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Posts from the "Economics" Category

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What’s Good for Green Transport Is Good for Business in the East Village

evill_sidewalk.jpgSecond Avenue shoppers are far more likely to arrive via bus, bike, or foot than private car. Photo: akuban/Flickr

Wherever parking spaces are replaced with infrastructure for sustainable transportation, you can usually find a local merchant yelling about how it will destroy his livelihood. With the redesign of First and Second Avenue bringing safer biking and faster buses to their neighborhood, five NYU undergrads set out to measure what local merchants stand to lose or gain. Their findings suggest that protected bike lanes and Select Bus Service are going to be good for business in the East Village.

The overwhelming majority of shoppers along Second Avenue walk, bike, or take transit to get there, according to the NYU students' research, which you can look over here. Overall, shoppers who don't arrive by private car spend more than 26 times as much as motorists at East Village businesses every week. 

Employing a method recommended by Transportation Alternatives, the students conducted 500 random interviews along Second Avenue between 14th Street and Houston Street, asking people on the sidewalk how they got to the neighborhood, how often they visit, how much they normally spend in the East Village, and other questions to gauge their shopping behavior. 

Their findings were striking, if unsurprising. Of the people they interviewed, 45 percent had come to the East Village by transit and another 43 percent on foot or a bike. Another five percent had taken a taxi, leaving only seven percent who took private cars. 

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Sustainable Transport Saves New Yorkers $19 Billion Per Year

New York City residents save at least $19 billion each year by driving less than other Americans, according to a new report from the non-profit CEOs for Cities. "New York City's Green Dividend" [PDF] makes the case that investing in transit, walking, and cycling isn't just better for the environment, it's great for our wallets and essential for the local economy. 

CEOs_for_Cities.pngGraphic: CEOs for Cities.

As Pete Donohue reported in the Daily News, the report also shows how New York City simply doesn't have the space for car-dependency. To match the car-ownership rates of the average American urban area -- not even the worst of the worst -- New York would require room for 4.5 million more cars. If each car was given only one very small parking space -- and cars demand more than one parking space each -- we would have to construct 25 square miles of new parking. That's the size of Manhattan. 

CEOs for Cities is broadcasting the benefits of sustainable transportation to public and private sector executives in order to bring the message to a new audience. "Janette [Sadik-Khan]'s office has made large strides in a quick amount of time, but congestion pricing didn't get through the state and there are other initiatives they're now pushing," said Julia Klaiber, the director of external affairs for CEOs for Cities. "Getting the economic development folks behind these policy arguments" would greatly strengthen the green transportation coalition, she added. That would certainly help in New York City, where the economic development corporation is a leading promoter of car-centric growth and our state representatives block transit improvements that pay for themselves. 

After CEOs for Cities produced similar reports for Portland and Chicago, Sadik-Khan requested one for New York, said Carol Coletta, the organization's president. Both Sadik-Khan and Mayor Bloomberg "intend to use it," she added.

At CEOs for Cities' national conference yesterday, the NYCDOT commissioner told the crowd that the $19 billion in annual savings are a reminder of why we need to keep up our investment in non-automotive modes of transportation. 

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What Happened to the Proposed “Transportation Tax” on Wall Street?

For several weeks last fall, as members of the House infrastructure committee pushed for passage of a new six-year federal transportation bill as a strategy to rouse the economy from recession, a proposal to pay for the legislation with a small tax on oil futures trades attracted a healthy crop of Democratic cosponsors and some vocal pushback from Wall Street.

defazio.jpgRep. Pete DeFazio (D-OR), at left, joined Sen. Tom Harkin (D-IA) to introduce a Wall Street transaction tax in December. (Photo: AP/Oregonian)

But the tax proposal has since lost steam in Washington transportation debate, getting little notice from lawmakers who strongly support taking up a new six-year infrastructure bill in 2010 even as it remains a magnet for progressives looking to rein in financial industry excesses.

