If you believe the soothsayers–including the CEO of Lyft–our cities will soon be home to swarms of autonomous vehicles that ferry us quietly, cleanly and safely to all of our urban destinations. The technology is developing–and rolling out–at a breakneck pace. Imagine some combination of Uber, electrically powered cars, and robotic control. You’ll use your handheld device to summon a robotic vehicle to pick you up, then drop you off at your destination. Vast fleets of these vehicles will flow through city streets, meeting much of our transportation demand and reducing the ownership of private cars. Big players in the automobile and technology industries are making aggressive bets that this will happen. But, the big question behind this, as we asked in part one of this series yesterday, is “how much will it cost?”
While the news that Uber is now street-testing self-driving cars in Pittsburgh–albeit with full time human supervisors–has heightened expectations that a massive deployment is just around the corner, some are still expressing doubts. The Wall Street Journal points out that the initial deployment of autonomous vehicles may be restricted to well-mapped urban areas, slow speeds (under 25 miles per hour) and good weather conditions. It could be twenty years before we have “go anywhere” autonomous vehicles.
And those looking forward and contemplating the widespread availability of self-driving cars are predicting everything from a new urban nirvana to a hellish exurban dystopia. The optimists see a world where parking spaces are beaten into plowshares, the carnage from car crashes is eliminated, where greenhouse gas emissions fall sharply and where the young, the old and the infirm, those who can’t drive have easy access to door-to-door transit. The pessimists visualize a kind of exurban dystopia with mass unemployment for those who now make their living driving vehicles, and where cheap and comfortable autonomous vehicles facilitate a new wave of population decentralization and sprawl.
To an economist, all of these projections hinge on a single fact about autonomous vehicles that we don’t yet know: how much they will cost to operate. If they’re cheap, they’ll be adopted more quickly and widely and have a much more disruptive effect. If they’re more expensive than private cars or transit or biking or walking, they’ll be adopted more slowly, and probably have less impact on the transport system. (It’s worth noting that despite their notoriety, today’s Uber and Lyft ridesharing services have been used by less than 15 percent of the population). Whether autonomous vehicles become commonplace–or dominant–or whether they remain a niche product, for a select segment of the population or some restricted geography, will depend on how much they cost.
As we reported yesterday, the consensus of estimates is that fleets of autonomous vehicles would likely cost between about 30 and 50 cents per mile to operate sometime in the next one to two decades. That’s potentially a good deal cheaper than the 50 to 85 cents average operating cost for a conventional privately owned vehicle. All of these estimates assume that the hardware and software for navigation and vehicle control, including computers, sensors and communications, though expensive today, will decline in cost as the technology quickly matures. Some of those savings come from a combination of electric propulsion, and perhaps smaller, purpose built “pod” vehicles. But most of the savings comes from greater utilization. Privately owned cars, it is frequently noted generally sit idle 90 percent of the time. In theory, at least, fleets of autonomous vehicles would be more nearly in constant motion, taking up less space for storage, and doing more work.
Peak demand and surge pricing
A couple of things to keep in mind as we ponder the meaning of these estimates: First, cost is not the same as price. While these figures represent what it might cost fleet owners to operate such vehicles, the prices they charge customers will likely be higher, both because they’ll want a profit, and because travel demand at some peak times (and locations) will exceed capacity.
And that’s the big obstacle to realizing the theoretical higher utilization of autonomous vehicles. Demand for travel isn’t spread evenly throughout the day. Many more of us want to travel as certain times (especially early in the morning and late in the afternoon) and the presence of these peaks, as we all know, is the defining feature of our urban transportation problem. Whiz-bang technology or not, there simply won’t be enough autonomous vehicles to handle the demand at the peak hour, for two reasons: first, fleet operators won’t want to own enough vehicles to meet the peak, as those vehicles would be idle all the rest of the time. The second issue is what Jarrett Walker has called the “geometry” problem: there simply isn’t enough room on city streets and highways to accommodate all the potential peak travelers if they are each in a personal vehicle.
Consider a practical example. One prominent study, by Columbia University’s Earth Institute, predicts that it would be possible to run autonomous vehicles in Manhattan for 40 cents per mile. That’s far cheaper than current modes of travel–including taxi, ridesharing, private cars and even the subway or bus for trips of less than five miles–so it’s likely that many more people will want to take advantage of autonomous vehicles than there will be vehicles to accommodate them. So, at the peak, autonomous vehicles will undoubtedly charge a surge fare, just Uber and Lyft do now.
The competitive challenge to transit, especially off-peak
Most of the estimates presented here suggest fully autonomous vehicles will be cheaper than privately owned conventional vehicles. It’s also likely that they may be less expensive than transit for many trips. In many cities the typical bus trip is only 2 or 3 miles in length; if the price of an autonomous vehicle is less than 50 cents per mile, the cost of such a trip (door-to-door, in an non-shared vehicle) will be less than the transit fare. Autonomous vehicles could easily cannibalize much of the transit market, especially in off-peak hours.
And because they can charge fares much higher than costs at the peak, operators will likely discount off-peak fares to below cost. That may mean at non-peak times, autonomous vehicles may be available to travelers at prices lower than the estimates shown here. Simply put, as long as operators cover their variable costs–which are likely to be electricity and tires–they needn’t worry about covering their fixed costs (which can be paid for from peak period profits).
Behavioral effects of per-mile pricing
The silver lining here–if there is one–is that the kind of per mile pricing that fleet vendors are likely to employ for autonomous vehicle fleets will send much stronger signals to consumers about the effects of their travel decisions than our current mostly flat-rate travel pricing. Today, most households own automobiles, and have pay the same level of fixed costs (car payments, insurance) whether they use their vehicle or not for an additional trip. Because the marginal cost of a trip is often perceived to be just the cost of fuel (perhaps 15-20 cents per mile), households use cars for trips that could easily be taken by other modes. That calculus changes if each trip has a separate additional cost–and consumers are likely to alter their behavior accordingly. Per mile pricing will make travelers more aware–and likely more sensitive to–the tradeoffs of different modes and locations. The evidence from evaluations of car-sharing programs, like Zip-car, show that per mile pricing tends to lead many households to reduce the number of cars they own–or give up car ownership altogether.
The price of disruption
If these cost estimates are correction, and if autonomous cars are actually feasible any time soon, the lower cost of single occupancy vehicle travel and a different pricing scheme will likely trigger greater changes in travel behavior. At the same time, other institutions, like road-building agencies and transit providers may see a major disruption of their business models. A move to electric cars threatens the principal revenue source of road-building agencies, the gas tax. And an overall decline in vehicle ownership coupled with more intense peak demand could be a state or city transportation department’s fiscal nightmare. Whether that happens depends a lot on whether these forecasts of relatively inexpensive autonomous vehicles pan out.
Measure A would help Santa Clara County build more supportive housing like the San Jose Family Shelter. Photo by Charities Housing
Santa Clara County is now one of the most expensive places to live in the country. The median home price is approaching $1 million, and ever-increasing rents have resulted in displacement pressures and a growing homeless population. As of January 2015, more than 6,500 unhoused people were living in Santa Clara County, including more than 4,500 unsheltered individuals — the fourth largest number in the country.
In November, voters in Santa Clara County have an opportunity to help those who are most in need of housing and improve quality of life for all. Measure A, a $950 million general obligation bond, will support the construction of approximately 4,800 housing units. The measure will fund very low-, low- and moderate-income housing ($200 million), first-time homebuyer assistance ($50 million) and permanent supportive housing ($700 million). The permanent supportive housing will serve people who are extremely low-income (households making up to 50 percent of the area median income, or $55,800 for a four-person household), primarily those with special needs: the formerly homeless, the mentally ill and the disabled.
SPUR is proud to support Measure A. Here’s why:
This bond will primarily fund permanent supportive housing, which requires a patchwork of funding sources. In order to compete for state and federal sources of funding, projects must show local support. So the funding this bond provides can help local projects access additional funding. Since residents of permanent supportive housing have little to no income and require extensive services, rental income for these developments cannot support a conventional loan, and these projects may require additional subsidy to fill the gap.
There are very few funding sources for this type of housing, and even fewer since California eliminated state redevelopment agencies in 2012. Before the dissolution of redevelopment, Santa Clara County cities had $60 million annually to invest in housing for low- and moderate-income households. Drastic cuts to federal and state housing programs further reduced affordable housing funding in the county; California Housing Partnership Corporation estimates that Santa Clara County’s affordable housing funding has been reduced by $130 million (an 83 percent reduction) since 2008.
