New Urban Planning

Warren Buffet’s recent purchase of the BNSF railroad was great news for the US for a whole bunch of reasons. First off, it was a strong endorsement of the railroad industry and its place in the US transportation network. It was also good news for the nation’s railroad system as a whole. One of the great challenges for freight railroad operators in the US is balancing the enormous demand for capital expenditures with the demands from shareholders for dividends and share buybacks. There is only so much cash to go around and railroads are one of the most capital intensive businesses in the US for the simple reason that they own and maintain almost all of the their own infrastructure. So BNSF moving from public to private ownership means that there will be less of a demand to pay out dividends and more of a focus on making long term investments that will pay off down the road. Basically the focus shifts from the short term to the long term. Now it is unlikely that the other major US railroads will be privatized anytime soon, but with BNSF in private hands it will force the other major railroads to focus more on the long term to keep up with BNSF. 

Another reason to cheer and laugh out loud is how the US media landscape tried to make sense out of the deal. Railroads are generally ignored unless there is a major accident or spill of some kind. And so, as articles have been written all over the country from newspapers to magazines, it is comical to watch as reporters try to make sense of why the ultimate savvy investor Warren Buffet bought the second largest railroad when most people think railroads are irrelevant and outdated. Articles, like the link to the ones below from the LATimes and the NYTimes, have been written explaining how railroads are suddenly a growth business again and how they are retaking market share from trucks because they are more fuel efficient, amongst other reasons. What’s amusing is that as far as these writers are concerned, this all just happened yesterday. But thats ok. Because the education of the public and the press about the importance of railroads in our national freight transportation system desperately needed to happen. And so, if all it took was Warren’s stamp of approval, its just too bad it took so long to happen. A point by the way, that was not lost on Buffet: Buffett has said he realized a few years late that railroads had become an appealing investment.

http://www.latimes.com/business/la-fi-rail3-2010jan03,0,27378.story

http://www.nytimes.com/2009/11/04/business/04deal.html

One of the great mistakes of transportation planning of the twentieth century in the US, if not the biggest, was the urban interstate. Instead of having interstates travel from city to city and then once arriving at the city limits going around the city (aka a belt highway), the way most european cities have built their major highways, in the US we rammed the interstates straight through cities and out the other side. In the process the US destroyed countless neighborhoods. In addition, the highways often traveled along or close to the waterfront, blocking access to the water from the city itself. Countless cities met this fate: Seattle, Philadelphia, Boston, St Louis, Kansas City, etc. Cities like St Louis that once had a vibrant downtown have been cut into pieces by urban interstates, ruining the neighborhoods in their path.

The good news here is that people have finally woken up to the fact that the urban interstate was never a good idea to begin with. The problem, of course, is that at this point the highways are full of cars and people, and spatial patterns have grown up around these highways. So just demolishing them is often impossible politically. There have been exceptions, like in San Francisco when the Embarcadero waterfront highway was demolished in 1991, when a urban highway was allowed to be torn down without a replacement built, but those have been few and far between.

So transportation planners around the US have begun to realize that the only way to fix these problem highways is to bury them or move them. Boston, with the much derided Big Dig, was the poster child for tunnels, although Seattle is heading that way as well. And despite the cost, the Big Dig has been quite a success. Now other cities are getting into the act. Providence, RI is moving its east-west urban freeway, Interstate 195, from the waterfront to a point much farther out of town and to the south. This is going to open up the waterfront, as well as acres of land that was formerly occupied by the elevated freeway, right in the heart of the city. Like in Boston, this is creating an enormous redevelopment opportunity, and one that is being greatly anticipated by the residents and institutions of Providence. New parks, mixed use developments and educations institutions are all planned.

One can only hope that more cities will examine this, as well as other urban freeway relocations, and plan their own. (St Louis, I am talking to you here!)

