How Councillors voted on the Unitary Plan

At 5pm on Friday the Unitary Plan was officially notified with this notice appearing in the NZ Herald.

NZ Herald Notification notice

The documents that were made available at 5pm included the final version of the plan the Council finished agreeing to earlier in the week. Also available from then were the minutes from that council meeting and so while we wait to see if there are any appeals, I trawled through the minutes to see which way the Mayor and Councillors voted on key issues and tried to put that information into a table. This includes both votes where a division was called and the Mayor and Councillors individually stated their position and votes where the resolution was passed but someone wanted their dissent noted.

A couple on notes about the tables.

  • While most of it was fairly straight forward to follow, it can get a bit confusing when some votes are delayed or especially in the case of item 6.14.1 (which covers the zoning maps) it can be hard to follow who was at the table, who wasn’t and who couldn’t participate due to conflicts of interest.
  • I don’t intend on posting all of the results as some of them are fairly boring technical matters where everyone agreed so I’ll just focus on a few key areas. You can click on the images for a bigger version.
  • The outcomes as to whether a vote was good or bad is based on my judgment call based on what we’ve discussed in the past or the result that will make it easier to deliver more housing. On some votes you may disagree with how I’ve scored it.
  • Green = Good, Red = Bad, C = Conflict of Interest and blank means they weren’t at the table.
  • I’ve only included a small explanation of the items voted on but have also included the page number the vote appeared on in the minutes should you wish to scroll through to see more information.

First up a number of hot topics including heritage and viewshafts

Final UP - Voting Table 1

Here are some of the items related to the City Centre and business zones. We were supporters of deleting the minimum dwelling sizes so most Councillors get marked down for voting to keep them.

Final UP - Voting Table 2

And here are some of the residential zones. One odd observation is that Cameron Brewer supported keeping minimum dwelling sizes in the City Centre but opposed keeping them in the general residential zones.

Final UP - Voting Table 3

There are obviously a lot more votes and as mentioned, many are fairly boring.

One of the reasons for pulling the data together was also to see which Councillors were the most or least supportive. The graph below counts the total number of red boxes from the tables above and the rest of the results. As you can see there was clearly one Councillor whose name came up more than others. To be fair not all votes are necessarily equal, especially some of the dissents which can be for fairly minor things but I think it is interesting none the less.

Final UP - Votes Against

What do you think of the results?

Zoning reform: Costs, benefits, and distributional impacts (1 of n)

This is the first part in an open-ended series on the economics and politics of zoning reform. The Unitary Plan decision means that Auckland’s urban planning framework is set for the short to medium term – albeit with inevitable appeals and changes. But the issues we’ve been grappling with over the past few years – i.e. how, where, and why to adjust the rulebook – will keep coming back. A growing city must also be a continually changing city, and zoning decisions can either help or hinder that.

A good starting point for thinking about the economics and politics of zoning reform is to ask: What are the costs and benefits of allowing more housing to be developed? And how are these costs and benefits distributed?

I investigated these questions in a conference paper at this year’s New Zealand Association of Economists. Without getting into the numbers, we can identify three main effects:

First, the benefits of new housing primarily accrue to people who are newly entering the housing market. For instance, young people trying to buy or rent a home benefit from there being more homes, as it means they can get better housing or cheaper housing. Equivalently, restrictions on new housing development mainly impose costs on people who don’t already own homes. When the supply of housing is restricted, then they face a choice between paying more for housing that meets their needs, living in substandard or crowded housing, or leaving the city entirely.

Second, the costs – adverse effects – of new development are location- and context-dependent. The distributional impacts – who is affected? – can also vary quite a lot. For instance, a new subdivision on the city fringe probably wouldn’t shade anyone’s home or block its view, but it might worsen water quality or biodiversity. And, given the dysfunctional way we build new suburbs, it will definitely increase traffic congestion.

By contrast, redevelopment and infill within the city will tend to have fewer environmental impacts – it’s already a city! – but there are more neighbours who may be affected by the various nuisances associated with development, like having new buildings casting shade on adjacent properties or more people parking on “their” street. People don’t like change very much… but they can easily adjust to different “status quo” scenarios.

For instance, consider Ponsonby. It would all be horribly illegal under today’s zoning codes. Lot sizes too small, buildings too close to each other and taking up too much of the lot, no parking, etc, etc. If you tried to get houses like these consented today, especially in an existing suburb, you’d be refused in about three seconds flat. But because they’ve been there for decades, people see them as something that should be protected – present-day zoning code be damned!

Ponsonby Russell St

Third, enabling housing development can allow cities to grow larger and in a more economically efficient pattern – leading to enhanced agglomeration economies. The benefits of increased productivity and greater consumer choice accrue broadly to most people in the city, or potentially even to the entire country. (Taxes paid in Auckland pay for retirements in Tauranga!)

Conversely, evidence from overseas cities suggests that restricting housing supply can result in large economic costs as a result of the misallocation of workers throughout space. For instance:

  • In the US, Chang-Tai Hsieh and Enrico Moretti found that high housing costs have discouraged people from getting jobs in high-productivity cities – in particular New York, San Francisco, and San Jose. If those cities had allowed more homes to be built over the past three decades – which would have entailed more intensive development – the US economy would now be 9.7% larger than it actually is, with commensurate gains in income.
  • In the Netherlands, Wouter Vermeulen and Jos van Ommeren found that housing supply, not productivity or availability of jobs, has driven cities’ growth. Rather than moving to locations with abundant high-income jobs, people move to places with more homes – again, with a cost to overall economic outcomes.

As Matt Yglesias observed, agglomeration economies benefit workers with different skills… provided that they can afford to locate in high-productivity cities:

…just as factories served as economic anchors for regions, today’s big industries produce broader local prosperity.

Here are some examples from the San Francisco area:

The problem is that for most residents of these places, the higher cost of living erodes the benefits of higher pay.

So how does all this add up? There are two answers. The first is that the benefits of urban development tend to outweigh the costs… provided that it isn’t happening in a totally dysfunctional way, like paving over the habits of endangered birds or building astonishingly unredeemable eyesores. In other words, the benefits for people who are getting housed, plus increased agglomeration economies, outweigh the costs from negative social or environmental impacts. So from the perspective of long-run social wellbeing, zoning that enables more development seems like a good idea.

The second answer is that the distributional impacts tend to determine the politics of zoning. As economist William Fischel observed, local governments tend to be dominated by “homevoters” who are mainly worried about risks to their property values and quality of life. In this context, the fact that enabling urban development mostly has benefits for new entrants to the housing market – i.e. young people and people moving into the city from elsewhere – is pretty important.

National and local voter turnout chart

As economists like to say, the incentives facing local government voters aren’t well aligned with long-run social wellbeing. To current voters, zoning reform isn’t necessarily an appealing proposition. It appears to create uncertainty for their neighbourhood and property values, while principally benefitting other people.

This is a very understandable view for individuals to hold, but it’s not awesome for society as a whole. If cities and economies don’t change, they wither and die, creating vast human misery in the process. In order to prevent that from happening – i.e. to keep people from crowding into unsanitary accommodation or going homeless – we need to be willing to reform our zoning policies.

