High Speed Rail Likely To Abandon Southern California Connection

HSR1It looks like the financial walls are starting to close in on California’s high speed rail plan.  Facing the reality that there’s not enough money to get the system over the Tehachapis to a gerrymandered, ill-advised stop in Palmdale, the California High Speed Rail Authority is now openly considering trying to connect to Silicon Valley instead, per the Fresno Bee:

Now, that south-first strategy for the statewide rail project could be in for a major shake-up. The agency’s leaders are contemplating a north-first option to link the San Joaquin Valley to San Jose and the Bay Area instead of the San Fernando Valley – a move that could be billions of dollars cheaper, and get at least a partial system operating faster than punching tunnels through the San Gabriel Mountains.

Read more here: http://www.fresnobee.com/news/local/high-speed-rail/article57420203.html#storylink=cpy

The issue is cost and lack of revenues. As I detailed in a previous blog post, given current projected revenues, the Authority will be about $17 billion short to get the train over the Tehachapi mountains and then tunnel through the San Gabriels. It will be possibly $7 billion cheaper to build it over the relatively flatter terrain into San Jose.  And that way the Authority would at least be able to claim a partial victory of getting the first line to a major metropolitan area with the state’s initial investment of bond money.

Of course, everything would change if private investors stepped up to help finance the system.  But so far that’s not happening.  And given the wayward, inefficient route, driven to large extent by local political considerations, no private investor wants to rescue the system.

The best the Authority can hope for now, besides this angel private investment, is to connect the system to San Jose from somewhere south of Fresno and then have it actually make some money temporarily as an improved Amtrak line.  In a few decades, state officials can return to the voters and ask for more money to try to convert it to high speed rail, with some funding to get it over the Tehachapis to Southern California.

Alternatively, Southern California counties could go in on a multi-county system that would connect Union Station in downtown Los Angeles to San Diego, which would be a perfect high speed rail route.

To be clear, I support the idea of high speed rail in California, and I want the system to successful.  But this current effort has so far been badly mangled by political compromises that have risked the ability of system proponents to even get it built at this point.  And that would be a huge setback — a multi-generational one — for the high speed rail effort in California.

NIMBY Politics And “Loss Aversion”

120913bucks-carl-sketch-articleLargeIt’s always dangerous to generalize, but in the case of neighborhood opposition to new development, I can’t resist.  In California, this neighborhood opposition is the prime reason why the state has under-produced housing since the 1970s, leading to economic inequality and environmental degradation — not to mention under-performing urban rail transit lines.

I should acknowledge that neighborhood opponents are armed with new tools to fight projects since the 1970s, such as the National Environmental Policy Act (NEPA) and its more powerful state version, the California Environmental Quality Act (CEQA).

But they also pressure local officials to restrict zoning to limit development and use voter initiatives to overturn project approvals, such as in Santa Monica recently on an Expo Line project and as is now brewing in Los Angeles with a proposed city-wide initiative to roll back density near transit.

So figuring out how to get ahead of this local dynamic and promote more transit-oriented development is key for anyone who cares about this issue.

Most of the complaints I hear from local opponents of new development relate to parking and traffic impacts, as well as to a generalized fear of losing the “character of the neighborhood.”  It’s not hard to see why locals would feel this way.  After all, most people move into a neighborhood because they like it as is, not because they hope it will change for the better with new development.

But at the same time, many new developments can bring benefits to the neighborhood, from new on-site amenities (like restaurants or retail), more tax dollars that can be spent on local services, a spiffier neighborhood with new construction, and sometimes features like parks and other improved infrastructure.  Yet those benefits often seem outweighed by the fear of loss.

This is where some generalization on psychology might help, to try to explain what’s going on in the minds of local opponents and figure out how to address it if possible.  It occurred to me that the dynamic at play may be what psychologists call “loss aversion.”  Carl Richards in the New York Times described the phenomenon in the context of finances:

It turns out that most of us don’t like losing. In fact, it’s what the academics call loss aversion. We feel the pain of loss more acutely than we feel the pleasure of gain. In other words, we may like to win, but we hate to lose.

