ODOT isn’t giving buses the shoulder, it’s giving transit the finger.

IBR is planning a transitway for the new $7.5 billion interstate bridge that can’t be used by buses.

It’s sketching in a “bus on shoulder” option as an excuse to justify building an even wider highway crossing.

Meanwhile it plans to place light rail tracks on raised concrete blocks, rather than embedding rails in the road surface, so that the transit right of way can be used by both light rail trains and buses.

Direct Fixation:  No buses allowed

Each of the bridge’s carrying Portland’s light rail and street car lines across the Willamette River has flush-mounted, recessed rails, that allow both trains and rubber-tired vehicles to use the same travel lanes.  Even the original Interstate Bridge, built more than a century ago, had recessed rails for interurban trains.  Flush mounted rails allow buses and light trains to use the same lanes.

Yet, IBR’s plan is to use embedded LRT track at only at intersections and “direct-fixation track throughout the rest of the program improvements.”  As the Portland Mercury reported:

In their plans for the MAX light rail extension, IBR program leaders have indicated the train will travel across the bridge on direct fixation rails. Direct fixation rails are raised on blocks above the surface of a roadway, making it so non-rail vehicles can’t utilize the same road space. In comparison, the Broadway, Steel, and Tilikum Crossing bridges in Portland all have embedded railways, allowing for increased transit capacity on the same roadway.

Only where the light rail line crosses or intersects with a roadway will they use embedded tracks—so as not to inconvenience cars.

“Direct fixation” is techno-speak for rails raised up on blocks above the surface of the roadway.  In contrast to embedded or flush-mounted rails, the “direct fixation” rails create a roadway that can’t be navigated by non-rail vehicles, in this case, specifically, buses.  It’s marginally cheaper to do direct fixation, but it means that the roadway then can’t be used by buses (or emergency vehicles). A short section of Portland’s streetcar crosses over Interstate 84 on a bridge that has rails mounted in raised concrete blocks:

Every other light rail and streetcar bridge in Portland has surface-mounted rails that allow rail vehicles and rubber tire vehicles to use the same right of way.

The proposed IBR will have about one train every ten or fifteen minutes in each direction.  There’s no reason why buses can’t run on the same exclusive transit right of way as the light rail trains.  The bus-on-shoulder option requires buses to run in mixed traffic, and for all entering traffic to cross the bus-shoulder lane to reach the auto travel lanes.

This is a reprise of a tactic that the “Power Broker” used in the 1930s to block transit service to suburban parks and homes.  Just as Robert Moses intentionally designed all of the overpasses on the Long Island’s South Shore Parkway to be too low to be cleared by buses, this one design decision is designed specifically to thwart optimal use of this roadway for transit.

Bucolic sure, but built so no buses will ever travel here. Just like the transitway on the Interstate Bridge Replacement.

As Robert Caro wrote in his biography of Moses, a New York planner observed:

In practice, no practical bus operator would run his buses on any road on which the clearance at the curb wasn’t at least fourteen feet . . .  the old son of a gun had made sure that buses would never be able to use this godamned parkways. (The Power Broker, page 952).

Bus-on-shoulder

IBR advertises “bus-on-shoulder” as a key part of its high capacity transit plans for the $7..5 billion project.

In reality, though, bus-on-shoulder is just an excuse to build an extra wide bridge.  Once the bridge is built, ODOT and WSDOT can easily re-stripe the bridge to include more travel lanes.  Elsewhere, ODOT and other highway agencies have used the excuse that they aren’t expanding the footprint of the roadway (or acquiring added right-of-way to argue that adding a lane via painting new lines qualifies for a categorial exclusion from environmental review—so no one ever looks at the added driving and pollution caused by widening the roadway.

It then becomes the justification for widening the roadway deck of the bridge, ostensibly to provide for “bus on shoulder” but in reality, to rationalize building a roadway that with a few hours work by a paint truck, can be re-striped to the full twelve-lane freeway ODOT and WSDOT have always wanted to build.

Instead of bus-on-shoulder, IBR could much more readily build “bus-on-shared-transitway” with embedded track, that would give buses an exclusive lane with no conflicts with road traffic.  On a double-decker bridge design, the transitway would be 35 feet lower than the highway deck (and its shoulder), meaning that buses would have less of a grade to climb, and would perform better.  And the last new bridge completed in the Portland area, the Tillikum Crossing, has exactly this technology which allows both buses and light rail vehicles to use the same right of way.

Just 13 months after raising the price of the Interstate Bridge Replacement (IBR) project by more than 50 percent, the state DOTs ay it will cost even more

We estimate project costs are likely to increase 20 percent or more, which would drive the price tag to as much as $9 billion, almost double the 2020 estimate..

While the DOTs blame “inflation” their own estimates show construction cost disinflation, with expected increases of no more than 3.5 percent per year for the rest of the decade.

