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Why the federal gas tax isn’t covering our needs

A few short decades ago the United States built the Interstate Highway System, one of the greatest public works of all time. It’s a good thing we built it when we did, because we couldn’t afford it today. We can’t afford to build much new transportation infrastructure at all these days, whether road or transit.

Why? It’s not as if we’re a less wealthy nation now. On the contrary, we’re wealthier. The problem is that the gas tax, the primary source of revenue for federal transportation capital investment, has been shrinking every year.

The gas tax isn’t indexed to inflation. It was 18.4 cents per gallon years ago when gasoline was less than a dollar per gallon overall, and it remains 18.4 cents per gallon today. Since revenue generated from the gas tax stays the same while the rest of the economy grows, that means the gas tax revenue doesn’t have the buying power that it used to.

In fact, when you take inflation into account American drivers are only paying half as much in federal gas taxes as they were in 1975.

That’s a double whammy, because not only do we have half the budget we used to, but instead of spending it all on new infrastructure we have to split it on maintenance for all the new roads we’ve built during that time. So we have less money, and most of what we do have is already spoken for. The leftovers available for new construction are a pittance, relatively speaking.

And that’s under the best case scenario from a revenue-generating standpoint.

What happens if Americans drive less, as we’ve been doing since 2008? Then the revenue starts dropping in real terms, not just inflationary terms. Triple whammy. VDOT’s budget in fiscal year 2008 was $4,797,323,761. For fiscal year 2011 it is $3,736,056,514. That’s almost a quarter decrease in real terms.

No wonder we can’t build the sort of things we used to be able to build. No wonder our infrastructure is crumbling. No wonder China is blowing us away.

The good news is that bipartisan support is building for a hike in the federal gas tax. The president’s bipartisan debt reduction commission recommended raising the gas tax by 1 cent per month for 25 months, until it is 43.4 cents per gallon (more than twice its current rate), and then indexing it to inflation after that.

If legislators have the courage to enact such a change they would be doing the country a dramatically important public service.

Of course, that would only be the first step of what would have to be at least a three-step process to really fix our nation’s infrastructure for the long term. The second step would be to spend that new cash on multi-modal infrastructure projects that reduce our need to drive long distances for daily needs. Investing in better rail, transit and non-motorized infrastructure would make our country less congested, less polluted, and less reliant on foreign oil.

The third step would be to abandon the gas tax and adopt a new revenue system, since gas tax revenue will become less reliable as multi-modal transport options become more available. With gasoline likely to become more sparse in the future anyway, that’s a problem we are likely to face sooner or later regardless of steps one and two.

While it’s true that increasing the gas tax may be a band aid (or a first step) rather than a permanent revenue solution on its own, it is also true that it’s desperately needed band aid. We simply can’t keep up with the infrastructure demands of our economy with such inadequate funding.

Cross-posted at Greater Greater Washington.
 
 
 

November 15th, 2010 | Permalink
Tags: economy, government, transportation



The height limit calls for a scalpel not a hatchet

Washington’s height limit has always been a subject of much debate. The question of whether or not we should keep it or allow taller buildings seems to come up in the local blogosphere about once per year. So I was not surprised to find Matt Yglesias saying:

“Office rents in downtown Washington, DC are now higher than in Manhattan. Normally what happens when you get high rents is that people respond with bigger buildings. Which is why Manhattan has such big office buildings. DC office buildings, by contrast, are quite short. So are developers working on responding to the high demand by building taller buildings? Of course not! Taller buildings are illegal in Washington DC. Consequently, instead of building up real estate developers in the DC area build “out,” putting more and more jobs in the suburbs.”