The psychologists Daniel Kahneman and Amos Tversky showed that even something as simple as a coin toss demonstrates our aversion to loss. In a recent interviews, Mr. Kahneman shared the usual response he gets to his offer of a coin toss:

“In my classes, I say: ‘I’m going to toss a coin, and if it’s tails, you lose $10. How much would you have to gain on winning in order for this gamble to be acceptable to you?’

“People want more than $20 before it is acceptable. And now I’ve been doing the same thing with executives or very rich people, asking about tossing a coin and losing $10,000 if it’s tails. And they want $20,000 before they’ll take the gamble.”

In other words, we’re willing to leave a lot of money on the table to avoid the possibility of losing.

So in the land use context, loss aversion tells us that no matter how great the benefits of new development might be, many local residents are more emotionally fixated on the certainty of what they will lose with a new project, which is relatively plain to see before them (i.e. the parcel that will be developed, or the current state of traffic or parking). Meanwhile, the benefits are uncertain, nebulous, and less emotionally impactful — and therefore not as valued.

So if we’ve identified this loss aversion dynamic correctly, how does that help us?  Well, perhaps the same article on finance can help.  In that article, Richards offers a hypothetical, in which people hold on to a money-losing stock because they’re afraid to sell and take a guaranteed loss.  In the hypothetical, the stock is suddenly sold overnight and the owners now have the cash when they wake up.  Would they re-buy the stock right away?  Most people wouldn’t.  The selling of the stock therefore creates a “reset” on their options that allows them to think more clearly.

How would this translate to land use?  Well, you would need an equivalent “reset” on the parcel in question.  If it’s an old structure, for example, a developer may want to get a permit to tear it down as soon as possible, while still seeking approval for the new project.  Once the existing building is down, locals may feel less attached to the present condition and better able to imagine new buildings and benefits.

Likewise, if it’s an empty parcel, developers or local officials may want to immediately do something temporary with the site, like pop-up markets or retail stalls or temporary plazas.  The hope would be to create life and activity in an otherwise empty space, in order to get the neighbors to feel comfortable with change and more open to the positives of the benefits rather than fixated on the negative.

These are just a few ideas that may counter the loss aversion of the locals.  Of course, the other alternative is simply to beat opponents at their own game, through local organizing.  But that path isn’t always possible or practical, and so addressing and “resetting” the concerns may provide a better option to encourage more housing production.

EV Charging Infrastructure-Palooza

electric-vehicle-charging-station-houston-engadgetLots of recent news on EV infrastructure:

  • The California Public Utilities Commission approved a major new utility investment in EV charging infrastructure this week, allowing San Diego Gas & Electric to install charging stations at “up to 350 businesses and multi-family communities throughout the region, with 10 chargers at each location for a total of 3,500 separate chargers,” per Clean Technica. At least 10% of the chargers will be in disadvantaged communities.  It’s a step in the right direction, as electric utilities probably provide the best hope for getting adequate infrastructure up and running for EVs in the long run.
  • The California Energy Commission is finally soliciting bids to put fast chargers in key travel corridors in California.  Some of the prime routes include I-15 north of Victorville to outside of Las Vegas, I-10 from Beaumont past Palm Springs, and I-80 from Auburn out to Lake Tahoe.  It’s about time.
  • Tesla is killing it on their proprietary network of supercharger sites, adding about 50% more chargers in 2015 alone, per Green Car Reports.  The company is on its way to becoming a vertically integrated monopoly.  Imagine if GM owned all the great cars, plus all the gas stations and dealerships.  That’s the path Tesla is on.
  • But sadly, NRG is still lagging on their implementation of the $100 million settlement with the California Public Utilities Commission.  The audit of their performance, announced over a year ago by the commission, has so far failed to materialize.  I called the agency for a status update a few months ago and never heard back.  In some ways, their failure to meet the terms of the agreement has created the need for more public dollars to go to this charging infrastructure investment, while Tesla’s success makes NRG’s slow progress look even worse by comparison.

In general, the infrastructure news is positive.  But sales of plug-in electrics are still lagging due to cheap gas, failure to introduce new models with better range, and poor marketing.  More work to be done, but this all-in-all a good start.

