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.

Shoddy Study Claims Light Rail Increased Congestion in Paris (Hoisted from Comments)

Jarrett points us to a just-published paper in World Transit Research that contends that Paris’s new T3 light rail line caused traffic congestion on the adjacent freeway, the Boulevard Périphérique, to increase, thereby causing a net increase in environmental damage and a negative social rate of return. Reading it at its original source requires academic access; here is a mirror on this blog, and thanks to ant6n for sending it. The study does not produce much evidence that an increase in traffic congestion indeed happened. As Angus Grieve-Smith explains in the comments on Human Transit:

It’s important to note that the authors did not measure traffic on the Périph. They just observed that average speeds on the highway declined from 45.9 km/h to 43.5 km/h, and that “many witnesses of the public hearing on the extension of the tramway to Porte de la Chapelle testified their fears to see an analogous shift increasing the congestion on Eastern Périphérique.” In other words, bullshit.

The fact is that a large portion of the traffic on the Périph is going from one side of the city to the other. If some of the drivers on the Maréchaux transfered to the Périph, increasing congestion there, some of the drivers on the Périph would take commuter trains across town instead. Some of the drivers would find it more convenient to take the metro instead of the tramway, or to drive an alternate route that doesn´t involve the Périph, possibly one of the parallel boulevards closer to the center of the city.

The study spends very little time arguing that an increase in traffic happened. It almost takes it for granted. The evidence it provides is that the average speed on the entire Périphérique went down 5%, from 45.9 to 43.5 km/h, whereas the average speed on the southern segment, which parallels the T3 line, went down 10%, from 37.9 to 33.9 km/h.

Instead of arguing that the reduction in speed represents extra traffic coming from the lanes removed to make room for the T3, the study assumes that 100% of the reduction in traffic on the Maréchaux, the boulevard on which the T3 runs, was transferred to the Périphérique. This is unlikely: the phenomenon of reduced demand is attested in the literature – see references here. Traffic shifts to less congested times of day, and sometimes disappears entirely as drivers choose not to take the trip. For one example, when the West Side Highway collapsed, about half its traffic disappeared; this percentage is high, presumably because Manhattan has good transit options, just like Paris.

It’s in fact worse than Angus says. Although the paper provides traffic counts on the Maréchaux, it provides no such counts for the Périphérique, although such counts should be very easy to find. Its computation of the traffic increase on the Périphérique comes entirely from prior assumptions about the traffic that disappeared from the Maréchaux. Another, more minor sleight of hand is the choice of years. For the Maréchaux, the paper argues for comparing present traffic to traffic in 2003, just before the tram’s construction began; for the Périphérique, the numbers provided use 2000 as a baseline.

Most of the paper’s effort is spent not on trying to prove that traffic increased, but on computing the social costs and benefits under questionable assumptions. Doing that is difficult to say the least without knowing more about the nature of traffic on the Périphérique, and the study makes even more questionable assumptions there. To be fair, the biggest smoking guns do not concern the social cost that according to the study is by far the highest, slower traffic speeds; those follow from the assumptions. Instead, they serve to showcase a careless and even biased thought process.

First, the difference in carbon emissions between free-flowing traffic at 38 km/h and 34 km/h is small; what causes fuel consumption to rise in traffic jams is not lower average speed but rather stop-and-go traffic. Thus, even a first-order estimate of extra fuel consumption is impossible given the study’s numbers and assumptions. Fortunately for the study, the carbon cost it uses is so low (€25/ton) and the overall effect posited not large enough that the overall magnitude posited is negligible.

Second, in its computation of economic costs, the study makes the following observation about the project’s cost:

Available information on the monetary costs associated with the project is scarce. One has only the ex ante costs envisioned in the official preliminary Public Inquiry: 341.8M€ for the initial investment and 43.9M€ for the exploitation of the tramway. Experience suggests that ex post costs are likely to be appreciably higher (Flyvbjerg et al. 2002).

For the record, it took me all of three minutes to search on Railway Gazette and Google and find ex post costs amounting to €311.5 million. Worse, the paper says it chooses to use the original cost estimate for lack of other numbers, but then multiplies the original budget by 1.3, the standard factor for public projects in France. As far as I can tell, the reason for multiplying budgets by 1.3 is to cushion against small budget overruns, which could turn slightly beneficial projects into net liabilities; it’s a more honest way of including a contingency budget. In other words, the paper claims that costs probably ran over but its cost estimate for net benefit purposes assumes they didn’t, while in reality they didn’t run over while the paper assumes they did.

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.