What happened to the idea of using an oil futures transaction fee -- set at 0.02 percent in a December bill offered by Rep. Pete DeFazio (D-OR) and Sen. Tom Harkin (D-IA) -- to fund long-term federal transportation projects?

Jim Berard, spokesman for the House infrastructure panel, explained in an interview late last week that the Congressional Budget Office (CBO) had conducted a preliminary analysis that found the transaction tax would raise less money than lawmakers had initially hoped. The reason for the lower-than-expected revenue, Berard said, was the rationale hinted at by House Speaker Nancy Pelosi (D-CA) in November: a tax levied only on domestic futures would end up pushing trades overseas.

"What sounded like a really good solution six months ago turned out to be not as good as we thought, and just not as viable," Berard told Streetsblog Capitol Hill.

That leaves federal transportation policymakers essentially where they were at this time last year, searching for a politically feasible stand-in for a gas tax increase that the White House and congressional Democratic leaders have both ruled out for now.

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Wanted: Crowd-Sourced Transportation Analysis

My recent post refuting David Owen's attack on congestion pricing ignited a long, rich thread. Here's one comment, from "Jonathan," that struck a nerve:

[A] cordon-pricing plan … which doesn't charge center-city residents could result in an increase in those residents' automobile use. If the streets are free of outer-borough traffic, more of my Manhattan neighbors might drive to work, or simply make extra automobile trips within the cordon that without CP [congestion pricing], they would have made by subway or taxi.

meet_the_bta_cropped.jpg

Jonathan's right: Any Manhattan cordon-pricing scheme will lead to an uptick in car trips that start and end within the charging zone. It's one of those "rebound effects" that congestion-price modeling needs to account for, and which I've taken pains to incorporate in my Balanced Transportation Analyzer pricing model.

Indeed, I daresay that the BTA handles just about every issue ever raised on this blog about congestion pricing. How many transit users will switch to cabs? Will variable tolls really flatten rush-hour peaks? Won't faster roads lure back the trips killed off by the toll (Owen's conundrum)? And many more.

Technically, the BTA is a spreadsheet. But I think of it as a vast mansion, whose 46 interlinked "rooms" (worksheets) are stocked with precious data and ingenious algorithms for cracking open questions like these:

  • How does congestion on weekends compare with weekdays?
  • How sharply do traffic speeds rise as volumes fall?
  • Which boroughs and counties stand to pay the most with congestion pricing?
  • Will a cordon toll lead to more bicycling, and will that improve public health?
  • Can decommissioning vehicle lanes increase congestion pricing's benefits?
  • Which will boost transit use more: lower fares or better service?
  • How many fares does a cabbie get in a ten-hour taxi shift, with and without pricing?

Multiply that list a hundredfold and you get a sense of the BTA's hidden treasures.

I say "hidden" because, except for a few mavens like "Gridlock" Sam Schwartz, who calls it "the best [modeling] tool that I have seen in my nearly 40 years," the Balanced Transportation Analyzer remains largely untapped by advocates. To me, it's as if we're all starving while this rich storehouse next door goes to waste.

Which prompts me to ask: Why is the BTA so underused? Is our community missing out on a valuable tool? What should we do about it?

Let's make this an open thread, with emphasis on what can we do together to make the BTA more accessible and useful to New York's livable streets community. (The model is adaptable to other cities, so those of you not from NYC are also invited.)

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How Much Would Most People Pay For a Shorter Commute?

chart.gifData: IBM's CPI
As Washington conventional wisdom has it, raising gas taxes or creating a vehicle miles traveled tax to pay for transportation is impossible during the current recession. After all, who would want to squeeze cash-strapped commuters during tough economic times?

As it turns out, the public is very willing to pay for the shorter commuting times that result from less traffic -- and they're willing to pay top dollar, as IBM's new Commuter Pain Index (CPI) shows.

