Chinese Cancel Treasure Island Investment as Brown Seeks High Speed Rail Funds

California's Governor Jerry Brown and an entourage of public officials and corporate executives has spent much of the last week traveling around China trying to drum up business for the state. One of his principal objectives is to entice Chinese investors to take a stake in the California high-speed rail project. From the Governor's perspective, this makes all sense in the world.

California's high-speed rail program may be the current holder of the largest projected funding deficit of any infrastructure in the world, at approximately $50 billion. (That's after shaving $30 billion off the project and losing the support of former California High Speed Rail Authority Chairman, former state Senator Quentin Kopp, who charges that the line is no longer "genuine high speed rail").

As Governor Brown concludes his trip to the Orient, word comes from The San Francisco Chronicle that "A $1.7 billion deal with China Development Corp., the Chinese national railway and Lennar Corp. to construct 12,500 homes on the former Hunters Point Naval Shipyard in San Francisco and a string of high-rises on Treasure Island has collapsed." The project was to be built over up to three decades and would have housed 20,000 people. The deal is said to have fallen apart over not allowing the Chinese investors sufficient control and "unresolved tax issues."

The now defunct deal may have been the largest serious Chinese investment proposal in California.

There are important lessons for proponents of the high-speed rail system, who sometimes fantasize about China as the bailout investor of last resort. The Chinese, like the other investors who have found better things to do with their money are not likely to be swayed by the line's excessively high cost or its modest ridership potential. Nor will the Chinese bear gifts to California.

These issues are described in detail in the new Reason Foundation Updated Due Diligence report by Joseph Vranich and me.

States Seek to Become More Self-Reliant for Infrastructure

During his March 29 visit to the privately built and financed PortMiami tunnel project, President Obama unveiled a new infrastructure plan. His latest proposal---costing $21 billion--- includes a renewed call for a National Infrastructure Bank capitalized at $10 billion,  a  $7 billion  "America Fast Forward Bonds" program modeled after the former Build America Bonds;  and a sum of $4 billion in direct loans and loan guarantees. The White House announcement did not make it clear whether  this latest infrastructure initiative --- " to encourage private investment in America's infrastructure" ---replaces or is in addition to the $50 billion "fix-it-first" infrastructure plan that the President announced in his State-of-the-Union address less than two months ago (see, "Infrastructure Advocacy and Public Credibility," InnoBrief, Vol. 24, No. 2, February 20).

Decidedly, infrastructure investment remains on the President's mind. It also continues to generate headlines. Just a week earlier, the American Society of Civil Engineers (ASCE) released its latest  "report card" giving the nation a D for highways and estimating the investment needs in surface transportation to the year 2020 to amount to a staggering $1.723 trillion. With expected funding during the same period amounting only to $877 billion, the funding gap comes out to be an astronomical sum of $846 billion--- more than $100 billion per year. As if to reinforce the ASCE conclusions, the Washington Post came out with a front-page story about the deteriorating state of the Capital Beltway, "a politically iconic and locally vital highway... dying beneath your turning wheels"  (Beneath the Surface, the Beltway Crumbles, March 31, 2013)

What kind of an impact the President's repeated pleas, combined with the ASCE report card and alarming press stories of "crumbling " infrastructure, will have on public opinion and congressional attitudes remains to be seen. As we have noted earlier, they come at a time of severe budget pressures and intense Republican efforts to curb excessive discretionary spending. To be successful,  pro-infrastructure advocates must explain to the skeptical lawmakers where the money would come from.  "At some point somebody  has to pay the bill," House Speaker John Boehner pointedly remarked in reaction to Obama's latest infrastructure proposal. The advocates also must persuade fiscally conservative House members that there are urgent and compeling reasons to boost spending on public works that override the imperative to reduce the deficit and get the nation's fiscal house in order. 

Second, the nation's taxpayers must become convinced that spending more on transportation will make a difference in practical terms such as easing congestion and improving the lot of  commuters, and that the money will not be wasted on questionable projects that have little to do with improving mobility. "The Bridge to Nowhere" as a symbol of wasteful spending still lives in the collective public consciousness. 

Third, infrastructure alarmists must contend with the upbeat conclusions of a Reason Foundation study, "Are Highways Crumbling?" That study has found that  America's highways and bridges are in a far better condition today than they were 20 years ago. "There are still plenty of problems to fix, but our roads and bridges aren't crumbling," said David Hartgen, lead author of the Reason study. "The overall condition of the public road system is getting better and you can actually make the case that it has never been in better shape." The study affirms what the traveling public experiences every day ---- that  the nation's highways and bridges not only are not "crumbling" but in most places are holding up pretty well. "Should I believe the pundits or my own eyes," asked Charles Lane, a Washington Post editorial writer, in a much-quoted column after having traveled thousands of miles "without actually seeing any crumbling roads."  (The U.S. Infrastructure Argument that Crumbles Upon Examination, October 31, 2012). 

