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Reason Foundation

Surface Transportation Innovations #97

Reauthorization and Interstate tolling, BRT without exclusive lanes, Senate's TIFIA proposal, I-85 HOT lanes succeeding

Robert Poole
November 28, 2011

In this issue:

  • Will reauthorization allow Interstate tolling?
  • BRT without exclusive lanes
  • The Senate's TIFIA proposal
  • I-85 HOT lanes succeeding, despite rough start
  • Enhancements under attack in Congress
  • Virtual traffic management centers
  • Upcoming Conferences
  • News Notes
  • Quotable Quotes
Future of Tolling at Stake in Reauthorization

Even if Congress somehow comes up with enough money (from somewhere) to avoid reductions in federal highway funding, it's quite clear from a decade of research that business-as-usual funding will scarcely make a dent in the overwhelming problem facing the U.S. highway system in coming decades: reconstructing and modernizing the Interstate highway system. This vitally important system will be reaching the end of its 50-year design life during this period. The Interstates were also laid out based on the United States of the 1940s and '50s, not the country it has become in 2011. The safety and design standards of the 1950s are a far cry from what we practice today. And many urban and inter-city Interstate corridors are woefully short of capacity. Estimates for reconstructing and modernizing this vital backbone of intercity travel and goods-movement range from $1.5 to $3 trillion.

The fairest and most practical way to pay for a 21st-century Interstate system is to finance it based on 21st-century all-electronic tolling. Only those who benefit from the replaced facilities would pay for them, under this approach, contrary to what would happen via an enormous increase in fuel taxes (which everyone would be forced to pay, and which would get carved up into enough categories to satisfy every money-hungry constituency). Under the principle of value-added tolling that I wrote about last month, tolling would be applied only when a corridor was reconstructed; there would be no "putting up toll booths on the [unimproved] Interstate," as critics rightly fear. And toll revenues would be used solely to rebuild, operate, maintain, and improve each specific tolled corridor.

I'm happy to report two recent developments that are fully in accord with these ideas. The first was the unveiling, on Nov. 2nd, of the U.S. Tolling Coalition, spearheaded by state-level highway construction associations in (thus far) 15 states, along with several chapters of the International Union of Operating Engineers. Thus far, only two state DOTs (Alabama and Florida) and one toll agency (North Texas Tollway Authority) are listed as supporters on the coalition's website (http://ustollingcoalition.com). But given the growing number of states applying for slots in the federal pilot program that allows only three states to reconstruct an aging Interstate with tolls, I expect more to step up to the plate in coming weeks and months. (Missouri and Virginia already have slots in the program; Arizona and North Carolina have applied, and Connecticut and Rhode Island are likely to do so.)

The other key development was an announcement in late October of an agreement between the organization representing state DOTs (the American Association of State Highway and Transportation Officials) and the organization representing toll roads (International Bridge, Tunnel & Turnpike Association) to enable the two groups "to work together in support of road funding and financing tools that help states build and maintain infrastructure." While acknowledging that not all state DOTs support tolling, AASHTO executive director John Horsley said that in signing the statement, "AASHTO expresses our common belief that all states should have the flexibility to use tolls to fund and support their highways."

Congress holds the key to whether states will gain this flexibility during the current reauthorization of the federal highway program. Except for those portions of the Interstate system that were originally developed with tolls, federal law prohibits the use of tolling on the Interstates, except to replace an existing bridge or tunnel, or as allowed under various pilot programs enacted during the last three reauthorizations. The recently released Senate Environment & Public Works (EPW) Committee bill would leave those pilot programs intact, except for the Express Lanes Demonstration Program, which was authorized only for the duration of SAFETEA-LU (which has been extended several times since its nominal end Sept. 30, 2009). The actual language of a House bill has not yet been released, but toll supporters are worried by repeated statements this year by Transportation & Infrastructure Committee chairman John Mica (R, FL) that he supports tolling only for "new capacity" but not for "existing" capacity. Taken literally, that position would wipe out the Value Pricing Pilot Program and the Interstate System Reconstruction and Rehabilitation Toll Pilot Program, which would turn back the clock on Interstate tolling to the pre-ISTEA (1991) days.

