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Swifties can't solve transit's funding woes | Sweden's city of wood | How wealthy suburbs cause climate problems

Swifties can't solve transit's funding woes | Sweden's city of wood | How wealthy suburbs cause climate problems


no. 27

Not even the massive crowds taking mass transit to Taylor Swift's Eras tour are enough to plug the holes in America's transportation agency budgets.

My kids aren't Swifties (not yet, anyway) so we didn't take the train to the Meadowlands last month for her Eras tour. But many of our friends from across the NYC metropolitan area did. Unfortunately, and in a sobering if a bit clickbaity headline at Next City, Taylor Swift would need to perform hundreds more concerts if she alone was to close the post-pandemic ridership gap that persists across America's biggest transit agencies.

Philly's SEPTA system clocked nearly 27,000 rides from Swift's performances back in May (in Chicago, riders took 43,000 CTA bus and rail trips to the show). But SEPTA is facing a nearly 4 million-ride monthly gap compared to the first few months of 2020 (so this would translate to an additional 465 concerts on the Eras tour). Not even the most diehard Swiftie is likely to buy a ticket to every one of those shows (let alone always ride transit, just to put a pin in this rather silly hypothetical).

But it's a real problem as I've written about here a few times before: the country's eight largest transportation agencies (NYC's MTA, BART, LA Metro, MBTA in Boston, the DC area's WMATA, SEPTA in Philly, New Jersey Transit, and the Chicago Transit Authority) are collectively facing a $6.6B cumulative budget shortfall through 2026.

It's true that the federal government stepped up during COVID, doling out $55B to America's ten largest transit systems. For example, in Chicago, fares went from nearly 40% of system revenues to just 16% post-pandemic, and federal support went from less than 1% to nearly 21% of the system's operating budget. (Remember that Congress only provides about 15 percent of US transit system funding.) In general, bus transit ridership seems to be doing better nationally than heavy/regional (Amtrak) and light rail (like Seattle's Link), which are all doing better than commuter rail (New Jersey Transit, although that system seems to be in better shape than most with a nearly 90% return to pre-pandemic ridership levels).

Middling ridership levels and calls to cut service beg the question: how are transit systems funded? More pointedly, how should they be funded in a post-pandemic transportation landscape? The answers vary from agency to agency. In Chicago, CTA has the strictest "farebox rules" in the country. (Farebox rules are a set ratio that agencies are required to adhere to by law in terms of their operating budgets.) Fifty percent of CTA's operating expenses must be covered by revenue from rider fares or ancillary system revenues, like retail leases or in-system advertising.

Local sales taxes and even road users support transit (as is about to be the case in New York City with its congestion pricing scheme, assuming it can resolve New Jersey's lawsuit against the federal government). For example, the DART system in Dallas covered 75% of its budget with sales and use taxes in 2019, and an incredible 95% in 2022. (43% of Chicago's transit system's budget comes from sales taxes.)

But once pandemic-related federal funding support runs out, America's transit systems will face three tough choices: increase sales taxes (both the rate and the types of goods and services that are subject to the tax); changing up or reducing service; or figuring out additional ways of charging road users that can go to support transit. (And as New York City is discovering, drivers aren't going to take that sitting down.)

Maybe the federal government can (or should) only do so much. As I noted here in a prior update, In a Bad State: Responding to State and Local Budget Crises, by Yale Law School professor David Schleicher, posits that post-pandemic American cities, states, and transit agencies are finding themselves facing not just a dilemma when it comes to making those choices but a "trilemma:"

In a state or local fiscal crisis, there are three bad outcomes: moral hazard, austerity-induced macroeconomic crisis, and reduced future investment in infrastructure. At best the federal government can prevent two of them.

Each of these alternatives is fraught with peril not just for agencies but taxpayers and transit riders too. So if you're planning to take mass transit to the next Eras tour when, like me, your kids are old enough to ask for tickets, you might end up back in your car (assuming a prohibitively expensive congestion pricing tax isn't levied against you). (Next City)

Transit Funding Problems Too Big Even For Taylor Swift To Solve
Facing depressed ridership and revenues, transit agencies need creative solutions to unlock sustainable funding for their operations.

