What if shared mobility fails?

IMG_20190918_125714Ridesharing (Uber & Lyft) and dockless e-bikes and scooters are a tremendous resource for those seeking to free themselves of car ownership. Both tools make it much easier for my household to forgo a second car. I mostly rely on my bike and public transit, but because this city’s system bike/transit system has serious gaps, it helps that I can rely on a Lyft or a scooter when I’m in a pinch. If not for those options, it would be much more tempting to spend thousands a year to own a second vehicle. (AAA estimates it costs the average American $9,000 to own a car)

The problem is, none of the companies that provide me these options are profitable.

Uber & Lyft
Uber lost $5.2 billion just last quarter, while Lyft lost a comparatively modest $644 million.

It’s not as if Uber & Lyft are paying their drivers too much. In the Wall Street Journal last moth, Ken Wiles, a UT finance professor, recently joined Kep Sweeney, some private equity guy, argue convincingly that Uber/Lyft are fueled by financial illiteracy. When taking into account the full cost of ferrying strangers around –– gas, repairs, maintenance and, last but not least, the decline in the value of their vehicle –– drivers are barely making any money at all.

For drivers who depend on Uber to make a living, their cars’ loss in value is serious. If a driver carries passengers for 40,000 miles a year and incurs depreciation of 29 cents a mile—the average reported by the American Automobile Association in 2018—the annual expense is $11,600, or $967 a month, $223 a week, $5.58 an hour based on 40 hours a week.

This dynamic is exacerbated by the fact that Uber/Lyft won’t let you drive a 20-year-old beater that doesn’t have much value left to lose. You have to have a relatively new car.

Wiles and Sweeney suggest drivers may catch up to the ruse:

Once drivers understand that they are liquidating the value of their vehicles, in effect receiving payday loans with their cars as collateral, the effects may be significant. Companies like Uber, Lyft, Grubhub and DoorDash may find it more difficult to recruit and retain drivers unless they raise prices and pay drivers more.

If Uber & Lyft can’t come close to a profit even when they’re ripping drivers off, what will happen to them if they have to actually pay them decently? And how much of a price increase are customers willing to tolerate?

One theory is that Uber & Lyft have no plans to be profitable until they can take the driver out of the equation. Which is why both are investing heavily in autonomous vehicles. If that’s true, you gotta wonder how many years of losses they can sustain waiting for a driverless revolution. A driverless car is one thing, but the ability to deploy a whole fleet of driverless cars to pick up and drop off people … that’s a long way off.

Scooters
It’s tougher to find out numbers associated with the scooter operators, which are largely private companies, but leaked numbers show that Bird, one of the two top companies, lost $100 million in the first quarter of the year. Speculation abounds online about whether scooter economics can work.

In recent months the scooter companies have recently raised their prices –– significantly. Originally they all charged $1 to unlock the device plus 15¢ per minute. The $1 flat fee has remained the same, but Bird and Lime have raised their per-minute rate to 27¢ and Lyft has gone up to 30¢.

So far the price increases don’t appear to have dampened enthusiasm. User racked up over half-a-million miles on dockless devices in August, around the same level as previous months. Now that school is back in full swing use appears even higher, and September is on pace to set a record for non-SXSW months.

Let’s prepare for the worst
If all of these companies fail, then we’re just back to where we were six years ago. That’s not disastrous, but it is certainly suboptimal. However, the city can take steps to mitigate the negative effects:

Keep leaving taxis alone: There is a profitable way to give people rides, even if those rides aren’t as cheap as those offered by Uber & Lyft in recent years. The key is for the city NOT to do what it did in the pre-Uber days, when taxis were strictly limited through a franchise system and left people on 6th Street waiting for hours to get a cab at night. Council voted last year to deregulate the taxi industry –– they should stay the course.

Make regular biking attractive: Keep building out our All Ages & Abilities Bicycle Network via protected bike lanes and urban trails. For only a couple hundred million dollars, we could put in place a system ala Portland that dramatically increases bike ridership.

