What City Observatory did for the past two weeks

Alert followers will know the City Observatory has been preoccupied for the past two weeks; we’re filling in with a “Two-Weeks Observed” edition this week, and will be back to normal editorial approach this coming week.

1. Does Cyber Monday mean Gridlock Tuesday? The rapid growth of e-commerce and package delivery has raised concerns that freight movement will choke city streets and produce gridlock. We take a careful look at these trends, and see no reason to panic. While its true that the value of e-commerce has increased three-fold in the past 9 years, urban truck traffic has risen by only about 3 percent since 2007. Another plus: the more packages delivered by carriers like UPS, Fedex and the US Postal Service, the more efficient, in terms of time and labor each delivery becomes. Finally, at least one new study confirms that on-line shopping substitutes for physical shopping trips, so that delivery trucks are likely taking shoppers’ cars off the road and may be reducing congestion.

2. Going faster doesn’t make you happier.  If you listen to traffic engineers, it seems like the overarching goal of our transportation system ought to be to move people faster. If that’s the case, you’d think that people who lived in places with higher average traffic speeds would be the happiest. But you would be wrong: it turns out, that if anything, there’s a negative correlation between self-reported satisfaction with an area’s transportation system and its average speed.  Places with faster travel are just more spread out, which means more time spent traveling, ergo, less happiness with the transportation system.

3. Our transportation rules of thumb are “all thumbs.” While it may often seem to have the trappings of quantification or professional endorsements, much of what guides decision-making in the world of transportation is largely ad hoc or out-dated rules-of-thumb. Much of the policy making for transportation is clothed in the pseudo-scientific industry standards that measure levels of service, trip generation, lane widths and parking standards. But as we point out, many of these measures are out-dated, based on flawed data or analysis, or are simply biased in favor of promoting auto-mobility over other transportation modes and competing priorities.

Must read

1. Portland plans to waste $168 million building park and ride lots.  Sightline Institute’s Michael Andersen has a detailed critique of plans to build more than 3,000 parking spaces as part of a proposed new light rail line in Portland. This represents and massive and misguided subsidy to automobile travel. It also flies in the face of Portland’s existing experience, where expensive park and ride slots are only about 65 percent full at peak hours. Rather that cater to car drivers (who will make up only about 15 percent of light rail passengers), that $168 million would be far better spent on affordable housing near the light rail line, or improvements to bike and pedestrian facilities. We’d add one other point–about the only thing not covered in Andersen’s comprehensive takedown: turning the area next to light rail into an auto-choked parking lot makes it less attractive for those who might bike or walk to a station, and also means the land used for parking–which would be an ideal site for transit-oriented development–doesn’t house anyone.

2. Some cities are more equal than others. Akron planning director Jason Segedy has another insightful commentary on the misapplication of popular national narratives to the challenges facing many of the nation’s urban centers. Contrary to popular belief, damn few poor neighborhoods are being transformed by gentrification, especially in the Rustbelt. But that doesn’t stop concerns about gentrification from being advanced even for small steps forward in the most struggling areas.  Segedy argues this is wrong-headed:

Applying national narratives about gentrification, without understanding the realities of the regional real estate market in the Rust Belt, can lead people to the erroneous conclusion that new housing, new people, or any change at all in urban neighborhoods is bad for the people who already live there.  New residential development and private reinvestment is exactly what the traditional working-class neighborhoods of the Rust Belt desperately need.

3.  Does Uber have a fatal financial flaw?  Ride-hailing giant Uber racked up yet another quarter of billion-dollar plus losses. There are critics like Hubert Horan, who make a strong case that far from being a temporary and necessary growth-inducing strategy, per-ride losses are pretty much built into the ride-hailing business model. It’s far from clear that there are economies of scale in the ride-hailing business, and there seem to be few barriers to entry.  This may mean that Uber’s investors will find it difficult to convince financial markets to pay a $100 billion or more they seem to think the company is worth–when, or perhaps if, it ever moves forward with an initial public offering.  Yves Smith of New York Magazine argues that the company may not survive the next decade.

New Knowledge

The Earned Income Tax Credit is a social policy that pays big economic dividends. So-called “welfare” programs get a bad rap in many popular discussions, and its widely assumed that income transfers are simply a deadweight loss to taxpayers. A new study by Jacob Bastian of the University of Chicago and Maggie Jones of the Census Bureau provides data that challenges that view. One of the most important income support programs is the Earned Income Tax Credit, which provides a special refundable tax break for low income households with wage earnings. Bastian and Jones find that the credit prompts additional work effort by low income households; and that additional effort and income produces tax revenues which offset 87 percent of the program’s costs.

Jacob E. Bastian∗ and Maggie R. Jones, Do EITC Expansions Pay for Themselves? Effects on Tax Revenue and Public Assistance Spending, November 30, 2018

In the News

Our critique and questions about a study claiming that the growth of ride-sharing was associated with an increased rate of road crashes was referenced by Science Magazine.