Monthly Archives: January 2016

Precedents for DC’s population growth

On the heels of the recent announcement from the US Census Bureau about DC’s continued growth, it’s worth asking how exceptional this growth is. Ask around, and you’ll find commentary about DC’s unprecedented building boom – or about how this growth isn’t particularly exceptional. So, which is true?

DC’s Deputy Mayor for Planning and Economic Development released their economic intelligence dashboard, compiling various economic indicators for the District.  The population data from the US Census Bureau is displayed both in absolute terms, but also showing year over year change:

DC population change

A few observations:

DC’s current trend hasn’t been seen since the 1920s and 30s. While there have been a few years of growth here and there post-WWII, there hasn’t been a decade of sustained population growth like we’ve seen in the past ten years. The longest streak of years with consecutive population growth was over a period of 5-6 years in the early 1960s. In the lifetime of a resident, chances are they haven’t seen a boom like this – only 11% are 65+ years old.

Does that make this growth truly unprecedented? Not in terms of magnitude. Even with that sustained growth, DC’s current boom pales in comparison to the rate of growth seen before WWII. The current growth of ~2% seems paltry compared to 5% or 10% annual growth.

To be fair, those years were the last of greenfield development inside the District; but it’s not a surprise that about half of DC’s housing stock dates back to this era. Those kind of large-scale development sites are few and far between, as the frontier for Washington’s urban area pushes deeper into the suburbs.

DC’s current growth is largely based on the center city and redevelopment of low-density industrial and commercial areas. Without actively planning for additional development and incremental land use change, it’s not clear if that pattern alone can continue to sustain this kind of population growth.

Housing prices vs. land prices – Vancouver, BC

One chart to note in discussions of urban housing affordability, from Vancouver, BC.

vancouver housing prices

The chart is from The Globe and Mail, looking at the changes in housing prices by the type of unit in Greater Vancouver. While condo prices have increased substantially, that increase is nothing compared to the boom in single-family detached house values.

“It’s really the value of the land that is driving prices higher for detached properties and widening that gap,” said Darcy McLeod, president of the Real Estate Board of Greater Vancouver.

Emphasis is mine. This demonstrates a few things:

  • In high-demand areas, new dense construction can and does improve affordability by making more productive use of expensive land. As the adage goes, a skyscraper is a machine to make the land pay.
  • Defining affordability in big cities solely in terms of single family home prices is misleading. Focusing on those prices also might skew potential policy solutions, which could focus on making housing units more affordable instead of making scarce land more affordable.
  • Given the scarcity of land, it’s hard to imagine a set of policies (barring a regional economic decline) that would ever make single-family detached homes affordable. Most developable land would be a candidate for denser development.
  • Skyrocketing values for single-family detached homes in Vancouver’s core indicates they would be good candidates for more intense development; if such evolution were allowed by zoning.

Renovating Penn Station as an institution, not a building

NYP Cuomo

Beware nostalgia for the old Penn Station. While the railroad station’s current iteration neither functions well nor provides an inspiring space, addressing these problems requires addressing the underlying issues of railroad governance, finance, and operations.

Writing in the New York Times, David Dunlap aims to demolish the myth of Penn Station’s demise as solely an act of civic vandalism. Penn Station’s decline was a symptom of major shifts in transportation finance, travel patterns, and urban development. Railroads were accustomed to their monopoly position and regulated accordingly.

With the rise of direct competitors for both intercity and commuter traffic from airlines and cars (both subsidized by the government), change was inevitable:

In “The Late, Great Pennsylvania Station,” Lorraine B. Diehl said the death knell first sounded in 1944, when President Franklin D. Roosevelt signed into law a bill to provide $1.5 billion in federal financing for new highways, including an interstate system.

It sounded again in 1947, when the Pennsy reported an operating loss for the first time in its long existence. One month later, in March, a United Air Lines DC-6 reached La Guardia Airport only 6 hours 47 minutes after it left Los Angeles.

