Taylor introduces the notion that transportation finance is a political matter, going on to give a brief history of the role of road usage in America from the 1930s, with similar changes occurring here in Australia.

This whole scenario depends on which form of government is in at the time, whether it be left or right. Performance criteria is utilised to asses what the cheapest short term option is for transportation investment that is financially viable. This clearly means that transportation finance is a political matter, but one must ask to whom the government panders and why.

With the onset of the great depression in America, fuel tax was the largest tax going at the time and the best means of accumulating revenue in those testing times - thus people were encouraged to drive. Highway construction started to occur all over the country, but what is key to all of this is how other forms of transport ie bike riding and public transport did not have to be accounted for within the planning of these new roadways. So while roads sprawled, development of other forms of transportation pretty much halted.

In the 1970s, General Motors bought up many other transport systems, making it somewhat impossible in many instances to get around without a car. Though it was at the same time that the public started to become irritated when new highways were being constructed within established suburbs, brining with them traffic, noise and pollution.

The notion of user pays is introduced, with the explanation that there is no such thing as 'free' parking, rather that the cost of provision of parking and road usage is offset through other means. The introduction of user pays means that the majority of the cost is past on to the user, but then when parking is 'free', it is financed via parking infringements, registration, taxes and shopping bills. An example of this is a shopping centre. Shopping centres provide 'free' parking often to entice customers. What many people don't realise is that those parking spaces come at a great cost to the business and the cost of providing them is offset by adding their expense to the price of their goods; meaning that you pay for the parking by paying the inflated prices the shop has introduced to its products. The same can be said of toll-ways and petrol. The more you use, the more it costs. At the same time, it must be noted that currently vehicles are not charged for the degradation they cause, whether it be environmental or social.

Here lies a problem. While it is good that cars are becoming more fuel efficient, an offset of this is less revenue acquired through fuel tax revenue. This is reason why the government is not keen on pushing cars to cleaner alternatives. It has also raised the issue that there is a growing gap between funds raised and service infrastructure needed. Need is outstripping what is being provided and while providing more roads may be seen to ease congestion, it only invite more cars to the road, cars that are not covering the cost of services required under the current level of taxes claimed to do so. It is becoming growingly financially unviable.

The issue of rising fuel costs is of concern, as people are struggling to afford to operate their vehicles and are paying heightened prices for goods that have to travel greater distances due to the dispersion of our car based cities. Calls to lower fuel taxes are ill-founded, as this tax is required to maintain the infrastructure to run on, meaning that other forms of finance generation will have to be employed, whether it means increased GST or something else. This has also resulted in many people who are in need of public transport not having it available to them, so reluctantly continue to drive their car, often into areas that are less car reliant, particularly for localised travel.

As is evident in America and Australia, our reliance on the car has a direct correlation to the way in which our urban centres have developed and operate, with dispersed suburbs that are too low in density to ensure public transportation is viable. Resulting in particular areas of higher density with little parking which are well serviced by public transport compared to seemingly endless expanse of suburbs which receive poor to no public transport within an acceptable walking distance, is too infrequent to warrant its use, does not take the person where they want to go and or is too slow, but with more than adequate parking.

Decisions in transportation finance spending will continue to have political ties, but it is up to constituents to rally their representatives to voice the change that they desire, whether that be increased public transport services, roads closed to cars or the introduction of bike lanes. The impact of transportation finance has a greater effect on everyone's life than most would care to believe.

Questions:

• How do we move from a car reliant society to one that favours public transport, riding and walking, if transportation finance favours roads?
• What are some of the social outcomes of a dispersed, car reliant urban environment?
• What kind of finance accumulation shift could be undertaken as to deliver the funds for road maintenance while pushing for more fuel efficient vehicles?

Reference:

Taylor, B. 2004, "The Geography of Urban Transportation Finance", The Geography of Urban Transportation, ed. Hanson, S., Giuliano, G., Guilford Press, New York, ch. 11 (38p)

11. Infrastructure 24th May, 2008 16:52:24   [#] [2 comments] 

We should start off by deciphering the title, "impacts" of a technological "improvement", I consider these two sentences used together a paradox, because how do improvements create impacts.

