Mass transit agencies developing land to generate revenues

The actions of New York’s MTA – Metropolitan Transportation Authority – suggest a way American mass transit agencies can generate money: through partnering on transit-oriented development.

That is what inspired Harrison’s Halstead Avenue project, a $76.8 million mixed-use real estate development built in collaboration between the Metropolitan Transportation Authority (MTA), which oversees the Metro-North, and developer AvalonBay Communities. It is the first time ever that the Metro-North will sell a parcel of its land for transit-oriented development (TOD); in this case: 143 apartments, 27,000 square feet of retail space, two pedestrian plazas, and a 598-space parking garage, most of which is reserved for the public and commuters…

The New York MTA, the largest transit agency in the U.S., is becoming more familiar with this type of construction. The Hudson Yards project—where the MTA decked over its train yards, and sold the rights to developers for $1 billion to build an entire Manhattan neighborhood on top, with a new subway line extension beneath—is perhaps the largest TOD project in American history. At One Vanderbilt Avenue, an office building being constructed across from Grand Central Terminal, developer fees to the MTA will pay for interior improvements throughout the huge hub.

But the Harrison project marks a new direction for the cash-strapped MTA, which is on the hunt for new revenue: Decades of underinvestment and recent ridership declines have left the MTA with a projected $433 million budget shortfall, a gap that a recession could worsen. Meanwhile, critics agree that Manhattan’s soon-to-come congestion pricing scheme cannot alone cover the cost of the subway system’s badly needed overhaul. Capturing revenues from transit-oriented development on MTA-owned lots could help. So the agency is eyeing projects in suburban communities outside of Manhattan, with the hopes that the prospect of economic development will prod smaller towns to plot their futures near its train stations…

Transit agencies in Europe and Asia are much more likely use development as a revenue tool much more commonly than their U.S. counterparts. David King, a professor at Arizona State University who has studied transit-oriented development, said that this is largely due to the fragmented (and car-centric) nature of land and transit planning, capital investment and operation in the United States. For example, as a state-regulated public authority, with a variety of funding pots for capital and operating costs, the MTA has to comply with home rule for a housing project.

Private transportation firms in the United States have promoted and/or participated in development for years. It was good business for transportation providers to promote travel and now more accessible properties. Railroad and streetcar lines made special trips to the end of their lines where they would then sell riders on new properties.

What could make this more complicated in the United States is that transit agencies could be drawing on public funds and the United States has a history of concern about how public funds are used for development. If public money helps support traditional suburban life – think the single-family homes and highways the federal government and others groups helped make possible before and after World War II – then there may be limited outcry. Try using such monies for affordable housing, particularly for poorer residents, and opposition will arise.

Thus, this project in suburban Harrison, New York fits existing patterns. Transit-oriented development along rail lines in suburban downtowns is very common and desired by many suburbs. The project is not too big. It sounds like the suburb wants some denser downtown development. It does not involve housing considered too cheap by the community. But, whether this tactic could expand across metropolitan regions remains to be seen.

SimCity, Jane Jacobs, and real estate values near the High Line

In a recent walk along New York’s High Line, I was reminded of two competing claims about how parks enhance nearby land uses.

In SimCity’s take on urban planning, building a park was a good way to help adjacent properties. If nearby residential and commercial properties suffered from low property values – perhaps due to higher crime rates or locations near industry – building a park could help enhance their values. This seems to make intuitive sense: people like being near greenery and this land use can distract or suppress less desirable land uses.

Jane Jacobs, in contrast, suggests parks are not the automatic panacea some planners suggest. More important than simply having green or recreational space is having a steady mix of people flowing through and around the park. It is human activity that makes the park, not just green space. Indeed, negative activity can thrive and recreational space can easily become part of a dull or blighted area.

HighLineAug19

In a simplistic take, the High Line seems to support both of these views. The conversion of an unused railroad line to a thriving park has enhanced nearby property values. The park is regularly filled with people – from tourists to local walkers to vendors – during much of the day. This is a success story for both the SimCity and Jane Jacobs school of urban planning.

Yet, how exactly such an urban space came about and has both positive (new development!) and negative (those same values limiting who can live nearby!) consequences is more than just plopping a park into an area that could use more development. If it worked this way, every city would have such a successful project.

HighLine2Aug19

In a complex environment like Manhattan where land is highly prized and regulated, putting together such a project takes collective efforts spanning activists, residents, local officials, developers, and others who have an interest in this land and who may have competing interests. Property values may indeed be high and the park full but the long-term effects of this on the neighborhood and the city are harder to assess.

