Articles on the not-too-far-in-the-future default expected for the Las Vegas Monorail… and the bonds guaranteed by the troubled bond insurer Ambac. The promoters predicted 54,000 rides per day. Last year the average was 21,640. I produced a report in 2000 that estimated the ridership to be between 16,000 and 25,000 with a midpoint of 21,143, not far from reality. I must admit, however, to having been too rough on them. I predicted default by 2007. The markets are now saying 2010. The promoters, of course, did not predict default, but made rosy projections for investment gains that can only be realized if there is a taxpayer bailout.

Last week, the bonds were downgraded 2 levels further into junk bond status

http://money.cnn.com/news/newsfeeds/articles/newstex/AFX-0013-22642598.htm
http://www.lvrj.com/opinion/15155121.html

Michigan could become the first large state to ever exceed 10 million population and then to fall back below 10 million. The latest US Bureau of the Census estimates indicate that Michigan’s population fell from 10,102,000 to 10,072,000 between 2006 and 2007. Should that rate continue, Michigan would fall to under 10,000,000 by the 2010 census.

Data just released by the US Bureau of the Census indicates that New York state lost 1,400,000 million domestic migrants between 2000 and 2007 (people moving from New York to other states). This is nearly equal to the population of the city Philadelphia. Perhaps most stunningly, New York also had the highest rate of domestic migration loss, at -7.4 percent, exceeding even that of Louisiana and its hundreds of thousands of residents driven out in the aftermath of Hurricane Katrina.

Report

The U.S. Bureau of the Census released annual state population and migration estimates today (27 December 2007). This document provides detailed data and observations on the trends in domestic migration.

Domestic migration occurs when a person moves from one place in the United States to another. In this case, a domestic migrant moves from one state or the District of Columbia to another.

Moving to More Affordable States

There is continued net domestic migration to the more affordable (responsive planning) states from prescriptive planning states. This is evident in comparing the change in annual migration rates in 2007 compared to 2000-2001.

In 2000-2001, the responsive planning states had a net domestic migration loss of 48,000. By 2006-2007, there was a net domestic migration gain of 452,000.

In 2000-2001, the prescriptive planning states had a net domestic migration gain of 48,000. By 2006-2007, there was a net domestic migration loss of 452,000.

Among the prescriptive planning states, the higher cost states experienced an increase in net domestic migration loss from 246,000 to 677,000 between 2000-1 and 2006-7.

Among the prescriptive planning states, the “safety valve” states experience a reduction in net domestic migration gain from 295,000 in 2000-1 to 225,000 in 2006-7. Net domestic migration gain peaked at 503,000 in 2004-5 (Figure)

Overall, between 2000 and 2007, there was a strong movement away from the more unaffordable states.

The higher cost prescriptive planning states experienced a net domestic migration loss of 3,752,000.

The safety value prescriptive planning states experience a net domestic migration gain of 2,538,000.

The responsive planning states experienced a net domestic migration gain of 1,214,000.

Texas Emerges as the Top Destination

In 2006-7, Texas had the largest domestic migration gain, at 140,000. Texas had emerged as the top destination in 2005-6, principally due to the exodus of Katrina refugees from Louisiana (220,000). However, the Texas net domestic gain remained strong in 200607, at an annual rate more than tripling the 2000-1 migration gain. Texas has gained 580,000 domestic migrants since 2000. Between 2000 and 2005 Florida strongly led Texas in domestic migration gains, with 1,050,000, compared to the Texas figure of 210,000.

The End of Migration to Florida?

Perhaps the most significant news from the new data is that Florida’s domestic migration gains have nearly come to an end. During the first 6 years of the decade, Florida gained an average of more than 200,000 domestic migrants annually. In 2006-7, this figure declined to 35,000. Florida’s overall growth rate has also declined. Until 2006, it looked possible that Florida would grow quickly enough to replace New York as the nation’s third largest state after California and Texas. This would not occur if the growth rate of the last year continues.