In the subsequent posts in this series, I’m going to take a look at what that might look like. In the first instance, I want to focus on the institutional arrangements that enable reform, considering issues like:

  • The trade-off between localised and centralised decision-making
  • The good and bad in New Zealand’s legislative framework
  • The role of analysis and evidence in planning decisions
  • The role of social norms in encouraging (or discouraging) people to plan for future generations.

As always, leave your views in the comments.

Local governments’ democracy problem

Local governments have a responsibility to represent the interests and desires of their constituents. That idea is written into the oath that elected representatives swear when taking their seats:

I, [full name of mayor, councillor or board member], declare that I will faithfully and impartially, and according to the best of my skill and judgment, execute and perform, in the best interests of [name of region, district, city, local or community board], the powers, authorities, and duties vested in or imposed upon me as a member of the [name of local authority] by virtue of the Local Government Act 2002, the Local Government Official Information and Meetings Act 1987, or any other Act.

For representative democracy to work, politicians must be willing to think beyond narrow parochial interests and act in the interests of the broader community. But unfortunately, elections don’t necessarily reward politicians that take this view.

The following chart from Local Government New Zealand illustrates a key challenge for democracy at the local government level. Voter turnout in local elections has steadily declined over the past two and a half decades. In 2013, only 40% of registered voters participated. This means that local body politicians have an incentive to respond to the needs and desires of a smaller and smaller share of the population:

LGNZ local government voter turnout chart

In a January press release on LGNZ’s plans to raise voter turnout, their president stated that change was urgently needed:

“Our goal is that, for the first time in nearly two decades, local government will be elected by a majority of New Zealanders,” said Mr Yule.

That’s a worthy mission. But another way of interpreting the data is that, for the last two decades, local governments have had extraordinarily weak democratic mandates. The people that are elected to councils generally aren’t voted in by a majority of citizens. In fact, most people chose not to vote for any of the candidates.

A weak democratic mandate is exacerbated by uneven rates of voting and civic participation. Last year, I took a look at the demographics of the people who submitted on Auckland Council’s Long Term Plan. I found that many groups were severely underrepresented among submitters, especially:

  • Maori, Pasifika and Asian people – underrepresented by 62%, 81%, and 73%, respectively
  • People aged under 25 – underrepresented by 70% or more.

Astonishingly, the picture gets worse when we look at who votes in local elections.

The following chart compares voter turnout rates in national and local elections by age category, using data sourced from the Electoral Commission and LGNZ. (Unfortunately, LGNZ hasn’t published any more recent data, but turnout has undoubtedly fallen further since 2001.)

Older people – i.e. those over 50 – turn out at roughly the same rate in both local and national elections. Younger people generally vote at lower rates than older ones in national elections. But participation among younger people – especially those under 30 – falls off much, much more severely in local elections.

National and local voter turnout chart

This chart shows two important things.

The first is that local governments do not represent the young, except occasionally by accident or in a mood of generosity. Why should they? Young people might be the future, but they don’t turn out to vote. In that context, local governments will generally be captured by the interests of older residents. (Many of whom vote primarily to preserve their property values against nuisances like affordable housing.)

If you believe in democracy, as I do, this seems like a serious problem. It’s important that people are heard at election time, and afterwards.

The second is that there are high barriers to youth participation in local government elections. How else do you explain the wildly divergent participation rates at national and local government elections?

The LGNZ paper I referred to earlier has a more comprehensive run-down of various potential causes of falling voter turnout, but it’s worth mentioning a few possible hypotheses that might disproportionately affect the young:

  • Local government elections are exclusively conducted by postal ballots, which poses a barrier for renters. As young people are much more likely to rent, and renters are more likely to move frequently, the ballots are more likely to be posted to the wrong address. Consequently, there may be a case to set up a few voting booths in places where they can be accessed by young people.
  • It’s difficult to get good information about candidates. As political party affiliation is less common (and less relevant for policy anyway) at a council level, it’s harder to assess where candidates stand on the issues. The media tends to focus on high-profile races like mayoral elections, while paying less attention to councillors and local board candidates. This barrier may be higher for younger people, who won’t have had as many opportunities to get to know candidates in person or by reputation.

I also want to raise one dark possibility that LGNZ does not mention: that youth participation in local democracy is low because it is neither welcomed nor encouraged. In other words, young people may not be heard respectfully at town hall meetings or in residents associations, leading them to get turned off from engaging.

Back in February, Bernard Hickey reported on what happened when youth representatives spoke at a Council meeting on potential changes to the city’s Unitary Plan, which was then being reviewed by an Independent Hearings Panel:

I watched this democratic deficit exposed most cruelly when the Council’s Youth Advisory Chair, Flora Apulu, spoke to the Council about how she felt the weight of the city’s half a million young people on her shoulders as she argued for the affordable housing they desperately needed from this “up-zoned” plan.

She was jeered and heckled by the dozens of elderly and predominantly Pakeha homeowners sitting just metres behind her.

Sudhvir Singh from Generation Zero was jeered even more loudly when he said the generation of home-owners sitting behind him were “pulling up the ladder” of home ownership on the young of today.

“Poor you”, was the response. Indeed. Poor us.

Ms Apulu and Mr Singh seem like they can stand up to a bit of heckling without being intimidated into silence, but the same can’t be said for everyone. If a similarly dismissive atmosphere prevails at other meetings, should we be surprised when few young people take an interest in local elections? As this chart from LGNZ shows, low youth voting rates coincide with a dearth of young candidates:

LGNZ age of candidates chart

To sum up, local governments seem to face challenges for democratic legitimacy. Voter turnout is anemic, and it’s unusually low among the young. This weakens councils’ democratic mandates and weakens their ability to understand and respond appropriately to their constituents’ needs and desires.

So what can be done to save local democracy?

The most important thing that people can do is to get out and vote in the 2016 local government elections. Voting is especially important if you’re young – council decisions will affect whether you can afford to rent or buy a home in the place you’d like to live.

Here are the key dates to keep an eye on. Unfortunately, the enrollment deadline closed last Friday, but if you didn’t enroll in time there’s still an opportunity to request and cast a special ballot.

Local government election dates 2016

But it’s not a matter for individuals. Governments need to lower the barriers that people face to voting in local elections and participating in consultation processes. The low rate of youth participation is not a trivial issue – in some respects, it sits at the heart of Auckland’s housing affordability challenge.

Young people bear the costs of policies that restrict housing supply in areas that are accessible to jobs and amenities. Empowering them in local body politics would create a constituency for change – not one that would sweep aside all other views, but one that would at least have a seat at the table.

What do you think could be improved in local elections?

Auckland 2016 Election Lists

The deadline for the 2016 local body elections was yesterday and last night the Auckland Council released the list of confirmed candidates. The council say 447 candidates have put their hands up for the 170 positions available for Mayor, Councillor and Local Board member. This is down on previous years with there being 470 in 2013 and 545 in 2010. Below are the 17 candidates for Mayor

Auckland 2016 Mayoral Candidates 2

In past years we’ve had some colourful candidates for mayor such as David Willmott under the ticket of Roads First and who could forget Emmett Hussey, especially his campaign vehicle. I wonder if there is anyone this time that can fill that role.

