Zoning restrictions on housing supply catch the White House’s eye

In case you were wondering, the White House grounds are technically unzoned - as is a lot of federal property in DC. Screenshot from the DC online zoning map.

In case you were wondering, the White House grounds are technically unzoned – as is a lot of federal property in DC. Screenshot from the DC online zoning map.

Zoning has been on the national stage in the past few weeks, starting with this paper (just hovering on a link to whitehouse.gov is good to see) based on remarks delivered to the Urban Institute on Nov 20 from Jason Furman, chair of the White House Council of Economic Advisors:

In today’s remarks, I will focus on how excessive or unnecessary land use or zoning regulations have consequences that go beyond the housing market to impede mobility and thus contribute to rising inequality and declining productivity growth.

For more in-depth commentary, I’d recommend the following:

  • Joe Cortright at City Observatory: “these observations show the pervasive and powerful effects of what we’ve called the nation’s shortage of cities.”
  • Matt Yglesias at Vox: “for younger people, for renters, and for the overall cause of social and geographical mobility it’s a disaster.”
  • Gillian White at the Atlantic: Rent seeking “often means that changing zoning laws or other supply-constricting regulations is in the hands of those who stand to collect on those economic rents in the first place, which can make change slow and difficult, if it happens at all.”
  • Paul Krugman at the New York Times: “Rising demand for urban living by the elite could be met largely by increasing supply. There’s still room to build, even in New York, especially upward.”

I had two immediate reactions to the paper: first, it’s great to see the White House recognize the importance of issues like this. Getting an issue like this on the national stage, linking it to a salient national political issue such as inequality is important. Getting someone like Paul Krugman to devote his NYT column to the subject is great to see (note that Paul Krugman is no stranger to urban economics: he won the Nobel Prize for his work on economic geography and agglomeration economies).

Second, given the scale and importance of the issue, the list of administration actions is underwhelming. Affirmatively working towards fair housing, offering incentives to localities to loosen zoning, and HUD’s program to lessen lending risk for multifamily housing development are all good ideas, but seem small in comparison to the scale of the issue.

It’s hard to say if there’s more that could be done administratively at the Federal level. In the absence of additional legislation, it’s hard to make the case for federal interference in an ostensibly local issue like zoning (no matter the national interest). Perhaps there are additional tools available that build on new rulemaking enabled by existing fair housing laws (perhaps involving litigation in the courts as well) in the same vein as New Jersey’s Mount Laurel doctrine.

Even with the national scope of housing supply constraints and their clear impact on the national economy, Pete Saunders at Corner Side Yard is quick to point out that housing demand is far more varied across the US. This presents yet another issue in raising housing supply as a national issue – it’s not a uniformly national issue. Relaxing the restrictions on housing supply only matter in the face of demand pressure – and many markets in the US don’t have the kind of demand to drive up housing costs in the first place.

USDOT rejects NTSB recommendation to shift WMATA to FRA oversight

US DOT Logo - Image from Wikipedia.

US DOT Logo – Image from Wikipedia.

Well, that was fast. Secretary of Transportation Anthony Foxx rejected the NTSB’s urgent recommendation to shift safety oversight for WMATA to the Federal Railroad Administration. From the Washington Post:

The Transportation Department “does not believe that the NTSB recommendation is either the wisest or fastest way to bring about the necessary safety improvements” at Metro, said Foxx spokeswoman Suzanne Emmerling.

“While we have made similar findings of oversight and management deficiency in recent inspections and audits, we disagree with their recommendation,” she said in an e-mail.

Rather than transfer Metro oversight from one agency to another within the Transportation Department, Foxx has a different plan, Emmerling said. She offered no details of the plan but said, “We are examining all options to make [Metro] safer immediately, and will release a plan very soon.”

Part of the reasoning from Foxx includes the very different characteristics of mainline railroads and rapid transit systems, as well as the different regulatory systems require a different approach. Foxx and the USDOT do not disagree about the first of the NTSB’s conclusions, that WMATA’s safety oversight is inadequate, but he does disagree on the second element: the FRA. The Washington Post cites this statement from the Federal Transit Administration:

“We take all recommendations of the NTSB seriously, but in this case, the NTSB is recommending shifting safety oversight from one agency to another,” the FTA said in a statement. “And these agencies have different authorities and areas of expertise. The NTSB is not wrong to assert that urgent action is needed; we just believe that there is an even more effective and faster way to achieve the safety goals we all share.”

Stay tuned.

UPDATE – Oct 10:

In lieu of the NTSB’s recommendation, Secretary Foxx informed the NTSB that the FTA will take over WMATA Safety Oversight from the Tri-State Oversight Committee effective immediately. This is an unprecedented step for the FTA. You can read Secretary Foxx’s letter here. Part of Foxx’s rationale includes the recognition that “WMATA does not have an understanding or familiarity with FRA regulations,” an implict admission of the wide gulf between regulations appropriate for rapid transit vs. those on the books for mainline railroads.