Quick Note: Barcelona Rail Tunnel

Barcelona’s rail tunnel connecting the existing high-speed rail station, Sants, with city center, has just been completed. The tunnel’s total length is 5.8 km. As for cost:

The tunnel has cost over €179·3m to build, including extensive measures to protect historic buildings such as Gaudí’s Sagrada Familia from any settlement.

I believe this sets a new modern-day record for low construction costs – about $40 million per km – certainly in cases of inner-urban construction. It balances out the city’s Line 9 boondoggle, which has run so many times over budget it’s now a full $180 million per km.

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.

Racism and Accidents

As has been widely reported in the news, China had a major rail accident three days ago, killing 43 people. A positive train control system that was supposed to prevent accidents didn’t; it was reportedly shut down due to severe weather, and as a result, when one train stalled on a bridge, another train rear-ended it and derailed, and two of its cars fell from the bridge. The Chinese government’s response was secretive and authoritarian, as can only be expected of a regime that treats breathing exercises as an act of subversion, and a leaked set of propaganda instructions to reporters contains such gems as “From now on, the Wenzhou train accident should be reported along the theme of ‘major love in the face of major disaster.'”

However, more interesting is the reaction of Western media to the disaster. Bloomberg quotes several financial analysts who raise doubts about China’s ability to export technology. A Financial Times blog analogizes high-speed rail to China’s fast-growing economy and warns of overheating. The general mood is one of treating accidents in China as evidence of a defective culture, which does not care about safety. More abstractly, it’s evidence that Asians don’t care about the individual, only about nationality and prestige. It comes from the same place as the San Francisco transit planner who, Richard Mlynarik reports, answered a question about Japan’s short turnaround times with, “Asians don’t value life the same way we do.”

The biggest HSR accident in history is still Eschede. The cause of the accident turned out to be a series of errors in maintenance and design. And yet, nobody doubts the safety record of Germany. They know that German industry turns out high-quality products. Siemens successfully distanced itself from the accident, claiming that it was only partially responsible to the manufacturing and that it was really DB’s train, and has sold its Velaro train in multiple foreign markets. An accident on its maglev test track that killed 23 hasn’t prevented it from marketing its maglev technology, and Germany’s continued rejection of maglev is on grounds of cost rather than safety. DB too was unfazed, made cosmetic changes, and was more recently hit with a less deadly egg on its face in Berlin; it too gets contracts abroad.

Eschede is emblematic of reactions to accidents in the West; Wenzhou is emblematic of reactions to accidents in Asia. (Amagasaki was as far as I can tell somewhere in the middle.) Individual incidents merely confirm what everyone knows.

The reality, buried at the bottom of few articles and unmentioned elsewhere, is that China’s overall safety record is not that bad. If one believes that Wikipedia’s list of accidents is exhaustive, then China’s record is very good. Even if not, on any reasonable estimate of Chinese HSR traffic (including traveling at lower speed, as the trains in question were), its safety is better than in many of the scoffing Western countries. Assume 150 billion passenger-km a year; this compares with an actual figure of 300 million HSR passengers per year as of 2010 and an average trip length of a little more than 500 km on all lines, not just high-speed (computed from data here). To beat the last twenty years’ American railway safety, China’s HSR division will need to have no additional fatal accidents for a year. To beat Germany, make that three years.

The sort of racism that would lead commentators and investors to think less of China’s safety over Wenzhou but not of Germany’s over Eschede is subtle; it’s nothing like overt discrimination in jobs or immigration or housing. As a result, it’s more or less self-solving in the long run: in the 1960s, Westerners thought Japan made shoddy products, in the 1990s they thought the same of South Korea, and in the last decade they’ve shifted the target to China. In twenty years, when China’s GDP starts approaching that of developed countries, they’ll find another target. They’ll of course not stop thinking that Asians are an undifferentiated mass of insects with no thought or creativity (or that Muslims are terrorists), but they’ll appreciate that they can make and even design manufactured products.

The significance is that it’s a telltale sign of the Not Invented Here syndrome. Convincing Americans to adopt European practices and vice versa is hard enough; but convincing them to adopt practices from Japan, let alone China, is anathema. You might as well try to convince an Orthodox Jew to switch from beef to pork. Attacking the assumption that other countries’ experiences are always part of a grand cultural essence is not just good humanity and antiracism; it’s also good technical planning.

In contrast to both the cultural approach and China’s apparatchik guidelines, I’d propose the following way to report accidents, terrorist attacks, and other major disasters:

1. Put individual events into broader statistical context. An aircraft or train crash should be accompanied by a reminder that those modes are still safer than all others.

