With robotaxis, more VMT is inevitable. But perhaps, not much.

The simulations on robotaxis have been clear for years: more VMT is inevitable, because trip-ends are poorly matched to trip origins. If two people are going from home to work, that's four Origin-Destination trips, of which only two are ferrying people*. More miles on the road, but less demand for parking at destinations. 

Is that a worthwhile social trade-off? Ignoring the equity question ("Who benefits?"), and converting it all into something fungible (dollars), what's the value of a parking space versus the cost of road capacity? Answering that question requires bounding it in time and space: a parking space where, and VMT when. The value of a parking space in Manhattan could easily be in the hundreds of thousands of dollars, while a parking space in rural west Virginia might actually be negative. Likewise, the cost of adding an additional car to the roadway at 3a is basically zero - the road is sized to serve peak hour traffic, and 90% of the time, isn't carrying anything like that volume. So as a thought experiment, say it's the peak hour and parking for a major league baseball event, where parking is $300 an hour for a prime spot. For the robotaxi user, not parking is a clear win - the cost of the trip might be $45, for a $90 round trip--still a huge win. But for society, what's the marginal cost of the additional VMT generated by the robotaxi moving to its next fare.  Extreme case is that it's pure dead-head - no outbound fare from the stadium and drives all the way back to where it picked up the last guy to start its next fare. 

Quick google suggests a value of 1.6 cents per mile for federal costs, plus .1-.5 per state. Call it two cents a mile. Say the stadium trip is 20 miles. So that's .02 * 20, or forty cents. 

Ride-hailing companies will argue that this is an absurd case, but empirical evidence has not been made broadly available. Published meta-analysis suggests robotaxis will generate more VMT, but not that much. Six percent is more than a rounding error, but far less than the 50% I've seen bandied about in the past. I suspect that it's density dependent - if you convert a whole city to ride-hailing, you get much better matching--the next pickup after a drop-off, the dead-head DO pair, is much lower. As a thought experiment, consider a city with only one robotaxi, taking fares on a more or less random basis. Adding a second robotaxi substantially increases the chance that time and place can be made to match, and adding a thousand robotaxis is exponentially better, as the DO distance and time match converge exponentially. 

But as with many urban schemes, the devil is in the details. Lots of schemes falter because while the end-state is optimal, a long-term project requires every intermediary stage to be sufficiently self-supporting to sustain itself if/when there is a pause in the progress of the scheme. In a way, that speaks well for the future of robotaxis--they've proven to be financially viable even at very low levels of penetration.

Also clarifies why Uber expanded from city to city only incrementally - it required massive subsidy (to drivers and passengers) to ensure sufficient market participants for the scheme to work in the first place. Lacking drivers, wait times would be analogous to that of phone-hailed taxis. But lacking a series of passengers, no driver will find it worth their while to make that first pickup. So the whole market had to be bootstrapped into existence.

It's fallacious to equate "there is no demand at that price point" with "there is no demand".

If the starter housing bonus was less profitable than building monster/luxury houses, developers (rightly) ignored it as irrelevant. It's obviously fallacious to equate "there is no demand at that price point" with "there is no demand". A single look at a basic economic chart* makes it pretty clear:

The price we 'see' and can observe is an equilibrium between supply and demand.  If I want 1100 SF of house, I can get that for $2000 a month. But If I could get 1200 SF, I'd take it. Likewise, if I could get 1100 SF for less than $2000 a month, I'd take that too. If push comes to shove, I might take 800 SF of house, but I'm not going to be willing to pay $2000 a month for it. 

Further, the discount in price has to reflect the discount in the quantity of what is being purchased. Being asked to pay $1800 for 800 SF is a bad deal when I can get 1200 SF for $2000. Of course, both supply and demand are non-linear (hence, curves), so I might be willing to pay $1500 for 800 SF, rather than the $1333 you'd intuitively expect. 

Regardless, there is no demand for starter houses at large-house prices. A subsidy offering me an extra $50 if I'll take an 800 SF house is totally irrelevant if aforesaid house costs $1600 a month. The subsidy just shifts the price curve down, but it's the equilibrium point that matters. Saying "there is no demand for starter houses" is nonsense. Look at that curve--there is a huge amount of demand below the equilibrium point! But none of it is matters, because the price is too high! 

* Undergrad economic textbooks are bad to the point of being gibberish. Do yourself a favor and buy Economix. I specifically mention this as mine left me baffled when it talked about things 'moving along the curve'. To be clear, in the chart, when one of the curves move, the equilibrium point shifts to a new point along the other curve. 