Fourth, as one highly knowledgeable reader of ours (a civil engineer) has observed, "we must get an objective, precise and quantifiable assessment of bridge conditions  before launching full bore into repair or replacement actions" costing billions of dollars. "Today," he wrote, " no one, and I mean no one  has an objective, clear and precise understanding of the actual condition of America's bridges." Before asking taxpayers for billions of dollars to fix a problem based on subjective visual assessments of bridge conditions,  we want to be very sure that we have accurate data to back up our position, our reader concluded. His remarks about bridges could equally well be applied to the condition of the nation's roads.

Lastly, infrastructure advocates must overcome a cynical perception, common among the public, that pressures to increase federal funding for transportation are nothing more than special interest pleadings by interest groups that stand to profit from higher levels of public spending (ASCE is one of them, raising questions as to its objectivity, several observers have noted). 

As one transportation advocate at a recent conference observed, "there is an enormous disconnect between us and the American public" --- a disconnect that may not be easy to overcome.

States Are Acting on their Own

As we have argued in recent columns, no one disputes the infrastructure advocates’ claim that some of America’s transportation facilities, such as the Capital Beltway, are reaching the limit of their useful life and need reconstruction. Nor does any one disagree about the need to expand infrastructure to meet the needs of a growing population. But fiscal conservatives among infrastructure advocates (and we count ourselves among them) contend that this does not rise to the level of a national crisis requiring a massive $50-70 billion federal crash program as proposed by the President, or the expenditure of more than $100 billion per year as recommended by ASCE.

Instead, the challenge can be met if each state did its part to incrementally, over a period of years, bring its transportation facilities up to a "state of good repair" using its own gas tax revenues  and its formula allocation of the Highway Trust fund dollars. As numerous news dispatches attest, that is precisely what's happening (see below). A growing number of states are not waiting for the federal government to come to the rescue. They are using their own resources and raising additional revenue to pay for reconstruction of their aging facilities-- "one lane at a time" if necessary---and keep their transportation systems in good working condition. "Governors and state legislatures realize that the level of federal assistance beyond 2014 is highly uncertain and they are acting on a credible assumption that federal funding will remain at current levels or may even be cut back," an association executive who is familiar with the thinking of senior-level state officials, told us.

What about  large-scale reconstruction and capacity-expansion projects that require billions of dollars---transportation  investments that are beyond the states'  fiscal capacity to fund on a pay-as-you-go basis? Those investments,  provided they are credit-worthy (i.e. are revenue producing or backed by dedicated tax revenue),  will be mostly financed through long-term credit instruments  and public-private partnerships. The future of infrastructure megaprojects is intimately tied to the financial involvement of the private sector and to a wider use of  tolling, "availability payments,"  and innovative credit instruments such as TIFIA and private activity bonds (PABs), a veteran facilitator of public-private partnerships told us. " President Obama was right to have shined a spotlight on the PortMiami tunnel project and drawn attention to the importance of private investment in major transportation infrastructure. The Highway Trust Fund no longer can serve that purpose."

The scenario we have suggested above---i.e., having states assume financial responsibility for fixing their aging transportation systems, while relying on debt financing for major facility reconstruction and system expansion---makes practical sense in view of the uncertain future level of  federal transportation funding.  It also may constitute a way to save the Highway Trust Fund from insolvency and provide a lasting solution to the federal transportation funding dilemma.

NOTE: States that recently have undertaken to raise additional funds for transportation include: Virginia and  Maryland (broad transportation funding overhaul  that includes a dedicated sales tax applied to the wholesale price of gasoline.  A sales tax, it has been argued, is no less a "user fee" than the gas tax since every consumer who pays a sales tax also is served by or "uses"  the highway system for goods delivery );  Arkansas (one-half cent sales tax increase to back a $1.3 billion bond issue to fund highway construction over the next ten years); Massachusetts ($13.7 billion bond-financed transportation plan); Maine ($100 million transportation bond proposal);  Michigan ($1.5 billion road plan funded with vehicle registration fees and a tax on fuel at the wholesale level); Missouri (proposal for a dedicated one-cent sales tax for transportation; the tax is expected to raise $7.9 billion over ten years); New Hampshire (12-cent hike in the gas tax over three years approved by the House; Senate approval uncertain);  Ohio (turnpike toll-backed $1.5 billion bond issue for highway and bridge improvements); Texas (statewide tolling);  Wisconsin ($824-million boost to the state transportation fund);  Wyoming (10-cent fuel tax increase, the first in 15 years); and California, Oregon and Washington (exploring new mechanisms for project finance through the cooperative West Coast Infrastructure Exchange).