The New York Times reports below on the redevelopment possibilites in Providence:

http://www.nytimes.com/2009/11/11/realestate/commercial/11iway.html?emc=tnt&tntemail1=y

The question of how to pay for highways has been floating below the surface of the debate on transportation and infrastructure, or the lack of it, over the last couple of years. The problem is simple and twofold. The principal mechanism to pay for highways today is the gas tax, both federal and state. Problem a: the federal gas tax has been the same since 1993, 18.6 cents. Unsurprisingly, that has meant that there is less and less money every year since inflation has been roaring in construction since then. So the net effect is that 18.6 cents go substantially less far today than 1993. It took a while for this to become a problem because there is a budgetary mechanism called the Highway Trust Fund where that 18.6 cents has been deposited for all of these years. As long as the trust fund took in more than it paid out, no problem. But Congress since 1993 has steadily increased transportation spending, without raising taxes to pay, thereby slowing draining the trust fund. Problem b: exacerbating the problem is that people are driving less and buying more fuel efficient cars. Therefore less money is coming into the highway trust fund than ever.

So what to do?

Well the easy answer is to raise the gas tax. Overall, this is the best idea both because it raises the revenue, and taxes a fuel that causes global warming. But there are even more reasons to want to raise the gas tax. Because it taxes behavior that causes sprawl and bad planning. So its an all around win. Except for that group of the population that believes that they should be able to continue to get better infrastructure and more government services without paying higher taxes. They are called Republicans. And they have so scared the democrats regarding taxes that the democrats are now completely scared of offering any new taxes, even when, like the gas tax, it is so obvious that it needs to be raised.

During the eight years of the Bush administration spending was increased while taxes were kept flat, a familiar strategy. So, of course, now the highway trust fund is out of money. Its a damn shame that it finally ran out when it did and not three years earlier when Bush would have been forced to act. Instead, now it has to be done sometime in the next year. So its the democrats problem. And the democrats do not want to raise taxes. Stalemate. What next?

Congress could see the writing on the wall about the lack of revenue for highway programs years ago, and so multiple blue ribbons panels were convened to look into how to raise more revenue. They all came up with the same set of answers. 1. Raise the gas tax in the short term. 2. Move to a distance traveled based revenue system. 3. public private partnerships (to be dealt with in a future post).

What is that you ask? Well it is a way to charge people for the miles they actually travel, and eventually charge based on time of day, type of vehicle and type of road. The ultimate solution to the gas tax question. To do this you need basically an ezpass type device in every car. As you can imagine, this brings up all sorts of privacy and technology issues. But it is clearly the right way to go, and ultimately the only fair way.

Up until recently there were limited systems around the world, but now the Dutch are moving in that direction in a big way.
They are now installing a system across the whole country to do just that. Ahhhh….. The Netherlands, home of so many good things. Check out the article below, where the whole system is described in detail. Basically, public transit and taxis are exempt, and then everyone else pays based on kilometers traveled, with prices varying based on the type of vehicle. And once the system is in place, it will be easy to switch to charging based on the time of day that you drive, type of road, etc. The possibilities are endless. And that is great news, because the only way to drive good planning (no pun intended) is to hit people in their pocketbook.

http://www.google.com/hostednews/ap/article/ALeqM5ggzUbQMWph8GplMdWzjDEnKD7ZJQD9BVD87O1

And of course its on PBS. Where else would it be? It actually part of a larger series about the environment and planning called e2 (e squared). It started out as different kinds of episodes, but now they are doing whole runs on one topic. And they have six episodes about transportation airing now on PBS. They are:

london: the price of traffic – No surprise here, how London got congestion pricing. -http://www.pbs.org/e2/episodes/307_london_the_price_of_traffic_trailer.html

paris: velo libre – My favorite so far, all about the Paris bikeshare system: how it works, who designed and how it is maintained. Amongst the great nuggets of info in this one is that the maintenance facility is a floating barge on the Seine that travels up and down the river all day picking up broken bikes and dropping off repaired ones and doing the repairs between stops. Brilliant! – http://www.pbs.org/e2/episodes/308_paris_velo_liberte_trailer.html