According to the letter, the FTA will retain direct safety oversight until WMATA’s jurisdictions can create an effective State Safety Oversight agency. This is not a new recommendation; the creation of a new, independent safety oversight agency was proposed following the 2009 Fort Totten crash and mandated by Federal law in 2013. WMATA’s contributing jurisdictions have been slow to act in creating, empowering, and funding this agency, dubbed the Metro Safety Commission.

WMATA, the NTSB, and the FRA: or, what do you mean the Metro doesn’t count as a railroad?

FRA Type II Safety Glass in a WMATA rail car. Photo from nevermindtheend.

FRA Type II Safety Glass in a WMATA rail car. Photo from nevermindtheend.

Last week, the National Transportation Safety Board issued an urgent recommendation to the US Department of Transportation and the US Congress to re-classify WMATA to be regulated under the authority of the Federal Railroad Administration. The NTSB usually waits until their full report on an incident is complete to make recommendations. If the preliminary conclusions from a report warrant immediate action, they will issue an urgent recommendation – this recommendation falls into the urgent category. The NTSB’s reports are thorough, but usually not released quickly (the full report from WMATA’s June 2009 Fort Totten crash was approved in July 2010). There will likely be more recommendations in the NTSB’s final report.

Looking at the NTSB’s letter, there are two distinct conclusions:

  1. WMATA’s existing safety oversight is inadequate.
  2. The Federal Railroad Administration has the appropriate regulatory tools to address these inadequacies, and therefore should have safety oversight over WMATA.

The letter documents the numerous occassions the NTSB has asked for strengthened safety oversight: “In general, the NTSB investigations of WMATA found that although safety program plans were in place, they were not effectively implemented and overseen.”

The curious part is the specificity of the second recommendation. Instead of suggesting that the existing safety oversight authorities through the Federal Transit Administration be strengthened to include the kinds of tools available to the FRA, the NTSB instead recommended a dramatic shift. The NTSB’s previous investigations specifically recommended that Congress act to increase safety oversight for the Federal Transit Administration:

In the NTSB’s investigation of the June 22, 2009, WMATA accident near the Fort Totten station, we called for increased regulatory oversight of rail transit properties and recommended that the DOT seek the authority to provide safety oversight of rail fixed guideway transportation systems, including the ability to promulgate and enforce safety regulations and minimum requirements governing operations, track and equipment, and signal train control systems.

Unsatisfied with both the pace of progress as well as the likelihood of resolving this conundrum soon, the NTSB is recommending shifting WMATA to the FRA’s jurisdiction as the most expedient option. Neither the legislation to expand safety oversight under the FTA, nor the region’s plans to replace WMATA’s existing safety oversight committee with the Metro Safety Commission would rise to include the regulatory tools available to the FRA:

Based on testimony from representatives of the TOC and the FTA during the NTSB’s June 23, 2015, investigative hearing on the January 12, 2015, WMATA Metrorail accident, the NTSB further concludes that neither the regulatory changes the FTA can make as a result of MAP-21 nor the proposed creation of a Metro Safety Commission will likely resolve the deficiencies identified in safety oversight of WMATA.

The only rapid transit system under FRA regulation is the PATH system connecting New York and New Jersey. Only four rail rapid transit systems that cross state lines – WMATA, the PATCO Speedline between Philadelphia and New Jersey, Metrolink in St. Louis, and PATH.

The NTSB suggests that PATH’s regulation under the FRA is due to the cross-jurisdictional nature of the service, but this doesn’t seem correct. In the NTSB’s accompanying blog post for the letter, they make the case that other transit agencies are regulated under the FRA (even though the use of the plural here is incorrect – there is only PATH):

There is precedent for the FRA oversight of WMATA that we have recommended because there are some transit agencies in this country that are currently under FRA safety oversight. For example, the FRA provides direct oversight over the New York and New Jersey PATH system instead of using state safety oversight agencies.

PATH’s regulatory jurisdiction is an anachronism. Because PATH previously shared a short section of track with the Pennsylvania Railroad, it was also considered a railroad. And while it remains under FRA jurisdiction, it only operates as a rapid transit system under several waivers that grandfather the system from FRA regulations aimed at mainline freight and passenger railroads.

Even with waivers, the impact of this unique set of regulations is substantial:

Before each run, PATH workers must test a train’s air brakes, signals and acceleration, Mike Marino, PATH’s deputy director, said in a telephone interview. When a train gets to its terminus, workers repeat the test.

In addition, every 90 days all of PATH’s rail cars undergo a three-day inspection at a facility in Harrison, New Jersey. Brakes, lights, communications, heating and air conditioning, signals and odometers are all checked, Marino said.

Many of these FRA regulations carry over from past generations of railroading. They’re extraordinarily detrimental to the progress of high-speed rail and passenger rail. This memo gives some regulatory background to the FRA’s role. It specifically discusses light rail transit operations and the potential for shared use of mainline rail tracks (as PATH used to do), and by doing so highlights exactly how many FRA regulations make little sense (by mutual agreement between the FRA and transit operators) for rail transit operations. Numerous waivers of these regulatory requirements would be required from the start.