The likely increase in costs will more than wipe out the $600 million in federal funds awarded to the project in December.  The cost of the IBR is increasing faster than the DOTs can find money to pay for it.

The “Cost Estimate Validation Process” (CEVP) that state DOTs implied would remedy future cost increases utterly failied

The use of lowballed construction cost estimates to sell highway megaprojects is part of a consistent pattern of “strategic misrepresentation.”  It’s  the old bait-and-switch:  get the customer to commit to buying something with a falsely low price, and then raise the price later, when its too late to do anything about it.

There will be likely future cost increases:  There are huge and unresolved risks to the projects actual cost, and the DOTs haven’t even turned a shovel of dirt yet.  The real price increases will likely come after construction starts.

ODOT has a consistent track record of lowballing pre-construction cost estimates, and recording huge cost overruns, with the average price of a major project doubling between pre-construction estimates and final costs.

Just 13 months ago, with great fanfare, the Interstate Bridge Replacement Project released a definitive new cost estimate for replacing  the I-5 bridges.  Costs jumped by 54% from earlier estimates, from $4.8 billion to as much as $7.5 billion.

Now IBR leaders are signaling the project will be even more expensive.  Oregon Public Broadcasting reports:

Planners for the effort to replace the aging span revealed Wednesday that it is going to be more expensive than previously thought. Program leader Greg Johnson didn’t put a number on the growing price tag, but he said the replacement project is falling victim to a “continuing creep of costs.”

How big a cost increase?  Likely a $9 billion project

IBR officials are being purposely vague about the cost increase, but given the wide range of their previous cost estimate–anything from $5 billion to $7.5 billion–the increase would have to be significant to lie outside this window.  At a minimum, we should probably expect an increase of 20 percent, with the costs increasing from a minimum of $6 billion to a maximum of $9 billion (or more).  Any smaller increase in costs would not significantly move the project out of the current range.  It seems entirely possible that the increase could be more than 20 percent.

While we’re generally reluctant to speculate on such matters, our earlier prediction of the increase in IBR costs was almost exactly correct.  As Willamette Week reported, our City Observatory prediction—made in May, 2022, seven months before the IBR estimates were released—that the cost of the IBR would balloon to between $5 to $7 billion was spot on, and slightly conservative.

Falsely Blaming Inflation

As they did a year ago, the DOTs are painting themselves as victims of inflation.

“One of the things all mega projects are experiencing is this inflation we’ve seen in the construction industry,” Johnson said. “We are going to be reissuing an overall program estimate probably later this summer.”

The trouble is, all of their earlier estimates–including those in 2020 and 2022–already allowed for inflation.  And more to the point, highway construction cost inflation, which did spike briefly during the pandemic, has subsided to historically typical levels–according to the official revenue forecast of the Oregon Department of Transportation. Here’s ODOT’s prediction of future capital cost inflation from their October 2023 forecast

From 2023 through 2031, ODOT expects that construction cost inflation will be about 3 percent per year—no higher than its long run historic average..

That represents almost no increase over the inflation that IBR officials said they had used in constructing their earlier forecasts of the IBR cost.  Keep in mind that cost estimates are made in “year-of-expenditure” dollars and according to their testimony to the Oregon Legislature, they model assumed the same construction time frame as the earlier estimates.  In January of 2021, the IBR team described the methodology they used to construct their estimates and predicted construction cost inflation of 2.2 percent to 2.3 percent per year after 2020:

As with the construction cost inflation factor, the program team used WSDOT’s Capital Development and Management (CPDM) historical and forecast cost indices for Preliminary Engineering (PE), Right-ofWay (RW) acquisition, and Construction activities (CN), using third-party data sources and statewide experience. The values used to escalate fiscal year (FY) 2012 dollars to FY 2020 are based on these indices by the three expenditure types, which include historical data through FY 2019. The overall effect of the three historical cost indices that were used to inflate from FY 2012 to FY 2020 equates to an average annual inflation rate from 2.0% to 2.2%, depending on which capital cost option is selected. Projected inflation rates by year beyond FY 2020 vary, averaging between 2.2% and 2.3% when applied to the expenditure schedules for the capital cost options.

By not showing their work, and describing exactly how their inflation estimates changed between their 2020 project cost estimate and their December 2022 cost estimate, the IBR is exaggerating the importance of inflation, and downplaying its inability to accurately calculate future costs.  It’s easy to blame inflation, but if a changed inflation outlook is really the cause of the cost increase, they should use their own agencies official estimates to show exactly how much the change in inflation affects the project’s cost: they haven’t.

The failure of “CEVP” to prevent further cost increases

At the time it presented its last set of cost estimates, IBR officials responded to legislative concern about cost increases by claiming that they had a sophisticated risk analysis tool to accurately predict future costs.  That tool, called the “Cost Estimate Validation Process” was presented as a kind of “magic wand” to avoid future increases. 

