Tuesday, February 23rd, 2010

Peter Christensen: Why Transit Used to Be Profitable and Isn’t Now

[ Note: This article was originally written for a computer technology oriented discussion site. ]

It’s a complicated issue, so here’s a little background (I have a Masters in Urban Planning so I’ve read a lot). Streetcar lines (and subways in some places) were profitable businesses, just like railroad lines. But there were a few features that we don’t have today.

First, it was a new mobility technology so it opened up land that was too far away to be developed. There is no such land now in metro areas because highways and have cars make all areas equally accessible.

Second, they were a real estate play as much as a transportation play. Because they opened up new land, the lines tended to go to greenfields where the streetcar companies and their allies owned or could buy land. Take a look at the Brown line in Chicago and watch how it winds – that was a land acquisition issue. This wouldn’t work now because a rail line doesn’t increase the value of land enough since so much is accessible by car.

Third, people rode trains a lot more then than people ride them even now. These trains were extensions off of a very dense, centralized city. Technology and social changes reduced the number of daily rides. For instance, refrigerators meant that women didn’t have to ride into the market every day. Worker benefits (like the 6 or 5 day work week) meant that workers didn’t ride as often. As shopping and employment decentralized, people didn’t have to ride to the city as often. And when people got cars, they had an alternative to the train.

So what can we learn from history and contemporary transit to make transit more valuable today?

First, there must be attractions at both end so the fixed costs in tracks and cars can make money both ways. Early streetcar lines often has amusement parks at the terminus to promote two-way travel. The Las Vegas monorail is a decent modern version of this – there’s something at every stop. Transit lines that end in the suburbs at a big parking lot will be underutilized by definition.

Second, land use matters. All of the streetcars and subways were built before zoning and so the market built what the market could bear by transit, and buildings could be razed and built bigger if demand grew. Housing in transit-rich cities and near light rail in cities with new transit systems is more expensive because zoning restricts how much can be built. In addition to maximum height, massing, and lot utilization, there are also minimum parking limits that mean every house/condo is much more expensive and not affordable to people that would use transit the most. Take a look at the area around the transit stops in Arlington, VA for an example of transit zoning done right – extremely dense development within 1/2 mile of transit stops. It has the lowest car ownership and usage in Northern VA and generates 50% of the county’s property tax in 5% of its land area.

Third is that quality of service matters. Buses in the US suck and are slow because fare collection takes place one at a time while the bus is stopped. Curitiba, Brazil (look it up, it’s the world leader in bus transit) has bus stops where you pay to enter and everyone boards at once. The city has one of the highest rates of car ownership in Brazil and the highest transit utilization in Brazil. On their main bus routes they have 1-3 minute headways so there’s no such thing as looking at a schedule. Other things like priority lanes for buses at stoplights, tech to let the bus hold a green light to make it through, etc help. Bogota, Columbia is the other leading bus tech center and both cities do something like 50x the miles of service per dollar as a subway would have cost to build and operate.

Fourth, if there’s lots of free parking at the destination it’s almost always easier to drive. Point to point means the trip is faster and free parking means it costs less. Places in the states that have the highest transit usage (Boston, New York, Chicago Loop, SF) are places where parking sucks or is expensive. Even LA traffic doesn’t keep people from driving because a) the buses are stuck in it too, and b) it’s free to park when you get there.

Basically, any city that’s building a light rail or subway line and not dramatically increasing the zoning around it is throwing money away. Without the proper land use, there’s not enough population to drive demand, without demand there’s not enough incentive to provide good levels of service, and without good levels of service people will find it faster to drive.

This article was originally posted on Y Combinator’s Hacker News discussion group and also ran on Peter’s blog What’s In Peter’s Head. Reprinted with permission of the author.

41 Comments
Topics: Transportation

41 Responses to “Peter Christensen: Why Transit Used to Be Profitable and Isn’t Now”

  1. Christopher Hylarides says:

    I would also add that Governments getting heavily involved in road (more specifically highway) building and allowing it’s free use also made it much more difficult for private transit companies to compete.