Another #1 for California

California became the nation’s largest state in the late 1960s, passing New York, which had been the largest state since 1810. In the last two years, California has also displaced New York as the leader in net domestic migration loss (in 2006 and 2007). Since 2000, California has lost 1,200,000 domestic migrants, a population approximately equal to that of the city of San Diego.

Moving from Florida to North & South Carolina?

There has been much talk of the “half-backs,” Northerners who move to Florida and then move “halfway” back to North Carolina or South Carolina. Since 2000, North Carolina has gained approximately 500,000 domestic migrants and South Carolina has gained 225,000. In each case, the 2006-7 domestic migration gain was approximately three times the 2000-1 gain. The halfbacks have also discovered Tennessee, which has gained more than 200,000 domestic migrants and has had a similar increase in rate since 2000-1.

On Public Transport in Hyderabad

A couple of months ago, Dr. P.R.Bhanu Murthy suggested that I offer some comments on urban transport in Hyderabad, India along the lines of my previously posted observations on Lagos, Nigeria.

I have not been to Hyderabad. My travel in India has been limited to the three megacities (Mumbai, Delhi and Kolkata). However, some general comments can be made on urban transport in Hyderabad. Obviously, much of what follows applies equally to urban agglomerations in other emerging market economies.

Hyderabad is relatively dense, with nearly 6,000,000 people living in an urban agglomeration (continuous urbanization) that is approaching 600 square kilometers. Thus, the population density is approximately 10,000 per square kilometer. This is below that of Mumbai (26,000) and Kolkata (13,000), but is approximately average for an agglomeration of above 5,000,000 residents outside the high-income world (see: http://www.demographia.com/db-worldua.pdf).

Any effective urban transport planning process must begin with a comprehensive vision that deals with ensuring mobility from every square meter of the urban agglomeration to every other (what I call ubiquitous mobility). It is this type of mobility that virtually removes any transport restraints on economic growth and poverty reduction. Given the documented relationship between better mobility (point to point travel time) and economic growth, this is a principal concern. Cars often provide the means for escaping poverty, both in lower income nations and higher income nations.

Most, if not all “regional” transport plans or “metropolitan” transport plans fail substantially in this regard. The principal emphasis is placed upon providing transport to the core, which may also be called the central business district, hypercentre or downtown. Such plans would be more appropriately called “downtown transport plans.”

The problem with such plans is their failure to effectively deal with mobility for destinations outside the core area. Yet, in most urban areas, the majority of travel is not to the core area, but is rather between non-core origins and destinations.

There is a tendency for urban areas outside the first world to look to first world urban areas for direction in their strategies. Thus, there has been an emphasis on high-cost projects, such as Metros and light rail. This can be at the expense of less costly, more comprehensive service strategies. The problem with the high cost strategies is that they can provide only a small share of the public transport services that are needed. For Metros or light rail to provide ubiquitous mobility, would require service grids of no more than 800 meters (with an assumption of a maximum walking distance of 400 meters). The cost of any such a system would rival the gross domestic product of any urban area, high-income or otherwise (see: http://www.publicpurpose.com/ut-wctrs2007.pdf). Moreover, the inclusion of these modes in a subsidized environment consumes resources that often could be used to provide many more trips.

Other modes of transport that are less attractive to affluent westerners are more effective in many applications, such as buses, vans, shared-ride taxis, auto-rickshaws, etc. The focus should be on mobility, not mode. An urban transport system should be evaluated based upon the extent to which it makes ubiquitous travel throughout the urban area possible.

This is not to suggest that the high cost modes are any more efficient in the high-income world. They are generally not, except in the highest density urban cores. However, in the high-income nations, the unwise use of subsidy funding does not lead to the widespread denial of effective mobility. This is because in Western Europe and the United States, the overwhelming majority of people who live outside the urban core have cars and travel by cars. Public transport’s failure to provide ubiquitous service in the high-income world has doubtless been a factor in the motorization, which occurred as fast as people could afford it. The extent to which public transport’s generally meager service offerings in relation to the need for mobility contributed to motorization, of course, is debatable.

