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Reason Foundation

Surface Transportation Newsletter #115

Access to jobs via auto, Inside the transit "black box," and More

Robert Poole
May 10, 2013

In this issue:

New Study Ranks Access to Jobs via Auto Commuting

Transportation is not an end in itself; it's a means to other ends, such as getting to and from work. Taking this point to heart, a growing number of researchers in recent years have promoted the concept of "access" as being more important than speed or travel time, per se. One of the leaders in this field, David Levinson of the University of Minnesota, defines accessibility as "the number of destinations reachable within a given travel time" by a particular mode of transportation.  He is the author of a new study called "Access Across America," released last month by U of M's Center for Transportation Studies.

In this study, Levinson estimated the accessibility to jobs by car for the 51 largest U.S. metro areas. His data are for 1990, 2000, and 2010, so in addition to providing a snapshot of conditions as of 2010, the data also allow him to document trends over the past two decades. The results may surprise many of those concerned about traffic congestion in the largest metro areas, because Levinson finds that the 10 metro areas that provide the greatest accessibility to jobs via auto commuting are, in order: Los Angeles, San Francisco, New York, Chicago, Minneapolis, San Jose, Washington, Dallas, Boston, and Houston. And over the past two decades, the places with the largest increases in accessibility by car are Las Vegas, Jacksonville, Austin, Orlando, and Phoenix. Those with the largest decreases are Cleveland, Detroit, Honolulu, and Los Angeles.

What accounts for these findings? Although Levinson doesn't really get into the details, I think one of the most important factors is the ongoing suburbanization of jobs. Remember, Levinson's data are for entire metro areas, and there has been a huge dispersion of jobs throughout these metros over the past 50 years. A good summary of the data was provided last month by Wendell Cox in "Job Dispersion in Major US Metropolitan Areas, 1960-2010." (www.newgeography.com/content/003663-job-dispersion-major-us-metropolitan-areas-1960-2010) For example, in 1960 54% of employment in 35 major metro areas was in the historical core municipalities—but by 2010, that figure had dropped to 30%, with 70% in suburban and exurban areas. The suburbanization of jobs has made huge numbers of workplaces more accessible by car than before, leading to shorter average work-trip travel times than in Canada or Europe.

Levinson's data show that in 31of the 51 metro areas, all the jobs can be reached by car in 30 minutes or less; upping the limit to 40 minutes brings the total to 39 of the 51, and at 60 minutes, almost everyone can reach nearly every job in every one of the 51 metro areas. That's pretty outstanding performance by the highway system, despite the existence of serious congestion.

It's instructive to contrast Levinson's auto accessibility figures with the findings of a Brookings Institution study from 2011 on accessibility to jobs via transit ("Missed Opportunity: Transit and Jobs in Metropolitan America"). Using a 45-minute transit commute time, that study found that only 7% of jobs could be reached, in the 100 largest metro areas. Even at 60 minutes, transit could get people to only 13% of the area's jobs. To reach 30% of the jobs, you need an average travel time of 90 minutes, which is more than three times the duration of the average U.S. auto commute.

Knowing this, some advocates of Smart Growth therefore disparage the suburbanization of employment as "jobs sprawl" and seek to promote public policies that would reverse it, so that transit could do a better job. But that confuses means with ends. If the purpose of an urban transportation system is accessibility, we should work to make the system serve that goal, not engage in a utopian quest to massively reshape the urban landscape. And, as I have written in previous issues of this newsletter, the implication for transit is to develop more flexible systems that can link more people cost-effectively to jobs. That argues for grid-based bus systems as opposed to radial bus and rail systems focused on what used to be the "central business district."

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Inside the Transit "Black Box"

When researchers and reporters ask me how valid various estimates of transportation infrastructure investment needs are, I generally point them to the Federal Highway Administration's HERS (Highway Economics Requirements System) model. Dating from 1996 and periodically enhanced, HERS incorporates various levels of benefit/cost analysis, and more recently added the ability to estimate the effects of congestion pricing on highway investment requirements. HERS is used for the various scenarios in the highways portion of US DOT's biennial Conditions and Performance (C&P) report, and I've concluded that the estimates produced by HERS are far more sophisticated than the kinds of wish lists of nice-to-have projects that we often see in surface transportation.