Two data points in transportation change: NYC subway ridership peaks in 1946, US non-commuter rail traffic drops after 1945

That the automobile came to dominate American social life and physical spaces after World War II is clear in multiple ways but two recent points of data I saw helped drive this point home.

Start in an obvious place: New York City. On one hand, the use of mass transit in New York City is unparalleled in the biggest American cities. On the other hand, subway ridership peaked in 1946:

1946: Subway ridership peaks

Subway ridership has never been as high as it was in 1946, and a precipitous decline began in the late 1940s as automobiles became widely available. The busiest station in the system, Times Square, saw its ridership drop from 102,511,841 riders in 1946 to 66,447,227 riders in 1953. Subway expansion would become increasingly difficult to justify as New Yorkers were abandoning the existing system—even though outward expansion was just what was needed to keep the subway as the region’s primary mode of transportation.

To a less obvious place: Toledo, Ohio. In the late 1940s, the city proudly constructs a new train station amid a growing population and optimism about the future. And then train traffic fell off dramatically across the country:

In the 20 years following Toledo Tomorrow, non-commuter rail travel in the U.S. collapsed, falling 84 percent nationwide, thanks in large part to the airports and the ribbons of limited-access high-speed roads Bel Geddes had foretold. Five years after the new railroad station opened in Toledo, the New York Central put it up for sale. Eight years later, the Beaux-Arts Pennsylvania Station in New York City would be demolished; five years after that, the New York Central and Pennsylvania railroads combined to form Penn Central, then the largest merger in American history. It would become the largest bankruptcy in American history two years later.

There is little doubt that the car is a nearly essential part of American culture today but it was not always this way nor is it guaranteed to be in the future. Reversing or countering a major trend is always difficult, particularly when its tentacles are everywhere and embedded in infrastructure and culture. To truly move to other forms of transportation would require not just fewer cars and vehicles on roads but a massive reconfiguring of American society.

Limiting cooling and heating emissions from the largest city buildings

New York City has plans to limit emissions from its skyscrapers:

Point is, 70 percent of NYC emissions come from heating and cooling a million buildings—and a third of that carbon comes from just 50,000 buildings of 25,000 square feet or more. Blame the skyscrapers. Trump Tower is apparently a representative of the 2 percent of very, very bad emitters, for what it’s worth. So one of the new bills tells the owners of those big buildings they have to cut their emissions by 40 percent in 2030, and 80 percent by 2050. That’s a lot. “We have to pay attention. The water is speaking to us. In the last century New York Harbor is up one foot,” says John Mandyck, CEO of the Urban Green Council, which helped design the bill. “There’s no question that this bill sets tough, tough carbon limits. It’s not going to be easy. That’s a reflection of the fact that climate change is a tough issue.”

As to how those buildings get there, their owners have a few paths. They can buy green power, which is really more hopeful than realistic at this point; 70 percent of New York City’s power comes from carbon-emitting fossil fuels. But ideally this option will incentivize a market for wind turbines and hydro power, and in fact another bill in the omnibus aims to pave the way for green rooftops with solar panels. Also the building can work with the city to figure out what kinds of improvements would get emissions down—new boilers, better insulation, new windows, all kinds of new investments that would, not coincidentally, translate to thousands of construction and building-trade jobs in the city. Ey, these boilers ain’t gonna install themselves, knowwutImean?

And in an approach out of Kim Stanley Robinson’s post-climate-flood novel New York 2140 (or maybe the Crimson Permanent Assurance) individual buildings would be able to trade carbon credits. “That’s a real breakthrough policy tool. It’s never been done at this scale at a city level,” Mandyck says. “It’s a flexible tool especially for building owners that own portfolios.” So those folks could trade credits among their own buildings, or form alliances and breakaway archipelagos of skyscraping carbon trade routes.

I would guess that few residents would think about buildings as large sources of carbon. This could be for a variety of reasons: building occupants may rarely notice when the heating or cooling is on (though they may be aware of the temperature); carbon reduction efforts have targeted other sources, such as vehicles; and the percent of carbon emissions in New York in buildings may reflect both the number of large buildings and a region unusually dependent on mass transit.

All that said, it will be interesting to watch how these efforts to alter buildings go. The article says little about how building owners have responded. For many, New York will still be a desirable enough market that leaving over these changes i unlikely. Would it make any property owner or potential owner refocus their attention elsewhere? And buying green power or buying and trading credits could prove popular compared to actually making significant changes to buildings which could be costly and require a lot of time and effort. Finally, could alterations remake or restyle some large buildings and introduce a different aesthetic to one of the most important skylines in the world? Images of future cities tend to show more curvy skyscrapers covered in greenery instead of the glass and steel that dominate New York and other American cities. I’m sure there would be ways to make changes that would not just reduce emissions but also push a new look.

