Monday, 8 February 2010

News

The Impact of Impact Fees

According to FloridaToday.com, the Brevard County Commission is going to extend a moratorium on impact fees that dates back to March 2009.  This will suspend $6 million in transportation impact fees to try to spur new construction.  Builders see this as a hopeful sign.  Since 2009, housing starts in the “Space Coast” are at their lowest level since 1975, after the Apollo program ended.

Impact fees are sold to the general public as a way to “make growth pay for itself.”  The reality - following the reliable axiom that you get less of what you tax, more of what you don’t tax - is that these fees suppress growth, which happens to be the unstated agenda of at least some of impact fee advocates.

Impact fees also distort the market because they put upward pressure on the pricing of housing units.  In other words, impact fees make housing less affordable.  So as Florida struggles through an economic recession, impact fees are doubly bad because 1) it slows development and 2) prices out low and middle income people from the opportunity of homeownership.

Further, the Washington Policy Center did a study of governmental regulations that impose higher costs on housing and found that impact fees were often overpriced and that many homeowners received “little or no public benefit in return for the impact fees they paid.”

Maybe public officials in Florida’s other counties will follow the good advice of the Brevard County Commission, or perhaps the state legislature can push through a bill for a statewide moratorium on impact fees.


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New ADC Videos Available

Jim Karlock, member of the ADC Executive Committee, has added more videos from past ADC conferences to his one-stop shop on the internet.  Videos from the 2009 Preserving the American Dream conference can be found here.

Also, Jim has compiled a wealth of information about the Mecca of Smart Growth, also known as Portland, Oregon.  Check it out and be intellectually well armed!


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High Speed Rail - After the Applause

It’s been a week since the Obama administration announced its grants for high speed rail projects.  This has given us some time to breathe deeply and assess just how smart an idea these plans are.  A total of 30 high speed rail projects received stimulus funding, affecting some 31 states in every region of the country.  Of course the $8 billion hand-out in federal dollars is only meant to be seed money.  The Feds hope it will spur private investment, but in reality it will force state governments to put more tax dollars into these projects.

The Washington Post points out that “these projects are massive, take years to build and cost tens of billions of dollars.  That’s why sprinkling limited funds across the country strikes us as an inefficient exercise, one that is ripe for pork-barrel politics.”  The Post cites one example: the proposed connection between Las Vegas and Los Angeles that did NOT receive any funding.  Does anyone seriously doubt that Democrat Senate Majority Leader Harry Reid will NOT be able to earmark funding into that project?

One route that was funded - to the tune of $1.1 billion - was the St. Louis-to-Chicago route.  So a surprising congrats goes to the St. Louis Post-Dispatch for railing against the rail plan, likening it to “building a bridge to the 19th century.”  They point out that the federal money will cover only about “a fourth of what it would take to upgrade the service to handle 90-mile-an-hour trains along its entire route.”  Moreover, the 110-mile train might cut the scheduled 5-hour, 40-minute travel time between the two cities by less than an hour, which after arranging for connections between terminal and destination will likely wipe out any “saved” time.

Finally, the indefatigable Wendell Cox has a great summary of the issue in the Wall Street Journal.  His guest column - “The Runaway Subsidy Train” - deserves to be read in full.


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Hurrah for High Density! Now Who’s First?

Another community has embraced the Smart Growth formula for miserable, unsustainable living.  This time it is Alachua County, Florida, with its county seat of Gainesville - home to the University of Florida.  They’ve adopted a new long-term transportation plan that focuses on crowded compact, stacked high-density development dependent upon oriented around transit lines.  This is the New Urbanist vision.

But one simple question: Is this really what the people want?

Hardly.  In fact, it is not even what the elected officials who adopted the plan or the planners who drafted the plan want.  They live in single family homes in single use zoned communities and drive automobiles to work and back again.  They just believe other people (read: YOU) need want to do this.

Along with many things wrong with Smart Growth and the arrogant presumptions beneath it, one funny bit is that local officials when adopting these plans will congratulate themselves for carving out a ”unique sense of place.”  The Alachua County growth management director called this plan a “prototype” because it moves away from road-widening projects and focuses on transit.

That’s exactly what is being done in communities all around the country - all of them unique … just like Portland.  This is the unique plan in Milton, Georgia, and in Mercer Island, Washington.  Heck, they’re retrofitting development around transit in Montgomery County, Maryland, and it’s only costing taxpayers about $895 million to chase this New Urbanist vision that assumes people really, really, really want to live in high density apartments.

By contrast, the Alachua County retrofit is only projected to cost $180 million, which - begging a political response - means only one thing: They’re not trying hard enough!