Talley's article focuses on the ocean container shipping industry within America since the 1950's. The article explores how movement of cargo was revolutionized since the introduction of the container (20 to 40 feet long) meaning the cost and efficiency concerning the movement of goods were dramatically improved as opposed to break bulking which was used in the past (placing individual items on wooden crates to be moved).

Efficiency was a result of the following:

• Valuable goods were able to be moved with regular goods
• Movement from one destination to the other was more feasible (crane would carry the container from the ship, then would load onto trucks or trains - which were designed to be able to carry the containers)
• Container rates were constant, so despite how valuable a good was to ship the cost of having it containerized was constant as opposed to break bulk.

The article furthermore explores how organizations and shipping corporations would merge together, forming alliances which resulted in less financial burden for individual shipping companies. In regards to the fixed pricing for container shipping rates, it meant that shipping and movement of cargo dramatically increased between 1980-1996 (433%).

As a result of improvements associated with the movement of cargo (containers), the carrying capacity of ships also increased. It has been noted by Talley that most ships constructed today have a carrying capacity of 5,000 to 6,000 Twenty foot equivalent unit, (TEU's - the measurement of an individual container) or 1,049 feet wide. The reason for the push towards larger ships as noted by Talley (2000) is because a 6,000 TEU container ship can result in 18% - 24% cost saving in movement and trips compared to a 4000 TEU; bigger is better in this case.

As the article progresses, Talley introduces us to the technological improvements container shipping underwent, the next phase introduced was the double stack trains - capable of moving containers stacked two high. Once again, this upgrade from the one container per flat car train is a result of finding more efficient and effective ways of moving containers and thus goods.

Talley then explores how as time progresses the runners of Ports are finding themselves "pawns" within the container moving game, instead of making their own decisions on which goods are moved or which shipping lines may be docked at their ports. This issue of not being in control has been attributed to the fact that when containers arrive at ports, they ultimately require land transportation to deliver goods to its final destination, this has meant that Ports located in areas with poor infrastructure or access(lets say freight/train lines) will not be chosen, as opposed to ports located in close proximity of infrastructural services for docking.

As a result of the competitive nature of container shipping and the increase in ship size ports have opted for major upgrades in its services merely to attract potential shipping lines to use their ports over others and to accommodate the mass vessels which need to dock there. Talley has noted that this major investment in capital has left many American ports in major debts. The investment in capital as noted by Talley, does not secure a good flow of ships using the ports, so at times the investment will not guarantee full port usage. With many ports affected by large amounts of debt, the following options serve as remedies;

• Taxes are raised to combat the debt
• Some publicly owned ports will move towards private bodies and result in the privatization of many ports.

The overall point Talley is trying to get across is that over time, many technological improvements towards the movement of goods (in this case shipping) has occurred, but the upgrades, for efficiency and financial viability has resulted in various impacts to the actual ports which are:

• larger ships require deeper channels
• larger ships require a larger port
• Infrastructural upgrades

So in order to keep up with the upgrades, competitive market and high rates of container movement, many ports have resorted to mass upgrades in, internal services and capacity.

Some questions to consider:

• It was briefly expressed that some publicly owned ports needed to resort to privatisation to reduce their debts, are government operated services that inefficient?
• Should tax payers be paying for the debts that have been generated by ports (even though they are performing well but due to competition they have been indebted)
• Is it fair on the ports to have to keep up with the continual upgrades associated with cargo/container movement?
• Do you agree that at times sacrifices are needed to be made in order to achieve an outcome (in the context of melbourne, blocking off roads to increase capacity etc)?

Reference:

Talley, W. 2000, "Ocean Container Shipping:Impacts of a technological Improvement", Journal of Economic Issues, v.34, i.4 p.933

11. Infrastructure 19th May, 2008 23:49:40   [#] [3 comments] 

With pressure on local governments becoming more and more intense regarding financial constraints, this article is of particular importance to planning because it may frame the way things are done in the future.

McNeill et al seek to analyse how local governments are coming to terms with the financial restraints and the changes that are occurring due to the current trend in developer charges and levies being applied.

Background

Developer charges play quite a more significant role with the larger sized local governments. This is demonstrated by the 25% of councils within NSW with a population of 40,000 or over who "raise no less than 69 per cent of developer charges revenue" (McNeill et al, 1999). McNeill et al also focus on the limitations of data collection due to changes in local government accounting systems.

