## Quick Note: High Third-World Construction Cost Examples

Dhaka, the world’s poorest megacity (at least until Kinshasa crosses 10 million and qualifies as a megacity), is building a metro system. Using Japanese financing and Indian consultants, it is planning to build a multi-line system, and getting bids for the first line. This line is going to be elevated, and 20-21 kilometers long; construction costs are 220 billion takas, which is \$2.8 billion in exchange rate terms and about \$8.5 billion in PPP terms.based on the 2013 conversion factor here. This is a bit more than \$400 million per kilometer, which is high for a fully underground line, let alone an elevated line.

Jakarta, which is much richer, but still third-world (Indonesia is slightly poorer than China, as of 2014), is building a metro as well. Its first line’s first phase is mixed underground and above-ground: 15.7 kilometers, of which 9.2 are underground. The cost is \$1.4 billion, or about \$4.2 billion after PPP conversion, giving \$266 million per km, still on the high side for a 59% underground line, but nothing as extreme as in Dhaka.

It’s a reminder that poor countries aren’t just low-cost. Things usually are cheaper in the third world, but by a much smaller factor than the income difference. Bangladesh’s GDP per capita, before any PPP conversion, is about \$1,000. It is cheaper than the US and Europe, but not by a factor of forty or fifty, but by a factor of about three. Three is an average – imported electronics cost about the same in exchange rate terms everywhere, whereas rent is much more sensitive to local wages – but, for rapid transit construction cost, the average turns out to level the entire difference between the first and third worlds. Some countries, like China, are still a bit cheaper than Europe, while others, like Bangladesh, overshoot.

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## Why Avoiding Stereotypes is Important (Hoisted from Comments)

In the transit-related forums I participate in, people know that the US builds subways at higher costs than all other countries, because I talk about it often. This feeds into various stereotypes Americans have of government effectiveness; Americans of many political stripes understand that there are serious problems with US governance, and compare the US negatively with certain countries that are famous for getting things done. Thomas Friedman periodically raves about China’s massive infrastructure investment; when he was secretary of transportation, Ray LaHood made the same praise, and connected this to Chinese authoritarianism, while saying that American democracy was still overall a better system. More recently, there’s been praise for Germany, or more generally Northern Europe, as a place with effective infrastructure investment (even as the actual state of German infrastructure is in decline). I was reminded of these stereotypes in the discussion of New York’s shrug-worthy reinvention report at Second Avenue Sagas: once again, the commenters praised the usual-suspect countries, and sometimes connected low construction costs with authoritarianism.

Several more examples from this month have made me notice that people overstate certain cultural differences, especially ones that are in line with stereotypes, such as Western individualism versus Asian collectivism or Northern European efficiency versus Southern European corruption. Cultures are far too diverse to be reduced to these oppositions, and this is especially true on the level of political subcultures, such as transit investment.

The reality is that the places with the lowest construction costs do not really match the stereotypes. Peruse my various posts about subway construction costs again: the main three, but also some of the side ones. Authoritarian countries like China and Egypt do not have unusually low construction costs. Countries with reputations for efficiency run the gamut: Scandinavia and Switzerland are relatively cheap, but Germany and the Netherlands are expensive, with some German projects needlessly expensive because of political influence over alignment choices. Labor costs seem to have a weak if any effect on construction costs: India, by far the poorest country on my lists, is fairly expensive to build in, and within the first world, low-income Naples has cheap construction but so do high-income Swiss cities and middle-to-high-income Milan. Culture in the sense of Samuel Huntington’s civilizations has a weak if any effect, again: there are multiple examples of subway lines built in the Western world, the Islamic world, and East Asia, and the cost differences within each bloc are far greater than the cost differences between the blocs.

I try to avoid giving explanations for these patterns of construction costs. If I knew for certain what caused them, I would not be blogging; I would be forming a consultancy and teaching New York and other high-cost cities how to build subways for less than \$100 million per kilometer. I have seen two explanations by professionals. Manuel Melis Maynar, the former CEO of Madrid Metro, explained briefly how Madrid has the world’s lowest construction costs, in terms of design compromises, avoidance of outside consultants, and structuring bids based primarily on technical merit and not cost. And Paul Barter’s thesis explains Japan’s relative lack of urban freeways as a result of high land costs and a costly eminent domain process; this also explains the pattern of Japan’s high urban subway construction costs compared with relatively cheap Shinkansen tunneling (the 50% underground Shin-Aomori extension was only about \$55 million per km).

The key here is that neither of these two particular explanations has anything to do with cultural stereotypes of the nations in question. When people think of Hispanic culture, many stereotypes come to mind, but none of them involves having hyper-competent local agencies designing subway systems with small in-house staffs. On the contrary, given the stereotype of Southern European corruption, an American or Northern European who was informed that Madrid Metro awarded contracts based on a combination of technical merit, speed, and cost, and did not use outside consultants, might conclude that it has a bloated in-house staff and that it uses the discretion of technical merit to favor the politically connected. Likewise, although Japan is notorious for the expense of its urban land, it does not have a reputation for strong property rights protections; Anglophone and Western supremacists take it for granted that the West has stronger property rights protections than East Asia, even if in reality English common law makes takings easier than Japanese law.

In addition to the thread on Second Avenue Sagas, in which I felt compelled to constantly defend Southern Europe’s record on building rail infrastructure efficiently, I was recently exposed to another set of stereotypes, in a four-week-old blog post by Andrew McAfee on Financial Times repeating all the usual American exceptionalist tropes of innovation. According to McAfee, the rise of the tech sector of Silicon Valley underscores how the US is going to keep winning the new global economy, giving Tesla as the prime example.

I have a simple bullshit detector for articles about innovation, especially in the tech sector: if they praise Israel’s entrepreneurial cultures, I know with a high degree of certainty that they’re familiar with too small a slice of the nation to be informed. The real Israel, even the upper middle-class slice that I grew up in, is a country at the bottom end of the first world, with Southern Italian average salaries (average household income per capita is about \$14,000 a year in PPP terms, about half as high as in the US), with people who move to the US and are floored by the plenty they see at American supermarkets. It has a lot of tech workers, who function as a back office to Silicon Valley, and a handful of inventors who make exit and become rich; neither group is large enough to raise average salaries to proper first-world levels.