On to the Councillors, with three steeping we’re guaranteed to see some change at the council table and obviously there’s the potential for more depending on how the elections go. I won’t list all of the names but here are a couple of quick observations in no particular order

  • Franklin Councillor Bill Cashmore has been re-elected un-opposed. Bill has been one of the better councillors so it will be good to see him back around the council table.
  • At the last election, Cameron Brewer in Orakei plus Dick Quax and Sharon Stewart in Howick were all elected unopposed. This time Brewer is stepping down (but he’s standing for the Rodney Local Board) and there are four candidates in Orakei. Further east in Howick there are ten candidates standing including both Quax and Stewart.
  • The North Shore has the most candidates with 12 putting their names forward. Chris Darby is standing again but George Wood is not but instead is standing for the Devonport-Takapuna Local Board with five other candidates under a ticket called Team George Wood.
  • Candidates in the Manukau ward have a 50% chance of getting elected with just four people putting their hands up for the job including current councillor Alf Filipaina. The other Manukau councillor, Arthur Anae is stepping down.
  • Further south in the Manurewa-Papakura ward the candidates have an even better chance of being elected with just three people putting their hands up including current councillors Calum Penrose and John Walker.
  • We already knew the Waitemata Ward would be an interesting seat with Mike Lee and Bill Ralston duking it out and they will be joined by just one other in the form of local board member Rob Thomas.

I put together this quick graph of the number of candidates in each ward compared to the number of seats.

Auckland 2016 Council Candidates & Seats

I’m not going to both looking the numerous local boards so you’ll have to have a look at the list if you want to see who’s standing in your area.

I’m sure it’s bound to be an interesting election. Voting opens on September 16 and goes through to October 8.

Register to vote for local body elections

This is a quick reminder: Today is the registration deadline for the 2016 local body elections. If you’re unsure if you’re registered to vote, please hop onto the Electoral Commission website and check your registration.

Although most people don’t participate in local body elections, they’re as important as general elections in many ways. Local governments’ decisions affect a whole bunch of important things, like:

  • Where you can live (and whether you’ll be able to get a home at all!)
  • Where you can work
  • How you get around
  • The quality and sustainability of the local environment, including air quality, water quality and biodiversity.

So please, if you’re not sure whether you’re registered, head to the Electoral Commission and find out. And if you’re at work, school, or out and about, maybe consider suggesting to others that they do the same.

Repost: Why I’m optimistic New Zealand can solve its housing troubles

This is a repost of an article I wrote last December explaining why I’m optimistic about housing affordability in Auckland – and New Zealand’s ability to solve problems in general. I think my optimism has held up reasonably well. Since then, New Zealand’s conversation on housing affordability and urban planning has matured in some important ways – crystallising in the response to the Independent Hearings Panel’s recommendations on the Auckland Unitary Plan.

As Toby Manhire observed, “the most remarkable thing is the response… on the whole it’s been incredibly positive”. Reasonable people could have reservations about aspects of the IHP’s recommendations, but most of the views I’ve seen recognise that the finished plan is a good step forward to solving the housing challenges the city faces.

Meanwhile, the UK has voted to Brexit the EU and a large share of Americans – possibly even a majority if we’re unlucky – are planning on voting for Trump. So New Zealand seems to be ahead of the curve on pragmatic problem-solving. Yay!

What’s the problem?

Housing is expensive in New Zealand, especially in Auckland, where median house prices have increased fivefold since the early 1990s (in nominal terms). Roughly half of this increase has occurred in the last four years, which is causing quite a bit of concern:

Interest.co.nz Aucklan stratified house price index 1992-2015

Housing markets are complex – prices are influenced by both demand-side and supply-side variables. As a result, it can be difficult to tell a single, simple story about why prices have gone up or down in any given year. Take the recent rise in Auckland house prices. Some people argue that it’s a financial bubble (a demand-side explanation); others blame high migration (demand) or distortionary tax policies (demand); and others cite inflexible planning rules (a supply-side explanation) or low construction productivity (supply).

Although short-term dynamics can be mysterious, elasticity of housing supply is the main long-term driver of housing market outcomes in a growing city. The easier it is to build new dwellings in the right places in response to increased demand, the less upward pressure there will be on prices.

The empirical evidence suggests that housing supply in Auckland is slightly inelastic – somewhere in the range of 0.7 to 0.9. This isn’t horrible, but nor is it sufficient to get housing supply in balance with demand.

Severe geographic constraints – Auckland’s harbours and steep hillsides – appear to be an underlying driver of the city’s inelastic housing supply. In this context, settling for average urban planning policies means getting a limited supply of housing and high prices. Consequently, we have to make it much easier to use scarce land efficiently. That means reforming our approach to planning regulations. In the past, we adopted land-hungry policies like minimum parking requirements or severe building height limits without thinking through their ill effects. That has costs, and we need to do better.

Auckland is not the only city coping with high housing prices and a lack of supply – you see similar problems in places like London, New York, San Francisco, and Sydney. However, I would bet that New Zealand will do a better job sorting out its housing affordability issues than other places. In fact, I am betting on it! I’m renting in Auckland, which means that I bear all of the downside and none of the upside of spiraling housing prices.

There are three reasons for my optimism:

1. Our proven track record of policy reform

Let’s start with a pat on the back. Having lived in New Zealand, the United States, and Nigeria, I’d say that Kiwis are, by and large, pretty reasonable when it comes to public policy. We’re not very corrupt, which removes one major source of inefficiency. We generally recognise that as a small, distant trade-exposed country we can’t afford to do things inefficiently. And, due to New Zealand’s small size, there’s usually no need to over-complicate things.

Policymaking anywhere will always be subject to cognitive and professional biases – people screw things up, and sometimes it takes a while to sort it out – but New Zealanders don’t seem want totally irrational or insane policies. Unlike the US, say:

Possibly as a consequence, New Zealand has a record of reforming policies that aren’t working, either incrementally or in one go. The classic example of this is in trade policy. From the 1930s to the 1980s, the New Zealand government oversaw an extensive set of import controls. Te Ara describes this policy:

Faced with declining export returns and a foreign exchange crisis, a Labour-led government introduced foreign exchange controls and import licensing regulations in 1938. The regulations prohibited the import of any goods except under licence or where exempted.

Importers had to apply to government for both an import licence and the foreign exchange needed for purchases. The quota – the amount that could be imported with a licence – was set on the basis of imports the previous year.

Just as restrictions on the efficient use of land produce windfall gains for landowners while foisting large costs on renters and new home-buyers, import licensing created fortunes for some manufacturers while making most consumers worse off. As a consequence, after experimenting with some liberalisation of trade policy in the 1970s and 1980s, the remaining import controls were swept away in the late 1980s.

Recent changes in transport policy also demonstrate our ability to reform bad policies. Over the last decade, there have been some important, although undoubtedly incremental, moves to reform our inefficient monomodal urban transport system.

For example, last year I reviewed a 2010 research research report on deficiencies in NZ’s public transport planning and operations – and was surprised to find that almost all of its recommendations are being implemented in Auckland, Christchurch, and other places. Since 2010, Auckland has:

  • Established a public agency (AT) that can plan and deliver a PT network and supporting infrastructure
  • Developed and begun implementing a frequent, connected network that satisfies best practice network design principles
  • Reformed bus contract models
  • Implemented integrated ticketing (and soon, integrated fares)
  • Started to build bus interchanges and bus lanes.