Recent major transportation infrastructure projects largely financed with long-term credit instruments rather than federal dollars include: the I-495 Beltway HOT lanes project in Northern Virginia; New York's Tappan Zee Bridge replacement; the San Francisco Bay Bridge Eastern Span replacement; the I-5 Columbia River Crossing;  the Highway 520 floating bridge in Seattle, the Midtown tunnel linking Norfolk and Portsmouth, VA, East End Crossing over the Ohio River, and the PortMiami Tunnel.

MoneySense Top 10 Best Places to Live in Canada in 2013

Here we go again! Another ranking of the “best” places to live. I wonder how many of those there are.  They just pop up on your computer screen like unwanted ads. Perhaps there are so many “best” cities rankings that at some point most cities end up winning or being in the top 10. Mayors and chambers of commerce know it, just like car companies. If you don’t win the top prize you will simply pick a category and exploit it to death to sell your product. It could be safety, trunk size, fuel efficiency, resale value. In the case of cities, it can be average house price, commuting time, unemployment rate, safety and the pièce de resistance, the vaguest criteria of all, the one that makes rankings such subjective tool: amenities.

What does it mean for MoneySense to be the best? A look at the methodology shows that the criteria are quite typical of most rankings: crime, amenities, commuting, heath, housing etc.  Also, the number of points given to each criterion varies from one to another and are totally based on the mood of those who design the ranking. If you think that dry weather is important then you will give it more points. If you dislike bike paths you give it less point. If professional sport teams seem unimportant, you simply don’t use it as a criterion.

One big mistake that those guys do is to mess up distinctions between metropolitan areas and suburbs. Too often, they only include the boundaries of municipalities and break up larger cities into pieces even though they are really parts of greater metropolitan areas.  For example, The Greater Toronto Area (GTA) has close to 6 million residents. The Municipality (or City) of Toronto has about 2.5 million people. Mississauga, a populous suburb of the GTA, but has its own place  in the very same ranking. How can this be? This is major flaw, a very common one.

So let’s take look at the ranking. We indicate when a city was part of a Census Metropolitan area):

  1. Calgary, Alberta
  2. St. Albert, Alberta ( a suburb of the Census Metropolitan Area of Edmonton)
  3. Burlington, Ontario (a suburb of the Census Metropolitan Are of Toronto)
  4. Strathcona County, Alberta ( a suburb of the Census Metropolitan Area of Edmonton)
  5. Oakville, Ontario (a suburb of the Census Metropolitan Are of Toronto)
  6. Ottawa, Ontario (Since all suburbs of Ottawa has been amalgamated it couldn’t be broken down like Edmonton or Toronto)
  7. Saanich, British Columbia ( a suburb of the Census Metropolitan Area of Victoria)
  8. Lacombe, Alberta ( a suburb of the Census Metropolitan Area of Edmonton)
  9. Lethbridge, Alberta
  10. Newmarket, Ontario (a suburb of the Census Metropolitan Are of Toronto)

It would be hard to end up with a more flawed ranking. There is a mix of small cities (Lethbridge), the mid-size city of Ottawa, with suburbs that have been amalgamated into one unified City of Ottawa, without taking account that the Census Metropolitan Area includes the City of Gatineau, across the Ottawa River, in the Province of Québec. It is simply impossible to judge a suburb or a city that is part of a metropolitan area and ignore the fact that its amenities, transportation system, jobs, highways etc. are all linked. How would Mississauga’s economy perform if it wasn’t of Toronto, or its airport, (located in Mississauga!)? How would Ottawa do if they didn’t have its pool Gatineau and its pool of 75,000 civil servants living in its more affordable houses, commuting by across the Ottawa River by one of its 5 bridges?

I am not pro-gentrification nor a big fan of downtown living, at least not until my kids will live at home. I myself live in an Ontario suburb of Ottawa, while commuting by train to Montreal a few times a month. However, I am fully aware that my suburb would not exist if not for downtown Ottawa. When 75% of the labour force living in my suburb commutes to downtown Ottawa each day to go to work, if the city had not been amalgamated in 2000, I would have laughed at any ranking that would have considered my suburb as a stand- alone city.

