Tag Archives: Chicago region

A Chicago congestion tax reveals regional issues in addressing traffic

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Looking for revenue and to reduce traffic, a congestion tax may be on the table in Chicago:

According to Michael Sneed in the Chicago Sun-Times, Chicago Alderman Ed Burke recently persuaded Mayor Rahm Emanuel “to study the feasibility and logistics of collecting a congestion fee from suburbanites who drive into the city.” The move could raise millions for the city and keep cars off city streets, easing congestion.

A panel has since been tasked with determining how such a fee would be collected, where it could be collected, and the costs of operating such a program…

In the Sun-Times, Burke was quoted as saying a congestion tax has been “extremely successful” in European cities such as London. There, drivers pay a charge for being able to enter certain zones from 7 a.m. to 6 p.m. on weekdays. Cameras monitor the zones and drivers who don’t pay are fined.

About 194,000 vehicles drive to Chicago’s main business district each day from elsewhere in the city and the suburbs, according to a Chicago Metropolitan Agency for Planning study conducted before Feb. 2010.

Traffic is a major problem in the Chicago region; see a recent report as to how many hours are lost each year. A congestion tax could be part of a comprehensive answer to this. However, it would be silly to expect this tax on its own to solve all the problems. Having effective mass transit across the region would help. If you want people to drive less, they need to have viable train and bus options. Having denser development near job centers throughout the region would help. Promoting Chicago’s core may be good but it also means concentrating more people from throughout the region on a single place. Promoting more bicycling and walking would help. Simply adding more lanes and roads does not necessarily help.

The other interesting part of this story from the Daily Herald are the predictable negative reactions from suburban leaders. They don’t want suburbanites to be penalized for going into Chicago. Yet, solutions to these issues have to be at the regional level. If suburban leaders don’t want a congestion tax, what are they willing to give to improve transit throughout the region? Can everyone contribute some money to help all residents of the region? The efforts of individual communities – even Chicago if it is just acting alone – won’t be enough.

Still looking for money to solve Chicago freight rail traffic congestion

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Illinois politicians can occasionally work together: they are still searching for funds to tackle freight rail congestion.

In an unusual display of local bipartisan unity, 13 of Illinois’ 18 U.S. House members have signed a letter urging that any new federal transportation bill include guaranteed funding to decongest the Chicago area’s crowded freight rail network.

The letter, sent to the chairman and ranking member of the Committee on Transportation and Infrastructure, comes at a critical time, as Congress shows signs of both finally producing a long-term funding bill and remaining stuck in a stalemate that has persisted for most of a decade…

But key rail hubs including Chicago received inadequate funding in prior bills, the letter says. To alleviate that, not only is a dedicated funding stream needed, but spending should focus on metropolitan areas, include access to multimodal facilities and allow for a competitive grant program for “complex mega-projects that have significant national and regional economic and quality of life benefits.”

That appears to be a reference to this area’s Create program, which has been only partially funded.

The funding shortfall continues even as the Chicago region handles a lot of train traffic. This has both local effects (blocked crossings) and national consequences (delayed freight traffic). However, the problem doesn’t get much attention: the freight traffic is distributed across railroad lines and facilities, the public doesn’t know much about it (outside of seeing block crossings as a nuisance) or doesn’t see it (intermodal facilities are big but often hidden), and a variety of levels of government aren’t exactly rolling in a lot of money to be spent on infrastructure (and there are other infrastructure matters requiring attention as well).

At what point would it be reasonable to ask the rail companies to fund some of these needed improvements? While this is important and costly infrastructure, couldn’t money be saved if someone acted sooner rather than later?

Can IL, WI, and IN work together to promote the region?

