LA Man Wants Cheaper Parking, Economics Be Damned

The Los Angeles Daily News has an article profiling the guy who helped shut down red light cameras in LA, and apparently his next target is parking meters. He's got some valid complaints, like how the parking duration is sometimes insufficient for any adjacent uses, but otherwise he doesn't seem to have any coherent plan other than an Eyman-esque "I don't like paying for parking and so I'm going to appeal to people's greed to force the rates lower."

This choice quote from a local sums up the type of person he's appealing to:

“I think it’s extortion,” said DiPadova, 34, of Hollywood, who supports radical parking meter reform. “It’s an unjust tax. It’s one that, because people don’t get involved in local politics, local lawmakers see it as an additional revenue stream. 

“It’s a travesty,” he added. “In a city where you’re forced to drive, there’s no reason you should be punished for small mistakes.”

Putting aside the total fallacy that you can't get around in LA without driving and that paying less than you would at a private garage is a "tax," if this guy's successful a lot of neighborhoods are going to end up in the toilet. Sorry, I know parking meters aren't fun to deal with, but they serve a purpose beyond revenue—if you undercharge for parking there's never any available, which means no one wants to visit your neighborhood. And that revenue can play a major role in making your city a more pleasant place to be (Old Pasadena's success as a neighborhood was largely attributed to parking reform). If you don't like it you can use private parking garages; cities have no obligation to provide public space so you can store your car at a discount.

Useful: Map of Property Tax Rates Across the Country (with some surprising results)

The Urban Institute just released a new report on property taxes in counties across the country, and the maps might surprise you. The first one shows property taxes in dollar amount per household, and it's pretty much in line with the "coastal cities and states have higher taxes" meme. California, Seattle, Illinois, and Northeastern households all pay an average of more than $3,000 in property tax every year (with a surprise appearance from various Texas metro regions, and what looks like Yellowstone National Park in Wyoming):

View fullsize

Pretty standard. What's really surprising is how the map changes when you look at property tax rates rather than amounts:

View fullsize

The colors invert to some degree, concentrating much more in the Midwest and away from the coasts. These states tend to rely less on things like income and sales taxes, so that makes sense. The Northeast and Illinois/Wisconsin look even worse though. 

Also notice that the colors form pretty accurate representations of the borders of many states (Texas in particular), unlike the dollar amount map where dark blue areas tended to concentrate according to metro area, not state.

Anyway, no messaging to accompany this post, just some observations. I encourage readers to dig into the full report—it's only 12 pages including the appendix, and full of valuable data. And as the report says, "[i]n 2011, property taxes made up 34.6 percent of total local revenues and 63.9 percent of local own-source revenue," so we should probably know more about them than most of us currently do.

Parents of Three-Year-Old Killed by Reckless Driver Share Their Story

Normally I stick to my own editorials on this blog, but this video is too powerful not to share as widely as possible.

In it, the parents of Allison Liao—a three-year-old killed by an SUV while legally crossing the street in a crosswalk with her grandmother—speak to a group at a traffic safety march, imploring drivers to to exhibit common decency and consider the potential impact of driving irresponsibly.

You will probably cry. Please share.

Hey, Washington Legislature, Enough with the Highways

The Alaskan Way Viaduct in Seattle, photo from

NMC

.

Washington's legislature is out with an 

awful new transportation funding package

, so I thought I'd make a few sweeping generalizations devoid of nuance but instructive nonetheless:

First:

Building roads and highways can increase the number of people able to travel by car, but in the long run it can't improve travel times—it can actually make them worse by encouraging more sprawl, and the longer and longer commutes that accompany it. 

And second:

Investing in transit can increase capacity and improve travel times—for example, by replacing bus lines in mixed traffic with unobstructed subway lines, or by converting mixed-traffic lanes into bus-only lanes and increasing bus frequency.

So, in light of:

- Declining vehicle-miles traveled both nationallyand locally;

- Advances in driverless technology, expansion of car-share programs, and shifts toward more active transportation likely to erode car ownership and use even further; 

- Massiveimpending cuts to King County Metro's service and previous cuts to Community and Pierce Transit;

- An ever-growing highway maintenance backlog, in addition to a seemingly endless list of partially-funded in-progress highway projects; and

- A general agreement that effective transit is better for health, safety, personal wealth, business,  productivity, and the environment; 

...why is the state planning to 

invest

 spend $7 billion on building more and wider highways, but investing almost nothing in transit, bicycling, or pedestrian inrastructure?

Here's Why Your City Needs to Get Rental Prices Under Control Right Now

No matter what your city's rental situation looks like, it has a lot of incentive to stabilize prices as soon as possible.

