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All I Want for Christmas Is a Transportation Infrastructure Plan That Helps

If the country is about to embark on a new era of infrastructure investment, care will be necessary to ensure long-term benefits for mobility.
Steven Polzin | December 7, 2016, 2pm PST
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Trong Nguyen

It was clear several months ago that both presidential candidates had visions of improving America's transportation infrastructure. While the magnitude of investment, the source of funds, the priorities, and the execution of the program would likely differ, we had a rare consensus that there was both a need for additional infrastructure investment and for the anticipated mobility and economic benefits that could be garnered from such investments—a degree of consensus relatively rare in national policy debates.

As someone who has long championed additional transportation infrastructure investment, I found this rare consensus somewhat promising. Fifteen years ago I had titled an editorial using Benjamin Franklin's quote, "An Ounce of Prevention Is Worth a Pound of Cure" that espoused timely investment as being prudent. A similar proverb, "A Stitch in Time Saves Nine," reiterates the historic wisdom that prudent investment pays significant dividends. While the 16-fold and nine-fold returns referenced in these proverbs are somewhat more generous than empirical studies suggest, there is certainly compelling evidence that procrastination on infrastructure investment can be extraordinarily expensive [1].

Having said that, I am anxious about our collective ability to make sure that transportation infrastructure investments indeed pay dividends. Visions of "cash for clunkers"—one of our less than sterling fiscal stimulus efforts, dance in my head. Good intentions and historical relationships between infrastructure and economic growth may not necessarily play forward as, indeed, the devil is in the details. How can we make sure that an ounce of prevention doesn't turn into a pound of deficit, with long-term benefits not commensurate with the costs?

Have we picked the low hanging fruit? 

Historically strong returns on infrastructure investment occurred when completing missing links in transportation networks—projects that offered substantial improvements in accessibility or substantial time and cost savings. Projects such as new interstate links could provide relatively dramatic improvements in mobility with commensurate benefits. As our transportation system has matured, it's increasingly difficult to find projects that improve mobility. Our networks have relatively good geographic connectivity, so they most often need maintenance or additional capacity. To capture long-term benefits from infrastructure investments will require care to ensure that real mobility improvements will be realized. The investment must deliver improved mobility that reduces travel costs or enables agglomeration benefits.

What's the denominator in our performance metric?

As we've come to appreciate the breadth of impacts from transportation, there's been a tendency to rationalize virtually any investment as offering some positive benefits. While these positive benefits may be meritorious, they will not necessarily stimulate economic activity. Offering choices, providing geographic equity in spending, creating signature projects for community pride, or attempting to redistribute land development patterns or attract development from other areas may all be nice objectives, but not necessarily objectives that have a proven history of net economic growth at the national scale. When we measure dollars invested, we need some denominator that relates to providing mobility if we want to enhance economic productivity.

Wow, that sure is expensive!

Several recent and proposed transportation projects have had stunning price tags. A host of factors are driving up costs including:

  • A greater share of transportation investments are in complex and expensive-to-build-in urban environments,
  • the inclusion of ever higher levels of technology in infrastructure,
  • a morass of regulatory hurdles,
  • a plethora of stakeholders squeezing out expensive concessions or amenities as a price of concurrence,
  • burdensome time delaying approval processes for complex projects with complex funding strategies, and
  • projects that rebuild and expand existing facilities in areas with high maintenance of traffic and maintenance of access requirements and challenging expensive construction site logistics.

Americans are used to affordable mobility. For example, American Airlines flew passengers for an average of $0.16 per passenger mile in 2015. Even if adjusted for circuity, that is cheap travel. Using Consumer Expenditure Survey data on household transportation spending and National Household Travel Survey data on household travel indicated that travelers spent about $0.48 per vehicle mile or about $0.29 per passenger mile—only a few cents of which pays for the roadway infrastructure. While not all projects can compare with historical averages that benefit from generations of investment and low initial right of way costs, some current and proposed projects are so expensive that, if they proliferate, will cause America's cost of mobility to ramp up well beyond the 18 percent of household spending that it currently consumes. At what price is a project too expensive for the benefits it produces—and who's asking that question? We often hear that a project is not affordable, but seldom hear that it's not cost effective.

Watch out for inflation!

Unemployment ticked down to 4.6 percent recently. There are already challenges finding skilled workers in the construction trades. As energy prices and the economy went through a severe recession, construction cost indices followed suit showing huge declines. However those declines were not uniform across the board. More specialized construction (for example, on public transit capital projects) tended to resist the downward cost trend as capacity for specialized skills and components are not as competitive or available as are more traditional elements of civil construction. If infrastructure construction ramps up due to federal initiatives as well as a multitude of state and local initiatives (and not just in transportation), there could well be capacity constraints and subsequent project inflation. The move toward technology-intensive infrastructure might compound the challenge of having an adequate workforce. Even basic skill sets for construction workers may not be as readily available as generations ago, when knowing how to use a shovel, hammer, and socket set were second nature. And of course, one wouldn't dare mention the possibility that perhaps fewer in the workforce, or among those hundred million adults not in the workforce, have the motivation to be highly productive for fear someone would be offended. Perhaps we need a 21st century equivalent of the 1935 Works Progress Administration (renamed in 1939 as the Work Projects Administration) to teach work skills and work ethic. Seeing a project come to fruition after contributing brain and brawn can be extremely satisfying, but for those not tracking as college-educated members of the information economy, the transition from hanging out in the city to becoming productive skilled construction workers is not particularly clear.

