Bacon's Rebellion

Democracy Thrives in Sunlight

Washington Metro Economy to Boom, GMU Study Says. More Transportation Investment Needed.

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by

James A. Bacon
in , , ,

Boomtown — downtown Washington, D.C.

The economy in the Washington metropolitan region will quadruple over the next 30 years but, despite an expansion of the METRO line to Washington Dulles International Airport, regional transportation will be almost as dependent upon the automobile in 2040 as it is today. That’s the central argument of “Connecting Transportation Investment and the Economy in Metropolitan Washington,” published by the George Mason University Center for Regional Analysis.

Although the report did not make specific policy recommendations relating to transportation in the Washington region, it did assert that continued infrastructure investment is needed. Projected growth of the Washington region’s GRP (gross regional product) from $429 billion in 2010 to $1,849 billion in 2040 assumes that “adequate infrastructure investments are made to support economic growth,” the study says.

The region’s economic future will continue to rely on significant investment in transportation infrastructure — investments that will need to provide key transit support for some economic centers and major support and investments for auto access and connections for almost all economic centers.

The GMU report was prepared for the 2030 Group, a business advocacy group comprised mainly of businesses and individuals associated with the development sector. The authors, John McClain and Alan Pisarski, did not recommend specific transportation projects.

There is a lot of inertia built into the transportation system. The ability to shift transportation modes “is very weak over time,” says the executive summary. Half (52.3%) of the growth in trips will consist of drive-alones in autos, while 28.7% will consist of drivers with passengers. Public transit will accommodate 6.1% of the growth, while biking/walking will account for 12.9%.

Interestingly, the study finds that the vast majority of economic growth taking place in “regional activity centers” will be in Washington, D.C., with Downtown D.C. grabbing the lion’s share, $146.3 billion, and the federal center in Southwest Washington picking up another $47.5 billion.

Outside the District, most growth will gravitate to Virginia activity centers. Tysons Corner will emerge as the region’s uncontested No. 2 commercial district in the region, growing by $58.4 billion, with strong showings in Arlington, Merrifield, Reston and Dulles. The only activity center in Maryland to experience significant growth will be the Shady Grove/King Farm area.

Also of interest, every one of the Virginia activity centers showing strong growth is located on an existing METRO line or the Silver Line to Dulles now under construction.

It may not have been the intent of the authors or sponsors, but the report can be seen as confirmation of the thesis, long propounded on this blog, that growth and development has experienced a major inflection point, shifting from the metropolitan periphery back toward the regional core — in this case, to Washington, D.C., Arlington, Tysons, and the Dulles Corridor.

The authors based their finding that commuting patterns will remain unchanged upon the modal stability exhibited during 1990-2010, a period during which growth occurred mainly on the metropolitan periphery in areas not served by public transportation. This is curious. Their own projections show that employment centers will remain focused overwhelmingly on the urban core. They provide no explanation as to why past trends would continue to apply.

Bacon’s bottom line: I’m not sure how useful an exercise this study is. Making 30-year projections for the Washington economy is inherently risky, given the massive uncertainties that exist regarding federal spending over the next 10 to 20 years. Personally, I find it inconceivable that the regional economy could quadruple in size over only 30 years. That projection, quite simply, is a leap of faith. The projections are interesting… but nothing upon which to base the expenditure of billions of infrastructure dollars.

Moreover, the statement that the region will require more transportation infrastructure is so obvious as to be a non sequitur. Yes, if you increase population by more than 25% and quadruple the economy, you will need more infrastructure. The question is, what kind? More heavy rail? More buses or street cars? More bike lanes? More walkable streets in mixed-use neighborhoods? More HOT lanes in regional arterials? More traffic light synchronization? Or more roads to greenfields like the proposed Outer Beltway? The GMU study doesn’t provide much guidance.

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  1. TMT Avatar
    TMT

    The 2030 Group is composed of parasite land speculators and developers headed by Til “I wanna be subsidized by taxpayers” Hazel. They want taxpayers to build roads near their landholdings so that they can be developed profitably. The Tysons landowners tried to play the same game, but were shot down by citizen opposition.

    The Fairfax County staff originally proposed taxpayers fund 58% of the costs for roads and bus transit needed to develop Tysons. The Planning Commission is recommending to the BoS that landowners and developers in Tysons pay 59.5% of the $2.053 B (2012 dollars) needed from 2013-2053. The share to be paid by Fairfax County taxpayers is limited to approximately 17.7%, with the rest funded by state and federal sources. If money is not available, development is slowed. If the pace of development slows, infrastructure spending slows too, and vice versa. If state and federal funding is not available, the share paid by Fairfax County taxpayers is to remain roughly the same.