New Network Model

This is a big deal, but it’s hardly the only story in town. How about the fact that central and local governments are now coming to the party on urban cycleways? For the first time ever, significant investments are going towards one of New Zealand’s “missing modes”.

We now have an opportunity to take the same approach to urban planning – reform what isn’t working and get better outcomes.

2. The structure of our governments

The current structure of New Zealand’s governments makes it easier to implement reforms and make them stick. We have two key advantages in this area that offer a smoother path to policy reform.

First, New Zealand’s government has a unitary structure rather than a federal one. This means that most powers are concentrated in central government rather than distributed among multiple layers of government. Political centralisation certainly isn’t all good – in the past it’s often led to a perverse situation in which urban transport policy is being designed by rural politicians.

But in this case, it makes policy changes much easier. If central government were to, say, issue a National Policy Statement on urban development or rewrite sections of the Resource Management Act (which governs the development and implementation of urban planning rules), it would lead to changes in the way that local governments regulate. That option isn’t usually available in federal systems.

Because any proposal to liberalise planning rules inevitably creates controversy at local body election time, central government involvement can potentially assist in getting important changes over the line.

Second, the creation of the unified Auckland Council ensures that all growth tradeoffs – and the negative consequences of preventing growth – are internalised within a single council. Gone are the days when councils could simply refuse to zone for growth and assume that it would become someone else’s problem instead. Now a single council is responsible for sorting the region’s problems out.

You can see the results in the Unitary Plan – a document that’s not perfect (no plan is!) but which takes some important steps forward. For example, it removes MPRs from the centre zones, which are intended to accommodate a mix of business and residential uses, cuts back minimum lot sizes throughout much of the city, and creates some midrise residential zones.

Amalgamation does come at a potential cost to Tiebout competition, in which adjacent councils compete for growth. But I suspect that the benefits outweigh the drawbacks. As the San Francisco Bay Area shows, local government fragmentation doesn’t necessarily result in more housing supply – the Bay Area has 93 local governments but building permits have still been falling since the 1970s.

New Zealand’s unitary government structure and the creation of a consolidated Auckland Council create the potential for “virtuous cycles” in which local and central government egg each other on to improve urban planning regulations and processes. To date, this has led to things like the Special Housing Areas, which aims to ease consenting in selected areas, and the Unitary Plan hearings process, which is intended to review the plan and allow it to be implemented faster.

The hearings process, in particular, has encouraged Auckland Council to think carefully about its proposed zoning rules. For example, following instructions from the hearings panel, the council is considering rezoning some areas to enable more housing. This is an important step towards recovering from the ill effects of past down-zoning.

FrameWORK_Housing_ZoningCapacity

Down-zoning in Los Angeles (Source: Re:Code LA)

3. The political agenda

Lastly, housing affordability has hit the political radar at a national level. There is an increasing consensus that reforms to urban planning rules are a key part of the solution. The latest Productivity Commission report on using land for housing outlined some key policy changes, and politicians from several major parties have subsequently endorsed a number of these recommendations. For example:

In other words, there is likely to be cross-party support for sensible reforms to urban planning that build on the good work that’s already been done by central and local government.

Globally speaking, it’s somewhat unique – and fortuitous – to have so much attention placed on urban planning issues at both a local and central government level. For example, in the US, a few economists in the Obama administration are starting to talk about the drawbacks of overly restrictive planning regulations. But President Obama has very little ability to influence zoning in San Francisco or New York.

New Zealand is different. We are generally willing to reform policies that aren’t working for us, we’ve got government structures that can facilitate that reform, and our elected representatives are paying attention to the problems and potential solutions. Those seem like good reasons for optimism!

Road pricing #2 – economic benefits

In last week’s post I waded through some of the political mud that was thrown about in response to the recommendation to consider road pricing in Auckland. I concluded there’s not many good reasons to avoid talking about road pricing, even if we don’t need to rush.

In doing so, however, I noticed that much of the discussion on road pricing occurs at what my friend Jarrett Walker calls “low altitude“. By this I mean the discussions tend to quickly descend into debates over things like the level of pricing, payment systems, and what to do with revenue. While I acknowledge these are important questions, they are also questions of detail: They relate to the “how” rather than the “why“. In my experience a good understanding of “why” helps answer the “how”.

In this post I want to look at two ways in which road pricing generate economic benefits. It’s a story of two brilliant people: One named Pigou and one named Vickrey …

1. Static efficiencies – The poisoned chalice of Pigouvian pricing

If you happen to search for “economics of road pricing”, then it’s likely something similar to the following image will pop up on your screen (source). In a nutshell, this graph illustrates the static efficiencies generated by road pricing.

Let’s walk through the details a bit. First, the graph measures traffic volumes on the horizontal axis and trip costs on the vertical axis.

The line marked “Demand” slopes down: As costs fall, traffic volumes rise. That’s sensible: If it is cheaper to travel by car, then more people drive – and vice versa. Now consider the ski-jump shaped curve labelled “average cost”. This shows the average cost of driving from the perspective of drivers; it curves upwards because your travel-time will increase as traffic volumes increase. Now look at the ski jump shaped curve labelled “marginal cost”, which refers to the social cost of each additional vehicle trip. The reason it curves upwards faster than the average cost is because each new car causes additional delays to all existing users. These delays are not reflected in an individual’s decisions, i.e. they are external.

Two important points are also marked on the graph; these are 1) the “Untolled equilbrium” and 2) the (somewhat vaguely named) “Objective”. The untolled equilibrium is where drivers don’t pay the costs of the delays they cause, i.e. it represents the status quo. This point is associated with higher traffic volumes and lower costs than the point marked “Objective”. The latter includes the costs of delays caused to others, and so is associated with lower traffic volumes.

So where do the benefits from road pricing arise? Well, because congestion is an external cost imposed on other people, more people choose to drive than is socially optimal. In this context, internalising congestion costs by way of a toll, a’ la road pricing, reduces demand to a more efficient level, i.e. society as a whole is better off. I should note at this point that congestion is but one externality associated with driving. Noise, air pollution, and accidents are also examples of externalities that drivers should probably pay for. The concept of internalising externalities from traffic congestion was first articulated by an English chap called Pigou, hence the moniker “Pigouvian pricing”.

At this point, many people close the road pricing story book, turn to their friends and family and ask: So shall we price the poor beggars off the roads then? To which the answer is usually “no”, or at best an uncomfortable “maybe”. But we’ll be better off, you might exclaim. Only to be chased out of town by angry people with pitchforks.

Thankfully, the road pricing storybook has another, often forgotten, chapter. Look carefully at the horizontal axis of the above figure, which shows traffic volumes as a function of price, and price only. Can you think of another variable that predictably affects traffic demands and the congestion arising therefrom? Like perhaps time of day? Hmm …

2. Dynamic efficiencies – Get onboard the Vickrey express

The image below is not one that’s easy to find online. I looked and couldn’t find any. Instead, it’s taken directly from my lecture slides (Acknowledgement: This guy).

Bottleneck model

Believe it or not, this psychedelic rectangle is the so-called “bottleneck model”. The vertical axis measures cost, whereas the horizontal axis measures clock time. The point labelled t* is the preferred arrival time at your destination, say 8am at work. The points tq and tq’ represent the start and end of the peak period respectively, say 6-9am, during which time queues form in front of a “bottleneck”, i.e. a capacity constraint. All users are the same (homogenous).

