Thursday, December 29, 2011

Madrid Rio: Highway Tunnel Project

I was lying flat on my back, sprawled across a marble platform, looking at the high ceilings above. I had just stepped off the escalator to the Metro terminal at the brand new (ridiculously large) Madrid Barajas airport,  when I slipped and fell. I was in a hurry: I could see that the next train was about to depart, but at this point I wouldn't make it in time. A custodian was mopping nearby, he came over, helped me back up, and asked me in Spanish if I was OK. I summoned up the little language training I had and asked "¿Cuando proximo tren?" He pointed wordlessly at the other track, where the doors were open on yet another train. I sheepishly schlepped my bags there, and within a few minutes, we were moving.

Riverside promenade, Madrid (source)

That was my introduction to the city of Madrid, in 2010. This past year, they completed their own version of the "Big Dig", putting the M-30 beltway underground, and restoring the Manzanares River. The project is called "Madrid Rio" and tunneling was started in 2003 as an effort to reclaim the riverfront land and improve the busy M-30 at the same time.

When I visited for a conference in 2010, I got to spend my free time exploring. I remember there being a river on the maps, and I did visit points on both sides of it, but I do not remember ever seeing the river itself. Apparently, I'm not the only person with this experience. Up until recently, the river was treated as a neglected median for the M-30. The park is so new that Google's satellite imagery still shows it under construction (as of this writing).
A highway runs beneath (source)
Already, comparisons have been made between this project and others around the world. Let's start with the basics.

Madrid Rio
Ten kilometers of tunneling, seven years of construction, 300 acres of new parks, 400 million (~$550 million) to build the park, out of approximately 4 billion (~$5 billion) for the entire project.

The Big Dig (Central Artery/Tunnel)
Over eight kilometers of tunneling, 10-20 years of construction (depends what you count), 26 acres of reclaimed space, $15 billion (or $22 billion with interest). This was really two mega-projects rolled into one, so it is difficult to compare directly. This site attributes $6.5 billion to the I-90 extension, leaving about $8.5 billion for the 5-km Central Artery.

Spain, it seems, is really good at building infrastructure cheaply. But to be fair, the project in Boston was a lot more complicated. The M-30 ran alongside the Manzanares River, which had never been an important part of the modern city of Madrid. The Big Dig took place in the heart of downtown Boston. It appears that the tunneling for the M-30 was relatively simple: not much to worry about except for some subway tunnels underneath. The Big Dig required the relocation of underground utilities, it had to thread below South Station, around both the Red Line and the Blue Line, all while supporting the weight of the Central Artery above. Madrid was willing to screw over residents during construction, in ways that would be unacceptable here in the States. I do not know to what extent this made it easier for them.

Madrid highway network (source)
The most effective way Madrid saved money, however, is by never building a city-dividing highway in the first place. The M-30 is the inner belt, and the highways that lead into the city end there. It may be hard to tell from this map, but the region within the M-30 beltway is quite large. It includes the heart of the city, and many of the inner neighborhoods. However, the outer barrios are crisscrossed by highways, and I have heard that traffic on them is quite heavy.

To counter this, Spain has been pro-active about building and maintaining public transportation. The Madrid Metro is currently sixth in the world in terms of length. I can attest that, when I visited, the system was largely clean and modern (having undergone renovation in the last ten years) and very extensive for a city of that size. This is complemented by buses as well as commuterintercity and high-speed railroad operations.

I don't know if Madrid Rio will be successful. The alleged benefits are the creation of a new river park, the revitalization of many properties abutting it, and new development to go alongside. Will Madrileños still stroll the riverside when the novelty has worn off? Perhaps: the park includes many new bridges and connections to Casa de Campo, which was cut off from the city previously. Even so, it may not be worth the cost -- which was fairly high by Spanish standards.

Friday, December 23, 2011

The Big Dig, part 2

The Greenway
A prescient Boston Globe article:
The year is 2010, and tourists are scurrying across the surface of the submerged Central Artery, avoiding cars and checking maps to get from Faneuil Hall to the Aquarium. Mothers with strollers are leaning into a gusty wind, passing through a barren park where no one lingers.
I have made one small change to the quote. The authors felt they were exaggerating when they wrote those words in 1999. However, a mere ten years later, the Rose Kennedy Greenway has already become the barren park that they had envisioned.