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Florida’s Boondoggle Bullet Train

The St. Petersburg Times reports on President Obama’s visit to Tampa, Florida, where he announced a $1.25 billion federal grant to start building a high-speed rail line between Tampa and Orlando.

“We are going to start building a new high-speed rail line right here in Tampa, building for the future, putting people to work,” Obama told the crowd of nearly 3,000 inside a gymnasium. “I’m excited. I’m going to come back down here and ride it. Joe and I — you all have a date.”

Floridians are now on the hook for paying both the capital costs (which will exceed the federal allocation) and the annual operating costs.  Its ridership will be dismal, carrying mostly business executives and tourists (who, by the way, are not the ones creating traffic congestion on I-4).  Plus, to move trains faster requires more energy, so claims that high speed rail is energy efficient and environmentally friendly are bogus as well.

Bonus: Let the infighting commence!!  Central Florida Congressman John Mica said Florida’s high speed rail project in Tampa is a money loser and ignores possible private investment that an Orlando project would draw.

Mica, the ranking Republican on the Senate Committee on Transportation and Infrastructure, told WDBO that he and Congresswoman Corrine Brown would work together to change the rail project to begin in Orlando where SunRail is also being built.

Meanwhile, we are finding that “San Francisco Muni riders face the prospect of some of the deepest service cuts in the agency’s history, resulting in longer wait times and more crowding.”  To make ends meet, Muni will enact a 10 percent service cut, shaving 313,000 hours of service a year.  ”The proposal would save $4.8 million through the fiscal year that ends June 30, or $28.5 million annually.”

Muni is not alone.  Within the Bay Area, the 10 largest transit agencies are all confronting significant deficits.  All have raised fares and reduced service.

And across the country, transit agencies are unable to cover operating expenses.  Transit services are being cut in Los Angeles, Baltimore, Minneapolis, New York, Philadelphia, Phoenix, Washington, D.C. and others.

The National Transit Database shows farebox recovery rates.  There are a handful of agencies that cover 100 percent of operating expenses with ridership fares, and most of them are privately operated.  The rest are subsidized, most heavily so by motorists and other sources.


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Rails Fail - Let’s Build More Rail!

Another transit agency is declaring it looming budget shortfall and considering cuts to bus and rail service as well as fare increases.  The hardest hit will be L.A. commuters who are dependent on public transportation.  The story also notes that there has been a decline in ridership, too.

Yet, naively perhaps, a bunch of politicians are going to show up in Tampa, Florida, to herald the coming of rail (specifically, high speed rail) with Phase 1 providing a link between Tampa and Orlando.  The Tampa Tribune reports that President Obama will award $1.25 billion in federal stimulus funds to help build a Tampa-Orlando high-speed rail line.  Dubious claims are made about rail’s benefits:  “The project is expected to create 23,000 construction jobs and energize business development, along with improved mobility planned by late 2014.”

One pattern with rail is that benefits are always overplayed and costs are always underprojected.  This will prove to be no different.  If you want to know why Florida should not build high speed rail, see this report.  Fortunately, it appears that the Tampa Tea Party plans to be there to protest the award … and the perpetual subsidies Florida taxpayers will be required to pay for something few will ever ride.


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They Call It ‘Progress’

If you want an omelette vibrant urbanism, you’ve got to break a few eggs destroy a few businesses and displace some schools.  According to KTRK-TV in Houston:

Some call it the price of progress as a local school dedicated to helping handicapped children finds itself in the way of the planned light rail.

The METRO transit authority needs other people’s property so that the city fulfill its vision of an under-utilized, over-budget light rail line.  Among the victims are the teachers and students at the Our Network School, a school for special needs students.  Hey, get over it!  This is progress!!

This is in Houston, Texas, long scorned by urban planners and assorted metrosexuals because of its sprawling, no zoning history.  It appears that city leaders have an inferiority complex, so they need to get what cool cities like Portland and Denver have - light rail.  To enact this 11-mile light rail line, METRO will need to acquire 212 parcels.  They plan to purchase just seven of them.  The rest, I presume, will be acquired through brute force because, you see, eminent domain is sadly alive and well.  Progress?  Oh barf!


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Rail in Florida - Who’s Right?

Over the weekend, the Tampa Tribune wrote an article on the debate about rail in the Sunshine State.  Ostensibly, the purpose of the story was to help readers determine how to make an informed decision about rail when there are competing claims.  The American Dream Coalition was one of those organizations making a competing claim.

When it comes to attention-grabbing covers, the title “Great Rail Disasters” with an illustration of a train wreck is tough to beat for creating a sense of danger and drama.  Inside, the 44-page American Dream Coalition report focuses on “foolish investments” and “pork barrel spending” in a critique of rail as a passenger transportation alternative.

