Mike on Traffic

Real Estate and the Financial Crisis - A Speech by Dr. Anthony Downs

Dr. Anthony Downs of the Brookings Institute explained the role of real estate in our financial crisis this morning at a joint meeting of ULI MN and NAIOP MN.  This is the topic of his most recent book (he has written 25 books and over 550 articles).  We got into this mess because a gigantic flow of worldwide capital came to the United States over the last decade.  The bursting of the dotcom bubble pushed investors out of the stock market and into the "safe" realm of real estate.  Ultimately, there was more money than quality real estate investment opportunities.  The overinflated real estate prices, coupled with low regulation and derivatives have led to a mess that will not be easily resolved.

Dr. Downs believes unemployment is going to hit 12% and new housing starts will be at their lowest level since 1945 (2009 housing starts will only be 30% of what they were in 2005).  The home foreclosure situation will continue, but will stabilize.  The next tidal wave will come with commercial real estate holders defaulting on their loans.  

Dr. Downs quoted Arthur Schlesinger's assertion that America falls into 15 to 20 year cycles of swinging between extreme regulation and deregulation.  Expect the U.S. to move hard from the deregulation started by Reagan to our regulation phase now started by Obama.

When will we hit bottom?  Here are the odds Dr. Downs gives on our recovery:

• 15% chance the recovery starts in 2009
• 65% chance the recovery will start in 2010
• 8% chance the recovery will start towards the end of 2010, but we'll face a drop in the value of the dollar
• 12% chance we'll recover by 2012, but we'll experience another recessionary dip before then

What about long term trends?

• Globalization has stalled, but will come back when the economy recovers.
• New houses will be smaller.
• High urban density will increase.
• Suburban sprawl will continue because of the entrenched lobbyists that push policies that end up promoting it.
• Home equity loans will go away, forcing Americans to live more within their means.
• Americans will accept a lower living standard to avoid excessive debt.

Ethics - U.S. Withheld Data on Risks of Distracted Driving

The New York Times published a disturbing article on Monday stating the National Highway Traffic Safety Administration (a sub-agency to the US Department of Transportation) withheld compelling data on the safety risks associated with driving while talking on cell phones.  From the article:

“We nevertheless have concluded that the use of cellphones while driving has contributed to an increasing number of crashes, injuries and fatalities,” according to a “talking points” memo the researchers compiled in July 2003.

It added: “We therefore recommend that the drivers not use wireless communication devices, including text messaging systems, when driving, except in an emergency.”

Dr. Jeffrey Runge, then the head of the highway safety agency, said he grudgingly decided not to publish the Mineta letter and policy recommendation because of larger political considerations.

This is akin to burying data on the safety impacts of drunk driving.  I believe it is the duty of professionals to present our data and make professional recommendations.  The politicians (the decision makers in many situations) then can choose to act on or ignore the data and recommendations.  Apparently the folks at the US Department of Transportation disagree with me.

Gridlock Buster from U of MN

Ever wanted to try your hand at traffic signal timing?  Here's your chance - the University of Minnesota has developed the "Gridlock Buster" traffic control game.  The University is trying to entice young folks into giving civil engineering a try.  Read more here.

I played a few levels (don't tell my boss).  Fun, but not addictive.

The Infrastructurist Blog - White Roof Tops... White Pavement?

I found the blog The Infrastructurist America Under Construction about a month ago.  They have a lot of interesting stuff.  Their current post is Stimulus Screws up Opportunity to Create Jobs, Save Energy.  It is about a company that paints rooftops white who can't get to the pot of stimulus money, even though their work lines up very well with the goals of the Obama administration (create jobs while reducing environmental impact).

The blog says, "Recent scientific work suggests that if cities around the world “lightened up”–that is, made rooftops and paved surfaces more reflective–it would have the same effect as taking every car in existence off the roads for more than decade and delay the progression of global warming by approximately 20 years."

New concrete pavement has an albedo (a measure of reflectivity - the higher the number, the more reflective) of 0.55 while new asphalt pavement has an albedo of 0.04. Basically, concrete bounces sunlight back while asphalt absorbs it.

Historically, concrete pavement is more expensive to install than asphalt but it has a longer life cycle.  Asphalt used to beat concrete in the economic decision.  Maybe the environmental angle is the reason we should be using concrete instead of asphalt in roads and parking lots.  Or maybe we need to add white dye to asphalt....

Telecommuting - eWorkPlace Minnesota

I heard a radio ad a few days ago for something called eWorkPlace Minnesota.  I checked out their website and signed up for free assistance.  We run a very flexible schedule at Traffic Data Inc and Spack Consulting, but I wanted to see what they were about.  I had already read Why Work Sucks and How to Fix It about the results only work environment started at Best Buy.

Kathy from eWorkPlace called me back and confirmed I am already well setup.  She explained their campaign is a component of the Urban Partnership Agreement project in the Twin Cities.  Basically, Mn/DOT and the Metropolitan Council are trying to reduce congestion along I-35W and Highway 77 in the southern portion of the metropolitan area without adding normal lanes to the highways.  They have a large federal grant and the state has contributed matching funds.

One of the goals of the project is to remove 2,700 peak hour trips per week through telecommuting.  That is where eWorkPlace comes in.  It is an advertising campaign that is trying to convince employers of the economic benefits of telecommuting and flexible work schedules.  They feel employees are already enthusiastic about this.  The hurdle is convincing the employers and managers to do it.  Behind the advertising campaign are several HR and IT consulting services to help transition companies into telecommuting. 

In exchange for the free consulting, companies need to commit to and track their peak hour work trip reductions.  This is how the Urban Partnership Agreement project will track if they meet their 2,700 goal or not.

Help spread the word in the Twin Cities.  eWorkPlace Minnesota makes a good business case for transitioning your company or organization to a more flexible work schedule.