Please guys, you do not rank cities like you rank sports teams.

Seeking Community in Vancouver's High Rise Ghost Towns

The Province in Vancouver reports (in "15% of downtown Vancouver condos sit empty, turning areas into ghost towns: Study") that "much of the downtown core is starting to look like B.C.’s ghost towns — with apartments languishing empty, businesses closing down and residents not feeling the sense of community they bought into." The study, by University of British Columbia (UBC) planning professor Andy Yan, indicates that the problem is most pronounced outside the long-established high-rise district of the West End. He notes that in Coal Harbour, well located adjacent to the downtown area along Burrard Inlet, approximately 25% of the condominium units are unoccupied.

UBC economics professor Tour Somerville suggests that the number may even be higher, at 65% vacant, including both unsold units and units that have been purchased but not occupied by their owners. Vancouver has had an unusual amount of investment from mainland China, especially as that nation has substantially limited the purchase of condominium units for investment purposes.

Reporter Mike Reptis of The Province notes the difficulties for businesses in the area, indicating that "it’s a problem to local small business owners and residents — especially in Coal Harbour — who have bought into the neighbourhood expecting more of a community, and more business."

A long time convenience store manager complained that “foot traffic has slowed" and "local people can’t afford (to live here)," concluding that "small grocery stores are closing up" and "A lot of small companies are closing up.”

Children Falling from High Rises in New South Wales

Frustrated young children confined in the small apartments proliferating in New South Wales are naturally inquisitive and incapable of judging risks.  They climb onto window sills or balustrades to fall onto concrete many metres below.

The results have been appalling. In Sydney during the period 1998 to 2008 169 children have fallen to serious injury or death, and, as the proportion of apartments increase, so do these tragic incidents, of which there is now one a week.

Apartments are especially unsuitable for bringing up very young children. Research  reveals that there are poor health and parenting outcomes. Crawling and walking is stymied due to space problems with children having little access to areas for meaningful activity. There is a lack of safe active play space outside the home. Parks and other public open space offer poor security due to the use of these areas by local youth gangs and the socially dysfunctional.

Over the past decade, the goal of the New South Wales Government has been that more than half of the population of NSW be squeezed into apartments by the year 2030. These high-density policies have placed a restrictive growth boundary around Sydney, and have been enforced by stripping away the planning powers of those local authorities that dared to offer any resistance.

This draconian approach is despite the fact that the vast majority of Australians prefer living in free-standing homes rather than in apartments. Half of apartment-dwellers would rather live in a house with a garden.

The government has been creating a child-hostile city and a child-hostile city is a disaster for the future.

The Westmead Children’s Hospital in Sydney formed a working party in 2009 in response to the growing number of child tragedies.  As a result the NSW Government has now belatedly announced that window safety locks that restrict the degree to which windows can open will be mandatory for new apartments.

But is locking children into apartments and restricting fresh air a good solution? Surely a much better resolution is for the high-density policies to be unambiguously abandoned. Housing that the vast majority of people want should be readily available – that is family friendly single-residential housing with a safe backyard for children’s recreation. 

There is some good news for young children, namely the recent announcement by the New South Wales Government of a proposed modified Metropolitan Strategy with the Minister of Planning saying “We’re trying to be less constrictive and restrictive and what we’re saying is the market place should have far more of a say in what the mix of housing is and where it will be.” Might the long-suffering families in Sydney and their young children hope that the iron grip of the high-density policies of the last two decades could be weakening at last?

The new Metropolitan Strategy announcement may indicate a faint light at the end of the tunnel. One hopes this will not be a mere will-of-the-wisp, but that this glimmer will brighten into a beam that will consign urban containment policies to the dustbin of history - and prevent the ongoing falling deaths of some of our most vulnerable kids.


Portland's Slothful Creative Class?

In an article entitled "Portland area's college-educated workers depress metro earning power by choosing low-paying fields, shorter hours," The Oregonian's Betsy Hammond reports on a new study decrying the less than robust economic impact of Portland's younger college graduates, especially males. According to Hammond, " the Portland metro area's young college-educated white men are slackers when it comes to logging hours on the job, and that's one reason people here collectively earn $2.8 billion less a year than the national average." The report is characterized as finding that "Portlanders tend to choose majors, careers and work hours that lead to low pay."

The report, "Higher Education & Regional Prosperity; The Story Behind Portland-Metro's Income Decline," was commissioned by the Value of Jobs Coalition. It documents a "startling decline in per capita income relative to the US" metropolitan average. Since 1997, metropolitan Portland's per capita income has fallen from 5% above the national metropolitan average to 5% below.