    So shouldn’t the 2030 Group also be expected to fund 59.5 % more or less of any other road or transit facilities needed to facilitate development or redevelopment? I’ll be you these filthy parasites would have nothing to do with any plan that required them to pay a proportionate share of the public transportation facilities needed to support their development projects. It’s time to get Til and his cronies off welfare. Apply the Tysons funding plan statewide.

  2. larryg Avatar
    larryg

    I’ve never seen a cogent connection between transportation and economic development myself.

    For instance, lanes miles in a region vs gross regional product

    but even as Jim has often asked – has there ever been a REAL ROI done for …say for instance, a Potomac Crossing?

    I would think my friend DJ would be among the first to advocate an ROI for any capital project – private business or public, right?

    I wonder what the rail companies think when they are dealing with ROI for a potential expansion of their network and then the state builds a new “free” road for trucks to take the business that the rails were looking at in their ROI analysis.

    A public/private toll road is a whole different ball game and yes.. you’ll see provisions in the contract to deal with new parallel competing “free” roads.

    1. DJRippert Avatar
      DJRippert

      The only issue I have with ROI analyses of public projects is that they will lead to endless waffling and possible legal action.

      In a private business “project debate time” is allowed for some period of time and then the executives have to decide. The world moves forward and the project either gets approved or it gets dropped.

      In the bizarre-o world of public business “project debate time” can last forever. Endless little groups of retired and semi-retired people have endless time to demand further analysis or propose an infinite string of alternative solutions.

      ROI projections for transportation projects would be fine so long as they don’t result in “analysis paralysis”. While the Smart Growthers are debating the Low Taxers and the PEC from their home offices, those of us with jobs (i.e. the people who pay income taxes) need to move on with these decisions.

  3. larryg Avatar
    larryg

    the delayed roads that get the attention are the minority. Most roads are more delayed by funding and the length of time it takes to do the design, acquire land, move utilities, etc.

    The roads that do encounter controversy often do precisely because of concerns about ROI, and, in fact, doubts about “need” – transportation utility vs development “need”.

    Up until recently VDOT would attempt to justify a road because they would say an area was “growing” and/or would grow more.

    If you’d take a look at the 9 pages of transportation projects for Fairfax that TMT supplied – how many of those 9 pages are opposed by the “retired” and “semi-retired” and experiencing “analysis paralysis”?

    Not too many. Most seem to be delayed for lack of funding which has pretty much always been the case with most projects with the random controversial ones getting more focus.

    When you have 9 pages of “needs”, it’s like a business that has a lot of “needs” but in the business case, they have to prioritize and focus on what they can afford and what will deliver the most bang for the buck.

    We don’t do that for roads and as a result – there is not only controversy sometimes but we end up with large lists of “wish list” projects that have to “wait” for funding that often never materializes.

    In the world of “blame game”, the blamers get frustrated with the byzantine prioritization process but misdirect their blame to the wrong parties.

    When 1/2 or more of the projects on a “need” list have no identified funding, except for a proposed transportation referenda, how do you convince the public that that those projects deserve higher taxes to fund?

    On new roads – these days, the ROI not only exists,it often is quite rigorous if the private sector is involved because you’ll not attract willing investors if the ROI process is like the one used with taxpayers.

    This is why new roads should be toll roads. That assures a real ROI process and gets us away from these sham process roads that when they rightly run into controversy , we get into blame games.

    There are no blame games with PPT toll roads. No one “blames” the investors or greedy grays for that matter when the investors look at the project and say “no”.

    Toll Roads are all about ROI while taxpayer-funded roads are about anything BUT ROI.

  4. DJRippert Avatar
    DJRippert

    “Toll Roads are all about ROI while taxpayer-funded roads are about anything BUT ROI.”.

    But the ROI isn’t public with so-called private – public partnerships. Even the proposals are often redacted to the point they can’t be read.

    Here’s an example of a toll road (bridge, actually) mired in politics.

    http://www.nomcb.com/

    In my opinion, this has nothing to do with ROI. Instead, it is a Developer vs NIMBY battle often played out under the guise of ROI.

  5. larryg Avatar
    larryg

    It’s true that the public does not know the ROI details but they DO KNOW that the investors will not sign on to the road unless there is a positive ROI.

    re: politics – yes but I guess you noticed that it was NOT about the greedy grays and green nimby’s but about FUNDING, right?