It sounded again in 1949, when the railroads’ share of intercity passenger traffic fell below 50 percent. And again in 1956, when construction of the interstates began in earnest. And again in 1958, when National Airlines inaugurated domestic jet travel with a run between New York and Miami that took just 2 hours 15 minutes.

Intercity travel and freight were the most profitable business lines for railroads. Commuter trains provided some feed for longer distance trains, but were an otherwise marginal business. In reality, the business was in decline well before 1944; Ridership for transit of all forms declined during the Great Depression (along with the rapid expansion of suburbs and proliferation of the automobile), only propped up by travel restrictions during WWII.

Penn Station’s edifice was torn down because the economic model of American railroads, predicated on their monopoly on metropolitan mobility, collapsed. Looking to monetize their assets, developing their lucrative real estate seemed obvious. For Penn Central, it wasn’t enough to save the company. Still, the loss of the building draws most of our attention.

Even today, we tend to focus mostly on Penn Station as a place, rather than on the underlying tunnels, tracks, and organizations that operate them. Last week, New York Governor Andrew Cuomo unveiled his reboot of the longstanding plans (with a throwback to Gov. Pataki and Pres. Bill Clinton) to redevelop Penn Station, complete with a rebranding.

The full presentation slide deck includes lots of flashy renderings of what’s possible, building off of the same basic concepts as before: relocating Amtrak functions to a new facility within the Farley Post Office building; removal of Madison Square Garden’s theater and a complete redevelopment of Penn Station’s concourses below.

There’s a lot to be said in marshaling the political will to get something done. Cuomo’s presentation doesn’t shy away from that ambition. But ambition alone isn’t enough. Given the challenges in executing complex projects, it’s not surprising to see figures like Robert Moses viewed favorably. But are you executing the right projects?

Slide #6 from Gov. Cuomo's presentation, complete with Robert Moses.

Slide #6 from Gov. Cuomo’s presentation, complete with Robert Moses.

Not only does the focus on the building itself miss the real capacity challenges for Penn Station’s infrastructure, it also elides over the very real challenges for operations and governance. Adrian Untermyer reminds us of the key governance challenges to success for any plan:

In 1970, one railroad controlled the transportation hub. After it went bankrupt, New York State took over trains to Long Island, New Jersey took over trains to the Garden State, and the Feds took on the rest…

Even with a reinvented station complex overhead, the Long Island Rail Road, New Jersey Transit, and Amtrak will still share the mostly same tracks, cramped platforms, and underwater tunnels. It’s unlikely that decades of dysfunction will disappear after the ribbons are cut.

Finding effective governance solutions for both the physical station as well as the underlying railroads that use it is a much bigger challenge. During the monopoly era, before the creation of either the MTA or Amtrak out of the remnants of Penn Central, that kind of vertical integration clarified things. Current governance is muddled.

Lack of integration and coordination among various stakeholders isn’t a new problem. When New Jersey Governor Chris Christie killed the ARC project, some advocates celebrated the demise of a flawed project with the hope for a better one. ARC’s primary flaws stemmed from an inability for the key stakeholders to effectively coordinate investments. Instead of one railroad forcing coordination, Penn Station was a battle between three entities (Amtrak, NJ Transit, and NY’s MTA – each with different priorities and different leadership).

The unwillingness to share turf isn’t just a challenge for Penn Station, coordinating between two states and Amtrak; but even within the MTA. East Side Access, connecting the Long Island Railroad to Grand Central Terminal is an extraordinarily expensive project, opting for a deep cavern terminal station under Manhattan instead of a potentially cheaper and more useful option that would’ve required better coordination and integration between the MTA’s own commuter railroads. Instead of tackling this issues, the MTA opted for the more expensive solution.