While the race to build the world's tallest timber tower ramps up, Sweden will instead build an entire city from wood.

Buildings are some of the worst offenders in contributing to the climate crisis - one estimate puts the tally at 28 percent of global emissions from their operations (heating, cooling, lighting, etc.). So it's no surprise that timber is emerging as an alternative; one cubic meter of glulam (or cross-laminated) timber sequesters around 700 kilograms of carbon. Could we build an entire city of wood?

One Scandinavian real estate developer thinks yes. When it's fully built out in 2035 the $1.4-billion Stockholm Wood City in Sickla, just south of the Swedish capital, will include 2000 homes, 7000 offices, and other mixed-use buildings (restaurants, retail, etc. ) across a 2.7 million-square-foot development site.

Led by Atrium Ljungberg, a Swedish real estate firm, the project team believes it can reduce Wood City's overall carbon footprint by 40 percent over a traditional steel and concrete development. Timber construction has been slow to catch on in the US. But since 2013 (when there were only 23 timber buildings in America) 1500 have been built or were in the planning stages as of last summer. And the IIJA included $32 million for timber construction, so more projects could be in the pipeline soon.

Meanwhile, there is a legitimate race underway to construct the world's tallest timber tower. The 18-story Tower of Mjosa in Norway, recently lost its title when it was surpassed by the 500,000-square-foot, 25-story Ascent in Milwaukee. And two even taller towers are in the planning stages in Ontario and Switzerland.  

Atrium Ljungberg is focused on developments in the urban core. Because there is less noise when you construct timber buildings they should work well for these sorts of urban infill and redevelopment projects. Many structural components can also be prefabricated offsite, leveraging the price and schedule benefits of modular construction. (Timber buildings do still come at a premium; the Tower of Mjosa cost $113 million to construct, around 12 percent more than a conventional structure.) Still, for these reasons, Wood City's developer believes it will achieve an impressive 20% ROI, telling The Economist that although "Sweden is progressive when it comes to wood construction . . . I don't see any reason why it shouldn't work elsewhere."

Part of that lingering skepticism is the perception that wood buildings present higher fire risks. But the wood used in engineered timber buildings does not burn through; many cross-laminated timber products are 3-hour fire-rated by the US Forest Service and, in any event, it's kindling that keeps fires going. If a timber structure started to burn, it would char from outside in (like when you burn a log in a fireplace) to a depth of only a couple of centimeters (and of course it would still be outfitted with the usual types of fire suppression systems required in any other building). Plus timber supply chains can be part of responsible forest management practices, helping to address some of the underlying causes of the world's wildfire problems which I've mentioned here previously.

There are valid reasons to be skeptical that timber can ever entirely replace steel and concrete as the backbone of our modern physical infrastructure. But if we can reduce the carbon output of cement, and green hydrogen can power blast furnaces, perhaps timber buildings and developments can play a much bigger role in the decarbonization of cities - as well as make urban infill projects more appealing and profitable. (The Economist, The New Yorker)

Sweden wants to build an entire city from wood
Modern timber buildings can be cheap, green and fireproof
Transforming Trees Into Skyscrapers
In Scandinavia, ecologically minded architects are building towers with pillars of pine and spruce.

Are small wealthy suburbs preventing cities from addressing affordable housing shortages at the regional level?

The Federal Reserve continues to try and pull off a soft landing for America's economy. But one major reason that inflation persists is the continued lack of affordable housing across the country's major metropolitan areas, particularly in blue states and cities. Why is it so hard to build affordable housing in the country's most dynamic economic and labor markets?

This challenge comes at a moment when large municipalities are struggling to navigate through existing zoning ordinances and building codes as they try to convert Class B and C office buildings into new housing in an effort to boost supply post-pandemic. But big blue cities aren't the only source of the problem: a new paper also lays the blame for America's affordable housing crisis at the feet of small, wealthy suburbs that encircle downtown cores.