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Efforts to cross state lines to promote the Chicago region have not produced much:

With Illinois Gov. Bruce Rauner threatening to “rip the economic guts out of Indiana” and Indiana Gov. Mike Pence admitting to “a playful penchant to poach business from Illinois,” efforts to forge alliances within the tri-state metro area have been consigned to scholarly conferences and countless committee meetings, with scant tangible results…

In the global competition to attract business and talent, regions that collaborate to establish a brand, develop industry hubs, streamline transportation, foster a cultural scene and revitalize neighborhoods have a competitive edge, experts say…

Formalized regional collaboration is paying off for a number of major metropolitan regions, helping to stoke their economies and lure new residents. Denver-area taxpayers have anted up repeatedly for cultural and transit projects that have revitalized the city. Portland and its suburbs worked together to rev up exports. Metro Minneapolis’ tax-sharing strategy has helped reduce the gap between rich and poor communities. The communities lining the southern coast of Lake Michigan comprise the nation’s third largest economy. They are home to a rich assortment of businesses, an educated workforce, respected universities and a massive, if overloaded, transportation system.

But greater Chicago’s tepid growth rate is outpaced by a number of metropolitan areas with cohesive regional strategies. Denver, for instance, ranked No. 6 in economic performance among the nation’s 100 largest metros since its pre-recession peak, while Chicago was No. 77, according to Brookings Institution data.

This is a good example of how relatively arbitrary political boundaries limit the ability to operate within day-to-day social boundaries. The Chicago region exists as an interdependent whole and it cross state lines into Wisconsin and Indiana as well as includes hundreds of Illinois municipalities. Yet, politicians are elected to represent their particular geographic area and don’t get much credit if nearby areas also do well. Voters don’t have broad views of regions – efforts to support metropolitan institutions and bodies are often voted down across the United States – and prefer to exercise local control. Thus, politicians hunker down and do what they can to boost their particular chances even if what they can do is affected by what these nearby leaders do. For example, see Indiana’s ongoing effort to attract Illinois businesses. In contrast, see what a 2012 OECD report said could be done across the Chicago region.

Given the issues facing the region (from mass transit to stormwater management to poverty to affordable housing to jobs to population decreases and more), one would hope that the various leaders and governmental bodies will start working together before it might be too late to do anything productive.

Indiana again takes aim at Illinois businesses

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The Illinoyed campaign ended but Indiana has a new strategy to lure Illinois businesses. From the featured story on the A State That Works website:

The state of Illinois has been drowning in debt for years due to mismanagement, and their only solution is to keep raising taxes. Sound familiar? Illinois taxpayers have been picking up the tab for longer than anyone cares to remember, but it wasn’t always that way.

Ten years ago Indiana and Illinois had the same AA credit rating, but the unfunded pension debt crisis in Illinois has steadily deteriorated over the years, to the point that their current credit rating of A- is the worst in the nation.

Illinois is borrowing a staggering amount of money to pay for state services and they’re seen as a bad risk to keep making those payments, according to the rating agencies. In fact, the interest alone on Illinois’ unfunded liabilities is about $1.5 billion per year…

Indiana is deliberately making smart financial decisions and defining what a state can do to pass the savings of efficient government on to their taxpayers by eliminating debt, keeping taxes low and continually balancing their budget.  It’s a refreshing change from a state like Illinois that has taxpayers picking up the tab for a public debt-management crisis, and it’s what makes Indiana a state that works.

Such efforts have been going on for quite a while yet I haven’t seen evidence that shows a campaign like this works. I’ve long suspected this is more about scoring easy political points than anything else; “look at the good things happening in Indiana while Illinois languishes.” Yet, somehow the Chicago region with its 9+ million people hangs on and the city is continually ranked as one of the top 10 global cities in the world.

One side note: part of northwest Indiana is in the Chicago metropolitan region. According to this campaign, some might get the best of both worlds: the residents and businesses get the lower taxes, less political gridlock, and less debt yet get to take advantage of the jobs and other opportunities the Chicago area offers. In the long run, a significant decline in Illinois or Chicago’s fortunes probably would have some residual negative effects not just on northwest Indiana but also the entire state.