Home prices, like rents, have been on an upward trajectory for decades, but as we know from the recent financial crash, owned homes have fluctuated wildly. Rentals haven't: they've increased consistently for the past fifty years, and even when they've been relatively flat in certain markets, they've very rarely decreased. A graph of the nationwide rent price index shows a steady, consistent rise since 1960:

The fact that rents increase is obvious, but that they almost never decrease has serious implications. Specifically, it means that the longer your city waits to seriously address its affordability problems, the worse they'll become. And when (or if) your city 

does

 manage to get rental prices under control, they're probably going to remain at those high prices even if they don't continue to climb. San Francisco will never be cheaper than it is now, nor will New York, D.C., L.A., or just about anywhere else.

A big part of the reason prices don't go down, I think, is that market rate rents determine what a property owner will seek from a potential buyer. If I've got a developable plot of land downtown, I'm going to ask a lot more for it if I know the units built on it will rent for $3,500 a month instead of $1,400. The cost of that land then contributes to the

need

 for developers to charge $3,500 a month in order to earn a profit. Or you can think of it as the developer being willing to pay more because they can command a higher rent, the point remains the same. It also means that the higher we let property values climb, the more money cities and non-profits need to spend on land for affordable housing development, regardless of what they plan to charge for rent.

I suspect many people will read this and think, "well, obviously," but our actions aren't reflective of how serious a problem this is. Despite how much talk there is of "affordability" from media, politicians, and advocates, we're still doing almost nothing to solve the problem. We're so concerned with gentrification, parochial interests like parking, and the idea of developers earning a profit that we've paralyzed ourselves. We whine and talk about things like rent control and inclusionary zoning despite the fact that they've done nothing to limit prices overall, and we appear unwilling to pay the cost of building and subsidizing the millions of units it would take to actually satisfy demand across the country. 

Rent control in particular is not a long term solution because it does nothing to increase the stock of much-needed rental housing in cities, and I plan to discuss alternatives to that in an upcoming post. For now, suffice it to say that allowing more construction has to be a part of the solution. As I wrote back at the start of this blog,

building housing in quantities sufficient to increase vacancy rates is really the only thing shown to stabilize rents

. Where development has actually been embraced to some degree,

developers themselves have openly worried about overbuilding and rents decreasing

. We should learn from their expertise and let them build enough that they have to fight over tenants, not pick from the cream of the crop. The longer we wait the worse things will get, and the more costly it will be—permanently—for cities to ensure that low- and moderate-income residents can continue to live in the cities where they work.

If you're interested, there are some graphs of rent vs home price indices in various cities below.

United States:

New York:

Los Angeles:

Chicago:

San Francisco:

Boston:

Seattle:

Atlanta:

Detroit:

Burden of Affordable Housing Funding Falls Disproportionately on New Residents, Pro-Growth Neighborhoods

Mixed-use affordable housing in West Hollywood, built for people living with disabilities. Image from

Tighe Architecture

.

I attended the annual Mayoral Housing, Transportation and Jobs Summit this week, held by the Los Angeles Business Council, and wanted to write something about how we pay for affordable housing. Workforce and affordable housing is a critical need, and one that every major city in America is failing to supply in adequate quantities.

One interesting point made by one of the speakers (I believe it was Paul Habibi) was that in Los Angeles, 80 to 120 percent of Area Median Income (AMI) is still too low to support profitable construction, even in areas with pretty inexpensive land—not places like Downtown or West Hollywood, in other words. To house people earning those incomes would require subsidies of up to $65,000 per unit, and that's assuming the land was given away to developers for free, which is technically illegal. I'm hoping to get into that in greater detail in a future post.

For now, I wanted to get into the issue of how we actually pay for those subsidies. Cities, states, and the federal government each have their own programs and funding streams dedicated to increasing the supply of workforce housing. I doubt I could list all of them if I tried, but suffice it to say that the money comes from a lot of different sources.

Some of these programs, unfortunately, are dependent on market-rate renters and pro-growth communities to bear the burden of subsidizing affordable housing.

One example comes from a panelist at the MHTJ Summit, speaking on the subject of building affordable, sustainable housing along transit corridors. She made a comparison between Los Angeles and San Francisco, claiming that because of SF's incredible housing prices, market-rate rents can more easily subsidize affordable housing. In Los Angeles, where rents are generally more reasonable (though still high), this is harder to accomplish. Construction costs don't vary

too

 much from region to region, so you can imagine that if it costs $200k to build an affordable unit it's easier to absorb that cost if your market-rate apartments are going for $4,000 a month rather than $2,000.*

Colorado Court, an affordable housing

development in Santa Monica.

Image from

Brooks + Scarpa

.