A few points:

  1. Actually, developers are working on responding to the high demand by building taller buildings. What will become the tallest building in the Washington region is under construction right now in Rosslyn, and the second and third tallest are planned nearby. Two of those three are office buildings.
  2. While true that Rosslyn is not technically part of “downtown Washington”, it is hardly a suburb in the traditional sense. It’s as close to the White House as Capitol Hill, and is fully urban. Functionally speaking it is part of the regional core in every way that matters, regardless of which side of a map’s line it sits on. Ballston, Crystal City, Alexandria, Bethesda and Silver Spring are much the same, although you might call them “uptowns” since they are a little more distant.
  3. The sort of businesses likely to pick genuinely suburban locations such as Reston or Gaithersburg over the region’s myriad urban options would likely do so even if Washington had no height limit. Even New York and Chicago have expansive suburban office centers.
  4. While it may be true that Farragut Square is built out, there are large areas of downtown Washington that are not. The NoMa Triangle and what you might call the greater Ballpark area are woefully underbuilt, and are capable of accommodating scores of millions of square feet of new development, if only developers would build. It is not the height limit that keeps these areas underbuilt.

Speaking on the same topic, Ryan Avent adds:

“But the bigger cost is in terms of dynamism. Industry towns are dull places, especially when the industry in question is as dull as government. Washington’s height limit means that there is room in the city for little other than the rich corporate interests and the kinds of cultural amenities favored by rich corporate interests. With the height limit in place, there is little risk of Washington becoming as vibrant or as innovative as rival cities to which it so regularly compares itself.”

Interesting point. I don’t think adding office workers from slightly different industries in somewhat taller buildings would have much effect on downtown’s vibrancy. After all, downtown is already plenty vibrant from nine to five. I do however think downtown’s lack of residents is a big problem, and is why it empties out after five p.m. That’s why I support the idea of a height bonus for residential uses downtown, which I think would do more for downtown’s vibrancy than filling it with even more people who leave at 5:00.

But since we’re talking about vibrancy, I want to bring up another point I’ve discussed before: That spreading office growth around the city’s neighborhoods would increase their vibrancy. If it is true that mixed land uses create urban vibrancy, and certainly that is true, then it works both ways. Residential uses add vibrancy to commercial areas AND commercial uses add vibrancy to residential areas. If indeed increased vibrancy and local diversity is a goal for our city, and I think it should be, that argues very strongly for not concentrating all of our office growth downtown, and for instead establishing a regulatory environment that spreads office uses around to create the maximum number of mixed-use neighborhoods.

If that means more people can live and work in the same neighborhood without lengthy and costly commutes, then hey, bonus.

Raising Washington’s height limit is a favorite topic of area economists, and a top fear of preservationists. I count myself as a moderate on the issue. I see real value in keeping the height limit that is not necessarily reflected in the numbers approach Yglesias and Avent favor. On the other hand, I think tall buildings can be an important part of the built environment, and are completely appropriate for many urban contexts.

I think the issue calls for a scalpel rather than a hatchet. Yes, let’s allow taller buildings, but rather than applying a one-size fits all solution to the whole downtown, let’s raise the limit carefully in the places where and the ways in which it will do us the most good. Use a height bonus to increase residential diversity downtown, or to encourage investment in Anacostia, or to find a developer who will build air rights buildings over I-395. Let’s absolutely do those things. But let’s not needlessly erase one of the most unique and interesting things about Washington in a misguided quest to make sure all office space is located within a single two-mile diameter circle.

October 19th, 2010 | Permalink
Tags: economy, preservation, urbandesign



The idea of ‘mainstream’ has changed

A recent survey finds that 60% of east coast residential developers are shifting away from the suburban detached house model and towards the mixed-use urban model. Essentially, they are building less auto-oriented sprawl and more walkable infill.

This is great, and in some ways shocking news. It wasn’t very long ago that nobody was interested in building anything but 20th Century suburbia, and those few who were interested couldn’t get zoning approval or bank financing to do it. The fact that a majority of developers are both interested in and capable of building urban products really speaks to how far we have come in the field of city building since the early experiments in New Urbanism during the 1980s.

Good work, America. Maybe there’s hope for us yet.

October 6th, 2010 | Permalink
Tags: economy, The New America



Lockheed is in Bethesda, after all

As expected, Northrop Grumman choose a suburban office park for its new corporate headquarters, rather than a Metro-friendly location. At least all their employees used to Los Angeles traffic will feel right at home.

