology. The challenges today are somewhat changed, but the knowledge of how to face them is the same. Good transit is not only different from smartphone-oriented transit, but also technically much easier to implement well.

Buy America is a Scam

Streetsblog’s interview with Amalgamated Transit Union President Larry Henley hits on the normal points regarding labor issues and transit, but one bit there deserves additional followup, regarding Buy America provisions:

Tanya Snyder: Some transit advocates are also critical of things like Buy America provisions because it costs transit agencies more money.

Larry Henley: This is the Wal-Mart question. This is whether or not we have a country at all anymore.

If the goal is to race to the bottom, to get the cheapest products, which means the cheapest labor, then we ought to be mindful that while we’re preserving the fiscal integrity of the MTA, we’re ruining the lives of American kids. We’re making it impossible for them to get a job. And if you look at the unemployment rates today, as staggering as they sound, it’s 9 percent overall, but for college educated kids it’s 4 percent. Which means that people who lack a college education no longer have a future in America. They just don’t.

…So that now, we have people in China and India and all across the world competing with American kids.

…This is about a moral crisis in America. And then they have the gall to come back and make all these arguments about American people being inefficient or American people not working hard enough and why shouldn’t they all be part time. But the central issue is that we have allowed corporations like Wal-Mart to wring every ounce of hope out of young Americans’ lives.

In the comments, Stephen Smith already justly mocked Henley for complaining about China and India when the major rolling stock and bus vendors are from peer developed countries, and Buy America’s most recent derailing of a light rail order was about imports from Spain, a country with 21% unemployment. But there’s much more at stake here.

Buy America’s purported role is to create American jobs. But let’s examine the costs. Amtrak’s Sprinter locomotives, compliant with both FRA regulations and Buy America, cost 30% more than the European locomotives they’re based on, and 50% more than competitor products built only for passenger trains rather than also for freight trains. A 30% premium works out to an extra cost of about $100 million, providing 250 jobs. Since the income earned by skilled workers is normally around $100,000 or less rather than $400,000, we can conclude most of the premium doesn’t go to workers. Or, for an even more egregious example, but without job numbers specified, look to SMART’s DMUs, at twice the cost of comparable European trains.

In other words, it’s a scam. Blocking parallel imports ensures only a select number of vendors can bid, driving up prices. Usually there’s a small sop to American labor, well-publicized in the media with photo-ops of people in hard hats – e.g. the 250 jobs heralded for the Sprinter order – but the bulk of the extra money goes elsewhere. It creates makework for consultants and lobbyists. It increases vendor profits, since fewer companies, typically the largest and most global ones, can bid. (This also goes for regulations: Caltrain applied for its FRA waiver in consultation with the biggest train manufacturers, potentially locking out Stadler and other small up-and-comers.)

When the number of vendors is very small, the result can be not just high cost, but also shoddy work. The reason the US has no legacy domestic rolling stock vendors is that two of the few that remained by the 1970s, protected by Buy America but servicing an ever-shrinking market, sold New York City Transit defective trains, the R44 and R46 orders; this was one of many mishaps facing the city in the 1970s. The subsequent lawsuits bankrupted the vendors. The R44 is still a lemon, though since refurbishment the R46 has performed well. In the 1980s, NYCT switched to global vendors instead; the next order, the R62, was not federally funded due to Reagan’s cuts, so NYCT went ahead and imported trains from Kobe, which worked fine.

There is another way, but, as with most other issues facing transportation, it requires importing ideas from other developed countries. The idea in question is that parallel imports are not a bad thing, either for the economy or for workers. The US and Canada import cars from each other; neither is any worse for it. To a much smaller extent due to trade barriers and different sets of regulations, North America imports cars from Europe and Japan – and the attempts to fight it have not resulted in a union revival, but in the proliferation of non-union plants in low-wage states.