Insight into the highest status western suburbs of Chicagoland

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An Internet journey led me to West Suburban Living‘s 2015 Best of the West which included this question to readers:

TOWN YOU’D WANT TO LIVE IN (OTHER THAN YOUR OWN)

Best: Geneva
2nd: Naperville
3rd: TIE: Glen Ellyn and Hinsdale
Other Favorites: Downers Grove, Elmhurst, Geneva, St. Charles and Western Springs

I’m sure there are all sorts of sampling issues here: who exactly reads this magazine and who votes? Yet, this may just provide a hint into how suburbanites in the western suburbs view their communities. All of these suburbs mentioned are majority white and pretty wealthy. They all have downtowns and fairly long histories (they were all founded before post-World War II suburbanization). Generally, they have high scores in quality of life: good schools, parks, good local services, low crime, nice houses, relatively competent local governments.

Sampling issues aside, this may get at the social status ranking of western suburbs. Or, at least, it hints at the geographic and lifestyle aspirations of the voters.

What is the economic benefit of O’Hare Airport to the Chicago region?

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Noise complaints may be up but local officials say O’Hare Airport has a big economic impact:

Chicago estimates O’Hare contributes more than $38 billion to the economy of the six counties and sustains about 450,000 jobs directly and indirectly. Airport expansion could generate an extra $18 billion and create 195,000 new jobs, the city projects.

Mayor Rahm Emanuel, in a speech to the City Club in June, attributed recent economic successes to O’Hare and Midway International Airport. “Out of the 10 major metropolitan areas (in the U.S.) last year, Chicagoland had 12,000 businesses created,” Emanuel said. “That’s No. 2 in the United States.”

I’m guessing these statistics won’t quiet the critics of the new noise patterns yet it should remind the region’s residents how an airport might indirectly help them all beyond providing easier and cheaper access to points around the globe.

Continuing to see Illinois highways as growth and job generators

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The selection of a new executive director of the Illinois Tollway suggests the agency wants to continue to push growth:

Greg Bedalov, president and CEO of Choose DuPage, an economic development organization, will take over as executive director at the agency, officials said…

Rauner’s pick for Chairman Bob Schillerstrom told the Daily Herald that economic growth and job creation go hand-in-hand with the tollway.

It’s expected Bedalov will reflect that philosophy as the tollway heads into the third year of a massive $12 billion road building program…

In a 2012 op-ed piece for the Daily Herald, Bedalov talked about communities collaborating in the region instead of competing to create jobs.

“It is critical that local and county economic development agencies work collaboratively with state and federal agencies to uncover additional opportunities for economic wins,” he wrote.

This sounds like a growth machine approach to building tollways: providing increased capacity for vehicles will lead to new economic opportunities for businesses who want access to such transportation options, workers who can reach jobs more quickly, and developers who can develop and build nearby. The argument here is that this can be good for the entire region as the benefits of improved or new tollways would extend across communities.

Quickly, some possible objections:

1. It is really difficult to build new tollways in a region that is already largely developed. It is costly (acquiring land, environmental studies, increasing construction costs) and takes a lot of time.

2. Adding highway capacity just increases traffic: people see more available roads and drive on them. Why not put some of this transportation money into mass-transit and denser developments that could benefit from an economy of scale?

3. Who really benefits from such construction? The firms getting the contracts and the developers? How exactly do the benefits trickle down to the average resident?

“Touring the Deep Tunnel and Thornton Quarry,” one of the largest civil engineering projects in the world

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Given the recent rain and flooding in the Chicago region, this seemed apropos: one journalist describes a recent tour of the Thornton Quarry and Deep Tunnel complex south of the city.