But McAfee’s wrongness goes well beyond the line about Israel. In a global economy with specialized regions, people tend to overvalue the sort of production that accords with their sense of identity, and this leads to either regional pride or nationalism. For a certain class of Anglo-American boosters, this is finance; New York and London are global financial centers, and this makes them worthier in this view than cities with different economic roles, such as Paris. McAfee belongs to the class that views the tech sector as the most important, and sees Silicon Valley’s wealth as superior. This is simply the modern equivalent of the 19th-century Manchester boosters’ denigration of Birmingham as a city that didn’t have Manchester’s culture of mass production of cotton, as described in The Economy of Cities; back then the boosters viewed the world as a giant factory, and today they view it as a giant smartphone app. The epitome of this is the overrating of Tesla, which is special only in that it’s made by someone with a background in online companies and not in the auto industry. Who needs the Tokyo rail system when there are luxury electric cars exciting the tech boosters?

As it happens, Europe has a lot of innovation in new fields – it’s not just Siemens making incremental industrial progress; it’s also the Human Brain Project. So do Japan and South Korea: McAfee brushes aside patent statistics, perhaps because Japan and South Korea have by far the highest numbers of patents per capita.

I’m reminded by a point that I made three months ago, in response to a proposal to move Silicon Valley to a growth-friendlier metro area like Houston. Facebook, Uber, and other hot Silicon Valley firms have a culture that works for their industry and that has led to useful inventions. This does not mean that the entire world has to operate like a Silicon Valley firm, nor does this mean that everything in the US operates like one. The same is true of other national stereotypes. The Spanish economy is weak, but happens to have a small segment, corresponding to infrastructure engineering and management, that works very well; other countries would be wise to copy this culture in the realm of infrastructure, and in nothing else, until it can be verified that the same principles work in other settings.

This sort of imitation, focusing on specific aspects of business culture in a particular industry, is harder than general handwaving about how to think like a German or Japanese business manager (a common trope in the 1980s and early 90s) or how to think like a Silicon Valley manager. It requires much more detailed knowledge of several different countries to make comparisons, and this is uncommon, since usually the sort of knowledge that leads to comparative analysis is broader and less specific. I certainly don’t have it – I only know the construction cost output, not the inputs that go into it. Even small mistakes are hazardous: it’s likely that the best performers’ cultures have many distinct features, of which some are crucial to their success but others are irrelevant, and it requires specialized knowledge to sort out which is which.

To add to my previous post about the MTA reinvention report, this is why I’m so disappointed in official efforts to improve American transit governance. The MTA and similar bodies have enough institutional clout and money to hire people who do understand the intricacies of various success stories abroad, and could make specific recommendations, which could appear small but could also be revolutionary. Commentators have to default to first-order information about costs, or to national stereotypes, but the MTA could have detailed knowledge about what’s needed. Instead, the MTA did nothing of the sort, and left the sweeping changes to mongers of stereotypes.

## What is the MTA Reinventing, Anyway?

In the last few years New York’s MTA has gone through multiple cycles in which a new head talks of far-reaching reform, while only small incremental steps are taken. The latest is the MTA Transportation Reinvention Commission, which has just released a report detailing all the way the MTA could move forward. Capital New York has covered it and hosts the report in three parts. Despite the florid rhetoric of reinvention, the proposals contained in the report are small-scale, such as reducing waste heat in the tunnels and at the stations on PDF-pp. 43-44 of the first part. At first glance they seem interesting; they are also very far from the reinvention the MTA both needs and claims to be engaging in.

Construction costs are not addressed in the report. On PDF-p. 53 of the first part, it talks about the far-reaching suburban Grand Paris Express project for providing suburb-to-suburb rapid transit. It says nothing of the fact that this 200-km project is scheduled to cost about 27 billion euros in what appears to be today’s money, which is not much more than \$150 million per km, about a tenth as much as New York’s subway construction. (Grand Paris Express is either mostly or fully underground, I am not sure.) The worst problem for transit in the New York area is that its construction costs are an order of magnitude too high, but this is not addressed in the report.

Instead of tackling this question, the report prefers to dwell on how to raise money. As is increasingly common in American cities, it proposes creative funding streams, on the last page of the first part and the first six pages of the second part: congestion pricing, cap-and-trade, parking fees, a development fund, value capture. With the exception of congestion pricing, an externality tax for which it makes sense for revenues to go to mitigation of congestion via alternative transportation, all of these suffer from the same problem: they are opaque and narrowly targeted, which turns them into slush funds for power brokers. It’s the same problem as the use of cap-and-trade in California.

One of the most fundamental inventions of modern government is the broad-based tax, on income or consumption. Premodern governments funded themselves out of tariffs and dedicated taxes on specific activities (as do third-world governments today), and this created a lot of economic distortion, since not all activities were equally taxed, and politically powerful actors could influence the system to not tax them. The transparent broad-based tax, deeded to general revenue through a democratic process, has to be spent efficiently, because there are many government departments that are looking for more money and have to argue why they should get it. Moreover, the tax affects nearly all voters, so that cutting the tax is another option the spending programs must compete with. The dedicated fund does neither. If the broad-based tax is the equivalent of market competition, a system of dedicated funds for various government programs is the equivalent of a cartel that divides the market into zones, with each cartel member enjoying a local monopoly. In this way there’s a difference between the hodgepodge of taxes the MTA levies and wants to levy and Ile-de-France’s dedicated 1.4-2.6% payroll tax: the payroll tax directly affects all Francilien workers and employers, and were it wasted, a right-wing liberal politician could win accolades by proposing to cut it, the way New York Republicans are attacking the smaller payroll tax used to fund the MTA.