Parallel imports are not an anti-worker or anti-union tactic. The Swiss Socialist Party is for them, and, far from a neo-liberal sop, it also supports linking trade to human rights and workers’ rights and has a general roster of policy positions that most Daily Kos contributors would love to see the Democratic Party endorse.

The majority of trade is within the developed world. To the extent Buy America is supposed to protect American workers from low-wage countries, it has failed; NYCT’s Buy America-compliant R160 trains were partially manufactured in Brazil to save money. The main function of Buy America is to protect companies that do business in the US from competition, period. At that it has done a very good job; it’s just not good for the public, which has to pay for it.

Organized Labor and the Housing Protest

In both the US and Israel, the power of organized labor is in decline, and union membership is increasingly restricted to public sector and legacy manufacturing employees, who are usually well-compensated and have a middle- or even upper-middle class income, but are still under attack by right-wing politicians who hope to privatize public services. However, these two countries’ lefts react to those employees and their representatives in diametrically opposed manner. American leftists typically support the major unions, Israeli leftists disdain them as sellouts. Although in both cases the left supports insurgent unions over well-established ones in intra-union fights – for example, UNITE-HERE over SEIU’s leadership – the attitudes toward the established unions are very different.

The relevance of this is the role of Ofer Eini, the leader of the Histadrut, in the emerging housing protests. Although the protest is grassroots, he’s started to play a role as well, demanding that the government negotiate with the demonstrators. For a selection of English-language mainstream sources mentioning his role, see Globes, the Jerusalem Post, and Haaretz, as well as Daily Kos, which bases its reporting on mainstream Israeli media. The general tone is that the protest began as a grassroots effort, separate from any mainstream organization, but now has a powerful player by its side.

In contrast the reporting I see from Hebrew-language leftist sources is quite different. 972Mag contributors Rechavia Berman and Yossi Gurvitz react uniformly negatively toward Eini. Berman explicitly and Gurvitz implicitly complain about Eini’s representing an establishment union whose members are predominantly public-sector. Berman even wrote a post on the subject entitled “Don’t Let Ofer Eini Coopt the Struggle,” calling Eini the biggest danger to the protests.

To clarify matters, neither Berman nor Gurvitz is an economic rightist, or even centrist. Both bloggers’ views on economic matters would place them in the middle of a group of Daily Kos contributors. Berman also took a hardline stance against Scott Walker’s anti-union law. But their view toward the mainline Israeli unions is hostile: they view them as representing the status quo, not the change that’s needed.

Put another way, the Israeli left is viewing its predicament and demanding wholesale changes in the economy, backed by grassroots activism. The American left is instead trying to cling to what the unions still have left; it welcomes struggles to unionize more workers, but views the mainstream unions as a succor of the working class rather than as part of the establishment.

I bring this up for several reasons. First, general interest. Second, more precisely, it shows that political stances come from not just ideology, but also political alliances, with all the implications it has. Third, specifically about good transit, it connects to what I said in my post about politicals vs. technicals, that the politicals are usually mainstream or moderate left while the technicals are all over, from the center-right to the radical left. Transit advocates with views similar to those of US labor liberals are just glad that they have APTA and Brookings on board and often want to expand from there. It’s advocates with views similar to those of the Israeli left – usually technicals, but not just politicals – who view those organizations as industry sops, with interests different from those of riders. It of course does not mean the latter kind of advocates are themselves left-wing – just that they view transit agencies the same way the grassroots left in Israel views the Histadrut.

Even on pure politics, it’s the latter approach that wins over non-leftists. The current housing protests in Israel attract everyone, even political groups that traditionally vote right-wing. The ultra-Orthodox and the settlers are fielding protest tents alongside anarchists and other people who demonstrate in front of the West Bank security fence. They argue heatedly about politics all day, and in the process build a new political arena that excludes the present-day establishment, but are united in their opposition to the status quo. The establishment right is doing its best to smother the protests, but its divide-and-rule tactics are no longer working. This couldn’t have happened if the protests had been started by the usual center-left organizations, with all their cultural baggage. People who want better services but are culturally indisposed toward joining with petrified organizations respond much better to grassroots efforts, even more radical ones, than to the same old.