The bottleneck model was developed by Vickrey. One of his key insights is that all travelers face the same cost; the only difference is how costs are split between 1) schedule delay and 2) queuing delay. Another way to think about it: You can either 1) travel early/late and face a shorter queue (but arrive at work early/late) or 2) leave home at the time that gets you to work at the preferred time t* (but sit in queues on your way). Vickrey shows that in equilibrium, options 1 and 2 cost the same (hence why the top of the rectangle, which represents the sum of schedule delay and queuing delay, is flat).

The two green triangles in the above figure represents schedule delay; this is the cost associated with arriving at your destination before or after the preferred time t*. Note that the two green triangles are different shapes, because people generally place a higher value on arriving later than arriving early (NB: This doesn’t change the story). The red area represents the cost of time spent queuing, or “congestion”; it increases from 0 (at tq) to c0 (at t*) and then declines to 0 again (at tq’).

Vickrey showed the optimal toll at any point in time is equal to the length of the vertical red line. That is, if you want to maximise people’s welfare, then you would set a time-varying toll that started off at zero at t = tq and increased to c0 at t*, before decreasing to zero again by tq. This toll would encourage people to leave later, and therefore avoid queues forming early in the morning. In essence, this makes use of underutilised capacity that exists later in the morning; it is a dynamic efficiency.

How does charging a toll equivalent to the cost of queuing delays leave people better off? Well, for the simple reason that time spent queuing (red area) has been “monetized. And unlike time spent in traffic, monetary revenue from tolls can be spent on other things, say lower taxes or increased government investment (depending on the colour of your political pajamas). Basically, road pricing takes wasted time and turns it into something useful (toll revenue).

One point to emphasise; These so-called “dynamic efficiencies” are achieved by changes in departure times (specifically leaving home later), not changes in demand. Moreover, the cost people face is the same with or without the toll. All the latter does is take a time cost and turn it into a monetary cost. The Vickrey model is in this respect very different from the Pigouvian model discussed in the previous section, where benefits arose from suppressing demand.

Conclusions

In this post I’ve presented two simple economic models that help illustrate two different types of benefits from road pricing.

The Pigouvian model focuses on demand. It concludes that a fixed toll should be used to internalise congestion externalities and price some drivers off the road. In contrast, Vickrey’s model argues that a time-varying toll can be used to monetize time spent queuing. The toll encourages people to change departure times, eliminating queues, and generating revenue that can be used for other things. This is as close to a free lunch as you tend to get in economic terms.

Discussions on road pricing often ignore dynamic efficiencies. I think this is unfortunate because I think they are potentially the largest source of benefits. Consider the productivity benefits to commercial vehicles from eliminating queues. Faster and more reliable travel-times would mean that commercial vehicles, and their drivers, could get through more work every day. Think of all the times your tradespeople or deliveries have been delayed en route. It’s frustrating for them, as well as you, but ultimately it’s you and I who pay the price of those delays: Inefficiencies arising from congestion are factored into the price of almost everything we buy.

Real life is obviously more complicated than these economic models imply; real people are not identical and actual tolls are not able to vary by infinitesimal amounts. In response to these realities, some modern road pricing schemes, such as that implemented in Stockholm, blend a fixed toll (a’ la Pigou) with a time-varying toll (a’ la Vickrey). Hybrid road pricing schemes like Stockholm’s have struck a reasonable balance between pricing some drivers off the road, while also encouraging others to adjust their departure times. You can read more about the history and politics of Stockholm’s scheme here.

I want to finish with a final comment on revenue recycling, because I think it’s essential to the potential viability of any road pricing scheme and is something that I will look to cover in future posts. One option would be to use toll revenues generated by road pricing to make a direct, annual per capita payment to Auckland households. This might be similar to the electricity trust payment paid to some households, and would ensure that everyone faced the marginal costs of travelling at peak times – with some money paid back later. A second option would be to use the money to reduce rates. For example, revenue from road pricing could be applied to reduce or eliminate the uniform annual general charge (UAGC). Let me know if you think of other options.

Anyway, that’s more than enough poppycock from me. Keen to hear what others think, and if there are particular aspects of road pricing that you’d like us to research, then please let us know in the comments and we’ll see if we can build it into future posts.

Road pricing #1 – Political poppycockatoos

Well, well, well. What a week.

For those who are interested in Brexit, I am currently writing a short paper on the topic that I hope to make available via the Blog.

Right now, however, I want to cover political issues closer to home. Specifically, the release of the ATAP report. What is ATAP? Well, it’s simply a collaboration between Auckland Council, Auckland Transport, and Central Government that is designed to align plans for transport in Auckland. Not a bad idea.

ATAP recently released a report that has breathed fresh life into the road pricing debate. As many of you will know, TransportBlog has over the years expressed qualified support for the idea of road pricing. While we think it’s important to carefully consider 1) distributional impacts; 2) revenue neutrality; and 3) complementary transport investments (of all modes), these issues should not be allowed to scuttle discussion and research into road pricing. The potential benefits of road pricing are simply too large to ignore, IMO.

Not everyone, however, seems happy with ATAP’s recommendation that road pricing be investigated in the Auckland context. In this post I’m going to review statements made by three political parties in response to the ATAP report. In future posts, we hope to cover some of theory behind road pricing in more detail, and consider their implications for road pricing in Auckland.

1. The Government – Simon Bridges

In the past few years I’ve been somewhat critical of the Minister, as evidenced by posts on Bridges’ bridges and subsidies for electric lemons. We’ve also criticized the ineffective mega-motorway projects this Government has promoted, such as the East-West Link and Auckland Waitemata Harbour Crossing.

On the other hand, I’ve really been impressed with Bridges’ comments on road pricing, which have been refreshingly candid, informed, and balanced. Here’s a selection of what Bridges has had to say about the ATAP report in general, and road pricing in particular (source):

In the short term, more roading and public transport may … be necessary,” Mr Bridges told the Herald. “But that alone isn’t enough. We can’t keep building new lanes on highways.

We will need a combination of demand-side interventions if we are going to deal with congestion over the next couple of decades.

When pressed on his Government’s tepid support for road pricing in the past, Bridges made the following comment:

Asked why the change of heart, Mr Bridges said: “It is the evidence. What’s been shown quite clearly here is that a combination of technology, including pricing, can dramatically lessen congestion on the network.”

In the same interview, Bridges noted that (1) road pricing was intended to manage demand, not raise revenue (even if the revenue could be used to accelerate some specific projects) and (2) road pricing would only be introduced over a period of 10 years, if further research found it to be effective. In these comments, Bridges demonstrated:

  1. An awareness that supply-side transport interventions will not, on their own, be a cost-effective way to manage the growth in travel demands Auckland is experiencing;
  2. A willingness to engage with complex issues, and to change his position if doing so is justified by evidence. This is something that is often hard for politicians to do, and I think is something to celebrate when such changes are based on new evidence coming to light;
  3. An acceptance that if road pricing is implemented, then it should be to manage demand – not raise revenue. This is an approach the Blog has supported for many years.; and
  4. An understanding that several years of research and discussion are necessary before road pricing can be implemented.

