All posts by Dan Ryan

Many residential buildings are built with more parking than their residents need, and even more parking goes unused during daytime hours when residents are away. So it was encouraging to see a recent announcement from GarageHop. GarageHop is providing 40 spaces for commuter use in an apartment building at the South Kirkland Park & Ride.

GarageHop is a Seattle company that provides monthly parking spaces in apartment buildings, typically leasing spots in buildings with over-provided parking to commuters and residents of buildings without their own parking. This is their first foray into suburban transit parking.

Kirkland Crossing is a market-rate apartment building in South Kirkland, created as part of an award-winning TOD effort that opened in 2015. It was, somewhat ironically, built with excess parking. GarageHop puts these spaces to use by offering guaranteed parking for $80 per month. Customers sign up online and access the secured garage using their smartphone to park in their own reserved parking space.

Parking at the Metro lot across the street is free. However the lot fills daily (averaging 97% utilization in fourth quarter 2017). At busy times, there have been issues with spillover parking to neighboring businesses. The only guaranteed parking at the Metro lot is via a pilot program for carpools and those spots are only guaranteed until 830am. GarageHop doesn’t require a carpool and can be accessed at any time.

GarageHop joins Diamond Parking Service in the market for privately provided transit parking. Diamond developed a similar offer in partnership with Metro last year.

Market rates for parking, even with guaranteed access, aren’t high enough to attract developers to build structured parking for transit in the suburbs. But GarageHop’s offer is welcome. They are efficiently reusing parking stalls that exist anyway, and offering an additional option for transit users to access the system.

Last week in Vancouver BC, Washington Governor Jay Inslee talked up how “the convenience of a one-hour trip between Vancouver and Seattle would create countless opportunities for people in both B.C. and Washington”. He cited an economic analysis that a high-speed rail link between the two cities could create up to 200,000 jobs and $300 billion in increased economic output annually. Inslee has characterized this as a 20:1 return. How seriously should we take these claims?

The economic analysis, funded by Microsoft and the Washington Building Trades, was prepared as an addendum to a study by WSDOT of HSR costs and ridership. It was released in January, a month after the main report. The analysis estimates 38,000 jobs will be created, directly and indirectly, during construction. More speculatively, the authors claim up to another 160,000 jobs will be created through agglomeration effects, effectively growing the Seattle and Vancouver urban area economies by reducing travel times from outlying cities. While agglomeration effects are a real phenomenon, the size of the claimed effects is preposterous. The reader is asked to believe that about sixty jobs can be created for every daily rider on the train. Continue reading “High speed rail economic study makes exaggerated claims”

Last night, the Senate approved SB 5955, changing the valuation schedule for the ST3 MVET (Motor Vehicle Excise Tax). Up to two-thirds of the cost is remedied by reducing payments from Sound Transit to the Puget Sound Accountability Fund. The vote was 30 yeas, 14 nays, with 5 members excused. The bill now moves to the House of Representatives which has already approved similar reductions to the MVET, but without an offset for the lost Sound Transit revenues.

Sound Transit levied a 0.3% MVET in Sound Move in 1996. That levy used a schedule that overvalues newer cars relative to resale values. In 2006, the Legislature approved a new valuation schedule that aligns to resale prices. The 0.3% MVET, because of bond requirements, continued to use the older schedule. This levy expires in 2028.

In ST3, voters approved an additional 0.8% MVET. The enabling legislation specified that it should use the familiar older schedule until 2028, then snap to the more accurate 2006 schedule in 2029. At the time, few noticed how this works, but it became suddenly controversial in 2017 when owners of newer cars received their much higher car tab bills. Some felt overcharged because the effect of the higher rates was compounded by a schedule that “overvalued” their cars.

For car owners, the bill would credit car owners for the difference in valuations for the ST3 MVET. Effectively, they’d pay on whichever schedule shows the lower value. Owners of cars less than ten years old will see bills reduced, and owners of older vehicles are not affected. The bill includes refunds for past payments before September 2018.

The credits reduce Sound Transit revenues by $780 million through 2028. Offsetting this are up to $518 million in reduced payments to the Puget Sound Taxpayer Accountability Account. As the revenue reduction increases Sound Transit debt, there are additional debt servicing costs which could increase the total impact up to $2.3 billion by 2041 if not mitigated. However, reducing the revenue hit by 65% will proportionately reduce the associated debt servicing hit.