Affordable Housing

A new post on Old Urbanist linking to prior posts about housing affordability, both on his own blog and on New World Economics. The theme is that various design standards – the two sites’ main scourge is streets wider than about 5-10 meters and in general excessive room for parking and front lawns – force the cost of construction up, making housing less affordable.

In reality, the first thing to note about high housing prices is that they exist everywhere: not just in new urbanist towns in the US, the type of development under discussion on the above blogs, but also in New York, and Paris, and Tokyo, and Tel Aviv, and Hong Kong, and London. In my matrix of different types of city planning, every row contains cities whose housing prices stretch the middle class to its limits. Often there’s significant homelessness, but most people have just enough to scrape by. The cities where housing prices are low compensate by either having very poor populations (inner-city Detroit) or requiring people to spend large quantities of money on driving (the Sunbelt): note how across US metro area, the total percentage of household income spent on housing and transportation is essentially constant.

Thus, as a first filter, the cities whose housing prices are low relative to incomes are very spread out and auto-oriented, exactly the opposite of any kind of urbanism other than suburbanism. As a second filter, Ed Glaeser notes that the high cost of housing in coastal cities comes from supply restrictions in the form of zoning, writing about Boston and about Manhattan as case studies.

First, what is clear about situations with unaffordable housing (really, barely-affordable) is that it is not due to high construction costs. Glaeser himself notes that construction of luxury apartments in Manhattan costs about $300 per ft^2, while the sales price per ft^2 is on average $600. In particular, parking requirements and other restrictions that effectively raise construction costs are not the primary agent to blame for high housing costs in general. An extra $20,000 for a parking spot is not going to make housing unaffordable, though it may influence developers’ decisions of what and where to build to maximize profits, in particular by making them abandon urban construction in favor of the suburbs. Glaeser blames persistently high housing prices on a regulatory tax, which forces developers to spend extra money on lobbying and preparing paperwork for permits.

Second, the primary determinant of housing prices is not capital costs, but the cost of the land underneath. An older post on Old Urbanist asks why real housing prices have increased since 1920; the answer is that a house is not a manufactured good, but primarily land, as is especially clear when one considers expensive, desirable cities.

Third, the worth of land is dependent on demand. Land on which a developer can build three apartments is worth three times as much as land on which a developer can build one apartment. That’s why on the level of the individual building, building higher does not reduce rents. Land supply only forms the limiting factor when there’s a regionwide desire to be in an area with a fixed land constraint, such as the national borders of Singapore or Monaco, or the physical extent of the New York City Subway or the walkable radius of Central Tel Aviv. In such cases, it could reduce prices to expand the available space for housing within the fixed constraint, via either increasing density or expanding the desirable area through transportation infrastructure or landfill. But otherwise, there’s not much point.

When high housing prices are genuinely the result of high capital cost, the result is different from that of high demand or a shortage of land. Consider North Tel Aviv, which mandates expensive whitewash on its traditional garden city buildings. When those buildings were first constructed in the 1930s, they were priced too steeply for the working class, leading the rising middle class to move in instead. Since the whitewash is also high-maintenance, apartments deteriorated, and the only buildings that maintain an aesthetic exterior cost much more to maintain and are only affordable to the rich. In effect, the result of high capital cost is worse physical stock, the opposite of what normally happens in Tokyo, New York, and other expensive cities.

Anti-gentrification activists often fight policies that make their areas more desirable; the above three points help explain why. Affordable housing to them is a bargain to richer people, and if they want to move in, they’ll be priced out. The only way to depress housing prices is to depress demand. One activist, a Harlem preacher with extreme right sympathies, even calls for a general economic boycott of his own neighborhood in order to cause an economic collapse and lower rents.

