Wednesday, December 23, 2009

Putting the T in TOD

By Ariel

You don’t have to take Reconnecting America’s word for it, just ask your Realtor, housing that is closer to transit is worth more than housing that is farther away. This is the premise behind Transit Oriented Development (TOD) and it is a popular one among transportation policy wonks and developers. Cities and suburbs across the United States have changed their zoning codes to creating dense, walkable environments within a half mile from transit and counties, states and federal agencies are pouring money into affordable housing near transit stations. Recently the US DOT and HUD have banded together to create “Livable Communities” and target their funding to maximize the land-use / transportation connection. What excites me about this is not the seismic change in federal policy that this shift indicates, but the opportunities it means for Philadelphia, SEPTA and our metropolitan region.

To date, there are a few problems with TOD in the Philadelphia region. For one, TOD is often project based and project biased. Any new development within a quarter mile of transit is slapped with a TOD sticker of approval by developers hoping to cash in on available dollars and win good will. This means that when we look at TOD, we focus on the “D” and not the “T” which is a huge mistake. It’s a huge mistake because it assumes that all transit is good for development. As Econsult noted in their report on TOD for NeighborhoodsNow, the value of any development is contingent upon the value of the transit service provided. T’s value in “TOD” is only as strong as the frequency of service that it provides: i.e. fast frequent transit is good for development. However in Philadelphia our fastest, most frequent and reliable transit systems are in the core of the city, along the Market Frankford Line and Broad Street subway, both of which travel through our dense urban and underinvested core. Our oldest neighborhoods have been hardest hit by the late 20th century exodus into the suburbs. These potential TOD districts are marked by complicated land ownership patterns and markets developers don’t want to serve. Moreover, typically TOD’s are financed by bonds backed by rising real-estate values created by the transit service. However not only do those TIF (Tax Increment Financing) backed bonds work best when a new transit line is placed where none was before, but Philadelphia with its ten-year tax abatement and slow reassessment processes means that TIF around transit does not work in Philadelphia.

But this does not mean that there are no TOD opportunities for Philadelphia. If we ignore for a moment the D side of “TOD” in Philadelphia (three such projects are being built around Temple and Washington Lane regional rail train stations and one around the 46th and Market, elevated train line) and focus on the T potential, we find that there are regional opportunities for collaboration.

Focusing on the T in TOD means we need to think of two key measures of transit: the strength/ draw of the destination (another D in a popular transit policy acronym, O&D or origin and destination) and the frequency of service. While we have regional rail lines flowing into center city from the Main Line to Malvern, their TOD value remains relatively low: with only half hour peak headways (i.e. trains that come only once every half hour during rush hour) and hour long off-peak headways, they simply are not that attractive to Center City commuters or area residents. Increasing transit service frequency on regional rails that bring workers from the region’s wealthiest neighborhoods through its poorest and into the heart of the central business district and allows for easier access for casual day-trippers is critical and has been called for by area policy-wonks at both the Economy League and Econsult (and featured as part of a UPenn city planning studio vision plan).

There are major challenges to doing so. SEPTA can only accommodate so many cars in its tunnels during rush hour. However the bigger obstacle is how much such a project would cost, but the suburbs don’t have the tax abatements Philly does and TIF financing could potentially pay for this.

It would take a shift in mind-set; we are used to having TIF financing pay for buildings. However the very development of new buildings is actually one of the hugest impediments to TOD developers, neighbors are worried about having new buildings come in and with it new families (and more children which means more teachers) and more cars. Investing in transit itself can help build regional land values without raising taxes, building new buildings or bringing new children into the neighborhoods. This would be a win for both the counties and the city. The counties (and municipalities along the rail lines) become more competitive and more frequent service along transit lines that also pass through Philadelphia’s inner neighborhoods builds the value of the surrounding neighborhoods within the city. Most importantly it provides an opportunity for cooperation between counties and the City, who all too often clash over SEPTA and the allocation of resources within the system.

Sunday, December 20, 2009

"The Future Is Now"

By Greg

A review of Imagining Philadelphia: Edmund Bacon and the Future of the City is this week's cover story in Philadelphia City Paper, written by Nathaniel Popkin. Check it out!

Friday, December 4, 2009

Beautiful Designs and Ugly Decisions

By Ariel

Yesterday I had the opportunity to see an in-depth presentation by the Barnes Foundation about their new home on the Parkway at the Design Advocacy Group’s monthly meeting. There are those who argue that this public presentation was far too late in the offering; particularly because the building is so heavily subsidized by public funds. Even more so when such a presentation falls weeks after the project’s groundbreaking. I was pleasantly surprised by the Barnes Foundation’s responses to previous criticisms: they reduced the vehicular forecourt by half and increased the sidewalk entrance into their space and seem to have done all they could, within certain parameters, to address these issues.

