Improving Urban Access

New Approaches to Funding Transport Investment

Elliott Sclar, Måns Lönnroth, Christian Wolmar

• Publisher: Routledge
• Year: 2016
• Print ISBN: 9781138927049
• eBook ISBN: 9781317404354
• Topic: Economics
• Subtopic: Urban Planning & Landscaping
• Index: Economics

By 2050, two-thirds of the world's population will live in cities. To thrive, they will need efficient and sustainable forms of transport, but to achieve this, the financial incentives guiding urban transport operation must change – and change rapidly.

Urban transport plays a critical role in determining the social, environmental and economic shape of cities. Improving Urban Access: New Approaches to Funding Transport Investment provide innovative ideas on how we might reorganize transport finance to ensure that it is suited to serving the social, environmental and economic principles that must guide future urban living. Continuing the work begun by its predecessor, Urban Access for the 21st Century, the authors assess the complexity of implementing new finance approaches and suggest ways to make positive and radical changes. Although the range of revenue raising options remain limited to users, indirect beneficiaries, and the general public, these can be recast to transform the way transport is paid for and therefore how its services are delivered.

New finance models only succeed when they are intrinsically linked to the economic, social, cultural and political forces that create urban life. Together these volumes provide a starting point for the deeper research and policy design needed to successfully create urban transport finance systems that can address the challenges that 21st century cities present.

Chapter 1

Sustainability and social inclusion

The complexity of financing urban access

Elliott D. Sclar and Måns Lönnroth

This volume continues the work we began with the 2014 publication of Urban Access for the 21st Century: Finance and governance models for transport infrastructure. The present volume takes that work forward; it seeks to make clear both the intellectual and policy challenges inherent in changing the present approaches to urban transport planning and finance. The first volume defined the breadth of the challenge. This one explores its depth. The overarching question remains the same: can urban transport be financed in a way that will promote urban access more efficiently, or must the focus of finance primarily serve to promote expanded mobility? In the first volume we approached the question from a bird’s-eye vantage point, considering issues of space economics and policy from above.

Here we shift the perspective. Here we begin the process of drilling down further into the challenges inherent in these domains of inquiry. We explore the strengths and pitfalls of implementing the various solutions that have been proposed to address the access finance problem. Our authors were asked to view the complexity of implementing new finance approaches based on their areas of expertise. There is a great deal of consensus on two points. The first is that for reasons of environmental and social equity as well as economic efficiency, the idea of new finance models is appealing. The second pertains to the range of revenue-raising options which remain as always users, indirect beneficiaries, and the general public. However, while overall these sources remain the same, new finance models will not work unless their specifics reflect a new understanding of the economic, social, cultural, and political forces that create the urban fabric. Failure to appreciate this dynamic can more easily make matters worse than improve them. Taken together these two volumes provide a starting point for the deeper research and policy design that needs to be undertaken in order to address the process of creating finance systems for urban transport that can effectively address the challenges of 21st century cities.

By the middle of this century we will be living on a planet where around two of every three people will either thrive or starve in urbanized places. If our fate is to be the former rather than the latter, we must quickly begin to rearrange the incentives that guide the ways we build and rebuild cities. Urban transport plays a major role in determining how that occurs and how successful it can be. The writers in this volume understand the importance of this. They provide much valuable knowledge about how we might get urban transport financing to correctly align with the challenges posed by the need to enhance access on an increasingly urban planet.

Chapter 2: A field guide to the challenge of financing urban access

(Elliott D. Sclar and Måns Lönnroth)

Chapter 2 sets the larger context for the volume. It makes three important points. The first is that the rapid expansion of the automobile-based urban mobility that swept through the high-income countries in the aftermath of the Second World War was driven by a unique event – the large expansion of the urban middle class in the nations of Western Europe and North America. The emergence of that broadly shared economic prosperity at a moment when the allure of the automobile as a means of personal freedom was at its peak explains much about the forces that shaped cities in the three decades from 1945 to 1975.

The desire for personal mobility in turn determined the way in which planners and transportation engineers addressed the needs of the burgeoning metropolis. “Automobility” created a demand for roads. Engineering and planning professionals assumed that given the space-consuming nature of the car to satisfy this demand, land use specialization had to replace the mixed use that had been the hallmark of the city until then. Specialized land use stimulated more trip generation, and that in turn stimulated a demand for more cars and roads. As the automobile-dependent suburbs were expanding, urban public transport in the older urban core was left to stagnate.

The end of the era of rising income equality, post-1975, coincided with the onset of a new era characterized by high-priced energy, environmental challenges, and a structural transformation of the world’s high-income economies away from a manufacturing base and toward service-based activities. Taken together these trends reshaped relative locational values throughout metropolitan areas around the world. In light of these changes the higher density of centre cities began overtaking the pastoral charms of low-density auto-dependent suburbs in terms of economic value. This reemergence of higher relative centre city value creates a need to reassess how we address the metropolitan transportation challenge. The public finance mechanisms that undergird transport have to better reflect these altered realties of access and mobility.