The C&P report also offers investment estimates for U.S. transit systems. Those are generated by a model known as TERM (Transit Economic Requirements Model). When I've queried various people who have worked with or advised those producing the C&P report how rigorous TERM is—e.g., does it do serious benefit/cost screening—they have generally told me that outside researchers know very little about TERM and consider it something of a black box: transit data go in and investment estimates come out, but hardly anyone outside the Federal Transit Administration knows what's inside the box.

Consequently, I was delighted to receive, two weeks ago, a report about TERM from the Transportation Research Board. A special committee had been appointed by TRB, at the request of FTA, to review TERM to assess "whether it provides reasonable and appropriate estimates of condition and investment needs" and "whether the model's reliance on a backlog of capital investments is an appropriate basis for developing future capital funding requirements."

The committee's brief report ("Review of the Federal Transit Administration's Transit Economic Requirements Model") is eye-opening, despite being written in the same kind of very cautious language as most GAO reports. The brief answer to the first key question is that TERM does give "a useful indication" of the amount of capital spending that would be needed to bring all transit systems up to a "state of good repair." But those estimates are "not constrained by a benefit-cost test." The committee also questioned TERM's estimates of investments needed to expand transit capacity, saying it "could not assess their reasonableness" since they depend on unverified ridership projections and assumptions of a linear relationship between ridership and expansion needs.

As for TERM's reliance on a backlog of previously defined (but unfunded) capital investments, the committee pointed out that TERM contains no functional relationship between capital investments and system performance, nor does it compare the performance benefits of alternative investments. Hence, "the committee was unable to determine the credibility of the estimates of capital expenditure requirements for expansion."

The report points out a number of shortcomings in the database used by TERM, which is nowhere near as comprehensive and standardized as the data from state DOTs used in HERS. And it notes problems with TERM's methodology, such as no consideration of cost uncertainty, pooling of data for transit systems with differing management structures and efficiencies, and lack of considering management alternatives to capital expenditures. And it emphasizes repeatedly that TERM nowhere attempts to project an "economically justified or otherwise optimal level of capital spending."

These points are elaborated upon in a brief appendix and are further explored in three background papers that are also available on the TRB website (www.trb.org/Main/Blurbs/168691.aspx). While the report points out serious shortcomings of TERM and its investment estimates, I commend FTA leadership for requesting TRB to do this assessment, and I hope they will take action to make the suggested changes to TERM (or replace it with a better model, as suggested by one of the supplemental papers).

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New Data on Separating Managed Lanes from GP Lanes

Late in 2011 the managed lanes community was somewhat alarmed by a report from UC Berkeley suggesting that the performance of HOV lanes (the earliest form of managed lanes) is directly related to the performance of adjacent general-purpose (GP) lanes. Specifically, as measured on I-880 in Hayward, CA, when GP lanes slowed down, so did the adjacent HOV lane. The HOV lanes had been getting jammed with hybrids and hence failing to meet the federal requirement of maintaining at least 45 mph speed during peak periods. So Caltrans had recently ended access for single-occupant hybrid vehicles to those HOV lanes. Researchers Michael Cassidy and Kitae Jang found that shifting the hybrids into the adjacent GP lanes failed to speed up the HOV lanes. Why? Because, they said, the resulting even-slower speeds in the GP lanes led to a parallel reduction in speed in the HOV lanes.

I suggested at the time that this phenomenon was not inherent in HOV or HOT lanes, but was an artifact of the design of the I-880 HOV lanes. Specifically, like all the other HOV lanes in the San Francisco Bay Area, access to the I-880 HOV lanes is continuous—i.e., vehicles can dart in and out of the HOV lanes at will. So it's hardly surprising that those driving in the HOV lanes will slow down to reduce the likelihood of a collision with in-and-outers. And I pointed out that this phenomenon has not been observed with HOT lanes and express toll lanes, all of which have some kind of "buffer" separation—either double pavement striping, plastic pylons, or concrete barriers.

