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Reason Foundation

Surface Transportation Innovations #34

Topics include: Reason's first Mobility Project study finds that adding capacity is key to cutting congestion; GAO study shows tolling's potential; feel-good, high cost air quality efforts; Tampa's new elevated express lanes; and other news.

Robert Poole
August 1, 2006

In this issue:

Adding Capacity is Key to Cutting Congestion, New Study Says

Every year the Texas Transportation Institute's Urban Mobility Report has a little section that shows, with real numbers, that those urban areas which came the closest to keeping highway capacity growing in pace with vehicle miles traveled (VMT) had the smallest increases in congestion. But more and more of America's metropolitan planning organizations (MPOs) have been ignoring this point. In a new Reason Foundation study, David Hartgen and Greg Fields of University of North Carolina at Charlotte show that the long-range transportation plans of many urban areas downplay highway expansion, devoting well over half their total planned spending over the next 25 years to non-highway aspects of transportation (www.reason.org/ps346). This is true not just in those places with traditional central business districts where transit can play a meaningful role (e.g., New York, Chicago, Boston) but also in large suburbanized areas such as San Jose, Salt Lake City, Charlotte, and San Diego, where transit can serve only niche markets.

What's happened over the past two decades is the triumph of the idea that "we can't build our way out of congestion," and hence that the only sensible policy is demand reduction. That accounts for the tremendous shift of resources from highways to transit, bike paths, and smart growth. The idea is that by dramatically reducing demand (VMT), we can thereby reduce congestion. Except that somewhere along the line, many of these same MPOs seem also to have lost sight of reducing congestion. As Hartgen and Fields note, in many long-range plans this no longer appears even as a goal. And if the plan's authors are honest enough to include their projected conditions in 2030, most show that congestion will be even worse than today's intolerable levels.

What this new study sets out to do, then, is to ask and answer the question: What if we wanted to expand highway capacity in response to the demand that's clearly there? More specifically, Hartgen and Fields worked with 32 MPOs to run their traffic assignment models so as to answer the question: How many lane-miles would you need to have, by 2030, to eliminate all serious congestion (defined as Level of Service F)? And then, using generic cost data for various types of lane-miles (freeway, major arterial, etc.), they estimated what it would cost to add this capacity over the next 25 years. Finally, using some rather clever techniques, they extrapolated these results to all 403 urbanized areas in the United States.

The resulting numbers look big at first glance: 104,000 added lane-miles costing $533 billion in 2005 dollars. But they aren't really that large when put in perspective. That cost of $21 billion per year is about 10 to 15% of already planned highway spending. It's about 28% of current MPOs' long-range transportation budgets. Thus, if none of the existing budget allowed for highway capacity expansion, the worst-case spending increase would be 28%. But in fact, most of these plans include some highway capacity additions, especially HOV lanes. And most of them include large sums that do little or nothing to reduce congestion, which conceivably could be shifted to capacity expansion, so the net cost increase might be zero.

What about the benefits? Hartgen and Fields estimate (based on the modeling results) that by 2030, nationwide travel time savings would be 7.7 billion hours per year. The cost of producing those savings varies considerably from city to city, ranging from as little as 9 cents per trip to about 75 cents per trip (in large cities). Overall, the average cost per hour saved is $2.76, far below even very conservative estimates of the average value of people's time.

To be sure, we know that incident-related congestion amounts to about half of total congestion, so adding capacity is not the only solution. But this paper makes a solid case that it can be a major part of the solution.

This paper is the first in a whole series of studies to be published by Reason over the coming year, as part of our Mobility Project (www.reason.org/mobility). Forthcoming papers will address topics such as the full economic and social cost of high levels of congestion, the best ways to use road pricing to reduce congestion, innovative design ideas for adding capacity, the role of transit in reducing congestion, and many related issues.


GAO Study Shows Tolling's Potential

In Issue No. 31 I reviewed a recent study by PBConsult for the Federal Highway Administration that provided a much-needed update on the extent of tolling, showing that it is already financing 30 to 40% of the nation's new limited-access highway capacity (and is likely account for a higher percentage in coming years). Reinforcing that report is a new study by the Government Accountability Office called "Highway Finance: States' Expanding Use of Tolling Illustrates Diverse Challenges and Strategies" (GAO-06-554).