2. Report on the causes of the accident, both immediate (as described in the first paragraph of this post) and fundamental, including any political or economic pressure to skimp on safety.

3. Avoid overinterpreting high-impact, low-probability events. Thus, avoid questions such as which train design standard is safer unless either directly relevant to the disaster (the wheel broke, the car crumpled, etc.) or backed up by extensive multi-year evidence.

4. If the official story or the source is not credible, pursue a separate investigation, using your own knowledge, or that of outside expert sources; pressure the institutions involved to be more candid about their own failures.

5. Follow up on the lessons learned, and whether they are helpful or not. As an example, consider the various measures taken to improve air safety since 9/11, and think which have been effective and which have not.

6. Avoid fluff at all costs.

For the most part, this list of items boils down to “Report on disasters involving non-Westerners as if they involved Westerners.” People are people, and societies are societies.

Followup on the FRA and Amtrak

My posts about the FRA and American railroad incompetence are getting a lot of traction nowadays, thanks to links from Aaron Renn and Stephen Smith, of which the latter has been relinked by Matt Yglesias. The comments to those posts have often brought up the question of why I believe that come 2015, the buff strength requirement will be gone. They also sometimes propose that FRA regulations are useful in the unique circumstances of American railroads. Let me address both concerns right now.

In 2009, Amtrak published its first document proposing higher-speed trains in the Northeast. In this document Amtrak states that,

Subsequent analysis by Amtrak suggests achieving 2 hour and 15 minute service between New York and Washington in the long-term by 2030 will require modifications to existing equipment, or deployment of next generation rolling stock, to allow required speeds through curves, as well as expansion of capacity into and through Manhattan, NY. Table 2 includes estimates of costs required to replace Amtrak’s existing NEC fleet with next generation equipment. As discussed above, this next generation of equipment has the potential to be lighter, and thus faster, than the current generation. However, performance specifications for such equipment will need to be developed and will depend in part on emerging standards for positive train control (PTC) and crash avoidance systems.

My reading of this is that the Amtrak believes the FRA will indeed waive buff strength requirements once PTC comes online; this is buttressed by the fact that Caltrain got a waiver, based in part on a requirement that it install PTC first. The PTC discussed doesn’t seem to be heading anywhere good – note the discussion of developing performance specifications rather than using the emerging worldwide standard that is ERTMS – but it does indicate that Amtrak’s new premium-cost locomotives could be much lighter.

As an aside, this document is what first clued me in to Amtrak’s incompetence. For example, immediately below the paragraph quoted above, Amtrak proposes to raise cant deficiency (“underbalance”) on Metro-North territory from 3″ to 5″; the Acela trainsets can do 7″, and Pendolino trainsets close to 11″. Based on this rather low standard, Amtrak claims “an additional five minutes of trip time reductions are potentially available with the deployment of modified or new equipment.” (Try half an hour.)

As for the second concern, usually the arguments in favor of FRA regulations hinge upon exaggerated claims that the US railroad system is unique. One commenter claims that railroaders call cab cars coffin cars because of the possibility of grade crossing accidents. In reality, lightweight trains safely cross roads at-grade abroad, to say nothing of light rail networks in the US.

There are still plenty of old-time railroaders who believe that in crashes, FRA compliance offers extra protection. It does not. Please read Caltrain’s structural report and compliance assessment for the FRA waiver, which include a technical explanation of the mechanisms for accident survivability used in Europe. Caltrain’s simulations show that high buff strength is only relevant at relative speeds between 15 and 25 mph, and that European EMUs and compliant cars are equally safe in grade crossing accidents. The FRA seems convinced of the safety of European EMUs; it is reportedly harassing Japanese manufacturers about compliance with European survivability regulations (for example, in collisions with a 6-kg steel ball) rather than American ones. Finally, high weight is a liability as much as it is an asset: at Chatsworth, the loss of life came from the fact that the first passenger car telescoped into the heavy locomotive.

Update: the Business Alliance for Northeast Mobility, an organization supporting Amtrak’s NEC Master Plan, published an article claiming Amtrak made the right choice to buy the aforementioned locomotives, claiming that Amtrak is underfunded. Recall that the Master Plan is the document that came out of the report referenced above, complete with the same laconic assumptions on train performance, as well as false claims about capacity constraints. The Business Alliance’s article’s greatest sin is the claim at the end that,

Smith also ignores the question of funding when he suggests that Amtrak should purchase Electric Multiple Units (EMUs) for the NEC. Unlike locomotives and non-motorized passenger cars, currently in use on the NEC, EMUs have smaller engines on each passenger car. The debate between investing in EMUs vs. locomotives + cars is beyond the scope of this post. Still, what’s clear is that EMUs would need a significantly higher up-front investment and require an even larger amount of government support, which is highly unlikely at this time.