  2. L. Q. says:

    ^Like highway user fees only covering around 50% of the cost of driving now: http://www.subsidyscope.org/transportation/highways/funding/

  3. cdc guy says:

    LQ, isn’t that 50% still far higher than transit farebox recovery?

  4. David says:

    Basically, any city that’s building a light rail or subway line and not dramatically increasing the zoning around it is throwing money away.

    Sounds like exactly what Indianapolis will be doing in the unlikely event that the newly unveiled transit plan goes anywhere.

  5. John Morris says:

    That’s it in a nutshell. They are throwing money away. The faster governments they broke, the better it will likely be for everyone. A sad state of affairs indeed.

    It’s not accidental that both Hong Kong and Singapore built transit at a time they didn’t have money to burn.

  6. John Morris says:

    I mean the faster governments go broke.

  7. John Morris says:

    “LQ, isn’t that 50% still far higher than transit farebox recovery?”

    This is because political and not economic judgements determine transit routes, fares and schedules.

    Would a company have decided to spend a half Billion dollars for a tunnel to serve an infrequently used Football Stadium, a couple of hotels and a casino in Pittsburgh? (that provides free parking)

  8. John Morris says:

    The point about attractions at all ennds of the line is very important. Peak load transit one way in and out means unprofitable semi empty trains running the other way and in off hours.

    This is why building up multiple mini downtowns in Queens and waterfront Brooklyn will make transit much more cost effective with full trains running in all directions.

    Off hour service is also IMHO, very important. The effects of public employee unions also plays a big role.

  9. Aaron says:

    Another factor in transit profitability-pricing power. Privately run transit properties could set prices to deliver a margin and had a monopoly on capital-intensive service to newly developing communities. Public organizations serve a public purpose, and fares are not seen as a price to ride, but the nominal cost for a subsidized service. Politics and voter blocs play a much larger role in service planning than demand for service and ridership capacity.

    Publicly-run transit would be a much more honest enterprise if it were free to ride, and my guess is that if you accounted for inflation, your old private transit systems would be charging fares up to double the current public property in real dollars.

  10. david vartanoff says:

    @ Aaron, Actually most US streetcar/transit co’s were regulated by state PUC/RRCommissions. The classic fantasy of revisionists is that if the City of New York hadn’t limited fares the IRT and BMT would still be around as profit making ventures. Funny how EVERY streetcar system in the US failed. If transit fares were full farebox recovery, the workers would be min wage part timers with only skeletal service to the few remaining dense employment centers. Given all the other economic sectors which are not genuinely self sustaining, transit subsidy is not much different from farm subsidy.

  11. Alon Levy says:

    David, you’ll be surprised how many of those streetcar systems were subject to onerous regulations. For example, the Denver streetcars had to pay 25% of road maintenance costs on minor routes and 50% on major routes; as the number of cars on the roads increased, the streetcars had to pay more.

    CDC Guy, the 50% figure (67%, really – 50% excludes gas taxes paying for non-auto infrastructure) is just for the national highway system. For local roads, it’s much, much lower. Texas claims 50% is the figure for the top-performing roads; some go down to 17%. The biggest troll on the transit blogs loves citing a study that gives a figure of 20-50% for US highways overall – he just spins it to make roads look good.

  12. Wad says:

    John, unions play the biggest role in setting the market price for wages. It isn’t just public employees. Private contract operations are heavily unionized as well.

    Yes, they push wages upward. Also, labor payments tend to be at least half and generally 2/3 of operating costs. This is a “normal” figure.

    However, the payroll outlay alone doesn’t determine whether drivers are overpaid. (Mechanics are likely to earn good money under any scenario.)

    Measure the driver’s hourly wage against how many passengers they can move in that hour. Highly-paid New York, San Francisco and L.A. drivers could justifably claim they are underpaid (!) because of the cost of living and the sheer amount of people can move in an hour.

    Highly productive vehicles bring down labor costs.

    Lower-paid drivers could actually be overpaid if they run on routes with low ridership.

    Also remember that the wage scale has to translate to trade-offs in the labor market. If bus drivers make too much money, how much do they deserve to make?