So I was pleased to read a paper in TRB's Transportation Research Record 2278 (2012) that provided empirical support for my assessment. Kitae Jang, Sanghyouk Oum, and Ching-Yao Chan compared the performance of continuous-access HOV lanes in the San Francisco area with buffer-separated HOV lanes in Southern California. Their paper is "Traffic Characteristics of High-Occupancy Vehicle Facilities: Comparison of Contiguous and Buffer-Separated Lanes." They carefully measured the speed-flow relationship on various continuous-access HOV lanes in the north and on buffer-separated HOV lanes in the south, as well as doing a before/after comparison of the HOV lanes on SR 55 in Orange County, CA which were (foolishly, in my view) converted from buffer-separated to continuous access in 2007.

For the continuous access lanes, their results were similar to those of the earlier paper by Cassidy and Jang—i.e., speed in the HOV lanes degraded as speeds declined in the adjacent GP lanes. "In the buffer-separated HOV facilities, however, the correlated traffic behavior between the HOV and adjacent GP lanes was not observed—traffic in the HOV lanes was almost indifferent to traffic conditions in the adjacent GP lanes." You can observe this phenomenon at work every day on successful HOT lanes such as those on SR 91 in Orange County and I-95 in Miami.

So the lesson for those planning managed lanes is clear. Provide clear-cut buffer separation between the MLs and the GP lanes, so you can give your customers what they are paying for: faster and more reliable trips.

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Will Congress Address WRDA's Basic Problems?

Hardly any Americans know that WRDA is the acronym for the Water Resources Development Act that Congress periodically gets around to reauthorizing. It's the vehicle by which spending decisions get made about the two lesser-known transportation trust funds: the Harbor Maintenance Fund and the Inland Waterways Trust Fund. Both are funded, in part, by user taxes, but those taxes occupy opposite positions. For harbor dredging, that fund will take in $1.8 billion from user taxes based on the value of incoming cargo at ports—but the Administration's budget request calls for spending only $872 million of that on dredging. The rest goes for non-harbor uses. So port interests are lobbying furiously for spending the whole amount, and for starting to spend down the accumulated $8.1 billion balance.

In waterways, the situation is the opposite. Barge operators pay a modest diesel fuel tax for the waterways fund, but last year that tax brought in $80 million, compared with federal spending (by the Corps of Engineers) of about $800 million to improve, operate, and maintain the waterway system's channels and locks. Knowing a good thing when they have it, most waterway groups are lobbying to have all improvement projects of $100 million or more paid for out of the (increasingly mythical) general fund. And they adamantly oppose any kind of charge to use each set of locks "because some carriers would be affected more than others." Say what? Whatever happened to "pay for what you use"?

Congress meanwhile grapples with the collision between its self-imposed (and very popular) ban on earmarks and the long tradition that each WRDA bill largely consists of earmarks—i.e., specific designation of which harbor improvements and which waterway improvements to authorize the Corps to spend money on. The only alternative they can see is to allow the Administration to select the projects, which most members of Congress and the port and waterways interest groups abhor. They would rather continue lobbying Congress for their own projects.

The whole situation cries out for serious, market-based reform. Yes, I'm sure targeted investment in replacing certain obsolete and undersized locks and dams, deepening some port channels to handle larger post-Panamax ships, and providing a more reliable funding stream to keep key river channels dredged to suitable depths would make sense. But none of the laundry lists of investment "needs" differentiates between real needs and projects whose costs exceed their benefits.

We already have institutions set up to do this. One of the most important is the bond market, which ports already use, as do airports and railroads. If you want the bond market to fund your dredging project, you provide them with reams of analysis so they can do their due diligence and see if there is a high likelihood that the project will generate enough revenues to cover the debt service. In many cases, this means having a revenue stream from those who will derive benefits from the improved facility—such as charges to use ports or locks. By the way, the Panama Canal is being funded this way, as I noted in an article about waterways several issues ago.