Property-owners would pay up to $12.66 per $100,000 of assessed property value. For a home valued at $810,000 (the county median home price in 2015), a homeowner would pay an additional $102.55 per year. Since older bonds may be reaching the date when they are retired over the same time period as the housing bonds are issued, the net change in property taxes for property owners may not be increased by the full amount in all years.
This measure could eventually have a net positive effect on the general fund. Destination:Home’s report Home Not Found: The Cost of Homelessness in Silicon Valley, found that the county spends $520 million annually on homelessness, with the highest costs associated with medical services and the justice system. The report also found that providing permanent supportive housing to the heaviest users of county services could result in avoided costs of more than $42,700 for each person who receives and remains in housing. Studies around the country confirm the cost-effectiveness of providing supportive housing to heavy users of public services.
SPUR strongly supports Measure A. We believe it is critical to invest in permanently supportive housing and recognize that the major constraint on affordable housing is the lack of funding. Measure A brings the funding we need to build more affordable housing. For more information about the campaign, visit http://yesonaffordablehousing.org/
SPUR also supports Santa Clara County Measure B >>
Everyone’s trying hard to imagine what a future full of autonomous cars might look like. Sure, there are big questions about whether a technology company or a conventional car company will succeed, whether the critical factor will be manufacturing prowess or software sophistication, and all manner of other technical details.How much will it cost?
But for economists — and also for urbanists of all stripes — a very big question has to be: How much will autonomous cars cost? We’re going to tackle this important question in two parts. Part one–today–assembles some of the estimates that have been made. We’ll aim to ballpark the approximate cost per mile of autonomous vehicles. In part two–tomorrow–we’ll consider what this range of estimates implies for the future of urban transportation, and for cities themselves, because transportation and urban form are so closely interrelated.
So here is a first preliminary list of some of the estimates of the cost per mile of operating autonomous vehicles. We’ve reproduced data from a number of sources, including universities, manufacturers, and consulting firms. Its difficult to make direct comparisons between these estimates, because they not only employ different assumptions, but also forecast costs for different future years (with unstated assumptions about inflation). There’s some significant disagreement about the cost of operation of current vehicles, which range from 59 cents per mile to 84 cents per mile. (For this commentary, we’ve assembled these estimates without undertaking our own analysis of their accuracy or reliability; we encourage interested readers to click through and read each of these studies and draw their own conclusions about their utility).$1.00 per mile.
Ford (2016) thinks it can reduce the cost of highly automated vehicles to about $1.00 per mile, making them highly competitive with taxis which it estimates cost $6.00 per mile. 51 cents per mile (2025), 33 cents per mile (2040)
Rocky Mountain Institute (2016) estimates that in 2018, autonomous vehicle costs will be roughly competitive with current vehicles (about 84 cents per mile), but will steadily decline, to 51 cents per mile by 2025 and 33 cents per mile by 2040. 50 cents per mile (2030).
Morgan Stanley (2016) estimates autonomous vehicles will cost about 50 cents per mile by 2030, compared to about 74 cents per mile for privately owned standard vehicles."
43 cents per mile.
KPMG (2016) estimates costs of 43 cents per mile total. It estimates current cars have variable costs of 21 cents per mile and fixed costs of 61 cents per mile for a total of 84 cents per mile. KPMG estimates new shared AVs would cost 17 cents per mile variable, and 26 cents per mile fixed (43 cents per mile total) with $25K car fully depreciated in 3 years being driven about 40K miles per year.
31 to 46 cents per mile.
Deloitte (2016) estimates costs of 46 cents to as little as 31 cents per mile for autonomous vehicles; the latter estimate corresponds to low speed purpose built pods.
29 cents per mile (2040)
Barclay’s (2016) estimates the costs of autonomous vehicles at .29 per mile by 2040, compared to about 66 cents per mile for conventional, privately owned vehicles today.
15-41 cents per mile.
Columbia University Earth Institute (2013) estimates costs of autonomous vehicles would be about 41 cents per mile for full-sized vehicles and could be as little as 15 cents per mile for purpose-built low speed vehicles. This compares to costs of 59 to 75 cents per mile for conventional privately owned automobiles.
The estimates for future costs range from as much as a dollar per mile (Ford’s near term estimate of its cost of operation for what it refers to as “highly automated vehicles),” to an estimate of 15 cents per mile a decade or more from now for the operation of small purpose-built low-speed urban “pods”–like Google’s prototype autonomous vehicle. Overall, the estimates imply that fleets of autonomous vehicles could be operated in US cities in the next decade or two for something between 30 and 50 cents per mile.
And, for a variety of reasons–which we’ll explore in more detail tomorrow–the deployment of autonomous vehicles is much more likely to occur in cities. The critical factor is that market demand will be strongest in cities. According to the Wall Street Journal, autonomous vehicles will initially be restricted to low speeds, avoid bad weather and stay within carefully circumscribed territories (given the cost and complexity of constructing the detailed maps autonomous vehicles to navigate streets), all factors that point to cities.
These estimates hinge on a number of important assumptions about operating costs. The highest estimates usually assume some form of automating something resembling existing vehicles; operating costs are assumed to be lower with electric propulsion and smaller vehicles. A key cost driver is vehicle utilization and lifetime; fleets of autonomous vehicles are assumed to be used much more intensively than today’s privately owned cars, with a big reduction in capital cost per mile traveled.
There are some other big assumptions about whole categories of costs, and the policy environment looking forward. Todd Litman raises the concern that autonomous vehicles will require relatively high expenditures for cleaning, maintenance and vandalism repair, as much as hundreds of dollars per week. Its not clear that any of the estimates for the costs of operating electric vehicles include any kind of road user fee to replace gas tax revenues now paid by internal combustion powered vehicles.
Despite they uncertainties, the available estimates suggest that successful autonomous vehicles could be substantially cheaper than today’s cars. And if they’re available on-demand and a la carte–freeing users from the cost of ownership, parking, maintenance and insurance–this may engender large changes in consumer and travel behavior. Tomorrow, we’ll explore what these effects might be.
We spend a lot of time talking about Missing Middle Housing and its critical role in developing healthy and inclusive neighborhoods. Discussing the theory and design behind Missing Middle Housing is essential, but we also need to consider the hands-on process of making these projects real. One major step in this process is selling Missing Middle Housing to the public – especially those that live near the project site. We are actively rezoning properties in Atlanta to Missing Middle pocket neighborhood development – and this gives us firsthand feedback on how communities perceive the benefits of these housing options, as well as the fears these projects generate.
To really understand the importance of the Missing Middle and how to bring it to our neighborhoods, we’ve got to go to the source. Dan Parolek and his wife Karen founded the architecture and urban planning firm Opticos Design in 2000. They coined the term “Missing Middle” a few years ago and maintain the Missing Middle Housing website, which contains a great collection of examples of a range of Missing Middle housing types. That site should be your first stop when reading up on the Missing Middle.
So how do we get more missing middle housing into our community? In Atlanta, Chattanooga, and probably most other cities, Missing Middle Housing is not supported under many parts of the current zoning code. In order to do a Missing Middle development, a rezoning and/or a variance is typically required. Rezonings typically require a community engagement process and public approvals, meaning the designer or developer has to sell the project to the public. This entire dynamic means that if you want to execute Missing Middle, you have to be well versed at overcoming NIMBYism on a project-by-project and neighborhood-by-neighborhood basis.
We follow a very straightforward approach to all our rezonings. We have to convincingly explain why our proposed project makes the community a better place. To us, “a better place” means that a neighborhood becomes more walkable, inclusive, and transit-accessible. Significantly underutilized land is repositioned to house more residents who will support local businesses. One thing that we do not ever use as a valid argument is that our project might raise property values. The property value discussion will quickly become a slippery slope. As communities improve, increased property values are just as likely to price existing residents out as they are to benefit residents who recently moved in.
People want to be altruistic, but typically still maintain a selfish streak. They each want to know why or how a proposed development will benefit them individually. All too often in Atlanta, density is perceived as number of units; size of units is much less of a concern. From the perspective of someone already living near the project, more units = more occupants = more cars = more traffic = not making my life better as a neighbor. We have to work hard to get people to understand that traffic is never going to get better, and trying to limit the overall density of a city on a project-by-project basis is not a recipe for success. This argument is easier to make when you choose to take on projects that are in close proximity to existing or planned transit locations (in Atlanta, MARTA or the Beltline).