Integration isn’t easy. The MTA’s split personality for regional rail dates back to the differences between the PRR and NY Central railroads. The merged Penn Central couldn’t integrate; it’s not a surprise integration hasn’t happened without some larger outside incentive to do so. The past decade of airline industry consolidation in the US shows how hard this can be, even with incentives.

The real challenge isn’t in finding the right design for a new Penn Station, but in reforming the institutions that operate and govern our transit systems.

672,228 – DC’s growth continues – short-term trend or long-term shift?

Just before the end of the year, the US Census Bureau releases their state-level population estimates. Thanks to DC’s city-state status, we get an early view of the District’s population trends before other major cities. DC’s 2015 estimate clocks in at 672,228 people – an 1.9% increase over 2014.

In 2009 and early 2010, I had a chance to help coordinate the District’s local outreach for the decennial census, emphasizing the importance of getting an accurate count of the city’s population. Back then, we were hoping to see a number above 600,000. Five years later, we’ve blown past that, climbing back to the city’s population in 1977:

DC (and Baltimore) population estimates, hovered over 1977. Screenshot from a Google search for DC Population; data from the US Census Bureau.

DC (and Baltimore) population estimates, hovered over 1977. Screenshot from a Google search for DC Population; data from the US Census Bureau.

(There’s also a great deal of uncertainty to contend with. Census estimates are often revised as better data is collected.)

DC’s press release about the data documents the elements of the recent population growth. Of DC’s increased population, about 1/3 was a natural increase, 1/3 from net new domestic migrants, and 1/3 from new international migrants:

According to the US Census Bureau, the main driver of the increase was domestic and international migration—people moving to the District from other parts of the United States, and from abroad. Between July 2014 and July 2015, in addition to the natural increase (births minus deaths) of 4,375 residents, a total of 8,282 more people moved into the District than moved out. Of these 8,282 net new residents to the city, 3,731 more people moved from other U.S. states than moved out and 4,551 more moved to the District from other countries than the number of residents that left the District for other countries. While net international migration made a greater contribution to the District’s population growth than net domestic migration, net domestic migration has grown four times its previous year total and demonstrates that the District continues to attract residents from other U.S. states.

Back in 2013, DC’s Chief Financial Officer forecast a slowdown in the District’s growth, citing slower economic growth in the region (thanks to decreased Congressional spending) as well as a slowdown in new housing starts. Part of the CFO’s job is to be appropriately conservative in these forecasts, but the Census Bureau’s estimates bucked the CFO’s forecast.

Part of the question is if this growth in DC represents a flash in the pan, or a real long-term shift in migration patterns. Last week saw some hearty twitter debate over this piece by Lyman Stone, questioning the narratives about a major shift away from suburbs and towards more urban locations (examples: here, here and a counter-example here). Stone argues that the data doesn’t support the conclusion of a major shift towards urban living. And given the macro-trends, it’s hard to argue against his broad conclusion.

Consider the analogue of driving, where a sustained period of high gas prices and a weak economy put a serious dent in US vehicle miles traveled, spawning all sorts of theories about how we’ve passed ‘peak car.’ But as soon as oil prices dropped, we’ve seen a massive increase in VMT (never mind the negative consequences of cheap gas). The broad narratives about a paradigm shift against car usage seemed hung up on anecdotes about Millennials using smartphones instead of cars, rather than looking at the broader trends of where people live and work (which hadn’t changed much). Beware reading too much into the data; or missing the outside factor.

However, the smaller-scale evidence is also hard to dismiss. Apartments in DC are sprouting like mushrooms (where they are allowed by zoning), and DC’s population can only increase as fast the city’s housing stock can expand. And even with the District’s sustained growth, rents and home prices continue to rise, indicating demand for urban living greater than the available supply.

Those peak-car arguments might accurately assess our desires to drive less, but the driving data is based on the reality of housing and transportation options available, rather than the options we might wish were available. Likewise, urban migration patterns are based on available housing, not what migrants might wish were available.