    “The problem we have as a state is we don’t have the revenue we need to take care of the infrastructure we currently have, whether it’s Interstate 95 or other roads,” said Sen. Ralph Hise, an Avery County Republican. “It’s just amazing to me the creative ways we’ve come up with to finance and borrow additional money in different areas.”

    but here is the worrisome thing: ” the private partner would carry much of the risk that the bridge – dependent on a healthy tourism economy – could turn out to be a financial flop.”

    Now what does that tell you about ROI?

    there’s another problem – if this bridge is tolled and the existing bridge remains untolled – what’s going to happen?

    You’re a business-man – would you take this bet?

  6. larryg Avatar
    larryg

    Also, what does it mean ROI-wise for this road or US 460 in Va when their analysis says that the road cannot be fully paid for with tolls alone and the state has to kick in an additional subsidy to the owners/operators?

    what does that really mean? Doesn’t it mean that the road fails the ROI standard?

  7. TMT Avatar
    TMT

    A real simple solution. The state should adopt the formula for funding transportation in Tysons that the Fairfax County Board will likely approve soon. Under this plan, the landowners are paying 59.5% of the total 40-year costs. Those costs will be recovered in the form of a service district tax (that also applies to residences in the area); road fund fees; proffers and in-kind contributions. The funds will be collected over time.

    With this requirement, I suspect the wish list will grow much smaller when speculators, such as Til Hazel, figure out they must pay for most of the costs for their “critical road.” Reform the system and we will come up with more realistic needs and a greater willingness on the part of the public to fund transportation. Fund what benefits the public and people will pay higher taxes for transportation.

  8. larryg Avatar
    larryg

    TMT – to play the devil’s advocate – how did the calculate that percent share?

    Down our way – for commercial only (so far), the analysis is performed to determine what in the way of infrastructure is needed then a transportation district is created that encompasses all the new commercial and the length of the bonds is affected by the total costs – i.e. stretch the bond payback out rather that increasing the supplemental property tax too high.

    The developers like this because – they don’t have to pay transportation proffers ( I think it is illegal to have both).

    But in the end, if you think about it – the costs are still paid by the taxpayers – although the taxpayers that use the commercial pay a higher amount than taxpayers who don’t shop in that area.

    No matter how we cut it, in the end, taxpayers will pay for the infrastructure – right?

    This is what I’ve heard that Til Hazel also says.

    I’m not citing this as a reason to oppose development but rather to acknowledge that taxpayer will pay no matter the path and that ought to make us think about which methods are better than others.

  9. larryg Avatar
    larryg

    re: “more” (More Transportation Investment Needed.)

    what metrics are being used to describe “more” and more importantly, what is expected to be the specific benefits that derive from “more”?

    We had a toll road proposal down our way that not only got rejected but it got the supervisors that supported it tossed out of office.

    But the one metric that I heard over and over is that the road would save 7 minutes but would likely cost $2.

    and that brings up an interesting conundrum:

    * – are people willing to pay for a quicker, less congested trip?

    and here’s the tough one:

    * – how much are people willing to pay for a quicker, less congested trip?

    * – with a “free” road, 7 minutes sounds like a real benefit if it costs the driver nothing but that’s the problem. If the real cost of providing that driver the 7 minutes was $2 per trip – and it had to come out of the gas tax revenues – you can see where this is simply not sustainable because, in effect, you are using gas taxes to not only provide needed, cost-effective improvements, but you are also using it to provide subsidized uses – when you know that for a given new road – that drivers would not pay the toll that would be required to build that road.

    So who should do this analysis? Ideally, VDOT would and the would themselves institute and promote for all road proposals a valid way to analyze their “need” but I’d also add that if VDOT won’t do it that it is an opportunity for the Smart Growth forces and other groups that believe that spending money on highways is NOT investments.

    1. TMT Avatar
      TMT

      Market conditions determine the price of real estate. A developer’s or builder’s costs are certainly material in pricing and also in whether he/she can get financing. In a soft market, I suspect a developer or builder would not be able to recover 100% of the costs imposed for roads or other public purposes. That’s probably one of the reasons developers and builders fight so hard to have others pay the costs for roads needed for their development. They may need to cancel the project, pay less for the land or make a smaller profit. Why is it taxpayers’ obligation to protect them from these consequences?

