June 25, 2014

Walkability In Saint Louis: My Feet Are My Only Carriage

Recently, the St. Louis Post-Dispatch published an article discussing the walkability of the Saint Louis area. The article focuses on a report from Smart Growth America, which insinuates that walkability drives wealth and development, and that the cities should create walkability with expensive rail projects and subsidies to developers in the urban core. But an examination of Saint Louis’ walkability scores and development patterns suggest just the opposite. Wealth and development drive walkability, and planners’ attempts to turn the process on its head are quixotic.

Smart Growth America promotes many common urban planning myths about demographic factors and magic millennials, with the main point being that people are abandoning cars and suburbs for cities and transit. But the facts are:

Like these myths, the idea that walkability drives wealth is likely a mirage, created by the metric for walkability itself. That’s because Smart Growth America gives higher walkability scores to areas where “…everyday destinations, such as home, work, school, stores, and restaurants, are within walking distance.”

That sounds reasonable, until one considers the type of areas that will not be considered walkable. One such type of area is suburbs like Ladue or Ballwin in Saint Louis County, with spread out single-family homes. But another is going to be poor inner city neighborhoods, such as areas in North Saint Louis. Despite the higher population densities, mixed housing stock, and narrow roads with ample sidewalks, the depressed economies and lack of safety in poorer areas mean fewer businesses, fewer restaurants, and fewer shops. Therefore, they have lower walkability scores. Use that definition of “walkable” nationally and one would erroneously conclude walkability means wealth because the definition of walkable precludes economically depressed areas.

St. Louis Apartments for Rent and St. Louis Rentals   Walk Score

North Saint Louis already has the infrastructure to allow residents to walk, bike, or take transit to nearby areas. It just does not have the wealth to attract enough shops, jobs, and restaurants into walking distance. The only way to fix that is to increase economic opportunity, or replace current residents with wealthier residents poached from the suburbs or other city neighborhoods. I’ll leave it to the reader to decide which route the city has taken with Washington Ave., the Northside Development Project, and Cortex in midtown.

June 3, 2014

Saint Louis City To Waste Sales Tax Monies On Streetcars, Transit-Oriented Development

Saint Louis City officials released their wish list for the anticipated $260 million from the proposed 0.75 cent statewide transportation sales tax. Many of the projects on the list propose reasonable improvements to streets, bike routes, and pedestrian paths. However, two of the largest ticket items, namely, a Downtown-Central West End Streetcar and Transit Oriented Development (TOD) at the Forest Park-DeBaliviere MetroLink station, are examples of government waste in the extreme.

We have written many times about the boondoggle that is the modern streetcar movement. Streetcars are incredibly expensive, often with a price tag of more than $50 million per mile, and do little to improve mobility. Claims that streetcars induce economic development are anecdotal at best, as streetcar lines are always paired with significant subsidies for developers and related investment.

Despite the very real costs of streetcars and their dubious benefits, Saint Louis City officials propose spending $35 million on Phase I of a streetcar from downtown to the Central West End. If the whole downtown to CWE Streetcar could actually be built for that amount, perhaps my objection would be less vehement. However, the total cost of the plan is estimated to be $540 million. That makes this Phase I investment less than 7 percent of the plan’s total costs. Even if the city can convince the federal government to unwisely pay for half of the total, the city still has to raise another $235 million. If the experience of other cities is any guide, Saint Louisans are in store for higher sales taxes, property taxes, and parking fees to pay the balance.

Another wasteful request is a plan to make “improvements” to the Forest Park-DeBaliviere and Delmar MetroLink stops. These improvements will waste taxpayer dollars to subsidize Transit-Oriented Development near MetroLink stations and accompanying aesthetic improvements. We have written about the empty promises of TOD, and this project is no exception. TOD often is nothing more than corporate welfare enabled by urban planners, succeeding only in diverting development at taxpayer expense.

TOD rarely succeeds in greatly increasing transit ridership, even if it can attract residents in the first place (not a given). If the MetroLink and the planned Loop Trolley are not enough incentive to bring more housing or new businesses near MetroLink stations, there is little reason spend $14 million of transportation sales tax money to make it happen.

