Surface Transportation Innovations #35

Topics include: Making urban highways more likeable through innovative design; Portland confronts goods-movement congestion; Brookings looks at costs and benefits of rail transit; and other news.
In this issue:

Making Urban Highways More Likeable

Last month I wrote about the Reason Mobility Project's first major policy study, which makes the case that over the next 25 years, America's urban areas need to add 104,000 lane-miles of expressway, arterials, and local roads in order to catch up with growth in vehicle miles traveled and eliminate the worst (Level of Service F) congestion. That's all well and good, some of you responded, but where on earth could we put that new capacity? There's no more room—and besides, roads are ugly bad neighbors.

Those are very legitimate concerns, and they are the subject of the second major policy paper from the Mobility Project, just now being released. It's Peter Samuel's "Innovative Roadway Design: Making Highways More Likeable," available on-line at www.reason.org/ps348.pdf. Can we, it asks, figure out ways to make roadways better fit in, adding much-needed capacity without paving over our metro areas with unending concrete? I'm very impressed with what Peter has come up with, and I hope you will be, too.

The paper acknowledges many things that highway boosters don't always like to admit: making freeways ever-wider can create real operational difficulties; there's a case for reviving pretty, winding pre World War II cars-only parkways; and there's definitely a case for traffic-calming measures to preserve neighborhood streets from invasions of through traffic that threaten neighborhood tranquility and safety. And many of our freeways are just plain ugly, incapable of inspiring admiration like some of our iconic transportation landmarks such as the Golden Gate Bridge.

Acknowledging all that, what does the paper suggest as innovative design ideas? Much of it deals with limited-access expressways, since that is the most difficult challenge. For these kinds of lane-miles, the paper scours the world for innovative examples, both built and on-paper, of going up, going under, or creatively re-using existing freeway rights of way. Tunnels hold great promise, for example, for filling in much-needed but politically impossible missing links in existing freeway systems (illustrated by examples from Paris and Melbourne). Selected double-decking holds promise, too, with an elegant example being the just-opened elevated tolled express lanes in Tampa that I wrote about last issue.

Two other keys to squeezing in more urban expressway capacity are special-purpose lanes and use of non-traditional rights of way. Cars-only express lanes or truck-only toll lanes can make use of much narrower rights of way than a conventional freeway—and such rights of way exist in the form of abandoned rail lines, power transmission rights of way, flood control channels or flood plains alongside rivers, etc. Some very provocative examples are shown, for example of an express-lanes roadway from Los Angeles International airport to downtown LA and a trucks-only tollway in Brooklyn�both using abandoned rail right of way.

The paper devotes a whole chapter to arterial improvements, as well, suggesting selective use of overpasses to avoid delays at signalized intersections (as in Silicon Valley's "expressways," which are half-way between freeways and conventional arterials), innovative intersection designs, and both the benefits and limitations of traffic signal synchronization.

This is, of necessity, a highly visual policy study, and it will repay careful perusal. As the Mobility Project releases a series of city-specific case studies in coming months, you will see many of these ideas proposed for use in real-world settings.


Portland Confronts Goods-Movement Congestion

For much of the past two decades, Portland has been the poster child of the transit and smart-growth approach to dealing with traffic congestion. The area has spent heavily on light-rail transit, subsidized development around transit stations, and imposed an urban growth boundary, among other things. Critics pointed out that its traffic congestion kept increasing, but some smart-growthers even viewed that positively, on the grounds that terrible congestion would push more people out of cars and onto transit.

But in trying to implement this vision, goods-movement somehow got lost in the shuffle. And eventually Portland's business community started to notice that congestion was having serious impacts on them. Portland Gas & Electric finds that in just the last seven years, congestion has added 20 to 30 minutes to the travel times of its trimming and line crews, which costs them $30-50 per day for each of the 36 crews. Intel has had to shift the time for outgoing overnight shipments back two hours, to be sure they get to the airport on time. SYSCO Food Services had to open a new distribution center in Spokane, WA because trips through Portland were taking so long. Even pizza operators have had to cut their radius of delivery.