As different municipalities are at different stages and situations with developer charges there is no one system consistently collecting data. As a result the Australian Bureau of Statistics have been unable to tabulate any data which has resulted in the annual growth and contributions known as developer charges, not being able to be determined. Developer charges in NSW have become quite prominent, some even argue more so then any other state in Australia.

Developer charges in NSW

Within NSW there was little financial risk for developers in the past, the Housing Cost Enquiry (1978) showed everyone that developers were being optimistic in relation to their assessment of demand. McNeill et al illustrate how this resulted in many instances where serviced land was under-utilised for extensive periods (McNeill et al, 1999). Many changes occurred when it came to formalising arrangements for developer charges. Section 94 of the Environment Planning and Assessment Act 1979 which McNeill et al maintain "codified" the existing developer financing practice (Simpson 1989:19, cited McNeill et al, 1999). As developer charges and other types of levy"s continue to be introduced, local governments seem to be using this revenue as a way to reduce debt.

An example of this comes from the 50"s and 60"s, which saw the expansion of planning powers. Local councils introduced to notion of developers having to provide some of the services for development that local government were until now, forced to provide.

Local government borrowings have been a prominent theme in the developer charges debate. This is the case as each municipality seeks to minimise debt, the amount of developer charges going towards these payments is growing, and may continue to grow and become even more prolific over time. As discussed above, total population and geographic local are key themes in this debate. None the less, it is not only NSW that is experiencing the positive affects of this trend.

Developer charges in other states

In Queensland developer charges have been reported as a method of funding fringe development. In Victoria a two-tiered system was recommended as a result of the problems associated with the existing system. The new system sought to have up front developer charges, and a new community infrastructure levy, for social infrastructure as a result of a growing community. Both are indications that developer charges and other council levy"s have begun, and may continue to gain momentum.

Conclusion

As this article has shown us developer charges is a current trend that is beginning to gain momentum in states all over Australia. McNeill et al believe that recent reviews of infrastructure financing in Queensland, Tasmania and Victoria have shown that "these states too are poised to embrace developer charges" (McNeill et al, 1999). Furthermore with developer charges becoming more and more accepted, I believe that this trend could very well be thing that relieves local councils of their current debt, and may even provide the basis for their expansion in the future

References:

McNeill, J. Dollery, B. 1999 "A note on the use of developer charges in Australian local governments", Urban Policy and Research, v. 17 i1, p61

11. Infrastructure 18th May, 2008 21:56:39   [#] [0 comments] 

Decline in transportation cost, at least for the shipment of goods.

Glaeser et al. documents the decline transportation cost, mainly due to technological advancements in the transport industry and reduced reliance fixed infrastructure transport (rail and water). However, there has been a rising cost of moving people within cities mainly due to congestion. Glaeser et al. elaborates on two major ways in which cities are changing. Firstly, the reduction in transportation cost for goods has allowed cities to change their primary functions and locations. Modern cities facilitate interaction (contact between people), which leaves little reason for cities to be near natural resources or natural transport hubs. Consumer preference has transformed cities are more likely to be located in pleasant climates and locations where governments are friendly. The second way in which cities are changing, according to Glaeser et al. is internal to the city. The automobile has created sprawl and reduced tendencies towards a single city center, a feature of the twenty first century. Glaeser et al. also notes that both of the classic of urban economics, the Alonso-Muth-Mills model and the Krugman-Fujita-Thisse new geography (see below for short summary), need updating. Whilst both frameworks are relevant to the characterizations of the city of the past, a new regional model, without centers and transport cost for goods will better capture the future of the city.

Glaeser et al. hopes that such regional models would be built around these basic elements:

• Productivity would be a function of agglomeration because there are gains from people being able to interact
• Key transport mode – the automobile –travels much faster on highways that on city streets and is subject to congestion effects
• Physical output is generally relatively costless to ship
• Even though output is costless to ship, people produce services that require face-to-face interaction
• Land is heterogeneous and some places are nicer that others

Alonso-Muth-Mills Model vs. Krugman-Fujita-Thisse Model

The Alonso-Muth-Mills Model is a model referred by Glaeser et al. combining classic homocentric urban models, are consistent with a world where people walk and take public transportation (Glaeser et al). Central business districts (CBD) can be considered as the hub for transportation technologies. Public transportation brings people to the hub and people walk from that point to their work places and use their feet to interact during the workday. The workers’ physical output then gets shipped from the hub to consumers using rail and water transport (Glaeser et al). To that degree, a homocentric model, where firms are extremely close to one another in the central business district, is natural when thinking about cities built around feet and trains. The Krugman-Fujita-Thisse Model is a model referred by Glaeser et al., where the hierarchy of cities was dictated by transportation. Locations of firms are determined through the minimization of cost, assuming that production cost are the same everywhere, transportation cost will dictate the choice of location. The new regional economics is built around fixed cost technologies with substantial transport costs. Population is anchored by a desire to be in close proximity to natural resources (Glaeser et al).