In my experience, the best approach to selling benefits to neighbors is to take the neighborhood convenience center (in Atlanta, typically a former streetcar stop commercial node) and talk about the required supportive density. If we believe that a commercial node like Candler Park is a benefit and makes a community better, and we like how it is massively underparked relative to zoning requirements, then we need to look at how to promote the ability for people to live close to the node so they can walk or bike there and not need a parking spot. Here’s the math:
A typical 30,000 square foot commercial node (Atlanta’s Candler Park neighborhood is approximately this size) will need around 2000 households to support it (reference Bob Gibb’s Principles of Urban Retail Planning and Development). A five-minute walk, or quarter mile, is the typical distance planners use to determine if someone will reasonably walk somewhere, assuming the walk is pleasant (it has shade and sidewalks). If you take a simple radius of ¼ mile, and draw a circle around the node, you end up with a catchment area of approximately 125 acres. This is the total amount of land within a walkable distance of the stores and restaurants. If we were amazingly hopeful, and wanted to get enough residents within this node to support these businesses, we would take the 2,000 households required divided by the total are to get a units/acre calculation. 2000 units/125 acres = 16 units per acre. A typical Atlanta R-4 lot in this neighborhood has a density of 4 units/acre. An R-5 lot has a density of 5 units/acre assuming just a single-family house per lot.
The point of this geeky planning math is to demonstrate that you can’t provide enough density to support a beloved commercial node with single-family homes alone. Further, I am willing to bet that there is strong neighborhood resistance to inserting a range of 4-5 story apartment buildings in the neighborhood to balance the overall unit density from 4-5 units per acre to the 16 needed. It is also important to note that 16 units/acre is the typical recognized minimum density needed for a place to be transit supportive. Mobility options beyond the private automobile are critical for making great places. Even if transit is not planned now, it is much better to be transit supportive than not. This transit can also take a wide variety of forms based upon the most appropriate solution for the specific place.
We find this connection between Missing Middle Housing and thriving walkable commercial nodes to be incredibly important, and one of the stronger arguments to overcome NIMBY opposition to projects. We also find this argument compelling when we see struggling historic commercial nodes. Linking the density of land use around these nodes to Missing Middle is key to the overall community’s success. This also demonstrates that there are certain locations that are more appropriate for Missing Middle developments than others. Walkable urban places need some form of Missing Middle to support their commercial components (outside of core downtowns). Locating a project in these walkable areas is critical to leveraging the arguments provided in this article.
Entrepreneurship is both a key driver of economic activity and an essential path to economic opportunity for millions of Americans. Historically, discrimination and lower levels of wealth and income have been barriers to entrepreneurship by African-Americans, but that’s begun to change. According to newly released data from the Census Bureau, its now estimated that there are more than 108,000 African-American owned businesses with a payroll in the U.S.
The new survey, conducted by the Census Bureau, in cooperation with the Ewing Marion Kauffman Foundation, provides a rich source of data about the economic contributions of African-American-owned businesses. Called the Annual Survey of Entrepreneurship, this is the first iteration of a survey that gathers data which asks detailed questions about key demographic characteristics of business owners, including gender, race and ethnicity, and veteran’s status. And unlike other business data, the entrepreneurship survey reports data by age of business, allowing us to examine separately the economic contributions of newly formed businesses.
The survey focuses on businesses with paid employees, and so generally excludes self-employed individuals working on their own. In 2014, the survey reports that there were more than 5.4 million businesses with a payroll in the United States. Of these, about 270,000 businesses were public corporations (or other business entities for which the gender or other demographic characteristics of owners could not be ascertained). These large corporate businesses employed almost 60 million workers (52 percent of total payroll employment). The remaining 5.1 million firms with identifiable owners employed about 55 million workers.
The survey concludes that about 108,000 businesses, or roughly two percent of those businesses with individually identifiable owners, were owned exclusively by African-Americans. Together these businesses employed more than 1 million workers nationally. On average, African-American owned businesses are younger than other businesses; about 14.1 percent of these African-American-owned businesses had started in the past two years, compared to about 8.9 percent of all employer firms. African–owned businesses are found in all economic sectors, but are disproportionately represented in health and social services. About 28 percent of African-American owned businesses are engaged in health and social services, compared to about 12 percent of all individually owned businesses.
The report also offers data on business ownership patterns for the 50 largest US metropolitan areas. We thought it would be interesting to see how different areas ranked in terms of the share of all businesses with employment that were owned by African-Americans.
Here’s a listing of the number of African-American owned businesses per 1,000 African-Americans in the population in each of the fifty largest US metropolitan areas. Think of this as an indicator of the likelihood that an African-American owns a business with a payroll in each of these places. Overall, about three in one thousand African-Americans in these fifty large metropolitan areas own a business.
Among the cities with the highest proportions of business owners among the African-American population are San Jose, St. Louis, Denver and Seattle. Each of these cities has about six or seven African-American entrepreneurs per 1,000 African-American residents. San Jose is famously the capital of Silicon Valley, which may explain why such a relatively high fraction of its African-American residents own businesses with a payroll. In contrast, Louisville, Buffalo, Memphis and Cleveland have much lower rates of African-American entrepreneurship, each of these metro areas has fewer than two African-American entrepreneurs per 1,000 African-American residents.
Another way to think about this data is to compare the share of the population in each metropolitan area that is African American with the share of entrepreneurs who are African American. The following chart shows this information. As one would expect, as the share of the African-American population increases, so too does the fraction of entrepreneurs who are African-American. There are some clear outliers. As shown on the chart, St. Louis has somewhat more African-American entrepreneurs than one would expect, given the size of is African-American population, and conversely, New Orleans has fewer. But on average, entrepreneurship is much less common among African-Americans than the overall population, in every metro area. On average, the share of the African-Americans who are entrepreneurs is about one-fifth their share of the population of a given metropolitan area.
In a previous post, we examined the geography of women-owned businesses. The Census plans to conduct its new survey of entrepreneurs on an annual basis. This promises to be a useful was of benchmarking efforts to draw more Americans of every stripe into business ownership.
Events in the news reminded me of an experience I had a few years back while renovating an old fixer upper in the countryside. The house had electricity, but it was a mess of cleaning, painting, and light carpentry at the time. Cell phone coverage was spotty and I didn’t even have a smart phone. There was no internet service or TV and my favorite radio station didn’t come in clear enough to listen to. I had plenty of paper books on hand, but I missed the internet, particularly in the evenings when I like to catch up with correspondence.
It was a gorgeous summer evening so I took a walk with my laptop to a local restaurant where I could hop on their WiFi. I had been taking most of my meals in town for months so this wasn’t unusual. But this time I arrived just after they closed so I sat on a bench on the sidewalk and checked my e-mail there.
Half an hour later a police car came screaming down the road at high speed. I looked around curious about what was up. This was a small town in the wine country, not the big city. The squad car stopped directly in front of me and a cop came out fast and furious – straight at me. The car headlights blinded me and I stood up in a hurry. I was smiling nervously. Cops don’t like it when people smile at them. They interpret it as a sign of disrespect. You aren’t taking them seriously. It took about thirty seconds for him to realize I was harmless. It was a very long thirty seconds. I’m a lot of things (not all of them noble) but threatening isn’t on the list. Then there was a more measured conversation and some vague warnings about nothing in particular. I hadn’t actually been doing anything wrong. After our brief but intense exchange he drove away and I walked back to the house.
I later asked around and pieced things together. The manager at the restaurant across the street (a place I frequent often) saw a shadowy figure who might be getting ready to rob the place near closing time after a lucrative weekend shift. Maybe the laptop was being used to communicate with other criminals in on the operation. He called the police to be on the safe side. A dispatcher relayed that information to a patrol officer in the vicinity who sprung in to action. At each step along the way the description of the situation became more sinister.
To this day I’m not sure how things might have played out if I hadn’t been a middle aged white guy. I could have ended up in a pool of blood by that bench if circumstances had been slightly different.
I was born in 1967. That was a particularly bad year for race riots in America. 1992 was another bad year as the Rodney King riots unfolded. We’ve seen numerous protests in recent months all across the country, mostly because so many incidents are now recorded and are available for public scrutiny.
The usual conversation defaults to three camps. First, white people who view racial unrest as evidence of how violent people of color really are. Second, black and brown people who know from direct personal experience that they’re treated differently by society in general and law enforcement in particular. And third, the awkward sometimes well intentioned, sometimes ineffectual, sometimes productive, sometimes self-serving folks who attempt to negotiate a better future for everyone. I’m fifty now. This racial peace and justice thing is a long time coming… It appears to be a problem we really don’t want to solve.