The panelist only intended to demonstrate the relative challenge of paying for affordable housing in Los Angeles, but I think there's something seriously wrong with the idea that it's market-rate renters' responsibility to directly subsidize their neighbors. I don't mean this in a libertarian, keep-yer-guvmint-hands-off-my-money way. My problem is with a system in which a small group of people—people who have absolutely no direct connection to the need for workforce housing—are bearing the whole burden of paying for it. The cost of providing this public good, something that almost all of us agree is desirable from a public policy standpoint, is not being broadly shared. Renters in older multifamily buildings don't contribute to this fund, though they do pay higher rents due to the restrictions that rent-regulated units impose on market-rate housing supply. Homeowners don't contribute at all.

Something similar happens in high-rise districts, like downtown, where developers often wish to build at densities beyond the by-right limits imposed by the zoning code. When they want to build above a 6:1

Floor-Area Ratio

(FAR), they pay a fee known as Transfer of Floor-Area Rights (TFAR) to buy unused air space from another property owner. This fee can reach into the millions of dollars for large buildings, but has the benefit of being spent on the local community. It can be used for schools, parks, streetscape improvements, public art, or any number of other nice things.

Or it can be used on affordable housing.

I have no problem with public money being used on affordable housing, as I hope I've made clear. But again, this is a case where a community like downtown, an area that has been extremely growth-friendly, is being held responsible for providing a public good that benefits the entire city. And they have to do so at their own expense, as any TFAR money that's spent on affordable housing is money that's not being spent on other local benefits. Anti-growth neighborhoods benefit from having this supply of affordable housing nearby, but they pay nothing (or at least considerably less) to help support it.

These aren't the only ways that affordable housing is paid for, and I'm pretty sure they don't account for the majority of the subsidies in LA or any other major city. Even so, if we agree that affordable housing is desirable we should be willing to pay for it in a more transparent, direct, and broadly-shared way. The burden shouldn't fall disproportionately on new residents, nor should it fall excessively on pro-growth communities, which are already doing the most to restrain rent inflation by trying to meet the demand for urban homes. If we really believe in the value of workforce and affordable housing, we should all be willing to pay for it, and we should make an explicit commitment to doing so.

UPDATE: I wonder what the impact of

this finding in the California Supreme Court

will be in regard to affordable housing.

*There are also land value costs that must be offset, however.

Cul-de-Sacs Build Community, But What Kind?

Image from

dailymail.co.uk

.

The Atlantic Cities published an article today titled "

The Case for Cul-de-Sacs

," highlighting the research of sociologist Thomas R. Hochschild Jr. His findings: "[cul-de-sac] residents experience the highest levels of attitudinal and behavioral cohesion, followed by dead-ends, then through streets." They're the most neighborly, in other words. It's an interesting finding, and worthy of greater study despite the negative environmental and mobility impacts cul-de-sacs are usually associated with, but the first two paragraphs of the article reveal a major flaw in the study's analysis. Emily Badger writes:

In a weird way, Thomas R. Hochschild Jr. actually first encountered the social cohesion of cul-de-sacs in his latest research when he wandered into one in Connecticut with his clipboard and polo shirt, and someone called the cops.

That never happened on the other types of streets he was studying, places where it would turn out the neighbors didn't know each other as well, and it was less clear who "belonged."

This is how we're introduced to the story of how wonderful cul-de-sacs are for social cohesion. Doesn't that seem wrong to you? It never addresses how absolutely perverse it is that the mere appearance of a stranger would warrant a call to the police, nor does the study consider what it says about the kind of social cohesion found in cul-de-sacs.

Hochschild says he's "concerned about the breakdown of community and of society," but it seems to me he's taking a very narrow view of both of those terms. His research reflects very positively on the influence of cul-de-sacs on the social interaction among its specific residents, then it completely ignore the question of communities and society more broadly, including how those residents interact with the wider world. His experience in Connecticut implies that the findings might not be quite so positive.

In "The Death and Life of Great American Cities," Jane Jacobs wrote extensively of the "turf" effect that isolated developments create, and the us-versus-them, insider-outsider mentality that often accompanies them. Edward J. Blakely, author of "Fortress America,"

writes of gated communities

(essentially a more extreme version of cul-de-sacs) that "[b]ecause streets and parks are accessible only to those living within the community, they begin to feel more like private living rooms and are defended fiercely against intruders."

I don't mean to dismiss the very real benefits of one-on-one and family-to-family social connections. They're critically important to both physical and mental health, and our cities and towns should be be designed to encourage them. And I'm definitely not saying that all cul-de-sac communities succumb to these kinds of divisions.

The point here is that communities are more than a small group of individuals at the end of a street, and society is far, far more than the sum of those small groups. If cul-de-sacs can only build a sense of community by turning within themselves—by transforming every unexpected visitor or passerby into "them," the outsider, the enemy—that's not an outcome worth striving for. That's street at the expense of neighborhood, neighborhood at the expense of city. It's zero-sum, pro-uniformity, and anti-society.