Like PATH, WMATA is not a mainline railroad. It’s not hard to understand why the NTSB would think that the FRA’s authority to inspect, fine, and shut down non-compliant operators is necessary; but those authorities also come with a rulebook that won’t make much sense to apply to WMATA.

Ultimately, the division between what is under the FRA’s jurisdiction is almost entirely arbitrary:

FRA will presume that an operation is a commuter railroad if there is a statutory determination that Congress considers a particular service to be commuter rail. For example, in the Northeast Rail Service Act of 1981, (3), Congress listed specific commuter authorities. If that 45 U.S.C. 1104 presumption does not apply, and the operation does not meet the description of a system that is presumptively urban rapid transit (see below), FRA will determine whether a system is commuter or urban rapid transit by analyzing all of the system’s pertinent facts. FRA is likely to consider an operation to be a commuter railroad if:

  • The system serves an urban area, its suburbs, and more distant outlying communities in the greater metropolitan area,
  • The system’s primary function is moving passengers back and forth between their places of employment in the city and their homes within the greater metropolitan area, and moving passengers from station to station within the immediate urban area is, at most, an incidental function, and
  • The vast bulk of the system’s trains are operated in the morning and evening peak periods with few trains at other hours.

Examples of commuter railroads include Metra and the Northern Indiana Commuter Transportation District in the Chicago area; Virginia Railway Express and MARC in the Washington area; and Metro-North, the Long Island Railroad, New Jersey Transit, and the Port Authority Trans Hudson (PATH) in the New York area.

Despite PATH’s history, it’s regulated by the FRA because Congress said so. The three specific criteria listed don’t particularly apply to PATH, or WMATA, or any other rapid transit system (nor some mainline rail systems that offer a high level of all-day passenger service).

A few things to note:

The NTSB can only make recommendations. The NTSB is not a regulatory agency, they are charged only with investigating safety-related transportation incidents. Their independence is by design – any regulatory agency must consider both costs and benefits to a regulation, while the NTSB’s purpose is to conduct independent investigations and offer their recommendations solely on the basis of improving safety.

This particular recommendation is for the USDOT to seek reclassification of WMATA as a ‘commuter railroad’ via congressional action. Perhaps in considering any action, Congress might consider addressing the other shortcomings in transit safety oversight.

Despite the FRA’s impact on PATH operations, it’s worth considering if additional safety inspections might help improve WMATA’s operational discipline. The FTA’s Safety Management Inspection report (the first such safety report for the FTA, under the new safety role authorized by Congress as a part of MAP-21 but deemed insufficient by the NTSB) identified several shortcomings in WMATA’s procedures and practices. Stronger safety oversight might help address those problems; the question is if the FRA is the right regulatory body and if their rulebook is the right one to use.

Is there a Chipotle near my Red Line station?

Is there a Chipotle within a half-mile walk of my WMATA Red Line station?

In case you were ever curious about transit oriented burrito chains in the DC area:

chipotle red line

I’m not sure why I looked into this (besides having a burrito for lunch), but it seemed like many Red Line stations have Chipotles nearby. Indeed, 15 of the 27 Red Line stations have a Chipotle within a 0.5 mile walk (with #16 coming soon – in Brookland). Distances were determined by Google Maps walking directions with some minor adjustments.

As of June 30, 2015, there are 1,878 Chipotle restaurants in the world; 97 of those locations opened in 2015. Anywhere on the Red Line, you’re never more than three stops away from a walkable burrito chain. 14 of those are walkable to a Red Line station. A few Chipotle locations are the closest outlet for multiple metro stations (the closest location to Van Ness is the Cleveland Park Chipotle); at least one location (the 7th and G location) is the closest Chipotle to three different Metro stations (Metro Center, Gallery Place, Judiciary Square).

The award for the closest Chipotle to a Metro station entrance goes to Union Station, located just a few feet from the top of the escalators. Union Station also wins for having two Chipotle locations – with a recently-opened location in the station’s lower level food court.

 

Seeking clarity on WMATA transit governance – operations vs regional funding and coordination

WMATA logo on a 7000-series seat. Creative Commons image from Kurt Raschke.

WMATA logo on a 7000-series seat. Creative Commons image from Kurt Raschke.

It’s not easy to do two things at once. Particularly when you have two very different tasks, one might get more attention than the other – or the goals for each might blur together in your mind.

Keeping these tasks distinct is a challenge. Jarrett Walker often speaks about the distinction between transit systems that focus on providing coverage vs. maximizing ridership, and the importance of thinking clearly about the two goals.

The current public dispute among WMATA’s Board of Directors about the preferred qualifications for a new general manager exposes a similar rift – with some members preferring to focus on a seasoned public transit executive (an operator), and others looking for a business-oriented financial turnaround manager.