Continue reading “Senate approves SB 5955 MVET bill”

At recently as 2012, Sound Transit had less than one billion dollars of debt. That increased to $4.6 billion by the end of 2017. The ST3 program will push it much higher, peaking at a projected $17.6 billion in 2035. That path puts Sound Transit close to legal limits as major ST3 projects are delivered. After 2035, as most major projects are completed, the outstanding debt could be reduced.

Sound Transit’s ability to take on more debt is constrained both by statute and by policy. Most immediately relevant is a statutory limit of non-voted debt at 1.5% of the assessed value of property within the RTA. This is the same limit all Washington State municipalities face. With 60% voter approval, the statutory limit would increase to 5%, though other policies and bond covenants would prevent the debt ever getting that high. The cushion between actual and allowed debt is most narrow in 2035, when the $17.6 billion in outstanding debt nudges against the $20.1 billion limit.

All financial projections over such an extended period are uncertain, combining assumptions about revenue growth, federal grants, project costs, and interest rates many years into the future. The legal debt limit may be lower than anticipated if the growth of assessed property values slows. Some risks correlate in unhelpful ways. Prolonged slower growth would mean lower tax revenues and less ability to borrow to fill the gap.

The long-term debt plan is very sensitive to small changes in the financial plan in the early years. Consider the bills to correct MVET valuations. The tax revenue loss from updating the valuation schedule is just $780 million between 2017 and 2028 if there is no other mitigation from the Legislature. The implications for Sound Transit debt are larger. Absent offsetting cost reductions, the lost revenues must be replaced by debt. The average interest rate is anticipated at 4% through 2021 (reflecting low recent bond rates), and 5.3% thereafter (a more typical pre-recession cost of debt). Sound Transit pays a 1% origination fee on bonds and typically begins repaying principal after five years. The principal and interest payments are themselves funded with more borrowing. At those rates, the MVET reduction accumulates to $1.6 billion in outstanding bonds by 2035, or $2.2 billion by 2041. That appears to just fit within future debt limits, but the margin of error is much too narrow for comfort in a decades-long financial forecast.

Could Sound Transit borrow to replace a loss of federal funding? Lynnwood Link and Federal Way Link alone were anticipated to receive $1.67 billion of federal grants, with several billions more in future New Starts loans on other projects. There is some short-term flexibility in the plan, as Sound Transit is still far from its maximum debt capacity. But extend out the cost of replacing those grants with accumulated interest, and the debt impact roughly doubles by 2035. More debt in the 2020s means exceeding debt limits in the 2030s. A significant shortfall in federal funding would almost surely mean delays or scope reductions somewhere in the capital program. Continue reading “Sound Transit’s debt limit”

Here’s the idea in a nutshell. Revise the valuation schedule for the MVET, per HB 2201, so that the ST3 MVET (0.8%) is levied on the more accurate 2006 schedule. Pay for it by extending the Sound Move MVET (0.3%) that is otherwise scheduled to expire in 2028. The extended 0.3% MVET can use the 2006 vehicle schedule too, and can be set to expire once the funding gap is made whole. Sound Transit’s ability to deliver voter-approved projects on time will not be impaired. Car owners will see an immediate tax cut, offset only by a delay in the expiration of the Sound Move MVET after 2028.

Let’s recall some MVET history and ST3 financing. Continue reading “How to pay for fixing the MVET”

Last year, the population of King County grew 48,600, or 2.3%. The housing stock grew 14,700, or 1.6%. The gap, 0.7%, is a rough measure of our failure to create enough housing.

This is the sixth straight year when population growth exceeded housing creation in King County. Snohomish and Pierce appeared more balanced until 2014, but now face heightened housing pressures as displacement of King County workers from expensive local housing markets grows.

The gap between population and housing growth is an increase in household size. Over this decade, 11.5% more King County residents have squeezed into 8.3% more housing units. That might not seem so large, but it’s about 27,000 missing homes. Those on the margins of the housing market live with parents longer or take on more roommates. Some are homeless. The housing shortage also manifests in rationing via higher rents and rising home prices.

The other safety valve to the housing shortage has been the displacement of King County families to neighboring counties, and particularly to the South Snohomish suburbs. The role of Pierce and Snohomish Counties in the regional housing market goes beyond more housing units. Specifically, they provide much of the new single-family housing growth in the region. Seattle is 21% of the region’s housing stock, but just 2% of added single family housing since 2010 is in Seattle. Distant developments on the edges of the urban growth area have helped to fill a second housing gap, a deficit of housing for families in King County. But in recent years both Pierce and Snohomish are increasingly unable to keep up with demand. Continue reading “The regional housing gap”

Last Thursday, Sound Transit and the City of Redmond held an open house to share the latest designs for the two stations on the Redmond Link extension, planned to open for service in 2024. Following a Sound Transit Board decision in June to ratify alignment recommendations from the City of Redmond, the agency has moved quickly advancing design on stations in Downtown Redmond and Southeast Redmond.