Ports all compete with one another, and there is no rational way for either the Administration or Congress to decide which investments are the "right" ones. There is no underlying need for ports to collect a tax on all their commerce (including ships that don't need deeper channels), send it to Washington, and hope to get some of it back.

And a waterways system that depends largely on federal general funds and lobbying is hardly sustainable, given the dire condition of the federal budget over the next several decades. So it's high time for the waterways community to come to terms with Panama Canal type user-pays methods. As Prof. Robert Criss of Washington University recently told Forbes, "If railroads can afford to maintain their networks, barge operators should, too."

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Major Toll Projects Proliferate, Many as P3 Concessions

With increased federal highway funding looking ever less likely, state DOTs are moving smartly ahead with major projects financed by tolls and often procured under long-term P3 concessions. The trend includes additional projects in states like Florida, Texas, and Virginia but also first-time new toll projects in other states.

The first P3 bridge project in the Northeast is the Port Authority of New York & New Jersey's replacement for the obsolete Goethals Bridge. On April 24th, the PANYNJ awarded a 40-year concession to a Macquarie/Kiewit consortium. They will build, operate, and maintain twin cable-stayed bridges linking New Jersey and Staten Island. Overall project cost is $1.52 billion. Although the bridge, like the old steel truss bridge it is replacing, will be tolled, PANYNJ will do the tolling and will compensate Macquarie/Kiewit via availability payments. The financing includes a TIFIA loan and tax-exempt Private Activity Bonds.

Another new bridge with a similar concession model is the East End Bridge across the Ohio River at Louisville, procured as a 35-year P3 concession by the Indiana Finance Authority. As in New York, the bridge will be tolled by the state, and the concessionaire (Walsh Investors/Vinci Concessions/Bilfinger Berger) will be compensated via availability payments. It was financed via Private Activity Bonds and sponsor equity, totaling $760 million.

Florida DOT has begun work on the $1.9 billion, 46-mile First Coast Outer Beltway for Jacksonville. The $400 million, 15-mile first phase, heading south from I-10, is beginning construction. The second phase is longer and far more expensive since it will involve a major bridge across the St. Johns River; it is planned to be procured as a toll concession.

North Carolina's first modern toll road opened in December. The $1 billion, 18.5 mile Triangle Expressway constitutes part of the beltway around Raleigh and also provides access to the Raleigh Durham Airport. It is the first major project of North Carolina's relatively new toll authority.

Texas continues to be the leader in toll roads and P3s, despite some degree of continued political opposition. The state is now using a mix of toll concessions and availability-payment concessions, partly in response to contractor pressure and partly in response to populist opposition to the state "losing control" over tolling. An $800 million project to add priced managed lanes to the SH 183 freeway near DFW Airport was originally offered as a toll concession, but was withdrawn and rebid as an availability-payment project. Public Works Financing reports that a decision was reached recently to offer the $600 million SH 288 managed lanes project in Houston as a toll concession. TxDOT has also negotiated a $1.3 billion extension of the ongoing North Tarrant Express toll concession in Fort Worth, extending the managed lanes onto I-35W; Cintra and Meridiam hold that concession. New toll roads are much in evidence in the Austin area, though only one—the extension of SH 130 southward to I-10 near San Antonio, which opened last fall—has been done as a concession (by Cintra/Zachry). The newer ones in metro Austin are all being developed by the Central Texas Regional Mobility Authority. Toll roads are also being used on a smaller scale in Texas, such as the 26 miles of (two-lane) Toll 49 loop around Tyler, nine miles of tolled managed lanes on Loop 375 in El Paso, and one new toll road apiece (thus far) in Brownsville and McAllen. Overall, reports the New York Times, Texas has added over 150 miles of new toll roads during the past six years.