    If bus drivers don’t need more than a high school diploma or GED, should they be limited to the lowest wages possible? If you answer yes, then consider that the occupation competes among other low-wage workers.

    No bus company would be able to find workers if it offered a minimum wage. It would have to compete with fast food places, Wal-Marts, janitorial services and the like. If the wages were equal, no one would settle for all the responsibilities of driving a bus for crappy wages when deskilled labor is comparatively easier.

    As for Aaron’s (not Renn) quote, “Publicly-run transit would be a much more honest enterprise if it were free to ride,” I’d beg to differ. Have you ever seen free public toilet facilities?

    There is economics in public transit, even despite the subsidy involved. The problem with free services is that demand is unlimited while supply is finite. Planners would have no incentive or means to curb demand, so they’ll manage the supply. A 40′ bus can carry 75 if all riders were packed in like sardines. Under a free scenario, that can happen. Yet there’s no incentive to add another bus when riders 76 and up can’t get on.

  13. John Morris says:

    Aaron says

    “Politics and voter blocs play a much larger role in service planning than demand for service and ridership capacity.”

    I said

    “This is because political and not economic judgements determine transit routes, fares and schedules.”

    Anyway, this is a huge, huge factor. Systems not deisigned by rational economic thinking.

    Wad said

    “John, unions play the biggest role in setting the market price for wages. It isn’t just public employees. Private contract operations are heavily unionized as well.

    Yes, they push wages upward. Also, labor payments tend to be at least half and generally 2/3 of operating costs. This is a “normal” figure”

    Let’s just say, very little in transit today could be described as private. Government regulations and power have distorted all relationships. Almost all routes seem to recieve subsidies of some kind and prevailing wage laws are attatched to government contracts.

    As we can see today almost every transit system is being bled by underfunded pension and benefit agreements.

    The other huge impact unions have on transit viability is higher off hour wages for working weekends, holidays and at night.

    I think a lot of transit economics has to do with making up capital costs. Getting lines to run near full in off hours and weekends and in both directions is critical. This also, reduces the need for people and businesses along the lines from needing cars and parking. Right now, service in off hours is poor on even most of the good American systems at night and on weekends. I gotta believe higher worker pay and overtime are a big factor at work.

    This is the main reason lots of people even in NYC’s best served areas still own cars. I never owned one there and I was highly sensitive to this since I was out at night a lot.

  14. When figuring cost recoveries I don’t believe it is appropriate to charge the cost of local streets entirely against cars and gas taxes. For one thing, without streets, there would be no where for buses to run. Also, no way for emergency vehicles like fire trucks to get to your house. And where would you be walking to get to the train, on a dirt path? Local streets serve many important functions around access to property and delivery of services. That’s why cities have always had streets, even well before the automobile.

  15. cdc guy says:

    “Basically, any city that’s building a light rail or subway line and not dramatically increasing the zoning around it is throwing money away.

    Sounds like exactly what Indianapolis will be doing in the unlikely event that the newly unveiled transit plan goes anywhere.”

    I think you’d be surprised. Indy’s planning department is working on TOD, but obviously there’s no need for it until those rail lines are actually funded and built (10 years out).

  16. John Morris says:

    “I think you’d be surprised. Indy’s planning department is working on TOD, but obviously there’s no need for it until those rail lines are actually funded and built (10 years out).”

    In other words one will build out neighborhoods and entrench lifestyles so that the line is useless. Buildings last at least 30-50 years.

    Anyway, one of Death & Lifes chapters is titled, Erosion of Cities or Attrition of Automobiles. All policies that enhance walkability will ultimately be good for transit too.

  17. cdc guy says:

    John, you’re apparently not familiar with Indy. Those lines aren’t planned to run through bean fields.

    The majority of the planned lines’ length will run through areas in slow (or fast) decline with little current prospect of redevelopment. Those places to which I refer have been built out for 35-80 years and will largely stay as they are until there is some economic incentive for redevelopment.