IBR administrator Frank Green assured the Oregon and Washington Legislators that the CEVP would help them manage costs:

Its a process that enables us to identify costs . . .we also go through a process where we bring subject matter experts to identify, on a program like this, what are some of the potential risks that we may encounter as we’re moving through development of the program.

. . . as we produce our CEVP report and publish it, it will show the list of risks, well over a hundred, that our team and our partners and our subject matter experts identified. It’s important to understand that we also identified strategies, that we as a team and our partners can take to minimize the potential impact of these risks.

Joint I-5 Committee Meeting, December 12, 2022 

As we pointed out a year ago, the IBR actually did not present the results of the “CEVP” when it released its new cost estimates, and claimed, in response to a public records request” that it had “no records” of having conducted a CEVP.

In reality, the CEVP doesn’t so much prevent cost increases as simply document, after the fact, why they occurred.  The next iteration of the CEVP will show how IBR officials made bad assumptions about design, schedule, environmental factors (like the in-water-work-window) that drove up costs or blew up the schedule.  In theory, the CEVP should anticipate these “risks”—in reality, it does nothing to prevent systematically bad or mistaken assumptions about project cost drivers.

ODOT’s Reign of Error:  Consistent Cost Overruns

For anyone who has followed ODOT cost estimates, this latest round of further cost increases comes as no surprise.  ODOT has consistently and badly under-estimated the ultimate cost of virtually every single one of its major highway construction projects.  As we’ve reported at City Observatory, ODOT’s cost estimates are a series of “exploding whales“—the Oregon Department of Transportation has a long string of 100 percent cost-overruns on its major projects.  Almost every large project the agency has undertaken in the past 20 years has ended up costing at least double–and sometimes triple–its original cost estimate.with the average large ODOT highway project seeing a 100 percent cost escalation between the time it is approved and its ultimate completion cost.  The likely $9 billion maximum cost of the IBR project, up from an estimated $4.8 billion “maximum” estimated by IBR in 2020 would put the IBR right in the middle of this cost doubling pattern.

As public finance scholar Bent Flyvbjerg has documented, these consistent errors are no accident:  they are a conscious, institutionalized practice of using low-balled initial cost estimates to secure support for a project, coupled with a strategy of revealing true costs only once the project is committed or under construction.

Cost Overruns Matter

The ever-increasing cost of the Interstate Bridge Project is problematic for many reasons.  First, the agency hasn’t fully identified (much less obtained) the funding needed for the current $7.5 billion cost estimate.  Oregon and Washington taxpayers will be on the hook for these amounts, and every cost increase raises they amount they have to contribute.  In effect, even a 10 percent increase in costs (and its likely to be double that, or more), would more that wipe out the value of the much ballyhooed $600 million grant awarded to the project in December, 2023.  In a real sense, project costs are escalating faster than ODOT and WSDOT can find new revenue.

There’s a second problem:  Rising costs could also invalidate the existing (and future) awards of federal funds.  As we’ve noted, federal law requires that highway projects be “cost-effective” in order to qualify for federal funds.  Cost-effectiveness is judged by a benefit-cost analysis.  In simple terms, if benefits don’t exceed costs, a project isn’t eligible for federal highway funds.  The current benefit cost analysis is already full of errors and suspect assumptions that inflate benefits, and was prepared by an IBR contractor with a clear (but undisclosed) conflict-of-interest.  If the new, higher level of costs were factored into the benefit-cost analysis, the project would be even shakier–and likely ineligible for federal funds because it isn’t cost effective.

Third, rising costs may force the project to try to extract more money from tolls.  If the project raises tolls, it will likely increase traffic diversion to I-205, with adverse effects on congestion and pollution.  The financial need for higher toll revenues may also undercut the viability of proposed toll-discounts for low income commuters.

What City Observatory did this week

The pernicious myth of “Naturally Occurring” Affordable Housing.  One of the most dangerous and misleading concepts in housing reared its ugly head in the form a a new publication from, of all places, the American Planning Association.  The publication “Zoning Practice:  Preserving Naturally Occurring Affordable Housing” purports to offer advice on how to maintain affordability by preventing new development in neighborhoods with smaller, older single family homes.  The publication observes because of their size and age, such homes sell or rent for less than new housing, and mistakenly asserts that preventing them from being enlarged, improved, or replaced—especially with apartments—would some how preserve affordability.  The reality is, of course, the opposite.

The myth at hand is the idea of “naturally occurring affordable housing.”  As we’ve long pointed out at City Observatory, that’s a wrong-headed metaphor.  Housing doesn’t “occur naturally” it is the product of a complex and interactive legal and economic system.  If older housing becomes cheaper, it’s only because we allow more new housing to be built.  When zoning preserves smaller older homes, it restricts the supply of housing and drives up rents and home prices.  The reason 1,000 square foot, 1950s ranch houses in Silicon Valley sell for over $1 million, and never became “naturally occurring affordable housing” the way they did in other cities has everything to do with the zoning and other restrictions that “preserved” these homes and prevented enough new housing getting built.  The pursuit of “NOAH” is a leeches and bleeding prescription for the nation’s housing affordability problem.