The proposals of where to spend the money to be raised so opaquely are problematic as well. There is a set of reforms, based on best practices in Continental Europe and Japan, that every urban transit system in the first world should pursue, including in their original countries, where often only some of those aspects happen. These include proof-of-payment fare collection on buses, commuter trains, and all but the busiest subway systems; all-door boarding on buses; mode-neutral fares with free transfers; signal priority and bus lanes on all major bus routes, with physically separated lanes in the most congested parts; a coherent frequent bus network, and high off-peak frequency on all trains; and through-service on commuter rail lines that can be joined to create a coherent S-Bahn or RER system. As far as I can tell, the report ignores all of these, with the exception of the vague sentence, “outfitting local bus routes with SBS features,” which features are unspecified. Instead, new buzzwords like resiliency and redundancy appear throughout the report. Redundancy in particular is a substitute for reliability: the world’s busiest train lines are generally not redundant: if they have parallel alternatives those are relief lines or slower options, and a shutdown would result in a major disruption. Amtrak, too, looks for redundancy, even as the busiest intercity rail line in the world, the Tokaido Shinkansen, has no redundancy, and is only about to get some in the next few decades as JR Central builds the Chuo Shinkansen for relief and for higher speeds.

The only foreigners on the Commission are British, Canadian, and Colombian, which may have something to do with the indifference to best industry practices. Bogota is famous for its BRT system, leveraging its wide roads and low labor costs, and Canada and to a lesser extent the UK have the same problems as the US in terms of best industry practices. Swiss, French, German, Japanese, Spanish, and Korean members might have known better, and might also have been useful in understanding where exactly the cost problems of the US in general and New York in particular come from.

The final major problem with the report, in addition to the indifference to cost, the proposal for reactionary funding sources, and the ignorance of best industry practices, is the continued emphasis on a state of good repair. While a logical goal in the 1980s and 90s, when the MTA was coming off of decades of deferred maintenance, the continued pursuit of the maintenance backlog today raises questions of whether maintenance has been deferred more recently, and whether it is still deferred. More oversight of the MTA is needed, for which the best idea I can think of is changing the cycles of maintenance capital funding from five years, like the rest of the capital plan, to one year. Long-term investment should still be funded over the long term, but maintenance should be funded more regularly, and the backlog should be clarified each year, so that the public can see how each year the backlog is steadily filled while normal replacement continues. This makes it more difficult for MTA chiefs to propose a bold program, fund it by skimping on maintenance, and leave for their next job before the ruse is discovered.

I tag this post under both good categories (“good transit” and “good/interesting studies”) and bad ones (“incompetence” and “shoddy studies”) because there are a lot of good ideas in the report. But none of them rises to the level of reinvention, and even collectively, they represent incremental improvement, of the sort I’d expect of a city with a vigorous capital investment program and industry practices near the world’s cutting edge. New York has neither, and right now it needs to imitate the best performers first.

## Height Limits: Still a Bad Idea

In a pair of recent articles on Strong Towns, Charles Marohn, best known in the urbanist community for introducing the term stroad (street+road) for a pedestrian-hostile arterial street, argues for height limits as a positive force for urbanism. He does not make the usual aesthetic argument that tall buildings are inherently unpleasant (“out of scale”), or the usual urbanist one that tall buildings lead to neighborhood decline; instead, he makes an economic argument that allowing tall buildings greatly raises land costs, and makes redevelopment of vacant lots less likely. He uses the following example:

Let’s say the local code allows [a] vacant lot to be developed as a one story strip mall, but nothing higher. If the strip mall is worth \$500,000, then the vacant lot is going to be somewhere around \$75,000.

Okay, but what if the development code allows that vacant lot to be developed as a sixteen story tower? If the tower is worth \$20,000,000, then that vacant lot is going to fetch a much higher price, maybe as much \$2.5 million.

You own that vacant lot. I come to you with an offer to buy it for \$75,000. What are the odds you are going to sell it at that price when you look to the other side and see the same piece of property going for millions? Not very good.

In most cities, as Charles notes, there is not enough demand to redevelop every vacant lot as a high-rise, and therefore, if high-rises are permitted, a few vacant lots will be redeveloped as high-rises, while the rest remain vacant. This is not the case in large cities, which Charles specifically exempts in his article (see also Daniel Kay Hertz’s response), but part of the problem with the argument, as we will see, is that the boundary between large cities and small ones is fuzzy.

Let me now explain why this argument fails, like all the other arguments for zoning restrictions: it makes implicit assumptions on future uncertainty. The reason the vacant lot owners are not willing to sell for \$75,000 is that they hope to get \$2.5 million. In a stable market, with low enough population that most lots cannot fetch such a high price, the lot owners know that holding off on \$75,000 offers is a gamble and that they are unlikely to ever get a higher offer. People have optimism bias and might overrate the probability that they’ll get the \$2.5 million offer, but also have risk aversion; in most cases in economics, risk aversion dominates, so that safer assets cost more and have lower returns.

So when do we see holdouts? Risk aversion predicts that the probability of obtaining a \$2.5 million offer should be higher than the total demand for new towers divided by the number of vacant lots. If we explicitly assume that the cost figures in Charles’ example, including land costs, are unchangeable, then this means vacant lot owners expect there to be more high-rise towers in the future, which comes out of growth regions. Charles’ example is based on Sarasota, which like most of Florida has high population growth.

The other possibility is regulatory uncertainty. In a competitive market, land costs are already as low as they can be while letting lot owners cash out on past investments. Developer profits are also as low as possible, and represent the developer’s wage for managerial work. However, zoning restrictions will greatly raise both figures, and a lot owner who expects future developments to brush up against the present zoning code can hold out until prices rise.

This is the danger of a system that is based on arbitrary rules (Charles proposes up to two floors or 1.5 times the average present height, whichever is higher), and arbitrary distinctions between small cities in which height restrictions are desirable and large cities in which they are not: these introduce political discretion in the details, which introduces additional uncertainty among lot owners. True windfalls usually involve the boundary between regulatory regimes, and this creates political incentive to game the system in order to be one of the few owners whose lots can be developed as high-rises. In contrast, once a ground rule is established that there is no zoning, such as in Houston, introducing zoning is difficult, even when there are rules that are zoning in all but name, such as parking minimums.