Saint Louis City’s transportation wish list is just another example of why the proposed 0.75 cent sales tax is not good policy. Supposedly necessary because the Missouri Department of Transportation (MoDOT) cannot fund necessary highway improvements, the money instead will be spent on projects (or 7 percent of a project) with political support, not transportation merit.

June 2, 2014

Kansas City’s War On The Future

With all the political rhetoric floating around Kansas City, one would think the city is embracing high technology and forward-looking, well, everything. A closer examination reveals just the opposite. The city is using 19th-century politics and policymaking, and hoping for 21st-century results. It is as anachronistic as those future-looking movies of the past.

width= What old-timey look at the past would be complete without a monorail light trail streetcar? Kansas City politicians are determined to employ 19th-century fixed rail transit, thinking wrongly that it will solve our problems. We’ve written extensively about why rail is bad for Kansas City. You can read about it here.

The most jaw-droppingly insipid claim is that such policies will draw the creative class. Never mind that there is no research to back up this claim — Kansas City already is rapidly becoming a fact-free city. In fact, a vocal proponent of streetcars who claimed to speak for millennials just announced that he is leaving Kansas City for the East Coast to seek greater opportunities. This supports the writings of my Show-Me Institute colleague: the so-called creative class goes where the jobs are, not to streetcars or airports.

Meanwhile, city officials view actual future-looking technologies such as those that Lyft and Uber provide with hostility because officials are mired in 19th-century protectionist cronyism. How are Kansas City officials going to react to the inevitable arrival of driver-less Google cars? Demand that cars undergo a background check? Require that each one contain a detailed street map? This is not forward-thinking; in fact, it’s not thinking.

Speaking of Google, Kansas City Mayor Sly James and others love to extol Google Fiber, as if Kansas City, Mo., won that national bidding war to bring them here a few years ago. We didn’t. We lost to Kansas City, Kan. We were just lucky enough to be next door. Kansas City, Kan., won because they demonstrated small and efficient government, not heavy-handed regulation and federal money.

In looking to create density downtown, city officials are falling over themselves to offer up any sort of taxpayer subsidy, handout, or corporate welfare package to bring density — sometimes just to move jobs two blocks. Yet they are unable or unwilling to deliver basic services to the rest of the city. This is not forward-thinking, it is urban cannibalism.

If Kansas City officials are serious about building a brighter future, they need to shed the city’s knee-jerk tax-and-regulate policies and start doing the few things a city can do well: maintain the streets and parks, fight crime, provide quality education, and do so while keeping taxes low. Then the city won’t need to pick winners — because the winners will come to the city on their own.

May 8, 2014

Streetcar Supporters’ Tortured Logic On Display In North Kansas City Extension Option

It seems the downtown streetcar line and the proposed 7.8-mile extension plan have not slacked some Kansas City residents’ thirst for more rail. As the Kansas City Star reported today, the Mid-America Regional Council (MARC) is still pushing for a streetcar extension to North Kansas City. According to the most recent report, the proposed line would not get its own bridge because it is too expensive. Instead, the streetcar would run across the congested Heart of America Bridge before heading north to 18th Ave. As we wrote when the plan was first proposed last year:

All streetcar lines are expensive and redundant, but the proposed northern extension is especially wasteful. Opponents and friends of the streetcar alike should be able to agree that this is not the best use of city resources.

Well, it seems like we can agree, with some rail supporters arguing against this extension plan. The price tag is an obvious point of criticism, but some streetcar supporters undercut their previous argument for streetcars by claiming that North Kansas City does not have the economic density to warrant a rail line. As Kansas City Councilman Russ Johnson put it, “it’s hard to have rail where there isn’t economic density.”

But wait a second. Haven’t we all been told that streetcars create economic density? Even Johnson has “insisted that the streetcar will help economic development near the rail lines and could help build urban population density.” He is not alone. Supporters of the streetcars have claimed that development follows the rail and that the un-built line in Kansas City has already driven development. If that is truly the case, a streetcar line makes more sense in North Kansas City than elsewhere, because its economic density could use a boost.

