Editors Note: The following letter was sent by Alan E Pisarski to The Wall Street Journal in response to articles on highway productivity in the context of highway productivity and current proposals for highway spending. Pisarski is creator and author of the Commuting in America series a member of the consulting team to the Transportation Research Board (TRB) study of the upgrading of the Interstate highway system. The letter was not accepted for publication, but we are pleased to print it here.
PROPOSED LETTER TO EDITOR: THE WALL STREET JOURNAL
The WSJ in a piece by David Harrison written July 4 and now expanded in an addition on July 14 is aimed at questioning the federal spending being focused on roads. It introduces all of the standard research papers from over the years as if they were really news. We should do benefit-cost analyses – what a breakthrough thought! Basically, the pieces suggest what the transportation community has been doing for 50 years. The biggest payoffs are early in a road systems life – if the investment were rational one would expect so wouldn’t one. That point was made in research in the 90’s on the massive pay offs generated by the Interstates on the order of 25% of all productivity growth over two decades. The Federal Highway Administration has had a standard process for highways and bridges addressing all those points for decades. What he could have noted is that the data to drive that work is terribly outdated, mandated to be reported every two years and is still waiting. The data that Congress requires to base investments on are now 7 years old. But probably no one has looked at it, certainly no one has noticed its late! All of the data in the present debate in Washington is of the order of: my number is bigger than your number. No sense of quantitative analysis has even been in the room when financial “plans” are being waved about.
While David Harrison’s summary treatment of highway spending and productivity has a lot to commend it. There is great care needed in automatically assuming highway infrastructure spending will not generate greater productivity. His argument goes wrong in at least two areas:
The first is that travel increases on new roads, labeled “induced demand” is somehow unproductive – “the roads just fill up again” argument. That demand is a good thing. It means that more people and goods can go where they want, when they want and how they want – close to a perfect definition of transportation productivity. Would we make that argument about any other form of facility investment? The hospital just filled up again; the library just filled up again; the school filled up again – let’s not build anymore of them. “Induced” demand is really latent demand that had been deferred because of lack of adequate accessibility.
The second point, that we learned in the National Academies study of the Interstates, Transportation Research Board Special Report 329, reported to Congress in 2019 is that the doubled population growth and the economic growth since the building of the interstates has generated demand in new places. What was the population of Las Vegas and Phoenix in 1956 when we designed the Interstates? That’s why there isn’t one between those two massive regions. Take a look around. Bringing access to new areas can be an immense boon to productivity. Moreover, the economists are tragically weak on their ability to assess the logistical needs of interstate commerce and international competitiveness. To assume that there are no new connections or improvements needed is utterly unsupported and needs far more serious study. We can all agree that our transportation economic statistics are really in need of updating. Where in this legislation is there support for the Constitutional mandate to defend and support interstate commerce?
Finally, just the upgrading of our present highway systems, meeting the backlog of maintenance and upgrading the system to respond to new technologies on the horizon can keep a properly designed investment process productive for a decade or more.
In an article entitled “Financial hit from Covid far less drastic than feared,” The Times of London reported on July 8 reported that “Unemployment, debt and earnings have not worsened significantly as a result of the pandemic, Britain’s leading economic think tank has concluded, hailing the findings as “astonishing”.
The report by the Institute of Fiscal Studies (IFS) expressed “surprise” that unemployment is much lower than was expected, that there has been only a small increase in people in arrears on bills and that the number of people using food banks increased minimally during the pandemic and is now below pre-pandemic levels.
At the same time, IFS noted “while the national picture was remarkable, its figures masked groups who have seen clear increases in hardship, particularly the self-employed and families already experiencing in-work poverty before the pandemic hit.”
The article attributed the positive developments to government interventions to support working people, more than one-third of whom received government support during the pandemic.
We add that, had it not been for the conversion to remote work, these results could not have been achieved. According to the OECD (See Note below), in Mid April of 2020, 49% of the United Kingdom pre-pandemic work force was working remotely, while 20% were working at their physical employment locations, leaving 31% who were not working (Figure). This data suggests that about 70% of the working population was teleworking (Figure). Had remote work not been embraced, the unemployment rate would have been far higher and the economic disruption would likely have been at least as bad as the most dire expectations.
