Friday, March 2, 2012

Railroaded

I don't have a tumblr. I guess I feel about it like the way I did iPads before I bought one of those. I've got a laptop, an iphone, why do I need the middle ground? Except, the ipad does have its specific functions that it's good at, outperforming either computer or smart phone, which I'm not entirely sure Tumblr does as the middle ground between longer form blogs and short staccato soundbites and rebuttals of twitter.

Anyway, I was up early this morning (unintentionally) and decided to do some reading. The first of which is a report from NYU on the rise of the super commuter, people who work at least 1 or 2 days per week in a different metropolitan area than where they live. Dallas ties Houston for greatest percentage of their workforce commuting in from elsewhere (13%) and is part of 3 of the top 4 connections between cities shifting labor around: Austin to Dallas, Dallas to Houston, and Houston to Dallas. Each of those linkages approaches the total number of people from all metros other than NYC that work in NYC, which is pretty astounding.

All of this got me thinking about High Speed Rail. So I wanted to do some quick calculations to determine where the break is between HSR's advantage over air travel in terms of time saved. The key factor is that for regional trips such as Houston, DFW, Austin travel, majority of the time isn't actually spent between the two but on the way to/fro and at the airports. A flight from Dallas to Austin may only take about an hour but you're spending that much time driving to the airport, standing in security lines, waiting to board, taxiing on the tarmac, etc. Then when you land, you have to deplane, walk seemingly 25 miles through terminals before grabbing a cab or rental car and you're still in the middle of nowhere, miles from the office/hotel destination.

On the flipside, I was in Spain last year riding around on their new AVE high speed rail system, shuttling between Barcelona, Madrid, and Valencia at speeds over 200 mph. It was pretty awesome. Not gonna lie. Not only was it fast and convenient heading from city center to city center, within walking distance of our hotel (or at least metro stop), but it was also measurably more comfortable than plane travel. And by measurably, I'm six foot one and could stretch my legs unlike every coach cabin in the skies.

The first quick calculation I did was comparing a trip to Austin by car, plane, and hypothetical high speed train. I'll be making certain assumptions for vehicle efficiency, etc:

Austin-Dallas round trip:
Distance: 200 miles

By car:
Time one-way - 3 to 3 1/2 hours
Cost: $80
Comfort/Stress level (subjective): low. I hate driving.

By plane:
Time one-way - 1 hour (excluding airport time) 3 hours (including airport time)
Cost: $100
Comfort/Stress level (subjective): low. Planes are cramped. Airports are pretty dreadful. Standing in security lines makes me want to scratch myself until I bleed.

By HSR train:
Time one-way: 1 hr
Cost: This is where it gets a bit tricky. The line doesn't yet exist so who knows what it might be priced at. But the similar distance Valencia-Madrid line runs about $100 each way. So we'll call this $200
Comfort/Stress level (subjective): high. Lap of luxury baby. Sip an espresso on your way to a morning meeting in Austin while reading the newspaper, browsing saved instapaper articles on your ipad with wifi hookup, etc.

It's certainly the priciest of the three, but it's basically first class travel compared to the other options. The other major issue is that a HSR rail station will have a huge benefit on real estate demand in whatever area it is placed. That is, if it isn't placed in the middle of DFW. Unlike regional road and air travel, if existing rail lines/row's can be used the negative impacts of HSR on land values are negligible.

Furthermore, I've found that we (DFW real estate industry) has drastically overvalued potential TOD land. Yes, there is a premium for it. But on much of it the ridership numbers are low and other than the actual station area the rail tracks have a negative impact on overall interconnectivity. Therefore it diminishes potential spatial integration (compare Mockingbird Station versus everything happening up on Yale blvd) and that means reduced land value. "Opposite side of the tracks" had to come from somewhere.

However, given that over 200,000 people are commuting in and out for work between Dallas, Houston, and Austin each week the market capture is potentially MASSIVE. Both in regards to ridership of the hypothetical rail line as well as for the real estate in the area. Again, unless we put it out in the middle of nowhere without taking advantage of potential synergies and existing infrastructure.

Let's say the rail network is able to capture about a one-third of those super commuters weekly trips. Let's say 70,000. The remaining thirds stick to the roads and air. And since they're going both ways that means 140,000 trips. And that's only for business travel. What if we bump that up to 200,000 if we include vacation/personal travel.* And let's say that occurs for 50 weeks out of the year. At $200 per round trip ticket, that comes out to $2 billion in fares per year.

*Side note: Imagine being able to travel down to Austin and catch an 8pm UT basketball game mid-week, leaving at 6 pm and getting back before midnight. At least having that option sounds pretty awesome to me.

Next calculation:

I wanted to figure out where the 'sweet spot' is for High Speed Rail. That is, if we factor in 90 minutes for airport time, at what point does flying start to become quicker than trains? I should add that 90 minutes is rather conservative. And between the more common flight delays (trains are less affected by weather), this number very well could be 120 minutes extra.

I ended up calculating that a 500-mile trip between Dallas and St. Louis (not that any of us would ever want to go there) would take about 3h 20m on HSR. That same flight takes 1hr 35m, but with "airport time" the overall trip is more like 3h 05m. Or, nearly the same. If we add that extra 30m contingency factor for flight delays, it puts 500 miles right around the nexus where plane travel and HSR are competitive in terms of time. Of course, it is still infinitely more comfortable and if time is equal, I'm choosing HSR even at double the cost.

The HSR line between Beijing and Tianjin covers 100 miles in a 30-minute ride. With that, I'd say HSR makes a lot of sense between 100 and 600 miles with the sweet spot being 200-400 or so. Anything less than 100, the trains really only spend about a minute at full "cruising" speed. The rest of the time they're accelerating or decelerating (imperceptibly). And given the infrastructural/upfront costs, what's the point of HSR if you're not spending more time at ludicrous, I mean cruising speed.