Invest in transit: In addition to the high-capacity routes created via Project Connect, the city must aggressively reallocate right-of-way on key corridors to transit. This will make transit much more attractive, whether or not you have a convenient last-mile scooter option.

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A look at Cap Metro’s July ridership gains

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Cap Metro’s July ridership was 8.9% greater than the previous July. The increases were seen across all bus services, including MetroRapid routes, Express routes to the burbs and the good ol’ local routes. The Red Line actually declined, no doubt due to the disruption of the downtown station due to renovations.

This builds upon the 5.5% ridership increase that Cap Metro experienced between July 2017 & July 2018. That first increase, along with most of the monthly increases Cap Metro has seen since implementing Cap ReMap in June 2018, could in some part be dismissed, since Cap Metro had essentially “bought” them by increasing service hours. Investing heavily in increased frequency and not achieving greater ridership would have been a catastrophe.

However, July 2019 is the first full month where we’re comparing year-over-year performance post-ReMap. So for whatever reason, presented with the same exact service, more people opted to take the bus this year than last. Hopefully that means that more people are giving transit a chance due to the increased frequency.

There’s one very obvious caveat: July 2019 had one more weekday than July 2018, which probably accounts for a couple percentage points of the higher total ridership. There may have been a couple weather differences too, although I’m sure both were miserably hot.

There are cheap ways to do even better

In a video promoting the increase, Cap Metro CEO Randy Clarke said, “Think about what could happen when we get dedicated lanes with something like Project Connect.”

Totz. I hope we do move forward on the ambitious plan for two high-capacity transit routes envisioned by Project Connect. But that likely won’t materialize until mid-way through the next decade, at the earliest. There’s a lot of work Cap Metro and, more importantly, the city, can do to further boost ridership on the existing system.

First, the city must aggressively seek opportunities for bus-only lanes on major corridors. Even small stretches of a road –– such as the new contraflow lane on Guad or the new transit/bike lane on W. 5th –– can substantially reduce the impact of traffic on bus service by helping buses avoid particularly nasty bottlenecks. Neither of the above projects cost much money or prompted armed rebellion, so there’s no need not to do a lot more of them.

And then there’s density. We need a lot more of it. Especially near transit stops.

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Maybe City Council shouldn’t take July off

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A zoning case Council is taking up at 3:26 a.m. today.

City Council adjourned at 4:18 a.m. today, concluding what I believe is the longest meeting in the four-and-a-half year history of the 10-1 City Council. It’s tough to keep it short with an enormous zoning case, a fight over hotel taxes with the county and two citizen referendums.

Yesterday would not have had to be so grueling if Council had had at least one meeting in the past seven weeks. But City Council has a tradition of taking a break in July. That’s to give the city manager and staff time to craft the budget, which Council takes up in August and September, but it’s worth noting that the County Commissioners Court meets every week all year long and their staff doesn’t appear to have problems putting a budget together. Yes, the commissioners court has fewer members and (at least currently) the members tend to be less talkative, but still…

Council’s first meeting in August last year similarly went into the early morning hours. That was not the case in 2016 & 2017, but both of those years the second meeting following the break was very long, which I imagine still had something to do with the lack of work in July.

It’s not good for City Council to be making big decisions at 3 a.m. Even the sharpest wits on the dais are seriously impaired by that point.

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A slumlord’s market

I’m not an expert on apartment maintenance, but my sense is that you’re not necessarily a bad landlord just because you picked up a couple code violations. But I also know that negligent and unfair landlords are not uncommon. Come to think of it, it’s not as if us tenants are always saints either.

I don’t know quite what to think when I look at the list of properties on the Code Department’s “repeat offenders” list. But then I look at a map of the properties and something is very clear: this isn’t really an issue in West Austin. Most of the central neighborhoods also show zero violations.