Where do we need new capacity?

Between 2000 and 2010 approximately 1/3 of the counties in the United States lost population and another third were mostly stable with the remaining third capturing 90 percent of population growth. Since 2010, a single state lost population; many grew very slowly, while several grew in high single-digit percentage. Generally, travel per capita has moderated. Thus, areas that are not growing need to focus resources on maintaining their existing infrastructure and upgrading safety and technologies. They are at risk of having more infrastructure than they can support if they attempt to expand capacity in some parts of a community when they have underutilized capacity in other locations. There are communities that have more transportation infrastructure than they can currently support. They have systems built to accommodate larger population and greater industrial capacity than they have or is foreseeable. They need to be extremely disciplined in determining what transportation infrastructure is critical and sustainable. Other communities continue to grow robustly. They will need new transportation capacity. Part of the moderation in new travel demand per capita is a result of the fact that significant shares of the population have not seen growth in real income. The growth in real income has been concentrated in population segments that may have saturated their travel demand or have time constraints on new travel. If real economic growth filters down to low and moderate income segments of society it is far more likely to increase travel demand.

What modes and capacity do we need?

Supply and demand interact. Planners and policymakers can influence the market based on what they choose to build and where—but only to a certain extent. Approximately 24 percent of roadway volume is freight, commercial vehicles and activity, police and fire, school and public transportation buses, utility vehicles, and taxis, etc. These vehicles don't represent demand that can be shifted to bicycle, pedestrian, or public transportation modes. In addition, a huge share of personal travel will continue to need roadway capacity, and roadway capacity will be the most effective and resource-efficient way to meet much of this demand. Public transportation will continue to provide a social safety net in most communities. In other communities, development intensiveness is such that transit can play a larger role in meeting mobility needs while maintaining productivity levels that enable transit as a resource efficient means of mobility. Some communities have the type and intensiveness of economic activity that enable the agglomeration benefits that support high land values and high densities and justify premium levels of public transportation service. These conditions are not universal, nor can they necessarily be dictated solely by policy and planning desires. Transportation infrastructure investment needs to respect the demographic, economic, behavioral, and cultural characteristics of the community if they are going to contribute to productivity and economic success. Underutilized or premature investments in expensive capacity do not aid economic well-being.

How do we build to accommodate automated vehicles?

One of the elephants in the room is planning transportation infrastructure investments while we anxiously anticipate the ongoing revolution in transportation ultimately expected to result in fully automated vehicles. While the timing of the arrival of fully automated vehicles is subject to debate, there is a high degree of confidence that it's inevitable, probably well within the economic lives of the infrastructure systems we are planning and will build in the future. Young people born today may never drive a car. We're only beginning to explore how automation may impact travel cost and demand and transportation system capacity. We're left with a huge challenge in terms of understanding how much capacity we will need in the longer term and what infrastructure investments will be prudent in light of the prospects of significant change. This uncertainty cannot excuse inaction given the current transportation infrastructure shortcomings, but it should be the basis for serious reflection on how to specify and build investments today that will continue to provide value, perhaps with modifications and adjustments, as we move toward automated systems. Understanding the need for flexibility in infrastructure and the criticality of finding projects with benefits captured in the near term and with disciplined costs are critical to ensuring productivity from infrastructure investment.

Historically, major transportation technology revolutions such as the development of rail networks, the emergence of automobiles and roadway networks, and the proliferation of air travel have had dramatic economic and quality of life impacts. Automated vehicle technologies may offer a similar transformative impact if executed correctly.

Playing nice with the private sector.

The provision of transportation and transportation infrastructure has become far more complex as the respective roles of the individual, government, and the private sector continue to change based on economic conditions, public policy, and technology. Technology is enabling the prospect of mobility as a service—where the individual no longer owns the vehicle and instead purchases services from network companies, public transit agencies or automated vehicle services. Similarly, public-private partnerships for building transportation infrastructure and providing transportation services, such as public transportation and toll facilities, are ever more common. Challenges, of course, will arise in managing the risks and roles in a way that leads to prudent decisions that benefit individuals, the stakeholders, and the broader public good. I'll write the prescription for those challenges next year.

So what is a planner to do?

This isn't rocket science—it's more complicated. In addition to complex technical issues, it involves human values, human emotions, and human interactions—and, yes, politics. But planners have an opportunity to nudge decisions by virtue of providing quality information. Good information can embarrass selfish or uninformed intentions. Planners have an opportunity to make sure the decisions are well-informed. Spending money is easy. Spending money that produces economic benefits by virtue of improved mobility is far more difficult. The search for and execution of prudent transportation infrastructure investments should keep everyone busy in 2017 and beyond.

Happy holidays.

The opinions are those of the author – or maybe not – but are intended to provoke reflection and do not reflect the policy positions of any associated entities or clients. [email protected].



[1] According to Kuennen,"“Making High-Volume Roads Last Longer," Better Roads, April Issue (2005), infrastructure preservation expenditures for about $1 before the point of rapid deterioration has been shown to eliminate or delay spending $6-$10 in future rehabilitation or reconstruction costs. In another study Sharaf et al. (1987); reported four-fold savings for maintenance and replacement activities when timely preservation interventions were performed. Projects that commit to timely capacity expansion that minimizes extraordinarily expensive right of way, maintenance of traffic, business damages, and other costs that can accrue if projects are delayed can offer higher ratios of savings.

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