Pro-rail advocates have put forward reports that seem to show rail is a cost-effective “investment” capable of attracting new economic development while reducing traffic congestion and improving the environment.  On the other end, organizations like the ADC, Reason Foundation, Cato Institute and others argue that rail doesn’t pay for itself or deliver on the promises of those promoting it.

One misnomer is that the ADC is “anti-rail.”  The ADC is pro-mobility, pro-markets and pro-taxpayer.  We are pro-freedom.  If rail paid for itself and relieved congestion and actually offered up what people wanted, we’d say so.  It does not, so we write reports showing that to be the case and trust that fair-minded people will evaluate our arguments, look at the evidence, and come to a reasonable conclusion.

To help the average citizen who is not a trained economist, I said “(o)ne of the key things people should try to do on these issues is to take an ‘apples to apples’ comparison.  Statistics can be squeezed in ways to give many types of answers.”

For example, it is often argued that rail can move as many people as an six-lane highway.  The underlying assumption is that the rail cars are filled to capacity while the cars on the highway carry only a single occupant.  These assumptions are grossly in error.  And if your argument is based on faulty assumptions … well then.

The only way to get an “apples to apples” comparison is to break down the variables to a per passenger basis.  How much energy (measured in BTUs) is used to move people by rail per passenger mile?  How much by auto per passenger mile?  How much carbon is emited per passenger mile by rail and by bus and by autos?

Serious policymakers and concerned citizens need to know the answers to these questions since billions of taxpayer dollars are going to be spent pursuing one or more of these ends.  The reality is that the reports by the ADC (and Reason, Cato, etc.)  hold up very well to scrutiny.  The pro-rail ones do not.

So how does the “other side” respond to this?  ”People have done a pretty good job of making money by telling people what they like to hear,” says Todd Litman, executive director of the Victoria Transport Policy Institute.  He’s clearly “projecting” because the VTPI is generously funded by government grants and pro-rail foundations … and he produces reports that say exactly what they want to hear.

I can’t speak for other pro-market organizations, but I can say that the ADC proudly does NOT accept government funding.  We are under no pressure to produce what they want to hear.  We are independent and our support comes from private citizens, many of whom are grassroots activists.  We have not received money from Big Oil, Big Auto, or Big Asphalt - although they or anyone else is invited to contribute to the ADC - a 501(c)(3) non-profit - at a level with which they are comfortable.

There is another, indirect way to determine the validity of competing reports.  When the US Transportation Secretary diminishes the importance of “cost-effectiveness” in determining how to award transportation projects … and VTPI and other rail advocates do the happy dance, doesn’t that answer the question about whether rail transit is cost effective?

It’s a pity that defending taxpayers from wasteful spending by self-interested politicians is considered a “special interest,” but we’ll wear that badge with honor.


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Alive & Well!

Over on MSN, there are a series of slideshows highlighting the best of the Detroit Auto Show, officially known as the North American International Auto Show.

And then there is another car that may out-pace any of these new ones.  India’s uber-cheap car, the Tata Nano, will soon hit the U.S. market.  In India, it sells for $2,500.  After retrofitting for U.S. standards, it will sell for about $8,000.  That’s a lot of hidden costs imposed on the consumer to meet regulatory requirements, but the vehicle will still be within range for many low income people who are seeking to enhance their mobility.

Despite claims (and hopes) by Smart Growthers and other anti-automobile enthusiasts that we are moving away from the automobile, I tend to think our best days of auto-mobility are in front of us.


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Back At Ya!

One of the contradictions with Smart Growth is its push to eliminate (or at least dramatically reduce) automobile use in the country while funding their preferred alternative, public transportation, with tax diversions from - ta da! - automobile gas taxes!

The amount of tax diversion varies from place to place, but whether the metro region is small or large road users are paying for much of it.  In Gainesville, Florida - a mid-sized university town of 120,000 - the regional transit system receives 80 percent of the city’s local option gas tax.  In New York City, the Triborough Bridge and Tunnel Authority diverted 68 percent of its toll revenues to subways and buses.

In addition to local subsidies, state and federal agencies fund transit operations with revenue from gas taxes and other motorist user fees.  Fare box recovery doesn’t come close to covering operating expenses.  Nor can transit pay for its own capital outlay.  Last year the Metropolitan Washington Airports Authority moved to dedicate toll revenue and toll bonds to cover half the cost of the $5.26 billion Dulles Metrorail project.

But in local jurisdictions, politicians and planners are doing their best to make driving miserable in the forlorn hope that people will give up driving for transit.  In Washington and in state capitols, our leaders are diverting monies from roadway maintenance and expansion which is leading to billions of dollars in backlogs of needed repairs and capacity-enhancements.

The irony is that the less people drive, the more transit agencies cut routes and service.


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