As a transit agency, WMATA has to fill several disparate roles (thus the search for a single leader with super-human capabilities):

  • Operate regional and local bus transit, as well as the regional Metrorail system
  • Coordinate regional transit planning
  • Provide a regional transit funding mechanism

The latter two tasks (planning and funding) can be somewhat grouped together. WMATA’s Board of Directors is therefore charged with two rather disparate tasks: to oversee the day-to-day management and operations of a large regional rail and bus system; and to coordinate and fund that system across three state-level jurisdictions.

These disparate roles present plenty of challenges for WMATA’s leadership – just look at this list of tasks facing WMATA’s future GM, ranging from safely operating the system to uniting the region. Piece of cake – anybody can do that! Super heroes need not apply.

Absent any regional government, the WMATA Board has no choice but to act as a proxy for a regional legislature. While state-level governments might be anachronisms, they’re also not going to disappear anytime soon. Twitter-based WMATA reformers will call for ‘blowing up the compact’ and replacing it with… something. Aside from the Federal government, an inter-state compact is the only form of cross-border regionalism we have available to us. Others call for direct election of Metro board members. It’s an intriguing idea – BART’s board members are elected – but BART only operates a regional rail system. There’s only one elected regional government in the US, and it is wholly contained within a single state.

The medium-term fiscal outlook for WMATA shows an unsustainable trend of rising costs and stagnant ridership and revenues. These trends have stressed the agency’s business model, which requires member jurisdictions to pitch in to cover the annual operating subsidies.

However, the most recent breakdowns in WMATA’s reliability demand greater oversight on the agency’s primary task: safe and efficient operation of the regional transit system.

Instead of arguing about the preferred qualifications for a general manager, this dispute should open the door for a broader conversation about the system’s governance and how it can best tackle the different tasks as a transit operator and as a regional governing body.

During WMATA’s last crisis and most recent round of governance reform proposals following the 2009 Red Line crash, David Alpert hit on the challenges of the different roles for the WMATA Board. Given the different needs, David went so far as to suggest two separate boards for WMATA. Too many reform proposals seemed to talk past the different tasks required of the agency’s leadership – operational oversight and regional coordination.

The idea isn’t unprecedented. For example, in Paris, the Syndicat des transports d’Île-de-France (STIF) is the regional entity that coordinates planning, funding, and operation of transit in the region, and oversees the performance of the various transit operators it contracts with.

STIF negotiates with operators, holding them to performance-based contracts. In Paris, there are two primary rail operators – RATP, operating the Paris Metro, and SNCF, operating most of the RER and suburban trains. STIF also contracts with various bus operators.

The European Union issued mandates for how transportation companies must organize themselves, but the arm’s-length contracting between the regional planning body/coordinator and the local operators pre-dates these EU models. While these mandates for privatization and separation of operations from infrastructure are intertwined with this governance model, they remain a separate issue.

The idea of keeping operations and regional funding/planning at arm’s length seems to help sharpen the focus on accountability. It remains to be seen if the competitive tendering of contracts between transport associations and operators results in meaningful competition – after all, these kinds of systems are natural monopolies. But these contracts do indeed codify the relationships between the regional governance system and the operator, opening the door for maintaining accountability.

In these examples, the governance structure helps provide clarity about the roles and responsibilities for each participant in the system.

Rising housing prices impact all incomes

In cities with strong real estate markets, affordable housing is a big problem. And it’s not just a problem for those with lower incomes, it’s a problem for everyone. The problems aren’t even limited to just their own metro areas.

Note: in this case, the term “affordable housing” refers to the plain meaning of the word: housing that is affordable (not Affordable Housing, in reference to a set of programs designed to subsidize the cost of housing – see this from Dan Keshet on the difference, as well as a better way to think about it: abundant housing).

Expensive housing is squeezing people at all income levels

The DC Fiscal Policy Institute documented the disappearance of DC’s market-rate affordable apartments in a report: Going, Going, Gone. And while the focuses on the dramatic decline in apartments available for an inflation-adjusted $800/month between 2002 and 2013, rents are up for all incomes in that same time period – and they’ve increased faster than income growth.

DCFPI_rents1

Rising rents for those with higher incomes presents less of a challenge, since these households can afford it. But simply because higher income households can afford higher rents doesn’t they want to pay more than they have to.

It’s not just a phenomenon in DC, but in lots of strong real estate markets. Richard Florida summarizes some research from Todd Sinai at the University of Pennsylvania, noting that rents in many cities have been outpacing income gains for more than a decade. Like DC, rents are rising and requiring a larger portion of income for a wide range of income brackets:

pennrentstrends

The upward trend for each of these lines represents a larger and larger portion of household incomes spent on rent in cities across the US. Sinai suggests that any policy response would require a large increase in the supply of market-rate housing (as politically challenging as increasing housing density can be). Because even a large increase in housing units would merely moderate prices, Sinai recommends a targeted program of housing subsidies, as well.