I've read a great many GAO studies over the years, and this is one of the very best. It should be required reading for officials of every state DOT and every metropolitan planning organization. It does an excellent job of putting tolling and public-private partnerships into context, at a time of massive traffic congestion and of shrinking real value of fuel tax monies. In a nutshell, the report argues that tolling needs to be used more widely because it:

The resource-allocation benefits of toll finance are particularly highlighted in this report. Here are two excerpts that I want to share with you:

"When costs are borne by nonusers, the beneficiaries may demand that resources be invested beyond the economically justifiable level. Tolling can . . . provide the potential for more rational investment because, in contrast to most grant-financed projects, toll project construction is typically financed by bonds sold and backed by future toll revenues, and projects must pass the test of market viability."

"A tolling structure that includes congestion pricing can also help guide capital investment decisions for new facilities. As congestion increases, tolls also increase, and such increases signal increased demand for physical capacity, indicating where capital investment to increase capacity would be most valuable. At the same time, [the toll revenues] would provide a ready source of revenue . . . to help fund these investments in new capacity that, in turn, can reduce delays."

The report also breaks new ground by raising the longer-term question of the ability of the federal government to continue such programs as highway and transit, given the enormous fiscal challenges of paying for the baby boomers' retirement. It suggests that "a reexamination of the federal role in highways should include asking whether the federal government should even continue to provide financing through grants or whether, instead, it should develop and expand alternative mechanisms that would better promote efficient investments in, and use of, infrastructure and better capture revenue from users."


Wasting Money on Feel-Good Air Quality Efforts

Last month I arrived in San Francisco to speak at a conference. Since the conference hotel was located a few blocks from a BART station downtown, I took the relatively new BART line from SFO to Market Street. To my surprise, there were signs all over saying that service was free. Same thing the next day when I went back to the airport. It was only later that I came across an article in the San Jose Mercury News (July 30, 2006) explaining why.

I turns out that for several years, now, the Bay Area Air Quality Management District has been holding "Spare the Air Days." When a really hot, smoggy day is forecast, fares on 26 area bus, train, and ferry services go to zero, in hopes of getting people out of their cars to reduce emissions. And obviously, the hope is also that some of those people, having tried this alternative mode, will stick with it, ditching their car for the commute.

The Mercury News article provided some useful information for judging how effective this program is. First, with a fare of zero, how much did transit patronage increase? The figures show a gain of just 15%. That should be sobering to those who imagine that changes in transportation policy can get large numbers of people out of their cars. And this, remember, is in an area with a pretty robust regional transit system interfacing with numerous local transit providers.

Second, the report notes that "nobody really knows how many of the new riders gave up driving that day, thus removing a car from the road." One survey found that less than 10% of those riders said they ditched the car because transit was free. I'm a good example of a tourist who would have ridden BART anyway, but took advantage of the free rides. "Stories abounded of joy-riding teenagers, homeless people, retired people, tourists, and others who had no plans to drive that day," but who took advantage of the free, air-conditioned rides.

Third, how many of the new riders will become regular transit patrons? The Mercury News reports that, sadly, "[A]lthough the program is in its third year, neither the air district nor the MTC has conducted follow-up surveys to see whether new riders ever return."

But most devastating of all is the low cost-effectiveness of Spare the Air days. The program cost $13.3 million this year, for advertising and to reimburse the transit agencies for lost fare revenue. The Metropolitan Transportation Commission estimates that it reduced smog by 8.4 tons. Do the math: that's a whopping $1.65 million per ton. Other smog-reducing programs run by the air district cost between $500 and $30,000 per ton�useful things like buying up and crushing gross-emitter cars and replacing the engines of old diesel school buses. The car-crunching program costs just $8,600 per ton�just half of one percent as much as Spare the Air.

And that's really the lesson that should be learned from this. The $13.3 million spent on this program could have been used to buy up and crush more than 1500 gross-emitter vehicles. That would have provided a lot more smog-reduction for the money.


Elevated Express Lanes Add Much-Needed Capacity

There's a widespread belief that it's impossibly costly to expand the capacity of urban expressways. Even if adjacent land for widening were not enormously expensive, there is also the likelihood of years of litigation, as befell the last major new-freeway project in Los Angeles, the Century Freeway (I-105). Too often neglected is the idea of going up when expanding outward is economically or politically infeasible.