Silver Spring's Lyttonsville neighborhood has a rich history, but urban renewal nearly destroyed it. With the Purple Line coming, this historically-black community could get a second chance, but not everybody looks forward to it.
Located west of the Red Line tracks from downtown Silver Spring, Lyttonsville is one of Montgomery County's oldest neighborhoods, founded in 1853 by freed slave Samuel Lytton. The area could soon be home to a Purple Line station if the light-rail line between Bethesda and New Carrollton opens as scheduled in 2022.
Over the past two years, Montgomery County planners crafted a vision for a small town center around the future Lyttonsville station, bringing affordable housing and retail options the community lacks. Some residents are deeply skeptical of what's called the Greater Lyttonsville Sector Plan, though it could restore the town center Lyttonsville lost long ago.
A rough history
During the early 20th century, a thriving main street developed along Brookville Road, including schools, churches, and a cemetery. As surrounding areas became suburban neighborhoods exclusively for white residents, the black Lyttonsville community lacked public services like running water and paved roads. For decades, its only connection to Silver Spring was a wooden, one-lane bridge that remains today.
In the 1970s, the county seized much of the area, destroying Lyttonsville's main street and replacing much of it with an industrial park, a Ride On bus lot, and storage for the Washington Suburban Sanitary Commission. Many of the older homes were replaced with large garden apartment complexes.
Today, Lyttonsville is a racially diverse community, and sought-after for its location between Silver Spring and Bethesda and being in the vaunted Bethesda-Chevy Chase school catchment. But one out of ten residents lives in poverty, compared to 6.9% of residents countywide. Lyttonsville is hard to access by any form of transportation, isolating its residents from nearby jobs.
Some residents claim the county's plan will continue a legacy of destructive planning decisions. They're worried about traffic and density, about getting redistricted out of the B-CC cluster, and that the area's affordable apartments could get replaced with luxury housing. Others are wary of the Purple Line after fighting off plans to locate a storage yard in the neighborhood.
Charlotte Coffield, who grew up in Lyttonsville during segregation and whose sister Gwendolyn fought to bring services to the area (the local community center is named for her), has emerged as one of the biggest critics. "All [Purple Line] stations do not need to be town centers," she wrote in a letter to the county planning board. "The proposed density would destroy the stable character and balance of our ethnically diverse neighborhood." Last week, the Lyttonsville Community Civic Association, where she is president, voted to accept no more than 400 new homes in the area.
New development in Lyttonsville
Bethesda-based developer EYA, which is currently building townhomes next to the future Chevy Chase Lake Purple Line station, has an alternate proposal for Lyttonsville that could address residents' concerns. The biggest land parcels in the area are owned by several different property owners, including multiple government agencies, each with their own plans. Some want to build lots of new homes, while WSSC has a large site that they intend to leave alone.
EYA has reached out to several landowners about coordinating, allowing development on a combined 33-acre site to happen together. First, they would partner with WSSC to build several hundred affordable apartments and townhomes on their property. Residents of existing apartments could move there first without getting displaced. Then, EYA would partner with the two non-profits who own the affordable apartments to redevelop them with market-rate townhomes. The county would restrict building heights to 70 feet.
Next to the Lyttonsville station itself, EYA envisions a plaza surrounded by market-rate apartments, 30,000 square feet of retail space (about half the size of a Giant supermarket), and a small business incubator modeled on Baltimore's Open Works that would offer job training to local residents.
Public art would promote the area's history, while Rosemary Hills Park would get a small addition. Local streets where drivers speed today would get traffic calming and new pedestrian and bicycle connections.
The $500 million proposal addresses most of the neighbors' concerns. EYA seeks to build 1200 new homes on the land, compared to the nearly 1700 the county would allow there. (What Montgomery County wants to allow in Lyttonsville is still less dense than plans for other Purple Line stations, including Long Branch and Chevy Chase Lake.) One-third of the new homes would be set aside for low-income households, and every existing affordable apartment would be replaced.
"The county can leave a legacy for how you can build Smart Growth," says Evan Goldman, VP of Land Acquisition and Development at EYA, stressing that the private development could help pay for the public amenities neighbors want. "There's only so much [public benefits] this can afford," he adds. "If you reduce the units so you can't pay for the benefits, the public benefits won't come."
Can the proposal actually work?
Residents I've spoken to like EYA's proposal, but are skeptical if it can happen. This project could have a transformative effect on Lyttonsville, but only if all of these partners agree to it. Recent experience in Shady Grove suggests finding new locations for the Ride On bus lot or WSSC's facility may be difficult.
"If EYA can execute its plan, there are more upsides," says resident Abe Saffer, "but since they don't have any letters of intent or partnerships firmly in place, I remain nervous."
The Montgomery County Council will hold two public hearings on the Lyttonsville Sector Plan next week in Rockville. Here's where you can sign up. If the plan is approved, the county would then have to approve EYA's proposal, which could then start construction in 2020 and take 10 to 15 years to get built.
1. America’s most creative metros, ranked by Kickstarter campaigns. One of the most popular ways to raise funds for a new creative project–music, a video, an artistic endeavor, or even a clever new product–is Kickstarter. Website Polygraph.cool has created an impressive visualization of nearly 100,000 kickstarter campaigns. We use that data to rank US metros by number of kickstarter campaigns per capita. The unsurprising leaders: Austin, Portland and San Francisco. See how your city compares, and use Polygraph’s data visualization to identify the top indie entrepreneurs in your area.
2. Successful cities and the civic commons. Cities are more than just collections of businesses, buildings and infrastructure: the social fabric of cities–they way they enable us to easily connect with one another–is important both to their economic function and to the civic realm. As we pointed out in our report Lost in Place, in many ways the social fabric of cities has been stressed and torn by growing segregation and privatization of many parts of our lives, from travel to entertainment to leisure. But there are growing signs of a revival of investments in the public realm that try to strengthen the social and civic functions of cities. Knight Foundation and others have launched a new initiative to reimagine the civic commons, with targeted funding for five cities around the country.
3. Caught in the prisoner’s dilemma of local planning. While the principle of local control has a lot of political resonance and popular support, when it comes to meeting our housing challenges, in creates a terrible conundrum. While every neighborhood in a city or metropolitan area would benefit from more affordable housing if greater density were more widely allowed, each individual neighborhood is reluctant to be the first (or only) place that allows more density, for fear that it alone will bear the brunt of change. This prisoner’s dilemma dominates many local zoning fights and is very much in evidence as New York tries to implement its new mandatory inclusionary zoning program.
4. Lessons in supply and demand: Housing Market edition. We recognize that many people bristle at the mention of economic terminology, but in our view its hard to make sense of our current housing affordability problems without explicitly thinking about supply and demand. Specifically, the demand for urban living has increased rapidly, and continues to do so; meanwhile the supply of great urban neighborhoods–and housing in those neighborhoods–has grown only slowly. The inevitable result is higher rents. Tackling our “shortage of cities” is a fundamental challenge.This week’s must reads
1. Another NYC Affordable Housing Project gets shot down. In New York City, a proposal to build 209 units of affordable housing in Queens in an area currently zoned for manufacturing has apparently died, due to opposition by the local city councilor. As we’ve noted, the Achilles heel of Mayor de Blasio’s mandatory inclusionary zoning program is the need for project-by-project up-zonings. So far, in both of the cases that have come forward, the up-zonings have provoked neighborhood outcry, and led local city councilors to oppose the project, which given the City Council’s deference to issues in member’s own districts, is the kiss of death. Yet more evidence that hyper-localism in decision-making makes it extraordinarily difficult to tackle housing affordability.
2. The Jane Jacobs Centennial. Writing at the New Yorker, Adam Gopnick uses his review of two recently published biographies of Jane Jacobs to assess her contribution to our understanding of cities. He argues that some of her insights haven’t weathered the test of time well, but in many ways, her work continues to be as fresh and provocative as when she wrote it. And in important ways its prescient about the situation we now find ourselves in, as Gopnick notes: “The new crisis is the ironic triumph of Jacobs’s essential insight. People want to live in cities, and when cities are safe people do. Those with more money get more city than those with less.”