Johnson’s statements betray the truth about streetcars: they do not necessarily drive development, but they benefit greatly from existing development. The massive expense of streetcars usually requires densely developed areas that can act as a supportive tax base. Downtown Kansas City has businesses and property owners who can be taxed to pay for the streetcar, North Kansas City does not. Sales and property taxes, like those proposed for the downtown streetcar, would not be sufficient to support a streetcar extension to North Kansas City.

April 7, 2014

Kansas City Streetcar Robs Poor to Pay … Rich?

Taxes Icon

The Robin Hood of legend was renowned for robbing from the rich to give to the poor. Liberals have heralded the story as an example of social justice and ethical redistribution. Conservatives see him as a hero of the trodden-upon taxpayer, cruelly set upon by wealthy and entitled elites. It is perhaps because of this dual view that the legend has survived so long.

Officials in Kansas City crafted a bizarro Robin Hood streetcar taxing plan that takes from the poor to give to the rich.

The city has created a Transportation Development District (TDD) encompassing much of the city in order to fund a significant portion of the rail line. The TDD will levy a “special assessment” on homes, businesses, and charities within a one-third mile of the proposed tracks and a 1 percent sales tax everywhere in the district.

While we have argued that claims that streetcars cause business development are completely unproven, streetcar supporters counter that there is some evidence that the project will increase property values along the route. And indeed there is some evidence that property values will increase, especially if the city pours money into the corridor, as NextRail KC officials hope. But while values may go up, property and sales taxes are guaranteed to increase as well. Even then, those increases in value primarily benefit the property owner when selling the property. (If you rent your home or apartment, your rent will go up but you won’t benefit from any property value increase.)

In other words, some of the poorest parts of Kansas City — those already in dire need of transportation and infrastructure improvements — will be paying more in taxes so that the already developed parts of Kansas City can get new sidewalks, landscaping, streetcars, and the increased property values that go with it. Those outside the TDD will also pay more through sales tax and the special assessment levied on government property, and by however the city decides to close the $30 million to $50 million gap in financing.

Seriously, that is Kansas City Mayor Sly James’ plan.

To make matters worse, non-profit organizations along the route will pay a special assessment that will impact their ability to serve those same communities in need. Not only is the city throwing the east side into the deep end of the pool, they’re pulling up all the ladders. That is why Fr. Ernie Davis, pastor at both St. Therese Little Flower and St. James, wrote a letter to his colleagues at other churches (emphasis added):

But most frightening is the proposal to assess churches, schools and charities within the corridor. That will literally take bread out of the children’s mouths and books out of students’ hands in order to fund a streetcar…. I hope you will study the issue and to the extent that you are able, lend your support to efforts that would derail the streetcar until there is a different funding formula that would not impose such a heavy burden on those who are least able to afford it.

Here at the Show-Me Institute, we are not totally opposed to some types of charities making property tax payments. But we have never included churches in that, and our argument has always been focused on true public needs, not pricey public toys such as a streetcar.

The Kansas City streetcar robs from those who don’t have to give to those who don’t need, or even want.

March 19, 2014

A Victory For Government Accountability In Kansas City

When the Missouri Legislature considered creating a land bank for Kansas City, the Show-Me Institute was opposed. We argued in testimony before the legislature that the existing Jackson County Land Trust was as effective as any similar agency across the country. We testified that:

There does not appear to be any evidence that the Jackson County Land Trust is doing a poor job of getting vacant property back into private, productive use.

Considering the Saint Louis example, any effort in Kansas City was likely to fall prey to Kansas City politicians who might direct the city to hold onto property on behalf of favored constituents or special interests. We are glad to report that the Kansas City Land Bank has addressed these concerns. On March 3, the Board of Commissioners adopted the following resolution:

The Land Bank supplements the Code of Ethics with the additional requirement, that any Commissioner that receives a contact from an elected official or staff lobbying for or against particular application for a property held by the Land Bank shall disclose such contact to the Land Bank staff within a reasonable time thereafter, and shall disclose that contact to the other Commissioners prior to voting upon the particular application for which such contact was made.

The board also will start listing the reasons for any application rejection in the minutes so that applicants and others can understand the commissioners’ decision-making process. This is a great win for transparency in government, and we congratulate the land bank board for taking this important step.