Once we get into the realm of cities with a large proportion of their lots developed, as Charles proposes, future development can only replace old development, and this introduces a key difference between new development and redevelopment: redevelopment requires buying out the preexisting property. If a two-floor building is replaced by a three-floor building, then the developer has to not only pay construction costs for three floors, but also buy out two floors, effectively paying for five floors. But the revenue is still only that of a three-floor building, which bids up effective costs by a factor of five thirds. The formula is that if it’s possible to multiply the total built-up area by a factor of $x$ then the buy-out factor will raise the cost of each housing unit by a factor of $1 + 1/x$.

This effect is why, in major cities, we usually see buildings replaced by much larger buildings: for example, a three- or four-floor Manhattan building may be replaced by a fifteen- or twenty-story tower on a base. Charles laments that this is not small-scale or incremental, but even his example of good incremental development is similar: in Houston, single-family houses are replaced by low-rise apartment buildings, generating similarly high ratios of the floor areas of redevelopments with the buildings they replaced. Incrementalism in these cases consists of replacing small buildings by much larger ones, gradually, until a few decades later the entire neighborhood is tall.

One way around redevelopment’s need to buy out preexisting buildings is to mandate that future buildings be built to allow adding floors on top of them. Chicago’s Blue Cross Blue Shield Tower is an example. This is a regulation that increases the average cost of construction but reduces the marginal cost and thus the price. It’s also a regulation that only really matters in situations when it is difficult to have a high ratio of new to old floor area, such as in areas that are already high-rise, especially major city CBDs. (It is easy to quintuple floor area ratio when the preexisting buildings have three floors, but not so much when they have twelve.) The current styles of construction of most small buildings, for example sloping roofs common in American and European urban and suburban houses, tend to make adding floors impossible. Of course, the implication that such a regulation should only apply for buildings above a certain height introduces political discretion and hence uncertainty, but at least this is uncertainty that would apply equally to all buildings in an area, which is not always the case for zoning.

What Charles proposes, to develop all vacant lots first and only then start going taller, is then a recipe for high marginal costs, because of the buyout factor. In a small city uniformly developed up to one or two floors, it is difficult to spread the new development across many buildings up to three floors, precisely because there is no way to build single-family houses that are recognizable as such to Americans or Europeans from countries I’ve been to (It’s different in Canada, but this is considered a feature of the low quality of Vancouver’s housing) and that can have floors added to them. In such an environment, building tall is the only way to avoid high housing costs.

## Toward a Tel Aviv S-Bahn

I have been thinking of alternatives to the current plan for a Tel Aviv Subway for several years now; last year I expounded on some principles for a better plan. As I mentioned last year, Tel Aviv’s subway system should be shaped roughly like the letter E, with a single north-south spine paralleling the rail mainline and three east-west lines intersecting the mainline at the city’s three main train stations. Today I would like to give more details about this system, with special focus on commuter rail. While thinking of how to create an optimal system serving the region’s secondary centers, I came upon an important principle used on the Paris RER and the Zurich S-Bahn, which past posts (including my own) on the subject downplayed in favor of city-center tunnels: namely, it is often correct to deviate from legacy alignments for a few kilometers in order to better serve a secondary center, even if it requires some greenfield tunneling.

Before I go on, I will note that this plan is intended to be politically neutral, in the sense of serving the dense primary and secondary urban centers of Gush Dan regardless of ethnicity, and with only weak regard for income. In my view, if there are anti-government riots in response to police shooting of a young minority, this is not a reason to deny service to the area; on the contrary, denial of social services is what creates the social alienation that contributes to rioting. But more than this, this plan assumes everyone travels to the same destinations, a reasonable approximation in a country with the level of social integration of the US or a monolingual European country, but a problematic one in Israel.

About 18% of Israel’s population is Arab, and another 12% is ultra-Orthodox; both groups are highly segregated, and have their own job centers. On 972Mag’s Hebrew-language sister site, Noam Sheizaf reports that MK Hanin Zoabi (the Knesset’s sole Arab woman), best-known for her incendiary rhetoric against the IDF, criticized the state’s emphasis on developing fast transportation to Tel Aviv on the grounds that Arabs, especially Arab women, typically work close to home. Incomes are much lower than those of mainline Jews as well: I have no ultra-Orthodox data, but making mild assumptions on income distribution within each decile from Central Bureau of Statistics data, per capita income from work is about \$6,000 per year for Arabs, a bit higher than Romania excluding Bucharest, and \$16,500 for Jews, a bit higher than Greece or Southern Italy. The best American analogy I can think of is the development of dedicated buses for Chinese immigrants in New York City proper and ultra-Orthodox Jews in the New York area, as both groups are very poor and have different centers bypassing Midtown and Lower Manhattan.

With this deliberate decision to ignore ethnic composition in mind, my plan is to build an E-shaped subway system, with the E’s southern leg turning north at its western end to provide a second north-south line in Central Tel Aviv. Here is a link to the map I currently think works the best. The brown lines are an electrified commuter rail system running at very high frequency between Tel Aviv HaHagana and Exhibition Center (currently called Tel Aviv University, though the station is quite far from the center of campus). Observe that the lines deviate from the current network in a few places:

* The circumferential service running along the Eastern Line loops to serve Elad better.

* There is a new branch into Kafr Qassem, passing much closer to Rosh HaAyin’s built-up area than the current Rosh HaAyin North station does.

* The Kfar Saba branch is completely redone. There are plans to connect it to the Coastal Railway concurrently with building a freeway along the same alignment, going due west from its current terminus alongside Route 531. The freeway should be scrapped – Israel is building too many of them, and insists of bundling every transit project with a freeway (even the currently proposed Red Line is planned to come together with a freeway tunnel through an alignment near Jaffa Road in South Tel Aviv, forcing the line to go deeper and raising its costs). Moreover, the connection west of Kfar Saba should be more direct. Conversely, east of Kfar Saba there is a right-of-way that can be used to send trains up to Tira, and perhaps farther into the Triangle, into Tayibe or Qalansawe.