3. Bonus Must Watch: City Observatory’s Daniel Kay Hertz on Chicago Newsroom. You’ve read his commentaries here on City Observatory, now you can watch him on video as well, discussing a range of issues from urban sprawl, to changing demographics, and even optimal bus-boarding process (the latter really get him going). A full hour of urban wonkiness.New knowledge
1. How zoning has re-shaped American cities. For decades, the conjecture among many academics was that zoning simply ratified the kinds of land use patterns that were already in place. But a new study of Chicago comparing land use patterns prior to the adoption of that city’s zoning code in 1923 with current development shows that zoning strongly influenced subsequent development. In a new NBER working paper, entitled Zoning and the Economic Geography of Cities, Allison Shertzer, Tate Tinam and Randall Walsh, examine parcel level data on land uses and market values from the 1920s and look to see how they are related to today’s development patterns. Their key findings: zoning does have an impact, and may be more influential in the location of different activities than either geography or transportation networks. They also find that exclusive residential zoning tends to drive up home prices. In addition, zoning seems to have greatly reduced mixed use development: in 1922, 82 percent of the developed blocks in Chicago had at least some commercial activity.
2. How city center service-exporting businesses drive the UK economy. A new report Trading places: Why firms locate where they do from the UK Centre for Cities looks at the location and growth of different industries. It divides businesses into those that export goods, those that export services and those that serve local demand. This is especially important for the service exporting sector which has powered the UK economy, as goods production as continued to decline. Fully 32 percent of Britain’s high-skilled jobs in service exports are located in city centers, more than double the proportion (14 percent) of all jobs. The report concludes with some pointed advice for new Prime Minister Theresa May: “The geography of Britain’s jobs and firms means that supporting growth in our cities will become increasingly important for improving the performance of the national economy.”
2. The 2016 Census Planning Database. The Census Bureau has released its annual compendium of geographically detailed data on population demographics and housing designed for use by planning technicians. This isn’t new information per se (the most recent data is taken from the 5-year American Community Survey results from 2010-2014). What it does do is assemble this information in a form–with census tract and block group estimates, and with baseline comparisons for similar geographies to Census 2010. Even by Census Bureau standards this is a giant mass of data; the national block group data is a 160 MB file.
Rotterdam Centraal is the city’s center for mobility and connections. Its many parallels to San Jose’s Diridon Station offer important lessons for Diridon’s upcoming redevelopment. Photo by Jannes Linders
Over the next decade, San Jose’s Diridon Station will be remade into the first high-speed rail station in the country and the busiest transportation hub west of the Mississippi. Throughout the world, hubs that connect local and regional transportation have had transformational impacts on cities and regions. It takes a lot to deliver on that promise, however. Over the next few months, SPUR will be taking a look at other stations and station districts around the world for best practices and cautionary tales.
First stop: Rotterdam Centraal, one of four stations in the Netherlands that have been updated or expanded in recent years. Parallel to Diridon in a number of ways, it offers an excellent model of what a modern transportation hub can be. In this post we’ll focus in on the design of the station and its immediate surroundings. A future post will focus on the redevelopment of the neighborhoods around Rotterdam Centraal.
Rotterdam Centraal is where trains, buses, the subway, light rail, taxis and bicycle infrastructure come together to serve Rotterdam and other parts of The Hague metropolitan region. In 2007, the old station (built in 1957) was demolished to make way for a new and larger station, which officially opened in 2014.
Trains, buses, the subway, light-rail and other travel modes come together at Rotterdam Centraal. All these services needed to be rationalized and relocated to make the train station function better and to accommodate new high-speed rail service. Photo by Studio Van der Valk (courtesy of West8)
Like Diridon, Rotterdam’s expansion was prompted by projections for growing transit ridership and the introduction of new high-speed rail. As Rotterdam started to redevelop from an industrial port city into a modern international service center, more and more people were using the station. The number of transit riders was projected to grow from 110,000 in 2000 to 320,00 people by 2030. Rotterdam Centraal was officially tied into Europe’s growing international high-speed rail network in 2009, when the Netherlands opened its high-speed line running from Amsterdam to the Belgian border. The opening of this new dedicated line put Rotterdam a mere 20-minute train ride from the Netherlands’ main international airport, Schipol, just 1 hour and 10 minutes from Brussels and 2 hours and 40 minutes from Paris.
Rotterdam Centraal is also a good case study for San Jose and Diridon Station because of its location relative to the city. Rotterdam Centraal is adjacent to — but not in — Rotterdam’s urban center, which is about a 15-minute walk south of the station. This is similar to Diridon’s location just west of downtown San Jose. (Explore the Rotterdam Centraal area in Google Earth.) Just as San Jose’s leaders hope to do at Diridon, Rotterdam’s leaders wanted to make the station more integrated with the downtown.
Rotterdam Centraal Station sits between the city’s main high-rise district and a more residential neighborhood, not unlike Diridon Station. In reconstructing the station, a key goal was to connect the station to the urban center. Photo by Rijskoverheid
A third reason Rotterdam Centraal is a good model for Diridon Station and San Jose is that the reconstruction of the station was coupled with redevelopment around it to create a center of activity for employment and cultural activities. San Jose is planning similar changes for the 240-acre Diridon Station Area.
Like Diridon, Rotterdam Centraal interfaces with two districts that are very different. In Rotterdam, the train tracks run from east to west, and passengers access the platforms via a central tunnel that runs perpendicular, linking the two entrances. To the south, the station faces the Weena, a large, busy commercial street lined with new high-rises leading to Rotterdams’ urban center. To the north, the station abuts the leafy canals and quiet streets of the residential Provenierswijk neighborhood. This meant the station needed to address two very different contexts.
The southern entrance was designed as an iconic gateway to the urban center. The roof projects over the public plaza in a triangular shape, directing people toward the activity and destinations downtown. From the pedestrian’s perspective, the transition from the plaza into the large arrival hall is seamless.
The southern side of the station offers a bold visual impact, with a grand entrance, wide pedestrian plaza, and a dedicated bicycle and pedestrian “runway” to the city center. The triangular roof points travelers in the direction of Rotterdam’s high-rise district. Photo by Emrah Beysülün (courtesy of HotelOneRotterdam)
Meanwhile, the Provenierswijk entrance to the station was designed to handle a smaller number of passengers. Compared to the south side, the north side of the station has a simpler glass façade and a much smaller station plaza that immediately dissolves into the surrounding neighborhood. There is also an abundance of on-street bicycle parking to help people get home from the train station by bike.
The residential scale of the northern entrance (pictured) contrasts sharply with the southern side’s large plaza and commercial hi-rises. Photo by Jannes Linders
The old Rotterdam Centraal station was not very safe or accessible for pedestrians. It was hard to find from the city center, and the main entrance was overrun by traffic, trams, buses, taxis and bicycles. In addition to the potential for collisions, the station area did not feel very safe as its public spaces were not well used. To address this issue, the planning and design team created a new pedestrian plaza from the south entrance that connects all the way into the center of the city’s high-rise district.
Turning this plaza into a pedestrian-friendly place required redirecting and relocating other modes of transportation. For example, buses were relocated to an off-site depot; drivers receive a signal that tells them when to pull up to the station to pick up passengers, eliminating the need for buses to wait at the station and opening up more room for the pedestrian plaza. The busy Weena was redirected through a short tunnel to keep auto traffic away from the station. Free parking for 5,000 bicycles was built underneath the plaza, keeping it open for pedestrians. An underground garage provides paid parking for cars.
A key goal for reconstruction was to create new public spaces that are active and safe for all users. Photo by Jeroen Musch (courtesy of West8)
A new pedestrian plaza and protected bicycle path link the downtown area to the station and provide a high-quality public space for people who live and work nearby. Photo by Jeroen Musch (courtesy of West8)
Prior to the renovations, the station was not a great place to be. The platforms were crowded, the station was dimly lit and there was a lot of loitering. The station didn’t have a lot of amenities for passengers waiting to catch a train or for people who lived or worked nearby.
The new station is designed to be active round-the-clock, a destination where people can gather for social or business purposes, as well as get from place to place. The new station has a central station hall, new restaurants and shops and more than 43,000 square feet of office space. Not only did these amenities make the station into a connector between neighborhoods, they also made Rotterdam more attractive for high-speed rail travelers coming from Paris or London. The lesson for Diridon is that the station must offer lots of amenities and services to support riders using high-speed rail, those who come to Diridon for shorter trips within the region — and even those who aren’t catching a train or bus.
But there’s also a cautionary tale here. Most European train stations operate as open-gate systems where passengers board freely and tickets are checked by conductors on the trains. The Dutch National Railway operator NS Rail recently decided that fare evasion had become a major problem and decided to install fare gates at all major train stations. This meant Rotterdam Centraal had to be retrofitted with fare gates between the station and the corridors leading to the trains. The corridors, however, are where almost all the shops and restaurants are located. Now only ticketed passengers have access to the commercial areas. Retail sales have dropped by about 25 percent, and the railway company is compensating retailers for their losses. The lesson for Diridon is to think carefully about which areas of the station should be open access and which might be restricted to passengers.