Thus, there is an important difference that may not be immediately obvious. High income urban agglomerations can afford transport plans that fail to address the transport needs of much of the community. Lower income urban agglomerations do not have this luxury.

It may be tempting to think that part of the problem could be solved by improving the “jobs-housing balance,” effectively by partitioning large urban areas into smaller units that somehow make it possible for residents to find jobs more locally and not travel so far. There is considerable evidence that this policy approach is likely to lead to failure. Peter Hall has chronicled disappointing research in the Stockholm area (which is a small urban area by international standards). The 2001 UK Census showed that in the new towns — which were to be self sufficient in terms of employment — the average commute is double the diameter of the new town in distance.

Urban areas reach the size of Hyderabad or Mumbai for a reason. They will continue to grow so long as it is more advantageous for people and businesses to move there than to smaller areas. This is why the greatest growth in recent decades has been in the larger urban areas, rather than in the self-contained, well-balanced urban areas of say, 100,000 or less. Around the world, the rural and smaller urban areas have generally tended to capture less than their share of growth. Indeed, in many nations, urban populations fall while overall growth rates continue strong.
Much of the world’s urban transport planning is geared toward the goal of reducing the use of automobiles or reducing the growth rate of automobile use. Ubiquitous public transport systems could assist in this. However, the lack of ubiquitous public transport increases the incentives for private, personal mobility. As a result, lower and middle income urban areas have comparatively high shares of 2-wheeled motorization (motos, motor cycles, motor bikes).
Given the choice between being able to get where they need to go and not, the moto is an obvious alternative. At the same time, the prospect is for greater, not less automobile use in the future. Tata Motors will bring the 1-lahk car to market in 2008 (100,000 Rupees or US$2,500). Other manufacturers intend to compete. Lower and middle incomes lack cars not because they don’t like or need them, rather because they cannot afford them. Moreover, the reality is that once people have achieved private, personal mobility, whether motos or cars, public transport stands little chance of winning them back.
Thus, it makes sense for lower income urban areas to not look to the west or the high income world for their transport models. They should rather look to places like Manila and the African urban areas where less expensive, informal, private and smaller vehicles provide mobility that is substantially more ubiquitous than in places that have not incorporated these approaches. Again, the test is the mobility results, not the presence of particular modes. A lower income urban agglomeration is likely to be able to build a “world class” public transport system (read “high-income”) only by denying mobility to large numbers of its citizens.
(Of course, where a public transport system or route can be built and operated using only passenger fares, this problem is avoided. Most systems, however, are heavily subsidized in construction and even operations.)
But this takes me back to the principal issue — setting of standards and objectives. For public transport to replace the automobile or slow down its expansion, public transport service must be ubiquitous. This is not so anywhere and is not even being aimed for. But the following standards are suggested.

1. Access Standard: X% of households shall be no more than Y distance from a public transport stop (in the US, a reasonable standard would be for 95 percent of households to be within 400 meters of a public transport stop).
2. Service Level Standard: Service from each stop shall operate no less than every X minutes during particular parts of the day. For example, a reasonable standard would be service at least every 10 minutes from 5am to 10pm and every half- hour in between.
3. Travel Time Standard: Travel times to all destinations (every single square centimeter!) shall not exceed X minutes in a Y radius, such as X1 minutes in a Y1 radius, etc. In the US, we could have a standard that says travel times shall not exceed 20 minutes for 10 km, 30 minutes for 15, etc.
4. System Development: The standards above shall be implemented within X years. This is a real issue. American urban areas are rushing to build nearly random rail lines without any sort of longer term vision (except to build, without particular reference to the
overall needs of customers). Those lines that are planned are many years away. Contrast that with Bogota, where the busway was in operation after just a few years and a far more comprehensive system will be completed long before a the more expensive and more limited Metro system would have been completed. It is simply a matter of maximizing mobility within the constraints of the available subsidies. Any other approach denies mobility to others.

