Over the past three years, the nation’s largest transit systems have endured a broad and unprecedented ridership decline. By far the largest drop has been in Los Angeles and this has resulted in justifiable consternation. Metro, the largest transit system in Los Angeles County, has seen its passenger counts (boardings, see Note 1) drop from […]
The key to both housing affordability and an affordable standard of living is a competitive land market that makes it possible to produce housing at production costs, including competitive profit margins. Economists Edward Glaeser of Harvard University and Joseph Gyourko of the University of Pennsylvania, have defined this concept as the minimum profitable production cost […]
The average car on the road consumed 4,700 British thermal units (BTUs) per vehicle mile in 2015, which is almost a 50 percent reduction from 1973, when Americans drove some of the gas-guzzliest cars in history. The average light truck (meaning pick ups, full-sized vans, and SUVs) used about 6,250 BTUs per vehicle mile in […]
The Census Bureau reports that home ownership in the United States rose to 63.9 percent in the third quarter of 2017. This continues a rising trend since the second quarter of 2016, when home ownership had dropped to 62.9. This equaled the previous low of 51 years before (1965), just a year after annual data reporting began. Home ownership peaked at 69.2 percent during the housing bubble and had been generally declining since late 2006 (Figure).
Issi Romem, buildzoom.com’s chief economist has made a valuable contribution to the growing literature on the severe unaffordability of housing in a number of US metropolitan areas. The disparities between the severely unaffordable metropolitan areas (read San Jose, San Francisco, Los Angeles, Portland, Seattle, Portland, Denver, Miami, New York, Boston, Sacramento and Riverside-San Bernardino) and the many more affordable areas in America are described in
“Paying For Dirt: Where Have Home Values Detached From Construction Costs”. Romem points out that: “In the expensive U.S. coastal metros, home prices have detached from construction costs and can be almost four times as high as the cost of rebuilding existing structures.” “Paying for dirt” refers to the ballooning land costs that now comprise an unprecedented part of house values, such as in the severely unaffordable metropolitan markets above. This has created an environment where affordability is impossible. In many of these metropolitan areas, a modest house commands an exorbitant price well beyond the financial capacity of most middle income households. Land has become so expensive that it doesn’t matter what is built on it, whether the average house or a tent, the price will be too high. The market distortions are so great that Romem is able to show that, for example, the average house value in Columbus, Ohio, a delightful metropolitan area, is less than the average land value per lot in Portland (Oregon).
Working at home continues to grow as a preferred access mode to work, according to the recently released American Community Survey data for 2016. The latest data shows that 5.0 percent of the nation’s work force worked from home, nearly equaling that of transit’s 5.1 percent. In 2000, working at home comprised only 3.3 percent of the workforce, meaning over the past 16 years there has been an impressive 53 percent increase (note). Transit has also done well over that period, having increased approximately 10 percent from 4.6 percent.
. . .The same is true of Los Angeles. Despite spending more than $15 billion (2016$) building and opening an extensive urban rail and busway system, not only has working at home recently passed transit, but ridership on the largest transit system has fallen from before opening the first line.
The data show that, nationwide, transit’s share of travel grew from 5.03 percent in 2006 to 5.49 percent in 2015. This growth was at the expense of carpooling, as driving alone’s share also grew. In 2016, however, transit’s share fell to 5.36 percent while both driving alone and carpooling grew. Among major urban areas, transit’s share of commuting grew from 2015 to 2016 in Pittsburgh, Salt Lake City, Seattle, and–amazingly–San Jose. But it declined in far more regions: Austin, Boston, Charlotte, Dallas-Ft. Worth, Honolulu, Houston, Los Angeles, Orlando, Philadelphia, Phoenix, Portland, Sacramento, San Francisco-Oakland, and Washington DC. It was flat (changed by 0.05 percent or less) in Atlanta, Chicago, Denver, Miami, Minneapolis-St. Paul, and New York.