NIMBYs In Berkeley Have An Anthem

Gary Lapow writes great songs for kids, but for his new tune he decided to venture into the realm of NIMBY politics, due to frustration with development in his Berkeley neighborhood:

The song is rife with references to corruption and greed underlying the effort to build more compact, multi-family projects in urban areas with access to public transit infrastructure and jobs.

But Mr. Lapow never considers that there are other reasons besides money for building projects that go “up” rather than “out” over open space or farmland and that address the housing under-supply that has been making the Bay Area un-affordable since the 1970s.

Maybe he doesn’t care if new sprawl projects take root on the urban edge instead, or maybe he’d just prefer that new projects go “up” in somebody else’s neighborhood.

The lyrics are also factually inaccurate. For example, he asks how we could build new projects when there’s a drought going on. But residents in compact development in urban areas have vastly decreased water usage per capita than people in sprawl housing. Where does Mr. Lapow think the future residents of these projects would live, if not in a Berkeley apartment?  The alternative suburban housing is much more water-wasting.

He also talks about displacing existing residents and driving out poor people. The gentrification issue is a tough one, but most new projects have affordable housing components, and I wouldn’t be surprised if these new projects will provide high-quality homes for people of low and moderate incomes who otherwise wouldn’t have an opportunity to live in places like Berkeley.

I bet a lot of the Berkeley people who agree with Mr. Lapow consider themselves environmentalists. But to be an environmentalist, you better have a plan for how we deal with population growth and suburban sprawl. And if it doesn’t involve more multifamily housing in cities with access to multi-billion dollar transit lines like BART, then how exactly do we pull it off? And how do you grapple with the economic impacts of not building enough housing so middle- and lower- income people can afford to live in the Bay Area?

I guess it’s easier to write a song complaining about changes in your neighborhood than thinking through these bigger issues.

With Federal Tax Credit Victory, Will Rooftop Solar Become More Controversial?

body-0-1376425473419It seems ironic, but the big win to extend the renewable energy tax credit in the federal budget deal last year may make state solar rooftop incentives more controversial.  Or so suggests Greentech  Media:

Many states were reviewing their net energy metering policies and programs while awaiting the ITC decision.

“The solar industry has gotten its holiday wish list,” Zach Pollock, also in PA Consulting’s energy and utilities practice, said of the ITC extension. “What that has done is put additional pressure on the state policies.”

For states with vertically integrated utilities that have been avoiding the policy considerations related to potentially robust third-party solar markets, “It’s going to be more about blocking and tackling,” said Mooren.

Nevada is the perfect example of the controversy, where the rollback of rooftop solar incentives, even for existing customers, has sparked a clean tech backlash and lawsuit, despite electric vehicle companies Tesla and Faraday locating in the state.  And in California, which went the other way recently, opponents of rooftop solar incentives noted that the federal tax credit means states don’t have to keep subsidizing rooftop solar to the same extent.

Meanwhile, one industry may benefit from the net metering rollback: energy storage.  Some analysts think Nevada’s new rules could push existing solar customers to buy on-site energy storage, like home batteries.  That way customers could capture surplus solar power they produce and use it when the sun goes away.  It would be a way to salvage their investment: otherwise the utility would no longer compensate them for the surplus, so it would be wasted.

In the long run, net metering incentives will have to ramp down, but the industry isn’t quite there yet.  That’s why it’s important for solar advocates to keep the fight going state-by-state.

Why Are The San Francisco & Los Angeles Economies Diverging?

Back in the 1970s, Los Angeles and San Francisco were at the top of the economic game for cities in America. At the time, the Bay Area was ranked first in income while Los Angeles was fourth.

But since then, Los Angeles has fallen to 25th, while San Francisco has surged, maintaining its top spot.

So what explains the difference? UCLA professor of urban planning Michael Storper and colleagues set about to examine the reasons in the new book The Rise and Fall of Urban Economies: Lessons from San Francisco and Los Angeles.

The book reads like a whodunit, but the bottom line explanation is that business leaders in the Bay Area continued to foster a connectedness and culture of innovation, while Los Angeles business leaders remained siloed and traditional (Storper’s slide show PDF here).  Think Steve Jobs radicals mingling with financiers and traditional business leaders in the Bay Area.