It is well to understand the competition that public transport faces. Cars and motos have the following characteristics. Meeting or approaching these characteristics is the principal requirement of any public transport system that would provide ubiquitous mobility.

1. Immediate access (not even a 400 meter walk)
2. Service available on demand (not every 5 or 60 minutes)
3. Fastest travel time to nearly all destinations.
4. It is available now… not in a regional transport plan that may never be finished and probably does not even seek ubiquitous mobility as an objective.

Any public transport system intending to seriously compete in such a market or any sub-market thereof needs to be designed with similar characteristics.

==================

Note: Link to latest information on the Tata 1-lakh car
http://www.deccanherald.com/Content/Dec192007/business2007121942043.asp?section=updatenews

The World Bank is out with a revised estimate of world economies (gross domestic product) based upon purchasing power parities. for 2005. There are a number of notable developments.

The United States remains the most affluent of the larger nations, with a GDP of $41,700. Canada has emerged as a strong number two among larger nations, at $35,100, leading perpetual rivals Australia ($32,800), the United Kingdom ($31,600), Germany ($30,500) and Japan ($30,300).

The United States, however, is not the most affluent. A number of smaller nations have higher GDP-PPP’s per capita than the United States, such as Luxembourg (population equal to metropolitan Santa Barbara) and oil rich countries Qatar, Brunei Darussalam, Kuwait and Norway.

Some smaller countries and city-states rank between the United States and Canada, including Ireland, Singapore, Macao and Hong Kong.

Argentina continues its relative slide. Some reports indicate that Argentina was among the world’s three strongest economies in the 1930s, before Peronism. Argentina has now fallen behind Mexico and is no longer South America’s most prosperous economy. That honor goes to Chile.

China ($4,100) and India ($2,100) ranked surprisingly low.

From the CODATU Mailing List

By Wendell Cox

I have never lived in Lagos… in fact my experience in Lagos is
limited to a brief stop over at the airport. However, I study cities and my familiarity has to do with research and resources such as Google maps.

My view is that high-income world planning concepts have little or
no applicability in Lagos (or in many other developing world
cities). This is especially true of American smart growth planning,
which is much more theory than reality. There is a raging debate on
the subject in the United States and around the world, with planners
generally favoring smart growth policies and economists suggesting
that such policies are destructive because of the way that they
drive housing prices up (I am on the economist’s side of that issue).

I say that smart growth is more theory than reality, because
virtually all high income world cities developed with little overall
planning — there was local zoning, there were some local or
subregional plans and there are the exceptions like Washington (or
Brasilia, which is in the middle income world) where strong planning
regimes have been implemented in the core. But outside the core, the
development is relatively random. Smart growth seeks to impose a
design on top of that randomness and its successes tend to be, at
best, marginal. I have always been bothered at the way that some
American smart growth planners go to the developed world and tell of
the “Nirvana” that has been achieved, for example, in Portland,
which in many respects is no different than any other American urban
area, and in fact, sprawls twice as much as Los Angeles for its size.

Whatever the final outcome of the smart growth versus economics
debate, western conventional planning principles are simply
inappropriate in a place like Lagos, with its uncontrolled growth.
Attempting to manage the growth of Lagos, except in the less
intrusive way, would (in my view) lead to massive disregard of the
law.

I recall one time being involved in a US State Department urban
planning seminar at which a planner from Manila indicated that their
first priority was to demolish the shantytowns that had grown up on
the rivers. There is a much more fundamental issue. Why do the
people live in shantytowns? Obviously because there has been
insufficient economic growth and it is thus the only choice. Where
would these people live if the shantytowns were demolished? He had
no answer, and my analysis of such situations is that the
shantytowns soon return, perhaps in different locations. Western
planning principles are simply unable to deal with such realities.

Solly Angel, who has done considerable work at the World Bank and
the United Nations suggests that urban planning in developing world
nations should be principally the identification (and later
building) a grid of major arterial streets. This is the first step
in providing the necessary infrastructure.