At the ARTBA Public Private Partnerships conference in Washington, DC on Nov. 15th, House Transportation & Infrastructure Committee staffer Jim Kolb said that it was hard for House members to support an expansion of the Reconstruction pilot program when only two of the three slots have been taken after 13 years and no reconstruction project has actually begun. And Senate EPW staffer James O'Keefe added that, in his view, the politics are not there so far for expanded tolling provisions; hence, "You guys need to make a stronger case" if you expect action.

In response, I suggest the following. Both the 1998 TEA-21 law and the 2005 SAFETEA-LU significantly increased federal highway money for the states, meaning the status quo was easy to live with. It's amazing that any state, flush with federal money in those years, would have seriously considered the politically more risky alternative of using toll financing where it had never before been used. But the best any state can hope for from a 2012 reauthorization is about the same funding as in recent years-at a time when the needs are greater than ever before. The fact that as many as half a dozen states are likely to be contending for the one remaining slot in the Interstate Reconstruction Toll  pilot program is evidence of how drastically the situation has changed since 1998. Moreover, simply expanding the number of slots in that program-or better still, removing any numerical limit-is not a mandate forcing any state to do anything. It simply gives states the option, under carefully worked out conditions that conform to the value-added tolling principle. So the case is there. The key question is: will a critical mass of state DOTs join the U.S. Tolling Coalition to make their case to Congress?

BRT Without Exclusive Lanes?

I have long been a supporter of bus rapid transit (BRT) as being inherently more flexible and cost-effective than rail transit. The idea has gradually been catching on with U.S. transportation planners, as documented in a report from the Institute for Transportation and Development Policy that I discussed in the June 2011 issue of this newsletter. Despite BRT's advantages, in most cases I think it's a mistake to develop BRT systems based on exclusive rights of way. While that may sound counterintuitive, bear with me while I explain.

First, we need to remember that what some have called BRT-Lite can be a highly cost-effective improvement over regular city bus service. The best-known example of this is the highly successful Metro Rapid program in Los Angeles. Specially marked buses operate on regular lanes of major arterials in Los Angeles, with stops between one-half and one mile apart, and often getting through signalized intersections thanks to traffic signal priority. Those may sound like trivial improvements, but Metro Rapid routes offer longer-distance commuters considerable time savings and have been so successful in attracting customers that the service has been expanded from its original corridor (Wilshire Blvd.) to 26 routes spanning 450 miles of major arterials. Other than the cost of the additional buses, there is practically no infrastructure cost.

Contrast that with currently planned exclusive-busway BRT projects. The long-planned Hartford to New Britain (CT) busway, 9.4 miles long, would be built on a former railroad right of way, but its cost is now put at $567 million-over $60 million per mile. Far more ambitious is a proposed 150-mile BRT network for Montgomery County, MD, at an estimated cost of $2.5 billion (at $17 million per mile, far less than the Connecticut project and much less than an estimated $120 million/mile for light rail). Sounds pretty good, until you think about how little those exclusive lanes would actually be used.

Even during peak periods, three-minute headways (i.e., one bus every three minutes) would mean only 20 buses per hour. A single lane of highway can handle about 1,600 vehicles per hour without congestion, which many HOT lanes are doing today, thanks to variable pricing. Even if you count each bus as two passenger car equivalents, that is still just 40 of a possible 1,600, leaving more than 1,500 spaces unused. In the Hartford busway case, that route parallels congested I-84. If the busway were instead developed as a HOT lane facility, it's quite plausible that 1,500 motorists per hour would be willing to pay a toll to bypass congested I-84 during peak periods. Such shared use would convert the busway into what I've called a Virtually Exclusive Busway. (http://reason.org/news/show/virtual-exclusive-busways)  From the bus system's perspective, the VEB would provide the same high speeds and absence of congestion as a physically exclusive busway, but would serve the additional purpose of providing additional congestion relief for paying motorists. And, in the process, it would generate toll revenues that would cover a significant portion of the $567 million cost.

Lest you think that idea is a flight of fancy, such a busway conversion is under serious consideration in South Florida. The 19.8 mile busway parallels highly congested U.S. 1 in southern Miami-Dade County. It was developed in 1997 when the state acquired a dis-used freight rail line alongside the highway. Because the busway (like U.S. 1) is intersected by numerous cross streets, it has dozens of signalized intersections along its route, meaning there is nothing like "express" bus service. Hence, the busway has done very little to relieve congestion on U.S. 1. In 2008, the Miami-Dade MPO did a study on the possible expansion of the busway and its conversion into a HOT/bus facility. Several of the alternatives included grade separations at major intersections. The results were promising enough that the MPO board in 2009 authorized a more detailed study, which got under way last year. A 2009 "vision study" for the Florida DOT included the revamped busway (as a VEB) as one component of a regional managed lanes network.