In Regional Governance and the Politics of Housing in the San Francisco Bay Area, the authors (Paul Lewis of ASU and Nicholas Marantz of UC-Irvine) argue that "a decentralized, localistic structure of government shapes land-use politics in ways that exacerbate housing shortages and inequalities." The wealthy, college-educated residents of small cities - leafy suburbs with strong public school districts, in most cases, safe streets, and walkable downtowns - are incentivized politically to fight upzoning and the development of multi-family housing. The authors conclude that "leaving a solution up to individual cities is unlikely to lead to increased housing supply."

The study first considered census data from California's metro areas to analyze multifamily housing development from 2014 to 2018 (while the housing market was recovering from 2008 financial crisis and its aftermath) and then expanded the data set nationwide. It concluded that cities with more than 100,000 people increased multifamily housing by 46 units on average versus similarly situated locations with less than 30,000 residents. "In other words, smaller cities, which typically are suburban in nature, added far fewer multifamily units," the authors write.

These conclusions echo those of author Jenny Schuetz in her recent book, Fixer Upper: How to Repair America's Broken Housing Systems:

. . . the controls over housing production are set by local governments. They have things like zoning rules and building codes and environmental reviews. But it’s actually even more hyperlocal than that. Individual neighborhoods get a lot of power over what gets built or not built in the neighborhood. And that’s particularly true for affluent college-educated neighborhoods, because people know all of the right political levers to push and the legal levers to stop development that they don’t want.

If political power is in the hands of citizens who are happy with the status quo, are there any solutions that can make both YIMBYs and NIMBYs happy? In the end, Schuetz believes that it comes down to how policymakers frame the question. Changing the public's perception to one where planning choices affect everyone, no matter their income bracket, is key. But our current hyperlocal approach to development precludes any sort of big-picture, regional thinking about how to solve the housing crisis.

For example, instead of making thoughtful decisions to, say, build new housing in low-density locations adjacent to transit, or in municipalities with declining populations and underutilized infrastructure, the path of least resistance leads to real estate development in the exurbs on the fringe. This creates soulless suburban car culture sprawl, requires the carbon-intensive construction of new civil infrastructure, and chains people to long commutes in their cars. This is bad planning that's bad for people. It's also one of the biggest reasons why the transportation sector contributes the most to America's overall carbon emissions.

Instead of being constrained by thoughtful, big-picture planning decisions, real estate developers instead move into the next town over that's not as wealthy, where residents don't have the same political power, and aren't able to participate in meaningful discussion about how (or even whether) new projects should occur. This generates uneven development patterns that further fuel economic inequality and exacerbate the climate crisis.

In the end, it's up to the citizens who hold political power to recognize that affordable housing benefits all of us, even if we own a nice house in the suburbs. The alternative is carbon-intensive real estate development and underinvestment in strong communities with good schools, access to jobs and transit, and a chance to improve our cities (regardless of their size) for the next generation. (The Conversation, The Ezra Klein Show)

How small wealthy suburbs contribute to regional housing problems
Small suburbs have a track record of blocking new housing. Two urban policy experts explain why that’s a problem and what metro areas could do about it.
Opinion | Why Housing Is So Expensive — Particularly in Blue States (Published 2022)
The urban economist Jenny Schuetz breaks down America’s housing crises, the policies that could fix them and the politics standing in the way.

Monthly roundup - 5 best of the rest for July 2023

This is the last infrastruttura update for July 2023. At the end of the month, I share some links and items of interest that recently caught my eye but haven't made it into an update yet. Here are the top five that I think are worth your time to check out: 
Five Minutes With James A. Morrison, Gateway Development Commission CTO
Key aspects of the $16.1B NJ-NYC Hudson Tunnel Project will be managed by Gateway’s new chief technical officer.
Traffic flow measured on 30 different 4-way junctions
mods used:https://steamcommunity.com/sharedfiles/filedetails/?id=812125426https://steamcommunity.com/sharedfiles/filedetails/?id=583429740
Ep214: Plug Power CEO Discusses Future of Hydrogen Economy | Norton Rose Fulbright
Andy Marsh, president and CEO of Plug Power, joins Todd Alexander for a lively discussion about green hydrogen.
How a Vast Demographic Shift Will Reshape the World
The most powerful countries have benefited from large work forces for decades. What happens when they retire?
The Battle for I-95
A quick repair project was the exception to the rule of American dysfunction.