California’s political leaders, having ignored and even abetted our housing shortage, now pretend that they will “solve it.” Don’t bet on it. Their big ideas include a $4 billion housing subsidy bond and the stripping away of local control over zoning, and mandating densification of already developed areas. None of these steps addresses the fundamental causes for California’s housing crisis. Today, barely 29 percent of California households, notes the California Association of Realtors, can afford a median-priced house; in 2012, it was 56 percent. At the heart of the problem lie “urban containment” policies that impose “urban growth boundaries” to restrict — or even prohibit — new suburban detached housing tracts from being built on greenfield land. Given the strong demand for single-family homes, it is no surprise that prices have soared. Before these policies were widely adopted, housing prices in California had about the same relationship to incomes as in other parts of the country. Today, prices in places like Los Angeles, the Bay Area and Orange County are two to three times as high, adjusted for incomes, as in less-regulated states. Even in the once affordable Inland Empire, housing prices are nearing double that of most other areas, closing off one of the last remaining alternatives for middle- and working-class families.
Some humility from the authors would have been welcome about the risks of the radical restructuring that basic income would entail; Van Parijs and Vanderborght see only upside. To illustrate the downside potential, consider the poor results from annual per-capita payments of casino revenues to American Indian tribes (not discussed in the book). Some tribes enjoy a very high “basic income”—sometimes as high as $100,000 per year— in the form of these payments. But as the Economist reports, “as payment grows more Native Americans have stopped working and fallen into a drug and alcohol abuse lifestyle that has carried them back into poverty.” The magazine contrasts this fate with that of more successful tribes like Washington State’s Jamestown S’Klallam, which eliminated poverty by investing in tribal-owned small businesses instead of handing out cash grants.
Halfway through the new decade, California, widely seen as an irresistible force for the young and ambitious, is underperforming the state’s own demographic projections. Since 2010 the state’s population grew 5.3 percent from the 2010 census figure, 12 percent below the 6.1 percent increase projected by the California State Department of Finance. The population increased at below projected rates in all of the five metropolitan regions (combined statistical areas, or CSAs and metropolitan statistical areas MSAs, outside the CSAs) with more than 1,000,000 population, except in San Diego.
Despite the frequent portrayal of long commuting as the norm, only 2.2 percent of the nation’s workers travel 90 minutes or more, one way to work. Moreover, that long commuting is concentrated in and near just a few combined statistical areas (CSAs), the larger the larger metropolitan area definition that combines adjacent metropolitan areas like Bridgeport-Stamford with New York, San Jose with San Francisco and Riverside-San Bernardino with Los Angeles. Figure 1 shows that 17 of the 25 metropolitan areas with the largest share of 90-plus minute commuters are in or adjacent to just four combined statistical areas (CSAs). . . . None of this is surprising, considering that each of these markets is plagued by urban containment land use policies that force up house prices. Harvard research indicates that domestic migration is being driven by the differential in house prices and people have been leaving the New York, Washington and San Francisco CSAs for other parts of the country. Seattle has done better, simply because its expensive housing is still a bargain compared to the much more onerous house costs in coastal California, from which migrants are being drawn.
Transit ridership in the first quarter of 2017 was 3.1 percent less than the same quarter in 2016, according the American Public Transportation Association’s latest ridership report. The association released the report without a press release, instead issuing a release complaining about the House Appropriations bill reducing funding for transit. . . . In most cases where light-rail ridership grew, it did so at the expense of bus ridership. Los Angeles Metro gained 1.66 million light-rail riders but lost 8.73 million bus riders, or more than five for every new light-rail rider. Between the two modes, Phoenix’s Valley Metro lost 23,100 riders; Charlotte 20,200 lost riders; and Dallas Area Rapid Transit lost 193,100 riders. Similarly, Orlando’s commuter trains gained 22,700 riders but buses lost 98,500.
The California High-Speed Rail Authority promises to “achieve net zero greenhouse gas (GHG) emissions in construction” and is committed to operate the system on “100% renewable energy” by contracting for “400 to 600 megawatts of renewable power”. These promises may please environmentalists, but they cannot be kept.
The Los Angeles political establishment and media is virtually unanimous in its praise for the now quarter century old rail system. Yet, despite more than $15 billion being spent on rail transit the already meager levels of transit commuting in the city have fallen further, while solo driving has risen to an all time high. Unless platitudes are more important than results, rail’s success is a false narrative. People are driving more and using transit less according to the American Community Survey for 2015.
In a just released poll by the Bay Area Council a majority of respondents indicated an expectation that traffic congestion in the Bay Area (the San Jose-San Francisco combined statistical area) is likely to get worse.
It is already bad enough. The Bay Area includes two major urban areas (over 1,000,000 population), with San Francisco ranked second worst in traffic congestion in the United States, closely following Los Angeles.