The synergy between BRT and priced managed lanes is also being explored in a project that recently got under way in Tampa. Under a Value Pricing Program grant, Hillsborough Area Rapid Transit and Tampa-Hillsborough Expressway Authority are jointly exploring the feasibility of a set of what they call "Bus Toll Lanes" that could be added to selected corridors in that metro area. The idea is also a key element in a forthcoming Reason Foundation mobility study of the Southeast Florida region, which I will report on here when it is released early next year.

Senate TIFIA Draft Looks Pretty Good

My natural skepticism comes into play whenever Congress takes up any subject, so I've been quite worried that during the current reauthorization process Congress would undermine the very factors that have made the TIFIA program a success. My initial review of the reauthorization bill voted out by the Senate Environment & Public Works (EPW) Committee earlier this month suggests they have done a pretty good job-with one exception.

In the Reason Foundation policy brief I wrote earlier this year, I praised TIFIA for including three key safeguards against facilitating bridges to nowhere and other transportation boondoggles. First, a TIFIA loan can be granted only to projects that have a dedicated revenue source to repay the loan (typically tolls, or for transit projects, a dedicated transportation tax). Second, TIFIA provides only subordinated debt, so the project must be able to attract primary debt that carries an investment-grade rating. Third, consistent with the second, is that TIFIA is limited to providing no more than 33% of the total project budget. (http://reason.org/files/transportation_infrastructure_finance_brief.pdf)

To cut to the chase, the EPW bill retains two out of three, and actually strengthens the investment-grade rating (by requiring such a rating from at least two rating agencies rather than only one). But it increases the potential size of a TIFIA loan from the current 33% to a new maximum of 49%. That is a mistake, for two reasons. First, it will likely increase the riskiness of projects that take advantage of the 49% maximum, which means they will have less of other funding-less sponsor equity or less investment-grade senior debt. In other words, project sponsors will have less skin in the game, relying too much on cheap federal loans. Second, while this may look attractive to individual project proponents, from an overall program perspective, it substantially reduces the TIFIA program's power in leveraging federal funds. As my policy brief pointed out, under current federal budget-scoring rules, a TIFIA loan is scored at 10% of the amount of the loan (basically, an estimate of overall program-wide default risk). Thus, every dollar of TIFIA budget authority generates $10 of loans. At the 33% maximum size, every dollar of budget authority can produce up to $33 worth of projects. But if the maximum is raised to 49%, every dollar can produce only $20 worth of projects. Hence, the large increase in budget authority proposed by EPW-from the current $121 million per year to $1 billion per year-could finance $20 billion worth of projects, compared with $33 billion. (Whether $1 billion/year is too much is another question, but whatever the final amount, the limit should be kept at 33% for maximum program leverage.)

There are other good features of the EPW TIFIA proposal, and I would be remiss not to mention them. It would remove the much-criticized discretionary element in project selection (added by the current administration), making the program basically a check-the-boxes program: if you meet all the requirements and there is money available, the request should be approved. It would also process applications as they are received, rather than making applicants wait for an annual notice of when they can submit requests. It also increases the program's administrative budget, so it can handle the much larger volume of business that a large increase in budget authority would generate.

We've been told that the House bill will also expand TIFIA to around the $1 billion/year level. I hope the Transportation & Infrastructure Committee will follow EPW's lead on the above program changes, except for the ill-advised increase from 33% to 49%.

I-85 HOT Lanes Survive Shaky Debut, Media Frenzy

When the Georgia State Road & Tollway Authority opened Atlanta's first HOT lanes project at the beginning of October, they thought they'd done their homework. They had held nine public hearings and 71 meetings in the project corridor (a highly congested stretch of I-85 from the northeastern suburbs heading toward central Atlanta). They had the variable message signs in place two months ahead of opening day. And they had fine-tuned their dynamic tolling algorithm. But when they opened the lanes to traffic, people gasped at the price displayed for the whole 15.5-mile facility and stayed out. So did nearly all of the former two-person carpools that were no longer eligible, since the occupancy requirement was simultaneously increased to HOV-3 for free passage. With the same total number of lanes on that stretch of I-85 and hardly anyone using the former HOV lane, congestion in the general purpose lanes got even worse than normal. That led to a media feeding frenzy that continued for weeks despite SRTA's quick action to reduce toll levels and attract respectable numbers of customers as early as the second week.