food miles – I topic I am personally less excited about, but interesting none the less. How everyone’s food comes from far away, and how that is bad across the board.- http://www.pbs.org/e2/episodes/309_food_miles_trailer.html

seoul: the stream of consciousness – An interesting story about Seoul, SK demolishing an urban highway in a city obsessed with dense modernity. – http://www.pbs.org/e2/episodes/310_seoul_the_stream_of_consciousness_trailer.html

portland: a sense of place – Pure transit and TOD porn here. Love it. – http://www.pbs.org/e2/episodes/311_portland_a_sense_of_place_trailer.html

aviation: the limited sky – frankly, the most depressing of them all. all about how modern aviation as we know it is unsustainable. that does not make me happy. i like traveling. – http://www.pbs.org/e2/episodes/312_aviation_the_limited_sky_trailer.html

Unfortunately I cant post the whole shows, just the trailers. But break out that DVR remote and record these for free on PBS! Or you can buy them at the apple store or on DVD from PBS. Seriously, they are worth it.

The high speed rail grant program created by the Federal Railroad Agency that was funded to the tune of $8 billion dollars in the stimulus bill is getting ready to award the first set of grants over this winter season. However, the US is finding that actually launching high speed rail, or even just marginally improving the existing passenger railroad system, is no easy task.

The FRA announced guidance that earlier this year that there would be two sets of awards, one for small ready to go projects sooner and one for major corridors and longer term projects second. However the FRA recently changed its mind and said that they two rounds would be announced at the same time to insure continuity between the phases amongst other reasons. That may be. But it is clear that the FRA has been overwhelmed. For a program that has never funded a dollar, there were $50 billion in long term and corridor work requests and $7 billion in shovel ready project requests.

Previous to the stimulus bill the FRA has run grant programs that ran into the millions not billions, and had been primarily a regulatory agency. Suddenly they are front and center with the largest new Federal transportation funding program in the recent past. And the agency is facing all of the classic challenges of how to create support for the program across the country and the political spectrum while at the same time insuring that something gets built, preferably as soon as possible given the employment situation in the US. And finally it has to address a fundamental question: what kind of high speed rail does america need? totally new systems, or gradual upgrades to corridors across the country?

The good news here is that these are the issues that are being discussed. What a difference a year makes! Remember during the Bush administration Amtrak skirted close to bankruptcy twice, with the encouragement of the White House. Clearly we should build a new build system in California, and the FRA will definitely fund it with the biggest dollars of any other project. And the existing Acela corridor will get major upgrades. After that I think the awards will go more the direction of what the FTA wants to promote. The Midwest seems like a good shot. And although Florida is pitching a new build system that looks good, the state has been so anti transit and so pro car for so long I am skeptical of their bid.

http://www.nytimes.com/gwire/2009/10/22/22greenwire-high-speed-rail-effort-proceeds-with-caution-77408.html

The American Planning Association doesn’t get much press outside the planning world, but their Great Places in America series is worth checking out. Every year the APA highlights interesting and innovative examples of city planning around the US in three catagories: great streets, great neighborhoods and great public spaces. The examples are from truly all over, small cities to big, east to west.

This is a great series both to highlight great towns and cities and point out what makes them great: planning. (remember this is coming from the planning association, so the answer is always planning).

http://www.planning.org/greatplaces/

There has been much debate recently about the Obama’s administration’s high speed rail plan that was funded in the economic stimulus bill to the tune of $8 billion dollars, plus a billion a year for the next five years. Much of the debate has centered on whether high speed rail is worth building on a economic basis. I personally believe that many of the negative reports completely miss the point, which is that you cannot measure the economic potential correctly when you only look a travel time reductions, or what the total outlay of federal dollars is compared to an economic payback that fails to look at the many intangible benefits that will arise from high speed rail. But frankly it should come as no surprise that I think high speed rail is a good idea. I have actually failed to post or comment on these stories about if we should build high speed rail because I think they are flawed and anyway, finally, we are building it one way or the other since the money is coming from DC regardless of what people write now. Thank goodness.