And toll road projects are finally gaining traction in California, specifically Southern California. Riverside County is under way on a $1.3 billion project to extend the 91 Express Lanes eastward eight miles from the Orange County line to I-15. Although that project is not a P3 concession, LA Metro has an ambitious P3 program under way. It includes:

The last of these attracted some 300 prospective bidders to an early-May industry day.

This trend suggests that state and metro areas with large transportation needs are increasingly turning to tolling as a revenue source and P3 concessions as a delivery mechanism. It's a kind of de-facto devolution; as the federal role shrinks in relative terms, states and metro areas are stepping up to the plate.

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News Notes

Poole Budget Committee Testimony. On April 24th, I testified before a hearing of the House Budget Committee on the future of the Highway Trust Fund, suggesting several ways in which the scope of the HTF could be redefined to restore its solvency, as well as urging Congress to give states more tools to enhance infrastructure investment. My written testimony is available on the Reason Foundation website: http://reason.org/news/show/highway-trust-fund-house-testimony.

Miami Port Tunnel 2nd Tube Done. The huge tunnel boring machine broke through on May 6th at the end-point of the second of two parallel tubes it has been excavating for the new Port of Miami tunnel. It will take workers another year to finish and test the tunnel before its scheduled opening to traffic in May 2014. Each tube will have two full-size traffic lanes capable of handling trucks and buses serving the port. The $1 billion project is being developed under a 35-year P3 concession agreement.

New P3 Evaluation Tool from FHWA. The FHWA's Office of Innovative Program Delivery has unveiled a tool to help state and urban agencies evaluate when it makes sense to use a long-term public-private partnership (P3). P3-VALUE (Value-for-money Analysis to Learn and Understand Evaluation) consists of four integrated spreadsheet-based analytical tools: a risk assessment tool, a Public Sector Comparator tool, a shadow bid tool, and a financial assessment tool. The tools and supporting documents are available at: www.fhwa.dot.gov/ipd/p3/toolkit.

Congestion is Back, Reports INRIX. For the first three months of 2013, traffic congestion is up 6 percent from the same period in 2012, big-data company INRIX reported last month. Of the nation's 100 largest metro areas, 61 had congestion increases in the first quarter, compared with only six in the same period in 2012. INRIX ranked Los Angeles as most congested, but the largest increase (of 30%) occurred in Boston, ranked 10th-most congested for the first quarter. INRIX suggests that increases in employment are the likely cause of increased traffic and hence increased congestion. Details at www.INRIX.com/scorecard.

EPA Biodiesel Mandate Slammed. A short article in the latest issue of Regulation magazine presents a powerful critique of the EPA's biodiesel mandate as part of the agency's renewable fuel standard. Sofie E. Miller of the GWU Regulatory Studies Center finds that the mandate will cause environmental harm from increases in criteria pollutants while unduly enriching soybean farmers. See "Crony Environmentalism" by Sofie E. Miller, Regulation, Spring 2013, pp. 2-3.

Safety Benefits from All-Electronic Tolling. Toll roads in South Florida are in the process of removing toll booths and toll plazas, converting to all-electronic tolling (transponders and license-plate imaging). The first large conversion was on the Homestead Extension of Florida's Turnpike (HEFT), effective in February 2011. In the first year of AET, accidents within a half mile of the former toll plaza locations declined by 27%, despite traffic volumes that have increased by about 10%.

Sharp Critique of "Road Diets". In their efforts to reduce the attractiveness of driving, advocates of "complete streets" have recently started promoting the term "road diet" to mean converting regular lanes to wider sidewalks and bikeways. The American Planning Association has joined this effort, producing a manual called "Complete Streets: Best Policy and Implementation Practices," developed in collaboration with the National Complete Streets Coalition. A provocative critique of these efforts was released in March by the Georgia Public Policy Foundation, and I commend it to your attention. (www.georgiapolicy.org/in-lean-times-road-diets-leave-slim-pickings-for-commuters)

Cooler Pavements to Cool Cities. Researchers at the University of California's Lawrence Berkeley Lab are testing six alternative "cool pavements" aimed at reflecting 30 to 50% of solar heat, compared to just 5% for traditional asphalt. The Lab's Heat Island Group said the new pavings are about 40 degrees Fahrenheit cooler than black asphalt.