Here are numbers I've assembled from data released by SRTA (and largely ignored by the media):

                                                Atlanta I-85 HOT Lanes       

Weekday Trips (Avg.)            Average Toll Paid

Week 1                                    4,170                           $2.02

Week 2                                    5,736                           $0.88

Week 3                                    8,688                           $0.89

Week 4                                    9,431                           $0.95

Week 5                                  10,122                           $1.05

Week 6                                  10,320                           $1.05

So...no big deal, apart from Week 1. Otherwise, a fairly typical ramp-up of a new HOT lane. Yet even a month into operations, we saw an editorial in the Washington Times (Nov. 1) headlined "Georgia's Tolling Nightmare." And even the normally sensible online newsletter, Urban Transportation Monitor, led off its Oct. 31 issue with this headline: "High Tolls on New Atlanta HOT Lanes Drive Users Away."           

Apart from setting the record straight for those who have not followed this situation closely, I'm writing about this here to think through lessons learned from this unfortunate start-up experience. The most glaring lesson is to start off erring on the low side with pricing. Apparently, SRTA's dynamic pricing algorithm started off being based largely on the level of congestion in the GP lanes. No wonder it was way too high at the outset, seriously dampening demand. I've always thought the main (or even sole) factor in managed lane pricing should be the desired level of service in the managed lanes, since what people are being asked to pay for is a fast and reliable alternative to the congested GP lanes, and that alternative needs to be priced so as to ensure LOS C or better.

Second, there was an understandable backlash from the simultaneous change from HOV to HOT and from HOV-2 to HOV-3. Yes, the increase in occupancy had been mandated by the feds, as well it should have been, since the HOV-2 lanes were failing to meet the statutory mandate of maintaining at least 45 mph speed 90% of the time during peak periods. FHWA does not seriously enforce this on most HOV lanes, but in this case it was part of the agreement for Atlanta's pricing grant. But it would have been wiser to separate the two changes, at least a bit, in time, so that the decision to go HOT did not get the blame for "kicking out the carpools," but instead was viewed as a solution to the resulting "empty-lane syndrome."

Third, SRTA tells me that one reason for the exaggerated response to their initial pricing was that the price they have to display, per the Manual of Uniform Traffic Control Devices managed lane signage standards, is the price to go the whole length of the project, even though many people do not go that whole distance, and are charged accordingly. I'm told that discussions are under way within IBTTA about this issue, and it may well be that those display requirements deserve another look.

But the bottom line of this episode is that the I-85 HOT lanes are not a failure. Since most of the usage of HOT lanes is during the eight peak hours on weekdays, once they reach 1,600 vehicles/lane/hour in the peak direction every weekday, they will be handling 12,800 vehicles a day, compared with the 10,320 per weekday already achieved during Week 6. So the lanes' traffic is already quite respectable. I suppose it's too much to hope that the general media will acknowledge that.

Enhancements and Other Non-Core Programs: Optional or Mandated?

One litmus test for how serious Congress is about setting priorities for the use of limited federal surface transportation monies is what it does about a whole raft of  "diversions" of highway user tax monies to non-core purposes. These include sidewalks, bikeways, recreational trails, landscaping, historic transportation structures, transportation museums, and the like. I'm not saying these things have no value, but it's hard for me to justify them as either (a) federal (as opposed to state or local) priorities or (b) legitimate uses of highway user-tax money.

Defenders of these programs are clearly worried, leading to headlines such as "Epidemic of Pedestrian Fatalities Investigated," touting a study that calls for continued dedicated federal funding for bicycle and pedestrian programs. A large array of interest groups is even trying to expand such programs, by having Congress enact (presumably as part of reauthorization) the "Complete Streets Act of 2011" (S 1056), which would require pedestrian and bicycle facilities on every federally aided roadway project.