The Downtown Redmond station is a simple elevated design between Cleveland St and NE 76th St. Elevating the station eliminated conflicts with pedestrians and vehicles crossing the line. The Redmond Central Connector trail is diverted very slightly to the north. There will be space for bus access and layover on both sides of the station area. The station platform is centered above 166th Ave NE, with entrances at either end.

East of downtown Redmond, the alignment quickly comes to grade before passing underneath SR 520 where the off-ramps to Redmond Way will be rebuilt. It then turns sharply to the southwest where a second station will be built in the Marymoor area. That larger station is close to the southern perimeter of SR 520. The city this year adopted a package of zoning amendments intended to remake the Marymoor Subarea as a denser mixed use neighborhood. With downtown increasingly built out, Marymoor is likely to become an important growth area for Redmond. Continue reading “Redmond’s station designs”

Concise explainer of what parking minimums do, via City of Ottawa.

Since the 1990s, Regional Growth Centers (RGCs) have played a central role in the growth strategy of the Puget Sound region. There are now 29, along with nine manufacturing/industrial centers (MICs) and other local or county- designated centers. Centers are a mechanism to focus growth and prioritize transportation investments. But the performance of centers is varied. Some, including the six centers in Seattle and downtown Bellevue, have far outperformed others where growth is anemic or non-existent.

This has prompted a revisiting of the regional center system that recognizes variations between centers.  The Puget Sound Regional Council (PSRC) has released a draft proposal for comment (through November 8). It envisions a two-tier system of ‘urban’ and ‘metro’ centers. Metro centers must meet more stringent criteria. They should have existing density of 30 activity units (population+employment) per acre, vs. 18 for urban centers. Planned targets are also higher at 85 activity units vs 45 for the urban centers. Transit service at metro centers should generally be light rail or equivalent BRT, whereas frequent bus service may suffice for an urban center. That threshold would designate ten metro centers in King County, and one each in Pierce, Snohomish and Kitsap Counties.

Beyond the regional growth centers, there are new criteria for manufacturing and industrial centers (MICs) which will also see a two-tier classification. The MICs process creates a new path for designating MICs, not only recognizing the largest centers, but also preserving industrial land from encroachment. There is a more consistent process for countywide centers, where King County currently has stricter standards than other counties. There is recognition of military installations. Military bases operate outside regional plans, but several are large enough to have important transportation impacts.

Updating standards for centers across four counties is politically fraught because every city is closely watching the prospects for their local centers. The King County centers (81% of center employment, 78% of center population) are far ahead of their suburban counterparts. The PSRC disburses $250 million in transportation investments annually, and the suburban counties wouldn’t stand for such a lopsided share of funding.

To avoid disruption to underperforming centers, several compromises have been made to delay impacts. The preliminary framework does not recommend revisions to the funding priority for different types of regional centers at this time. Neither is there any imminent prospect of de-designating existing centers. The first evaluation of existing centers will take place in 2018-2020 as part of the VISION 2040 update. Centers have until 2025 to achieve consistency with new standards, and the PSRC board has flexibility in evaluating existing centers after 2025 if they are close to meeting the criteria. Continue reading “Reforming the regional growth centers”

Last evening, the Chair of the Seattle Council Budget Committee, CM Lisa Herbold, released her initial package of budget changes. This is a set of proposed amendments to the budget the Mayor proposed last month. The initial package reflects updated revenue assumptions and council member requests.

For transit advocates, the most notable elements are (a) the absence of any request to cut Center City Connector funding; (b) the statement of intent to consider speed and reliability improvements in South Lake Union and First Hill;  and (c) several pedestrian improvements. Without an amendment to reduce streetcar funding, that part of the mayor’s proposed budget moves forward.

Budget pressures were eased somewhat by $2 million in extra general fund revenues identified in the revenue update, mostly due to increased construction activity. There were also $2 million in other savings identified by staff across city operations. Those updates eased any pressure to seek new savings in the budget.

Continue reading “Seattle Council proposes budget without further threats to CCC streetcar”