But you don't have to take my word for it. In late 2011, a political movement known as Occupy Boston took over the open space near South Station called Dewey Square -- part of the southernmost portion of the Greenway. Eventually a Suffolk Superior Court ruled that the city could evict them. As part of that ruling, the judge provided a description of the space:
Developed as parkland, the locus in quo is a hundred-foot wide median strip, which covers an interstate highway tunnel and is bounded by an exit ramp and heavily trafficked streets. It is operated by the Rose Fitzgerald Kennedy Greenway Conservancy, Inc. and is known as Dewey Square.
Many decades and dozens of billions of taxpayer dollars were spent on designing and constructing the Big Dig. It was supposed to open up nearly 30 acres of prime downtown real-estate, and reunite the city. But when former environmental secretary John DeVillars approved the plan, he inserted an arbitrary stipulation that 75% of the land be used for "open space." Also: as it is constructed, the tunnel underneath will not support any building taller than a few stories. As a result, nearly all proposals for the land focused on different ways to turn it into a park, or worse, a parking lot. And in the end, what have we got for all of the effort? A six lane divided highway, at-grade, with "open space" in the middle. See for yourself:

$15 billion buys you a tunnel, a new at-grade highway and a glorified median strip (source)

"Pedestrian friendly" connection to the North End (source)

Northernmost section - perhaps the nicest part but still very highway-like (source)
We didn't get redevelopment of the urban fabric to replace what was demolished fifty years ago. And we didn't get much of a park either. Just a barren "open space." Or as Charlie Gardner put it: they made a desert and called it a park.

He also asks: did anyone consider the option of removing the Central Artery, and not replacing it? After all, the 1989 Loma Prieta earthquake forced San Francisco to do that to the Embarcadero Freeway, and the result has been overwhelmingly positive for them. While people have made comparisons between that highway and Boston's Central Artery, nobody seems to consider if what worked for them might have worked for us as well.

Consider this segment from a fascinating interview with Fred Salvucci, where he explains how the idea for the Big Dig came about:
Initially Bill Reynolds, who was a highway builder and the head New England Road Builders, came up to me and said that, "This big ugly elevated road is like a neon sign flashing, 'Roads are bad.' And it's just a bad advertisement for our industry and I'm convinced that the only way we'll fix this anti-highway attitude is by correcting the mistake and putting it underground." And my first reaction was, "This is crazy. You know, how are we going to shut the city down for ten years while we build a new road?"
Two things: perversely, the Big Dig project grew out of the anti-highway movement (the interview discusses this at length), and Salvucci felt that shutting down the Central Artery was tantamount to shutting down the city. As far as I can tell from my research, that presumption -- spoken or not -- is never questioned.

See also: The Big Dig, part 1 and part 3.

Wednesday, December 14, 2011

Nathan Lewis continues to embarrass himself

I've written about this before. Nathan has written an excellent and inspiring series of articles about traditional urbanism, beginning with The Eco-Metropolis. But he's also a gold-standard crank. This poses a difficulty for me. How can I recommend his site to people, when they will find some really bad writing on economic issues there?

Let's take a look at his latest offering:
The distinguishing characteristics of a Keynesian are easy to identify. In response to a recession, they recommend expanded government spending – they usually boast outright that it doesn’t matter what the money is spent on, even egregious waste — and some sort of “easy money” policy. [..] Keynesians generally don’t have any ideas except for these. None at all.
Wrong, Nathan. This theory of macroeconomics draws from the work of English economist John Maynard Keynes who surmised that it was possible for individual "rational" decisions to add up to an inefficient overall outcome. In other words: markets were not perfectly self-regulating and they could lead to extended human misery for no good reason. Therefore, an active government policy role -- both fiscal and monetary -- was required to tamp down the excesses of the business cycle. Keynes was especially interested in solving this problem because of the Great Depression. Many of the ideas found in his work are older, but have been grouped under "Keynesian economics" because he put them together into one general theory.

What does all this mean in practice? The simplest answer is this: the government plays a counter-cyclical role relative to the private sector. When times are good, and the economy is booming, the government should take steps to pay down its debt and reduce inflation. When times are bad, and a depression is looming, the government should do whatever it takes to prevent unemployment from passing a critical level, even if that requires taking out loans and providing "stimulus." The former principle is just as important as the latter.

Keynesian economics provided models that were successfully used for the following forty years to manage the economies of many countries, including the United States. However, those models were unable to explain the phenomenon of hyper-inflation in the 70s, so they went out of favor, and some alternatives have come and gone, including monetarism, the Austrian school and Real Business Cycle theory. Other economists responded to critiques by producing New Keynesian models, instead. Since 2007, as we nearly dipped into a second Great Depression, Keynesian-style economics has been re-popularized, as the alternatives have all failed to explain the conditions we are seeing today.

For example, Nathan goes on to make this claim:
Today, Keynesianism is in its era of final absurdity. With governments now running into their borrowing limits across the globe, the idea of deficit-spending your way to prosperity is mostly off the table.
If Nathan and his cohort of Austrian economist friends were right, US treasury rates would be sky-high. Unfortunately for him, he didn't bother to check the facts. If he had, he would have learned this:

Far from running into any kind of "borrowing limit", United States Treasury bonds are more popular than ever. People are willing to loan the government money at a zero percent interest rate! Even when real interest rates have dipped into negative numbers, people are willing to effectively PAY an interest rate in order to hold bonds. So much for final absurdity.