Even with these potential remedies in mind, Sinai isn’t optimistic: “It is hard to conclude that there is an affordability cliff from whence we can step back from the brink.  Rather, the threat to housing affordability in this country is much more fundamental, and more economically pervasive.”

The higher rents are hurting the economy

It’s not just an inconvenience to pay a lot to rent an apartment, even if you can afford it. As Sinai argues, this added rental cost is “economically pervasive.” Put another way, the failure to add housing supply in strong markets is a huge drag on the economy. Kriston Capps summarizes research by Enrico Moretti and Chang-Tai Hsieh:

Hsieh and Moretti came up with a way to measure what local output and national growth would look like if wage dispersion were equalized. They proposed a model that lowered the regulatory housing constraints in New York, San Francisco, and San Jose to the level of a median city. If workers were able to cross over from low-wage cities to high-wage cities—that is, if New York, San Francisco, and San Jose were to lower barriers to new housing and let them in—then GDP could rise by 9.5 percent.

Easier said than done, but it does show the magnitude of the problem. More people would move to these productive metropolitan areas if the housing prices were more affordable.

Affordable Housing vs. affordable housing

Part of the reason to illustrate rising housing burdens for all incomes is to help define what “affordable housing” means. The plain English meaning is simply housing that is affordable. Relative to a household’s income, how much can they afford to easily pay for rent or a mortgage?

Then there is Affordable Housing (capitalized here), referring to a whole host of programs that subsidize housing for lower-income households. Labeling these subsidies under the umbrella of Affordable Housing is an effective bit of rhetoric to earn support for these programs (who would possibly be against affordable housing?) in light of the sullied reputation of public housing.

You can see the confusion in some of DC’s recent debates about the impacts of rowhouse pop-up expansions on housing prices. The DC Zoning Commission recently tightened rules on development in these zones, with one commissioner unconvinced that additional housing units would create more affordability:

But Anthony Hood, the chair of the commission, pushed for the restrictions, saying that he didn’t believe that pop-ups and condo conversions helped bring down housing prices.

“This connection to affordable housing? I’m sorry, I haven’t seen it yet. I’m still waiting for it. It’s not a reality.”

If Hood is thinking of capital-A Affordable Housing, then he’s correct. But that’s not the only meaning of the term; it’s not the only measure of affordability. And while additional market-rate housing units might not directly help lower-income households, they can make a big difference for those middle-income households feeling a squeeze.

Flipping Houses, Zoning Codes, and Building Codes

DC row houses - the first CC image hit for "dc house flips" on Flickr. Photo from Elvert Barnes.

DC row houses – the first CC image hit for “dc house flips” on Flickr. Photo from Elvert Barnes.

Earlier in May, local public radio station WAMU aired a lengthy three-part report on the collateral damage involved in house flipping in DC. Martin Austermuhle’s series offers a window into the nightmare for buyers of newly renovated homes – often converted from single family rowhomes into multi-unit buildings – who soon learn that their dream home is actually a nightmare of shoddy work and potentially illegal construction.

The three-part series focuses on buyers, developers, and the city’s regulatory response.

As horrifying as these stories are, Austermuhle correctly focuses on the challenges of enforcing the building code as the root cause of these problems, rather than the zoning code.

Small-scale development is an important tool in strong markets (like DC) to respond to demand for new housing. So many opportunities for small-scale urban development have already been regulated out of existence in American cities. The people buying these flips aren’t suckers taken by con men; they represent the market for additional housing in a city like DC.

Shoddy flips shouldn’t put those remaining opportunities for small-scale development in DC at risk, because the problem here is with building code enforcement and inspection, not with zoning. But whenever there is outrage, there is a strong urge for the city to do something, even if it doesn’t address the stated problem.

The zoning code is not the building code

Tales of illegal construction in flipped houses might stoke the fears of development opponents, but the problems described in the series involve errors in construction.

Too often, cities attempt to use the zoning code as a catch-all regulatory structure, encompassing economic development goals, social policy, etc. Part of this is out of convenience (I did have at least one proponent express support to me for DC’s recent zoning code changes in rowhouse neighborhoods due to the challenges in enforcing the building code – both for approvals and for construction inspections). I suspect part is also a confusion of the issues, thinking that because zoning deals with the city therefore zoning is an appropriate place for regulations about the city.

This series helps clarify the differences; Austermuhle correctly gives zoning only a cameo appearance.

Pop up limits

Even with the focus on building code enforcement, that doesn’t stop public calls to address development issues via zoning restrictions. However, it’s not clear that zoning would stop the flips. House flips are hardly limited to structures with the opportunity to increase the total number of units.

Enforcement matters:  One example of shoddy construction also includes blatant violations of the zoning code. What good will modestly tighter zoning regulations do without basic enforcement? Perhaps zoning isn’t the root problem; enforcement is.