Note: OECD, “Working during COVID-19: Cross-country evidence from real-time survey data.” At oecd-ilibrary.org
Fortune recently published an interview with Ed Pinto, director of the American Enterprise Institute Housing Center, and former chief credit officer of Fannie Mae.
In the interview, Pinto tells Fortune’s Shawn Tully that the high end prices have increased in price as at least as much as medium to high portion of the market. This is unusual, but not so unusual is the fact that prices of high end housing are increasing faster than the low end of the market, which typically experiences the biggest price increases.
Pinto attributes this to “The work from home economy” that has “unleashed people who before the pandemic were tied to jobs in expensive coastal metros and empowered them to move to cities where they can get a lot more house for the same or in most cases less money.”
Pinto describes the United States as having two housing markets, the coasts and the interior. About a quarter of the population lives in the coastal market, where house prices average seven times income, according to Pinto. In the interior, on the other hand, house prices are 3.5 times incomes. Pinto says: “That opens a high-pressure dynamic that’s pushing people to move to where housing is more plentiful and a lot cheaper.”
He notes that restrictions on new house building have forced people in metros like Los Angeles and Seattle “to pay ever higher prices for a relatively small, aging pool of homes.
He cites migration increases to the usual domestic migration magnets like Austin and Raleigh, but notes big increases in less likely metros such as places like Pittsburgh and Columbus. Moreover, he cites local moves away from urban cores to peripheral locations in California, observing an equally strong trend from “downtown rentals” to “roomy homes” far out of town.
After a COVID interruption, CICA has now announced winners the 2020 Bruno Zevi Book Award, and Infinite Suburbia is among those honorably mentioned. The award is highly competitive and will be presented at UIA World Congress in Rio de Janeiro.
According to the Chamber, “San Franciscans are overwhelmingly supportive of solutions to these issues that were proposed in Mayor London Breed’s recent proposed budget. 60% of San Franciscans believe that it should be a high priority for the city to maintain funding for police academy classes, so that we can recruit younger, diverse, progressive members to replace those who have retired or left the SF Police Department. 76% of San Franciscans believe that it should be a high priority for the city to increase the number of police officers in high-crime neighborhoods.”
Results of the poll were presented at the 171st annual City Beat breakfast on June 23. The Chamber also hosts an “Economic Recovery Dashboard” on its website, with statistics on issues such as “percent of small businesses opened,” a measure on which the city trails New York City, homeless tent complaints, broken storefront windows, overflowing trash cans, animal and human waste, etc.
Evidence keeps mounting that conversion to the “hybrid” or “cloud” employment model is gaining steam. The Quebec government has announced its back to work program for provincial employees. The government administration Minister, Sonia LeBel announced that starting on September 7, up to one half of employees will be allowed to work from the office one or two days per week. After November 15, all employees will be required to work two days per week in the office.
Labour Minister Jean Boulet stressed that even with the hybrid model “If the 2-metre distance can’t be respected, we will have to ensure that there are physical barriers in place and that people wear a mask… Everyone will need to know how to respect these principles. Until Sept. 7, we have ample time to prepare and plan properly.”
The two Ministers also announced that all employees “whose job allows it” will be able to work up to three days at home starting at the beginning of 2022.
Minister LeBel said “The ‘3-2’ formula strikes the right balance. It gives workers the benefits of teleworking while consolidating our workplaces and strengthening the sense of belonging among employees.”
On today’s episode of Feudal Future hosts Joel Kotkin and Marshall Toplansky are joined by Julius Krein, editor of American Affairs, and Aaron Renn, an opinion-leading urban analyst, consultant, speaker, and writer on a mission to help America’s cities and people thrive and find real success in the 21st century.
Julius Krein is the editor of American Affairs. American Affairs is a quarterly journal of public policy and political thought. It was founded to provide a forum for people who believe that the conventional partisan platforms are no longer relevant to the most pressing challenges facing our country. The obsolescent ideologies and expectations of previous decades are constraining our political discourse. The hyper-partisan posturing of our politics masks an underlying conformity and complacency in our intellectual life. American Affairs, by contrast, seeks to advance a more ambitious discussion of the fundamental issues and divides of our time.