      But even assuming 100% of the costs could be passed along to buyers and renters, what’s wrong with that? My old Torts professor in law school used to argue regularly every tub should sit on its own bottom. If a highway needs another lane to handle added traffic from a major new housing or office development, shouldn’t the costs be paid by those people using the road lane to get to and from the new development? It’s possible to apportion costs between normal growth in traffic on a road and added growth from development. Only the latter should be recovered directly from the new development.

  10. larryg Avatar
    larryg

    re: ” But even assuming 100% of the costs could be passed along to buyers and renters, what’s wrong with that?”

    I’m in agreement with you but there is a problem the way that Va does proffers and that is that the “improvements” cannot be “too far” away from the development. The proffers are targeted at the immediate impacts of the development – not the secondary or cumulative impacts in the “area” of the development.

    We had a proposed development down this way that was 6 miles form the I-95 ramp and everyone knew and agreed that the primary impact from the development would be near the ramp but the way the law is written apparently says that 6 miles away is “too far” and that’s the fundamental problem with proffers in that they cannot be applied to the most urgent/beneficial projects in the general vicinity but rather specific to that development.

    So the proffers can sit a while waiting – and their is an end date where they have to be returned – which in turn encourages them to be used but if there are no other nearby developments then the proffers may not be enough even for minor vicinity improvements.

    So proffers are a CF for the most part in terms of how they can work.

    What I’ve heard is that when proffers were first considered that the development community was adamantly opposed and when they could not stop them outright, they then tried (successfully) to cripple them in how they could be used.

    The Transportation Districts are also problematical because they require 51% of those affected to approve and that tends to rule out such districts except in those places where there is one or two developers or a consortium that has acquired 51% of the properties.

    Bottom Line – Va with ample “help” from developers has fought tooth and nail to make it hard to extract transportation improvements from developers. They hold the upper hand in negotiations.

  11. TMT Avatar
    TMT

    Larry, a service district for transportation can be imposed by the Board of Supervisors without landowner approval. Because Lerner & Macerich had already been rezoned under the old Comp Plan and because a number of other landowners were not planning on redeveloping for years and/or couldn’t get much additional density because they were located near the rail stations, the landowners were unable to agree to a proposed transportation district. They could not get 51% of the land or the land value to agree to a plan for a district. Faced with this situation, the Fairfax County BoS is poised to impose a service district on all commercial, industrial and residential property in Tysons (1700 acres), presumably at a rate of 7 to 9 cents per hundred. Since development at the new densities is contingent on the construction of specific transportation improvements, the landowners came on board, albeit reluctantly for most. The money must go to projects within the district, but in the case of Tysons, that’s a lot of expensive projects.

  12. larryg Avatar
    larryg

    TMT , I did not know that. So the BOS can impose the district over the owners objections – like an eminent domain “taking”?

    1. TMT Avatar
      TMT

      Larry, see § 15.2-2400 of the Virginia Code. Every locality in Virginia has this power. See also § 15.2-2403(2).

      Fairfax County has not gone in this direction unilaterally, but has had many discussions with the Tysons landowners and other stakeholders. There is also a requirement for a public hearing. Had there been strong landowner opposition, I don’t think the County would be adopting this service district. But without the additional tax revenues for transportation, the County would not be able to approve the rezoning applications. Like the Comp Plan amendments before it, the funding plan is part of a grand bargain among all the stakeholders.

  13. larryg Avatar
    larryg

    @TMT – I guess you have seen this:

    http://www.fairfaxcounty.gov/planning/tysons_docs/050212tysonstaxdistrictsummary.pdf

  14. larryg Avatar
    larryg

    and another:

    http://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+15.2-2405

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  16. Terry Avatar
    Terry

    Tend to agree with you there is little value in this exercise. It is largely a multiplication product of assumed or highly questionable projected underlying values.

    The biggest assumption: Growth in the region will average 5% per year–“This is an average annual growth rate of 5.0% (not adjusted for inflation).” (p.4) A modest 2.5%/yr average inflation rate cuts that growth in half. We will be hard pressed to achieve a 2.5%/yr real growth rate over 30 years.

    The rest is largely based on projections by MWCOG TPB for population and job growth and BLS BEA for salaries for various professional categories 30 years from now that are anything but reliable. The TPB itself is based primarily on county inputs which reflect the local desires of developers. So what we have here is a very large self-licking lollipop.

    These wobbly forecasts are interwoven in a weak analytical process to the projected composition of jobs in 3,722 traffic analysis zones (TAZ) in the MWCOG region.

    Is it any wonder the results are so unbelievable.

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