Building codes matter

While zoning codes often get the attention, this doesn’t mean building codes aren’t important factors in determining the shape of the city. Houston famously (or infamously) lacks standard, use-based zoning codes. However, Houston’s building code and other regulations still mandate many of the aspects commonly found in zoning codes: minimum on-site parking requirements, minimum lot sizes, etc. It’s not a regulation-free environment.

Even when the building code sticks to more traditional subject matter, there can still be a tremendous impact on the financial feasibility of certain types of construction. In February, Let’s Go LA featured a guest post from LA Architect Tom Steidl about local differences in LA’s high rise building codes that make Vancouver-style towers less financially feasible:

Towers in Los Angeles tend to have significantly larger floor plates than those in Vancouver and US cities that have embraced high-rise design. The primary reason for this isn’t differences in land use or zoning codes. It’s mainly building code and fire department regulations that require additional floor area be added to the core of the tower. In addition to making our towers more bulky, this added floor area increases construction cost and reduces affordability.

One of LA’s quirks (now removed from the code) was a fire department mandate for rooftop helipads. But, as Steidl notes, each requirement that reduces the efficiency of the floor plate adds to the total cost. High rises are already expensive to build and will only pencil out under certain circumstances. Adding costs on the margins only makes the developer’s pro forma more challenging.

The building codes matter. But, LA’s quirky code provides a cautionary tale on policy relying on high rises alone to absorb housing growth. As Payton Chung has written, achieving mass market affordable housing via expensive construction types is a challenge – particularly in DC.

A comprehensive approach to affordable housing in strong markets like DC and LA can’t ignore the key role of small-scale, low-rise development in providing affordably built housing. This means projects of the type taken on by house flippers; smaller scale projects that increase a single lot into 2-4 units.

Poor construction risks eroding confidence in small-scale construction that is vital to meeting housing demand. Likewise, a strong, predictable, and nimble team of inspectors needs to effectively enforce DC’s building codes to manage this period of change.

Lawsuits: the American Way.

Maybe they will help. Writing about some of the same flippers as Austermuhle (and working in parallel), Ian Shapira at the Washington Post notes that some of the same flippers have been sued by DC’s newly elected Attorney General. A more robust consumer protection watchdog can’t hurt, and could even help jump-start a more robust system of code inspections.

Tactical Urbanism – useful procedural hack, or something more?

Cover of Mike Lydon and Anthony Garcia's new book, Tactical Urbanism.

Cover of Mike Lydon and Anthony Garcia’s new book, Tactical Urbanism.

Tactical Urbanism is all the rage these days. There’s an undeniable appeal to the idea of getting the community together to do something rather than drafting another plan. But is the appeal just about the results of these projects, or does Tactical Urbanism offer path to improve how we plan and build our cities?

Earlier in April, the Coalition for Smarter Growth in DC teamed up with Island Press to host a book talk from Mike Lydon at Smith Public Trust in Brookland. I’ve known Mike for years; we attended graduate school together at the University of Michigan.

Early in Mike’s career, he worked on a large-scale planning effort to re-write Miami’s zoning code. While a tremendously important project, Mike felt frustrated by the limitations of the required public process – evening meetings with a small handful of citizens, probably not representative of the city’s demographics. Add to that the challenges of talking about abstract regulations like zoning, and it’s not hard to see a good plan derailed by fear, uncertainty, and doubt. That kind of frustration led Mike to look for a better process.

Tactical Urbanism isn’t just about doing things quick and dirty. The emphasis is on using tactics as a part of a larger strategy (the book’s subtitle: short-term action for long-term change), opposed to art or beautification – short term actions that often lack a longer-term strategy. This process emphasizes working fast to prototype something, measure it, and moving on to the next idea if it’s not successful.

The textbook example of this process comes from New York. The NYC DOT’s pedestrianization of Times Square started as a pilot project with some traffic cones, paint, lawn chairs, and the political will to try something different. After proving successful, expanded sidewalks became permanent. Had the city tried to push the full design from the start, layers of process (each offering the potential to delay) would’ve likely derailed the project.

As transformative as New York’s reallocation of public space has been, it’s worth noting that those projects haven’t required a large physical change. The buildings are all the same; there aren’t any new subway lines; the street rights of way are the same as they were 100 years ago. Instead, these projects represent a change in behavior, a different way to use the same streets.

Likewise, as the city implemented these pilot programs, there’s been plenty of bluster but no real disagreement about the city’s overall strategy: streets that are safe for all users. One of the lessons from NYC DOT’s programs is to emphasize the link between the tactics (pilot programs) and the strategy (safety). It helps to have a strategic goal that is unassailable – After all, who would be against safety? Yet, the existing procedural requirements aren’t advancing a strategy so much as they protect the status quo.

There’s a difference between incrementalism and experimentation, and while incrementalism is important to Tactical Urbanism, it has limits. Larger capital investments require more planning. DC’s streetcar project is struggling to get on its feet due to a history of ad-hoc decisions regarding implementation. For a large, capital-intensive project, this is not the way to go.