But the Transportation Enhancement program, which dates back to ISTEA (1991), has become the focal point for priority-setting reformers. This program mandates that 10% of the money in the largest federal highway program (the Surface Transportation Program-STP) be set aside and spent only on bicycle and pedestrian projects, beautification, historic preservation, and museums. Separate programs also exist for recreational trails, "safe routes to schools," and other non-highway programs. Between 1992 and 2010, states spent $8.7 billion of federal money just on Enhancements projects.

Sen. John McCain (R, AZ) attempted to eliminate the Enhancements mandate in the FY 2012 transportation appropriations bill, but his amendment was voted down 59-39. A slightly different amendment with the same goal by Sen. Rand Paul (R, KY) failed by 60-38. So Enhancements  live on for FY 2012. Their longer-term survival depends on the upcoming reauthorization legislation. Sen. Tom Coburn (R, OK) has taken a softer line there; along with EPW ranking member Sen. James Inhofe (R, OK), he won support from EPW chair Barbara Boxer (D, CA) to make Enhancements optional for states. The two-year reauthorization bill approved several weeks ago by a unanimous EPW vote (18-0) would shift Enhancements to the Congestion Mitigation and Air Quality (CMAQ) program, along with Safe Routes to Schools, Recreational Trails, and several other non-core, non-highway programs. States would be free to use the CMAQ money for their choice of included programs, which could exclude any or all of the traditional Enhancement projects.

The House bill may take a harder line. The House GOP leadership, along with Transportation & Infrastructure (T&I) Committee chair John Mica (R, FL), have singled out Enhancements and related non-core spending mandates as symptoms of federal bloat. Mica has said Enhancements won't be included in the T&I bill, but whether that means no funding or making these programs optional remains to be seen. The existence of a bipartisan 160-member Congressional Bike Caucus suggests there will be a battle over this in the House as there was in the Senate.

In my view, if Congress cannot even eliminate "nice to have" but non-core spending programs like these, it will fail to restore any semblance of public trust in the Highway Trust Fund. And that does not bode well for meaningful, cost-effective federal investment in surface transportation.

Virtual Traffic Management Centers?

As part of the development of intelligent transportation systems (ITS) over the past two decades, many transportation agencies have created traffic management centers (TMCs). Late last year, ITS expert Phil Tarnoff wrote a devil's advocate article for Thinking Highways (Vol. 5, No. 4) asking whether "consolidated" TMCs are cost-effective, and introducing the alternative of a virtual TMC. I think he raised some excellent points. (http://thinkinghighways.com/App_Documents/Article.File/4232b695-c947-4493-8ea0-967a713d7b6f.pdf)

The key question Tarnoff asks is whether (as in some TMCs) most or all possible incident responders should have someone permanently located at the consolidated center or, alternatively, whether their participation could be carried out by virtual means, such as internet-enabled video, voice, and data communications. He does not deny that improved incident response has reduced incident duration and secondary crashes. But the high benefit/cost ratios reported by U.S. DOT are mostly the result of service patrols and other field units; no comparable B/C ratios exist for consolidated TMCs.

To further explore the trade-offs, Tarnoff presents a list of nine possible TMC functions. Of these nine, he maintains, only two are potentially supported by co-location of personnel: incident management and response to major emergencies. And he notes that in most actual TMCs, during a major emergency, people from various responder agencies are temporarily relocated to the TMC, rather than being stationed there permanently. He then reviews the trade-offs that exist for permanent co-location, concluding that the most-compelling case exists for having the state police/highway patrol there (along with core transportation agency staffers), and perhaps a media person. Weighed against this are significant costs, both for the TMC and for the various responder agencies, for having people located permanently at the TMC.

In my view, Tarnoff makes a compelling case for at least considering the virtual alternative when new TMCs are being planned.

Upcoming Conferences

Note: I don't have space to list all the transportation conferences going on; below are those that I am (or a Reason colleague is) participating in.