* There is a new branch to Glilot and Herzliya Pituah, an edge city located a bit too far from the Herzliya train station to be a comfortable walk, especially along the wide, pedestrian-hostile access road.

* The line enters Netanya along a new alignment, with a short tunnel; the current Netanya station is at the edge of the built-up area.

* There is a reactivated branch serving Tsrifin.

* The route through Rishon LeZion avoids the current plans to connect Rishonim Station (Kiryat Simha on my map, to avoid confusing with Ramat HaSharon Rishonim) to the Ashdod Branch via Route 431, avoiding the Rishon LeZion built-up area. Rishon is a sprawling suburb, but has more than 200,000 people, and secondary centers; it is better to spend a bit more money, tunneling under the center of the city and going above-ground to its west to serve the College of Management Academic Studies, Israel’s largest independent (i.e. non-university) college.

These short tunnels are in line with construction in European cities: the Paris RER’s centerpiece is the connecting tunnels in central Paris, but as seen on this map, which includes chronology, the Charles-de-Gaulle branch opened in 1976, shortly before the RER B it connects to, and the Disneyland branch opened in 1977, concurrently with the RER A. The Zurich S-Bahn includes short greenfield tunnels to access the airport from both directions. The Stockholm commuter rail system includes a tunneled loop serving Arlanda, which was built for the Arlanda Express and then extended and used by the regular commuter trains. Usually these new tunnels serve airports or other new centers such as Disneyland, since the old secondary centers already have legacy lines, but in Israel, most towns’ train stations are located at the edge of the built-up area rather than in the center, and in the larger secondary cities, this justifies some additional tunneling.

On the same principle, the Jabotinsky subway line, which is otherwise elevated outside the Tel Aviv core, tunnels to reach central Petah Tikva, in lieu of the current plan to skirt the center of the city and go in tram mode to Petah Tikva Central Bus Station.

I expect most ridership, and by far most of the cost, to come from the subway lines, colored red, green, blue, and yellow; I call them subways, but out of the system’s 60 km, 27 are above ground and only 33 are underground, mainly in Tel Aviv proper and in the parts of Ramat Gan and Givatayim that do not have wide roads for a right-of-way. I chose names for political reasons: the north-south line is called the Jaffa Line since it passes through Jaffa, a low-income left-wing Arab area; the northern leg of the E is called the Jabotinsky Line since it runs largely along streets named after Zeev Jabotinsky, founder of Revisionist (right-wing) Zionism; the central leg of the E is called HaShalom Line since it intersects the mainline at HaShalom train station, and the peace process (shalom in Hebrew) is a cornerstone of the Zionist left; and the southern leg of the E is called HaTikva Line since it passes through HaTikva, a low-income right-wing Mizrahi neighborhood. I tried to steer clear of politics in the route choice: only the choice of names, constrained by the need to refer to features of the lines, is political.

In the remainder of the post, I will deal with possible objections to the proposal, and with various doubts and drawbacks.

1. Probably the biggest objection I expect is that the system skirts the proposed Tel Aviv CBD, which is District 6 on this map. Unlike the current plan, there are no tunnels under Namir Road, but rather the tunnels are farther west, in the city’s traditional center. This is deliberate. I do not have bus traffic data, but I do have frequency data for the most frequent buses, expressed in daily departures in both directions. It is in Hebrew on the Israeli Bike-to-Bus Rider blog; the key is that a gold medal denotes at least 4 buses per hour, a bronze one denotes at least 3, a silver one denotes at least 3 and at least 4 at and on the shoulders of the peak, and a V on the left column denotes at least 6 at rush hour. The bus route numbers are on the second column from the right. See also this frequent bus map to match route numbers to streets.

While I criticized the use of bus corridors for subway planning last year, noting that buses serve the wider Jerusalem Boulevard through Jaffa and not the narrower but more centrally-located Yefet Street, the map provides a rough guide to which regions and which directions of travel have the most demand. North-south travel along Ben Yehuda, Dizengoff, and Ibn Gabirol Streets and Namir Road is very popular. Ben Yehuda’s routes 4, 104, and 204, which HaTikva Line roughly parallels, have 642 buses per day. Dizengoff’s routes 5, 39, 72, 129, 172, and 239 have 1,071. Route 9, which runs along Ben Yehuda and Dizengoff in a one-way pair, has 162. Ibn Gabirol’s routes 24, 25, 125, 126, 189, and 289 have 986. And Namir Road’s routes 1, 40, 42, 51, 60, 71, 160, 171, 240, and 271 have 1,726. Despite the large number of buses on Namir, these buses closely parallel mainline rail, and moreover, there are 65% more buses on Ibn Gabirol and points west.

2. My plan ignores many active plans made by the state. This is on purpose: until such projects as combined freeway-rail lines are built, they should be opposed, since the road construction will ensure connectivity by road will be faster than by rail, frustrating any attempt to maintain a high public transit mode share. To my understanding, the most expensive portions of the planned subway, namely the underground parts, have not been built, and on the contrary there are constant schedule and budget slips; the current timetable calls for the completion of the Red Line in 2023, and the budget has slipped from 10.7 to 14 to 17 billion shekels; this is \$200 million/km, accounting for PPP but not future inflation (if Israel holds to 2% inflation, it will be about \$180 million/km), for a line that’s only 43% underground.

3. Four-tracking the mainline rail route through Tel Aviv is going to be expensive, since it requires building over or rerouting the Ayalon River. In the long run, rail growth makes such construction necessary: Israel’s economic geography forces all travel between the north and the south to go through or right next to Tel Aviv, which means potential travel demand is higher than through Stockholm, which is currently four-tracking its main route through T-Centralen to provide for both additional commuter rail and intercity rail service.

In the short run, there are two ways to cut initial costs. First, it may be the case that there is room for four tracks along the Ayalon right-of-way, as long as only two are served by station platforms. If that is true, then HaShalom should be reconfigured as a local station, with two nonstop tracks, while all trains should continue to stop at Tel Aviv Center and HaHagana, both of which already have more than 4 tracks. While HaShalom is Israel’s second busiest train station (see file here, shared by a forum member back in 2008: the leftmost column is total daily entries and exits), high-frequency local commuter rail service connecting it with Tel Aviv Center and HaHagana is an acceptable substitute if it saves a lot of money.