Still obsessed about gold:
The United States used a gold standard system for 182 years, 1789-1971, and became the wealthiest country in human history.
Except, of course, when FDR abandoned it in order to save the economy during the Great Depression. And then there's the period of economic growth following WWII, when Keynesian thought guided the creation of the Bretton Woods system, based heavily on capital controls.

More silliness:
At that point, a gold standard system will seem straightforward and inevitable. Once you decide that you want Stable Money, instead of Ben Bernanke’s funny money fiesta, the solution is obvious.
And reality:

Inflation as measured by CPI has trended low and stayed under 2.5% since the beginning of the crisis. It nearly dipped to zero, and by some measures, we saw deflation for some months in the last couple years.

I have been talking generally about Keynesian macroeconomic theories, and how they have been successful in recent years compared to other theories, while objecting to Nathan Lewis's characterization. To be fair, the issue is far more complex than this: there are many models, and none of them are perfect for every situation. If you are interested in learning more about this, you should go ahead and read about how real economists work. Whichever way you go, the most important thing is to check predictions against the real world data, which is easier than ever to do nowadays.

It is really frustrating for me to have to debunk Nathan. I really like his writing on cities, his style is a lot of fun to read. But these economic matters are also important. And sadly, he is better known for his crank writing than his good writing.

Saturday, December 10, 2011

The Big Dig, part 1

The Big Dig (source)
The most expensive highway project in the United States was built here in Boston. It was nicknamed "The Big Dig", a name that became notorious and synonymous with massive cost overruns and delays.

So when the highway segments were finally completed, many people were eager to put the whole mess behind. The cost was high, but at least we had some shiny new bridges and tunnels to use. Also, the space formerly occupied by the Central Artery had become open land, with grass and marginal roads.

However, the Big Dig did not live up to its promise, and may have made some traffic patterns worse. The Boston Globe conducted an investigation and published an article in November 2008:
Ultimately, many motorists going to and from the suburbs at peak rush hours are spending more time stuck in traffic, not less. The phenomenon is a result of a surge in drivers crowding onto highways - an ironic byproduct of the Big Dig's success in clearing away downtown traffic jams.
The State of Massachusetts has spent $15 billion on a fight against "The Fundamental Law of Highway Congestion," and the Law won. The original paper was published in 1962. There has been plenty of research over the years on this subject, and there was no excuse to be unaware of the dilemma by the early 90s when the Big Dig planning was underway.
Proposed Green Line extension

The trouble does not end there. The State agreed to mitigate the pollution from the additional vehicle traffic induced by the Big Dig. To this end they made legally binding promises to build several public transportation projects, including: Green Line extension to Medford, Arborway trolley restoration, and Red-Blue subway connection. However, the MBTA has weaseled out of Arborway by substituting improvements to the 39 bus, and has moved on the other projects only when threatened by lawsuits. The Green Line extension was recently pushed back, yet again, causing widespread anger among residents and elected officials. The State government apparently thinks that, with the completion of the highway segments, it can brush off any further obligations to the citizens.

In 2000, in an attempt to fix the finances of the MBTA, legislation called "Forward Funding" was passed. This law dedicated 20% of sales tax revenue to the MBTA, and in exchange, charged the agency with issuing and paying its own debt. People were assured that this would be sufficient to run operations. However, the legislature also did something sneaky: they moved $3.3 billion of debt from the State onto the books of the MBTA. Part of that debt was from the Big Dig. The reformed agency was "[Re-]Born Broke:"
Legal obligations debt ($1.688 billion) corresponds to state implementation plan (SIP) commitment projects.  These were public transportation projects the state agreed to build as part of the Big Dig.  [...] The State also transferred the responsibility to finish many SIP commitment projects, and the T borrowed to do so.  In 2007 the State agreed to re-assume responsibility for outstanding SIP projects, but not the debt for such projects borrowed before 2007.
In other words, the State of Massachusetts had made a binding agreement with the citizens that, among other things, it would improve the public transit systems managed by the MBTA in exchange for constructing the Big Dig. But less than ten years later, Beacon Hill was able to completely twist the logic of this agreement around. Now the MBTA alone is being forced to bear the debt burden that the State was supposed to pay  in the first place. And the revenues from sales tax never met the original expectations. The result is a system that is breaking down and cannot pay for desperately needed repairs. We are looking at possible fare increases, up to an outrageous $3.25 per ride using CharlieTicket, and severe service cuts. This plan could demolish ridership on the system, leading to a spiral of further deficits. And if that happened, it would not only hobble mass transit, but also the entire economy in the Metro Boston region which depends on the T.

See also: The Big Dig, part 2