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It’s a particularly big issue in the north and the southeast. Broken down by Council District, District 3 (Pio Renteria) leads the pack with 888, while Greg Casar’s North Austin District 4 is in a close second, at 864. In contrast, CentralAustin District 9 (Kathie Tovo) only had 6 violations. (Curiously, however, there was one major property in West Austin District 10 that racked up 169 violations)

In a real estate market as tight as Austin’s, however, advocates for tenants and low-income people find themselves balancing their desire to demand better from landlords with their desire to keep affordable housing available. A condemned property not only immediately disrupts the lives of the current tenants, but it takes affordable housing out of a market that is desperate for it.

If you have any insights or experience dealing with this issue, I’d love to hear your thoughts.

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Scooter, e-bike use up 375% in year

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Scooters are far from perfect, but they are definitely here to stay.

Half a million trips a month … 
In July of 2018, the first full month when electric micro-mobility devices were legal in Austin, people here took about 119,000 trips totaling 142k miles. At the time, there were 1,959 devices in circulation. Almost all of that came from scooters –– there were only 247 bikes in circulation that generated 7k trips.

One year later, there were 450,000 trips totaling more than half a million miles. Undoubtedly the dramatic increase is partially driven by increased popularity and awareness, but it also has something to do with supply: there are now just under 17,000 devices in circulation.

While scooters still dominate, there is now a substantial number of e-bike trips: 29,000 last month.

If it’s not broke…
This is very good news for Austin mobility. Although city officials have been surprisingly supportive of the scooters from the get-go, there is always a threat of a political backlash (see: San Antonio). The more popular the devices are, however, the harder it will be for the city to clamp down on scooters (e.g. franchise system).

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Zoning debate is nationalized

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The national conversation about housing is changing. Or rather, for the first time in years, a national conversation about housing is taking place.

On social media I’m seeing prominent liberal writers take a few minutes from Trump-bashing to bemoan exclusionary zoning and excoriate the (predominantly) Democratic elected officials who protect it in major cities across the country. The New York Times has twice editorialized in favor of eliminating single-family zoning and has run guest columns that have blamed NIMBYs for making San Francisco and other major cities increasingly unlivable for the poor and middle class. Elizabeth Warren, Cory Booker, Kamala Harris and Julián Castro have all proposed housing policies that aim to dismantle exclusionary zoning.

Here’s what Elizabeth Warren says about zoning in her housing plan:

But there’s another driver of expensive housing costs: some state and local zoning rules needlessly drive up the cost of construction. These aren’t necessary rules that protect the environment or ensure that homes meet safety codes. These are rules like minimum lot sizes or mandatory parking requirements. These kinds of rules raise the costs of building new housing and keep families from moving into areas with better career and school choices.

This is great news for local activists who for years have struggled to make the case that liberalizing zoning regulations is actually the progressive thing to do, whether or not it helps developers.

It’s easy for local politicians and activists to dismiss those who call for density as developer shills. It’s much harder, however, to tell loyal Democratic voters the same thing about Elizabeth Warren.

The old adage is that all politics is local, but today I believe the opposite is increasingly true: all politics is national. For a variety of reasons, including the decline of local media, people seem much more likely to keep up with national politics than local politics. People often view local politics through the national political lens, supporting candidates not so much based on their views on local issues as much as their affiliation with a national political tribe. 

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A look at affordable housing projects

Of the $250 million affordable housing bond that we approved in November, $94 million is used to fund income-restricted rental units. Any developer can apply for those funds. Some of the projects will be a mix of market-rate and affordable units (the city funds can only fund the latter). Other projects are done by developers that focus exclusively on affordable housing.

Staff from the Neighborhood Housing & Community Development department provided an update earlier this week on the applications they’ve received in the past quarter. There were 17 applications just in that three-month period, which is about twice as many as the city typically receives in a year.

Here’s a map of the projects applying, most of which probably won’t get picked.

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Only one or two of these projects is located in what would traditionally be viewed as a “high-opportunity” area. That generally means an area with high(er) incomes that is close to jobs, amenities and good schools. But in light of changes in the real estate market, it’s worth rethinking those definitions.