  18. Attrill says:

    That is an excellent article. I agree with all the points made, especially the second one about real estate development supporting the construction and running of transit systems in Chicago. Looking at the history of Chicago Transit it has never been profitable.

    Throughout the 1890’s lines were going bankrupt and changing hands regularly. Much (if not all) of any profits in that time came from the financial and political machinations of men like Underwood and Yerkes, not from true operating profits. Stock purchasers were offered outrageous bonues that never could be supported. Saying the lines were profitable during this time period is like saying eToys was profitable in the 90’s.

    When the lines all went bankrupt again around 1910 Insull came in reorganized the lines under the Chicago Elevated Railways Collateral Trust. He did this as a way to create demand for electricity and real estate development. The CER basically broke even for ten years, but by the 20’s the investors all wanted to sell off the lines to the city. The city wouldn’t take it over and they were forced to reorganize as the Chicago Rapid Transit Company. This was basically propped up by Commonwealth Edison until the Depression, when it went under due to decreased ridership. It was run as a bankrupt company overseen by the Public Works Commissioner until the CTA was created in 1947.

    What’s interesting is that the privately run lines were continually falling into bankruptcy before unions, OSHA, ADA, and the Highway Act. I think that to a certain degree transit will always need to be subsided from some source – either from private sources (as support for other profit making endeavors) or by the Government (as a service).

  19. CJ says:

    Prior to the depression and the great migration to the cities – rural populations were very much larger than today. This is partly why you now see so many empty/former one room school houses. Greater population density allowed for rural interurban systems.

    There was and still is a peak load / rush hour problem. It is very expensive capital-wise to have enough street cars/busses to handle peak commuting traffic. This is why street car lines owned amusement parks – they generated traffic during weekends and holidays when the equipment would have been sitting idle. -chris

  20. cdc guy says:

    The urban/rural change isn’t quite as dramatic as you might think. In 1940, well into the era of the automobile, US population was between 40-45% rural, a total of 57 million people. In 1990, the percentage was 25% rural…but that was 61 million people. Density is definitely not the driver.

    Lack of other cost-effective, safe, comfortable and timely means of intercity transportation is what supported interurbans, and economic progress is what killed them. Just as passenger trains and interurbans killed stagecoaches.

    Creative destruction at work: Once cars and roads became cheaper, safer and more comfortable, interurbans disappeared.

  21. Alon Levy says:

    CDC Guy: it wasn’t exactly economic progress. From the start, rural populists supported more government funding of roads as an alternative to the interurbans and railroads. A better analogy is to how light rail is killing highways on the peak-hour-to-downtown market: it was fueled by massive government investment, often with an ideology that said the existing mode of transportation was bad, and had very little concern for cost control or for serving inner-urban trips.

  22. John Morris says:

    I can’t add to what Alon just said. It wasn’t creative destruction, just destruction.

  23. cdc guy says:

    Guys, government didn’t fund the whole mode of automobile transportation. They just upgraded right of way to permit a new technology to compete. People wanted personally-directed mobility.

    The analogy is closer to the pre-Internet dominance of closed computer systems dominated by IBM and the BUNCH companies…the railroad monopolists of the computer era. The government funded the superstructure of the Internet, and made it possible for all of us to connect our PC’s and Macs and relegate mainframes to a comparatively small part of the computer world.

    The rise of the auto, like the rise of the personal computing device, does indeed represent creative destruction by new technology.

    If we really believe in “the hive”, that all of us are smarter than any one of us, then the price of that belief is acceptance of market forces and market decisions as well as popular government policies. There was no overt act of destruction. Governments built roads because people demanded them. In a democracy, that’s the way it works.

  24. david vartanoff says:

    @ Alon, actually, not surprised, well aware. Nearly every “traction” history book on my shelves describes struggling companies chronically under capitalised.
    @Attrill. The corollary to your summary is that CTA should have bought the assets at a penny on the dollar at the real estate tax sale. Instead, CTA paid millions for a nearly worthless hulk and then was saddled with paying off the inflated value bonds which sapped their budgets for years.

