The problem with not borrowing

We've heard a lot about the evils of borrowing in the recent election cycle, but I don't think enough attention has been paid to the evils of not borrowing. In other words, to the problems of not having money when you need it.

Obviously, if your income goes down and you don't borrow, you can't spend as much as you used to. This is not necessarily a bad thing if you don't need to spend as much money. For us, though, it is. Accomplishing our goals will require a massive shift from personal cars to transit, and we will need to spend lots of money to develop the necessary capacity.

If your income is down and you don't borrow, you miss out on investments that could increase your income down the line. Worse, deferring maintenance can mean bigger expenses down the line, as with the Manhattan Bridge. The worst is when you spend money for infrastructure that doesn't get used for 73 years.

It may be better to borrow if it will increase your income later, if it will avoid much bigger expenses, or if it will allow you to put previous investments to use. You just need to be fairly certain that the costs won't exceed the benefits. Of course, you can never be completely sure: nothing about the future is a hundred percent certain. It's important to be careful and not take big risks. But it's also important to take small risks to avoid major expenses.

Getting rid of minimum parking requirements

In many circles, minimum parking requirements have been accepted as part of zoning laws without question for years. Of course there have always been those who disagreed, but the conventional wisdom goes like this: people will have cars, if there's no off-street parking they'll park on the street, off-street parking is in high demand as it is, so we need to force developers to create on-street parking. As I wrote back in May, there is no corresponding mandate in favor of transit expansion, so these constitute an implicit subsidy to driving.

Clearly, parking minima should be phased out, but there will be objections from people who use on-street parking. How do we address these objections? You could argue that anyone who depends on the city for free parking should take what they can get, and you'd probably be right, but those people have more power than us, so we can't just tell them to suck it up. You could also argue that the best way to deal with scarce on-street parking is to start charging for it, and I'd be happy to support you on that, but we should be realistic about your chances of success there.

Some of my neighbors have a proposal. Since the argument for parking minima often rests on the idea that adequate transit is not available, why not eliminate or cap these minima in areas where we know transit is available? That's already what's done in the zone (PDF). The proposal is to eliminate or cap parking requirements within a quarter mile of transit.

One of the members of the group asked how to define transit. Does it include subways and buses, or just buses? It's a very good question: while many people can justify car ownership even if they live above one subway station and work above another one on the same line, I think most people would agree that a lot of the apartments within a quarter-mile of a subway line that goes to Manhattan don't need space for a car. But what about buses?

Well, it's clear that people use the buses. There are many bus routes in Queens that carry more than 10,000 passengers a day, round-trip. Most of those do not go to jobs in Manhattan, but rather they connect to subways. People seem satisfied with them. But those are for commuting; in order to live without a car, you need frequent service around the clock, seven days a week. Fortunately, I've already made a frequent bus network map for Queens. Most of the borough is within a quarter mile of a frequent bus or subway.

Someone could argue that these buses are not as reliable as the subways. If the MTA can cut any bus route, what's to stop them from cutting the Q46? Suppose a developer builds an apartment building without parking along the Q46, and then it gets cut? Then everyone in the building would buy cars, and fill up the streets!

There are a couple things to keep in mind here. One is that these frequent routes are not like the abandoned routes that have been given to the van companies. They have high ridership, and it would be hard to drive that many riders away. Most of them have very high farebox recovery ratios, and if they were abandoned it would be possible for lower-overhead jitneys to make a profit.

The other is the principle of induced demand. If developers aren't forced to build parking, residents will find it much easier to take transit, and that in turn will mean higher ridership for those transit lines. It will also mean more political support for transit subsidies, and less for driving subsidies.

I would argue that it is reasonable to eliminate or cap parking requirements for any building within a quarter-mile of a transit line (of any mode) that has service at least every ten minutes between 6AM and 10PM, seven days a week.

Learning from the failure of the livery van program

Earlier this week, Taxi and Limousine Commission Chair David Yassky acknowledged that the Commission's plan to run vans on five abandoned local bus routes was failing, and took responsibility for that failure. I don't think it's quite dead yet, and I'll have another post soon on ways to save it, but for now I'd just like to give some reasons why it's failing.

First of all, please send this to every uninformed loudmouth who tries to tell you that they need to run the MTA like a business, man. There are some runs that can never make a profit without radical changes that are beyond the control of the MTA and most potential bus operators. There are also many differences between running a private business and running a public agency. These differences show in the case of the vans.