The transport problem virtually all large cities have (whether in
Nigeria or the West) is that they are too geographically expansive
for public transport to be an efficient, ubiquitous (door to door)
form of mobility. At the same time, with the exception of some
American urban areas, they are not geographically expansive enough
for the auto to work optimally. For all of the criticism of US urban
areas, work trip travel times here are better than anywhere else
when size of urban area is considered.

But back to ubiquitous mobility. This is not easy to provide in a
large urban area. The urban footprint of Lagos is at least 300
square km and perhaps even larger. No major urban area of that size
(or for that matter of any size) has the kind of ubiquitous public
transport system that I am referring to — one that gets you from
every point to every other point in the urban area in a time that is
competitive with personal modes (cars, taxis and motos). Manila,
which covers about 500 square km and has 17m people (don’t believe
the UN numbers, which exclude all of the spillover suburban
development outside the jurisdiction of Metro Manila) comes the
closest, with its jitney system that nearly provides ubiquitous
mobility. The problem in Manila is that the road system is so bad
that travel speeds are terrible. They could have used a “Solly
Angel” design 25 years ago. Of couse, Manila’s system (which has the
highest service level in the world, including Hong Kong) is based
upon inexpensive jeepneys, which are legal but certainly look
informal.

Regrettably, planners tend to focus on urban cores. The standard
urban transport planning regime for Lagos would be rail lines
leading to the main business centre on the island. In fact, though I
don’t have the data, my experience elsewhere would lead me to
believe that no more than 10 percent of the jobs are there and maybe
only 5 percent.

This, again, is where busways come it. To the extent that we can
improve public transport, through the most cost efficient means, we
will improve people’s lives and, delay their purchase of motos and
cars. But if we do not provide the ubiquitous public transport
systems that people need, they will buy cars and motos — that is
the experience in virtually every large urban area. Thus, it would
seem to me that low-cost busways (following the example of places
like Manaus and Porto Alegre, rather than the more expensive system
in Curitiba) would help. But, again, to make it work optimally, you
will need a grid that serves virtually everywhere and a strong
feeder service system — buses operating on ½ hour schedules will
not do. This means informal services feeding the busway. Of course,
this is theory, but I think this is the way to go.

But this takes me back to the principal issue — setting of
standards and objectives. For public transport to replace the
automobile or slow down its expansion, public transport service must
be ubiquitous. This is not so anywhere and is not even being aimed
for. But the following standards are needed (perhaps repeating
myself now).

1. Access Standard. X% of households shall be no more than Y
distance from a public transport stop (in the US, I would say 95
percent of households should be within 400 meters of a public
transport stop).

2. Service Level Standard: Service from each stop shall operate no
less than every X minutes during particular parts of the day. For
example, a reasonable standard would be service at least every 10
minutes from 5am to 10pm and every ½ hour in between.

3. Travel Time Standard: Travel times to all destinations (every
single square centimeter!) shall not exceed X minutes in a Y radius,
X1 minutes in a Y1 radius, etc. In the US, we could have a standard
that says travel times shall not exceed 20 minutes for 10 km, 30
minutes for 15, etc.

4. System Development: The standards above shall be implemented
within X years. This is a real issue. American urban areas are
rushing to build nearly random rail lines without any sort of longer
term vision (except to build, without particular reference to the
overall needs of customers). Those lines that are planned are many
years away. Contrast that with Bogota, where the busway was in
operation after just a few years and should be completed long before
a far more expensive Metro system would have been completed and
served much less of the population.

I know all of this sounds like a lot, but think of the service that
a moto or automobile provides.

1. Immediate access (not even a 400 meter walk)

2. Service available on demand (not every 5 minutes)

3. Fastest travel time to nearly all destinations.

4. It is available now… not in some transport plan that may or may
not ever be finished.

Demographia has posted household debt to income ratios for 1945 to the present, using data from the Federal Reserve Board and the National Income and Product Accounts (Available here).

Generally, household debt has risen strongly in recent years as housing prices have increased, especially in smart growth markets.