Why California should see its high-speed rail project through

Broken ground. Image: Getty.

In California, there is now a serious proposal afloat to divert dedicated high-speed rail money from the construction effort predominantly taking place in the San Joaquin Valley, located in the state’s centre. It would go instead to what are known as “bookends” projects in the San Francisco Bay Area along the peninsula between San Francisco and San Jose (if not beyond) on Caltrain, and on Metrolink in the southern part of the state between Anaheim and Burbank. Caltrain and Metrolink are heavy rail, commuter-train operations.

If this proposal gains traction and funds are actually diverted – billions, I hear – the commuter-rail services in question will reap substantial improvement benefits. But what the state’s mid-section will be left with, I suspect is a 119-mile-long rail corridor connecting small rural villages (Madera and Shafter in this case) with the one large city in between (Fresno), and one built to high-speed rail standards but bereft of high-speed-rail trains. In lieu of actual and true high-speed rail, America’s national passenger rail service provider, Amtrak, is the entity most likely to use this section of track. And the trains will most probably be diesel-powered to boot.

Should this become the reality, I believe California high-speed rail can forever be kissed goodbye. The motivation and urgency for seeing the entire project through will, in all likelihood, fall by the wayside.

There are myriad reasons why mid-state bullet train construction should continue.

Firstly, Golden State voters apparently thought what was coming down the pike was a network of high-speed tracks linking Los Angeles/Anaheim and San Francisco (520 mile Phase 1), with separate extensions to San Diego and Sacramento (280 mile Phase 2) to follow, covering a distance of 800 miles in all. It is a grand plan to say the least.

No secret, meanwhile, is that the high-speed-rail program has faced staunch opposition. It’s been hamstrung by mismanagement and cost overruns. It’s been litigated against. All these factors are partly responsible for construction delays; all have slowed building progress.

California high-speed rail building in the Valley commenced 16 June 2015 on the Fresno River viaduct in Madera County; the formal ground-breaking took place on 6 January 2015 in Fresno. In the latest plan, high-speed rail is being constructed between Madera and Shafter, covering a distance of 119 miles, with the expectation that ultimately 171 miles of track in Bakersfield (in the south Valley) and Merced (in the north Valley) will be completed. The intent here is to provide electrified high-speed train service to those city-pairs no later than 2028.

The proposal in question seeks to redirect between $5bn and $6bn to the bookends sections, leaving a total $20.4bn, of which $14.4bn to $15.4bn will be expressly for high-speed rail construction work in the valley. Arguably, constituents should be provided with what initially they thought they would be getting. At this late date, to do – or settle for – anything less than the full allocation just isn’t right.

Moreover, with Bakersfield-to-Merced a key part of the initial California bullet-train operating segment – a so-called high-speed rail “starter” line if you like – will come five key stations: Bakersfield, Kings/Tulare, Fresno, Madera and Merced. The last of these could serve University of California students, faculty and staff there well.

These new stations provide an incredible opportunity for location-efficient, medium- to high-density, mixed-use, transit-oriented development to sprout, providing tremendous potential for increased bullet-train ridership. This will in no way be a “train to nowhere” as some have suggested.

Case in point: at Merced, there are plans for a new multimodal “union” station, served not only by high-speed trains but Altamont Corridor Express trains too. High-speed train riders and others will be provided with the means to travel to San Francisco Bay Area destinations, most notably San Jose, via the ACE connection.

For the uninitiated, via bullet-train construction work, dollars by the billions have been injected into the state economy.

And, let’s not forget the quality of San Joaquin Valley air. The region, year after year, sees some of the worst air pollution in the country. The Valley has consistently topped the American Lung Association’s most air-polluted list. In response, not only is the project being built using the most environmentally-friendly equipment and methods going, but electric trains running on nothing but renewable energy – solar and wind power, for example – will do much to reduce fine particulate matter and ozone and other pollutant emissions in air further, as well as to contribute to the state meeting its greenhouse gas emissions-reduction goals. Where else do you find that?

With increased numbers of train riders, drivers on paralleling motorways will feel the impact – there will be less motor vehicle traffic. To some degree there will be less need to build additional runways and gates at airports in state, even as its population grows an estimated 25 per cent from 40 million today to an estimated 50 million by mid-century.

Once in full swing, the train will be a momentum generator for driving further bullet-train development along with patronage numbers both in the north and south state – make no mistake.

There is that now-popular expression coming immediately to mind: “Build it and they will come.”

Alan Kandel is the author of the ebook, “The Departure Track: Railways of Tomorrow”. You can buy a copy here.

 
 
 
 

A new wave of remote workers could bring lasting change to pricey rental markets

There’s a wide world of speculation about the long-lasting changes to real estate caused by the coronavirus. (Valery Hache/AFP via Getty Images)

When the coronavirus spread around the world this spring, government-issued stay-at-home orders essentially forced a global social experiment on remote work.

Perhaps not surprisingly, people who are able to work from home generally like doing so. A recent survey from iOmetrics and Global Workplace Analytics on the work-from-home experience found that 68% of the 2,865 responses said they were “very successful working from home”, 76% want to continue working from home at least one day a week, and 16% don’t want to return to the office at all.

It’s not just employees who’ve gained this appreciation for remote work – several companies are acknowledging benefits from it as well. On 11 June, the workplace chat company Slack joined the growing number of companies that will allow employees to work from home even after the pandemic. “Most employees will have the option to work remotely on a permanent basis if they choose,” Slack said in a public statement, “and we will begin to increasingly hire employees who are permanently remote.”

