Putting the brakes on TOD enthusiasm

By Ariel

In this month's Atlantic, Chris Leinberger suggests that private developers should fund the development of street car lines because of the higher values that proximity to transit brings.

Over at the Next American City, Yonah Freemark has some pretty scathing criticism of Leinberger's enthusiasm. He writes that "Leinberger’s solution — that developers could benefit by spending their own money to build transit — is problematic. For one, it fails to account for the fact that most land speculators move on to new work once they’ve sold off their projects to home buyers. Who would continue to subsidize the operations costs of the new transit systems once the land has been sold? Is it fair to expect municipal transit operators to take over the servicing of privately developed systems? Second, Leinberger’s argument assumes that developers would be either wealthy enough or powerful enough to assemble the necessary right-of-way for said transit and then build it. Noting Detroit’s recent public-private streetcar deal, he posits that the federal government should be more willing to fund private-initiated public transportation, and it’s true that involvement from Washington would make such investments far more feasible."

Yonah's criticisms are pretty spot on, but they miss even bigger problems that would actually squash any of Leinberger's lovely dreams. When you actually look at the costs of building a light rail line, and you look at the scope of profits, and even the marginal growth in value induced by TOD, you still don't cover the costs of building a light rail line.

Even more importantly? The lead time to build a light rail line is HUGE, and long, probably much longer than the time a developer wants to spend building. Developers want no more than five years of pre-development commitment. Assuming that the costs justified the TOD, which I doubt, the amount of time required to build a light rail, is so long that it’s just not worth it for developers.

Finally, Leinberger who uses the early developers of regional rail and light rail as his model, forgets that they had a few different things going for them that made their 19th century projects a success:

• low labor costs
  
  
• control of LOTS of land. (Now its scattered sites, and even if you could control all the land, the market for people to move into these new neighborhoods would be a HUGE risk that no developer would take on, at least not in a city, maybe for greenfield development, and definitely not in this economy)
  
  
• fair grounds: Lots of these developers had fairgrounds at the end of their lines, transit use was actually much higher on the weekends when people went to the fairs. That won’t work these days with much more competition for our entertainment dollars.
  

This isn't to say that there is not a role for the private sector in TOD, but we can't think we should just abdicate the role of the government in building our cities from the ground up.

I want to ride my bicycle...

By Ariel
Full disclosure, I work for Philadelphia's Mayor's Office of Transportation and Utilities. The following does NOT reflect any official policy of the City and only my own personal analysis.

Last month, the Philadelphia Bikeshare Concept Study was released. The study was commissioned for the City, the Bicycle Coalition of Greater Philadelphia and the William Penn Foundation. On its release it was met with great fanfare, the advocacy group Bikeshare Philadelphia proclaimed “YES to bike share! The study verifies the viability of a Public Use Bicycle Program for the City of Philadelphia.” It is worth it to take a much closer look at this excellently researched study for yourself; not only because the study actually answers a slightly different question than the advocates claim it does, but because viability means something different for institutions than it does for advocates.

The study answers two interrelated questions, is there a market for bikesharing in Philadelphia, and if someone were to build a Bikeshare system, what would it look like? It starts by building a map of where bikesharing could work in Philadelphia based upon the density of people, jobs and retail activity as well as the presence of tourist attractions, parks and transit stops. It is no surprise that the Central Business District (i.e. Center City and parts North and South) and University City constitute this core market.

While this mapping exercise describes what parts of the city would best support bikesharing it does not tell you how big such a program should be. To do that the study reviews three surveys done in Paris, Lyon and Barcelona, big dense cities with significant Bikeshare programs. In each of these cities surveys were conducted that essentially asked, “Without a shared bicycle how would you have completed your trip?” In Lyon 1.4% of the people surveyed would have taken a bus or a subway, while 4.6% of Parisians surveyed gave up transit to use bikeshare (far fewer people gave up their car to use Bikeshare, only .06% surveyed in Lyon and .18% in Barcelona). The study then applied these percentages to kinds of trips people take in Philadelphia within the aforementioned market area. They found that within the core market area, anywhere from 5,900 to 18,200 people might ride Bikeshare on any given day.

This means that for Philadelphia to build a Bikeshare system it would need to have 50 to 160 bike stations with anywhere from 770 to 2,370 bicycles, costing anywhere from $2 to $6 million to set up (the final recommendation is for a $4.4 million dollar initial program that would deploy 1,750 bicycles in only the initial phase).

The issue of money is a big one. Advocates point to the success of the Parisian system, suggesting that bikesharing systems must be built into street furniture contracts with the advertising companies that build bus shelters, etc. But they miss a very important fact: J.C. Decaux only offered to build a Bikeshare system so as to win the contract and Paris must now pay $1 million a year to subsidize the program. With ad revenues as an unpredictable source of funding, and with the city scraping every penny, bikesharing looks less and less attractive from a municipal standpoint. While in Barcelona they pay for bikesharing through a parking fee and looking at the Parking Authority as a “home” for a bikesharing system may be initially attractive, there are serious ramifications for it. The PPA contributes money not just to the City but the School District. Moreover, raising the cost of parking in the City is not an attractive option, just look at the pushback over the soda tax.

The study also notes other issues that must be addressed for a bikeshare program to work in Philadelphia. The City would of course need to “upgrade… the bike-lane/path network throughout the core area to provide safe circulation options for both expert and novice riders. [The City would also need to provide] aggressive levels of education and enforcement to minimize conflict among bikes, cars, and pedestrians on the city’s constrained streets and sidewalks.” It is here where a difference in perspective, between that of the advocate and that of a municipality further diverge.

So far all the easy bike lanes in Philadelphia have been set, more bike lanes, which would make it easier and more attractive for people to ride in Philadelphia, require taking away parking. If anything that would make drivers angrier at bicyclists, and we don’t need more of that. The number of people who park is far larger than those who bike, walk or take transit. And they vote.

In other words, the implementation issue is not simply a financial one, it is a political one. Are we as the City willing to make the trade-offs necessary, and even some of the sacrifices necessary to make bikesharing work? Are we willing to reduce the amount of money that goes to different programs to fund bikeshare? Unfortunately that is not a decision that just the advocates can make. In the end, the most significant challenge is the education one, not simply because the tension between bicyclists, pedestrians and drivers in Philadelphia is untenable, but because all Philadelphians need to see the benefit of bikesharing, not just the bicyclists.