The report indicates that "the biggest driver of this trend is our college educated workers, who work less and earn less, creating a significant income gap," though cautiously notes that it is not clear whether” the lower hours and earnings are the result of a lack of higher-paying/time-intensive jobs available or the result "life style choice(s)" to not work in higher-paying jobs."

The report found the largest differences compared to other metropolitan areas to be among white males from 25 to 39 years old. The differences with the rest of the country were substantially less among older white males.


New Metropolitan Area Definition Winners: New York, Charlotte, Grand Rapids, and Indianapolis

Metropolitan America continues to expand. The new Office of Management and Budget metropolitan area definitions, based upon the 2010 census indicate that the counties composing the 52 metropolitan areas with more than 1 million population increased by 1.65 million from the previous definition. This includes more than 1.4 million new residents in the previous 51 major metropolitan areas and more than 200,000 in Grand Rapids, which has become the nation's 52nd metropolitan area with more than 1 million population.

The fastest growers due to the addition of counties were New York, Charlotte, Grand Rapids, and Indianapolis. New York had a 670,000 increase in its metropolitan population, resulting from the addition of Dutchess and Orange counties. New counties also increased the population of the Charlotte metropolitan area by 459,000, the Grand Rapids metropolitan area by 215,000 and Indianapolis by 132,000. The largest percentage gains were in Grand Rapids (28%) and Charlotte (26%).

Ten metropolitan areas had population increases under 100,000 from expansion of the metropolitan area definitions.

For the most part, the major metropolitan area county components were unchanged, with 31 having the same boundaries as under the previous definition. Six metropolitan areas were reduced in geographic size.

The changes in population for 2000 based upon the new metropolitan area definitions are indicated in the table. The components of metropolitan areas are determined by commuting patterns to urban areas (not to the historical core municipalities).

Effect of New Metropolitan Area Geographic Definition on Population: 2010
Population Change Rank Metropolitan Area Old Definition New Definition (2013) Change % Change
12 Atlanta, GA        5,268,860        5,286,728 17,868 0.3%
15 Austin, TX        1,716,289        1,716,289 0 0.0%
15 Baltimore, MD        2,710,489        2,710,489 0 0.0%
15 Birmingham, AL        1,128,047        1,128,047 0 0.0%
15 Boston, MA-NH        4,552,402        4,552,402 0 0.0%
15 Buffalo, NY        1,135,509        1,135,509 0 0.0%
2 Charlotte, NC-SC        1,758,038        2,217,012 458,974 26.1%
15 Chicago, IL-IN-WI        9,461,105        9,461,105 0 0.0%
46 Cincinnati, OH-KY-IN        2,130,151        2,114,580 (15,571) -0.7%
15 Cleveland, OH        2,077,240        2,077,240 0 0.0%
7 Columbus, OH        1,836,536        1,901,974 65,438 3.6%
8 Dallas-Fort Worth, TX        6,371,773        6,426,214 54,441 0.9%
15 Denver, CO        2,543,482        2,543,482 0 0.0%
15 Detroit,  MI        4,296,250        4,296,250 0 0.0%
3 Grand Rapids, MI           774,160           988,938 214,778 27.7%
15 Hartford, CT        1,212,381        1,212,381 0 0.0%
49 Houston, TX        5,946,800        5,920,416 (26,384) -0.4%
4 Indianapolis. IN        1,756,241        1,887,877 131,636 7.5%
15 Jacksonville, FL        1,345,596        1,345,596 0 0.0%
48 Kansas City, MO-KS        2,035,334        2,009,342 (25,992) -1.3%
15 Las Vegas, NV        1,951,269        1,951,269 0 0.0%
15 Los Angeles, CA     12,828,837     12,828,837 0 0.0%
51 Louisville, KY-IN        1,283,566        1,235,708 (47,858) -3.7%
13 Memphis, TN-MS-AR        1,316,100        1,324,829 8,729 0.7%
15 Miami, FL        5,564,635        5,564,635 0 0.0%
15 Milwaukee,WI        1,555,908        1,555,908 0 0.0%
6 Minneapolis-St. Paul, MN-WI        3,279,833        3,348,859 69,026 2.1%
5 Nashville, TN        1,589,934        1,670,890 80,956 5.1%
11 New Orleans. LA        1,167,764        1,189,866 22,102 1.9%
1 New York, NY-NJ-PA     18,897,109     19,567,410 670,301 3.5%
15 Oklahoma City, OK        1,252,987        1,252,987 0 0.0%
15 Orlando, FL        2,134,411        2,134,411 0 0.0%
15 Philadelphia, PA-NJ-DE-MD        5,965,343        5,965,343 0 0.0%
15 Phoenix, AZ        4,192,887        4,192,887 0 0.0%
15 Pittsburgh, PA        2,356,285        2,356,285 0 0.0%
15 Portland, OR-WA        2,226,009        2,226,009 0 0.0%
15 Providence, RI-MA        1,600,852        1,600,852 0 0.0%
15 Raleigh, NC        1,130,490        1,130,490 0 0.0%
52 Richmond, VA        1,258,251        1,208,101 (50,150) -4.0%
15 Riverside-San Bernardino, CA        4,224,851        4,224,851 0 0.0%
10 Rochester, NY        1,054,323        1,079,671 25,348 2.4%
15 Sacramento, CA        2,149,127        2,149,127 0 0.0%
47 St. Louis,, MO-IL        2,812,896        2,787,701 (25,195) -0.9%
50 Salt Lake City, UT        1,124,197        1,087,873 (36,324) -3.2%
15 San Antonio, TX        2,142,508        2,142,508 0 0.0%
15 San Diego, CA        3,095,313        3,095,313 0 0.0%
15 San Francisco-Oakland, CA        4,335,391        4,335,391 0 0.0%
15 San Jose, CA        1,836,911        1,836,911 0 0.0%
15 Seattle, WA        3,439,809        3,439,809 0 0.0%
15 Tampa-St. Petersburg, FL        2,783,243        2,783,243 0 0.0%
14 Virginia Beach-Norfolk, VA-NC        1,671,683        1,676,822 5,139 0.3%
9 Washington, DC-VA-MD-WV        5,582,170        5,636,232 54,062 1.0%
Total   167,861,575   169,512,899    1,651,324 1.0%