The inevitable conclusion, namely that it’s impossible to make housing persistently cheap without raising other costs or impoverishing people, does not mean that affordable housing issues are moot. First, the equity issue remains; although on average housing is just marginally affordable, to many people it is not affordable, and as a result, expensive cities engage in government intervention to prevent mass homelessness, even ultra-capitalist Singapore.

In addition, although expanding housing supply makes land more valuable and normally prevents prices from falling, it also create better housing in the process. Auto-oriented sprawl in the US has caused dwelling size to increase; upzoning and the construction of better transportation infrastructure in expensive cities would enable people to move from the periphery to the core – or, more precisely, people could stay where they are, but public transit could redefine regions from periphery to core.

For a toy model, suppose there are two kinds of development: regular suburbia and new urbanism, where new urbanism is more expensive. Constructing more new urbanism is going to reduce the price for both kinds of housing (new urbanism has an increase in supply, regular suburbia suffers from a subsequent decline in demand), while also shifting people from regular suburbia to new urbanism. Overall the average price of housing shouldn’t change, but the quality will increase.

In other words, on a national or regional level, affordable housing is never a problem; it may be a problem for poor people, but not in general, on average. Supply restrictions should show in low-quality housing, measured in terms of size, local walkability, aesthetics, and other factors that on the local level determine price.

Austerity and State Support for Transit

The debt ceiling deal between the administration and Senate Democrats on one side and House Republicans on the other includes significant discretionary spending cuts, though not as much as the Tea Party had hoped for. It is not clear yet which programs will be cut, but since all discretionary spending is fungible, money for transportation is going to become much tighter.

In a climate of austerity, and one in which transportation is not considered as untouchable as Social Security, transit agencies must find alternative sources of funding. Multiple transit blogs have proposed state and local government support instead, including The Transport Politic and Portland Transport; on the Infrastructurist, commenter Progressive Capitalist suggested the same with respect to the gas tax, which is about to lapse independently of the debt ceiling.

Let me pour some cold water on this idea: in a climate of austerity, states will lose federal support, and need to cut spending or raise taxes, of which the former is more likely. The AP wire documents some instances of state budget gaps that will get worse under the new austerity program; even in Connecticut, one of the biggest per capita tax donor states, 16% of non-transportation funding comes from the government. In other states, which are poorer and sometimes net tax recipients, the problem is much larger. Although the drying of federal aid may well skip transportation, states will still be under pressure to cut everything. Money is fungible like that.

Simultaneously, the New York Times published an article documenting Rhode Island’s transit service cuts, in its attempt to plug its own budget hole. Although the article’s tone is very politically pro-transit, noting that it’s critical for small business, and spends much time uncritically quoting job numbers from APTA as well as Brookings’ shoddy transit accessibility study, one can glean the political priorities in Rhode Island from it. I’ll come later to the technical side of Rhode Island’s service cuts, but for now note that there seems to be no political will to raise taxes to keep buses running, although the state is very liberal.

At the above-linked Portland Transport post, Engineer Scotty went further and said that austerity would actually change transportation priorities, perhaps even making transit better off in the long run by making people less able to afford cars. He says the following consequences are likely:

  • A lower standard of living overall.
  • Higher prices for fuel, especially petroleum products. Most of the oil we use is imported; and a devalued dollar would make oil more expensive. A reduction in US military presence could affect the stability of oil shipments, and the continued rise of emerging economies such as China, who will have their own increasing needs for oil, will further increase prices.
  • Fewer funds for capital projects. In an austerity-focused economy, there would be less money available for infrastructure projects–or for anything other than debt service, for that matter.
  • More migration to urban areas.
  • Wage adjustments in the public sector. This section is above and beyond any reductions in wages to affect the broader economy.
  • More people unable to afford cars. The combination of increased fuel costs and decreased overall disposable income will likely increase the number of households unable to afford an automobile, or cause wealthier households to cut back, perhaps to a single family car rather than one per driver.

As a result, he suggests, there will be more local and private-sector involvement in transit, regulations will be relaxed in order to reduce costs, investment in highways and rail will decline in favor of on-street BRT (of the kind that only requires paint), and an end to the transit stigma.