It's very admirable of Yassky to take the fall for this project, but he's a government guy who spent eight years in the City Council. I don't get the impression that this was his idea. I don't know if he has any business experience, but he's never been a big pusher of privatization. At least some responsibility should rest with the person who told him to do this but didn't give him any resources with the necessary business expertise. Maybe Bloomberg, maybe Goldsmith, maybe both.

So now here are some points to take away from this whole debacle:

Jitney service is qualitatively different from scheduled government bus service. It really seems as though Yassky's (and Bloomberg's) big mistake was thinking that the "dollar vans" are profitable because they're smaller and non-union, and would therefore be able to succeed where the MTA failed. Unfortunately for this program, that's only part of the story: they can be profitable when they operate in thick markets (to use the term introduced by Klein, Reja and Moore (PDF), but will not automatically be otherwise.

Admitting ignorance is the first step on the path to wisdom. Bloomberg, Goldsmith and Yassky have never run a jitney operation. Ricketts and Haqq have never run a transit service for middle-class white people. None of them seem to have read Klein, Reja and Moore, even though I found it by just googling around. Maybe they should have looked to people who had at least some experience or knowledge in those areas.

Consider the customer's perspective. I don't really see any evidence that anyone involved in running this pilot ever imagined what it would be like to be a former passenger of any of these bus routes. Your bus route gets cancelled, so you find other transportation. Three months later, the city gives some guy permission to run fifteen-passenger vans with non-working seatbelts on the route, but you can't use your Metrocard or get a free transfer. You figure you'll give it a try, so you show up at the bus stop one day. There is no schedule, and you can't find any information on the TLC website. Maybe you wait fifteen minutes, maybe an hour. The van never shows up. Nobody is there to explain anything to you. You call a number on the sign, and nobody answers the phone. You're late to work or class. How many times would you go back?

Transit is in competition. People have different ways to get there.

Thin markets need an anchor. If you've got enough competition, you will need some kind of anchor to keep people showing up at the bus stops. You can't do it half-assed.

Sometimes marketing can help. In thick markets, everyone knows about the transit service and the operators compete on the basis of value. In thin markets, knowledge is scarce and marketing becomes much more important.

Gaps in service can kill your business. Wouldn't it be bizarre if all the Q74 riders had simply stopped going to classes, if the Q79 and B39 riders had stopped shopping, for three months, just waiting for someone to come along and put up a small, cryptic sign? They didn't; they found other ways to get where they were going.

Take constructive comments seriously. The TLC has been completely defensive and unwilling to entertain reasonable suggestions. Isn't that the point of a pilot, to gather feedback?

Well, I'll have another round of suggestions coming up soon. Gotta keep the hope alive! Or something like that.

Muddle-headed transit advocates

Every so often we get a new study that examines some aspect of transit politics and comes up with counterintuitive results. This is generally a good thing, because it's always important to reexamine your assumptions, but anti-transit forces will often inflate their conclusions in order to undermine transit advocates. Usually there's some theme of, "Oh, you muddle-headed transit advocates! You really mean well, but a bus with only two people on it is more polluting than a single-occupancy car. Don't you see that transit will never stop us from polluting the air?"

The latest such study, "Maintaining Equity in Transit-Rich Neighborhoods" (PDF), comes from Stephanie Pollack, Barry Bluestone and Chase Billingham of Northeastern University. I'm sure that Garyg or some other troll will be linking to it from the Streetsblog comments in no time: "Oh, you muddle-headed transit advocates! You really mean well, but transit lines only wind up increasing the percentage of people in the neighborhood using cars! Don't you see that transit will never be a real alternative to driving?"

Just reading through the reports on the article, I began to have some doubts, and after flipping through the PDF, I've got some real concerns. But before I get into the article, I'd just like everyone who reads it to imagine how much easier it would be to read if the authors had done a global search and replace of "TRN" with "transit-rich neighborhood." Done? Okay, let's move on.

The report is based on the Census data, and deals with a number of outcomes, including median income, racial diversity and attempts to estimate population displacement, but the outcomes we're concerned with are transit use for commuting and motor vehicle ownership. The authors studied the neighborhoods around 42 transit stations that had opened between 1990 and 2000.