Sydney to Abandon Radical Urban Containment Policy

The New South Wales government has proposed a new Metropolitan Strategy for the Sydney area which would significantly weaken the urban containment policy (also called urban consolidation, smart growth, livability, growth management, densification, etc.) that has driven if house prices to among the highest in the affluent New World (Australia, Canada, New Zealand and the United States) relative to household incomes.

According to the Australian Financial Review, the state's Liberal-National government plans to allow the building of more than 170,000 new homes, with the vast majority being on greenfield sites, largely beyond the current urban footprint. Premier Barry O'Farrell and his party had promised in their electoral campaign in 2011 to liberalize land-use regulation and to moderate the previous Labor government's quota that required 70% of new houses to be built within the current urban footprint and 30% on greenfield sites. In fact, however, under the Labor government's administration, new house building had been produced at a well below demand level.

Among the major New World metropolitan areas rated in annual Demographia International Housing Affordability Surveys, Sydney has been the most unaffordable, along with Vancouver, in recent years. Sydney and Vancouver have had among the most stringent urban containment policies in the New World, and the resulting unaffordable house prices under such circumstances are consistent with economic principle.

Premier O'Farrell told the Sydney Morning Herald that the government wanted to "make home ownership a reality again." He continued, "The more blocks of land (lots) we can release, the greater downward pressure we can put on housing because it's been so high for so long." In a press release issued by his office, the Premier recalled that “Before the election, I said I wanted to ensure owning a home wasn’t a fading dream for young families" and noted that the massive housing package "will go a long way to delivering on that commitment."

In the longer run (by 2031), the government intends to provide for a total of 545,000 new homes, while abandoning the practice of allocating locations based upon planning theory. Planning and Infrastructure Minister Bradley Hazzard told the Sydney Morning Herald that the government intended to “look further afield” than the presently planned greenfield suburban growth centers. He continued: "We're trying to [be] less constrictive and restrictive and what we're saying is the marketplace should have far more of a say in what the mix of housing is and where it should be,'' adding that ''it doesn't matter'' what percentage was delivered in greenfield and established suburbs. He concluded: ''No one should be preoccupied by particular prescriptive formulas.''

The government also indicated its intention to encourage one half of employment growth over the next 20 years to be in Western Sydney. Western Sydney is virtually across the urban area from the central business district. This dispersion of employment, along with roadway improvements in the area, is likely to improve the metropolitan balance between jobs and housing.

The plan for greater job dispersion would, if successful, bring Sydney more into line with urban best practices, which are exhibited by the location of most new jobs in edge cities, as well as throughout the entire urban area. Sydney has among the longest work trip travel times in the New World. The one-way work trip travel time is newly reported in the Metropolitan Strategy to have reached 35 minutes. Work trip travel times are worse only in Melbourne, at 36 minutes. By comparison, Dallas-Fort Worth, with a larger population, a much lower urban area density and a mere fraction of the Melbourne or Sydney transit work trip market share has a far shorter one-way work trip travel time (26 minutes).