The authors credit business organizations like the Bay Area Council for serving as collaborative, idea-sharing hubs for regional business leaders.  But I also wonder if the region’s transportation links and business districts played a role.  BART and the general centrality of the business districts in the Bay Area, from San Francisco’s financial district to Silicon Valley to downtown Oakland, allow professionals in the Bay Area to more easily congregate and mingle than in the more horizontally dense landscape of Los Angeles.

It’s perhaps another intangible benefit that could be achieved by Los Angeles expanding the Metro Rail network and building more offices near major transit stops.

You can see a snippet from Storper’s recent presentation at the Bay Area Council here:

My Los Angeles Times Op-Ed On How To Boost Transit Ridership

Following my blog post last week in response to the Los Angeles Times story on falling transit ridership, the paper asked me to weigh in with an op-ed, published this morning:

If transit leaders want to improve ridership, they need to find ways to reduce fares and make them more equitable, such as by accounting for distance traveled and providing universal passes for students.

Local leaders can also improve service by allowing more bus-only lanes on major arterials and on freeways. These relatively low-cost options would make use of existing infrastructure and provide a huge time-savings to transit riders.

Given the stakes, it makes sense to prioritize passage for buses carrying more people than single-occupancy vehicles. And more people would take transit if they knew it would save them time compared to being stuck in traffic.

I’m hopeful that this hullabaloo about ridership will lead to some positive and overdue action to improve service and transit-oriented development in the region.

Los Angeles Transit Ridership — To Trend Or Not To Trend?

In response to the hullabaloo about long-term transit ridership in Los Angeles, transportation planner Jarrett Walker of Human Transport argues that the Los Angeles Times basic claim of ridership decline since 2006 is premature:

Sure, ridership is down 10% since 2006. But it’s up since 2011 and way up since 2004.  Want to talk about the grand sweep of history? [Los Angeles Times reporter Laura] Nelson says that ridership is lower than it was 30 years ago, which sounds terrible, but it’s higher than it was 25 years ago!  Thirty years ago, by the way, was fiscal year 1984-85, the year of the Olympics, so of course ridership was unusually high.

With a trendline like the one in the chart, you can say anything you want by comparing some past year to the present.  Your conclusion is about the year you chose.

Walker makes the overall point that transit ridership in L.A. has been generally flat since 2006, “going up and down in about a 10% band, with no sign of strong movement in any direction.”  He then tweeted in response to a Streetsblog LA article:

I share Walker’s concern about cherry-picking baseline years (although his point about the 1984 Olympics boosting ridership that fiscal year is actually not true — the few million extra riders for the Olympics was a drop in the overall bucket [PDF] — h/t Henry Fung).

But is it really too soon to start identifying recent trends in ridership patterns? Particularly when you look at the historical context for the trends over the long term, the recent dip may not be as indeterminate as Walker makes it sound.

Bus rider advocates have been making the point for years now that ridership trends are directly correlated to fare increases or decreases. And as someone who has studied the history of rail transit policies in Los Angeles for the book Railtown, I find their evidence compelling.  For example, take Robert Garcia’s 2012 post on ridership trends, in which he uses data from longtime rail critic Tom Rubin to argue:

There are five clear periods of ridership change in the 34 years up to the current fiscal year. In the three periods when fares were increased, bus service was reduced, and the emphasis was on spending as much money as possible on rail, total riders dropped significantly. In the two periods when the fares were reduced or held constant and the quantity and quality of service improved, ridership increased hugely — even when MTA was spending half of its funding on rail to carry under 20% of the riders.

Here’s the chart to illustrate the point:

transitgraph001-thumb-600x410-42435

The 5 periods of transit ridership changes correspond to 1) rising fares until 1982 when 2) the three-year fare decrease from a 1980 ballot measure went into effect from 1982-1985, 3) fare increases following 1985 until 4) the famous Bus Riders Union-MTA consent decree in effect from 1996 to 2006 kept fares steady, and then 5) rising fares since 2007 leading to the present downward trend.