But isn't elevated construction unthinkably expensive? Back in 2002 (well before recent increases in the cost of concrete and steel), when Ken Orski and I were researching the Reason HOT Networks policy study, by canvassing recent elevated projects around the country we came up with an estimate of $25 million per lane-mile. That would make a four-lane elevated expressway a $100 million per mile proposition. I have to agree, that's pretty pricey.

But several weeks ago I took a ride, during the AM rush hour, on Tampa's new elevated Express Lanes. Developed and opened in July by the Tampa-Hillsborough County Expressway Authority (THCEA), the Express Lanes are built above the median of their Crosstown Expressway toll road. Thanks to recent growth of Tampa's eastern suburbs, that expressway had become seriously congested westbound in the morning and eastbound in the afternoon peak�the ideal conditions for a reversible express lanes facility. So that's what they built.

The project is a total of nine miles, of which six are elevated. There are three lanes plus a breakdown lane on each side, making a total width of 59 feet. The whole thing is supported on central pillars that take up just six feet of median space. The original budget was $320 million, but a design error by one of the contractors meant that the foundations of many pillars had to be replaced, boosting the cost to around $420 million. Still, that works out to just $15.5 million per lane-mile�far below my 2002 estimate.

What makes this project relatively economical is its innovative design. The bridge structure is made up of pre-cast segments which are made off-site, trucked to the site, and hoisted into place. This type of segmented construction was developed years ago by Figg Engineering, but has been used mostly for conventional bridges, rather than elevated expressways.

I asked THCEA to work with Figg to come up with generic cost estimates for elevated express lanes projects using this design approach. Assuming zero right of way costs but including design, construction management, and a contingency, the figures they gave me (based on today's materials costs) are $18 million per lane-mile for a two-lane facility, $15 million per lane-mile for a three-lane facility, and $13.6 million per lane-mile for a four-lane elevated facility. These figures apply to a modest-length facility in the 5-10 mile range. The per-mile cost would be lower for longer projects. Costs would be higher if there were a lot of on-ramps and off-ramps. But express lanes are intended for relatively long trips, not the kind of short on-and-off trips that clog up many of our freeways. So a lot fewer on- and off-ramps would be needed than for the freeway itself.

The bottom line: Don't let people tell you that networks of new priced lanes are infeasible, either because there is no room to add them or because of cost. Where they need to be built as elevated projects, Tampa has showed us the way to do it.


Noteworthy Publications

New TxDOT Magazine. The Texas Department of Transportation, one of the most innovative DOTs in America, has begun the publication of a quarterly magazine. Called Horizon: The Future of Transportation, it made its debut with the Summer 2006 issue. Contributors to this issue include Martin Wachs of RAND Corp., Joseph Giglio of the Hudson Institute, Kenneth Orski of Innovation Briefs, and Peter Samuel and me (with a reprint of our article, "The Return of Private Toll Roads" from the FHWA's Public Roads magazine). You can sign up for a complimentary subscription at www.txdot.gov under the "Inside TxDOT" link. Or email them at TDOTHorizonSubscriptions@dot.state.tx.us.

PPP Primer. Fred Kessler and Geoff Yarema of Nossaman Guthner Knox & Elliott have written an excellent overview of why transportation public-private partnerships are taking hold in America and how they work. You can find it at www.nossaman.com/information/articles/articles.asp#Infrastructure.


Speaking Engagements

I have a very busy speaking calendar this fall. Here are the principal surface transportation events I will be speaking at. I hope to see you at one or more of these:

Sept. 16: Preserving the American Dream conference, Atlanta (http://americandreamcoalition.org/pad06.html)

Sept. 20: International Bridge Tunnel & Turnpike Association Annual Meeting, Dallas (www.ibtta.org/events)

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)


Correction

Several readers wrote to me after last month's article on diesel truck emissions, in which I asserted that diesel locomotive emissions would remain high during the next decade while diesel truck emissions would be heading sharply downward. It turns out that I had missed two important EPA actions, dating back to May 2004. First, the same low-sulphur fuel requirements as apply to diesel trucks are going to be applied to locomotives. Second, EPA is in the rule-making process for more-stringent diesel locomotive emission standards. So I'm pleased to say that I stand corrected.


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


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