February 21, 2014

Ask Not For Whom The Bell Clangs

It clangs not for thee, according to Kansas City Mayor Sly James.

If you are reading this, the streetcar is not for you. In a Feb. 13 interview on KCUR radio, James said the following:

We need people to understand, a lot of the folks who are against this [streetcar expansion] are people who have been vested here, they’re already here. They’ve lived most of their lives if not close to all of it [here]. We’re not building this city for them. We’re building this city for the next 75 years.

Not only is the streetcar not for people in Kansas City; voters ought to discount the views of Kansas Citians exactly because they are from Kansas City. In the same interview, James said:

And despite people’s objections, despite their willingness to look at it in some instances, when we’re out looking for talent to come to this city, they’re not looking for some place where they can drive all around town, they are demanding public transportation.

Got that, Kansas City taxpayers? The streetcar is not for you, it is for others, either in the future or those who live somewhere else. You’ll just be paying for it. Planning ahead for city growth and seeking to attract new citizens are noble goals. The problem is that nothing in the research about streetcars indicates that it accomplishes either.

February 7, 2014

An Open Letter To Streetcar Supporters

At the recent meeting of the Kansas City Save the Trolley Trailsupporters of an expanded streetcar system dismissed assertions from the Show-Me Institute, which are backed by research, that construction of fixed rail does not drive economic development. This is important because it appears that economic development is the raison d’être for the streetcar. One Kansas City City Councilmember told the Kansas City Business Journal:

“The stated goal of this project is economic development. That’s the dominant goal,” [Russ] Johnson said. “The dominant goal is not to have a lot of people ride it. The dominant goal is to develop the city.”

During remarks at the meeting, supporters, including Kansas City Mayor Sly James, presented as evidence of economic development the construction that has already taken place downtown. However, this employs a logical fallacy — post hoc ergo propter hoc. Municipalities often claim credit for development simply because it occurred after their policies were enacted, but it is disingenuous.

Below is an incomplete list of studies that demonstrate that economic development is not a result of fixed rail. We encourage everyone to read these, and we encourage streetcar supporters to provide contrary evidence that stands up to scrutiny.

  • “The Great Streetcar Conspiracy,” Cato Institute, June 2012. Randal O’Toole has written extensively about the topic. If one questions this research because it comes from the libertarian Cato Institute, there are plenty of other sources.
  • The Atlantic Cities published an article which makes clear that evidence for economic development due to streetcars is lacking. The author writes:

But while the Portland streetcar was the anchor or at least the featured element of this growth, it wasn’t responsible for this boom by itself. Rather, it was part of a broader development plan in which zoning, public-private investment, street upgrades, and other renewal efforts also played considerable roles.

The literature regarding empirical measurement of actual changes in economic activity, such as changes in retail sales, visitors, or job growth, is almost nonexistent for streetcars. Indeed, this lack of empirical data was cited by many of the streetcar system survey respondents described in this report.

The same report also addressed the notion that streetcars attract the creative class:

Although occasionally the literature forecasting economic benefits for proposed streetcar systems posits that streetcars will attract more “creatives” to the area, this idea cannot be substantiated.

Taken together with earlier evidence that the social costs of rapid transit are higher than those for buses, the results suggest that it may be difficult to justify rapid rail investment on the basis of a benefit-cost analysis. In the absence of local economic development around stations, the benefits of rail are limited to those that might occur at the regional level. Future work should seek to quantify these benefits.

. . . the increase in property values and economic development are subsidized benefits and may not be greater than the subsidy costs. Both citizens and local officials should have an understanding of the costs of light-rail transit relative to the potential benefits. Given the size of costs relative to the benefits, the creation of light-rail transit systems or the expansion of existing systems in American cities may be difficult to justify.

Indeed, building commercial-grade rail lines through 100-plus-year-old neighborhoods is difficult to justify. Study after study indicates no support for the city’s “dominant goal” of economic development. If streetcar boosters are aware of research that supports the claim that streetcars themselves — and not the tax-subsidized construction that goes with them — results in economic growth, we are eager to learn of it. Presumably, everyone else cited here would welcome seeing the research as well.