On Greedy Developers

 Developing housing is incredibly risky, and (successful) developers are incredibly risk averse, so they walk away from anything that even smells like it might not be profitable. A lot of people chalk this up to greed, but that kind of misses the point. If you are a developer, anything you do is with borrowed money. And if you borrow money, and can't repay it, no one will ever loan you money again, and your career is over, and your company is bankrupt. So, every developer is incredibly cautious to never let that happen. And the best way to prevent that from happening is to plan for projects that are incredibly profitable. That way, when things go wrong  is to have a project that is planned to have a very high profit margin. Lot of developers won't touch anything with less than 10% profit at the initial planning phase. It's not greed, but a rational reaction to being an investor in a high-risk context--only the risks with the highest potential reward are worth gambling on.

A useful contrast is the Good Samaritan who plans to build housing with 0% profit. When things go wrong (permits delayed, material prices go up, labor costs rise), the project doesn't get finished, and the half-completed construction is ruined, all the money is wasted, and no housing is produced.

Chatting with a not-for-profit housing developer, the way they do the analysis is not to build in explicit profit, but to make plans that everything is going to cost 10% more than they expect. (Not everything does, but when one thing costs 20% than expected, the project doesn't die).

Mode choices & transit pricing

I make a regular trip to a yoga studio. It's about a mile and change from my house. I can drive, bike or take the train--all will get me there in 17-23 minutes. I drive more often than I'd like, because the parking AT THE METRO STATION PNR is free (unenforced), while the Metro ride will cost me $5.  This is despite the fact that I know (intellectually) that driving is costing me 62 cents a mile--but I also know that most of that is a marginal cost--my car will depreciate regardless, and I'll still need to pay insurance (regardless of how many miles I drive). Most people don't even consider the marginal cost of driving, especially beyond gasoline. (Everyone I've ever talked to 'budgets' by curtailing trips by pay-period.) 

We want more people to choose transit. If you want people to do more of an activity, you can make it cheaper. But you can also make it seem cheaper by hiding the cost from them: 1) reduce the marginal cost of a journey to zero, 2) put a lump-sum payment on auto-renewal (with unlimited use), 3) make someone else pay for it.

Transit agencies should also get rid of 'monthly' passes, and start selling '31 day' passes, so someone who can't buy the whole loaf on the first of each month isn't screwed, and so there is never a reason anyone should delay buying a bundle. Which also enables households to budget to all the main expenses (rent+ & transportation) aren't falling due on the same day an in the same paycheck. 

And for every transit agency with space capacity (and that's every agency, some time of the day), there should be dynamic pricing. (Once you're running a vehicle-trip, there's almost no marginal cost to letting more people on the bus). An economist will tell you to charge a premium for the peak, but an advertiser will tell you to offer a discount for the off-peak--when prices change unexpectedly, people should get a pleasant surprise.  

Is urban water distribution a natural monopoly?

 Arguably, for water, it's a natural monopoly. Public streets typically provide easements for both water and sewer. Both leak, especially with age. So there is a clear need to separate them, so cities put water lines on one side, and sewer lines on the other. Water lines have to be buried below the local frost line, so a second set would need to be even deeper, and provide structural support for the first set previously provided by undisturbed soil. The same is true of sewer, which must be low enough to drain into.

Notes on Parking for Railvolution

Parking as a 'common property resources'

-rivalrous, non-excludable

-Tragedy of the commons results

-Almost all parking management is based on shifting it from being a common-pool resource to a public good, by increasing excludability.

1) Exclusion through 'club lists' (resident parking permits)

2) Exclusion through pricing (metered parking)

The first is generally seen as more equitable, but the latter is understood to be more efficient. The ethical acceptability ties into the political acceptability. There will be a political backlash against any policy that makes some some people better off while making others worse off, especially if the harms are concentrated and the benefits diffuse. Right now, in Utah, Brigham Young University started to charge to park on campus. Suddenly, all the on-street parking just off-campus is jammed. Residents who were using it are enraged-their free available parking is gone, through no action of their own. 

After a few mobs-with-torches situations, politicians get gun-shy about parking. And hence cautious, doing so in limited cases. Rare indeed are cases like Britain (where minimum parking requirements are now forbidden, nation-wide) or the city of Buffalo (where minimum parking requirements have been eliminated city-wide). This sort of disjointed incrementalism should be welcomed: Better some than none. And better to discover potential problems during a test-case, rather than everywhere, all at once. 

The 'equitable' approach itself has serious equity issues of its own. Limited passes to those currently parking is unfair, as that is to the detriment of those who are not currently using the parking--it seems only fair that everyone should get an equal number of passes. Doing so vastly undermines the effectiveness of the program. Current parking use is responding to the actual supply of parking. Over-providing permits swamps the supply, doing little to ensure parking availability. It is also inefficient, as residents 'loan' unused parking permits to friends and family, which is neither efficient nor equitable. 

Pricing parking efficiently has problems as well. My dad refused to drive downtown, because he wasn't willing to pay for parking. When we did, we parking in strange marginal lots, many blocks from our destination. Berkeley, California, has one of the best, where on-street parking (the most available) was made more expensive, while off-street parking was made cheaper. This both increased the perceived availability of parking, and provided an incentive to go to the (cheaper) garages. 