  25. Exile says:

    I think this article misses the point. Streetcar use was heavily favored, and very popular prior to the National City Lines conspiracy

    http://en.wikipedia.org/wiki/National_City_Lines

    When They started replacing streetcars with buses, transit use plummeted markedly.

  26. Alon Levy says:

    They just upgraded right of way to permit a new technology to compete.

    It wasn’t mere upgrades – it involved reconstruction of roads to ever-increasing standards of width and minimum speed. The construction was so extensive it busted some states’ budgets even during the 90% federal match phase of the Interstate Highway System.

    There was no overt act of destruction. Governments built roads because people demanded them.

    “People” is a weasel phrase. It wasn’t a generic “people” that demanded good roads, but a combination of interests: rural populists who disliked the railroads, travel boosters and the AAA, patrician urban reformers who thought cities were so bad that the working class had to be moved to the suburbs for its own good, and later on the oil and auto industries.

    All of those groups felt entitled to free roads, and raised a stink every time something inconvenienced motorists. For example, the AAA successfully lobbied for listing fuel truck inspection fees as a user fee whose revenues must be spent only on road construction and nothing else.

    If we really believe in “the hive”, that all of us are smarter than any one of us

    I don’t think anyone except James Surowiecki actually believes it in that formulation. Even Surowiecki would probably agree that the hive made stupid decisions about investing in companies like Enron. Besides which, what is the hive, anyway? In 2003, would the hive have been the American people, who believed by a more than 2-to-1 margin that Saddam was responsible to 9/11? Would it have been the people in Congress who voted on the Iraq War, or perhaps the government that went through with it?

  27. cdc guy says:

    Alon, your first paragraph denies and then goes on to perfectly describe an upgrade. Yes, it was massive, but almost none of the first Interstates were totally new-terrain highways. Most converted two-lane US highways to interstates. I grew up riding around the US on station-wagon vacations in that era and remember seeing firsthand the upgrades in progress. It’s no different than a railroad double or quad-tracking a busy ROW to improve flow and safety.

    It was much more problematic in cities, as there were immovable downtowns to skirt. In many cases those downtowns were surrounded by doughnuts of blight, so we ended up with near-downtown (or river-adjoining) interstates in many cities that did not follow the old US highway routes so closely.

    I went too far in suggesting “the hive”. I’m an economist and should have just stuck with “market forces” (the cumulative effect of millions of daily consumer decisions): streetcars went away because people didn’t want to pay to ride them any more; intercity passenger trains went away because they weren’t profitable for the railroads.

    Outside of New York, where there may be a legitimate case that Robert Moses controlled transportation planning for several decades and pursued his own warped vision, there is not a strong case to suggest that “people” (by which I mean “a clear majority of the marketplace”) wanted urbanism, public transit, or bad two-lane roads in outlying areas. The shift to the suburbs was (I concede) partly latent racism, but also partly class-ism and partly expressed utopianism based on Americans’ recent agrarian past: country people don’t always take to city life and want some greenspace around them all the time.

    Whether one considers that benignly “sociological” or negatively “pathological” is one’s own choice. But it’s a clearly expressed preference of many individuals. In the post WW2 rush to the suburbs, when the GI bill made college education a path to a good job in the city, and when the automobile made it possible to have a good job in the city and a half-acre of grass in the suburbs, lots of people liked that vision…and still do. It just isn’t some vast right-wing or corporate conspiracy. It’s the reality of human choice.

    And those suburbanites pay taxes and vote too. Focusing on the arcana of which lobbyist gets his/her special deal in legislation ignores the broad force of choices (and may confuse cause and effect): the legislators decide something needs to be done, then figure out how to pay for it (or not) later. Classifying a particular set of fees to pay for roads didn’t cause more road building, it was the result of the desire to build more roads.

  28. Alon Levy says:

    CDC Guy, you’re not going far back enough in US history. The Interstate system was merely a culmination of decades of good roads astroturf. The federal aid highway act dates to 1917; the Denver streetcars had to pay 25% of road maintenance beginning in the 1920s; the AAA opposition to any kind of user fee goes further back than 1910, and its organized opposition to toll roads was especially evident in the 1930s, when it and allied organizations prophesied doom for such projects as the Pennsylvania Turnpike, which ended up making money.