So, moving on from the question of if we should build high speed rail to the question of where, today I want to highlight an excellent report from America 2050, an offshoot of the regional plan association here in NYC, called “Where High Speed Rail Works Best”. The report, see the link below, examined every possible city pair in the US that could potentially host high speed rail and ranked those city pairs on a host of factors (factors by the way which I think are much more all encompassing than the metrics used to judge if high speed rail makes sense). Unsurprisingly, the city pairs that lead the list are in the northeast corridor. The first four on the list are all northeast corridor, but number 5 is LA-SF, and 7 and 8 are also California related. It’s nice to know that all of the top 15 city pairs are on the lists of planners to build high speed rail with the notable exceptions of two: Los Angeles – Phoenix and Dallas – Houston. But maybe this program will finally spur traditionally red anti rail states like Arizona and Texas to plan for the obvious future that is passing them by.

http://www.america2050.org/pdf/Where-HSR-Works-Best.pdf

The efforts in the US and around the world to figure out what to do about carbon emissions from coal have heated up recently as global warming and climate change are being debated in the US Congress. President Obama is pushing hard to get Congress to act on climate change in time for the UN global climate change conference in Copenhagen this December. What to do about coal is a fascinating issue, because there is so much coal out there, and much of it just happens to be in two countries that are the largest producers of carbon emissions, the US and China. Although environmentalists have pushed hard to have coal heavily taxed in the new cap and trade scheme being debated in the US Congress, that is proving to be very challenging, given the political strength of regions in the US that produce and consume coal. On top of that, with 50% of base electrical load generated by coal, replacing it in the near future is pretty much out of the question, as the scale of any replacement would have to be massive.

Coal usually has three strong business supporters; the miners, the railroads that transport the coal, and the power producers. However, lately the issue of coal for the railroads is becoming a lot more complicated. The crux of the issue for the railroads is that although today they are major beneficiaries of coal traffic and depend a great deal on revenue derived by moving coal (for the big four railroads, between 15% and 20% of total revenue) they may benefit even more in the long run from higher costs that will be associated with carbon emitting industries, such as truckers.

Railroads claim they can haul a ton of freight four times as far as truckers with the same amount of fuel. And the growth industry for the railroads in the last twenty years has been intermodal, which is carrying truck loads on trains, mainly because of the vastly lower costs when you can move one hundreds trailers on one train with two drivers instead of one driver for one trailer. So the future of that business looks better than ever in a carbon constrained environment.

Railroads are extremely capital intensive businesses and therefore cant make mistakes when planning investments in their physical plant that will last twenty years or more. So right now coal investment is on ice, until the fog clears about what the future holds for carbon emissions. But longer term in a carbon constrained world the future of railroads looks bright.

http://www.nytimes.com/cwire/2009/09/16/16climatewire-big-coal-carriers-navigate-a-risky-climate-tr-5184.html

The Economist looks at the British rail system: With demand soaring and a national government with massive budget deficits, some way has to be found to pay for the needed expansion of the system to meet the future demand for rail services in the UK. But the system is already heavily subsidized, and no one wants to make citizens pay more in fares or increase the subsidy. What a surprise!

The British rail system today is a public/private mix. Public infrastructure, private operators. Today Network Rail owns and maintains the British railroad network and private train operating companies operate freight and passenger service along their tracks. Network rail debt is under written by the British government and its operating loss is subsidized by the British government, but the Government claims it is not a public sector company, mainly to keep the large debts network rail has off of the national balance sheet of the UK.

The future of the railways: Pay up, pay up, and board the train | The Economist