My analysis is a good deal more pessimistic. States do not have money for transit operating subsidies, or even for the in-house expertise required to reduce the amount of subsidy required without enormous fights with the unions. Declining gas tax revenues mean less money for transit rather than more; although the marginal rider who switches from driving to riding the bus produces a net increase in revenue to the agency, other drivers who respond to lower incomes by traveling less produce a much larger net decrease in revenue. Furthermore, the stigma that only poor people ride the bus is not going to change merely because more people are poor.

On the contrary, the situation is going to force even more federal involvement in transportation, assuming that all else is equal, i.e. that the bipartisan austerity plan to be released at the end of this year does not specifically target transportation funding. The states are genuinely cash-strapped. Their revenues come from income taxes and from sales taxes that exclude basic necessities, of which the former are quite cyclical and the latter extremely so. They can only issue bonds for so long before they get their credit rating downgraded.

In contrast, the federal government can borrow at a negative real interest rate, and is embarking on an austerity plan for purely political reasons. I fully expect states to start begging for more federal help a year or two from now. This will be especially egregious if after the 2012 election one party takes control of the White House and both houses of Congress, in which cases all promises of austerity will be a distant memory. But even if austerity persists, a few self-serving reports by the construction industry saying that infrastructure requires even more trillions than previously thought are all it takes. At the end, the federal transportation bill may well stay the same size, while state transportation funds are certain to shrink.

Tel Aviv Protesters’ Demands

The protesters on the ground in Tel Aviv and other Israeli cities are often disorganized, and lack coherent goals; many have claimed that the very presence of bottom-up protest is good enough on its own (which Israeli blogger Idan Landau notes is evidence for how low the public’s expectations of politics are). However, many organizations for affordable housing have banded together to form a more normal political front, and are calling for concrete reforms. A website can be found here; it is in Hebrew, but has the occasional English article.

While the leftist bloggers are still demanding rent stabilization, it is only one of several demands (Landau proposes it together with public housing and an end to land privatization), and the new Coalition for Affordable Housing has released a nine-point plan that is considerably broader. Their main demands, amendments to a national housing law under discussion, are as follows (translated from a summary article on Ynet and a blog post on the coalition’s site):

1. Every high-rise national housing plan with at least 200 units must include at least 20% affordable rental units and at least 30% units with at most 75 square meters.

2. No plan will be approved if it includes only housing for welfare recipients, in order to avoid creating concentrated poverty.

3. Public housing will have priority, and the state will spend the 2 million shekels (about $580 million in exchange rate value, or $670 million in PPP) it has from previous sales of public housing on new construction.

4. Affordable units will be rented for at most 25% of the maximum income ceiling for eligibility, and the rent could only be increased at a fixed rate, whose value the coalition does not mention.

Separately, the student groups are issuing their own demands, which, in addition to small and affordable apartments, include removal of legal barriers to municipally approved development, taxation of apartment buying for investment rather than for renting, 400 million shekels for construction of student housing, and opening 5,000 500-square-meter lots in the Negev and Galilee for construction of subsidized units.

The government’s own proposals have not gotten popular support, as the protesters consider them to be mere bones or actively counterproductive. Two members of the Knesset – Labor’s Shelly Yachimovich (who is currently running for the top position in the party’s primary) and Likud’s Karmel Shama, have offered a rent stabilization law limiting increases in rent to 5% a year; the protesters rejected it. More cynically, PM Netanyahu tried to buy the students out with a 50% discount in public transportation fare; he was met with the same scorn he got in the 1990s, when he tried to deliver pizzas to students who were on hunger strike.

So far, ideas meant to increase central city housing supply have not been seriously raised by any group. Netanyahu’s plan to accelerate construction must be viewed as an attempt to reward developers rather than as a housing solution; owing to the high land prices, new construction tends toward luxury, just like in New York and other expensive cities. This led to general opposition to any supply-side solution, at least among the bloggers I read; for example, Shalom Boguslavsky, whose article about the Jerusalem light rail I ran six weeks ago, blamed the problem on inflated demand coming from speculation. Note, however, that the student proposals do include some supply increases, though not within central cities.