The Sydney developments are the latest in a trend toward liberalizing urban land use in four nations.

In October, the New Zealand government announced plans to liberalize land-use amid growing concern about the extent to which that nation's urban containment policies have destroyed housing affordability. In the introduction to the 9th Annual Demographia International Housing Affordability Survey, Deputy Premier Bill English said:

Land has been made artificially scarce by regulation that locks up land for development. This regulation has made land supply unresponsive to demand. When demand shocks occur, as they did in the mid-2000s in New Zealand and around the world, much of that shock translates to higher prices rather than more houses.

Recent polling has shown support, by an almost 2 to 1 margin for government action to improve housing affordability, with even higher stronger support in the 18 to 34 age group, where the margin was more than 3 to 1.

The United Kingdom Cameron government is also embarked on a program to liberalize that nation's restrictive land use policies, which former Bank of England Monetary Policy Committee member Kate Barker found to be the cause of severe housing unaffordability in a report commissioned by the Blair Labour government. Planning Minister Nick Boles has characterized the unaffordability of housing as "the biggest social justice problem we have."

In 2011, Florida repealed its statewide smart growth mandate and closed the administrative bureaucracy that had overseen the program. Before that, the government of the Australian state of Victoria substantially expanded the urban growth boundary of the Melbourne urban area.

Wanted: A Reasoned Approach to Dealing with America's Infrastructure Needs

It seems like not a week goes by without fresh warnings about the nation’s”crumbling infrastructure" and renewed appeals to rebuild our aging highways and bridges.  President Obama reinvigorated the campaign with his State-of-the-Union proposal for a $50 billion program of infrastructure investments, $40 billion of which would be devoted to a "fix-it-first" program targeted at urgent improvements such as "structurally deficient" bridges. The following day, the House Committee on Transportation and Infrastructure held a hearing on "The Federal Role in America’s Infrastructure," focusing on the importance of infrastructure for the U.S. economy and the federal role in its preservation and expansion. The same day, the U.S. Chamber held a "Transportation Infrastructure Summit," a day-long gathering to explore "transportation infrastructure challenges and promising solutions" with prominent industry representatives. Yet another meeting, this one convened by Rep. Rosa DeLauro (D-NY), a longtime proponent of a National Infrastructure Bank, will explore innovative strategies for financing infrastructure in a March 18 forum on Capitol Hill.

Two recent reports have added to a sense of urgency about America’s deteriorating infrastructure. The Building America's Future coalition has published a report, Falling Apart and Falling Behind, urging development of a long-term national infrastructure strategy, establishing a National Infrastructure Bank and lifting restrictions on tolling. The American Society of Civil Engineers (ASCE) has released a report, Failure to Act: The Impact of Current Infrastructure Investment on America's Future, warning that if the investment gap is not addressed, the economy is likely to suffer $1 trillion in lost business and a loss of 3.5 million jobs.  ASCE's 2013 Report Card for America's Infrastructure, a detailed analysis of the performance and condition of America's infrastructure  to be  released on March 19, may be expected to reinforce this gloomy forecast (a previous  "report card," issued in 2009, gave the U.S. infrastructure an unflattering grade of D.)     

What kind of impact this flood of warnings and advocacy efforts will have on public opinion and on congressional attitudes and fiscal decisions remains to be seen. They come at a time of severe budget pressures and intense Republican efforts to curb excessive discretionary spending. To be successful, the pro-infrastructure campaign must persuade fiscally conservative lawmakers that there are urgent reasons for a boost in spending on public works that override the imperative to reduce the deficit and get the nation's fiscal house in order. 

Further, infrastructure advocates must convince the nation's  taxpayers--- who see no visible signs of  "crumbling infrastructure"--- that spending more  on transportation will not be wasted but will result in concrete benefits in the form of reduced congestion or shorter commutes. Infrastructure alarmists also must contend with a public that lately has grown skeptical about warnings of catastrophic consequences of minor cuts in spending.  

Lastly, the advocacy campaign must overcome a cynical perception that pressures to increase funding for transportation are nothing more than special interest pleadings of interest groups that stand to profit from higher levels of public spending.  As one transportation advocate at a recent conference observed, "there is an enormous disconnect between us and the American public" --- a disconnect that may not be easy to overcome.