One of the greatest things about the density, diversity, and connectedness of cities is how effective they are at encouraging acceptance of other beliefs, other lifestyles, other everything. When we talk about communities we should be more mindful of who belongs in them—and, if we really want to know whether they're worth emulating, who they deliberately exclude.

Long Commutes Justify More Expensive Cars (And That's a Bad Thing)

Yeah, that's definitely what driving is like.

This is somewhat related to

my last post

, so I just want to mention it briefly before it slips my mind.

When you take into account gasoline, insurance, repairs, licensing fees, parking, and the cost of the vehicle itself, cars are expensive. AAA estimates that a single car costs families $9,000 a year (

though

I think that's sometimes overstated

). That cost is heavily dependent on what you drive, of course, since a $50,000 car is going to average out to a much higher annual cost than a $10,000 one. It's also dependent on how much you drive.

Looking at things from another angle, the more you drive the more justified you are in buying an expensive vehicle. After all, if you spend 2-3 hours a day in your car (which amounts to more than a month out of every year), your comfort and feelings of safety while driving are probably more important to you than if you only use your car for a few trips a week. A Lexus you use every day seems like a much better investment than a Lexus that sits in the garage 5 days out of the week.

In this sense, it's completely rational to spend more money on your car the longer your commute—it also exacerbates the problem of overspending on transportation. When you choose to buy a "cheaper" home in the suburbs you spend less on housing and more on transportation, and part of that is because the increased travel time requires spending much of those housing "savings" on daily driving costs (gas, etc.). That additional travel time also means you're in your car a greater percentage of the day, so why not get a nice car to make it a little more enjoyable? It sounds reasonable enough, until you re-examine why you chose to live in the suburbs in the first place and realize that it was to save money.*

I'll be the first to admit this is entirely speculative, and that intuitive results aren't always the same as empirical results. It'd be really interesting to see a study on this, to put together real data on whether—all other things being equal—longer commutes encourage people to throw away more of their money on more expensive cars and trucks.

*Not everyone moves to the suburbs just because they believe they're cheaper. Some people want what the suburbs have to offer, and that's okay. Many, on the other hand, are only there because they think they're being financially responsible.

Living in the City Isn't Just Cheaper, It's Also a MUCH Better Investment

Image from

The Atlantic

.

More good news on the economics of living in the city

. A recent comparison by David Hughes, a broker at Mortgage Group Ontario, Inc., calculates that, over a 40-year horizon, living in the city costs about the same as it does in the suburbs. Slightly less, in fact.

Specifically, he found that a house in the suburbs valued at $500,000 will cost about $688k over 40 years, and a two-car household will rack up an additional $688k in vehicle costs over that same time-frame. Total cost: $1,304,995.

By comparison, a home in the city valued at $720,000 will cost $1,031,130 over 40 years. A family that doesn't own any personal automobiles but spends about $250 a month on transit and another $250 on taxis and car-share will spend approximately $240k in transportation costs over that time-frame. Total cost: $1,271,130, or about $33,000 less than the suburbs. (Tables for each scenario are found

at the original article

—apparently I don't have permission to recreate them here.)

As the article notes, this doesn't take into account the physical and financial costs associated with the stress of longer commutes, congestion, etc. It also misses something even more important by ignoring what these two hypothetical families are left with at the end of their 40-year experiment: the homes themselves.

The surburban and city houses are both completely paid off, but one is worth far more than the other. When all is said and done, the city-dweller owns a home worth $220,000 more than the suburb-dweller, even though they spent $30,000 less in total housing and transportation costs. This is before taking into account the fact that

urban homes increase in value faster than suburban homes

, and that

homes in the most expensive markets increase in value faster than those in the least expensive markets

. It also ignores the fact that, even given equivalent rates of home appreciation, the gap in value will grow over time. (If both increase in value an average of just 2% per year, the suburban home will be worth $1.1 million in 40 years, and the city home will be worth $1.59 million, almost $500k more.)

While

investing in a home as a primary retirement vehicle may not be the best idea

, if we're talking about spending the same amount of money either way we may as well point out that one option is far superior to the other from an investment standpoint.

As I've written

on multiple occasions, for all the time we spend focused on housing + transportation (H+T) costs, we spend relatively little time discussing its investment implications. Homes are an asset and vehicles are a liability, and in a country where the majority of people aren't saving enough for retirement, it's important that we make this point crystal clear. Yes, living in the suburbs is expensive, unhealthy, unproductive, and bad for the environment. When you earn enough to afford a home, it's also a terrible investment decision.

Bus Seats, LA Edition

There's no point to this post other than to share my favorite transit-oriented meme. That and to highlight how well it describes LA's train and bus seats.

Seats on the Purple Line Metrorail trains in Los Angeles.