These tidbits are extracted from a detailed study sponsored by the Portland business community, with the cooperation of Portland Metro and Oregon DOT. "The Cost of Congestion to the Economy of the Portland Region" is the first case study I've seen that focuses primarily on the costs of congestion to businesses and a metro area's economy. It was carried out by Economic Development Research Group (www.edrgroup.com), a Boston firm headed by economist Glen Weisbrod, whose pioneering NCHRP study on the costs of congestion to regional economies I reported on in Issue No. 22. The study is available on the EDRG website, as well as that of Metro. (www.metro-region.org/article.dfm?articleid-16673).

Portland is particularly hard-hit by traffic congestion because "a significant part of [its] economy is based on the city's location as a gateway port for marine and air movement, and intersection of major cross-continent highway and rail routes." Because these functions all depend heavily on trucks, "they are particularly vulnerable to worsening highway congestion." The study also notes that "The effects of congestion are eroding the significant progress that has been made in inventory management and control, by re-introducing uncertainty in shipping and receiving attributable to the over-the-road and 'last mile' portion of the supply chain system."

Like the Hartgen/Fields study for Reason's Mobility Project, the EDRG study used Portland's transportation planning model to project congestion into the future, assuming the existing long-range transportation plan is implemented, as written. It reaches a similar conclusion, of much worse congestion by 2025. Then it modeled Portland's unfunded alternative plan, which increases both transit and highway capital spending by $6.2 billion. The result is that congestion would still be worse than today, but that extra money would save 30 million vehicle-hours per year that would otherwise be wasted in congestion.

Had the modeling focused more on adding highway capacity, the savings might have been far greater. Hartgen & Fields estimated that spending $2.7 billion more in Portland, solely to add highway capacity, would yield annual savings of 101 million hours per year by 2030, eliminating all Level of Service F conditions. As the Portland business community ponders what to do next, they should take a closer look at which investments produce how much congestion reduction.


Brookings Scholar on Rail Transit in America

Rail transit projects in most U.S. urban areas arouse controversy. Many taxpayer advocates argue against them, contending that they produce very small benefits in exchange for very large taxpayer costs. But transit advocates justify the projects as essential to reduce congestion and improve air quality, by "getting people out of their cars."

Brookings Institution's transportation scholar Cliff Winston has taken a quantitative look at this issue. His new paper is titled "On the Social Desirability of Urban Rail Systems," co-authored with Vikram Maheshri, an economist at the University of California at Berkeley. It appears in the Journal of Urban Economics and is available online at www.sciencedirect.com.

The purpose of the paper is to estimate the contribution of U.S. urban rail systems to social welfare. The authors define the net benefit of a rail transit system as the difference between its benefits, broadly measured, and its net cost to taxpayers. If this difference is positive, it means that the dollar value of the rail system's benefits is greater than its net cost to taxpayers (i.e., the difference between what the rail system's customers pay as fares and the total cost to build, operate, and maintain the rail system).

On average, rail transit systems cover about 40% of their operating costs from farebox revenues and none of their capital costs, according to figures in the National Transit Database. That means their net taxpayer subsidy is large, given the high capital costs of rail.

Winston and Maheshri construct an elaborate econometric model to estimate the "consumer surplus" of 25 rail transit systems. This is economists' term for the benefits to users, over and above the fares they pay. The large systems (New York, Washington, DC, San Francisco's BART, etc.) all produce significant consumer surpluses. But most of the smaller ones do not; those with "negligible" consumer surpluses are Miami, St. Louis, Sacramento, San Jose, Pittsburgh, Denver, Buffalo, and Newark. Most of these are relatively new light rail systems.

Next, the authors compare the consumer surplus of each system with its net taxpayer cost. On this measure, every single one of the 25 systems has negative net benefits—i.e., the annual value of the benefits to users is less (usually much less) than the annual cost to taxpayers. Surprisingly, this is true even for the massive New York City rail transit system, which by itself accounts for two-thirds of the nation's rail transit passenger miles.

But what about larger benefits to the metro area? Rail systems are advocated not just to benefit their riders, but because they are expected to reduce traffic congestion, reduce air pollution, save energy, etc. So the final step in Winston and Maheshri's analysis was to estimate the value of these "externality" benefits. They first conclude that the only one of these purported benefits large enough to make any difference is congestion relief. Given rail transit's low load factor (less than 20% during all the hours of the day these systems operate, generating costs), neither the energy savings nor the emission reductions are significant.

