Friday, April 20, 2018

Taxes and Light Rail vs. Uber and Express Lanes

Colleague Malcolm Getz posts a critique of Nashville's transit plan, up for a vote on May 1, 2018.  He uses the "indifference principle" from chapter 9 to conclude that neither bigger roads, nor mass transit, will reduce congestion

With wider roads, traffic expands to congest them. This well-established fact is the "iron law of traffic." ...
Similarly, ... when some people shift from cars to transit, other people take their place on the roads. Visit cities with vast transit services—Chicago and Atlanta, for example. Notice that roadways are as congested as those in Nashville, if not more so. Transit may attract riders but does not reduce traffic congestion. The average time to travel to work by car is 24.2 minutes in Davidson County, TN, 27.6 minutes in Fulton County, GA, and 32.6 in Cook County, IL.

So what does Professor Getz recommend?  Car-hailing Services and Express Lanes.

The new services will reduce congestion with the confluence of three factors. A) The car services, including Lyft, are more convenient than owning a car or using conventional transit for many trips. B) The car-service companies are offering increasingly sophisticated shared-ride services. C) Digital systems are managing the flow of traffic in real-time on express lanes to forestall congestion. Taken together, these developments improve mobility, increase the capacity of the road network, and reduce congestion. They are also less expensive than trains.

Perhaps the most intriguing part of the report to students is that Prof. Getz uses the indifference principle to evaluate the fairness of using a broad-based sales tax to finance transportation improvements.  Provided that the transit plans work as intended,
Where better transit improves access to a location, the value of real estate increases. Market rents on housing and commercial space increase. The benefits of the transit improvement, then, go to the landlords, the owners of the real estate with better access, not to the transit riders. 

If readers disagree with Professor Getz's analysis, please comment!

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