Implications of declining transport costs for goods

Implication 1: People are no longer tied to natural resources

Implication 2: Consumer-related natural advantages are becoming more important

Implication 3: Population is increasingly centralized in a few metropolitan regions

Implication 4: People are increasingly decentralized within those regions

Implication 5: High-density housing and public transportation are becoming increasingly irrelevant

Implication 6: Services are in dense areas; manufacturing is not

Implication 7: The location of manufacturing firms is not driven by proximity to

Customers or suppliers, the location of service firms are determined by proximity.

Implication 8: Density and education go together

Implication 9: Productivity will decline as congestion exceeds some threshold level?

Questions:

• How will the rising cost in fuel and inevitable the depletion of oil has an effect on this?

Reference:

Glaeser, E., Kohlhase, J. 2003, Cities, Regions and the Decline of Transport Costs, Harvard Institute of Economic Research, Online (54p)

11. Infrastructure 17th May, 2008 10:52:10   [#] [0 comments] 

Lewis, in the chapter “The Spurious Market” out of the book ‘Suburban Backlash’ delves into the world of building and planning and how the government, local, state and federal have managed, governed and intervened to come up with a system that supposedly is right for local communities.

Lewis begins by giving us a background into the settlement of Australia and how our governments, basically from the word go, have been interfering in private development operations. Lewis explains how land used to be leased to different people with the expectation that they would then develop that land and the land size and what was built on the land would then determine how long it could be leased for. It wasn’t until later in the majority of Australian cities could you purchase and own a piece of land and or the buildings which would be placed on it.

Lewis then interestingly discusses the emergence of building controls is Australia and notes how in the early 1800’s not every municipality had the same controls. He explains that different areas had different controls but all were basically based around the London Building Act and the fireproofing of new buildings as to avoid events such as the Great Fire of London. From here Lewis mainly focuses on planning and planning issues which I found of great interest.

Lewis discusses in detail the somewhat silent, but ever prevalent part of planning, the paying off of objectors by developers to insure a quick, hassle free approval of different developments. Lewis explains the many different ways in which developers and even objectors have used their situation to financially benefit out of the planning process. He explores the myths and truths around why people object to applications, whether the public should have the right to object, whether it is ok to pay an objector to remove their objection and even objectors demanding money from developers to remove their objections. Lewis explains that these issues can be avoided and that really developers and objectors have the power to be able to negotiate outcomes which will best suit both parties, but the reality is this is not the case!

The focus of the chapter soon switches to local infrastructure, who is responsible for it? Who owns it? And who can claim rights to use it. Lewis explores the issues around infrastructure and how it can cause serious debate, especially now that higher densities are encouraged throughout our cities with the increasing urban sprawl issues that we are currently facing here in Melbourne. Lewis explains that with changing household sizes and higher demand for unit living, more units etc are being built in existing areas and this is putting pressure on existing infrastructure and services to be able to accommodate this. Lewis notes the massive reduction in people living in house together as families etc.

One could go on forever discussing the issues raised by Lewis within this chapter, however it is more productive for me to ask the questions which arise from the themes in this chapter and in which I am sure we all have thought about before.

Questions:

• What are your thoughts on developers paying objectors to withdraw their objections or objectors demanding money from developers to do the same? Do you think this is ethical? What are the possible repercussions from this?
• Why is planning subverted by hidden subsidies and vested interests?
• Would it be better if we completely got rid of planning and purely relied on the Building Regulations? Why?

Reference;

Lewis, M. 1999, “The Spurious Market”, Suburban Backlash, Blooming Books, Hawthorn, ch. 6 (28p)

11. Infrastructure 16th May, 2008 22:34:16   [#] [13 comments]