The reconstruction of Rotterdam Centraal took seven years, but the members of the project team recognized that they didn’t have to wait until the station was finished to make it more usable and more integrated into the community. The team’s motto quickly became “make every step better than the last.” This meant adding temporary things to do, eat and see in and around the station while it was being rebuilt. They set up temporary shops, bike storage and bike sharing facilities, and even a pop-up movie theater, Kriterion Rotterdam. One of the most remarkable (and beloved) temporary installations was a 180-step staircase to the top of an adjacent historic building that allowed people to look out over the station and the city. Designed to mark 75 years since the city began its post-war reconstruction, the staircase also helped Rotterdam celebrate the reconstruction of its central station. Adopting a similar approach for Diridon could turn the construction site from a potential multi-year eyesore and into an attraction.
A temporary staircase to the top of an adjacent building provided an observation deck over Rotterdam Central Station and its plaza. Photo courtesy MVRDV
A key challenge with the expansion of Rotterdam Centraal was to maintain transportation operations during construction. This required the team to build a temporary station before completing the new station hall and facilities. While the historic Diridon Station will remain, it will still be complicated to keep transportation services operating during the construction of BART, high-speed rail, and new passenger facilities and public spaces. In addition, there is no identified source of funding to expand Diridon Station into the type of place it needs to become. It’s possible that a temporary solution will be needed as more funding is identified.
Although Rotterdam Centraal needed to accommodate the addition of high-speed rail plus three times the number of passengers per day, the planning and design team was not permitted to increase the number of tracks or platforms: they had to use the footprint of the historic station. This made it essential to develop a rail service schedule that minimized the amount of time trains dwelled at the station before departing. The integration of schedules took place early in the design phase to achieve operational and space efficiencies.
A new footbridge over the train platforms creates more space for passengers and circulation. Photo by Jannes Linders
Achieving the goals for Rotterdam Centraal and the surrounding area required a high-level of cooperation between many parties, including ProRail (which owns, maintains and coordinates the use of heavy rail infrastructure in the Netherlands), the Dutch Railway, several other transportation operators, the city, the regional government, the federal government and others.
Early on in the process of designing the new station, stakeholders developed and signed a memorandum of understanding that identified the shared goals for the station. With these in place, all parties were committing to the same vision of success. The memo also outlined the relationships and interdependencies between each of the projects happening at the station (for example, the relationship between new high-speed rail and the addition of new passenger amenities, or the relationship between the relocation of the bus terminal and the new pedestrian plaza). This facilitated a mutual understanding of how decisions about one project influenced the other projects at the station. The memorandum also included a detailed plan for phasing the planning, design and construction of each component of the transportation projects and the station. Having a shared vision, an understanding of how each project added up to the whole and a sequencing for the changes was essential for keeping all transit services running during construction.
Rotterdam Centraal offers a number of lessons for Diridon Station. In an upcoming post, we’ll focus on what San Jose can learn from the development of the station area around Rotterdam Centraal.About the Authors
Laura Tolkoff is SPUR's San Jose policy director. Deike Peters is an assistant professor at Soka University of America and a research associate with the Mineta Transportation Institute.
Its apparent to almost everyone that the US has a growing housing affordability problem. And its generating more public attention and public policy discussions. Recent proposals to address housing affordability in California by Governor Jerry Brown and in New York, by Mayor Bill de Blasio have stumbled in the face of local opposition. Its a delicate moment in housing policy debates.
So now we’re being told, by our very smart friends at the Sightline Institute, that we ought not to talk about urban housing problems using the terms “supply and demand.” Excuse us if we politely, if firmly–and wonkily–choose to disagree. Housing affordability problems, in Seattle, San Francisco, and just about everywhere have everything to do with supply and demand.No escaping the laws of demand and supply.
OK, sure: for general audiences, saying supply and demand may cause some people’s eyes to glaze over, and for others, it may be taken as a sure sign that one has succumbed to a heartless neo-liberal paradigm. For many people, we know, any mention of economics reminds them of a painfully unpleasant under-graduate course. And Sightline has prudent advice about how to talk about the problem in the media. They say:
But for us at City Observatory, this is a teachable moment. The demand for cities and for great urban neighborhoods is exploding. Americans of all ages, but especially well-educated young adults are increasingly choosing to live in cities. And in the face of that demand, our ability to build more such neighborhoods and to expand housing in the ones that we already have is profoundly limited, both by the relative slowness of housing construction (relative to demand changes), and also because of misguided public policies that constrain our ability to build housing in the places where people most want to live, to the point in many communities, we’ve simply made it illegal to build the dense, mixed-use, walkable neighborhoods that widely regarded as the most desirable.
Our key urban problems–housing affordability, concentrated poverty, gentrification, long commutes–are all either directly caused or significantly worsened by this imbalance between housing supply and demand.
But there’s a studied disbelief in many media outlets that market forces have anything to do with housing. NIMBY’s believe that blocking new construction will keep prices down, when the opposite is true. As a result, we paradoxically pursue strategies that make housing affordability problems worse.
Two recent bits of evidence remind us that supply and demand are very much at work. A terrific analysis, written by Financial Times reporter Robin Harding and echoed by Vox’s Matthew Yglesias shows how even in a big dense city, increasing supply to meet demand keeps prices in check. In Tokyo, one of the world’s largest and densest metropolises, housing prices have barely budged in the past two decades, because Japan makes it relatively easy to build new housing. Local jurisdictions and neighbors don’t have effective veto power over new development, so when demand increases, supply responds relatively rapidly, and as a result house prices remain much more affordable.
Closer to home, Yardi Matrix is a real estate data research firm tracks and regularly reports on changes in rents and housing occupancy in major markets around the nation. They’ve noted nearly 300,000 new apartments will be completed this year. As a result, in many markets supply is finally catching up to demand, and rental price inflation is going down in places like San Francisco, Denver, Austin and Houston. For example, after seeing double digit growth in rents for several years, rents in San Francisco are up just 3.5 percent in the last 12 months, according to Yardi. In some places, such as the oil patch, where demand has declined due to layoffs in the energy sector, rental prices have actually declined.
While these trends are hopeful signs, and while they clearly illustrate that the market forces of supply and demand are very much at work, there’s still much to be done to re-work our public policies to address affordability, urban livability and equity. We don’t expect the demand for urban living to abate any time soon–in fact, there’s good reason to believe that it will continue to increase. And it’s still the case that we have a raft of public policies – from restrictions on apartment construction and density, to limits on mixed use development, to onerous parking requirements, and discretionary, hyper-local approval processes – that make it hugely difficult to build new housing in the places where it’s most needed.
Many of the problems we encounter in the housing market are a product of self-inflicted wounds that are based on naive and contradictory ideas about how the world works. We believe that housing should both be affordable and a great investment (which is an impossible contradiction), and we tend to think the laws of supply and demand somehow don’t apply to one of the biggest sectors of the economy (housing). At their root, our housing problems–and their solutions–are about understanding the economics at work here. So in our view, it’s definitely time to talk about supply and demand.
A friend works in the pharmaceutical industry and described how a particular extremely profitable non-narcotic sleeping pill is made. A Japanese company developed the pill at their lab in Osaka. These are the high value jobs that the Japanese are keen to keep at home. The chemical components that are used to make the pills are just bulk commodities. They can be made anywhere so they’re sourced in places like Indonesia, Malaysia, and the Philippines where labor is cheap, foreign investment is heavily subsidized, and special tax holiday arrangements are always available. The pills themselves are fabricated in a plant in Ireland which has the optimal combination of favored tax and trade regimes with Europe and North America. Finally, the pills are sold in the most lucrative markets around the world, not least of which is the U.S. where the retail price of drugs is exceptionally high relative to the low cost of manufacture.
That same process of global supply chain management is repeated for every single product you’ve ever bought. Your car, your clothes, your dish washer, your cell phone, the food you eat… everything. It’s one of the reasons such a spectacular array of products is available to modern consumers. And let’s not forget that you probably bought many of these items on credit. When you swipe that little plastic card at the shop you’re tapping in to an equally convoluted chain of interlocking financial institutions that stretches around the planet and includes pension funds for school teachers in Germany and insurance companies in Hong Kong.
All of these transactions are organized with a just-in-time delivery system. When a box of breakfast cereal or a package of lag bolts is waved over the laser scanner at the check out counter a computer automatically orders the exact number of replacements to be restocked and shipped the next day. The order goes straight to the manufacturers who know exactly how many new units to churn out that week. And that orange juice you’re buying used to be trucked in from Florida or California, but these days it’s more likely to come from Brazil.