And second, Israel Railways runs very inefficiently, partly because of single-tracking and partly because of the use of slow-accelerating diesel locomotives. Peak traffic on the two-track mainline, excluding the third track (which is run as a captive single-track commuter line), is still in the single digits of trains per hour. While my plan calls for 10-minute peak frequencies on each of 5 branches, I believe that for a long while, several branches could make do with 20 minutes; with high-capacity signaling, and the use of the third track for emergencies if a train is late, 30 trains per hour are possible, permitting space for commuter trains as well as the four hourly intercity trains to Haifa, two to Beer Sheva, and future trains to Jerusalem.

4. Too much service to the north. The way the map is presented, without extra proposed extensions, the best-served part is District 6, which has almost no residential population: counting transfer stations twice and jurisdiction-boundary stations as belonging half to each jurisdiction, it has 1.5 stations for 4,600 residents, or 1 per 3,000. But the second best is District 3, the Old North, and even Herzliya is better-served than District 8, South Tel Aviv. It’s an unfortunate fact that Herzliya’s train station is located on a pedestrian-hostile road, between the two centers of Herzliya and Herzliya Pituah and beyond walking distance to both, requiring considerable additional construction; but it’s also possible to either eliminate the Herzliya Pituah commuter rail branch or cut the Jaffa Line to KKL Junction. The Old North needs this much service, because of the high demand for bus service along both Dizengoff/Ben Yehuda and Ibn Gabirol, as well as the presence of several major retail and entertainment centers, such as the Port, the Marina and waterfront hotels, and Dizengoff Center, making the neighborhood more than just residential.

5. Not enough service to the south, especially Holon. The official plan calls for building a second line going north-south from Tel Aviv University to Holon and Rishon LeZion, giving two north-south branches to the south (including the initial one to Bat Yam) versus one in my plan. I admit that the indirect service to Holon is problematic, but counter that the city is substantially less dense than Bat Yam, and moreover the east-west orientation of the Jaffa Line connects the two cities while giving Holon a transfer to a direct mainline rail connection to Tel Aviv. Rishon LeZion is completely cut from my subway plan, but gains a centrally-located commuter rail station.

South Tel Aviv has relatively little service, too, since the Jaffa Line and HaTikva Line have stops just outside it. The alternative I proposed within the map file, in which HaShalom Line is extended two more stops to Old Jaffa while the Jaffa Line is rerouted along the more southeasterly Shalma Road alignment, provides several more South Tel Aviv stations and makes Central Bus Station the Jaffa/HaTikva transfer point, at the cost of a detour that lengthens end-to-end trips as well as about 3 km of additional tunneling. In either case, the center of South Tel Aviv today is close enough to Central Bus Station to be serviceable, even if it’s only by one line rather than two.

6. Tight timed transfers. Unlike the simply-connected lines branching to the north, the lines to the south have multiple mergers, to be dealt with using timed transfers at Lod and Lod Junction. The plan is, using a 20-minute clockface schedule, to have Airport Branch trains leave 4 minutes before mainline Lod trains, be slowed down by the airport detour and the extra stops, and have a timed transfer with the Eastern Line at Lod Junction, which then has a timed transfer at Lod. This corresponds to a 4-minute slowdown as planned, but requires two successive transfers. I do not know to what extent this is robust, although given relatively low frequency per branch, I do not think it’s a trouble on a railroad with reliable trains and level boarding. Israel’s current diesel rolling stock is unreliable, but this can be fixed with EMUs, and there’s already level boarding.

7. Station locations. I tried keeping station spacing to one per kilometer, but ended up finding more good locations, so station spacing is slightly narrower. More fundamentally, at several spots, mainly east of Ayalon, I chose station locations based on destinations rather than street intersections. The tradeoff is that the destinations can provide better waiting spots than an intersection of two wide roads built for high car speeds, and by definition have something within walking distance, but street intersections make it easier to run connecting buses.

8. Quibbles on termini. These I am happy to be convinced about, including the eastern termini of HaTikva Line (on Twitter, Moshe Schorr proposes avoiding Kiryat Ono, and instead swerving southeast to serve Or Yehuda and Yehud), the southern terminus in Ashdod (it is possible for trains to enter the city on viaducts and serve it more centrally), and extensions or cutbacks to lines already mentioned.

9. Quibbles on routes. As with the termini, I am happy to make changes. These include the route through Ramat Aviv (the current map provides a stop on the south side of the Tel Aviv University campus, but it’s possible to instead take two sharp turns and serve Ramat Aviv Mall), and the routes of HaShalom and HaTikva lines through Ramat Gan and Givatayim, which could both be moved south. There are no compelling destinations west of the eastern anchors at Bar Ilan and the Bakum/Kiryat Ono and east of the neighborhoods abutting Ayalon such as HaTikva, which makes the routes more flexible.

The first two objections are the most fundamental, and the ones I feel the most strongly I am right again. The others are smaller changes, in descending order of importance, and do not conflict with the concept of an E-shaped rapid transit system supporting a single frequent S-Bahn spine.

Posted in Israel, Regional Rail, Transportation, Urban Transit | 23 Comments

## The NITBY Problem

Usually, the barrier to new development in a neighborhood is NIMBYism: connected local community members do not want the project, saying “not in my backyard.” There’s a wealth of literature about NIMBYs’ role in restrictions on development; William Fischel’s work is a good start, and the short version is that opposition to development is local, based on fear of the risk of decline in property values. Urbanists take it for granted that decisions made with regard to regional rather than local concerns will be more pro-development: Let’s Go LA has examples from Los Angeles, and Stephen Smith explains Toronto and Tokyo’s lax rules on new development based on their high-level decisionmaking (at the provincial level in Ontario and national level in Japan). In this post, I would like to discuss the opposite problem, which I call NITBYism – “not in their backyard.”