I still maintain the most effective solution should be to avoid rent controls at all costs, and instead pursue the following set of policies:

1. Subdividing apartments must be legal, as must new construction of small apartments.

2. Zoning should preference contextual housing over towers in a park, and allow 6-story buildings as of right, with 8-story zones on wider streets and in more desirable neighborhoods. Setbacks should be eliminated for future construction, and for front yards this should be retroactive, legalizing enclosed balconies as long as the materials are more permanent and aesthetic than plastic. These two points together should roughly double the allowable intensity of development, while also incentivizing small improvements by building owners over large-scale redevelopment.

3. Low-income people should receive subsidized or public housing. Even if the housing is owned outright by the government, it should be done voucher-style, and buildings should not clearly advertise that they are public. For example, a new public housing company could be empowered and given a budget to purchase small buildings anywhere it wishes, even in expensive neighborhood.

4. Speculation should be deterred by, as the students propose, a tax on buying housing as an investment. I do not have the details of the students’ proposal, but I would propose a capital gains tax. A tax on imputed rents for owner-occupied housing, as in Switzerland, should not be necessary here; the problem is at the upper end of the market, not in the middle.

5. The government should invest in public transportation, including a subway for the inner Tel Aviv region and an upgrade of the rail network to modern S-Bahn standards. Israel is already pouring concrete, i.e. building extra lines to unserved cities, but the organization is still substandard, with mediocre frequency and no ticket or schedule integration with local transit.

Rent Control

Tel Aviv’s housing protest grows, and Saturday night tens of thousands of protesters descended on HaBima Square, demanding rent control. Although I have yet to see media heavyweights on the left echo those demands – instead, they view it in abstract terms of people power versus the state – they are clearly too important to ignore right now. There is already a response from the right and from (classical) liberals saying that it’s government’s fault and that the correct solution is deregulation of new construction.

However, since government intervention is ubiquitous in expensive cities, including several famous ones I have lived in, I’d like to talk about case studies of world cities. In most of the last ten and a half years, I lived in Singapore and New York. Both have extensive government regulation, despite the capitalist orientation of Singapore. However, this government involvement takes different forms, though some of consequences are similar.

In New York, there’s rent control, precisely what the Tel Aviv protesters are demanding. More precisely, there are two forms of rent regulation: rent control, and rent stabilization. Rent control is far stronger, requires the tenant to have continuously occupied the apartment since 1971, and only applies to 2% of rental units, mostly in Manhattan. Rent stabilization allows higher rents and merely limits the increase in rent every year to a few percent, and is far more common, applying to about half of rental units. Both figures come from the most recent housing survey, in 2008. There are also public housing programs, some for the poor and some for the middle class. In addition, the Inclusionary Housing Program encourages developers to set aside 20% of the units as affordable housing, by offering them a bonus in floor area ratio.

In Singapore, the main form of government involvement takes the form of subsidized public housing, called HDB estates after the housing development board. These are rented and sold to Singaporean citizens at a discount, and are home to 85% of Singaporeans. The mandatory savings accounts, which function similarly to social security programs except that people only get back what they paid in, with no redistribution of wealth, encourages home ownership by allowing people to use their accounts to buy housing. Thus home ownership is high, in contrast to the situation in other expensive cities, such as New York.

The important feature in both cases is that not everyone is eligible for reduced rent. In New York, rent stabilization disappears in certain cases if the tenant leaves (vacancy decontrol); in Singapore, HDB is not available to non-resident immigrants, who form 25% of the country’s population. This is also seen in other expensive cities, including Monaco, where the minority of residents who are citizens have access to highly subsidized public housing, and Hong Kong, where half the population receives housing subsidies.