Significantly, improving the nation's infrastructure was not a topic of discussion at the President's meeting with Senate Republicans, according to Sens. Roger Wicker (R-MS) and Orrin Hatch (R-UT), as reported in POLITICO.  The President must have come to a conclusion that his $50 billion infrastructure plan stands no chance of winning a favorable Senate vote ---not to mention being an anathema with the House Republicans.

A Reasoned Approach

No one disputes the infrastructure advocates’ claim that some of America’s transportation facilities are reaching the limit of their useful life and need replacing. Nor does anyone disagree about the need to expand infrastructure to meet the needs of a growing population. But fiscal conservatives among these advocates (and we count ourselves among them) contend that this does not rise to the level of a national crisis requiring a $50 billion crash program as proposed by the President, or a two trillion dollar infrastructure investment program over fifteen years as recommended  by ASCE . 

The condition of infrastructure varies widely from state to state as studies by the transportation research group TRIP and by the Reason Foundation have shown. Most states maintain their transportation assets in a state of good repair and only a few need extensive modernization. "There are still plenty of problems to fix, but our roads and bridges aren't cumbling," said David Hartgen, lead author of the Reason study. "The overall condition of the public road system is getting better and you can actually make the case that it has never been in better shape." Hartgen's conclusion is backed by a detailed study of the condition of America's roads and bridges. The study is based on a variety of sources, primarily from the states themselves as reported to the federal government from 1989 through 2008. ( "Are Highways Crumbling? State and U.S. Highway Performance Trends, 1989-2008, Reason Policy Study 407, February 2013).

The generally acceptable condition of the nation's transportation infrastructure in most places, argues for a more selective approach. Rather than launching a new massive national public works program in the name of "fix-it-first," state-level efforts should be targeted specifically at aging facilities that are in a demonstrable need of replacement or modernization.  "The nation simply cannot afford blindly to throw money at the problem," in the words of one senior congressional Republican. "We have learned from the Administration's $8 billion high-speed rail fiasco that scattering resources in an unfocused manner in order to satisfy demands for geographic equity, leads to imprudent, irresponsible and often downright wasteful spending."     

To the extent that large-scale multi-year megaprojects demanding billions of dollars still figure on the drawing boards of state DOTs,  they can---indeed, they will ---be financed through public-private partnerships, tolling and credit instruments such as TIFIA and state infrastructure banks. They include the I-495 Beltway Hot lanes project in Virginia, New York's Tappan Zee Bridge replacement, the San Francisco Bay Bridge Eastern Span replacement, the I-5 Columbia River Crossing, the Highway 520 floating bridge in Seattle, the Miami Port Tunnel, the Midtown Tunnel linking Norfolk and Portsmouth VA, and two Ohio River bridges in Louisville, a joint undertaking of the Indiana and Kentucky DOTs. All of the above projects will be financed with long-term obligations rather than funded on a pay-as-you-go basis through annual congressional appropriations.

A transition from funding to financing of major transportation infrastructure projects was also the preferred approach of the financial practitioners and analysts assembled at the October 2012 conference on Public-Private Partnerships convened by the American Road and Transportation Builders Association (ARTBA). The most practical way to build future transportation megaprojects, these experts concluded, will be through project financing and public-private partnerships.

In sum, the Highway Trust Fund no longer can serve as a source of capital for new infrastructure, and funding large capital-intensive projects with current user fee revenues on a pay-as-you-go basis is no longer feasible. Instead, look for the states to assume responsibility for remedial "fix-it-first" activities, and for a shift from funding to financing for multi-year construction megaprojects. This may turn out to be the only practical long-term solution to our transportation funding dilemma. Mixes Apples and Oranges on "Worst Cities for Drivers"

The website mixes apples and oranges in producing a list of the 10 worst "cities" for car drivers in the United States. The ratings hardly matter, since the score is based on a mixture of urban area and municipality data.

The Apples: uses the Texas Transportation Institute traveled the may delay measures for urban areas. These are areas of continuous urban development that always include far more population than is in the central city or municipality. There is no data for the traffic congestion measures at the central city level. These traffic congestion scores are's "apples."

The Oranges: The oranges of the population densities for the core municipalities. For example, the density shown for New York is that of the city, at 27,000 per square mile. The urban area has a density of approximately 5000 per square mile.

The Comparison: The net effect is that uses the city of New York, with its 8 million people in approximately 300 square miles to the New York urban area with approximately 18 million people in 3,400 square miles. These are not the same things and any score derived from the mixing of these two definitions is inherently invalid.

This is one of all too many examples of comparisons that are made in the press between "cities," with editors and fact checkers taking insufficient care to ensure that they are using comparable data.