Notably, a number of projects on the near-east side, for instance, are providing affordable housing in an area where market rates have exploded due to gentrification. They are also very close to transit and downtown.

There’s a big range of projects targeting different household sizes, different income levels. And of course, some projects are much bigger than others. Housing bond dollars can only be used for units for those at or below 50% area median family income ($30k/single, $34k/2 person, $43k/family of four). But some of the projects are drawing other funding sources (notably Low Income Housing Tax Credits) to provide income-restricted units at higher levels and some projects include some market-rate units, which help pay for the affordable ones.

For instance, on E. Oltorf, Saigebrook Development, a for-profit affordable housing builder, is planning a 190-unit project. Fifteen of those units will have no income restrictions, while 123 will be at 60% AMI (financed by tax credits, no bond funding) and 52 will be at 50% AMI. Among the income-restricted units, 43 will be 1BR, 81 will be 2BR and 51 will be 3BR.

Similarly, at Lakeline Station, Foundation Communities, the nonprofit developers, wants to build 13 units at 30% AMI and 56 units at 50% AMI. Of those 69 units, 21 will be 3-bedroom, 34 will be 2-bedroom and 14 will be 1-bedroom. Those units are part of a bigger development that includes another 51 units at 60% AMI.

Meanwhile, some projects almost exclusively target smaller households. Burnet Place Apartments, for example, is seeking funding for 55 studio apartments, 33 of which would be at 50% AMI, 11 at 40% AMI and 11 at 30% AMI, which amounts to $18k for a single person and $25.8k for a family of four. Similarly, of the 62 units Travis Flats is seeking bond funding for, only 11 will be 2BR and one will be 3BR. The rest will be studios or 1-BR.

Some projects are really, really small. Blackshear Community Development Corporation wants money to build two units –– one 2-bedroom & one 3-bedroom –– at 50% AMI on a single-family lot in the Rosewood neighborhood. At 6711 Porter, Guadalupe Neighborhood Development Corp wants money to build a single 1BR garage apartment at 30% AMI.

How does the city decide which projects are most worthy of its support? It’s a complicated scoring process that takes into account a number of city goals. The goal to build as much affordable housing as possible is balanced against our desire to facilitate economic integration by placing affordable units in affluent areas that are otherwise off-limits to the poor. Similarly, we want housing to be near transit or within walking distance of critical services, schools, grocery stores. Finally, we want housing that serves different types of households, including families with children.

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First step towards Project Catalyst, er, 4700 E. Riverside

After repeated postponements, the Planning Commission will finally take up what could be the biggest zoning case in a generation: Project Catalyst, or as it was recently humbly renamed, 4700 East Riverside.

It’s a 97 acre mixed-use development centered at E. Riverside and Pleasant Valley. The plan is about 4 million square feet of office and around 4,700 residential units. The developer, Presidium, says 8-12% (400-550) of the units will be income-restricted.

This project has gained prominence over the last year due to the opposition it has attracted from Defend Our Hoodz, a group of anti-gentrification activists. DoH was originally founded by a veteran east side activist in response to the demolition of the Jumpolin piñata store on E. Cesar Chavez, but it was eventually taken over by 20-something radicals. They’re not a particularly large group, but they show up at every meeting related to the project and disrupt it. They will almost certainly show up tomorrow.

Folks with more credibility than DoH will likely voice concerns about gentrification and displacement as well. While the income-restricted units are significant, the rest of the units will likely be very pricey. Much pricier than the Ballpark Apartments, a student-oriented complex that will be demolished to make way for the new development.

CM Greg Casar previewed his stance on the project when he opposed rezoning the nearby Mesh Apartments. Although the rezoning will allow greater density and a certain percentage of the new units will be income-restricted, Casar says he is opposed to upzoning existing multifamily properties that provide low-cost housing. He worries that upzonings will incentivize their redevelopment into luxury housing.

What was interesting in the Mesh debate, if we can even call it a debate, was the lack of opposition from the West Austin anti-growth crowd. There was not a peep from Tovo, Alter, Pool, the three who are most likely to claim that upzoning single-family properties will result in displacement. Will the same dynamic play out at 4,700 E. Riverside?