Aaron Renn focuses on urban, economic development, and infrastructure policy in the greater American Midwest. He also regularly contributes to and is cited by national and global media outlets. He is a columnist for Governing magazine and his work has appeared in the The Guardian (UK), The New York Times, and The Washington Post, along with many others. Renn was a Senior Fellow at the Manhattan Institute from 2015-2019 and is a Contributing Editor at its quarterly magazine City Journal. Prior to his work in public policy, Renn had 15 year business career in management and technology consulting, where he was a partner at Accenture. He also founded the urban data analytics software platform Telestrian, which continues to underpin his work on cities.
[ 2:48] Changes in Wall Street and the financial community
[10:01] The effect of elite thinking on the middle class
This show is presented by the Chapman Center for Demographics and Policy, which focuses on research and analysis of global, national and regional demographic trends and explores policies that might produce favorable demographic results over time.
We have previously shown that California is the least sprawling state, with an urban population density of 4,304 per square mile of land in 2010 (the last year for which such data is available --- new data will be reported in the 2020 census). This is slightly higher than New York, at 4,181, with its large lot New York City suburbs and low density urbanization upstate. This more than dilutes the effect of the nation’s densest large municipality (New York), which has more than 27,000 per square mile.
California’s urban densification between 2000 and 2010 was simply above and beyond that of any other state. The density of new urban development was 11,100 per square mile. (See: State Urban Density: 2000-2010 and below). This is nearly as dense as the city of Chicago, yet is spread all over the state, from Siskiyou County to Imperial --- and thus includes a lot of areas that can hardly be considered dense urban.
California’s density of new urban development was more than double that of number two --- Oregon, with its tough urban planning law. It is more than five times that of urbanization in the nation.
California has some of the most restrictive land use policies in the nation and there has been much analysis of the relationship between these and rising house prices. With California’s growth rate having dropped by 40% in the 2010s from the 2000s, and now losing population, these contrasts could be shown to be even greater when new data is released.
On this episode of Feudal Future, hosts Joel Kotkin and Marshall Toplansky are joined by Andrew Romans, Venture Capitalist, 3x author, advisor to Corporate Venture Capital Groups & Host of podcast - Fireside with a VC.
Andrew Romans is the founder of 7BC Venture Capital and Rubicon Venture Capital. Andrew lives by the motto - only invest if you can add value – otherwise, you do not deserve to be in the deal. He has financially outperformed more than 75% of all VCs in Silicon Valley. Before becoming a VC he was a VC-backed entrepreneur and 3x author, former techVC and M&A investment banker, founder of The Founders Club & cofounder of Georgetown Angels. He is the author of Masters of Corporate Venture Capital, Masters of Blockchain & The Entrepreneurial Bible to Venture Capital, which have been translated into Chinese, Japanese, Italian and Russian by major publishers. Romans raised over $48m for tech startups he founded by the age of 28. He is fluent in English, French & German. MBA Georgetown University, which he completed on scholarship.
[ 2:33] Concentration of power in global tech
[ 6:45] Historians perspective of the power of tech giants
[16:30] The impact on the middle class and becoming labor slaves
[29:08] Effect of regulations on tech giants and a glimpse into the feudal future
This show is presented by the Chapman Center for Demographics and Policy, which focuses on research and analysis of global, national and regional demographic trends and explores policies that might produce favorable demographic results over time.
Newgeography.com Context Note: We are pleased to present the following press release from the Housing Industry Association, Australia’s association of home builders. For some years, planners and governments have pursued densification policies that encourage households to choose multi-family rather than detached housing. Historically, detached housing has been dominant in Australia, but in the middle 2010s, multi-family housing was a majority of new construction in some months. With the pandemic, remote working and the increased demand for space — both in houses — and in gardens, detached housing construction rose strongly and again dominates housing construction.
Infinite Suburbia is the culmination of the MIT Norman B. Leventhal Center for Advanced Urbanism's yearlong study of the future of suburban development. Find out more.
Authored by Aaron Renn, The Urban State of Mind: Meditations on the City is the first Urbanophile e-book, featuring provocative essays on the key issues facing our cities, including innovation, talent attraction and brain drain, global soft power, sustainability, economic development, and localism.
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