The problem is these ‘certain parameters.’ They stem from the Barnes Foundation context of the decision-making that brought it to the Parkway in the first place. Proponents of the move praise the decision as one that brings the Parkway ever closer to the on-going dream of a Champs-Élysées, dense with cultural attractions. Opponents decry the flagrant breaking of Alfred Barnses’s will to bring a large tourist attraction to the Parkway. I myself am personally in favor of dense urban development of the Parkway and was initially hard-pressed to criticize something that I thought was for the ultimate good of the city. However as the design reveals, the Barnes Foundation, as an institution, is itself not amenable to being part of that dense urban development. One sees that first with the trees.

There is a grove of trees, four rows deep, on their site as it lining the Parkway. The trees are large and beautiful, and it would be a shame to cut them down. However if the dream of a Champs-Élysées-like boulevard is to be realized, new buildings along the Parkway actually need to come to the lot line and, I hate to say, the trees would need to be sacrificed to realize that dream. Instead what the architect prioritizes (largely, I am sure, at the behest of the Foundation and in an attempt to reflect the dream) is a sense of seclusion and quiet contemplation. That sense of seclusion and quiet contemplation is best served not on a busy urban boulevard, but in a suburban location. Oh wait, that is what they are moving away from.

Granted the Barnes Foundation had unique needs that its Cret building was not serving. There was little room for back offices, conservations labs, etc. However as the Barnes Foundation’s new building program was being designed, the clients added all these extra amenities that seem, in their own internal logic to be all well and good, but make little sense in the specific context of where they are going. The architects have created a park and fountain as a gift to the city, in what they consider to be the real entrance to the site, at the corner of 20th and the Parkway. Forget for a moment that most visitors will be coming via car (because that is how a majority of museum-goers actually travel) and think about another fountain in the area, the Logan Circle fountain which has seen massive investment and massive use. While certainly the Logan Circle fountain is hard to get to and this new one is less so (one must cross two lanes of traffic instead of four) I suspect that both fountains will suffer due to what might also amount to an over-saturation of fountains in the area, if such a thing is possible. What I am relatively more sure of is the certain over-saturation of auditoriums along the Parkway. The Barnes will include a 150-seat auditorium in the building; The Foundation is hoping to host movies and public concerts with the orchestra in the auditorium and they are pitching this as a new public gathering place for the city. The problem is that both the Free Library and the Academy of Natural Sciences both have large auditoriums literally across the street and I wonder who and why one will be chosen over the other. My real complaint about the auditorium is that I fear that the project funders have overburdened the Barnes itself with a series of amenities and features that will cost significant money to maintain, and will provide little real return. I can only imagine a new bail-out for the Barnes ten years down the line.

Ultimately, I think the building itself is beautiful; I just think the overall decision-making context that wrought it is ugly.

Wednesday, December 2, 2009

A brief aside regarding tax policy, fiscal crisis and why taxing Wall Street to pay for infrastructure is not quite right...

By Ariel

I think it is fair to say that our current financial crisis was caused by the legalization and utilization of financial products whose risk was not properly appreciated. The failure of these products has cost the United States, and the world, dearly.

One might suppose that it is not surprising that Democratic representatives are looking to tax Wall Street to fund key initiatives. Recently Rep. Ed Perlmutter (D-Colo.) has argued that the US should levy a tax upon financial transactions to fund a jobs bill and Rep. Pete DeFazio (D-OR) would like to impose a small per-trade tax on the Wall Street oil futures market.

When James Surowiecki of the New Yorker writes about similar attempts to regulate the financial markets (as opposed to imposing the above mentioned taxes with very tenuous nexus) he characterizes the reaction against such initiatives as veritable chastisements of attempts to “stifle innovation.” Surowiecki argues that indeed, that is precisely the point: that we want only so much innovation, that such potential (and now actualized) risk is externalized to the public and not born only by the investors. I buy that argument. I’m not just indulging in a little populism when I say that I find it hard to argue that the any of these financial instrument portfolio managers (or whatever) who received six figure bonuses really suffered the effect of the damage they caused.

However, tax policy must be refined and not blatantly spread about taxes should be based upon some sort of nexus. I am highly ambivalent about the above-mentioned proposals, while they smell like bad policy I would love to get my hands on that tax revenue to build better transit service in Philadelphia.

An appropriate tax would integrate an assessment of the risk any given financial instrument has to our overall economy. HMO’s determine your monthly payments based upon your potential to cost them a lot of money. I would argue we need to tax financial products similarly. If you want to engage in risky home mortgage derivatives, you should pay for it with a transaction tax.

Not only does that discourage risky products (not risky for the investor, rather risky for the economy as a whole) from proliferating but we could use the generated revenue to either invest a hedge against such damage, or to invest in necessary reforms, etc.

This argument has its limits, I am uneasy with the parallels to the tobacco industry, and various states’ reliance on cigarette taxes to plug budget deficits and I am not sure how on earth you would even begin to measure such risk on the outset, none the less, I believe that is an avenue worth exploring.