January 30, 2014

Streetcars Are Not Economic Development

Over the weekend, KCPT’s current events program Rukus (starts at 4:33) quoted a Show-Me Institute blog post (Streetcars Will Waste Your Money and Your Time) which points out that there is no evidence that fixed rail removes cars from the road or drives development. It read:

We know from previous studies that rail transit does not remove cars from the road. And we know that it is not the rail lines themselves that drive economic development but rather the additional tax incentives that governments hand out along rail lines.

Kansas City Star editorial board member Yael Abouhalkah interrupted Woody Cozad’s comments on the quote to ask, “Proved by what?” For that, we refer him to the links above. Abouhalkah went on to say, “They just had two downtown without incentives.” He never explained what he was referring to, but we suspect it refers to two hotels that Abouhalkah wrote about in August:

Yes, it can be done: Someone can build a hotel in the Kansas City area without a taxpayer subsidy.


…It puts new development along the planned two-mile streetcar line, near the Kauffman Center for the Performing Arts, and near the Power Light District and Sprint Center.

First, we at the Show-Me Institute share Abouhalkah’s enthusiasm for anything built in Kansas City without taxpayer subsidies and we are pleased he is highlighting the matter. The problem in the piece is that this development has nothing to do with the streetcar, aside from possibly diverting it from another location in Kansas City. According to Abouhalkah’s own newspaper, the developers’ interest predated the streetcar (emphasis added):

Rob Schaedle said the firm’s first interest in Kansas City was in 2009 when it considered redeveloping the old 21-story Federal Reserve Bank of Kansas City building at 925 Grand Blvd. Though it admired the historic structure, the firm decided to pass on converting it into a hotel.

But we liked the market,” Schaedle noted and in August of this year bought the property of its new project for $4.5 million.

Abouhalkah and other streetcar boosters are simply claiming credit for any development that occurs after plans to build a streetcar. This is the most basic of logical fallacies: post hoc ergo propter hoc. But this is not uncommon. In a study of economic development programs across Missouri, my colleague, David Stokes, quoted researchers who wrote:

“The best case is that incentives work about 10 percent of the time and are simply a waste of money the other 90 percent.” The authors then relate that, in their experience, “it is not unusual for public officials to attribute all new employment to incentive programs.”

Streetcars will not improve the economy of Kansas City. The economic development handouts, amounting to corporate welfare, will be the engine that drives any development, and even nine times out of 10, that is  “simply a waste.” As time goes on, it will be increasingly difficult to determine exactly what prompted development, but rest assured that everything will be credited to the streetcar.

January 20, 2014

Streetcars Will Waste Your Money And Your Time

Paul Jacob writes in his blog This is Common Sense:

Transportation scholar Randal O’Toole regales us with the fix that California’s overlords have put themselves in. Merely assuming that dense city living decreases commuting, California’s legislators cooked up a law requiring local governments to increase population density.

But it turns out “transportation models reveal that increased densities actually increase congestion, as measured by ‘level of service,’ which,” O’Toole informs us, “measures traffic as a percent of a roadway’s capacity and which in turn can be used to estimate the hours of delay people suffer.”

This should be no surprise to Kansas Citians, who are familiar with official calls for increased urban density and the streetcar system that they believe will bring it. An effort to raise private money for the streetcar (so far, $3,775 of their $10 million goal) says that streetcars:

. . . provide high-quality transit service that promotes compact, walkable, higher-density development.

A firm hired to help build the streetcar system offers as a potential benefit, “Increase[d] population and economic density to the urban core.” Streetcar booster and former Kansas City Mayor Mark Funkhouser claimed that a rail system “produces density, which is key to efficient land and resource use.”

We know from previous studies that rail transit does not remove cars from the road. And we know that it is not the rail lines themselves that drive economic development but rather the additional tax incentives that governments hand out along rail lines. We know that the people of Kansas City have voted down streetcars every time a legitimate election has been held. And judging by the effort to raise private funds yielding only three-ten-thousandths of 1 percent of their goal, Kansas Citians still don’t support it.

But just as in Kansas City, California politicians continue undaunted. O’Toole writes:

The gist of the new standards of “regulation”? “[T]hey ignore the impact on people’s time and lives: if densification reduces per capita vehicle miles traveled by 1 percent, planners will regard it as a victory even if the other 99 percent of travel is slowed by millions of hours per year.”