We no longer have local warehouses full of stored goods. Instead we have centralized distribution centers. These massive buildings oversee a high turnover reshuffling of products that arrive by truck at one end and are split up, regrouped, and sent out to trucks on the other end. Items pass through very quickly. There is no storage per se since that would be inefficient and expensive. These facilities are always built in low cost locations with the support of local government incentives and inducements. Your Ikea coffee table probably spent a day or two inside this particular building in the desert on its way from Asian factories and the sea port in Long Beach to your living room in Ohio.
When families chose a place to buy a new home they look for a well regarded school district, low property taxes, and a location that’s halfway between the husband’s employer thirty minutes away in one direction and the wife’s employer thirty minutes away in the other direction. That’s the sweet spot in terms of price, quality, and convenience. It’s the same basic decision making process as the Japanese pharmaceutical company on a smaller scale.
Why should you care about any of this? Well… look in your fridge. That is the grand total of the food that’s stored in your entire community. The supermarket shelves will go empty in three days without continuous deliveries. The distribution centers that supply necessary medications are most likely in another state. Replacement parts for every machine you rely on are twelve thousand miles away. And the money and fuel that keeps all these distant elements connected and free flowing across oceans and continents are both incredibly efficient and extraordinarily vulnerable. What could possibly go wrong?
Measure A1 would support building more affordable housing in Alameda County, like the Harrison Street Senior Housing project in downtown Oakland. Photo by Sergio Ruiz for SPUR.
In November, residents of Alameda County will have the opportunity to make their cities more affordable by supporting Measure A1. This $580 million bond would fund the creation of permanently affordable rental housing, help moderate-income households afford home ownership and make existing housing for low-income seniors and the disabled safe and accessible. $460 million of the funding would create rental housing, and $120 million would go to support homeownership programs.
Measure A1 is badly needed. The Bay Area is experiencing an extreme shortage of affordable housing. In Alameda County, rents increased 34 percent between 2011 and 2015 and home prices increased 22.5 percent between 2014 and 2015. Oakland is the fourth most expensive housing market in the entire country. At the same time, resources for affordable housing took a severe hit when California eliminated state redevelopment agencies in 2012, making it even harder to create affordable housing at a time when it’s needed most.
The problem has not gone unnoticed. Mayor Schaaf’s Housing Implementation Cabinet called for protecting existing homes of low-income families, as well as creating new permanently affordable housing. The cabinet’s report recommended a new county bond for affordable housing, as well as a local Oakland infrastructure bond to help nonprofit housing groups acquire and rehabilitate existing low-income housing in order to keep it affordable. At the same time, affordable housing advocacy groups like the Non-Profit Housing Association of Northern California and East Bay Housing Organizations have been hard at work looking for ways to fund the creation of affordable housing. After considerable advocacy from both affordable housing groups and the City of Oakland, the Alameda County Board of Supervisors placed this measure on the ballot.
SPUR is proud to support Measure A1. For more information, or to get involved contact the campaign for an affordable Alameda County.
SPUR also supports Oakland Measure KK >>
 Zillow Rent Index (ZRI), Median Rent Series. In Alameda County Board of Supervisor’s Board Packet presentation for June 28, 2016.
 Multiple Listing Service (ZRI). In Alameda County Board of Supervisor’s Board Packet presentation for June 28, 2016.
 Zumper National Rent Report, http://blog.sfgate.com/ontheblock/2015/12/21/oakland-ascends-to-nations-...
It's happy hour time again! Tuesday night, from 6 to 8 pm, we'll be enjoying local beer and pizza at Fire Works, located at 2350 Clarendon Boulevard in Arlington. And after you get the details on that, check out other chances to get involved in your community offline!
Photo by beyrouth on Flickr.
We're hosting this happy hour in collaboration with the Association for Commuter Transportation Chesapeake Chapter, an international trade association that advocates for commuter transportation options. You can meet some of their board and members and learn how they're helping to improve transportation in our region.
Fire Works is just two blocks from the Court House Metro station (Orange and Silver lines), though you can also take Metrobus 38B or ART routes 41, 45, or 77. The nearest Capital Bikeshare stations are at the Court House Metro station and at Wilson Boulevard and North Barton Street, two blocks away.
Will we see you there? Click here to RSVP.
Can't make it? Check out these other great events this week, including a status update from WMATA General Manager Paul Wiedefeld and transit experts.
Tuesday, September 20: Paul Wiedefeld has been the General Manager of WMATA for almost 12 months. If you can't make it out to GGWash's happy hour in Arlington, consider joining Coalition for Smarter Growth at 6:00 pm (doors at 5:30) at 640 Massachusetts Avenue for a special progress check with him. What is happening at Metro? Where do we go from here? RSVP now, space is limited. This event is co-sponsored by Georgetown University's School of Urban and Regional Planning.
Wednesday, September 21: Brookland residents once led a successful fight against destructive urban highways. Today, the community is fiercely debating transit-oriented development. Join Coalition for Smarter Growth at 6:00 pm this Wednesday to take a closer look at this neighborhood's approach to change. RSVP for more details.
Thursday, September 22: Join the worldwide movement to go car-free by taking part in Car-Free Day this Thursday. Car-free day is an annual movement to get commuters out of their cars and onto transit, bikes, and sidewalks. Think you can do it? Take the pledge today (carpooling is allowed)!
Thursday, September 22: In December, DC took a big step towards dedicated bus lanes on 16th Street NW. Head over to the latest public meeting at 6:30 pm at the Mt. Pleasant Neighborhood Library (3160 16th Street NW) to get an update on the status of the project and share your thoughts.
Next Monday, September 26: Little River Turnpike runs between City of Fairfax and Alexandria. The Fairfax Department of Transportation wants to improve bicycling on the corridor. Share your thoughts at a meeting next Monday at 6:30 pm at Annandale High School (4700 Medford Drive).
Saturday, October 15: Metro wants help putting its trove of data to use; for example, a developer could help customers plan a trip that only went to station entrances with elevators. The agency's Office of Planning is hosting a day-long idea session next month at 600 5th Street NW to talk about what data there is and what needs riders might have, and to work on potential solutions. Attending is free, but make sure to RSVP!
Calendar: Beyond what we've highlighted here, there are many other worthwhile events across the region. Check out more great events in our events calendar:
Do you know of an upcoming event that may be interesting, relevant, or important to Greater Greater Washington readers that should go on our events calendar? Send it to us at firstname.lastname@example.org.
One of the cleverest adaptations of web-technology is the development of crowd-sourced funding for new products and business ideas. The biggest of these crowd-sourced funding platforms is Kickstarter, which since its launch in 2009, has generated funding for ideas like the pebble smartwatch, the “coolest” cooler and a revival of the Mystery Science Theater 3000 television series. Most Kickstarter campaigns are for relatively small amounts, raising between $1,000 and $10,000 and are popular ways of raising funding for creative projects ranging from music albums and films to games and art. Since its inception, Kickstarter has raised more than $2.6 billion for more than 112,000 projects.
The website Polygraph.cool has used data on the location and industry of Kickstarter campaigns to create a city by city, industry-by-industry visualization of these business plans. Using data from more than 90,000 Kickstarters, their interactive infographics display the relative size of the campaign (based on money pledged to each project), and projects are color coded by industry (music, film and video, design, publishing, art, theater and games, among other categories).
In these diagrams, the overall size of each cities constellation of dots corresponds to the volume of funding raised via Kickstarter, and the size of each dot represents the value of pledges. The concentration of colors of each diagram is indicative of the industrial focus of Kickstarter campaigns in that city. You can mouse over any dot on the diagram to see details on the particular project.
Not surprisingly, the nation’s largest metro areas (New York and Los Angeles) account for the largest number of Kickstarter campaigns. New York has more than 11,000 Kickstarters; Los Angeles has more than 8,000. The campaigns in some cities are heavily skewed toward local industrial specializations–Nashville’s for example, consists mostly of music projects (the red dots in the chart above). Its worth exploring the infographics for different cities to see the number and variety of projects funded in different locations.
At City Observatory, we focus on metropolitan areas, so we’ve tabulated Polygraph.cool’s Kickstarter data by metro area (aggregating multiple cities within a metro, such as Tempe and Scottsdale along with Phoenix, and Cambridge and Lawrence along with Boston). To get an idea of the relative importance of Kickstarter to each metro economy, we’ve computed the number of Kickstarter campaigns in each metropolitan area per 10,000 population. As you can see, there’s wide variation among metropolitan areas.