However, not all transportation projects are large, expensive pieces of infrastructure. Detailed planning studies and documentation of environmental impacts might be worthwhile for a new highway or a large infrastructure project, but can we really justify that level of analysis (nevermind the what counts as an ‘impact’) for changing the allocation of road space by installing bike lanes? Part of the appeal of Tactical Urbanism stems from this mis-match of onerous processes required for minor projects.

Mike would be the first to talk about the limits of Tactical Urbanism. One is a limit of scope: housing policy? Inequality? Addressing those issues is more complicated than improving pedestrian safety at a few intersections. The scope of the challenge is too large, too complex.

Likewise, Tactical Urbanism’s best examples are in re-allocating space to better match human behavior; where you can physically test the idea, show people how it can work. Often, zoning reforms suffocate under the same kind of lengthy public process with multiple veto points that hamstring safe streets projects. Can you envision a tactical urbanism approach to zoning reform? How can you apply the same lessons about pilot projects, testing concepts, and earning citizen buy-in for an entirely abstract concept like zoning?

Contrast the examples of incremental development in Mexico (highlighted here by Charlie Gardner) compared to the rigid, rule-based urbanism in the US. Our political processes and legal frameworks don’t allow for much incremental change to buildings or to the physical fabric of the city. Allowing that kind of incremental change requires changing laws and regulations; changing laws and regulations requires a legal and regulatory process. None of these potential changes has an obvious analogue to the current applications of Tactical Urbanism.

Tactical urbanism can circumvent rules to achieve a physical change; but can it be used to create a legal change? If not, what lessons can we learn about improving public process for other kinds of changes? Can these lessons be applied to controversial projects?

Is an issue like zoning reform controversial because of our archaic processes (e.g the tactics), or is there a more fundamental disagreement about the overall strategy for our cities? If the latter is true, can Tactical Urbanism provide any useful lessons for resolving disputes about strategic urbanism?

Dispatch from the battle lines over Globalization: US Airlines take on the Middle East Carriers

Dubai International Airport. CC image from Raihan S.R. Bakhsh

Dubai International Airport. CC image from Raihan S.R. Bakhsh

There’s a fight brewing amongst big international airlines. The old guys are complaining that the new kids aren’t playing by the same rules; the new kids argue that the old guys need to step up their game. The dispute represents a fascinating window into a very public battle over globalization. What are the rules, and who gets to make them?

A coalition of the three major American airlines (American/US Airways, United, and Delta) combined with many of the unions that represent their employees are putting on a full-court press (complete with ads in DC’s Metro), arguing that the Big Three carriers in the Middle East (Emirates, Qatar, and Etihad – often abbreviated as the ME3) are undermining the principles of free and fair competition with subsidies that distort the market. The Gulf air carriers are pushing back against the accusations, arguing they provide a superior product at a lower cost. Vox has a brief article that summarizes the arguments for both sides.

The US carriers outline billions in subsidies to these carriers. They include everything from subsidized development of the region’s massive airports to interest-free loans and infusions of capital from the ruling families – who also own the airlines themselves.  The alleged subsidies support Qatar and Etihad to a greater degree than Emirates (the paper alleges that Qatar and Etihad would not be viable commercial businesses without their subsidies; not so for Emirates). You can find the white paper and presentation here.

ME3subsidies

Summary of the subsidies alleged by the US carriers. Image from the Americans for Fair Skies presentation.

Central to the debate are the United States’ Open Skies treaties with Qatar and the United Arab Emirates. Open Skies treaties deregulate the routes and destinations for international air travel between the two signatories. The US State Department prioritized signing Open Skies agreements since signing the first such agreement between the US and the Netherlands in 1992 (see the full list of agreements here, as well as the text of a sample agreement).

There is an inherent asymmetry in any Open Skies agreement between the United States and Qatar or the UAE; due to the small size of those countries, the agreements only add two or three destinations worth serving for US airlines (indeed, there are only two scheduled flights to Qatar or the UAE from US-based carriers – Delta flies ATL-DXB and United flies IAD-DXB). Gulf airlines, however, earn rights to fly to a wide array of American cities.

Part of the success of the Gulf carriers is due to the geographic advantage of the Middle East hubs. Dubai has long served as a stopover point for refueling along the Kangaroo Route. Now, carriers like Emirates use Dubai as centrally located hub to efficiently connect air traffic between Europe, Africa, India, and Southeast Asia.

However, there’s more to the rise of the Gulf carriers than advantageous geography. For these Gulf states (often, effectively, city-states), focusing on aviation is a deliberate economic development strategy. When you’re talking about state-owned businesses, how do you differentiate between the viability of the various airlines as businesses from the state’s explicit policy of aviation-focused economic development? In their white paper, the US carriers make the case that Open Skies agreements assumed that an open market would provide a superior business model to state-owned airlines (and there is a long history around the world of poorly run state-owned airlines) and that competition would bring this truth to light. However, with the rise of State Capitalism, the US carriers argue, it’s not clear that assumption can be trusted.