Infrastructure Investor America's 2011Forum, Dec. 7-8, New York, NY, McGraw-Hill Conference Center. Details at www.peimedia.com/iiamericas11. (Shirley Ybarra speaking)

Hong Kong Society for Transportation Studies Annual Meeting, Dec. 18-20, Hong Kong, Intercontinental Grand Stanford Hotel. Details at: http://home.netvigator.com/~hksts/conf.htm.  (Sam Staley speaking)

Transportation Research Board 91st Annual Meeting, Jan. 22-26, Washington, DC. Details at www.trb.org/annualmeeting2012/annualmeeting2012.aspx. (Robert Poole and Shirley Ybarra speaking)

News Notes

Pension Fund Invests in Florida Toll Project

One of America's largest pension funds-Teachers Insurance and Annuity Association of America (TIAA) has purchased a 50% stake in Florida's I-595 concession project, a complete reconstruction of this major freeway, including the addition of three reversible express toll lanes. TIAA purchased the stake from developer/operator ACS Infrastructure Development, which holds a 35-year concession to develop and operate the highway, which is now under construction.

An Evolutionary Approach to Implementing Freeway Congestion Pricing

I'm pleased to report that the paper I delivered at the 2011 annual meeting of the Transportation Research Board is now in print. It appears in TRB's Transportation Research Record No. 2221. Its title is "Rethinking the Politics of Freeway Congestion Pricing." The paper or the complete issue can be purchased via the TRB website (or you can email me for a copy).

Post Publishes Overview on PPP Toll Roads

A well-researched and fairly comprehensive overview of long-term concession toll projects appeared in the Oct. 22nd issue of The Washington Post. Written by Cezary Podkul, formerly of Infrastructure Investor, the article discusses a number of recent projects, both large-scale investment in new highways and bridges and the leasing of existing toll roads. It includes the growing involvement of pension funds as investors, and also discusses who won and who lost when a recent start-up toll road filed Chapter 11. (Note: at press time, this piece was available on the Post's website, but with a very long URL. It's simpler to just Google the title: "With U.S. Infrastructure Ailing, Public Funds Scant, More Projects Going Private.")

Tunnel Boring Begins for Port of Miami Tunnel

The huge (41-ft. diameter) tunnel boring machine from Germany began digging the first of two parallel tubes for the new Port of Miami Tunnel on Nov. 4, 2011. Each of the two tubes is expected to take six months to drill and line with concrete panels. The $1 billion project is being procured by Florida DOT under a 35-year concession awarded to a team led by France-based Meridiam Infrastructure Partners and Bouygues Travaux Publics.

Bay Bridge Congestion Pricing Eases Congestion

Higher peak-period tolls, and charging half-price (instead of zero) to carpools have reduced congestion and increased speeds on the San Francisco-Oakland Bay Bridge, according to UC Berkeley research commissioned by the Metropolitan Transportation Commission. The biggest impact was that more than half the traffic formerly in the carpool lanes disappeared; officials speculate that some shifted to BART and some changed the time of their commute, and many were probably cheaters who now drive in the regular lanes. The overall reduction in AM peak traffic was about 4%, and time savings varied greatly depending on which approach road people use to get to the bridge and the time (within the peak period) that they travel.

DOT Relents on Ohio Turnpike Lease Study

In October, following union-inspired complaints from several Ohio members of Congress, the U.S. DOT revoked a previously awarded study grant to the Ohio DOT to research alternatives for "leveraging" the value of the Ohio Turnpike. The unions object to the possible leasing of the Turnpike, which Gov. John Kasich is on record favoring. But Republican members protested the DOT's action, and several weeks later DOT rescinded its action, restoring the funds. The study is to be completed by July 2012.

Major Safety Benefits from Open-Road Tolling

Florida's Turnpike Enterprise (FTE) has been replacing electronic toll lanes with open-road tolling (ORT) at many of its toll collection locations around the state. Those with Sunpass transponders no longer have to slow down to 25 mph to go through a narrow toll lane, but instead drive beneath a gantry at highway speed, while cash customers pay at toll booths off to the side. A study by FTE and outside consultants found that the crash rate at ORT locations was reduced by as much as 70%, with all but one having at least a 50% reduction. The next phase of toll system modernization-already under way-is to replace cash collection altogether by implementing all-electronic tolling (AET). These findings are documented in "Safety Benefits from Deployment of Open Road Tolling for Main-Line Toll Plazas in Florida," in Transportation Research Record No. 2229, available from the Transportation Research Board website.