    Both urban decline and railroad decline were at their most evident in the 1950s and 60s, but they go back many decades, and almost always there was some sort of subsidized competition in the background. The US is too lemon-socialist to be otherwise; the railroads, too, were immensely subsidized back in the 19th century. You can’t really discuss those trends without discussing lobbying; it’s like trying to figure out which abstract principle is responsible for media ownership regulations or sugar subsidies. You can’t reliably engage in this sort of democratic positivism, holding that anything that’s been legislated must have been the unquestionable collective decision of everyone for progress. Democratic politics is subject to as many failures as the market: externalities, asymmetric information, monopoly, misaligned incentives.

  29. Alon, here are my questions.

    1). Do you think we should not have paved roads?

    2.) Do you think we should not have built the interstate highway system?

  30. Alon Levy says:

    1. Yes, I think roads should be paved. However, the decision of which roads to pave first should have been based on how many people were affected, on on who agitated the most for government funding. The good roads movement was so anti-urban that by the 1940s many urban roads still lay in disrepair while rural routes were up to standard.

    2. No, the Interstate system was a mistake. Most of it was severely overbuilt – the rural and suburban portions would have been fine with two lanes, or, rarely, four. It wasn’t so much about an existing transportation need as about creating a transportation need, and it absolutely destroyed the cities it passed through.

  31. Wad says:

    Exile, the death of streetcars was an inevitability even with or without the National City Lines conspiracy.

    Transit ridership was universally declining through much of the 20th century. Many private streetcar systems could not find the capital needed to fund refurbishments or even day-to-day costs. This happened in cities that weren’t bought by National City Lines, too.

    The bus represented the technological successor to the streetcar. It required less capital, it had lower operating costs — especially important considering that transit foresaw secular decline and cost control became paramount.

    Only a few of the largest cities chose to maintain their World War II legacy lines. The rest ripped them out.

    There’s no point in blaming conspiratorial forces. They won’t bring back the rail renaissance, and they won’t change American history.

    We now must play with the transit hand we’re dealt. For many cities, that means emerging from a dark age, as well as building a system in which all the physical components and knowledge trees were tended to by government bureaucrats.

  32. david vartanoff says:

    Alon and all. Yes the Interstates were a HUGE mistake. Not only did they wreck neighborhoods–the Dan Ryan in Chicago for instance–but they accelerated and encouraged the white flight to the sprawlburbs which savaged the urban economies nationwide. Michael Harrington’s The Other America paints the picture of “daddy” driving past all those he hopes not to interact with (why suburbanites hate public transit) on his way to the grey flannel cubicle. More recently on the late Paul Weyrich’s website there was the essay explaining that conservatives should support commuter rail because it allowed a family to need only the car for the stay at home mom because daddy could take the train to the office in the city while mom shuffled the kids around the suburban paradise. This all ties right back to the crumbling inner cities where if any high paying jobs remain, they are all commuters who take their paychecks and leave to be taxed in the ‘burbs where the schools are still habitable buildings.

  33. David, you might dislike the social attitudes of some highway workers, but I can assure you that social attitudes on many issues were far worse prior to the interstate system than after it. You can’t just cherry pick aspects of the past and claim it was better. It was all part of a system that I doubt very much any of us would actually like to go back and live in.

    The interstate highway system was a huge win for America. An America with only two-lane roads connecting our country is one I’m glad we don’t have anymore. It’s true that too many urban freeways were very destructive, but it is naive to blame the decline of urban cores only on freeways. Just look at cities like Lexington, KY; Ft. Wayne, IN and others that did not get urban freeways and their downtowns fared no better.

  34. Alon Levy says:

    The Interstate system was not the dividing line in social attitudes about race; the civil rights movement was. It’s true that the early construction of the Interstates coincided with the civil rights movement somewhat, but if you look at drivers of attitude changes, they’re all civil rights, rather than highways. More often they conflicted: the biggest highway boosters, e.g. Robert Moses, were class A racists, and built highways with the full intention of using them to destroy black neighborhoods.