They do quantify the congestion reductions, which are significant because the rail systems attract riders during rush hours, when marginal reductions in cars on the road can make a meaningful difference in the level of congestion. Adding the congestion savings to road users to the consumer surplus gives the total benefits of rail transit. When this total is compared with the net taxpayer costs, only San Francisco's BART produces net social benefits (though the Chicago Transit Authority system comes close).

All 23 other U.S. rail transit systems are net losers. The net social cost of some of these systems is as follows:

  • Miami-Dade Transit: $141 million/year
  • St. Louis light rail: $171 million/year
  • Dallas DART light rail: $457 million/year
  • Sacramento light rail: $106 million/year
  • San Jose light rail: $210 million/year
  • Pittsburgh light rail: $135 million/year
  • Denver light rail: $279 million/year

This means each of those urban areas is poorer by that amount each year.

Winston and Maheshri anticipate that some rail advocates will protest that these systems offer other benefits that are not accounted for in their calculations. For example, rail stimulates some development around rail stations. "But case studies have yet to show that after their construction transit systems have had a significant effect on employment or land use close to stations and that such benefits greatly exceed the benefits from commercial development that would have occurred elsewhere in the absence of rail construction."

And there is also the claim that rail systems increase the mobility of low-income residents. But the authors point out that the median annual income of rail users in 2001 exceeded $50,000, which was greater than the median income of the general population in that year. So rail's primary market is not the poor (unlike bus transit).

Overall, then, the authors conclude that rail transit is erroneously believed by the public to be socially desirable, because "supporters have sold [rail systems] as an antidote to the social costs associated with automobile travel, in spite of strong evidence to the contrary." [emphasis added] They conclude that, in fact, rail transit is "an increasing drain on social welfare."


News Notes

No-Frills Intercity Bus Trips. The Wall Street Journal reported this summer on the launch of a low-cost carrier in the intercity bus industry, taking on Greyhound in the same way that Southwest and JetBlue have taken on what are now called "legacy" airlines. The new entrant is megabus.com, a unit of Stagecoach Group's Coach USA. It's offering service among eight Midwestern cities for as little as $2.50 round-trip, though most pay $10-15, and last-minute riders pay as much as $50. This is very similar to "yield-management" pricing in the airline business. Passengers book seats online, and wait at designated street corners for their assigned megabus. At a time when Amtrak seeks ever-higher taxpayer subsidies, it's nice to see the free market still innovating to provide affordable intercity trips.

Competing Toll Road Offers Money-Back Guarantees. Australia's two largest metro areas have been getting nearly all their new limited-access highways via long-term concessions with private firms for the past two decades. So perhaps the land Down Under offers us a preview of what highway privatization may bring to the land of the free. In Melbourne, the new (under construction) Eastlink toll road has announced that it will offer up to A$25 per year in rebates to customers if it makes tolling mistakes, closes lanes, or performs poorly in other ways. Competing CityLink has so far announced no offsetting moves, according to the Herald Sun, Australia's highest-circulation daily newspaper.


Quotable Quote

"The proposed multibillion-dollar sale or long-term lease of the New Jersey Turnpike is just in the talking stage, but one plan would use the revenue to bail out the state pension plan. To dump the proceeds down that drain would be a form of state-asset cannibalism. It would not move New Jersey forward with needed infrastructure or encourage critical long-range financial planning."

—Editorial, "Public-Private Partnerships Can Be a Powerful Resource," Engineering News-Record, August 21/28, 2006.


Speaking Engagements

Here's the latest version of my surface transportation speaking calendar for this fall. I hope to see you at one or more of these:

Oct. 19: Bond Buyer 7th Annual Transportation Finance Conference, Houston
(www.sourcemediaconferences.com)

Oct. 23: Hawaii Highway Users Alliance, Honolulu
(808-674-5223)

Oct. 26: Infrastructure: A Growing Asset Class, New York
(www.srinstitute.com/cx610)

Nov. 29: Miami Chamber of Commerce Transportation Summit, Miami
(www.miamichamber.com)

Dec. 5: IBTTA Transportation Finance Summit, Washington, DC
(www.ibtta.org/events)

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





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