Sunday reading: 24 May 2015

Greg Bruce, “Skypath: The Path of Most Resistance“, Metro Magazine:

This is a story of conflict and how a small but heavily fortified opposition attempted to block a project that has overwhelming public and institutional support. But if SkyPath is granted its resource consent and any subsequent appeals to the Environment Court are dismissed, the story is likely to be framed differently. It will be about a humble accountant who fought to bring the project to life, despite tremendous institutional opposition and public apathy.

Bevan Woodward estimates he now spends six to nine hours each day working on SkyPath, and that for long periods over the past 10 years he worked even harder, until he realised he was burning himself out.

For many years, almost nobody supported it: not NZTA, not Auckland Transport, not Waterfront Auckland. SkyPath had supporters at Auckland Council, but few other people in power were prepared to help it succeed.

He’s an unlikely champion for a project that almost everyone now wants. He seems surprised by it himself. “I’m a former accountant. I was a business owner in Takapuna, I now live up in Warkworth for family reasons and once a week I carpool down to Auckland, go to my meetings. I’m not being paid to do this. Why is it that one of the most important transport projects has to be run by some unpaid members of the community?”

In 2009, before 5000 Aucklanders pushed through police lines, crossing the bridge on foot and on bike to demonstrate their support, he was ready to quit. He still talks about that event with reverence, as if its memory still sustains him.

Shabnam Dastgheib, “Auckland’s housing boom could prove unstoppable“, Stuff:

The statistical analysis of of 20 industrial countries including New Zealand since 1970 has found that housing booms and busts are lasting longer and when governments take a “wait and see” approach to those cycles, they can spiral out of control.

The longer the booms like the one Auckland is experiencing last, the less likely it is that intervention will be effective…

The paper, Booms, Busts, and Normal Times in the Housing Market by the American Statistical Association appeared in the Journal of Business and Economic Statistics and was publicised this month.

The paper’s authors say their findings support preventive policy interventions by governments during boom times and emphasise the need for timeliness.

A counter-cyclical policy was needed before housing booms and busts reached 26 quarters in order to avoid large and persistent housing price swings and to speed up the return of the market cycle to a normal phase.

New Zealand Institute of Economic Research principal economist Shamubeel Eaqub said the typical cycle (bottom to top) in New Zealand had gone from about three years in the 1970s to six years in the 2000s boom. The current boom had been running four years “and counting”.

“The international evidence in (this) paper suggests that action should be taken within the first six or seven years of the boom. We are in that phase now where co-ordinated action by policy makers is necessary to avoid the costs of sharply accelerating house prices and the risks of a potential future downturn,” Eaqub said.

Brandon Gaille, “21 Startling Road Rage Facts and Statistics“:

Jim Russell, “The Third Gobalization: Human Capital and Demographic Decline“, Pacific Standard:

Riffing off of the University of Toronto’s Roger L. Martin, the history of globalization can be understood as the international trade of different forms of capital. For Globalization I, the world exchanged physical capital (i.e. manufactured goods). The epicenter of this economic epoch was Detroit. United States President Ronald Reagan unleashed Globalization II, the era of financial capital. The twin towers, New York City and London (NYLON), ruled the flows of money across sovereign borders. The time of Globalization III is nigh. Human capital lords over physical and financial capital, setting up Boston as the Venice of the current age.

Echoing Martin once again, the highest return on the type of capital defines globalization. If physical capital offers the strongest returns on investment, then Globalization I rules. Welcome to Globalization II if finance provides the best way to get rich. Lastly, acknowledge Globalization III when higher education defines economic geography. Instead of goods or cash, where the brains go matters most.

Invest in education, not stocks or oil.

Chang-Tai Hsieh and Enrico Moretti, “Why Do Cities Matter? Local Growth and Aggregate Growth“, NBER Working Paper. Thanks to Eric Crampton for the reference:

We study how growth of cities determines the growth of nations. Using a spatial equilibrium model and data on 220 US metropolitan areas from 1964 to 2009, we first estimate the contribution of each U.S. city to national GDP growth. We show that the contribution of a city to aggregate growth can differ significantly from what one might naively infer from the growth of the city’s GDP. Despite some of the strongest rate of local growth, New York, San Francisco and San Jose were only responsible for a small fraction of U.S. growth in this period. By contrast, almost half of aggregate US growth was driven by growth of cities in the South. We then provide a normative analysis of potential growth. We show that the dispersion of the conditional average nominal wage across US cities doubled, indicating that worker productivity is increasingly different across cities. We calculate that this increased wage dispersion lowered aggregate U.S. GDP by 13.5%. Most of the loss was likely caused by increased constraints to housing supply in high productivity cities like New York, San Francisco and San Jose. Lowering regulatory constraints in these cities to the level of the median city would expand their work force and increase U.S. GDP by 9.5%. We conclude that the aggregate gains in output and welfare from spatial reallocation of labor are likely to be substantial in the U.S., and that a major impediment to a more efficient spatial allocation of labor are housing supply constraints. These constraints limit the number of US workers who have access to the most productive of American cities. In general equilibrium, this lowers income and welfare of all US workers.

AAP, “Study links car commute with weight gain“, NZ Herald:

Research led by the University of East Anglia in the UK had 4,000 participants describe their main mode of transport for their daily commute and provide details of their height and weight, which was used to calculate their body mass index (BMI).

Researchers then used a series of analyses to see if changes in mode of transport were linked to changes in weight over a two-year period.