This is the building they choose, right off Route 50 in Fairfax County:


Truly a paradise.
Aerial image from Bing Maps.

Cross-posted at Greater Greater Washington.


July 12th, 2010 | Permalink
Tags: architecture, economy, urbandesign



‘Streetcars vs. homeless’ is a false dilemma

click to enlarge

In a post at the Washington Post Local Blogging Network, I discuss why it is foolish to suggest that the District should divert money from infrastructure to social services, because infrastructure is an investment that pays off in terms of economic development, which in turn simultaneously reduces the need for social services while providing the city with the money it needs to pay for them.

June 9th, 2010 | Permalink
Tags: economy, social, streetcar, transportation, washpostblog



Why the MidCity ruling may not be all bad

DC’s Zoning Administrator issued a ruling that DCRA will no longer grant Building Permits or Certificate of Occupancies for restaurants, bars, diners, coffees shops and carry-outs along 14th and U streets (plus adjacent commercial side streets) because of zoning regulations restricting the availability of space to eating and drinking establishments to 25% of the linear frontage of the greater 14th and U Street area.
Welcome to MidCity

This is a tough game, because nobody wants to discourage investment in the city, especially in places that are historically underdeveloped. On the other hand, there are some good reasons why this 25% rule is a good one.

One of the most basic tenets of urbanism is that a healthy mix of uses should be encouraged, and while people normally think of “mixed use” as meaning the residential/commercial mix, it also applies to the type of commercial. Healthy city neighborhoods need a mix of commercial types just as much as they need a mix of land use types. If a neighborhood becomes overrun with too many of one type of storefront, that means there is less room for every other type. If a commercial district leans too heavily on restaurants and bars, that means it probably doesn’t have enough hardware stores, clothing stores, book stores, barber shops, or home goods stores to meet the day-to-day needs of neighborhood residents. And neighborhood commercial districts that force neighborhood residents to travel elsewhere for their basic needs aren’t doing their job as neighborhood commercial districts.

This is something that private shopping malls have known a long time, and it’s one of the advantages they have over urban neighborhoods that led to the mall’s dominance in the latter part of the 20th Century. Ownership controls the exact mix of tenants in order to serve every need under one roof and reduce shopper’s desire to ever leave or go anywhere else. Every good mall has one or two sports apparel stores, one or two formalwear stores, one or two jewelry stores, etc. And of course a food court. But unless it’s an older mall struggling to survive (and therefore not picky about who signs leases), there is never more than a couple of stores for any one niche. They want to hit every niche, so they can capture as many markets as possible. In the short term that means some potential tenants have to be turned away, but in the long term it makes the whole mall more healthy. It’s a form of delayed gratification that the major commercial developers of the country are very, very good at.

Of course, we don’t really want our neighborhoods to all look like shopping malls, lest they all look exactly the same. Been to one Lids and you’ve been to them all. But that having been said, DC is generally a city that is overserved by restaurants and underserved by actual stores. And while it’s OK for some neighborhoods to develop specialties (such as 14th Street emerging as a furniture district), it’s in the city’s long term best interests to have as diverse a collection of retail as possible.

Zoning has always been a blunt tool, and maybe the zoning for Mid City needs to be more sophisticated. It’s entirely possible that 25% is the wrong ratio. But in discussing the matter we should remember that there are legitimately good reasons why livable neighborhoods don’t want every storefront to be the same.

 Cross-posted at Greater Greater Washington.




Update: Ryan Avent responds thoughtfully, suggesting that higher residential densities are a better way to encourage commercial diversity, and that as a regional specialty district for nightlife, U Street in particular increases investment in the whole city.

April 8th, 2010 | Permalink
Tags: economy, government, law, urbandesign



Crown Farm on again

Crown Farm transit square
Central Crown Farm, at the proposed Corridor Cities Transitway station.