When asked what value they would place on every 15 minutes sliced from their daily commute, 36.5 percent of CPI respondents said between $10 and $20. That's about five times the recent trading price of a ton of carbon emissions on the nation's climate-change exchanges.

And the price of a shorter commute was higher in more congested cities. In Los Angeles, 22 percent of residents said every 15 minutes not spent en route to work would be worth between $31 and $40 -- or more than $100 per hour.

What does the data mean? For one thing, those who fear that voters would revolt if asked to pay more for a more efficient, less congested transport network shouldn't let that stop policy-making. As every successful politician knows (and the president is re-learning on health care), messaging is the key to winning over the public.

In other words, Democrats who feign unwillingness to subject voters to higher gas taxes are ignoring their ability to control the message. When a greater contribution to transportation is pitched as a way to shorten commutes and give workers more free time, the prospect becomes more desirable.

And it's not that lawmakers don't know how to decrease congestion, particularly in the urban areas that were polled to produce the CPI. Reducing the number of car trips and lowering demand during peak travel times are proven to be a cheaper and more effective method of battling congestion than expanding highway capacity.

Is it time to nickname the White House's Sustainable Communities Initiative the "Shorter Commutes Initiative"?

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How to Judge “Cash for Clunkers”

clunker.jpeg(Photo: NYT)

At this point, it's difficult to know exactly what the government's "cash for clunkers" program is supposed to accomplish.

Claims about its economic and environmental benefits are increasingly detached from reality, and the chief advantage of the program would seem to be that it "worked," in the sense that it was popular among those looking to buy a car.

To add to Elana's post yesterday on the "myths" circulating about the program, let me offer a few thoughts on how best to think about whether the program has provided actual net benefits.

The first thing to consider is what would have happened in the absence of the program. Vehicle sales rose fairly strongly in July, and this will no doubt be attributed to the "clunkers" rebates.

But during the recession, sales hit historic lows. Replacement rates for vehicles sank to unsustainable levels, suggesting quite a bit of pent up demand in the economy.

With economic recovery and continued improvement in credit markets, sales were sure to begin rising, with or without a government subsidy.

"Cash for clunkers" may have altered the timing of purchases, but in all likelihood most of these buyers were going to be in the market soon anyway.

What about the efficiency savings generated by the program? To generate its 0.5 percent of oil consumption savings estimate, the study Elana cites used the following assumptions:

The projection assumes some 250,000 "clunkers" with an average 15 miles per gallon efficiency are traded in for vehicles rated at an average 25 mpg, and travel an average 10,000 miles per year.

Given that far less than a 10 mile per gallon improvement is required to get a $3,500 voucher for a car or any voucher on an SUV or truck, it's not clear that this is an appropriate number to use. And even when efficiencies do improve significantly, the increase in mileage can't be solely attributed to the program.

Moreover, most of the clunkers being traded in this summer will have been purchased at a time when oil prices were lower than they are at present. Real oil prices in 2003 were half their current level; those in 1998 were one-fifth of prices now.

So in all likelihood, efficiencies for new vehicle purchases would be, on average, higher than those of trade-ins even without the program.

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Report: Good Transit and Good Jobs Go Hand in Hand

457108139_3eb15e5a4f.jpgMARTA train in Atlanta, Georgia, where officials are studying the link between transit and job growth.
How could federal job creation programs be greener? Making access to public transit a priority would be one way.

A report called "Uncle Sam's Rusty Toolkit," released today by Good Jobs First, details the group's finding that federal job-creation programs fail in several key ways to meet "best practices" standards already used by states and cities — including locating work sites in places accessible to public transit.

The group's press release stated, in part:
"The federal government can promote better jobs, protect taxpayers, and reduce greenhouse gas emissions by simply taking some lessons from states and cities," said Greg LeRoy, Executive Director of Good Jobs First. "These well-established safeguards are consistent with President-elect Obama’s stated goal of reforming programs to make them more transparent and cost-effective."

