What City Observatory did this week

1. If your corporate campus has 10,000 parking spaces, it isn’t really “walkable.” With great fanfare, American Airlines has announced its building a new corporate campus in Fort Worth.  While American calls it highly walkable–it will have pedestrian paths, parks and some bikes, it is surrounded by freeways, it’s in a suburban location distant from transit, has a current Walk Score of 20 (“car-dependent”) and offers about 10,000 parking spaces for its 12,000 employees.

2. The myth of the revealed preference for suburbs. One of the most frequently repeated arguments about the superiority of suburban living is the claim that because more Americans live in suburbs than in cities, it must be because they prefer suburban locations. But as we’ve argued at City Observatory, part of the reason for that disparity is our shortage of cities: we don’t have enough urban locations to accomodate all those who’d prefer to live in urban neighborhoods. That’s partly reflected in the growing premium buyers pay for central locations. Survey evidence marshaled by Jonathan Levine and his colleagues confirms we’ve have a lot more urban residents if we just built the space for them.

3. If you can’t see ’em, you can’t feel ’em. City Observatory friend Carol Coletta recently gave a keynote address at the Kinder Institute in Houston. We think its got some important messages for urbanists about how we use civic spaces to promote true inclusion.

Must read

1. Why Chicago should have a progressive real estate transfer tax. Two of our favorite Chicagoans, City Observatory alum Daniel Kay Hertz and Metropolitan Planning Council’s Marisa Novara, have an editorial in the Chicago Sun Times making the case for a progressive real estate transfer tax. The city now has a flat rate transfer tax, which funds housing programs and transit. Hertz and Novara argue that a transfer tax with higher rates for more valuable properties would be one key to raising more money to bolster the city’s housing programs, which now get only modest support from city general funds and tax increment financing.

2. Three policies for making driverless cars work in cities. Market Urbanism’s Emily Hamilton gives some serious thought to what cities might do to accomodate driverless cars in a way that makes cities more livable. She has three main recommendations:  First, pricing the roads to avoid congestion. Second, creating more shared streets that facilitate pedestrian movement, so that dense neighborhoods are more walkable. Third, eliminate parking requirements and auction off space now used for vehicle storage.

 Requiring new buildings, with lifespans of several decades, to include space for car storage in places where real estate is valuable is mandating an enormous waste of space and resources as demand for parking decreases.

3. Is San Francisco’s Inclusionary Zoning requirement throttling new construction? SPUR, the Bay Area think-tank has an analysis. In 2016, San Francisco voters approved Proposition C, which toughened the city’s existing inclusionary housing requirements, upping both the minimum share of affordable housing units developers must build if they construct new apartments in the city, as well as raising the fee for those who elect to have units constructed off-site. On the advice of its economists, the City Council backed of temporarily on raising the affordable unit set-aside to the voter-approved level of 25 percent, but didn’t reduce the off-site fees. The result appears to be a big slow down in new apartment construction proposals, and much lower fee revenues for the city’s off-site construction program. And that’s the rub with inclusionary requirements: they can easily be so high that they reduce the amount of market rate housing being built, putting further pressure on rents, and reduce funds for new affordable units as well.

4. Claims of vacant storefronts in NYC based on bad data. A September 6, 2018 New York Times article made it sound like there was a growing epidemic of retail vacancy in Manhattan, with overall vacancies tripling in the last few years, ostensibly, as greedy landlords evict long-time tenants and hold-out for more lucrative shops (one’s selling luxuries and who won’t provide for the basic needs of neighborhood residents. The story hinged critically on retail vacancy data attributed to Douglas-Elliman, a local real estate brokerage, claiming that vacancy rates had gone from 7% to 20% in Manhattan. That factoid was being used to buttress the case for imposing commercial rent control. But on closer inspection, that’s not what the data shows, according to a report in The Commercial Observer “What is the real vacancy rate for Manhattan storefronts? Not 20 Percent.”  (A hat tip to Market Urbanism for flagging this article).

New Knowledge

The impact of ride-hailing services on satisfaction with taxi service. The advent of ride-hailing services has generated much interest in how they affect city traffic congestion, which is primarily about the quantity of service they provide. But its seems likely that ride-hailed services, what with their app-dispatched, electronic payment and invited feedback on operator performance have changed rider expectations about the quality of service. A new paper investigates the connection between complaints about taxi service in New York and the expansion of Uber/Lyft service in various neighborhoods.

The authors find that the increased roll out of ride-hailing is associated with an increase in complaints against taxis for poor driving, a lack of cleanliness and driver discourtesy.

Much of the paper is devoted to trying to figure out why taxi service became worse with the advent of Uber and Lyft:  Were taxi driver’s left with the least desirable fares? Did the competition make them worse or less courteous drivers? Some of these explanations are plausible, we think there may be a simpler explanation:  rising customer expectations. While it’s possible that Uber and Lyft somehow made taxi service worse, it seems more plausible that the ready availability of a qualitatively better transport experience led customers to realize that better service was possible, and led them to complain when taxi service was not up the the higher standards set by Uber and Lyft.

Mishal Ahmed, Erik Johnson and Byung-Cheol Kim, “The Impact of Uber and Lyft on Taxi Service Quality:  Evidence from New York City.” http://www.netinst.org/Kim_18-16.pdf

In the News

The Portland Tribune featured a story on our correct prediction (made last January) that Amazon would split its much-anticipated HQ2 among at least two cities in their article “Portland economist predicted Amazon HQ2 split months ago.”

The BlockClub of Chicago linked to our analysis of claims that Oakland’s Fruitvale neighborhood had avoided gentrification, in their story “Can Chicago’s Gentrifying Neighborhoods Grow Without Leaving Longtime Residents Behind?”