Perhaps unsurprisingly, many of the usual suspects of the creative economy show up at the top of the chart. On a per capita basis, Austin, Portland and San Francisco have the highest number of Kickstarter campaigns, with between 80 and 100 campaigns per 100,000 population. Among metropolitan areas with one million or more population, the median metropolitan area has about 20 campaigns per 100,000 population. The metro areas with the fewest Kickstarter’s per capita include Riverside, Virginia Beach and Hartford, each of which have fewer than 8 campaigns per 100,000 population.
As the authors of the Polygraph visualization note, many of our conventional yardsticks for measuring the creative economy are dominated by data sources that capture large scale enterprises, but not grass roots and D-I-Y activities. Because Kickstarter has few barriers to entry, and is accessible even to individual artists, its one way to measure creative efforts that simply don’t show up in other sources. So have a look at the Kickstarter data for your city, to see how it stacks up.
Picture Templeton the rat from Charlotte’s Web complete with the voice of Paul Lynde. That’s me. Irritating? Yes. Charming? Nooooo. Quite the opposite. Smart? Not so much. Industrious? Bone lazy. Impulse control? Zero. Like Templeton I’m amoral and omnivorous. But we have our niche. Put me in a conference room full of adults with official positions and I’m a complete train wreck. But the more dysfunctional and wasteful the larger culture the more bountiful the late night rodent buffet.
I travel around the country meeting with people who are passionate about the places they call home. They love their towns, but know things could be improved. They call in experts to identify the nature of the problems and possible solutions. But change is incredibly difficult. All the interlocking parts of the existing system push back. The change that is possible is small and profoundly compromised by existing procedures, vested interests, and political boundaries. Being anything other than a relentlessly optimistic cheerleader is bad form. So tiny victories are celebrated while the larger machine bulldozes on.
Societies are good at maintaining the status quo by drawing down resources from alternative areas. On the surface things look fairly normal, but eventually the entire system becomes so leveraged and brittle in a dozen different interdependent ways that it’s vulnerable to relatively small external shocks. We’re currently facing a series of predicaments that very few people are interested in acknowledging. Predicaments don’t have solutions. Instead, they must be endured and painstakingly worked through over time. That’s not a message that can be sold at a city council meeting.
We’re in another huge economic bubble. Bubbles tend to pop. The people who did the worst in the 2008 financial crisis were those who held too much debt, had the most disposable jobs, and lived in the most vulnerable locations. We’re going to see more of that in the future. That’s not a story people want to hear.
There’s also a big war brewing in the world. Sooner or later the Middle East is going to explode and take a big chunk of the world’s oil supply off line. The resulting shortages will ripple out like waves jacking up prices and disrupting all the attenuated supply chains. That will translate to inflation, unemployment, and political mischief all around. Again, some people will be hit much harder than others. What exactly will the folks at the county level do in response? At the moment they have no ability to do… anything.
That takes me back to Templeton the rat. When things begin to unravel there are going to be all sorts of opportunities for anyone who has no debt and cash on hand. The trick will be to stay out of the way of angry mobs and desperate bureaucracies attempting to hold things together with a mallet and duct tape.
1. Cities are powering the rebound in national income growth. There was great news in this week’s Census report: After years of stagnation, average household income saw its largest one-year gain on record (5.2 percent). But underlying that story was another one: household incomes in central cities surged even faster (7 percent), growth in suburbs was more middling (4 percent) and incomes in rural areas kept shrinking (by 2 percent). This isn’t just about “winners” and “losers,” though. The underlying force here is that cities are better than suburbs or the countryside at producing the goods and services that the current U.S. economy is best at. As much as we might want to turn rural areas into economic winners, we can’t.
2. McMansions: Fading away? A few months after one (bogus) trend story claimed that McMansions were back, there’s a new round of talk that McMansions are passe. It’s powered by a Trulia discovery that homes of 3,000 to 5,000 square feet, built between 2001 and 2007, don’t command the premiums they did in 2012. Nice to know, but it’s hardly surprising if people paying for flashily large homes prefer homes built to the latest fashions. A more fundamental factor, maybe: McMansions’ tendency to be far from urban activity, which commands more of a premium than it did before.
Photo: Dean Terry.
3. Inclusionary zoning: Don’t screw this up, Portland. As our hometown deals with the costs of a housing shortage, it’s likely headed toward a requirement that some new buildings offer a certain percentage of units to lower-income people at below-market rents. Unfortunately, IZ policies in other cities have failed to create meaningful numbers of low-cost units. The risk here is that even with countervailing incentives, rules like this will dampen new construction, especially of higher-density buildings. Our Joe Cortright argues that steps to minimize the potential damage of an IZ program should include a slow phase-in, a simple approval process and an initially low (but rising) fee on developers that opt out of on-site units.
4. Should parking prices reflect opportunity costs? Think of it as Uber’s “surge pricing,” but for parking: when a certain block or neighborhood is in high demand, meter rates rise to keep a few spots open at all times. That’s the techno-utopian dream of today’s parking reformers, but their supply-and-demand formula misses one key factor. What if a space has public value as something other than a parking space, like a bus lane or a parklet? There’s no simple market mechanism for setting the value of such amenities, so cities must ultimately try to find it themselves.The week’s must reads
1. An overlooked metric: income volatility. Monthly income isn’t just annual income divided by 12 — and the difference is a major force in the lives of middle- and low-income Americans. Jonathan Morduch and Rachel Schneider tracked transactions by 200 households for a year and found that the typical household earning 36,000 a year will spend five making significantly more or less than $3,000. Since 92 percent of Americans say they prioritize financial stability over higher income, urban policies should take this volatility into account and look for ways to mitigate it.
2. Ford’s plan to reinvent mobility. After years of talking in theory, the country’s oldest major automaker is putting its cards on the table. Ford Motor Company will buy the 2-year-old private shuttle startup Chariot and partner with bike-share industry leader Motivate to create an online service called FordPass that will offer integrated private transit by shuttle and on 7,000 shared bicycles around the Bay Area. It plans to expand Chariot to five more cities in the next 18 months. “Sometimes the old technologies are best,” San Jose Mayor Sam Liccardo said at the announcement.
San Francisco Mayor Ed Lee, arriving at work by bike share. Photo: San Francisco Bicycle Coalition.
3. How Seattle killed microhousing. It’s rare to read a blow-by-blow explanation, complete with anecdotes, of a good municipal policy suffering the death of a thousand cuts. Architect and developer David Neiman tells the story of how this happened in Seattle. He begins with a young woman who most cities would love to have as a resident and shows how one decision after another made it impossible to build more of the sort of home that has made her life possible.
4. How about “Schools on Safe Routes” instead? Strong Towns’ Charles Marohn has a biting observation about the armies of advocates and pros working to retrofit biking and walking routes into school sites using “Safe Routes to Schools” funds: where were those people when new school locations were being determined? He’d rather see the “billions spent annually on new schools be spent in neighborhoods that are already safe for children, neighborhoods where children are actually located.”New knowledge
1. How to make private transit work for the public interest. Cities and transit agencies have things that Uber, Chariot and other mobility startups want — like parking spaces and public right of way. They should use those to negotiate for things the public wants from private companies, like equitable coverage, open data and contracted services. A new report from Transit Center offers lessons for transit agencies on planning for a new multimodal age.
2. Pick your poison: sprawl, demolish or displace. An analysis of 60 years of U.S. housing outcomes by economist Issi Romem for the contractor service BuildZoom finds a classic “trilemma” for urban regions. They can accommodate growth by sprawling into rural areas; they can accommodate growth by allowing physical change to occupied areas; or they can minimize housing construction and watch home prices climb. (BuildZoom observes that since 1950, most metro areas have chosen either “sprawl” or “displace.”) Data and maps for 569 metro/micro areas are open and downloadable.
3. Race-neutral school admissions can lead to less gifted student bodies. When it scrapped its race-aware admissions process for a race-blind system in 2007, Chicago Public Schools also created a complicated workaround for preserving socioeconomic diversity without selecting for race. In a new National Bureau of Economic Research working paper, Economists Glenn Ellison and Parag Pathak analyze the new policy and conclude that it’s much less efficient: not only are fewer low-income students admitted, they’re less academically gifted than if race had been considered. The authors consider various alternative approaches.
The Week Observed is City Observatory’s weekly newsletter. Every Friday, we give you a quick review of the most important articles, blog posts, and scholarly research on American cities.
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