In light of this new reality, the third point is that to make progress we will need what we term a triple paradigm shift in our thinking. The three elements of this paradigm shift concern, first, the need to make social inclusion a central concern; second, to find additional sources of finance for integrated urban transport; and third, to create institutions of urban governance aligned with the changed social and technical realities of 21st century cities.

Chapter 3: Shaping rapidly growing Chinese cities: lessons in the behavioural impacts of transport finance choices

(Jinhua Zhao and David Block-Schachter)

In 1896 the noted American architect Louis Sullivan observed, “form ever follows function.” This insight became the explanatory watchword for modern architectural designs in the first half of the 20th century. A century later, in 1995, the architectural historian Carol Willis entitled her history of American urban architecture Form follows Finance: Skyscrapers and skylines in New York and Chicago.¹ She implied that Sullivan missed the important role of finance in shaping the built environment. Zhao and Block-Schachter do not. Though individual buildings are not their concern, transport infrastructure is. They survey the financial forces that are shaping it in the 21st century via a study of experiences in Chinese cities. They conclude that the choices about transport technology and hence urban form in these places heavily follow the imperatives of finance. They demonstrate how the relationship between transport finance and urban morphology plays out. They show, in one case, how the diversity of vehicle ownership policies indirectly influences location choice and hence urban form via car ownership and travel behaviour. In their second case history, they turn their attention to the ways that decisions about land sale finance has a direct influence on the pace and location of urban development and speculate on the influence of finance on accessibility.

Chapter 4: The social meaning of “access”: lessons in transport governance from cities in developed counties

(Jago Dodson, Matthew Burke, Neil Sipe, and Anthony Perl)

While urban form follows transport finance, a larger question needs to be addressed: what determines the shape of the financial conditionalities? Dodson and colleagues conclude that the answer is rooted in what is meant when the term access is used. The dominant conceptualization in transport planning frames access as a point-to-point, individual-by-individual matter. This conceptualization is the philosophical core of the standard “predict and provide” modeling that dominates urban transport planning. It fails to capture the social reality of the urban metropolis as a singular space in which a diverse range of activities takes place. These shared spaces need to be differentially accessible in different ways and at different times to the wide-ranging social and economic groups that comprise the urban population. Access is not a matter of accommodating isolated individuals; it is a matter of making the urban space as a whole function well for all the social groups that comprise it.

Moreover, the four-step planning models that embody predict-and-provide planning fail to account for the larger social and environmental costs imposed by privileging individual travel times over aggregate social access. The authors take their analysis a step further by using a variant of “urban regime” theory to explore the political economics of which interests gain and lose from particular decisions. Regime theory helps to explain why a variety of approaches emerge in different places. In particular, they contend, this theory in part explains where the political support for the patterns of sprawl arose and the finance models that underpin it derived from cases of cities in North America and Australasia. By contrast in European cities the politically dominant urban regimes sought to capture the externalities of density, and hence the finance and political economics there are more public-transport oriented. To overcome the bias in North America and Australasia the authors argue that “access” as commonly understood needs redefinition away from a concern with individuals and in the direction of what they identify as “systemic access.” Systemic access requires that we “view the entire urban system as an access system rather than a land-use system.” They conclude that we have to cease viewing transport as an instrumental variable in pursuit of access and instead shift our focus to view access as the critical outcome of the entire spatial-physical configuration we call the metropolis.

Chapter 5: Mobility and access when formal markets do not exist: lessons from cities in developing countries

(Julien Allaire, Pablo Salazar Ferro, Bernard Abeiku Arthur, and Jean-Claude Ziv)

As a matter of market economics, the spectrum of urban transport services runs a wide gamut, from the random to the highly organized. In this chapter Allaire and colleagues review the strengths and weaknesses of this market spectrum with special reference to the access challenges of cities in the world’s low- and middle-income countries. In these places market informality is the dominant institutional structure. Allaire et al. address the process by which informal markets arise to create access in places where public transport investment, beyond some underwhelming attempts at road maintenance, and the low incomes of residents conspire to make formal systems nonexistent to rare. While resources are extremely limited, mobility and access needs are growing exponentially. This chapter describes the ways that informal and quasi-formal arrangements evolve to fill the gap. The travel possibilities range from hitchhiking to paratransit. Further they consider the ways in which information and communications technology (ICT) has, in recent years, broadened the alternatives. The “sharing economy” of auto ownership and app-based taxi services is now standard in many places across the world, regardless of levels of national income.