Must Read

How to make room for a million more New Yorkers.  Architect and planner Vishaan Chakrabarti shows that New York could build another half million or more apartments–enough to accommodate a million more residents, in areas with great transit service in New York City.  A mix of high rise, mid-rise, and low rise apartment buildings, and office conversions would create additional housing opportunities in all five boroughs. Chakrabati says:

“We found a way to add 520,245 homes, enough to house more than 1.3 million New Yorkers, near transit, and away from flood zones, all while maintaining the look and feel of the city.”

The increased housing supply would moderate rents, and a million more people would stimulate the economy.  Chakarbarti’s analysis is important because it provides a detailed and concrete description of what more housing would look like across the city.  It emphasizes that a “Yes in my backyard” solution to housing affordability can be accomplished with a city-wide strategy that adds more homes while retaining a city’s character.  This is the kind of planning exercise more cities need to undertake.

To fight climate change, reduce car travel.  A new report from the Rocky Mountain Institute makes the case that improving active transportation, public transit and building more walkable communities would not only reduce carbon emissions, but would save peoples lives and save households money.

Too often, fighting climate change gets treated as a purely technological challenge of converting vehicles to less polluting energy sources.  The RMI report points out that vehicle electrification isn’t enough by itself, and isn’t happening fast enough to reduce greenhouse gases from transportation, and that steps to reduce driving will also be needed.  But, as the report points out, less driving comes with significant additional benefits in the form of fewer crashes, injuries and death, less air pollution, improved health from greater walking and biking, and, on top of all this, financial savings for households from lower transportation expenses.  Our car dependent transportation system has posed economic as well as ecological costs:

The high price of car ownership is personal to many Americans. With stagnant real incomes and no choice but to drive, gas money can come at the expense of rent, healthcare, nutrition, education, and recreation. The US transportation system wasn’t built with these tradeoffs in mind. From relentless road expansions to zoning and land use policies that encourage sprawling, car-dependent communities, policymakers have long viewed car ownership as a benefit in-and-of itself, rather than the burden many Americans know it to be.

The report’s title sounds a hopeful tune:  “Drive Less and Live More.”  It’s the kind of upbeat approach that is needed to tackle climate change.

In the News

StreetsblogUSA republished our commentary on USDOT’s publication of flawed traffic data purporting to show a big decline in trip-making in the US.

Clark County Today republished City Observatory’s analysis of the rising cost of the proposed Interstate Bridge Replacement project, which is now likely to cost as much as $9 billion.

City Observatory Director Joe Cortright is quoted in the Capital Chronicle’s story on ODOT’s chronic short-changing of road maintenance as it spends profligately on highway expansions.

What City Observatory this week

Robert Moses strikes again:  One of the most infamous decisions of “The Power Broker” was to build the overpasses on the Long Island Expressway too low to allow city buses to use the roadway, cementing auto-dependency and blocking easy and economical transit access to many suburbs.  And eight decades later, state highway departments are still doing essentially the same thing.  Part of the likely $9 billion Interstate Bridge Replacement Project connecting Portland and Vancouver, Washington, is a short light rail extension across the Columbia River.  (So far, so good).  But the highway engineers are planning to build the transitway portion of the project with rails elevated on concrete blocks, so that that transitway cannot be used by buses.  Using “direct fixation” rather than flush-mounted embedded rails is a bit cheaper, but forever makes the roadway impassible to buses (and impassible as an alternate route for emergency vehicles).

Instead, the highway engineers are planning to build an extra wide highway structure to theoretically allow for “bus on shoulder” service.  Building the transitway (which runs on the lower level of a proposed double-decker bridge) so that it can’t also be used by buses, condemns all future bus service to mix with highway traffic (which requires climbing a steeper grade to the top level of the bridge, and merging with  through car traffic).  It’s a calculated decision by highway agencies to block better transit service, and create an excuse for a wider bridge (that can then be converted to more car lanes later).  Somewhere, Robert Moses is smiling.

Must Read

Pushback on New York Times traffic safety story.  The good news over the last month is that The New York Times gave prominent coverage to the dramatic surge in US road fatalities. It’s long overdue, and as road safety pundits regularly note, particularly given the the contrast between widespread publicity and quick action on even modest aviation safety issues (where there’s been great progress) and the steadily increasing death toll on the nation’s roads.  The Times article clearly lays out the tragic statistics, but offers some questionable speculation about the underlying causes of the problem.  In particular, the Times notes the increase in the number of deaths at night, and also correlates the surge in deaths with the advent of smart phones.  As Stephen Coleman Kennedy  writing at Greater Greater Washington argues, there are good reasons to question this speculation:

Focusing on whether someone is using their phone while walking, perhaps while wearing dark-colored outerwear at night, is an argument that rests on the concept that Americans are somehow both a) more technologically advanced than other countries and b) too stupid to use that technology safely. But looking at the data, peer countries with much lower pedestrian fatality rates use smartphones at similar rates.