So first, here are the big news findings: in 19% of these 42 transit-rich neighborhoods, the percentage of people commuting by transit increased at less than 80% of the rate for the metropolitan statistical area as a whole (and in 31% of them, the increase was more than 20% higher than the metropolis). In 26% of these neighborhoods, car ownership rose more than 20% faster than in the surrounding metropolis (and in only one neighborhood was it less than 80% of the rate for the metropolis). The authors' explanation is that transit-oriented development can lead to gentrification, bringing in wealthier suburbanites who keep their cars.

It's a prospect that's worth watching out for, and Pollack, Bluestone and Billingham recommend several possible measures to prevent it, including bundling transit passes with housing, unbundling parking, and reducing parking requirements. Those are a good idea in any area well-served by transit, whether the transit is old or new. But the effects they report are not very large, and it is important to connect them to our overall goals.

In terms of access for all, these results are largely irrelevant. The access is there, because the transit has just been built. There may be a long-term cyclical effect if the transit is not well-patronized; I will discuss that later.

In terms of increasing energy efficiency and reducing pollution, we want to see worldwide change. In terms of asthma and carnage the effects are local, but they are per area, not per capita. In terms of obesity and carnage, we are concerned not with increasing transit use but decreasing car use; walking and bicycling are as good for those as transit, if not better.

Why do we care about local effects as opposed to metropolitan or global effects? Because if people get displaced, they go somewhere. If poor, transit-dependent nonwhite people are forced by gentrification to move to a less transit-oriented suburb, they will not be any more likely to afford cars there than they did in the city, so they will bring their transit-dependent ways to the suburb. This means more business for the suburban transit lines, and more political pressure for transit expansion in the suburbs, if they can organize enough to overcome the inevitable opposition. The result could very well be a net decrease in car ownership and car use across the metro area.

The effects measured by Pollack and her colleagues are only directly relevant for one of our goals, improving society. Unfortunately, that's the goal that's been the hardest to pin down. Walkable neighborhoods, more face-to-face interaction, walkable businesses are all part of it. Car ownership definitely brings these down, as do car commutes, but it's hard to know how much.


Of course, transit use is a feedback loop, and if these car-owning yuppies demand wider roads it will set back the cause of transit. However, since there were overall population increases in many of these neighborhoods, there has been an overall increase in raw numbers of transit riders, and since there is gentrification, these transit riders tend to be wealthier and more influential, and thus more effective advocates for transit expansion, and more likely to be seen by potential transit funders as "us" than as "them." A racist state legislator is more likely to vote to fund a transit project if his friend's daughter lives in the neighborhood than if there's nothing there but "those people." And you thought the Cap'n couldn't do realpolitik!

All in all, this is something to be mildly concerned about, and if the report gets more people working to bundle transit passes with leases and to eliminate parking minima and unbundle parking, that's a good thing. But the analysis is so sketchy and so distantly related to the goals of transit advocacy that at this point it's a wash. Keep that in mind, all my muddle-headed transit advocates!

P.S. Also, check out Charles Siegel's comment on the Streetsblog DC discussion of the issue. It's true: the best way to bring down the price of anything is to produce a lot of it!

Chris Christie and the money tree

A few days ago, New Jersey Governor Chris Christie was campaigning for a congressional candidate in Pennsylvania, and he offered this anecdote about the ARC Tunnel:

In our house, when I used to go my mother and say "I’d like something new, I’d like to buy something," my mother would look at me and say "well, of course Christopher, you can have that just go in the back yard and take the money off the money tree. You know where that is, right?" …to me it is a moral imperative to say no to these things.

Christie is clearly fond of this story in justifying budget cuts: he used it in January to describe Corzine's budget, and in July when discussing the budget of the Delaware River Port Authority. It's a cute little story, but it's not really helpful.

Christie describes his upbringing as "middle class," and it's doubtful that he ever had to go without food, clothing or shelter. His parents both worked and brought in money, so there was money for things that were a priority. When he wanted "something new," that wasn't a priority, so he had to do without. The honest thing for his mother to say would have been, "Christopher, we only bring in so much money. For us to have enough to pay for the thing you want, I'd have to work overtime, or else you'd have to go without new clothes for school this fall."

There is always money in the budget. That's what budgets are for. When someone says "there's no money in the budget," what they're saying is, "all the spending that's in the budget is a higher priority than this thing you want." Nobody likes to hear that their project is a low priority, so politicians fudge the issue by saying, "there's no money." The money tree is a cop-out, a way to avoid talking about budget priorities. I'm glad my mom was a lot more honest with me.