The authors conclude that solutions to the problems of informality cannot focus on the observed shortcomings of isolated modes. Such interventions will only exacerbate problems. Instead, comprehensive solutions are needed to contextualize the isolated modal problems. Ad hoc informality does not solve systemic problems.

Chapter 6: Lessons from economics: mechanisms for financing mobility

(Kenneth Gwilliam)

Gwilliam reviews financing approaches for transportation and mobility, both for investment costs and operating costs using microeconomic analysis. He describes actual and potential revenue sources and their possible contribution to overall requirements. He focuses on both public and private mobility strategies and their financing including cross-subsidy mechanisms. The chapter makes the all-important connection between land value and transport. The chapter also analyzes the feasibility of capturing the value created by transport investments, a topic taken up in more detail in the next chapter. Gwilliam reminds us that that some mechanisms now considered as standard were seen as revolutionary when first introduced and that the time may have arrived for some approaches which originally did not become orthodox practice. Moreover, future technological developments will potentially enable us to create funding mechanisms that align microeconomic theory with practice in ways that were not possible before.

Chapter 7: Value capture: why we may be disappointed

(Lauren Ames Fischer and Elliott D. Sclar)

As mentioned by Gwilliam, one of the most popular ideas for solving, at least in part, the problem of adequate transport finance is value capture. While there is much written about the potential for this funding source, little is said about its complexity and downside risk. In this chapter Fischer and Sclar take an extensive look at the challenges. They argue that recent advocacy for value capture should not be hailed as a “new” innovation. Indeed value capture to support urban infrastructure in general and transport in particular has a long history. This chapter demonstrates that history through US experiences. This history shows that value is not easily or predictably generated by infrastructure investment, and whether or not it is captured by the public sector is highly dependent upon the legal and political context in effect in which it is attempted. The chapter also provides a rich description of the assumptions made about value capture and the claims made for its success in the existing literature. The takeaway is that although value capture is useful, it will also prove difficult to implement in ways its advocates hope it will work.

Chapter 8: Why can’t urban transport behave like other public services? Explorations in public utility regulation

(Andrea Rizvi)

When all is said and done, urban transport is, like water, sanitation, and power, a public utility. Because it is a public utility, then why can’t it be financed as these other utilities are financed, by charging the users for the full cost of the entire system? In this chapter Rizvi explores the potentials and problems for making a public utility approach to transport finance a reality. It is an appealing idea, especially in a time when information and communications technology makes it possible to much more precisely monitor users’ movements from point to point and across varying modes. Rizvi concludes that it is certainly conceptually and even technically possible, but to succeed it is going to require a complete reorganization of the agencies of urban transport governance that presently guide our cities. Whether such reorganization is politically feasible remains an open question.

Chapter 9: Measuring access, not mobility: a technical challenge

(Elliott D. Sclar and Måns Lönnroth)

This chapter sets the context for the two chapters that follow it. As a mobility service, urban transportation is highly measureable in terms of product and cost. But if access is to be considered the critical metric against which transport service is measured, how are we to usefully quantify it? The two chapters that follow this one demonstrate the state of the art in answering this question. This chapter seeks to highlight the context and the dimensions of the technical issues addressed in the succeeding ones. The authors point out that mobility measures are typically measures of network efficiency. When we turn from mobility to access we make a major change in the way we view urban transport. In place of narrow-based network efficiency we seek to assess the degree to which we are maximizing social value. It is not that network efficiency is unimportant. Rather it is that network efficiency is only one component of the social value added created by access. Because it is po...

Table of contents

• Cover Page
• Improving Urban Access
• Praise
• Title
• Copyright
• Contents
• Preface
• Acknowledgements
• List of Contributors
• 1 Sustainability and Social Inclusion: The Complexity of Financing Urban Access
• 2 A Field Guide to the Challenge of Financing Urban Access
• 3 Shaping Rapidly Growing Chinese Cities: Lessons in the Behavioural Impacts of Transport Finance Choices
• 4 The Social Meaning Of “Access”: Lessons in Transport Governance from Cities in Developed Countries
• 5 Mobility and Access When Formal Markets Do Not Exist: Lessons from Cities in Developing Countries
• 6 Lessons from Economics: Mechanisms for Financing Mobility
• 7 Value Capture: Why We May Be Disappointed
• 8 Why Can’t Urban Transport Behave Like Other Public Services? Explorations in Public Utility Regulation
• 9 Measuring Access, Not Mobility: A Technical Challenge
• 10 Practical Approaches to Measuring Access and Social Inclusion: Lessons from Lisbon
• 11 Access and Social Complexity: Identifying and Managing Access Requirements Across Social Groups and Across the World
• 12 “What’s Past is Prologue”: Stepping into the Future
• Index