It’s the next step in the idea of developing around the aerotropolis. Instead of building your economy around an airport, why not build it around an airline? Dubai’s success in developing their middle-eastern metropolis around a global aviation hub inspired Qatar and Abu Dhabi to do the same – a strategy that not only required the airport, but the airline to feed it.

The Gulf carriers aren’t just looking to their Middle East hub airports, either. Emirates took advantage of struggling Alitalia to earn a fifth-freedom route from Milan to JFK. Emirates makes no secret of their ambitions to offer service around the globe via some key fifth-freedom routes:

President Tim Clark has revealed the first details of what looks like the next step in Emirates’ march to become a truly global powerhouse. On the sidelines of last week’s International Air Transport Association (IATA) annual general meeting in Cape Town, the airline outlined plans to set up a major transpacific operation. Its aircraft would be flying through intermediate points in Asia to destinations in North America. What is making the threat even more serious for Asian and U.S. airlines is that Emirates has another 67 Airbus A380s on firm order, which—like its large incoming fleet of Boeing 777-300ERs—has the range capability to fly from many points in Asia to cities far beyond the U.S. West Coast.

Emirates can choose from several geographic points that offer the necessary aeropolitical framework. The United Arab Emirates (UAE) has an open skies agreement with the U.S. “It allows us to take passengers on a fifth-freedom basis from the West Coast and central points in the U.S. to points in Asia,” Clark says. In Asia, there are open skies agreements with Thailand and Singapore. Emirates also has similar rights for some destinations in Japan.

Bold added. This is the root of the entire debate: a battle over the details of a global aeropolitical framework. A battle over the rules.

When it comes to Emirates, their Dubai hub isn’t the concern from the US carriers. The real concern is these aspirations to cover the globe with fifth-freedom traffic. Delta claims that the ME3’s cheap connections in Dubai make it difficult to serve India directly from the US (and presents strong competition for the European joint venture partners if connecting to India in Europe). Flying to US cities from Europe or Asia directly (e.g. the current New York-Milan service, if expanded to other airports) threatens to undermine direct service to Europe; additional fifth-freedom routes across the Pacific could do the same. Brett Snyder notes the concern about hurting the overall network:

If the Middle East carriers skim the international markets with the most traffic, then the US carriers will have to cut back service. When international flights get cut, the whole network becomes vulnerable. The end result is probably less service for smaller and mid-tier cities. It’s just the way the network effect works.

While the American carriers are asking the US Government to revisit these agreements, the Feds must balance other US interests in the region beyond air travel. Qatar and the UAE host a number of US military facilities. The US has a large trade surplus with both nations, partly due to companies like Boeing selling lots of widebody airliners to the Gulf Carriers. American cargo airlines like FedEx take advantage of Open Skies in a similar fashion to the Gulf carriers, facilitating global cargo movement. In other words, it’s not clear the US carriers have a sympathetic ear from the Federal government.

The PR campaign from the US carriers is an attempt to change policy by influencing public opinion, but it will be an uphill climb with the general public. Counter-arguments from the Gulf carriers ask why the American carriers are afraid of competition. US airlines aren’t exactly earning lots of sympathy from the public.

The PR battle is also getting nasty: Qatar Airways’ CEO accuses Delta of flying “crap” planes without a hint of irony: it’s not hard to buy nice, new aircraft when you can fall back on massive capital infusions (as alleged in the white paper) to buy those expensive aircraft. Lufthansa’s CEO, facing a strike from his unionized pilots, joked that he should hire Qatar’s CEO as his union advisor (unions being illegal in Qatar and the UAE). And while customers might like the product and the price point offered by the Gulf carriers, it’s not clear than anyone in the US would be willing to accept the trade-offs that make that product possible.

The white paper notes that the subsidies documented meet the World Trade Organization definition. However, even though both Qatar and the UAE are part of the WTO, aviation isn’t a core part of the WTO’s agreements.

If aviation were a part of the WTO, there would be a specific process to raise and resolve disputes. In other trade areas, the WTO can authorize the use of ‘counterveiling measures’ against subsidies and dumping, such as tariffs or restrictions on trade volume. But here, there aren’t any specific rules governing aviation – hence the PR campaign.

In essence, this is a battle over the rules. If the story of the aerotropolis is the story of globalization, is this a tide that lifts all boats? Or is it a race to the bottom? Competition is good, but what if the basis for that competition is based on the rules governing labor markets in Qatar or the UAE? Will the fight over the rules of the game lead to improvements in working conditions for migrant labor in the middle east? While the US airlines are certainly acting in their own self-interest, is this battle similar to the public scrutiny over Qatar’s labor practices in advance of hosting the 2022 World Cup? Could this battle over the rules not only find room for fair competition, but also leverage an improved quality of life elsewhere in the world?

Or is all of that wishful thinking?