The Future of Infrastructure in Los Angeles


On November 3, 2015, major key players of the Los Angeles infrastructure came together for the second “State of L.A. Infrastructure” meeting, hosted by Los Angeles Area Chamber of Commerce, Los Angeles Times and Siemens. Los Angeles Airport, L.A. Port, Department of Water and Power, Edison International, the Mayor of Los Angeles, Eric Garcetti, among others, discussed the future of the Los Angeles region.

Aging water infrastructure, water shortage, reliance on imported water, poor air quality, traffic congestion, deteriorated roads, increasing energy demand, outdated electric distribution systems, are just a few of the major challenges Los Angeles region has been facing.

A Blueprint for 21st Century Los Angeles Infrastructure 


To address these challenges, the L.A. Area Chamber in partnership with Siemens – a global infrastructure provider – developed a report “A Blueprint for 21st Century Los Angeles Infrastructure” that evaluates L.A.’s infrastructure, compares it with other megacities worldwide and makes recommendations. “What we wanted to do is to think about some ideas not just for Los Angeles but for the greater area, what I call a collection of villages,” said Martin Powell, Head of Urban Development, Global Cities Centre of Competence, Siemens.

Some key observations of the report are: Los Angeles ranks third out of four U.S. major cities for public transport use. Only 20% use public transport while 74% rely on private transport. Residents of L.A. consume less electricity per person than in the other U.S. cities and wealthier global cities. Electricity in L.A. is some of the greenest in the world. Air quality in L.A. is the worst amongst U.S. cities, but better than in international megacities.

state of la infrastructure blueprint

“One of the challenges we face is, infrastructure construction sometimes takes a back seat when governments are putting together budgets for wages, betterments, and day-to-day services, but there has to be a focus on building for the future,” said Gary Toebben, President & CEO, L.A. Area Chamber.

While Los Angeles has made great progress in improving poor air quality and reducing traffic congestion it is still far away from being acceptable. Public transportation infrastructure is very limited. The infrastructure issues haven’t been addressed quickly enough. To expedite the progress policymakers need to make quicker decisions. “We need to think about how we connect businesses with policy makers in a meaningful way. I call it advocacy. How do you influence policymakers to make decisions?” Powell said.

Aligning different government departments, different jurisdictions, and different communities is extremely difficult and takes a long time. When you develop a long-term infrastructure plan in collaboration with different jurisdictions and consult businesses, such a plan will force jurisdictions and stakeholders to start aligning priorities.

In Los Angeles, long-term comprehensive infrastructure plans exist, although, they are not combined in one single unified plan. Earlier this year, L.A. Mayor Eric Garcetti released the first-ever comprehensive Sustainable City pLAn. The sustainability plan is made up of short term (by 2017) and longer term (by 2025 and 2035) goals in 14 categories that will improve the environment, economy, and equity.

Every two years, the Los Angeles Department of Water and Power (LADWP) updates its Integrated Resource Plans (IRP), which identifies actions that are central to the continued reliability of the electric and water system.

L.A. County’s Metropolitan Transportation Authority (Metro) released in 2009 its Long Range Transpiration Plan (LRTP), which takes a look ahead over a 30-year time frame. The LRTP serves as a blueprint for how Metro will spend anticipated revenues to operate and maintain a current and planned system.

Numerous other key players in infrastructure management and development in Los Angeles prepare plans separately. All these well-intended plans create a silo effect that prevents an overall effectiveness and efficiency in the region.

London is one of the first cities to develop a comprehensive and cross-sector infrastructure plan. The region brought 50 different jurisdictions together and at least as many other stakeholders around the city to align interests in a single unified plan, “London 2050”. “It’s not easy. It never is, but a city like L.A. could do this,” noted Powell.

Los Angeles is known for being a car-centric city. The level of public transportation in Los Angeles is very low. Nevertheless, there is probably the most ambitious program in the entire nation to build out public transit. It is going to be a challenge to get people to give up their beloved cars and use public transportation.

To get people to use public transportation you have to make it attractive, affordable, easily accessible, and clean. It needs to connect the places that people want to go. If you travel from one office to another across town, that needs to be a reasonably convenient connection.

Anytime you ask Angelenos what they can’t stand about Los Angeles, traffic congestion always comes first. “In Los Angels people spend more time stuck in traffic than anywhere else in the world, 64 hours a year, which is a lot,” said Powell.

Giving Angelenos transportation options not only helps reduce traffic congestion but also increases productivity. Siemens frequently talks about wasted productivity. The amount of time wasted by commuters is enormous. Martin Powell explained, “In London there are 23 million trips done per day. If you can improve everyone’s traveling time by 10 minutes, that’s a lot of 10 minutes saved for the economy.” Increasing productivity by decreasing traveling time has a huge impact, not only on people but also on goods movement.