In reality, a new unpowered Amtrak coach costs $2.2 million, about the same as a decent FRA-compliant EMU on the LIRR and Metro-North. And the three European EMU orders in Railway Gazette’s April 2011 compilation cost between $1.3 and $2 million per car.

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.

Uncompetitive Transit

In general, government at all level should be encouraging a mode shift away from cars and toward trains, using legacy lines for regional service outside urban areas. Here is a canonical example of such a proposal, unfortunately completely unofficial, in Medford, Oregon. A key point is that transit needs to provide a competitive trip time, and connect people to where they want to go, or else there’s no point in running it.

Sometimes, it’s impossible given present infrastructure. One example of this, routinely mooted on California High-Speed Rail Blog, is a system connecting to Gilroy and feeding high-speed rail. For the purposes of this discussion, let’s assume that the current FRA regulations and US rail practices have been completely gutted and replaced with Swiss or Japanese practice, and, more speculatively, that the legacy line can be made passenger-primary, despite Union Pacific ownership. The system would connect Gilroy, Santa Cruz, Salinas, and Monterey, using a now-abandoned right-of-way to get to downtown Monterey and legacy lines elsewhere.

The result can be seen on this map. There would be timed transfers at Castroville and Watsonville (running one-seat rides everywhere at acceptable frequency would require too many trains), and several additional intermediate stops, such as Marina, Seaside, Capitola, and Aromas. In terms of pure railroad operations, it could be a well-run system. Unfortunately, it could not be a successful one: the largest and densest city on the line, Salinas, is connected to the others in a very roundabout way. Salinas-Gilroy is 60 kilometers by rail and only 45 by road. Frequent curves would make it impossible to maintain a high average speed. Even a 55-minute trip time, allowing two trainsets to provide hourly service, would be ambitious, though possible with a wide stop spacing and good rolling stock; in contrast, driving takes 37 minutes according to Google Maps.

Monterey-Gilroy and Santa Cruz-Gilroy would be a little more competitive – they’re 50 and 54 minutes by car respectively. However, the markets are much smaller, especially in the case of Santa Cruz, where to get to any regional destination other than Gilroy, it’s faster to drive to San Jose. In addition, Santa Cruz-Gilroy is the hardest pair to get on a reliable clockface schedule: it’s 65 km, and the segment west of Watsonville is 34 with many curves, some of radius going down to about 220 meters, restricting speed even under optimistic performance assumptions to 75 km/h.

Since the congestion level in this part of California is not very high, cars could always beat the train, and for many trips so could buses. Therefore normal origin-and-destination travel would not produce much ridership on such a system. The worse trip time would be tolerable to some high-speed rail travelers if the transfer to high-speed rail were well-configured; however, high-speed travel alone does not generate enough ridership to justify an entirely new rail system, especially at an outlying station such as Gilroy. It would be the high-speed rail equivalent of an airport express.

There occasionally arise such cases, of lines that look good in principle but can’t be made competitive in practice. That is one example. A few more, not all seriously proposed by transit proponents: many international high-speed rail links in general, and some in particular, for example Minneapolis-Winnipeg (it would dominate the market, but the market is so small it’s not worth it). The only thing that can be done is spend scarce transit funding elsewhere. There are enough regional and intercity lines that could work well and no shortage of local transit supporters, some with political clout, who want them. Urban lines, which routinely get the short end of the stick in California in favor of low-performing outward extensions, would clamor for some of the money required to get a Santa Cruz-Monterey-Salinas-Gilroy system up to acceptable performance standards.

Housing Protest Ongoing in Tel Aviv

Over the last week or so, protesters have been occupying HaBima Square in central Tel Aviv with tents, demanding cheaper housing. Prices in Israel have been rising sharply over the last ten years, especially urban housing prices, and new urban construction is predominantly luxury. Populist politicians are already visiting the tents, talking up their own record on marginally related issues.

Some right-wingers, who identify everything coming out of Tel Aviv as left-wing, which locally means a dovish elite, are instead yelling at the protesters to “move to the periphery,” where housing is cheap. Israel has the opposite city/suburb dynamic as the US: the city center is generally richer and more expensive than the suburbs, and the richer suburbs of Tel Aviv – typically those in its favored quarter to the north – are not called periphery any more than the Upper East Side is called an inner city.