No Trend Toward Multi-Family Housing

Data from the Census Bureau's 2010 American Community Survey debunk the trendy idea that that Americans are shifting their preferences from detached, single-family houses to attached and multi-unit housing. The data show that 79.2% of new households in the 51 largest metro areas chose detached houses over the past decade. Overall, the decade resulted in 4 million net new occupied detached homes, compared with 570,000 attached homes and 590,000 units in multi-family buildings. In most of the 51 metro areas, detached and attached homes increased their share, while apartments and condos decreased their share. More details and a table showing all 51 metro areas are in "More Americans Move to Detached Houses," by demographer Wendell Cox, at newgeography.com, Nov. 1, 2011.

Megabus Expands in Atlanta

Fast-growing Megabus, one of the leading companies in the revival of intercity bus service, has established a hub in Atlanta, serving 11 cities: Orlando, Gainesville, and Jacksonville, FL; Birmingham, Mobile and Montgomery, AL; Chattanooga, Knoxville, Memphis, and Nashville, TN; and Charlotte, NC. To publicize the new routes, the company gave away 10,000 tickets for travel between Nov. 16 and Dec. 16, including Thanksgiving. Analyst Randal O'Toole estimates that Megabus fares average 7 cents a passenger mile, compared with 30 cents for Amtrak and 35 cents per vehicle mile for cars.

Quotable Quotes

"The U.S. DOT's TIFIA loans have underpinned every major greenfield P3 project in the past 20 years. TIFIA is the least expensive, most flexible, longest term, and most 'patient' subordinate debt available in the global financial markets to finance transportation capital expenditures. There is no other financing tool like it in the world. Without TIFIA, the Goethals Bridge would be a redecking job, a temporary fix causing huge delays and a negative impact on the regional economy. And it would create few jobs. With TIFIA, the project is the replacement of a dangerous 1920s bridge with an iconic, cable-stayed arch built as a DBFM project that will be privately maintained for 30 years. So the future of transportation P3s depends on TIFIA."

--Bill Reinhardt, editor, Public Works Financing, speech to the National Council of Public-Private Partnerships, Tampa, FL, Oct. 5, 2011.

"Top-notch though it is, the U.S. infrastructure could use an upgrade; by their very nature, roads, bridges and the rest require constant maintenance. The effort could boost both current employment and the economy's capacity to grow in the future. But it's not just a matter of turning on the money tap and letting it flow. Though roads, rails, and levees represent huge, upfront capital expenditures, the long-term benefits are often difficult to calculate objectively. The whole business is fraught with uncertainty, trade-offs, and pork-barrel politics. Nor are the economics of public works simple. After its economic bubble burst, Japan tried to restart growth with more than $6 trillion in infrastructure spending between 1991 and 2008. It ended up with little to show for it but a swollen national debt and lots of bridges to nowhere."

--Charles Lane, "The U.S. Infrastructure Argument that Crumbles upon Examination," The Washington Post, Oct. 31, 2011.

"Every green energy firm has some kind of political connection, given that the entire industry is a creation of the government. In this symbiotic world, cause and effect blur. Loan programs like DOE's are always going to pick up the Solyndras of the world, since their reason for being is to help companies that can't acquire private financing, and can't persuade enough investors that the risks they take on will be profitable. A government program dedicated to uneconomic goals is naturally going to end in economic failure."

--Editorial, "The President's Venture Capitalist," The Wall Street Journal, Nov. 16, 2011.

"When the federal government is paying for infrastructure, state officials and members of Congress fight for their share of the funding, without worrying too much about efficiency, environmental issues, or other longer-term factors. The solution is to move as much infrastructure funding as we can to the state, local, and private levels. That would limit the misallocation of projects by Congress, while encouraging states to experiment with lower-cost solutions. It's true that states make infrastructure mistakes as well, as California appears to be doing by subsidizing high-speed rail. But at least state-level mistakes aren't automatically repeated across the country."

--Chris Edwards, The Washington Post, Oct. 21, 2011

"[T]here is a general tendency among the public to view [highway] assets as 'build-it-once-and-forget-it' systems, rather than as utilities that require continuing attention and investment. The result is a persistent shortage of appropriate funding for these assets as politicians fear voter reprisals should they raise taxes or initiate tolls. There is one way to break this impasse: Take the bold step transforming our transportation assets into functioning public utilities. We need only to look at the success of our electricity, gas, and water utilities for inspiration."

--HNTB Think, "Envision Transportation Assets as Utilities," November 2011. (www.hntb.com/think)


Robert Poole is Searle Freedom Trust Transportation Fellow and Director of Transportation Policy


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