This type of declaration has been echoing through workspaces since Twitter made its announcement on 12 May, particularly in the tech sector. Since then, companies including Coinbase, Square, Shopify, and Upwork have taken the same steps.


Remote work is much more accessible to white and higher-wage workers in tech, finance, and business services sectors, according to the Economic Policy Institute, and the concentration of these jobs in some major cities has contributed to ballooning housing costs in those markets. Much of the workforce that can work remotely is also more able to afford moving than those on lower incomes working in the hospitality or retail sectors. If they choose not to report back to HQ in San Francisco or New York City, for example, that could potentially have an effect on the white-hot rental and real estate markets in those and other cities.

Data from Zumper, an online apartment rental platform, suggests that some of the priciest rental markets in the US have already started to soften. In June, rent prices for San Francisco’s one- and two-bedroom apartments dropped more than 9% compared to one year before, according to the company’s monthly rent report. The figures were similar in nearby Silicon Valley hotspots of San Jose, Mountain View, Palo Alto.

Six of the 10 highest-rent cities in the US posted year-over-year declines, including New York City, Los Angeles, and Seattle. At the same time, rents increased in some cheaper cities that aren’t far from expensive ones: “In our top markets, while Boston and San Francisco rents were on the decline, Providence and Sacramento prices were both up around 5% last month,” Zumper reports.

In San Francisco, some property owners have begun offering a month or more of free rent to attract new tenants, KQED reports, and an April survey from the San Francisco Apartment Association showed 16% of rental housing providers had residents break a lease or unexpectedly give a 30-day notice to vacate.

It’s still too early to say how much of this movement can be attributed to remote work, layoffs or pay cuts, but some who see this time as an opportunity to move are taking it.

Jay Streets, who owns a two-unit house in San Francisco, says he recently had tenants give notice and move to Kentucky this spring.

“He worked for Google, she worked for another tech company,” Streets says. “When Covid happened, they were on vacation in Palm Springs and they didn’t come back.”

The couple kept the lease on their $4,500 two-bedroom apartment until Google announced its employees would be working from home for the rest of the year, at which point they officially moved out. “They couldn’t justify paying rent on an apartment they didn’t need,” Streets says.

When he re-listed the apartment in May for the same price, the requests poured in. “Overwhelmingly, everyone that came to look at it were all in the situation where they were now working from home,” he says. “They were all in one-bedrooms and they all wanted an extra bedroom because they were all working from home.”

In early June, Yessika Patapoff and her husband moved from San Francisco’s Lower Haight neighbourhood to Tiburon, a charming town north of the city. Patapoff is an attorney who’s been unemployed since before Covid-19 hit, and her husband is working from home. She says her husband’s employer has been flexible about working from home, but it is not currently a permanent situation. While they’re paying a similar price for housing, they now have more space, and no plans to move back.

“My husband and I were already growing tired of the city before Covid,” Patapoff says.

Similar stories emerged in the UK, where real estate markets almost completely stopped for 50 days during lockdown, causing a rush of demand when it reopened. “Enquiry activity has been extraordinary,” Damian Gray, head of Knight Frank’s Oxford office told World Property Journal. “I've never been contacted by so many people that want to live outside London."

Several estate agencies in London have reported a rush for properties since the market opened back up, particularly for more spacious properties with outdoor space. However, Mansion Global noted this is likely due to pent up demand from 50 days of almost complete real estate shutdown, so it’s hard to tell whether that trend will continue.

There’s a wide world of speculation about the long-lasting changes to real estate caused by the coronavirus, but many industry experts say there will indeed be change.

In May, The New York Times reported that three of New York City’s largest commercial tenants — Barclays, JP Morgan Chase and Morgan Stanley — have hinted that many of their employees likely won’t be returning to the office at the level they were pre-Covid.

Until workers are able to safely return to offices, it’s impossible to tell exactly how much office space will stay vacant post-pandemic. On one hand, businesses could require more space to account for physical distancing; on the other hand, they could embrace remote working permanently, or find some middle ground that brings fewer people into the office on a daily basis.

“It’s tough to say anything to the office market because most people are not back working in their office yet,” says Robert Knakal, chairman of JLL Capital Markets. “There will be changes in the office market and there will likely be changes in the residential market as well in terms of how buildings are maintained, constructed, [and] designed.”

Those who do return to the office may find a reversal of recent design trends that favoured open, airy layouts with desks clustered tightly together. “The space per employee likely to go up would counterbalance the folks who are no longer coming into the office,” Knakal says.

There has been some discussion of using newly vacant office space for residential needs, and while that’s appealing to housing advocates in cities that sorely need more housing, Bill Rudin, CEO of Rudin Management Company, recently told Spectrum News that the conversion process may be too difficult to be practical.

"I don’t know the amount of buildings out there that could be adapted," he said. "It’s very complicated and expensive.

While there’s been tumult in San Francisco’s rental scene, housing developers appear to still be moving forward with their plans, says Dan Sider, director of executive programs at the SF Planning Department.

“Despite the doom and gloom that we all read about daily, our office continues to see interest from the development community – particularly larger, more established developers – in both moving ahead with existing applications and in submitting new applications for large projects,” he says.

How demand for those projects might change and what it might do to improve affordable housing is still unknown, though “demand will recover,” Sider predicts.

Johanna Flashman is a freelance writer based in Oakland, California.