While the trend lines on the chart above may not be super precise, they do lend credence to the idea that fares are potentially the major factor determining ridership.  And they are often a proxy for larger economic trends, as recessions squeeze transit budgets which too often leads transit agencies to raise fares.  They also indicate that it may not be too soon to start identifying a recent trend, contra Walker, given the historical pattern.

If this is true, and we care about maximizing ridership, then Metro’s first response to the latest ridership decreases should be to re-examine the fare structure.  And in the long-term, the agency should focus on improved bus service through bus-only lanes and encouraging local governments to build more affordable housing and offices near rail stops.

The Eagles: Repertoire & Harmonies

I was traveling last week when I heard the news that Glenn Frey, frontman for the legendary 70s band The Eagles, passed away.  Like many classic rock fans, I’ve enjoyed many of the Eagles songs throughout my life and own their two greatest hits albums.

But I didn’t really get a full appreciation for the band until I used the occasion of Frey’s passing to watch the epic 2013 documentary on the band, The History of the Eagles.

The documentary really gets at the heart of why the band was so good for so long, and it boils down to two things: harmonies and songs.  On the harmony front, The Eagles mastered beautiful multi-part vocals that gave all their tunes a distinctive, quasi-country feel.

And the documentary shows how this sound almost didn’t happen.  During one of their early recording sessions with legendary British rock producer Glyn Johns, everyone was getting frustrated.  Johns, who’d worked with Led Zeppelin and The Rolling Stones, was about to give up on them.

But then he heard them harmonize on one of their obscure tunes, and he was sold.  He built that sound into all their early work.  Later in their career, The Eagles even became masters of the lead guitar harmony, most famously on the outro guitar solo to “Hotel California.”

The second big factor was what Jack Nicholson described simply as “repertoire,” as he was standing next to Jackson Browne at an Eagles reunion show in the 1990s.  The band was awesome at churning out catchy hits throughout the 1970s, led by Frey and Don Henley on drums (mostly).

The documentary can be depressing, as it’s largely a story of how creative masterminds Frey and Henley ditched their surrounding bandmembers over decades.  The musicians who stayed had to be totally subservient.

Still, you have to give credit where credit is due: Henley and Frey were talented songwriters who were not afraid to collaborate in search of a hit.  They even let newbies write songs, if they were any good.  This kind of pragmatic approach to finding a good song and presenting it well served the band fabulously.

I recommend the documentary, and watch the whole thing so you can catch the somewhat bizarre postscript with Governor Jerry Brown (he dated Linda Ronstadt in the 1970s, and The Eagles started out as her backing band).  And then maybe you’ll be able to get this scene from the Big Lebowski out of your mind:

California & Nevada: A Tale Of Two States On Rooftop Solar

solar-germanyCalifornia regulators looked into the solar abyss that is now Nevada and said “no thanks” yesterday.

In a narrow 3-2 vote, the Public Utilities Commission decided yesterday to keep current rooftop solar incentives basically as they are, with relatively minor tweaks.

Like many states, including Nevada, California has been grappling with how to reform its net metering program, which is the critical incentive for homeowners to go solar.  Under net metering, customers get retail credit for any surplus solar energy they produce on-site but don’t consume.

Nevada, on the other hand, in a stunning display of holiday Grinch-ness this past December, killed the incentive, even for customers who had already bought the panels expecting 20-year returns (Nevada regulators are now revisiting the order for these customers). The move effectively killed the in-state solar industry, which pulled out en masse.

California regulators could have done the same, as utilities were itching to kill rooftop solar, at least of the solar lease variety.  By imposing high monthly fees, utilities would be able to erase the savings margin on many systems.

But yesterday’s decision [PDF] puts the issue to bed in California until 2019.  Utilities did secure a one-time interconnection fee for new solar customers, as well as a minimum monthly charge.  But they didn’t secure their bigger objective to raise rates significantly on solar customers.

In the long run, these incentives will need to ratchet down.  Costs are decreasing on solar panels, and higher penetration will bring new costs associated with integrating the intermittent power.  But by staying the course, California regulators send a strong message that the industry needs continued support, and California is committed to providing it.

And as a potential postscript, Nevada voters may soon have the opportunity to overturn their regulators’ move, if a backlash measure qualifies for the ballot this year.  That will be a fun story to follow.

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