Learning about the notorious criminals of other major cities

In recently reading Tenements, Towers & Trash: An Unconventional Illustrated History of New York City, I learned about several notable criminals and crimes in the largest city in the United States. This got me thinking: does every large city have its cast of unsavory lawbreakers that are relatively unknown to those who live outside the city or region?

Without reading histories of every large American city, it is hard to know. And I wonder if it is harder for these infamous characters to go unnoticed on the national scene today with the round the clock news coverage online and on TV that can talk about possibly criminal activity for hours and days without stop. On the flip side, these local characters might even become a part of civic pride or a grim experience everyone has shared or even tourist fodder. While cities can be compared on overall crime statistics (such as with claims that Chicago is the murder capital of the United States), stacking criminal individuals or groups against each other is a more nuanced task.

And would it be worthwhile to be able to name a few notable criminals from every major American city? These cases could help reveal some unique local history and character. But, they could also reinforce notions that cities are centers of crime. With so much interesting material to learn about a large city and/or a metropolitan region, criminal activity would be far down my list of what I would want to know.

Suggestion that Hudson Yards and other urban megaprojects threaten suburbs

The glitz of the new Hudson Yards in New York pushes one theater critic to argue such spaces threaten suburbs:

A problem faced by suburbs becomes all too clear at Hudson Yards. Affluent Americans are almost all going to live in cities, starving urban centers of affordable housing just as they’ll choke up the traditional suburban resources. No suburb, I kept thinking, can compete with this. And Hudson Yards, or Lincoln Yards, or whatever comes next, are far from done.

Such large developments in significant urban neighborhoods are worth keeping an eye on because of all the change that comes at once plus what is included in the new spaces.

But, I don’t think Hudson Yards or the proposed megaproject on Chicago’s north side or the development around Staples Center in Los Angeles will threaten suburbs in the long run:

  1. These spaces do not have the same combination of factors that Americans like in suburbs starting with the emphasis on single-family homes and family life. Projects like these have elements of what suburbia can offer but primarily offer a different experience: bustling activity, diversity of dining and cultural options, presumably a greater mix of people. Suburbs can indeed compete with this by offering a different lifestyle.
  2. The housing available in these new projects is primarily for wealthy urbanites, likely appealing to young professionals and older adults who like all the activity and the newness. This may indeed continue to help concentrate the affluent in certain urban neighborhoods but there will be plenty of working to middle-class residents who will be priced out and will find suburban housing more affordable.
  3. Surveys continue to suggest that even young Americans desire a suburban life in the long run, particularly when they reach a certain age or have families. From my vantage point, the emphasis on the rush to the big cities is overplayed.

Both sizable and exciting urban megaprojects can find success alongside suburban life. Perhaps they may even draw on different people groups in the long run, segmented by age as well as resources. And perhaps we should continue to keep paying attention to who has difficulty finding a true home in either type of space.

American battle: weirdness vs. wealth

In a closer look at what is happening to retailers in New York City, Derek Thompson suggests two contrary forces are at work in urban America:

A war is playing out in American cities between wealth and weirdness. The former encourages the pursuit of national trends and national brands—high-end fitness studios adjoining Sweetgreen franchises—for the purpose of maximizing profit on a per-lease basis. That spirit runs counter to the desire for diversity and experimentation, which requires policies that actively promote the survival of small companies in an economy that would otherwise eat them up.

I would suggest this goes further than just big cities. One could argue this is a larger battle fought since at least the end of World War Two involving revered ideals in American culture.

On one side are the powers of standardization, efficiency, predictability, and national chains. Think the rise of McDonald’s, Walmart, and Google. These companies came to represent whole sectors of business and their actions helped lead to predictable user experiences and outcomes across different geographic contexts. They are good at efficiency, offering customers a cheap service while turning out billions in profit.

On the other side are the powers of small businesses, entrepreneurs, diversity, and American individualism. Think the quirky and interesting shopping districts that attract visitors. Many of the establishments offer unique experiences that are difficult to replicate elsewhere. Think businesses that reflect the traits of their owners. These are people trying out ideas and participating in the local community. Non-conformity and cool are still sought after.

Both of these types of businesses reflect American ideals. Many of the national chains we know today started as the more unusual business options that became wildly successful. Some owners and founders want to remain small and others want to try for everything they can get. Obtaining a good balance of these approaches is likely hard to do from a policy level.