Brian Williams tried to get Christie to talk about his priorities, but he chose the wrong words. He stayed in the "no money" frame, so Christie was able to look justifiably baffled by Williams's question about "finding money." Williams needed to get out of that frame and point out, as I did, that Christie has no trouble finding money for projects that he likes.

Interestingly, Christie did point out to Williams that New Jersey "can't print money like the federal government." It's true: states don't have the power to set interest rates and perform quantitative easing like the Federal Reserve. Some states can borrow money to provide stimulus, but in New Jersey, the Governor and the Legislature are constitutionally required to pass a "balanced budget" with no borrowing.

Of course, Christie could support a constitutional amendment to get rid of that balanced budget requirement, or push the federal government to print money for stimulus, but he clearly likes that balanced budget requirement. It's his own lack of money tree, and he can point to it any time he wants to cut a program. Not quite a reverse Houdini, but enough to allow him to avoid being held accountable for his priorities.

Is the rent 2 damn high?

We all got a good laugh out of Jimmy McMillan, gubernatorial candidate for the Rent is 2 Damn High Party, at the debate last week. He was clearly a clownish figure, with his black gloves and his muttonchops. And he was outrageously nonsensical, one minute saying that all we had to do was execute the plans that Obama has put in motion, the next promising to "bulldoze some of those mountains in Upstate New York, to make New York State an independent state ... for the children!" and then again promising to "help all Americans." He showed that he knows almost nothing about most of the issues, claiming for instance that there is a hunger crisis "even here at this college," meaning Hofstra University. Even as a karate expert, he was clearly the least qualified person out of the seven to be governor.

McMillan got me thinking, though: is the rent 2 damn high? What does that even mean? There are definitely some high rents: today on Craigslist there's a three bedroom apartment going for $8600, a two bedroom for $4330, a one bedroom for $4195, and a studio for $2200. With what I'm making, I can't afford to live in either of the Manhattan neighborhoods where I grew up. And I'm sure that there are millions of New Yorkers who are struggling to pay their rents, whatever they are. So in some sense, yes, the rent is 2 damn high.

On the other hand, I live in a wonderful neighborhood in Queens, with lots of nice shops and restaurants. I can get to almost anywhere in Manhattan in less than an hour. The streets around me are quieter than Columbus Avenue or Second Avenue. And as a family, we can easily afford our mortgage and maintenance bill every month. As far as I know, most of my neighbors are in the same situation, whether they rent or own. So in that sense, no, the rent is not 2 damn high.

If you say that something is too high, you're inviting the question, "2 damn high 4 what?" Too high for someone to afford on a janitor's salary? That's probably true throughout Manhattan south of 96th Street, unless you want to live in an illegal boarding house in Chinatown. But there are places around the city where the rent is lower. In the Bronx there are studios under $800, and three bedrooms under $1500, close to the subway. True, those are in relatively high-crime neighborhoods, but then you're saying that the rent is 2 damn high for a janitor to live in a low-crime neighborhood.

Once you get into that, what seemed like a simple problem reveals itself to be much more complicated. What if we invested more in policing those areas? If they got safer, would the rents rise? What if we could make it so that the lowest paid workers still got enough to afford to live somewhere safe? What other expenses do they have? Can we cut medical expenses so that people have more money to pay for housing?

McMillan is wrong. It really doesn't all boil down to one issue. He deserved to be laughed off that stage not for his beard or his gloves, or even for his lack of knowledge about basic facts. He deserved ridicule for taking such a simplistic approach to a complex problem, and for attempting to mislead people into thinking that we deserved a Strong Leader because of it.

The problem is that this criticism applies to most of the other people on stage with McMillan last week. There were only three candidates who showed any grasp of complexity and nuance: Kristen Davis, Charles Barron and Howie Hawkins. Warren Redlich might as well be running for the "Government Salaries R 2 Damn High" party, and Carl Paladino on the "Business Taxes R 2 Damn High" party line.

Most disappointing of all, because he's expected to win the election with more than sixty percent of the vote, is Andrew Cuomo. Forget about his nominations by the Democratic, Independence and Working Families parties, he might as well be running for the "Taxes R 2 Damn High" party. While Davis, Barron and Hawkins each proposed measures that will stimulate the state's economy and thereby increase revenue, Cuomo expects us to believe that he'll reap huge savings by eliminating the same wastefraudandabuse that politicians have promised to eliminate election after election, back to his father and beyond. His insistence on a property tax cap and avoiding any tax increases has led him to promise spending cuts that will plunge this state into a deep depression.