He also points out that the cross-sectional evidence about crash deaths shows that some places (particularly sprawling, sunbelt metros) have much worse traffic safety records, which is a strong indicator that road design, rather than pedestrian behavior or smartphone distraction, is a key factor in our road safety problems.

Time for single-stair multi-family buildings.  While most of the conversation about promoting affordable housing tends to focus on zoning, there’s a strong argument to be made that we need to re-think some key aspects of our building codes.  One of the most widespread—and least examined—issues, is the general requirement that most multi-story buildings provide two separate routes of egress.  This seemingly innocuous provision of the building code profoundly shapes what can be built, and requires nearly every new multi-story apartment building have long central corridors connecting two separate stairwells, usually at opposite ends of the building.  This requirement effectively prohibits “dual aspect” apartments (where a living unit has rooms fronting on two or more sides of a building).  If we allowed single stair buildings (which are common in most of the rest of the world), architects would have much more flexibility to design structures with a wide range of unit sizes, more creative layouts, and with less space dedicated to blank hallways.   Stephen Smith makes a strong case for allowing single stair buildings for many 3- to 5-story apartment buildings.

Without the requirement for a second stair, buildings can be laid out in a fundamentally more efficient way. With less vertical circulation, the circulation core can simply be repeated a few different times, with apartments of different sizes arrayed off of each core, potentially stretching from the front of the building to the back. If planners redraw zoning envelopes to accommodate thinner buildings, more bedrooms can be packed in less square footage, offering more affordable and competitive family-sized designs.

Building codes are squarely in the control of state and local governments, and Smith has founded the Center for Building in North America to help do the thorough research that’s needed to show how with today’s technology, single-stair buildings can promote fire safety, and much greater housing affordability.

New Knowledge

The lethality of taller vehicles.  For some time, it’s been obvious that the growing size of trucks and sport utility vehicles is strongly correlated with increased road death rates, especially for people on foot.  A new study uses some very detailed crash data to validate the statistical connection between vehicle hood height and traffic fatalities.  It concludes that increasing the height of the front of a car or truck by 10 centimeters—about four inches—increases the probability that someone will be killed in crash by more than 20 percent.

Justin Tyndall of the University of Hawaii assembled a unique database of vehicle-pedestrian crashes that looks at the height and weight of vehicles and other aspects of crashes, and shows that the larger the vehicle, the greater probability that a pedestrian will die.

Tyndall concludes that front-end height is the most significant variable affecting death rates.  He concludes that height is more important the vehicle weight, and also that the changing composition of the vehicle fleet (more taller and heavier vehicles) likely means that pedestrian deaths may increase more in the future:

. . . high-front-end vehicle designs are particularly culpable for the higher pedestrian death rate attributable to large vehicles. A 10 cm increase in the front-end height of a vehicle increases the risk of pedestrian death by 22%. Conditional on multiple measures of vehicle size, front-end height displays the most significant effect. The shift towards electric vehicles is projected to make vehicles heavier still, as the batteries needed to power the vehicles add significant weight (Shaffer et al., 2021). If a strong relationship between pedestrian fatalities and vehicle weight exists, the number of fatalities attributable to vehicle size will likely continue to rise in the coming years. However, I find that once front-end height is controlled for, the impact of vehicle weight is small, suggesting the regulation of body design may be more important for pedestrian safety than the regulation of vehicle weight per se

Tyndall’s study should be read in combination with calculations from the Rocky Mountain Institute that show that fuel consumption and greenhouse gas emissions would be 30 percent lower today if personal vehicles were the same weight that they were a dozen years ago.  The takeaway for policy is that the growing height and weight of cars, SUVs and light trucks is making the roads more dangerous, burning more fuel, and accelerating climate change.

Justin Tyndall, “The effect of front-end vehicle height on pedestrian death risk,” Economics of Transportation, Volume 37, 2024, 100342, ISSN 2212-0122,
https://doi.org/10.1016/j.ecotra.2024.100342.

What City Observatory this week

Why does it take four years and $200 million for consultants to serve up a warmed-over version of the Columbia River Crossing?  The Interstate Bridge Replacement Project’s director admitted that he’s just pushing “basically the same” project that failed a decade ago, but in the process, he’s spent $192 million on consultants, with the largest single chunk of that money ($75 million) going to his former employer, WSP.