    More in general, government support for suburbanization independently of highway construction was fueled by racism. Mortgage aid redlined neighborhoods with any racial integration, ensuring white people couldn’t get mortgages if they wanted to live near blacks. That’s one of the reasons why as American cities matured, the racial animosity among Jews, Irish, Italians, and other white ethnic groups subsided, while white/black animosity didn’t. (One of the early impetuses for greenfield suburbanization was that it was the easiest way to ensure that neighborhoods would be white-only, preventing them from being redlined).

    Lexington and Fort Wayne are not the best examples of central city decline, because their entire regions are in decline. The reason for the focus on Detroit is that for decades the overall region was doing fine – it was just the central city that was bleeding. The same is true for Oakland, New Orleans, Washington, and the Bronx. It’s ultimately a government policy choice that ensured the rich would live in the suburbs and the poor in the inner city. Other governments chose differently, and got different results.

    You’re right that it’s not highway construction in general but the way it was done that killed inner cities. There are ways of building roads without destroying cities. However, all this is irrelevant because more often than not, the highway builders and good roads populists wanted to make central cities less livable instead of more livable. (Nowadays urbanists often fail to distinguish between the Mumfords and Moseses, but they were two separate sets of people; city leaders frequently opposed suburbanization and believe in urban renewal as the way to prevent it.)

  35. cdc guy says:

    “However, all this is irrelevant because more often than not, the highway builders and good roads populists wanted to make central cities less livable instead of more livable.”

    Alon, most of what you wrote before the above is sensible and fact based. The above quote, however, infers a level of malice that simply wasn’t there (again, with the likely exception of Robert Moses and New York). In areas near interstates, yes…cities became less livable as a direct result of the interstate. No one can deny the effect of a highway on a 3-6 block swath. But in the aggregate, the interstates didn’t affect livability as much as suburbanization did; my parents live less than a quarter-mile from an interstate-grade highway in an upper-middle-class suburb of Philadelphia. The highway is a non-factor in desirability of the neighborhood.

    Suburbanization was underway decades before the Interstate system was built…when there were still streetcars. The Interstates weren’t the cause. The desire to be surrounded by yard instead of pavement and commerce was the same 100 years ago as it is now.

  36. Wad says:

    CDC guy, suburbanization goes back beyond streetcars. It’s as old as post-agrarian civilization itself.

    To have suburbs, you need cities. (The architectural form is not material to this discussion.)

    A city, as an economic unit, can transform the land underneath it to a bountiful source of value. Highly productive cities will have especially valuable land that will gradually become more cost-prohibitive to obtain.

    Since no one can make more land, the next alternative is to transform comparatively less productive land around it by absorbing it.

    The transformed lands would be what are now known today as suburbs. Improvements in transportation technology help to make these lands less distant.

    So suburbs came into being even before motorized power allowed for the transformation of even larger areas.

  37. Alon Levy says:

    Suburbanization was underway decades before the Interstate system was built…

    …and so were the federal-aid roads and the limited access expressways. The first regions to suburbanize, the Mid-Atlantic and California, had a large system of paved roads for cars by the 1920s and multiple free and tolled expressways by the 1930s. If you look at when areas like New York’s Nassau County and California’s Orange County started booming as bedroom communities, it’s right after the roads got to them.

    In areas near interstates, yes…cities became less livable as a direct result of the interstate. No one can deny the effect of a highway on a 3-6 block swath. But in the aggregate, the interstates didn’t affect livability as much as suburbanization did; my parents live less than a quarter-mile from an interstate-grade highway in an upper-middle-class suburb of Philadelphia.

    If the highway came first and the suburb came second, it probably wouldn’t affect livability too much. The suburb grew around the highway, and would consider it a primary road instead of an obstacle. This is why the least intrusive highways are those built to follow existing borders. But at any rate, highway construction often involved leveling multiple blocks of neighborhoods, with no concern for the people living in them, and splitting other communities. The idea was that those neighborhoods were all slums and had best be turned into public housing projects.