In certain circumstances, opposition comes from people living in other areas, who are aghast that an area they don’t live in is getting so much investment. This is more likely to happen when there’s heavy public involvement in development, but, since upzoning an area is a public decision (as opposed to unthinkable across-the-board zoning abolition), opposition can sprout anytime. One common thread to NITBY opposition campaigns is that NITBYs view housing as a good thing, and want it redirected to their areas. Another is that they self-perceived as ignored by the urban elites; this is common to both right-wing populists and left-wing ones. Since the process is heavily public by assumption, the price signal telling developers to build in the center of the major city is irrelevant, and this encourages the government to build more low-value peripheral projects.

The first example of this is when the process actually is public: subsidized affordable housing. As discussed by Daniel Kay Hertz, in Chicago, affordable housing regulations require developers to pay a fee to a dedicated affordable housing fund, which then uses the money to develop or buy housing and rent it out at subsidized rates for moderate-income residents. To minimize the cost per affordable unit, the fund builds the units in the cheapest neighborhoods, i.e. the poorest ones, exacerbating housing segregation. As Payton Chung explains, the low-income housing community networks in Chicago support this arrangement, because they are based in the neighborhoods where this affordable housing is built. This is not as self-serving as the examples I will include below, since the community groups want to see the most number of housing units built at a given cost; but a common feature of NITBYism, namely that the NITBYs view housing as a good rather than as a burden imposed by outsiders, is present here.

In Israel, NITBYism does not have the cost defense that it does in Chicago. Zoning in Israel is prepared by municipalities but must get approved by the state. This means that it is geared not only toward providing services to Israelis (such as cheap and orderly housing) but also toward national goals of Judaization. The worst NITBYism is not affecting Tel Aviv, but Arab cities, where the state refuses to approve zoning plans; since independence, not a single new Arab city has been built, except to house Bedouins who the state expelled from their villages after independence, and plans to build the first new Arab city are controversial on segregation grounds. This is while the state has built many new Jewish cities from scratch, often in peripheral areas in order to ensure a Jewish majority.

However, NITBYism afflicts housing in Tel Aviv, too. Although the state could if it wanted declare a housing emergency and force upzoning in Tel Aviv, it does not. There are few permits for new apartments in the Tel Aviv District (though more new housing sales): only 5% of the national total (including settlements), as per the pie chart on page 17 of the Ministry of Construction and Housing’s report and the more complete (in English) data on page 49, compared with a national population share of 16%; the Center District, consisting of Tel Aviv suburbs (though not the richest and most expensive, such as Ramat HaSharon, which are in the Tel Aviv District), has 22% of national permits, about the same as its share of the national population. This is not just NIMBYism in Tel Aviv, although that exists in abundance. Local politicians from peripheral towns demand local construction, and view Tel Aviv construction as something useful only to outsiders, such as foreign speculators or the urban elite. During the housing protests of 2011, there was widespread debate on the left about what solutions to offer, and people representing the ethnic and geographic periphery were adamant that the state build and preserve public housing in peripheral towns and not concentrate on Tel Aviv, which they identified with the secular Ashkenazi elite. A common thread in housing and infrastructure debates to both working-class Jews from the periphery and Arabs is the demand for a policy that would create jobs and housing in their hometowns, rather than build infrastructure that would put them in the Tel Aviv orbit.

Of the above examples, in Chicago the NITBYs self-identify as leftists, and in Israel, the NITBYs who want local housing rather than Tel Aviv housing either identify as leftists or identify as economic leftists and support the right on security and ethnic identity issues. However, the populist right is not immune from this. Right-wing supporters of suburbs who oppose cities for what they represent (diversity, usually left-wing politics of the kind they associate with the liberal elite) may also oppose urban upzoning. The best example of this kind is Joel Kotkin’s opposition to upzoning in Hollywood, which sounds like a criticism of government projects until one realizes that upzoning simply means developers are permitted to build more densely if they’d like. Now, Kotkin is pro-immigration, setting him apart from the main of right-wing populism, but in all other aspects, his paranoid fear of urban liberal elites imposing behavioral controls on ordinary people would be right at home at the UK Independence Party and its mainland European equivalents. Kotkin is also just one person, but his views mirror those of Tea Party activists who equate dense urbanism with an Agenda 21 conspiracy, to the point of conflating a phrase that means building new suburbs with a plan to forcibly relocate suburbanites to central cities.

I do not know Japan’s regional patterns of politics well, but I know Ontario’s. In Ontario, there is not much us-and-them politics regarding Toronto. There is such politics regarding the inner parts of Toronto – Rob Ford was elected on the heels of an outer-urban populist backlash to David Miller’s urbanism, including the perception that Miller was fighting a war on cars. But there’s none of the hatred of the central city and all that it represents that typifies politics in both Israel and the US. Hatred of the city in the US is right-wing (though within the city, hatred of the gentrified core is often tied to left-wing anti-gentrification activism), and hatred of Tel Aviv in Israel is generically populist, but in both cases, the us-and-them aspect encourages NITBYism.

In the most expensive American cities, this is not a major problem. Anti-urban populism does not have enough votes to win in New York and California, so state control of zoning in those states would not produce these problems. The Tea Party disruption of zoning meeting I brought up above happened in San Francisco suburbs, but did not have an effect on planning; I brought this example up to show that this political force exists, even if in that specific locality it is powerlessly weak. In those areas, local NIMBYism is a much bigger problem: many New York neighborhoods were actually downzoned in the Bloomberg era by local request. The primary problems that would plague state-level decisionmaking are corruption and power brokering, in which politicians hold even straightforward rule revisions hostage to their local pet projects. The us-and-them politics of Upstate and Downstate New York contributes heavily to power brokering, but Downstate’s demographic dominance precludes ideological choking of development.

Within the US, the risks of NITBYism are different. First, in the cost tier just below that of New York and California there are city regions in more moderate states, for examples Philadelphia and the Virginia suburbs of Washington, or possibly Miami (where the county-made rules have allowed aggressive new construction, mostly urban, which Stephen Smith credits to the political power of Cuban immigrants). And second, zooming in on different neighborhoods within each expensive city, the Chicago example suggests that if New York and other expensive cities begin a major program of public housing construction, the community organizations and the populists will demand to spread construction across many neighborhoods, especially poor ones, and not in the neighborhoods where there is the most demand.

