Sunday, December 9, 2012

Urban Economics

On Tuesday, downtown residents voted to tax themselves to build a street car system. The street car will be funded by ‘up to’ a $80 MM property tax on all building owners within 3 blocks of the proposed track. In addition, the street car expects to receive Federal matching funds. All in all, people voted to tax themselves in a very, very narrow way (owners within 3 blocks, no one else will be taxed) for a street car that could potentially benefit a large portion of the downtown area (if not the city).

I thought the street car campaign was waged expertly, narrow tax range, identified goals, with a small system that is easily fundable. In addition, the system blends in with the existing subway system.

http://la.curbed.com/uploads/2012.12_streetcar.jpg

The success of the Street car vote made me think of how the city has changed in recent years. I’m a fan of mid-century design, but I am no fan of mid-century urban planning.

http://t1.gstatic.com/images?q=tbn:ANd9GcTEwgmK8zuBsXgte0enaDHm4MzTat01yNLXZoVDUpYb1fQzknz_fQThe 4-Level Interchange

The middle part of the 20th century was dominated by the personal automobile. The success of the United States after the Second World War was the major catalyst for our post war economy. The United States remade the Capitalist world economy into an image of its own design; for example the Bretton Woods System of 1944 tied all international exchange rates to the US dollar (thus saving the US untold trillions in transactional costs and thus creating the dollar as the world’s reserve currency),  in addition (and what really set the stage for the dominance of the car) was that purchases of oil on international markets was done in dollars (the famous Petrodollar). When you set the rules for international trade, how can you lose?

The post-war city was built to cater to individuals living in distant suburbs who drive alone into the city for work. We were permitted to do this because of cheap energy, if energy had not been artificially cheapened by the terms of international trade and emerging economies of scope and scale the suburb would simply not exist.  

The end of communism was the first herald of the end of the suburb. The entry of an extra 2 billion people in the capitalist system was bound to experience shocks. And, that it did. The price of gas in the last 20 years has exploded:

http://t0.gstatic.com/images?q=tbn:ANd9GcRbK03J6lrFw9RWohfFnpLJRiUHgcf5FhQLoweNmIxbcx29i5zq

This is due to the emerging economies competing for energy. Obviously, if costs increase it makes driving more expensive. Living far from work in a suburb is swiftly becoming economically impossible.
http://www.geohive.com/img/population_cubed.pngComparative Population per Nation
25 years ago China, Russian, Eastern Europe, most of South America and the Middle East were involved in the Capitalist world system. Today, nearly every nation is Capitalist, and they are all in competition for the same energy.

Our societal costs have been increasing rapidly, the greatest solution to this problem is a total overhaul of the urban core.  We need more mixed-use building, better mass transportation, and changes to local zoning codes,  these are the changes that can make a more efficient city. We are living in an age of cheap energy, that age is coming to an end.

So what about the street car?
Well, in my personal opinion, the street car is a blow against the use of a car in the central city. Downtown Los Angeles was built before parking codes and zoning codes made it impossible to start a business without a dedicated parking lot. Most of Broadway (the street where the street car will go down) does not have any curb side parking, which is an anomaly in most of the post-war city. By replacing the car with a transportation system we move closer to a unified central core. A place where people can live, and work in the same area.

The personal car shortens distances to be travelled, but conversely, it also requires a huge amount of built space

http://t1.gstatic.com/images?q=tbn:ANd9GcTWovScbJ2kXAfgH3aje4yy55jZo4E_ZVJK52lUJcJmclQAuiKl

Roads, parking lots, and freeways are all dead space that have no real economic impact besides to house cars. The street car in downtown moves cars off the street in favor the economic space of people and buildings. This, and how it was passed, is why it’s so critically important to the growth of the urban core. 



For the sake of comparison; see the historic map of the old Pacific Electric Railway. In the era before the personal car, Los Angeles had a railway system that stretched from Woodland Hills, to Pomona, to Long Beach. 

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