    Moses himself was especially evil, but the other highway builders were not much better. The phrase “negro removal” as an expression for what happened during highway building and slum clearance was used throughout the United States, not just in New York.

  38. Wad says:

    CDC guy, a lot has changed between 100 years and now.

    The industrial cities of the late 19th and early 20th centuries were very nasty places indeed. There’s a good reason why people didn’t want to live in them. They looked grim, smelled awful, and the externalities of industrial production (polluted air, water, etc.) was making them physically sick.

    Urban wealth allowed us to solve these problems. We’ve figured out how to clean our air, treat our water, and mitigate visual and noise pollution. There’s much less of an impetus to flee.

    Imagine our forebears looking at us going into convulsions over … gasp! … parking spaces in front of Starbucks and what colors we’re allowed or forbidden to paint our houses.

    Worse, America was a relatively younger country, and hadn’t gone through the urban social transformation process. “Old World” cities went through the process long before American cities even became regional, let alone national or global, spheres of influence. The process, and it is a very frightening one, had long been settled.

    Why are cities generally associated with concrete and tall buildings rather than yards and picket fences? Density isn’t a lifestyle choice but an economic necessity. When demand for a dwelling exceeds the supply of land, fitting more people in on that plot of land is economical.

    As people have more money, their choices in housing arrangements is broader. They could afford to buy a bigger house, or one that matches their lifestyle.

    That, of course, depends on a thriving economy and public policies to allow that choice.

    What may be true 100 years ago may not hold for the next 100 years.

    A house in the ‘burbs was suitable for a time when people could count on working in the same workplace in the same city region for their adult lives, and that their kids would follow in their path.

    Now, workers must be settled into having not only several employers, but a few whole career changes along the way. It may even involve moving into faraway city regions, or probably out of the U.S. altogether.

    Then we have the unique challenge posed by the housing bubble. This is going to hang over our heads for at least one generation. There are too many houses on the market, so property as a store of value is going to be a losing proposition. (Commercial real estate is next.) And the house isn’t as important as the land underneath it, and the land’s value is determined by its relation to other important economic activities.

    Plus, all economics is global. If Americans insist on a house as a prerequisite for economic participation, then they must also reconcile the fact that lower economic functions can always be given to a part of the world (i.e., the half that subsists on less than $2 a day) that doesn’t have such finicky workers; and the higher ones can be done in cities where well-paid and well-educated workers don’t have self-esteem issues about living in crowded areas with no yards or property deeds.

  39. cdc guy says:

    Wad, I’m unclear: are you asserting that globalization and the housing bubble will somehow reverse a 100-year trend of suburbanization, make people change their housing preferences in US metros, put lots of jobs into the central cities, and make transit popular and profitable?

  40. Wad says:

    Let’s take one thing at a time, cdc guy.

    I don’t think transit can be made profitable. Nor should it be. That’s a certainty.

    Globalization and the real estate bubble (the industrial and commercial sectors have problems just as big) have taken a lot of the wind out of suburbanization.

    There is a surfeit of both unused housing stock and commercial and industrial land. Prices are going to be low for a long time.

    That eases the price pressures on land that make suburbanization necessary. Suburbanization involves the transfer of land from a lower value to a higher one.

    Once the post-bubble wreckage has been sorted out, people are going to choose from the variety of housing that has been made available. It’s not either houses or multiunits/rentals. Stronger city regions will have diversified housing and property ownership options.

  41. John S says:

    I disagree with the contention that with technology, people have less need for short, regular trips to the ‘center of the city’ or what have you. It is arguable people today leave their houses *more* especially with the transformation to a service economy, for either leisurely activities, educational (dance class, etc.), or whatever else.

    Such trips would also be fine candidates for light rail; that is, if it was ubiquitous enough to actually service people near their homes, and to multiple locations where they might be going. It’s not that people won’t ride rail just because; it’s because it is not very convenient to have to drive several miles to a rail station, and find alternate transportation from the stop to wherever you are going, which is the case in most places with rail today.

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