And WSP has returned the favor, providing Johnson with questionable reports that purport to rule out examining an immersed tunnel option and which exaggerate project benefits to qualify for federal funding. Between the failed CRC (which cost nearly $200 million a decade ago) and its rebranded clone, the IBR, the two states will have spent nearly $400 million, mostly on consultants, and without turning a shovel. More than 10 percent of IBR’s recent consulting largesse—more than $20 million—has gone to public relations firms to help it sell the project.

Must read

US DOT puts Fresno highway expansion on hold over environmental concerns.  California had been planning to add new capacity and build new interchanges on Highway 99 in Fresno.  Fresnoland reports that, under pressure from environmental groups, the Federal Highway Administration is reviewing this decision. CalTrans claimed that the project would have no significant environmental impact and would not increase air pollution, but local advocates—and now possibly, FHWA—disagree.

The project would serve a massive proposed freight distribution facility, and would increase truck trips and air pollution in an area that is not in compliance with state and federal air pollution laws.  Left to their own devices, state highway departments have often played fast and loose with such environmental reviews; maybe FHWA will hold them accountable for obeying the law.

Seattle area puts road expansion ahead of climate goals.  Writing at the Urbanist, Ryan Packer reports that when it comes to putting their money where their climate pledge is, Puget Sound leaders will just keep on widening highways, thank you.  Two local government officials proposed prioritizing federal funds for safety and transit and active transportation projects, and ruling out using these flexible funds for highway expansion.  As Packer relates:

. . . members of the Puget Sound Regional Council’s Transportation Policy Board, a group of local elected officials from Pierce, Kitsap, King, and Snohomish Counties tasked with regional planning issues, voted against a proposal to bar transportation projects that would add general purpose vehicle capacity to the region’s limited access highways from competing against other public transit and traffic safety projects for a specific pool of federal dollars, . . .

The unwillingness of regional leaders to take this relatively small step illustrates the degree to which a region that prides itself on being climate-forward is not ready to take the hard steps to actually make its emissions reduction goals a reality.

Sadly, it wasn’t even close:  the proposal lost with 15 votes against and just 3 in favor.

California forever:  Urban fantasy or exurban nightmare? There’s a brash, bold proposal for a huge urban-scale development in California, which proposes to build what amounts to a new city for 400,000 people in Northern California.  Proponents are pursuing a ballot measure in Solano County to authorize the proposal, and their pushing plans for a dense, walkable gridded community that ticks many urbanist boxes.  While it seems like an appealing way to address the Golden State’s chronic housing shortage, Benjamin Schneider raises some important qualms at Substack.

While a the local level the plan exhibits an admirable urban form, the new city’s location—and most critically— connections to the rest of the region, are sketchy and car-dependent.  The city would be located between the San Francisco Bay Area and Sacramento.  The city’s new residents would have plenty of non-car alternatives for local travel, but would need cars to travel pretty much anywhere else.  The project anticipates widening local freeways, and in the process adding more traffic to the already congested Interstate 80.  And, as Schneider reports, proponents have given little thought to connecting to regional rail, despite the fact that an Amtrak corridor runs nearby and a BART terminus is a bit further.  It’s tempting to think that a new city in a greenfield can avoid the gnarly political problems that block redevelopment, but adding more population on the urban fringe exacerbates car dependence and increases pollution.

In the News

The Portland Mercury reported on our analysis of the rising cost of the Interstate Bridge Replacement boondoggle.  The price tag rose from $4.8 billion to as much as $7.5 billion just a year ago and project staff are now letting on that the costs will go even higher.

Salem Breakfast on Bikes also pointed its readers to our analysis that the new price tag for the IBR is likely to reach $9 billion.

What City Observatory did this week

A $9 billion Interstate Bridge Replacement Project?  Just 13 months after raising the price of the Interstate Bridge Replacement (IBR) project by more than 50 percent, the Oregon and Washington DOTs say it will cost even more.  We estimate project costs are likely to increase 20 percent or more, which would drive the price tag to as much as $9 billion, almost double the 2020 estimate..

While the DOTs blame “inflation” their own estimates show construction cost disinflation, with expected increases of no more than 3.5 percent per year for the rest of the decade. The likely increase in costs will more than wipe out the $600 million in federal funds awarded to the project in December.  The cost of the IBR is increasing faster than the DOTs can find money to pay for it.

The “Cost Estimate Validation Process” (CEVP) that state DOTs implied would remedy future cost increases utterly failed. The use of lowballed construction cost estimates to sell highway megaprojects is part of a consistent pattern of “strategic misrepresentation.”  It’s  the old bait-and-switch:  get the customer to commit to buying something with a falsely low price, and then raise the price later, when its too late to do anything about it.

ODOT has a consistent track record of lowballing pre-construction cost estimates, and recording huge cost overruns, with the average price of a major project doubling between pre-construction estimates and final costs.