As I noted two posts ago, there is a political economy problem, coming from the fact that the politically palatable amounts of construction are not transformative enough to let the working class live in market-rate city-center apartments, not in high-income major cities. Israel could semi-plausibly double the Tel Aviv housing stock; even that requires housing forms that Israelis associate with poverty, such as buildings that touch, without side setbacks. This would allow many more people to live in Tel Aviv, but they’d be drawn from the middle class, which is being priced out to middle-class suburbs or to working-class suburbs that it gentrifies. The working class in the periphery would be able to move into these closer-in suburbs, but this cascading process is not obvious. Worse, from the point of view of community leaders, it disrupts the community: it involves a churn of people moving, which means they end up in a different municipal fief, one with leadership the current suburb’s leaders may be hostile to.

For essentially the same reasons, subsidized housing in the center produces the same problems. If Israel builds a massive number of subsidized or rent-regulated apartments in Tel Aviv, there will be immense nationwide demand for them. Few would serve the residents of a given peripheral suburb, and there is no guarantee anyone would get them. On the contrary, in such a plan, priority is likely to go to downwardly-mobile children of established residents. At the 2011 protests, the people who were most supportive of plans to lower rents in Tel Aviv specifically were people from Tel Aviv or high-income suburbs who wanted to be able to keep living in the area. The community disruption effect of offering people the ability to live where they’d want would still be there. Thus, all the incentives line up behind periphery community leader support for building public housing in the periphery, where there is little demand for it, and not in the center. Even when housing is universally seen as a benefit and there’s no NIMBYism, politics dictates that housing is built in rough proportion to current population (since that’s where political power comes from) and not future demand.

Abolishing zoning is one way to cut this Gordian knot; it is also completely unpalatable to nearly everyone who is enfranchised in a given area. Allowing more private construction is the more acceptable alternative, but leads to the same problems, only on a smaller scale. It really is easier for community leaders to twist arms to demand veto rights and local resident priority than to push for sufficient citywide upzoning to alleviate the price pressure. But in an environment with weak NIMBYs and few NITBYs, fast growth in urban housing is possible.

Posted in Development, Israel, Politics and Society, Urbanism | 27 Comments

## Pedestrian Observations from Central Stockholm

I like Stockholm. There’s something reassuringly familiar about it, despite the language barrier, which I think comes from the fact that the Central Stockholm housing stock is of similar vintage as the residential parts of Manhattan. It even avoids New York’s most annoying (to me) architectural tic, the exposed brick. The buildings here are similar in style to the ones in New York (and more generally northern Europe), but most have smooth exterior, with enough variation of colors between buildings to make it interesting.

The streets here vary a lot in width, but outside the older sections of the city, they are never very narrow. In Gamla Stan (“the old town”), the medieval core of the city that is now a tourist ghetto, complete with stores selling Swedish flags or English-language books, there are some pedestrianized streets with single-digit building-to-building width. But in my part of the city – Roslagstull, near the outer end of what’s considered Central Stockholm – the street width ranges are almost identical to those of Manhattan. My street, Birger Jarlsgatan, is about 30 meters wide, while less important parallel streets are about 15 or 20. Like the rest of city center, it’s lined with almost uniformly mid-rise buildings, six to seven stories tall. See photos here, from Södermalm, and here, from Regeringsgatan, a street that for a portion of its length is elevated over intersecting streets.

A feature of Stockholm streets that I have not seen in other cities is that on-sidewalk bike lanes. While the overall sidewalk width on Birger Jarlsgatan is generous, the sidewalk is broken by the bike lane. The inner side of the bike lane is interrupted by trees, and the outer side by sidewalk cafes, and as a result, sometimes walking in the bike lane is unavoidable if one wishes to avoid walking in zigzags. In any case, cyclist traffic does not seem to be heavy; there is much more pedestrian traffic.

Crossing the street is rarely difficult. There are beg buttons at intersections, but the pedestrian light will turn green even without pressing them. The stoplight phasing is simple: most of Central Stockholm is on one of several grids, and even at intersections of two-way streets (one-way streets are uncommon, at least around Roslagstull), there are only two phases per stoplight cycle. Without grade-separated freeways in the city core, the worst streets for the pedestrians are the occasional freeway-like structure, or one of several excessively wide roads. I walk to work on one of those roads, Valhallavägen, and during the daytime, the cars’ noise and air pollution are uncomfortable unless I walk through the parking lots behind the street or the bus bay in its median.

The transit system is useful, though I almost never take it. This is a combination of very high fares (with my pay-per-ride smartcard, I pay 25 kronor per ride, about PPP\$2.70) and a city core that’s small enough and pedestrian-friendly enough that I can get around most of it on foot. The pedestrian orientation of the streets matters: my apartment is 2.3 km from the CBD mall and 1.7 km from Stockholm University; but I will walk to the mall, whereas to get to and from a conference at SU, I didn’t walk on Roslagsvägen (which is almost a full freeway) but instead took the subway from my university, KTH, which is more centrally located within the city.

Of course, most people in the region don’t live in Central Stockholm, and for them the T-bana is a lifeline. Subway ridership here, excluding commuter rail, is about 900,000 per day (not weekday), not much lower than on the U-Bahns of much larger Berlin and Munich. As a curiosity, there are many light rail lines that connect outlying suburbs to a T-bana station, requiring a transfer to get to the CBD; the busiest, Roslagsbanan, is a narrow-gauge commuter rail system terminating next to KTH, with one T-bana branch, the T14, running parallel to it for a few stops before terminating. This is in addition to a mainline commuter rail system, with 267,000 daily passengers; this ratio of about one commuter rail rider to three subway riders is higher than anything most (see first two comments) in North America, but is much lower than in major European transit cities like Paris and London, where commuter rail and the metro have roughly equal ridership levels. Among the transit projects under construction in Stockholm is a new rail tunnel, which will increase the capacity of commuter rail.