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Quotable Quotes

"For many P3 enthusiasts, the term P3 connotes innovation. However, availability payment deals that do not bring new revenue streams to the table and do not feature demand risk sharing leave something to be desired for practitioners used to working in a market-based economy with dynamic private-sector partners. In Europe, too, the availability payment model is on the defensive. The UK is finally considering tolling for the proposed A14 highway in Cambridgeshire. . . . Particularly given the fiscal state of governments in Europe and the US, we simply cannot afford simple availability payment structures that leave the government on the hook for all project revenues. Crisis and struggle lead to innovation, and in this scenario we may see European P3 programs borrowing more from US models than the other way around."
—Brian Desilets, Claret Consulting, "Are Availability Payments Socialist?" Claret Consulting mass email, March 14, 2013

"The biggest of the big lies about Amtrak is that the NEC [Northeast Corridor] is 'profitable.' Amtrak claims this only because they exclude ALL of their infrastructure, heavy equipment maintenance, overhead, and similar costs (like a bankrupt airline claiming it is 'profitable' so long as it doesn't have to count its 'capital' costs like landing fees, gate rentals, aircraft acquisition, heavy maintenance, or headquarters costs). In the private sector, if you do this it's a crime and you go to jail—ask Bernie Ebbers. At Amtrak, it's called 'marketing.' In fact, if the NEC operation were charged all of its annual infrastructure and related costs as well as the above-the-rail costs that Amtrak acknowledges, the NEC (by GAAP criteria) would lose more than $600 million a year, every year."
—Andrew Selden, United Rail Passenger Alliance, April 10, 2013 (www.jeffersonpolicyjournal.com/?p=3479#comment-50652)

"Why is it that people have not abandoned their automobiles to switch to transit? Commentators often talk of America's 'love affair with the car,' without recognizing a similar attachment to refrigerators, the Internet, and other modern conveniences. The attachment is to convenience and (affordable) products that enhance our lives."
—Wendell Cox, "Transit Policy in an Era of the Shrinking Federal Dollar," Heritage Backgrounder No. 2763, Jan. 31, 2013 (http://report.heritage.org/bg2762)

"Job dispersion is a now a reality in virtually every metropolitan area, with twice as many jobs located 10 miles from city centers as in those centers. Between 1998 and 2006, 95 out of 98 metro areas saw a decrease in the share of jobs within three miles of downtown, according to a Brookings report. The outermost parts of those metro areas saw employment increase by 17 percent, compared to a gain of less than 1 percent in the urban core. Overall, the report found, only 21 percent of employees in the top 98 metros in America live within three miles of the center of their city. . . . While companies in walking distance of big-city reporters make news all out of proportion to their importance, virtually all the major tech concentrations in the country—including Silicon Valley—are suburban. San Jose is a postwar suburban core municipality, having experienced the vast bulk of its growth since 1940. Virtually all the nation's top tech companies—Apple, Google, Hewlett-Packard, Intel, Oracle, and even Facebook—are located in suburban settings 45 minutes or more from San Francisco."
—Joel Kotkin, "The Triumph of Suburbia," New Geography, April 29, 2013 (www.newgeography.com/content/003667-the-triumph-suburbia)

"Bad climate policies, such as backing renewable energy with no thought for the cost, or insisting on biofuels despite the damage they do, are bad whatever the climate's sensitivity to greenhouse gases. Good policies—strategies for adapting to higher sea levels and changing weather patterns, investment in agricultural resilience, research into fossil-fuel-free ways of generating and storing energy—are wise precautions even in a world where sensitivity is low. So is putting a price on carbon and ensuring that, slowly but surely, it gets ratcheted up for decades to come."
—Editorial, "Apocalypse Perhaps a Little Later," The Economist, March 30, 2013

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


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