In short, I thought Bridges’ comments were candid, informed, and balanced. Bravo. The two issues he doesn’t appear to discuss in detail was (1) distributional impacts, although further research would seek to clarify the nature of these impacts and (2) the need for complementary transport investments to manage anticipated demands from road pricing. While there’s still room for improvement, it’s heartening to seem Bridges take a somewhat bold position on an important issue.

2. The Labour Party – Phil Twyford

Now for a different perspective. In response to the ATAP report, Labour Party MP Phil Twyford commented as follows (source):

The Government wants to tax Aucklanders thousands of dollars a year just to use the motorway network … the average Aucklander … would pay new congestion charges of between $185 and $2461 per year.

National has allowed the gridlock on Auckland roads to get steadily worse over the past eight years, leaving Aucklanders to sweat it out daily in traffic jams … Now they want to whack commuters with a massive tax for the privilege of using a road network that they’ve already paid for with their petrol taxes and road user charges.

I feel Twyford is being overly dramatic, and would like to clarify a few relevant issues from my perspective:

  • The last Labour Government also looked into road pricing; you can still find the reports here. While it ultimately didn’t go anywhere, ATAP is simply a continuation of a debate that started under Labour. In the intervening decade, technology has of course improved considerably.
  • In a revenue neutral situation, the revenue from road pricing would be used to reduce taxes elsewhere. Or increase welfare payments to low income households. Until we know the precise details of the scheme, we won’t know who wins/loses, or to what degree, so any statements to this effect are simply premature.
  • As the ATAP report shows, government spending on transport in Auckland has increased to approximately 2.5% of GDP. This is high by historical standards, and more than most OECD countries. In a nutshell? Both Labour and National have spent buttloads on transport in recent decades; the supply side has received plenty of attention.
  • Transport projects take time to design and construct. Most of the highway projects being completed now were planned under the last Labour Government, even if they have been accelerated under National. Thus, you cannot blame all of today’s problems on National; the transport system reflects decisions made over decades.
  • The road network is never “paid for”, at least not in the way that Twyford implies. Operating costs, the opportunity cost of land, capital improvements, and externalities, such as congestion, noise, and air pollution, are all examples of costs associated with roads that are incurred continuously over time.

On the other hand, it is true that this Government has spent billions on relatively ineffective road projects, such as Puhoi-Wellsford, SH18-SH1 connection, the East-West Link, and Kirkbridge Rd grade separation. These projects do little for congestion compared to their costs, and is something that Twyford is justified in criticising.

Twyford also had this to say:

Without a massive improvement to the public transport system as a viable alternative to driving on the motorways at peak hours, it would be utterly unfair to charge people thousands of dollars extra a year …

The first thing I want note is that it’s not immediately clear road pricing requires complementary public transport investment. The experience in London and Stockholm, for example, was that road pricing caused a ~20% reduction in vehicle travel but only a small shift to PT. In London’s case buses were the big beneficiary of less congested roads, as you can imagine. Personally, I’d expect road pricing would justify some selective investments in PT, but this shift should not be overplayed. The second thing to note is that the statement is duplicitous. Why? Well, the ATAP report considers how road pricing impacts on the demand for PT, and identifies where PT infrastructure and services may need to be improved. Put simply, the ATAP report does not present road pricing as a standalone solution, but instead considers it as part of a wider transport plan. As it should be.

Some of the issues with Twyford’s argument are highlighted in this Radio New Zealand interview, in which he moderates some of his positions under pressure by the interviewer. Twyford makes an excellent point with respect to the North-western Busway: It does seem to be a clear situation where road pricing might create the need for a project to be accelerated.

One other issue worth considering: In a recent press release, Twyford advocated for removing Auckland’s urban growth boundary and shifting costs on developers (NB: evidence suggests costs will ultimately be paid for by occupants, but that’s besides the point). ATAP shows that even with additional infrastructure investment, Auckland would still experience ongoing congestion. The latter might even worsen without an urban growth boundary. So while getting rid of regulations is well and good, it won’t mean congestion disappears. To put it another way, changing the way we fund transport infrastructure from rates to development taxes doesn’t mean that demand management is not beneficial.

Ultimately, I think Twyford needs to take a longer-term perspective on the issue of road pricing. Rather than trying to assail the Government to shut the conversation down, Twyford should be supporting the need for a 5-10 year investigation that gives serious attention to distributional impacts and complementary transport investments. I really don’t see any reason to get emotional before the details of possible schemes are worked through.

3. The Green Party – Julie-Anne Genter

In this interview Genter advances the Green Party’s position on ATAP’s road pricing proposal and also argues for more investment in public transport before road pricing can be implemented. As noted above, I suspect this issue tends to be over-played, simply because the benefits of road pricing don’t necessarily require huge mode shift, as Stockholm and London demonstrate. There’s also several other reasons to push back on the notion that road pricing is not a priority until public transport is improved.

The first reason is that investment in public transport won’t reduce congestion for those who continue to travel by car. In a city that is growing as fast as Auckland, even massive investment in public transport won’t maintain vehicle demands at present levels. By extension, even with significant public transport investment, there will be many, many vehicle trips that will continue to suffer from congestion. Commercial vehicles being a prime example: Why leave these vehicles sitting in congestion, when they are prepared to pay for faster and more reliable travel? One of the key benefits of road pricing is that it enables commercial vehicles to do their thang. And that generally benefits all of us.

The second issue is that, as noted above, ATAP does consider complementary transport investments to support road pricing. There is probably sufficient time between now and when road pricing is implemented to complete the CRL, extend electrified rail services to Pukekohe, progress extension of the Northern and AMETI busways, and construct key elements of the North-west busway. It may even be possible to implement LRT on Dominion Rd within 10 years. Auckland will within 10 years have a much better bus network with higher frequencies and capacity. Now, I appreciate completing all these projects would require a change in Government priorities, and that it’s important to highlight this need, but such things are kind of what the ATAP process is all about. Of course, if and when PT investments are rolled out, we may find that we can delay implementing road pricing, which is all well and good – but the opportunity to avoid road pricing through PT investment shouldn’t stop us (a priori) from discussing how we might implement road pricing.

Basically, I’m suggesting that the Greens should express conditional support for the idea of road pricing, subject to more detail on the nature and timing of its implementation. I don’t think saying “it’s not a priority we should do other things first” is a sufficiently strong reason to object to the recommendations of the ATAP report, at least at this stage.

Wrapping up

All in all I am happy to see the road pricing debate reinvigorated. I’m particularly impressed with comments from Simon Bridges, which are candid, informed, and balanced. Twyford and Genter are justified in highlighting that (1) implementing road pricing will likely require some complementary transport investments and (2) this will likely require the Government place a greater emphasis on public transport than the have in the past.

On the other hand, the positions adopted by both Labour and the Greens come across as overly negative. While I can appreciate this is the general nature of political opposition in New Zealand, I feel that they might want to step back from the political coal face on this particular issue. Road pricing is not a discussion that needs to be rushed, nor should it be shut down. It seems to me that the more reasonable position is to express conditional support, with some specific caveats on where the ATAP research should head.

As something that will take several years to develop, we have the chance to discuss the nitty gritty of road pricing means in the Auckland context without committing to anything. Why fall into hard and fast negative positions before then?