Switching from a car to walking, cycling, or using public transport was associated with an average reduction in BMI of 0.32kg/m2 – equivalent to a difference of around one kilogram a person.

The longer the commute, the stronger the association, with a weight loss of around 2kg associated with journeys of more than 10 minutes, and 7kg on average for journeys of more than 30 minutes.

Switching to a car was associated with a significant weight gain of around 1kg per person after taking account of other influential factors.

Charles Marohn, “Lafayette“, Strong Towns:

You would think that would make a city, especially one as well-managed and prudent as Lafayette, incredibly conservative when it comes to taking on long-term commitments. In reality, we see the opposite, not just in Lafayette but in nearly every city across the country. Local governments face enormous incentives to pursue near term growth objectives by taking on onerous long term liabilities. We’ve called it a Ponzi scheme because, despite the lack of a nefarious objective, the mechanism is the same. Cash today with the bill coming due sometime in the future…

The median house in Lafayette costs roughly $150,000. A family living in this house would pay about $1,500 per year in taxes to the local government (more to the schools and regional government) of which 10%, approximately $150, goes to maintenance of infrastructure. A fraction of that $150 – it varies by year – is spent on actual pavement.

To maintain just the roads and drainage systems that have already been built, the family in that median house would need to have their taxes increase by $3,300 per year. That assumes no new roads are built and existing roadways are not widened or substantively improved. That is $3,300 in additional local taxes just to tread water.

That does not include underground utilities – sewer and water – or major facilities such as treatment plants, water towers and public buildings. Using ratios we’ve experienced from other communities, it is likely that the total infrastructure revenue gap for that median home is closer to $8,000 per year.

Urban Kchoze, “Traditional Euro-bloc: what is it, how it was built, why it can’t be built anymore“:

The Traditional Euro-bloc (what I at first called the traditional European urban bloc) is a form of development that is present in almost all European cities and typically forms their densest residential and mixed up sections.

Here is a typical example, in Prague:

A more recent Traditional Euro-bloc in Prague

So, what is the Traditional Euro-bloc? It takes the form of buildings built wall-to-wall, lining the street, that are typically mid-rise (usually 4 to 6 stories high, sometimes a bit more or less). They have little to no front setback, providing for a great sense of enclosure (maybe even more than most North Americans would like) but having the possibility of creating a cold, claustrophobic street scene if without commercial activity and with street parking. Since buildings are built at the property line, it creates an empty space inside the bloc, that space can be used in many different ways: a shared courtyard, parking, a park, playing fields, etc…

So, to come back to the idea of urbanism focused on form or on process, focusing on the form of these Euro-blocs rather than the process through which they were built is, in my view, a mistake. They have emerged largely organically through incremental development, responding to economic signals and community needs, trying to replace that by a planner’s dictates seems like a bad idea to me. But that’s what happens when people want harmony and are ready to leapfrog stages of development heedless of economic realities to get it. Not that it cannot work, but it can also fail by making it so expensive and difficult to do that developers will pass on that opportunity and prefer to work in suburbs where regulations are less restrictive.

Can we build this today too?

Actually, the exact form of these Euro-blocs would probably be illegal, and adapting them to fulfill the legal obligations would make them much more expensive…

Toby Lloyd, “Understanding and adapting the land market is the key to solving the housing crisis“, LSE British Politics and Policy blog. A nice discussion of the “natural monopoly” aspects of land markets:

Try buying some land. You will rapidly discover that the land market has some very odd features. First, it’s extremely hard to find out what bits of land might be for sale. Landowners sometimes advertise a site for sale, in trade magazines most of us have never heard of, but this is very much the exception. Most sites are bought by a developer or agent approaching the owner directly to suggest a possible sale.

Second, it’s often very tricky to find out who the owner is. The ownership of most land is recorded at the Land Registry and can in theory be looked up – but it’s not an easy process, and you need to know what you’re doing. Half the time it turns out that the registered owner is a company name, often registered overseas, so you may never be able to track down someone who could discuss selling the site.

The next barrier is simply that most landowners have no intention of selling their land, at least not unless you offer them a very high price. After all, they’ve stopped making it. Many landowners turn out to have no interest in building: 50% of land with planning permission in London is owned by non-developers.

Adam Gopnik, “The Plot Against Trains“, New Yorker:

What we have, uniquely in America, is a political class, and an entire political party, devoted to the idea that any money spent on public goods is money misplaced, not because the state goods might not be good but because they would distract us from the larger principle that no ultimate good can be found in the state. Ride a fast train to Washington today and you’ll start thinking about national health insurance tomorrow.

…the prejudice against trains is not a prejudice against an élite but against a commonality. The late Tony Judt, who was hardly anyone’s idea of a leftist softy, devoted much of his last, heroic work, written in conditions of near-impossible personal suffering, to the subject of … trains: trains as symbols of the public good, trains as a triumph of the liberal imagination, trains as the “symbol and symptom of modernity,” and modernity at its best. “The railways were the necessary and natural accompaniment to the emergence of civil society,” he wrote. “They are a collective project for individual benefit … something that the market cannot accomplish, except, on its own account of itself, by happy inadvertence. … If we lose the railways we shall not just have lost a valuable practical asset. We shall have acknowledged that we have forgotten how to live collectively.”

Trains take us places together. (You can read good books on them, too.) Every time you ride one, you look outside, and you look inside, and you can’t help but think about the private and the public in a new way. As Judt wrote, the railroad represents neither the fearsome state nor the free individual. A train is a small society, headed somewhere more or less on time, more or less together, more or less sharing the same window, with a common view and a singular destination.

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