Crown Farm in Gaithersburg is a really good development. Putting asides its relatively far-flung location, the development team did everything right. It’s dense, it’s walkable, it’s got a good mix of uses, solid architectural guidelines, good public space, and good integration of transit (assuming Maryland can ever get the Corridor Cities Transitway built). The Gaithersburg city-administered plan is everything that the near-by Montgomery County-administered Gaithersburg West is not.

Unfortunately, in the depths of the recession it was left for dead.

And now, apparently, it is back on track. According to a story in the Gazette, a new set of developers purchased the property a few weeks ago. Since a strict annexation agreement with the city controls what can be built there, the new developers are moving forward with the same plan already in place, for 2,250 residential units and 320,000 square feet of commercial, mostly retail. With the basic plans already in place, the new team has set to work already on getting the individual plats approved for construction. No word on when construction will actually begin, but it’s nice to hear progress being made.

January 27th, 2010 | Permalink
Tags: development, economy, urbandesign



What’s a few hundred million among friends?

Want to know where those hundreds of millions of dollars in cuts to Virginia’s transportation budget are coming from? The $400 million or so worth of them that are direct cuts to construction projects are listed here (pdf). Mostly the cuts are to smaller projects, with the largest single cut being about $40 million from a highway interchange project in Hampton Roads. The other $450 million in cuts out of the $850 million total cited by the Post include other categories, such as maintenance and administration.

You can see what’s still in the construction budget by visiting VDOT’s six year improvement program.

November 19th, 2009 | Permalink
Tags: economy, government, transportation



College Park out, Elkridge in

The bad news: UMD East Campus, a massive expansion of downtown College Park that would have been the largest new TOD along the Purple Line, is dead in the water. The developer pulled out, citing the recession. Ultimately the University still wants to develop that parcel as planned, but without a developer the future is uncertain.

The good news: Howard County is excited about a developer proposal for a TOD in Elkridge, at the Dorsey MARC station. While not exactly a new Ballston, the 1,400 residential units and 1,000,000 square feet of commercial space proposed is respectable. The site is a little far from the MARC station, so layout and urban design will be particularly important. Unfortunately, a plan doesn’t appear to be available online.

November 16th, 2009 | Permalink
Tags: development, economy



TIGER!

click to enlarge
Not that kind of tiger.
Photo by Wesley Hargrave of the UK Daily Mail.

Tuesday, September 15 was the deadline for submittal of applications to the TIGER discretionary grant program, that $1.5 billion pot of stimulus money that USDOT can award to whoever they want. As GGW has covered, the Metropolitan Washington Transportation Planning Board has been putting together a regional transit application. That application was submitted on schedule and will now compete with the thousands of others sent it from around the nation.

Here (pdf) is an overview of the TPB’s application. In the end it includes requests totaling $267 million, broken down into three packages, any of which could theoretically be funded individually:

  • Package 1: $204 million for bus priority or BRT improvements to 16 corridors, most notably the K Street and Crystal City / Potomac Yards Transitways.
  • Package 2: $13 million for a regional bike-sharing network with a total of 3,250 bikes (including approximately 1,000 being procured using other funding sources). The regional network would cover DC, Arlington, Alexandria, the City of Fairfax, and parts of Montgomery and Prince George’s Counties.
  • Package 3: $47 million for improvements to three major transit stations, Rosslyn, Medical Center, and Takoma-Langley.

Nobody knows how USDOT will distribute money. Will they go for a small number of big splashy grants, or will they distribute money more evenly across the country with a large number of small grants? By submitting one application that can be split into smaller packages, TPB is giving USDOT the flexibility to consider its application in either event. And while all these projects are important, getting any of them funded would be a major unexpected win for the region.

Personally, I think the bike-sharing package will be particularly competitive. Although the smallest package, it hits the innovative/sexy criteria that many believe USDOT is looking for.

The deadline for USDOT to announce TIGER grant awards is February 17, 2010. They hope to announce sooner than that, but the large number of responses may hold them up until the deadline. Hold your breath, starting… now.

September 18th, 2009 | Permalink
Tags: economy, government, transportation



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