On Saturday, I joined the Southeast Environmental Task Force (SETF) on one of its tours of Chicago’s goliath infrastructure. The tour featured the future site of the Thornton Composite Reservoir, the largest such reservoir in the world, and a Deep Tunnel pumping station 350′ below ground at the Calumet Water Reclamation Plant. Both are part of the Metropolitan Water Reclamation District (MWRD)’s gargantuan Tunnel and Reservoir Plan, the multi-decade, multi-billion dollar project designed to protect the Chicago region from the flooding and pollution caused by overflowing sewer and stormwater infrastructure…

After this brief greeting, we drove to the former Thornton Quarry in the south suburban city of Thornton. The quarry, which is one of the largest aggregate quarries in the world, is still being actively mined nearby; however, the MWRD has acquired two significant portions of the area for the Deep Tunnel project. The resulting reservoir will hold 7.9 billion gallons of water, which MWRD Principal Civil Engineer Lou Storino estimated is the equivalent of 36 Soldier Fields. While on site, staff mentioned that we would be one of the last tours to descend to the base of the quarry, which will enter into operation shortly.

Tourists may find man-made sights like Hoover Dam impressive but Chicago area residents don’t have to go far to see similarly impressive projects. Not that the public could simply walk into the Deep Tunnel complex but you can glance at the quarry from the I-80/94 corridor. The Deep Tunnel project was quite costly and time-consuming but represents an effort to more effectively drain water away from Chicago, an on-going concern that even one of the largest civil engineering projects can’t solve on its own. This is what you get when you build a 9+ million metropolitan region centered on a swampy area near Lake Michigan…

Around 25% of Chicago area mortgages still underwater

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The numbers aren’t as bad as two years ago but the sizable number of underwater mortgages in the Chicago region still present a problem for the housing market.

One-quarter of homes with a mortgage in the Chicago area, and almost 24 percent in Illinois, are “seriously” underwater, meaning homeowners owe at least 25 percent more on the loans than the property’s value, according to data released Thursday.

The report from RealtyTrac, which shows the percentage of underwater homeowners growing in most parts of the nation, helps explain why more homes are not coming on the market, despite the desires of would-be sellers. They simply don’t have the equity in their properties to be able to sell them unless they bring cash to the closing table or get approval from their lender for a short sale.

Also driving up the percentage of underwater borrowers is the slowing rate of appreciation that many housing markets are seeing, a trend that economists say is a return to more normalized boosts in housing prices. In the Chicago market, median prices of home sales in March posted a dramatic year-over-year spike after eight months of flat or declining prices.

Outside of the booming housing markets, these underwater mortgages are going to take a long time to clean up. In other words, that big drop in housing values with the economic crisis has long-lasting consequences.

I know this isn’t going to happen but I would love to see numbers on whether it might be possible that the new housing industry could receive a jumpstart through a mass mortgage reduction plan. If enough people could get out from under the underwater mortgages and sell their own homes and move (maybe this would be a requirement for getting a mortgage reduction), could this be a net economic gain in the end?

Trends in the slowly improving housing market in the Chicago suburbs

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The Daily Herald reports on the slow growth in real estate transactions and construction in the Chicago suburbs:

Sales of existing homes were on the upswing in February, climbing 1.2 percent from January and 4.7 percent from a year ago, according to the National Association of Realtors.

The tactics of builders and developers have changed:

The result is that buyers are seeing new houses of smaller square footage loaded with amenities such as wood floors, high-end appliances, specialty cabinets, spa-quality bathrooms, upscale windows and trims, and the latest wireless communication and entertainment technology.

Two groups of buyers are driving this trend: older millennials tired of paying rising rents and ready to raise a family, and baby boomers at or near retirement and looking to downsize…

Like other developers, Pulte is focusing on building in closer-in suburbs rather than massive subdivisions on the fringes…

Toll Brothers also has a limit on how far out it will develop, said Keith Anderson, Midwest group president.

“Elgin is as far as we will go. We’d rather pay more for the land and build closer,” Anderson said.

Or, put differently, there are not enough buyers and sellers putting pressure on builders and developers to construct homes further in the hinterlands in the Chicago region. In contrast, those buying homes have different expectations as well as the means to purchase more in-fill properties. This provides more evidence – from the higher economic end of suburban homeowners – that the bifurcated housing market continues.