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December 30, 2007
David Warsh, Proprietor


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The Shape of the Cities

To gain a little perspective on the housing bubble, compare it in your mind’s eye with the great slow-motion changes in real estate values that have taken place over the last century and a half in response to the advent of the railroad and the automobile. John Stilgoe, of Harvard University, has pondered the implications of these developments for the landscape as well as anyone.

In Metropolitan Corridor: Railroads and the American Scene, published in 1983, he described the triumph of railroads in the years after 1880, when they re-arranged the American landscape, creating suburbs, transforming manufacturing districts, robbing small towns of their vitality and linking formerly distinct cities in a series of metropolitan corridors, usually powered by electricity.

Then, just as rapidly, the golden age of railroads was over, with the advent of Henry Ford’s famous Model A. Something like a third of all rail passengers defected to automobiles during the 1920s alone. Traffic declined another forty percent during the first four years of the Great Depression, and never again approached its former peaks, despite massive population growth.

New York and New England became laboratories for the automobile, “the testing place of a sprawling, irregular pattern of real estate development, the automobile exurb.” No one who carefully read Stilgoe would have been surprised by the spectacular growth of Wal-Mart in the 1980s and ’90s – a canny Arkansas businessman taking advantage of the Interstate highway system, cheap oil, globalization, modern finance and the computer in order to create business districts where there had been farms.

Now Stilgoe is back with Train Time: Railroads and the Imminent Reshaping of the United States Landscape. “An economic and cultural tsunami is about to transform the United States,” he writes; the question, he says, is not if? but when? “Return [of the train] will alter everyday life more dramatically than the arrival of personal computers, internet connections, or cell phones….” Half-forgotten cities that lie along the nation’s obscure operating railroad routes – Lynchburg, Virginia, for example – will be transformed, he says. So will be regions that lie far from any presently-functioning track – national parks, ski facilities, Lake Tahoe, Moosehead Lake.

What will drive the change? Rising fuel costs and intractable highway congestion, Stilgoe says. He barely mentions global warming – that goes beyond the scope of the “scenario analysis” he favors, at least for now, but of course if it begins to take on the atmosphere of crisis it will be the single biggest factor in accelerating the changes that he expects. Railroad locomotives account for just one percent of national oil consumption. Electrification permits faster acceleration and braking, and so enables more trains to operate in a given space; electric locomotives pull more, require less maintenance and pollute very little. The demand for fast and clean electric trains will increase the attractiveness of nuclear power.

Who’s making the change? Corporate managers, savvy long-term investors, real estate developers, and speculators – the same people who, for the middle fifty years of the twentieth century, were committed to a model focused on the automobile. In the last twenty years, these same players have begun to swing round to railroads. The freight and bulk materials portion of the return is already well underway: classification yards and intermodal transport facilities have sprung up in low-tax, out-of-the-way locations all around the country; containerization ports well away from center cities connect directly to transcontinental rail lines: that’s why Warren Buffett owns a big share of Burlington Northern Santa Fe. It isn’t necessary that there be a grand unified plan that the next stage should unfold. Stilgoe is a believer in mechanisms of “implicit conspiracy.” “Without active effort, often without knowing each other, individuals – and corporations – may allow something massive to happen because a small part of it benefits them.”

What’s his evidence? Stilgoe scans the trade magazines – not just Railway Age, but Modern Materials Handling and Commercial Real Estate Investment. He reads books such as Main Lines: Rebirth of the North American Railroads, 1970-2000, by Richard Saunders. He practices what he preaches and gets out plenty to look around. But the evidence he finds most compelling are the questions that his former students get in touch to ask. He is a little short on numbers here, but you get the idea when one alumnus inquires whether, if the trains ran on time, passengers would phone ahead to order take-out: “Bit by bit the questions reveal where so much of the now-hidden late-1990s dot-com-boom money went. It went to wait for the train.”

What will the world look like, after the return to rails? Autos and airliners distribute population, writes Stilgoe; railroads concentrate it. “Assume the train as a given, and suddenly many small satellite cities, often with very low real estate values, become attractive to real estate investors.” Old roadbeds will be upgraded, rights-of-way previously converted to nature trails will be reclaimed and converted to high-speed passenger service. (Think not? A prime early example is Massachusetts’ new Greeenbush line along the shore towns south of Boston.)

My favorite bellwether among those that Stilgoe mentions is the one closest to home — the Grand Trunk Line spur in Cambridge, Massachusetts. Today this single track is nearly invisible as it snakes out of Somerville’s Boynton Yards, across busy Cambridge Street, through the campus of the Massachusetts Institute of Technology, over the Charles River alongside the Boston University bridge, bypassing the Boston’s North and South stations in the process, arriving finally on the doorstep of the 200-acre parcel where Harvard University plans to build its new science park.

Anybody for the under-priced northern suburbs in Boston? Already MIT has arranged the buildings it has constructed above the Grand Trunk siding to allow a double track to be installed – the fundamental improvement required to allow for passenger travel. Such “architectural evidence of assumed future change” is everywhere to be found among the railroads, says Stilgoe, and I, for one, believe him.

“However difficult it is to imagine a grass-grown railroad track becoming a high-speed, heavily-trafficked route, it is still more difficult to imagine grass growing through the pavement of interstate highways,” he writes. What about the vast changes in relative real estate prices – urban, railroad suburban and beltway — that would follow in the wake of such a technological turnabout? A reversal of fortune of this magnitude, unfolding over several decades, dwarfing the dislocations of the housing bubble, is much easier to contemplate if you have read Stilgoe’s book.

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