Must Read

Housing is up, rents are down. Jay Parsons of Realpage reported  that 2023 was a banner year for apartment completions.  In 2023, the US completed nearly 440,000 new apartments, the highest number in about 35 years.

The surge in apartment construction has been a key factor in bringing down rental price inflation–something that will increasingly show up in the national inflation numbers in the coming year.  But real estate markets are local, and the big improvements in supply are producing the greatest rent relief in those markets that are building the most.  As Parsons writes,

. . . there remains a clear link between supply and rent change by market. Rents fell in 2023 across 40% of U.S. metro areas – and nearly all of those saw significant new supply entering the market. By comparison, nearly one-third of U.S. metro areas produced rent growth of 3% or more in 2023, and nearly all of them had little supply to work through.

The good news is that the surge in apartment completions is likely to continue through 2024, with more than 650,000 new apartments expected to be finished.  There’s clear evidence that expanding supply helps making housing more affordable.

Upzoning increases supply and lowers rents.  The principal policy tool that local governments wield to regulate housing supply—zoning—turns out to be a critical way to improve housing affordability.  Todd Litman summarizes the growing global literature showing how upzoning leads to more housing construction, and in turn, improves housing affordability.  Writing at Planetizen, Litman surveys a series of careful academic studies documenting the positive effects of upzoning.  One of the most striking examples comes from Aukland, New Zealand, which saw big increases in housing following its upzoning in 2016:

Whether the present surge in apartment construction continues, and whether it reaches the markets that need additional supply the most, will hinge in important ways, on whether local governments upzone for more supply.

Some state DOTs are climate deniers. More than 20 states are suing the US Department of Transportation over regulations that would require state Departments of Transportation—which receive billions of dollars of federal funds—to measure and report the greenhouse gas emissions associated with their transportation systems.  Streetsblog reports that this dirty dozen and a half don’t want to have to even discuss the fact that the systems that they run are now the single largest source of greenhouse gas emissions in the US.  As Transportation for America’s Beth Osborne says, the state DOTs are either dishonest or climate deniers (or both):

“They’re saying they don’t have the capacity to measure greenhouse gas emissions, and in the same [document], they’re saying they do; I’d like to know which it is,” Osborne said. “Do they have the information, and they could share it, but they just don’t want to? Or are they unable to determine the carbon impacts of their investments? … Because if they can’t, maybe we shouldn’t entrust them with this money in the first place — and give the money to the cities, which could.”

This lawsuit is just part of a pattern and practice in the transportation engineering industry to deny climate change:  As we’ve pointed out, they’re content to build us a highway to hell.

In the News

Streetsblog also pointed its readers to our critique of the flawed USDOT claim that the latest National Household Travel Survey shows a decline in travel.

Writing at Planetizen, Todd Litman cited our debunking of USDOT’s infographic purporting to show a decline in trip making, based on a flawed comparison of two very different household travel surveys.

Housing doesn’t “occur naturally”

Using zoning to preserve older, smaller homes doesn’t protect affordability

There’s no such thing as “Naturally Occurring Affordable Housing”–older, smaller homes become affordable only if supply and demand are in balance, usually because it’s relatively easy to build more housing.

The parable of the ranch home shows that old, small homes don’t “naturally” become affordable:  they’re utterly unaffordable in markets like Silicon Valley that constrict housing supply.

“Preserving” older, smaller homes will have exactly the opposite of the intended effect, restricting supply, driving up prices and increasing displacement.

There’s a catchy but fundamentally flawed idea floating around housing affordability discussions:  “naturally occurring affordable housing.”

To many housing policy practitioners, “affordable housing” is a creation of government policy:  it’s either public housing (built, paid, for and operating by local authorities), or subsidized affordable housing (typically built by non-profits) with government subsidies and tax breaks.  By extension, anything else that turns out to have low rents or inexpensive prices (and wasn’t built with these subsidies) is somehow “naturally occurring.” It even has a cute acronym: “NOAH.”

A new report from the American Planning Association claims that restrictive zoning can be a way to hold down housing costs by “preserving naturally occurring affordable housing.”  The report concedes that up-zoning and expanding supply might help with affordability, but then simply ignores this point, asserting that added supply doesn’t result in more homes affordable for low income households, and argues that public policy should protect older, smaller homes from being redeveloped, especially to add many more units.

What this misses is that the cumulative effect of these ostensibly well-intended efforts to “preserve” older smaller homes is to drive up the price of these homes by making them scarcer, and to increase the overall level of prices and rents in a market.  There’s a profound myopia to this approach to planning that assumes that the affordability of a structure is an intrinsic characteristic of that building, rather than the overall balance of supply and demand in a city or region.  Affordability is a system condition, not something that inures to a particular building.  Ignoring the system level effects of supply restrictions makes housing availability and affordability problems worse.  The additive, cumulative effect of limitations on constructing new homes is to make all homes more expensive, and measures like those advocated in this report drive up rents for everyone.  Indeed, measures to restrict new home construction assure that older, smaller homes will not become less expensive over time.  That’s the big lie about the term “naturally occurring”–older smaller homes are cheaper in some cities because they are abundant relative to demand, and typically because these places make it easier to build new housing.