Gets My Goat

Articles like this never fail to get my goat:
"Your city bus costs more per mile than a first class overseas flight"

...it claims.

But the devil is in the details:

PUBLIC TRANSPORTATION:
These public transit systems charge a flat cash fare to go one mile within the center of their cities. So if you're using one for a quick trip, you'll pay the following:
New York Subway, Boston T: $2 per mile
Chicago El: $2.25 per mile
Atlanta MARTA: $1.75 per mile
Los Angeles subway: $1.25 per mile
San Francisco MUNI: $1.50 per mile
London Tube: £4, or $5.63 per mile (plus more if you travel beyond the central city)
Paris Métro: €1.60, or $2.01 per mile
Cairo metro: 1 Egyptian pound, or 18¢ per mile
Hong Kong MTR: HKD$7.7 or 99¢ per mile

The author assumes that the default fair is for ONE mile of travel. Nevermind who uses that same transit fare to travel much further. UTA's default fare was $2.50 for a bit...but that provided 2.5 hours of travel time, enough to get from one end of the system to the other. Which takes 2.5 hours, and covers (fully) 83.1 miles of distance, or 0.03008423586 cents per mile. Given that the IRS allows you to deduct 57.5 cents per mile for driving.

Long story short, this points out two things:

FIRST: Short trips are more expensive than long ones.
Airplanes are different than buses.  Air resistance increases with the square of velocity. The faster a vehicle travels, the more air resistance opposes it, and the more power is needed to overcome it. An airplane traveling at 640 mph generates 16 times as much air resistance as an airplane traveling at 160 mph, despite the fact that it's only going four times as fast. To minimize this effect, airliners fly very high (39,000 feet) where the air pressure is much lower. (For reference, Mt. Everest is 29,000 feet at the peak). For a flight, all the cost is in getting up in the air, to cruising altitude (after which, the plane largely just maintains a semi-ballistic glide through the thin air of the upper atmosphere, all the way down. Most of the flight is spent at 'cruising altitude'. The cruising altitude is selected on the basis of algebraic equation containing the costs per unit of vertical travel at a given height, and the cost of getting to that height. The way the math works out, its always cheaper to go to where the air is thin, so the cost of a flight is largely invariant to the distance traveled.

SECOND:
It's not how good something is, it's how good it is compared to its alternative. Every trip takes time, and costs money. The default alternative for short trips is walking, which can be very time consuming, but costs (effectively) nothing. Whether it's worth spending money for higher speed depends on your own personal cost of time. If your time is worth $10 an hour, saving 1/2 hour is the same as saving $5. So every 6 minutes of your time is worth a dollar. If the bus fare is $2, take the bus anytime doing so will save you 12 minutes, or anytime you have to walk over 6/10 of a mile.

Neighborhoods & Amenity

In abstract, a house can be understood as a bundle of characteristics that determine its value. The value of a house is not determined solely by the characteristics of the house, but also by its location. These characteristics represent sources of amenity. Two broad classes of amenity exist: Amenity of structure and amenity of location. Structural amenities are typically defined by number of bedrooms, number of bathrooms, square footage, and other characteristics of the house. Amenities of location are typically characterized in terms of proximity to sources of amenity (shopping, recreation) and dis-amenity (air pollution, crime, noise). 

The importance of location is widely recognized in real-estate. All property occupies a unique location in space, and thus all real estate is unique and non-replicable. Nearby locations sharing similar characteristics often act as complements.

But there exists an additional package of amenities of location not contingent on proximity, typically characterized in terms of ‘neighborhood’. The concept is poorly defined, formally referring to a geographic area, but also referring to a less well articulated set of aspects associated with that that. Neighborhood membership is typically defined by proximity, but the boundaries of neighborhoods are rarely well defined, and may change over time.  

Neighborhoods are important because geographic proximity implies more frequent interaction. Whether interaction represents an opportunity or threat depends on the compatibility of residents. Does not imply social conformity, but rather social compatible—norms about the use of space, social presentation, privacy, and behavior do not conflict. Desirable neighborhoods are characterized by compatible socio-demographic groups. ‘Areas in transition’ represent shifts in the socio-demographic characteristics of a neighborhood, as different groups move and in and out.

Houses in a similar neighborhood already share amenities of proximity and amenities of neighborhood, so that neighborhoods with houses with similar amenities of structure also show highly uniform prices. This affects housing affordability, and results in a strong association in socio-economic status with neighborhood.

Economism

The ongoing expansion in housing units square footage per person and acres per housing unit is usually justified using the 'Economistic' idea that humans are rational self-interest maximizers, capable of gauging the marginal value of an additional increment. In reality, humans are not rational optimizers, but rational satisficers and irrational maximizers. People make decisions on the basis of meeting perceived needs. Once those perceived needs are met, they act to maximize any offered considerations, regardless of their desirability.