While opponents of the project will make it appear that Council has the choice to either preserve the Ballpark Apartments or bulldoze them to create luxury units, that fact is that the developer does not need permission to do that.

Council’s choice is this: It can do nothing and inevitably the developer will redevelop the properties with no affordable housing. Or Council can negotiate a major upzoning in return for certain community benefits, notably affordable housing.

Beyond the affordable housing, another major benefit of the new development will be density and mixed use. The existing multifamily properties on E. Riverside aren’t particularly dense due to the enormous amount of space they devote to surface parking. For instance, the Ballpark Apartments is about 13.5 units/acre, which is about the same density as the most common form of single-family zoning in town (SF-3).

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Unlike the current properties, the new multifamily will hopefully be up on the street, rather than behind gated parking lots. Along with the office and commercial, this should create a more walkable, transit-oriented area. This nicely compliments the city’s plans for the E. Riverside corridor, the only one of the city’s major corridors that has been designated for the full treatment of urbanist improvements, including protected bike lanes, wide sidewalks, streetscaping, etc. And of course, Riverside will also be home to high-capacity transit –– dedicated right-of-way for bus-rapid transit or light rail –– if voters approve Project Connect in 2020.

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RVs everywhere

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The Woodview mobile home park, off W. Oltorf.

For once, everybody at City Hall appears to be adopting a “live and let live” approach to housing. But only in mobile home parks.

On Tuesday the notoriously anti-housing (but improving!) Zoning and Platting Commission adopted a recommendation to allow RVs in mobile home parks. Current city code distinguishes between RVs and mobile homes and prohibits the former in mobile home parks.

Despite the prohibition, some mobile home parks around town are predominantly inhabited by RVs, in some cases because RVs were on that property before it was annexed by the city and subject to city zoning rules. So they’re sort of grandfathered, although the new rules will likely kick in if they do any sort of redevelopment of the site. To try and help out some of these mobile home park residents, staff offered a compromise code change: mobile home parks could be up to 50% RVs. But at least one property I’ve seen is more like 90% RVs. So that doesn’t really help…

To ZAP’s credit, they said what’s the point of RV restrictions? The proposal even came from David King, a former president of the Austin Neighborhoods Council and one of the most reliable opponents of zoning changes that facilitate more housing throughout the city. CM Ann Kitchen, who appointed King to ZAP, tells the Monitor that she supports the idea:

“I think that that proposed ordinance (as written by staff) needs some more work. I think focusing on the type of entity –  the mobile home versus the RV – is not the point and it’s limiting in a way that doesn’t help us with our goals for affordability and housing options.”

What’s striking is how easily everybody can agree to adopt a commonsense change in places where they and likely few people they know lives. Compare that to the bloodletting that follows the tiniest changes proposed for single-family neighborhoods in Central Austin. Kitchen, for instance, joined three colleagues in voting against a 2015 ordinance that legalized accessory dwelling units (garage apartments) in most of the city after vociferous opposition from ANC. Even those considered friendly to land use reform, such as the mayor, will not go as far as allowing triplexes by-right on every lot.

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Which areas of Austin at highest risk of wildfires?

The other day the Public Safety Commission recommended that City Council adopt a Wildland Urban Interface Code, a distinct set of land use regulations geared toward reducing the risk of wildfires. Here’s a map of the city based on wildfire risk.

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As you can see, the great majority of what we’d refer to as the urban core (bounded by MoPac, Ben White and US-183) is not identified as at risk of wildfire. Why? Areas at the highest risk (red) are directly interacting with wildland that is likely to catch fire. The areas of lower risk, in green and blue, are within striking distance of embers from wildfires.

According to a city analysis, 62% of homes in Austin are outside of the no-risk areas. That tells you everything you need to know about how the city has grown over the past few decades. We have prevented housing in the urban core and pushed growth out onto the fringes, eating up more wildland.

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