ATAP Interim Report

Yesterday, the second Auckland Transport Alignment Project (ATAP) report was released, with the third and final report due in August. ATAP is the council and government working together to come up with an agreed transport plan for Auckland, one that ultimately performs better than what is currently planned.

The first Foundation Report was about agreeing on the assumptions they would use (such as land use, growth rates etc), and looked at how the currently planned transport projects would perform in the future based on these assumptions. There was a lot of interesting information, but ultimately the report found that by 2046 the outcomes weren’t great, and highlighted that we need to improve our plans or face even greater congestion.

Now we have the Interim Report (2.1MB), which explains the outcomes and thinking so far from the work to look at how our transport plans could be better. The work so far includes looking at a range of transport interventions to see how what impact they have.

So far the media have focused on one very specific outcome of this interim report – road pricing – but there are a lot of other important points that needs to be covered. Perhaps more than anything, the important thing from ATAP so far is that it hints at thr old business saying of ‘joined up thinking’. That’s because it doesn’t just take a “build more stuff” approach, but looks at a mix of building stuff and also managing demand. So let’s go through what I thought were some of the key and interesting points found in the Interim Report.

Revenue Assumptions

While the purpose of ATAP is to come up with a better and aligned transport plan, it’s also important to consider how much that might cost. To that end, the ATAP team have taken a stab at how much money might be available to spend in the future. Investment in transport in Auckland has been much higher over the last decade, as the city has gone into catch-up mode, however they’ve projected that level of investment forward based on a couple of options. Continuing the current investment:

  • as a share of Auckland’s projected GDP – currently estimated at over 2.5%
  • on the same per capita basis.

Because productivity is expected to improve over time, the share of GDP measure results in a lot more transport spending and over a 30-year period results in total difference of around $23 billion. The two approaches are shown below, with the current expected spending also shown as far as is currently budgeted (10 years). The lump in current investment is the result of a heap of big projects on the books including CRL, East-West link, Puhoi to Warkworth etc.

ATAP - Interim Report - Revenue

Testing Alternative Packages

ATAP have tested alternative scenarios and condensed these down to two packages as shown below.

ATAP - Interim Report - Test Packages

These have then been modelled, to see how they perform relative to the Auckland Plan Transport Network from the Foundation Report. The outcome isn’t great, and they say that while there can be some improvements made in some areas, they are not to the level that would be needed to make a material difference. The colours on the graphs match the colours above.

ATAP - Interim Report - Package Modelling

The graphs above are at a regional level, but at a sub-regional level, things can be quite different. The Foundation Report highlighted big issues with accessibility from the South and West.

The big improvement in the Northwest for PT is the result of building the Northwest Busway, highlighting once again just how stupid it is that the NZTA aren’t building it right now as part of their motorway widening.

ATAP - Interim Report - Package Modelling - South + west

The report also gives a lot of backing to Auckland Transport’s plans for light rail – although without actually mentioning it. It talks about how a number of bus corridors to the city centre (North Shore, Northwest and Isthmus) will be subject to significant capacity issues unless something is done. The example given is of Symonds St showing that by 2045 it is well over capacity.

ATAP - Interim Report - Symonds St

The Additional Waitemata Harbour Crossing gets a specific mention too, which is unsurprising because as currently planned, it’s by far the single biggest transport project ever planned in New Zealand. What is surprising, though, is that ATAP seems to pour a bit of cold water on the road-building side, saying that it doesn’t improve congestion and seeming to suggest that perhaps a PT-only crossing might be more appropriate.

Improving access to and from the North Shore

  • The bridge and its approaches are a pinch-point on the transport network, particularly during the evening peak in both directions.
  • An additional crossing significantly improves accessibility to/from the North Shore, but does not appear to substantially improve congestion results.
  • Projected growth in public transport demand appears likely to trigger the need for a new crossing within the next 30 years. There is potential for a shared road/PT crossing, but the costs and benefits of different options require further analysis.

High cost of potential solutions

  • Because any new crossing will be tunnelled, there is a significant opportunity cost arising from this investment. Fully understanding key drivers, alternatives, cost and benefits will be crucial before any investment decisions are made.
  • It makes sense to protect the route for a new harbour crossing in a way that integrates potential future roading and public transport requirements.

The congestion issue is highlighted in these results, showing it is just as bad or actually worse.

ATAP - Interim Report - AWHC

New Opportunities

New opportunities represent some of the potential changes that could be made to the system but which are not currently in plans. It’s possible that they might not all become reality, but they were included in a bid to see what impact they could potentially have.

Part of ATAP’s terms of reference was to look at the impact of road pricing as a demand management tool. While the media have picked this up as “motorway tolling”, the outcome ATAP is talking about is quite a different beast. In essence motorway tolling was about raising as much money as possible and trying to do that efficiently. Road pricing for demand management is primarily about trying to get more efficient use of the road resource we have. ATAP is talking about pricing roads regardless of whether they are motorways or local roads, across the entire region i.e. a network-wide solution.

Their hypothetical solution looked at having varying charges between 3c and 40c per kilometre depending on time of day, location and the type of network the travel occurs within. As a comparison, a rough estimate suggests current fuel taxes are about 6c per kilometre now. An example of how the pricing could differ is shown below.

ATAP - Interim Report - Road Pricing Differences

This would still need some infrastructure investment, particularly on PT to give people options and these were included into a fourth package for modelling. As you can see, this fourth package (in blue below) performs significantly better than the other packages above when it comes to congestion.

ATAP - Interim Report - Manage Demand

This initial work suggests that the package of ‘road pricing plus extra public transport investment’ makes a massive difference, for both congestion and accessibility as shown in the two images above. ATAP says more work is needed to determine the exact impact, but it seems that road pricing is likely to have a major role in Auckland in the future. This has also now been confirmed by Simon Bridges, whose predecessors were very negative about earlier tolling ideas. This is a significant change and a welcome one.

In addition, ATAP also considered the impacts of technology, such as higher occupancy vehicles, most likely through ride-sharing and connected vehicles. They say the results are encouraging but also warn they likely reflect a best case scenario. Furthermore, as they don’t include any potential impact on overall travel demand (which could be significant), those savings could disappear.

ATAP - Interim Report - technology

Emerging strategic approach

ATAP say they asked the question of Should we build more or should we address demand? Ultimately, they suggest the outcome is likely going to be a mix of infrastructure and demand management. They highlight that there are likely diminishing returns on infrastructure, since it is increasingly expensive to provide to the existing urban area, so building our way out isn’t an option. This is an issue being faced all over the world.

All of the work above leads to the high level strategy ATAP will take – which is not all that different to what we’ve seen suggested before in various documents.

ATAP - Interim Report - Emerging Stragetic Approach

Overall, ATAP seems to be on the right track with the approach they’re taking. With the government, the council and all of the relevant agencies working together, it’s likely we’ll end up with a lot more agreement on transport in Auckland than we’ve had in the past. Have you read the document, if so what are your thoughts?

Sunday reading 5 June 2016

Welcome back to Sunday reading this long weekend.