If you doubt that city leaders care more about spending taxpayer money than respecting taxpayer time and convenience, consider the plans to build a $1.2 billion airport terminal.

December 13, 2013

Using Questionable Data To Back City Planning

A recent report from the Pew Charitable Trust called for increased affordable housing in cities across America. As the Atlantic reports, the authors suggested:

Solutions like requiring developers to include affordable housing units in new projects and developing metropolitan-wide transportation are politically unpopular. But they are a necessary part of any effort to restore economic mobility and the American Dream.

While everyone supports economic mobility and the American Dream, there is not adequate evidence to back the authors’ call for more regulation and transportation subsidies.

According to the report, “Mobility and the Metropolis: How Communities Factor Into Economic Mobility,” income segregation in a city leads to low economic mobility. This is important for Missouri cities such as Saint Louis, where income segregation is high and income mobility is low. The authors of the study would have Saint Louis expand transit and entice developers to build mixed-income housing. However, the track record of Saint Louis-area transit-oriented development has been less than ideal, as exemplified by a subsidized apartment complex near the Richmond Heights Metrolink station. A closer look at statistical models of the report calls their entire conclusion into question.

Without getting into too much detail, the problem with the report is that their model only finds an effect from income segregation when they don’t include other relevant explanatory factors. For instance, analyze New York City, which has among the highest income segregation (A) and lowest economic mobility (B) ratings. The report would have you believe that A contributes to/causes B, so improving A improves B. But what if (C), the dominance of financial services or legal professions, causes both A and B in New York City? Then fixing A will have no practical impact on B. In the complicated areas of income segregation, we must account for many possible factors like C.

However, the report promotes a simplified model that only shows a relationship between income segregation and economic mobility without including enough alternative variables. The report did not even mention that their model demographic variables did not show that income segregation was associated with economic immobility. Despite this shortcoming, both the report and media coverage have used the report to make irresponsibly expansive policy recommendations.

This over-hyping of statistical data can be all too common in the social sciences, so Missouri policymakers and citizens have to be vigilant. It is easy to twist data to justify government intervention if no one challenges the strength of the result.

July 29, 2013

What Should Crestwood Do?

The Crestwood Tax Increment Financing (TIF) proposal is dead, at least temporarily. Joining it in death is Crestwood Mall, also perhaps temporarily. City officials in Crestwood did the unthinkable and actually questioned the basis for giving large sums of public money to private developers. In return, the developer has reacted to not getting millions of dollars of other people’s money by closing Crestwood Mall (a.k.a. Crestwood Court), and pulling out of talks with the city. That is fine — it is what I would expect.

Perhaps more surprisingly, the city’s urban planning partner, PGAV, has stopped working with Crestwood because, for once, a city didn’t do exactly what PGAV told them to do. Here’s hoping that this example of a city listening to its residents and voters instead of its planning consultants gains a lot of traction.

From a municipal finance perspective, Crestwood’s solution to the closure of the mall is straightforward: join the sales tax pool. As of 2010, Crestwood was receiving $189 per capita for its general sales tax, while the pool cities received about $116 per capita. However, the $189 number has probably gone down a lot since then, and is certainly going to go down fast now that the mall has closed. Joining the sales tax pool is the answer for city finances, both short-term and long-term. Would some services have to be reduced and some taxes raised? Perhaps. But responding to this situation by trying to resuscitate a failed mall with a huge TIF would be insane. Just look at Northwest Plaza to see how that simply will not work.

From the perspective of what to do with the space, that is going to require a commitment to patience and a faith in free markets. Just look at our recent (and now very timely) video about the rejected TIF in Olivette as an example of how good things can and will come without huge incentives if you give it time.

I went to Crestwood Mall plenty when I was younger. I remember its glory days. Those days are not coming back. Reacting to the closure with some huge tax subsidy and more corporate welfare won’t work either. No matter how grandiose the planner’s dreams may be, it does not justify taking other people’s money to give out more corporate welfare. Crestwood officials deserve great credit for their judiciousness so far. Here’s hoping it holds.

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