Whether a 1950’s ranch home is “affordable” today or not has nothing to do with its age or size, but rather the supply and demand for housing in the market in which it is located.  The reason 1,000 square foot, 1950s ranch houses in Silicon Valley sell for over $1 million, and never became “naturally occurring affordable housing” the way they did in other cities has everything to do with the zoning and other restrictions that “preserved” these homes and prevented enough new housing getting built.

As a result, the idea of “preserving naturally occurring affordable housing” has a kind of “leeches and bleeding” quality as a policy prescription.  Precluding redevelopment of smaller, older homes actually makes the housing affordability problem worse by blocking new supply that would help drive down prices.  Instead of fetishizing smaller, older homes, planners should step back and look at overall supply and demand in the market.

The world according to NOAH

The idea of “naturally occurring affordable housing” has been kicking around in planning circles for a few years. There’s a 2016 report from Co-Star (the real estate advisory firm), issued in collaboration with the Urban Land Institute and the National Association of Affordable Housing Lenders, which inventories the number of such naturally occurring units in each of the nation’s large metropolitan areas (they count about 5.6 million).

Even conservative think tank the Manhattan Institute has employed the term, arguing that Mayor Bill de Blasio’s affordable housing program is unnecessary because the city has a reservoir of “naturally occurring affordable housing” that are currently available and require no additional government investment.

The term is a relatively recent coinage. Google shows no instances of the phrase “naturally occurring affordable housing” appearing prior to 2007. There were fewer than 10 websites using that term in the years up through 2013, and in 2014, “NOAH” began to take off. There were 66 occurrences in 2014, 39 in 2015 and 125 in 2016. While it’s a popular, and to some, seductive, term it’s fundamentally misleading.

Reality:  There’s no such thing as naturally occurring affordable housing

Basalt, glaciers, arable land and virgin forests are all naturally occurring. So are clouds, insects, and mountains.

While there’s nothing wrong with affordable housing that doesn’t currently rely on direct government subsidies, there’s something profoundly misleading with the term “naturally occurring.”

There’s nothing “natural” about it. Housing markets and the process of investment, decline, and filtering, are all profoundly influenced by a range of policies, from the federal government’s subsidies to housing and highways, to local land use decisions. The process of investment and neighborhood change that results in used housing is “anything but natural” as the University of California’s Karen Chapple and her colleagues put it in a recent report to the California Air Resources Board:

The story of neighborhood decline in the United States is oft-told. While early researchers naturalized processes of neighborhood transition and decline, the drivers of decline are anything but natural and stem from a confluence of factors including: federal policy and investments, changes in the economy, demographic and migration shifts, and discriminatory actions.

(Ironically, that doesn’t stop the authors from also using the term “naturally occurring affordable housing” four times in their report, juxtaposing that with Section 8 vouchers and deed-restricted affordable housing units.)

Naturally occurring conjures up visions of mineral deposits, or mountain ranges or a benign climate.  But the existence–or non-existence–of affordable, privately owned housing has everything to do with a wide range of conscious public policy choices that simply don’t belong in the category of natural occurrence.  The danger with this term is that it implies that there’s really nothing that we can or should do to promote market housing–it’s naturally occurring, right? It’s either going to be there or it isn’t, so there’s really no point trying to influence it.  And if your community doesn’t have enough, well, then there’s really not much you can do about it.

What that misses, of course, is that public policies, especially local zoning requirements, building codes, parking requirements, development fees and the like have everything to do with whether the private market provides housing that is affordable. When we ban apartments from wide swaths of most communities, when we outlaw affordable micro-units in desirable neighborhoods, when we subject development to a wide range of discretionary and arbitrary approval processes, and when we impose enormous costs in the form of parking requirements, we’re making sure that the private market doesn’t produce housing that is affordable.

And as we’ve noted, the whole process of filtering, where, as housing ages it becomes more and more affordable, is contingent on allowing an ample supply of new housing, even when those new units are themselves more expensive than low and moderate income households can afford. The only reason that some communities have plenty of what gets called “naturally affordable” housing is that they made it relatively easy to build new housing and that in turn led housing to filter downward and become more affordable.

In contrast, many communities–we’re looking at you, San Francisco–made it really difficult to build any new housing, with the result that a lot of older units which would have filtered down market as they aged, became the only feasible housing alternative, and consequently their prices got bid up so that they didn’t become more affordable as they got older.

So by all means, let’s talk about the role of markets and privately owned housing in addressing affordability; but let’s not use a term that intrinsically isolates this from the policy arena.