Poor people with cars

In the comments on my last post, Joel writes:

I know that the image of NJ drivers are BMW driving upper middle class yuppies. However, I have put in many miles in NJ and I can tell you that many parts of NJ have residents that are treading water in 1980s vintage automobiles. Warren County and large chunks of south Jersey have poverty problems and the land usage makes demand for NJT bus service sparse. These people are finished if fuel climbs.

I am not saying that raising tolls and the gas tax would be bad. I am simply saying that most of our transit advocates have transportation myopia that causes them to misunderstand their respective markets. Christie has done his best to protect the people that don't have much and he is doing it again.

I'm glad that you're not saying that raising tolls and the gas tax would be bad, Joel. (I'd be interested to know when and how you think they should be raised.) But you raise an important point, and I'm going to use it as a springboard to discuss a persistent problem in leftist transportation discussions: compassion.

I'm a compassionate kind of guy, and like many leftists, a lot of my politics are motivated by compassion. But a lot of leftists get paralyzed by their compassion - or maybe it offers them an excuse to avoid something they didn't particularly want to do anyway. They lose perspective, lose the ability to distinguish between different levels of pain, and between short-term disruptions and long-term inequities. For some reason it happens a lot when the topic of poor people who drive cars comes up.

Let me give an example, taking Joel's argument to its extreme: I live in Queens. I just heard about this great job in Chicago. Obviously, none of you are going to suggest that the government pay for my commute; I should either move to Chicago or get a job here.

But what if my Senators and the Senators from Illinois get a great idea for economic development: ten dollar flights to Midway! The federal government covers the difference between the ticket price and the airline's cost per passenger. I take the job in Chicago and start flying back and forth every weekday.

A year goes by and it's a hugely popular program. The city is talking about building a new airport in Brooklyn to accommodate the demand. The US has occupied Iran to ensure a steady supply of jet fuel. But it's straining the federal and state budgets, and the government is looking at either raising taxes or cutting other programs to pay for it.

Suppose that someone gets bold enough to suggest that the program could pay more of its own costs if the fare were raised to twenty dollars. But that would mean paying a hundred dollars a week for me. It would add up to almost five thousand dollars over a year! My job only pays thirty thousand, so it would be a devastating blow to me. How am I going to pay for the mortgage on my house, the payments on my car, and my kids' tuition at private school?

My point, to be clear, is that any subsidy will eventually have a significant number of people who are dependent on it. Ending a subsidy like this will disrupt people's lives, causing economic suffering. But just as we currently live fine without ten-dollar flights to Chicago, we would be able to live fine if they were given and taken away. And just as people were able to live fine in Warren County without cheap gas and free highways, some day they'll be able to do that again. Maybe all the people who moved to Warren County to take advantage of the cheap gas and free highways will have to move back to the cities, but they won't necessarily move back to the slum conditions that many of them left behind.

Making the transition is important. A lot of the pain associated with eliminating subsidies is transitional. This can be mitigated with proper support: a favorable job market, a good safety net. Interestingly, when there is enough support, transitions like this are often not even perceived as painful. It's another chapter in someone's life, even an adventure.

We also need to realize that subsidies can hurt as well as help, and compare the pain of getting rid of a subsidy against the pain of keeping it. Think about the budget mess and fuel shortages that ten dollar flights to Chicago would cause, let alone the suffering that it would cause if we occupied Iran. Similarly, it would probably cause a lot more suffering over the long term to continue subsidizing sprawl in Warren County than to stop.

Note the difference between my argument and a libertarian one. I am not saying that all subsidies are evil and must be eliminated. I am saying that they must be justified, and that those that can't be justified should be eliminated. I'm not saying that they should be justified with some kind of cold monetary cost-benefit analysis, but in terms of how they fit with our priorities, and how compassionate they are. I'm also not advocating pain and suffering, I'm advocating adequate transition support.

Again, I'm not trying to make Joel the bad guy here. I don't know what he thinks should be done in Warren County. But "These people are finished if fuel climbs," sounds like an argument for letting these subsidies persist indefinitely, which is not an answer.

The bottom line is that compassion doesn't mean never doing anything that could possibly make someone suffer somewhere. It means keeping perspective, and doing what's necessary to reduce the overall suffering. And that includes measures to mitigate transitional suffering.