The study deals with five federal programs: the Department of Housing and Urban Development’s Community Development Block Grant program; the Department of Labor’s Workforce Investment Act; the Department of Commerce’s Public Works and Economic Development Program; Industrial Revenue Bonds as allowed under the Internal Revenue Code; and the Department of Agriculture’s Business and Industry Guaranteed Loans Program.

The report, which could hardly be more relevant than it is today, may be downloaded here.

Photo: Michael Hinton/Flickr

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Reason to Like Rahm Emanuel as White House Chief of Staff

Spotted in today's Times story on Barack Obama's emergency economic agenda:

Mr. Obama is coordinating with Congressional Democrats behind the scenes on the stimulus plans, which would include more jobless benefits, food stamps, aid to financially strapped states and cities, and spending for infrastructure projects that keep people at work. His chief liaison has been Mr. Emanuel.

"You don't ever want a crisis to go to waste; it's an opportunity to do important things that you would otherwise avoid," Mr. Emanuel said in an interview. "In 1974 and 1978 we never dealt with it, and our dependence on foreign oil never changed."

Good stuff, except for that "foreign" part.

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If Gridlock Sam Was President…

gridlocksam.jpgA bit of pre-Election Day fun: Here's a mock state-of-the-union speech drafted for the next President by "Gridlock" Sam Schwartz. Combining some ideas from Barack Obama's platform with some that no candidate would utter during a presidential campaign, he lays out a plan for infrastructure investment and how to pay for it:

The National Infrastructure Bank will assemble a portfolio of projects for investment by the public and private sector. I will follow the formula developed by the renowned economist Felix Rohatyn so that any project seeking over $75 million in federal support would be required to submit a proposal to the bank. The submission would include the contribution to be made by the state and local governments, user fees and a plan for maintenance. The bank would then decide to fund the project outright, or through credit guarantees for state bonds or loans against future revenues from user fees and other sound financial strategies.

The federal government will favor cities that introduce congestion pricing. A recent study by the Brookings Institute found that more than $100 billion could be raised annually by road pricing in the 98 largest metropolitan areas. We will adopt the previous administration’s call for a dedicated Metro Mobility (MM) Program (pdf) for metropolitan areas with populations greater than 500,000. These are the battle grounds for congestion, fuel inefficiencies and production of greenhouse gases.

The gas tax is a dinosaur (pun intended). As long as it remains a flat tax at 18.4 cents per gallon and gas consumption decreases (a goal of my administration) it will be a dwindling source of revenue. I propose that the tax, like most other taxes, be indexed against the sale price. This way, when foreign influences raise the price of gas, some revenue will be returned to the taxpayers in public works projects. I propose a 5 cent/gallon increase over present levels, the first increase since 1993, to generate about $10 billion annually. But, if the price of gas goes down, and I hope it does, the tax will go down accordingly.

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In New Report, RPA Reinforces Link Between Transit and Growth

rpa1.jpg

Following yesterday's Build for America launch and last night's presidential debate, the Regional Plan Association released a major report today recommending an array of public transportation improvements for New York City and northern New Jersey, adding its name to the ever-growing list of orgs and officials calling for federal investment to spur and sustain economic growth in the coming decades.

Over a dense 53 pages, "Tomorrow’s Transit: New Mobility for the Region’s Urban Core" [PDF] lays out dozens of projects, large and small, that would improve transit access and performance, with a focus on underserved and, in many cases, high poverty areas. The report, as breathtaking in scope as the $29 billion five-year capital plan unveiled by MTA head Lee Sander last March, also proposes augmentations to long-planned mega-projects like the Second Avenue Subway, and stresses links between modes to maximize coverage and efficiency.

Proposals are categorized by cost and level of need, as determined by existing transit service, income levels, and rates of auto ownership.

Follow the jump for highlights.

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