The problem with such a dynamic is that the periphery has no access to jobs. The roads are congested (and the extra driving costs would eat up the entire difference in rent); public transportation doesn’t run on weekends for religious reasons and consists of buses, which are very slow, and commuter trains, which aren’t very frequent and do not get people to most city destinations.

The housing problem, as one may expect, is predominantly political. While Tel Aviv’s wealth and access to jobs make it unusually desirable, there has not been any concerned attempt to create livable secondary urban centers. This post explains in more detail the issues; while it’s in Hebrew, you can still look at the pictures – in short, despite reforms, zoning still encourages construction like that in the first photo (a “development town,” i.e. a housing project, with about the same connotations as in the US) and discourages that in the second photo (Sheinkin Street, a once-bohemian, now-gentrified commercial artery).

Although Tel Aviv’s car ownership is not very high – about 60% of households own a car – parking is mandated in most new developments. Existing parking facilities are overstretched; pricing parking is a political non-starter. And despite the high demand for non-luxury housing, city regulations make it difficult to build smaller apartments: according to the blog linked above, it is difficult to get approval for apartments under 120 square meters, or to subdivide large apartments.

As in New York and other cities with a housing shortage, the resulting land shortage is leading developers to concentrate on the luxury market. In the last decade, developers have built huge skyscrapers surrounded by empty land along and near Namir Road, a wide arterial throughfare that the government is trying to turn into the new CBD and that the first line of the Tel Aviv subway is planned to pass under. Due to the building height, the density of such developments is fairly high, but in reality not much higher than the surrounding neighborhoods. Akirov Towers have a density of about 125 apartments per hectare, counting to the midlines of the streets adjacent to the development; the residential parts of the Old North, built almost uniformly to the fourth floor, average about 250 residents per hectare, and my own calculations suggest about 100 apartments per hectare.

A cohort of reformers, from both left and right, propose better public transit as a solution. People would be able to live in the periphery and commute to city jobs. The main efforts in the region are new commuter lines and the subway. The subway has been proposed and canceled so many times that nobody I have talked to seems to believe it will ever open. The commuter lines are not electrified and run against a capacity constraint in central Tel Aviv, where there is room only for three tracks; in addition, the service level is far short of an S-Bahn or RER, and is on a par with the higher-grade lines in North America, for example the LIRR. Typically the people advocating for such issues, even in government, are secular and would favor operating public transportation on the Sabbath, but no action or serious legislation has emerged yet, despite a fair amount of grassroots activism.

Less commonly proposed is development in the gaps in urbanization. As is readily seen on Google Earth, there is empty space directly adjacent to the urban area both to the north and south of Tel Aviv, interposing between adjacent municipalities. I am told that there was a plan to develop the empty space to the north, but it was torpedoed by a local desire to keep the municipalities strictly separate. (For clarification, those are both wealthy favored quarter suburbs – I believe Herzliya and Ra’anana, but I no longer remember.)

Also not commonly mentioned is the issue of political will. The protesters do not view their cause as one strictly about housing. A commenter on another blog quotes the following text from one of the tents:

I’m not here because of housing prices. I see them as a symptom of a systemic problem – a country that loses its democratic character in favor of a corrupt system of government based on connections, lobbyists, and property owners….

After a few days here, I’m discovering amazing things. People are completely forgetting about the elements that usually divide them, share their opinions, and listen to each other. Housing prices look like a drop in a sea of inequities. The problem is systemic. The apartments are a symptom.

…

We are still in the initial phase, where everyone talks to his heart’s content – but this is how you build cross-sectional solidarity.

If we continue to deal only with housing, at best we’ll solve just one point, important as it is, and in a year we won’t be able to afford food or studies. I worry we’ll miss the Israeli Spring and settle for a few flowers in our vase.

The Israeli government is no stranger to rapid growth. The settlements’ population went up 50% between 1999 and 2006. In terms of urban-rural politics, Israel has still not gotten to the stage that cities are an object of romanticism, and keeps pouring money into contested regions in order to create facts on the ground. The era of Mapai, the predecessor of today’s Labor Party, saw disinvestment in cities in favor of kibbutzim and development towns in peripheral regions; today, there’s some investment in luxury towers in the newly-built CBDs, but the political system is still anti-urban, just with a different focus.

Tel Aviv’s housing prices are putting it between a rock and a hard place. The status quo is intolerable; so is massive urban renewal, raising density marginally and pricing out the middle class, which unlike in American cities has remained mostly intact. The political consensus, to the degree it exists, is not to do anything. Good urban design and laxer zoning rules could mitigate some of those problems, but they’re too politically unpalatable right now. So, unless they indeed settle for a symbolic reform, the protesters will stay.