We start this week with a borrowed slide explaining the way that the quality of your city’s Transit system controls the quality of your driving commute:

DOWNS-THOMPSON PARADOX

This explains what’s wrong with current expansion of SH16 and the completion of the Western Ring Route. The Transit part of this project is woefully inadequate: Intermittent bus lanes on the shoulder of the motorway are unlikely to lead to sufficiently fast or reliable bus travel times, this means the choice of taking the bus will probably not be attractive enough to tempt enough people away from driving on the newly widened motorway. This will lead to more induced driving and an increase in traffic congestion [which ironically will further slow those buses, because they are not on their own RoW]. Perhaps not immediately on the new parts of motorway itself, but certainly on local feeder roads and especially in the city and CMJ where the State Highways 1 and 16 and city exits all meet.

The biggest beneficiaries of high quality Rapid Transit are those who need or choose to drive. The better the alternative; the better your drive.

Staying with the value of Rapid Transit let’s head to Montréal where plans for a new layer of Rapid Transit has just been announced [in Lime Green below, with existing networks], which raises important issues around driverless technology:

reseau-electrique-metropolitan-montreal-metro-subway-map-connections

Similar to Vancouver’s Canada Line, a system that CPDQ also has a financial stake in, trains will run every three to six minutes along the mainline and every six to 12 minutes on the three branch routes, including the train service from the airport to downtown. In contrast, the Deux-Montagnes commuter rail line is limited to every 20 to 30 minutes during rush hour and every hour outside of rush hour on weekdays.

But these high frequencies are only possible due to the nature of automation, which makes frequent train services significantly more economically feasible to operate. If there is a surge in demand, operators can easily and quickly increase frequency by deploying more trains by switching the controls at the operations centre.

With driverless technology, the operating costs are markedly lower than systems that require drivers and it has the potential to attract more ridership given that frequent services and superior reliability increase the utility of a transit system. Knowing that a train or bus will come soon, a transit service with a high frequency means transit users do not have to worry about service schedules. This reduces waiting times and connection times between transit services.

We really need to have a Transport Minister and Ministry just as excited about the opportunities for these technologies in the PT space as they are about them for private vehicles, the value is huge and the technology proven. SkyTrain in Vancouver has been driverless since 1985, carries 117m pax pa, and has run at an operating surplus every year since 2001.

Staying in Canada, here is how Montréal can have such ambitious city-building plans, central government is chipping in:

The new Canadian government is shifting investment to sustainable and social assets, away from Carbon intensive assets likely to become a burden on future citizens, and away from the failed ideology of austerity:

Investing in infrastructure creates good, well-paying jobs that can help the middle class grow and prosper today. And by making it easier to move people and products, well-planned infrastructure can deliver sustained economic growth for years to come.

At the same time, new challenges have emerged that make the need for investment more acute: things like the rapid growth of Canada’s cities, climate change, and threats to our water and land.

Congestion in Canadian communities makes life more difficult for busy families, and has a negative effect on our economy—when businesses can’t get their goods to market, it undermines growth.

A changing climate is also hard on communities. From floodways to power grids, investments are needed to make sure Canada’s communities remain safe and resilient places to live.

Investing in infrastructure is not just about creating good jobs and economic growth. It’s also about building communities that Canadians are proud to call home.

With historic investments in public transit, green infrastructure and social infrastructure, Budget 2016 will take advantage of historically low interest rates to renew Canada’s infrastructure and improve the quality of life for all Canadians.

In Budget 2016, the Government will implement an historic plan to invest more than $120 billion in infrastructure over 10 years, to better meet the needs of Canadians and better position Canada’s economy for the future.

2.2-en

Frankly I expect this kind of approach to become orthodox this century. That is once we can shake the stultifying grip of last century’s habits and world view, and properly start to address the issues in front of us.

More on vehicle speed and safety, this time from Nate Silver’s 538:

Given the social and economic toll of speeding, one might assume that we set speed limits with careful calculations aimed at maximizing safety. But that’s not exactly how it works, and a history of questionable applications of data is partly to blame.

Roads are planned according to a concept known as design speed, basically the speed vehicles are expected to travel.3 Engineers often apply the 85th percentile rule to a similar road to arrive at the design speed for the proposed road. It might make sense, then, that the design speed would become the speed limit. However, in practice, the design speed is often used to determine the minimum speed of safe travel on a road.

Confused? So was I. Norman Garrick, a professor of engineering at the University of Connecticut, explained how this works using the example of a commercial office building.

“It’s completely unacceptable for someone to die in a plane crash or an elevator,” he said. “We should expect the same of cars.”

And for some local flavour via Stuff: Drivers not coping with Christchurch’s new central city 30kph limit:

Acting Senior Sergeant John Hamilton said police spent 90 minutes on Friday to see if drivers were abiding by the new limits. Stuff witnessed about 10 drivers being pulled over for speeding on the corner of Montreal and Cashel streets within 30 minutes, including two Christchurch City Council staff. 

Hamilton said most of the drivers ticketed were driving between 50kmh and 60kmh, with one motorist spotted driving 65kmh.

Now I have some sympathy with these drivers for the simple reason that the both street [see above] and vehicle design mean that to stay below 30kph in anything other than congested traffic takes a huge amount of attention and control. You might argue that we should be attentive and ‘in control’ whenever we are driving, and of course that’s true, but the fact is that most operation of the vehicle for anyone but learner drivers is a subconscious act, and in fact needs to be as we should be focussing on the environment and not constantly checking the speedo. But of course, in truth, half our minds are really elsewhere, on other things when we drive; we do it on a kind of human autopilot. So if we want drivers to keep to safer slow speeds in cities, or around schools, or wherever, we really need to change the physical environment to forcibly slow the ‘natural’ speed of those places.

As for the cars themselves, well that’s a lost cause, even the simplest little car is way overpowered and torquey for these environments: they just want to get up to highway speed and stay there. Perhaps these slow streets won’t really work until those law abiding pendants the bot-cars are ponderously pootling us around…? Note these drivers weren’t just breaking the 30kph limit they were all also breaking the old 50kph one!

CHCH slow streets

Christchurch 30kph network

Related: we do like this more creative communication from some Transport Department:

Below a very interesting chart showing population change in London. I like that it has a name, and a good one, for the cycle we are clearly in now: City Renaissance and that it dates its beginning unambiguously to the early 1990s:

London Population changes

Note also that London’s population growth in this City Renaissance period has decidedly been both up and out, not just up. The rest of the paper, City VillagesPDF, from the Institute for Public Policy Research is very interesting too and relevant to Auckland’s situation. Basically the housing supply problem can be pretty clearly matched to the abandonment of public housing construction under neoliberalism, same as in NZ. Despite population growth, State and Council dwelling numbers have been falling not growing in recent decades:

London Housing supply

And lastly, something from the energy transition department. Luís de Souza is a scientist from Portugal who is always worth reading on energy supply, especially for anyone interested in the longer term trends than the noise of the trader market as reported in the MSM. Here he is calling 2015 as the year of Peak Oil:

Titling the last press review of 2015 I asked if that had been the year petroleum peaked. The question mark was not just a precaution, the uncertainty was really there. Five months later the reported world petroleum extraction rate is pretty much still were it was then. This is not a surprise, but the impact of two years of depressed prices is over due. 

Nevertheless, during these five months of lethargy the information I gathered brings me considerably closer to remove the question mark from the sentence and acknowledge that a long term decline is settling in. Understanding the present petroleum market as a feature of the supply destruction – demand destruction cycle makes this case clear.

So happy Birthday Queen Victoria [yes it’s actually her birthday], and happy reading…