Another area of infrastructure that, nowadays, is as essential as the air we breathe, is telecommunication. It is the glue that holds all infrastructure elements together.

The megacity Seoul, Korea, recognized the importance of the high-speed internet as a tool to provide better services for the citizens and has been investing heavily in the deployment of Internet throughout the city. Subways, buses, parks — there is everywhere high-speed internet. With smartphones in their hands, citizens on buses and subways can make purchases, answer emails, or study for an exam.

The combination of an extensive public transportation network, technology and wide-ranging accessibility of high-speed Internet has a tremendous impact on the economy. In Los Angeles as most people drive their cars door-to-door this economic benefit is lost.

While there is an ambitious plan to expand public transportation in L.A., it will take a long time and effort to get most citizens to use public transit. In the meantime, as a short-term solution, L.A. could work on relieving traffic congestion and increase the quality of life and productivity by shortening citizens’ time biting into a steering wheel.

There is a window of opportunity to use technologies to make traffic flow better and make people’s commute more convenient.

In November 2012, Los Angeles introduced congestion pricing on the I-110 and in 2013 on the I-10. This strategy has raised equity concerns among both public and officials. Supporters suggest that those who contribute most to congestion will be required to pay more. On the other hand, critics argue that congestion pricing will harm low-income commuters who are forced to pay additional cost or are priced off the roads. Martin Powell added that implementing congestions pricing is not a very efficient strategy in a city like Los Angeles where people drive all over the city versus in and out of a busy city center as they do in London.

In Europe, public transportation is incentivized, while driving a car is highly discouraged. In Germany federal gas taxes, sales taxes, and regulations make car ownership and use very expensive. There are requirements for less polluting cars combined with restrictions on car use in the urban environment.

It’s hard to imagine that elected officials in the U.S. are going to introduce such strategies anytime soon, especially not in car-centric cities, “You can’t do that here in Los Angeles, or your career as a politician is over,” said Powell. “Things have to be done incrementally.”

los angeles infrastructure metro

When it comes to infrastructure, it is sometimes difficult to calculate the benefits, but it’s easy to identify the cost. Opposers of investment in public transportation argue that it takes too long to recover the cost. Often, policy makers use “clever politics” to underplay how much a project will cost to get it through and then reveal the true cost.

“Even projects that come out at much higher, in terms of capital cost, will ultimately pay back. Economically, the benefit to the place is always going to recover that money,” said Powell. “75% of the cost of these infrastructure projects is recovered through improved competitiveness, better connectivity, and economic improvement. It just adds to the economic revenue for the area. So, to make the case of any real infrastructure projects to work, you only have to fund 25% of the cost through revenues. This way of calculating investment in infrastructure would attract much more investment.”

Stakeholders need to look at core benefits that infrastructure projects bring, and not focus solely on the cost. If you factor in external benefits, like reduction of energy consumption, water use, waste, air pollution, time wasted on roads, these benefits can quickly outweigh the burden of cost.

What would be the long-term benefits of reduced cost of health care, if you improve the air quality? Los Angeles is known for clean energy and very progressive environmental policies and standards, so why not focus intensively on building out electric vehicle infrastructure and be known for the city that drives the electric vehicle generation.

When investing in a city, companies weigh in the cost of doing business — time needed from submitting a proposal to an approval, and delays between start and completion of a project.

In the infrastructure blueprint, L.A. Area Chamber recommends, among other recommendations, to modernize the permitting process, simplify environmental standards and provide diverse mechanisms for funding and financing of infrastructure. This will enable more investment come to Los Angeles region and help complete more projects.

The Private Sector wants to work with the Public Sector to understand infrastructure priorities and collaborate on implementation strategies, including co-funding and financing projects. This type of collaboration will require a clear, cross-sector infrastructure delivery plan for the entire L.A. region. It will result in Los Angeles remaining a competitive city market on the worldwide stage.

There is still lots of work to do and many compromises to make. L.A. Mayor Eric Garcetti and L.A. Area Chamber of Commerce, among other leaders, are putting their heads together to ensure L.A. becomes one of the best places in the world to live and do business.

state of la infrastructure - LA Mayor Eric Garcetti

On the left: Gary Toebben, President & CEO, L.A. Area Chamber. On the right: L.A. Mayor Eric Garcetti

“I can’t wait for the pace that we have in many cases, replacing our pipes on a 300-year cycle, which is, somewhat laughable, and power lines that are holding up power poles. Looking at the need that we have, not just to finish those five rail lines, but have a network that finally connects to almost every place you need to go in L.A. County. So, I think there is a sense of urgency to ramp even further the amount of resources we have,” said L.A. Mayor Eric Garcetti. “I have tried as the CEO attract other great CEOs. We have four big CEOs, the port, the airport, MTA (Metropolitan Transportation Authority), and DWP (Department of Water and Power), and I told all four – I want you to focus on rebuilding your entities.”

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