The result is parallel markets. There’s an affordable market, and an unregulated market, which is much more expensive than it would be without government involvement since there is a restricted supply of market-rate housing. Effectively, in order to prevent mass homelessness, the government increases rent for unfavored groups – expats in Singapore, relative newcomers in New York – in order to reduce that of favored groups. Rich members of the unfavored groups, for example executive expats, can easily pay the higher rent. Poor members, for example recent immigrants from developing countries, pay the rent by living in overcrowded housing.

A more pernicious result, common in New York, is landlords’ recurrent attempts to move rental units from the controlled or stabilized market to the unregulated one; although rent control is rare, it is concentrated in desirable neighborhoods that once hosted many working-class artists, such as SoHo and the West Village. Since the path of least resistance is vacancy decontrol, landlords harass such tenants in any way possible.

Immigrants who speak little English are a favored target of harassment, since they often don’t know their rights, and since many of their neighborhoods, for examples Washington Heights and Alphabet City, are desirable for college students. In contrast, students are often a standard replacement, since they have more money due to parental support, and are transient and therefore don’t complain as much about maintenance. However, everyone who is stabilized or controlled can be at risk; many of the stories I have heard come out of the Village rather than Washington Heights. Community board members know countless instances of landlords who defer maintenance, install noisy or inefficient heating and refuse tenants’ suggestions for better options, turn off the electricity or the water at inopportune times, and even engage in outright fraud. An anti-gentrification activist from West Harlem told a Columbia student group of landlords who pretend not to have received rent checks from their tenants, and then use this as an excuse to evict them.

I do not know whether the same results exist in other expensive cities with extensive rent control, for example Paris; I would appreciate help from any reader who knows the situation there. However, I posit that at least some degree of the two above issues are universal to a regime in which part of the market is regulated and part is not.

Based on admittedly partial information, I’d recommend against rent control in Tel Aviv, and for other forms of reform, including some government intervention when necessary. The differences with other land-constrained cities, in which intervention is universal, can be summed as follows:

1. Tel Aviv, while dense, is not as land-constrained as Singapore, which is limited by national borders, or New York, which is limited by the available subway infrastructure; therefore, there’s less inherent market pressure on land prices.

2. Tel Aviv’s zoning code allows much less development, and can be reformed accordingly. The 1920s-era Geddes Plan, good for its time but now in need of change, mandates setbacks of 4 meters front and back and 3 meters of each side, roughly halving the buildable area of the 20*25 lots typical of the city, and limits height to 4 stories. In addition, the city makes dividing apartments into smaller units so difficult landlords have taken to doing it illegally

3. A big portion of the problem is low purchasing power among specific groups, namely students, who do not have access to free tuition as in many progressive European countries or loans as in the US. Thus it’s not just a housing problem, as already noted by some protesters.

In general, there’s a distinction between socialism and bureaucracy. Social-democratic programs can be delivered with remarkably little bureaucracy. The Soviet Union was both socialist and bureaucratic, but Scandinavia’s quality of government is much better, as seen in its stellar rankings on corruption indices. In contrast, many developing countries impose many hurdles on starting a business without appreciable socialism, for example India’s license raj. The difficulty of building affordable market-rate housing in many cities can be traced to bureaucracy in the form of an onerous permit process, a zoning code that requires so many variations that developers are at the mercy of politicians, and similar questions that boil down to political power.

The consequence is that the process of reform must target regulations that empower kvetching community board and city leaders to make landlords’ lives miserable. Good deregulation would make it easier to build and easier to build densely, and streamline the permit process. It would not try to inflict maximum damage on tenants. The reason I’d mistrust any deregulation coming out of the present government is that its recent record – for example, cutting funding to fire services in the years leading up to the Mount Carmel fire – is not one of trying to make government better, but of trying to make government so small and inefficient it can be drowned in a bathtub. It’s exactly this attempt to destroy public services and give handouts to politically connected entrepreneurs that people in Tel Aviv are really protesting.