High Costs Should not be an Excuse to Downgrade Projects

In an environment of high construction costs, there’s an impulse to downgrade projects: build light rail instead of subways, BRT instead of rail, commuter rail on existing tracks instead of greenfield light rail, shared-lane buses and streetcars instead of ones running in dedicated lanes. Some of those downgrades have already gotten flak individually from transit supporters, of which Jeff Wood’s recent article about commuter rail and Mike Dahmus‘s repeated attacks on BRT and the Austin commuter rail are good examples.

I do not think anyone has made the following point connecting those projects: the same causes that lead to incompetence in running one mode will lead to incompetence in running all other modes. Regardless of the mode chosen, a project in the US can expect to cost several times as much as a comparable European projects. (As a single exception, FRA-compliant commuter rail can be expected to be especially bad, because there the regulations and operating traditions are especially bad.) With very few exceptions, building BRT in a corridor that begs for rail, suburban transit in a city that needs urban transit, peak-only commuter rail, and other apparent cost savers will incur the same cost escalations as in every other mode.

In particular, downgrading service will not save any money, and going to the FRA will actually raise costs. This affects both the choice of technology and the choice of how to use it: American light rail lines keep the per-km costs reasonable by building out to exurbia, creating ersatz commuter rail with low ridership. This is epitomized in Dallas, whose light rail is setting records for low per-km ridership, and whose plans for the next decade are projected to cost $2.4 billion for 60,000 additional weekday riders, i.e. $40,000 per rider. In contrast, Houston’s urban Main Street Line cost $300 million for 34,000 riders, which is about $10,000 per rider in today’s money, the lowest per-rider cost in the US in the last 15 or so years. And Houston is unusual; more common is the Portland Milwaukie light rail extension, projected at $55,000 per rider and $110 million per km.

If we start looking abroad, we see the same pattern. When European LRT is more expensive, as for example in Nice, it’s because it’s very high-ridership urban infill. And Nice is an exceptionally expensive case; Lyon’s trams are cheaper. Few European light rail lines go over $10,000 per rider, and on Yonah Freemark’s list of recent and planned projects in Paris, a few lines are below $5,000.

Something similar is true for bus transit. Despite Jaime Lerner’s admonition that “Creativity starts when you cut a zero from your budget,” American cities have failed to create good BRT under budget constraints. The Los Angeles Orange Line is expensive for the ridership it has ($15,000/rider in construction, with the high operating costs of a bus) and has mediocre signal priority. Under a budget constraint, Los Angeles still built something inferior to the Blue Line, or even the expensive-to-build, cheap-to-operate Red Line subway.

As an aside, this also holds for the costs of transit versus highways. In the rest of the developed world, prudent cities invest most or all of their transportation money into mass transit, and try to restrain traffic. This should also be true in the US, where subways and light rail are expensive, but so are highway projects: see the 8-times-over-budget Bay Bridge Eastern Span replacement, the Big Dig, and the proposed Tappan Zee Bridge replacement, and compare them to the more complex Øresund Bridge-Tunnel connecting Denmark and Sweden.

At worst, the high costs of transportation in the US imply that government should spend its money elsewhere – on health or education, or perhaps tax cuts. Even then I’m personally skeptical about the efficiency of the marginal dollar: American health care is infamously expensive, tax expenditures are byzantine and in such cases as the mortgage tax credit create the wrong sort of incentives, and so on.

Second Avenue Subway Phase 1 is by far the most expensive urban rail project in the world today, but its per-rider cost is only $25,000, high by European and Japanese standards but lower than any other rail line proposed or under construction in the US today. It would not be approved in today’s pennypinching climate, and even ten years ago it was funded only thanks to legislative blackmail by Assembly Speaker Sheldon Silver, whose district would be served by Phase 3. Of course at normal cost it would be very cheap, just as at normal cost everything else in the US would become much more affordable, but it is still more cost-effective than seemingly cheap commuter lines.

The upshot is that from the perspective of transit planning, high costs should not deter anyone. Other than the special rule that FRA-compliant commuter rail is practically never justifiable, the relative merits of projects are about the same in the US as in all other developed countries. Agencies all over the world have to choose between a subway, five trams, and twenty busways. In an environment of high costs, it still make sense to draw plans as if the costs are normal, and when the costs are not normal, build more slowly and start with the most cost-effective lines. If agencies and activists behave as if there’s no money for good transit, they will only get bad transit.

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16 Responses to High Costs Should not be an Excuse to Downgrade Projects

  1. Joseph E says:

    “this also holds for the costs of transit versus highways”

    Very true. In Los Angeles, we are paying over $1 billion dollars to add a single lane (in one direction) to the 405 freeway. That’s over $100 million per mile, just for one 12 foot wide strip of pavement over the hills. Notice that this is the 6th lane in that direction, so it will only increase capacity by 12.5% over the existing road, and only in that direction. We could have increased capacity just as much by turning one of the existing lanes into a carpool-only lane and changing the standard to 3 persons per vehicle (from 2). http://www.metro.net/projects/I-405/

    Interestingly, building a two-track rail tunnel (without station) under this pass would only be 6 miles long, so it probably could have been done for about the same cost. For $2 billion, even with our inflated costs, we could have built a light-rail subway from the Orange Line to Wilshire Blvd at Westwood (the future subway location), with stops at Ventura Blvd and UCLA in between. This would have peak-hour capacity theoretically equal to the current (mainly) single-occupancy-vehicle freeway; 20,000 per hour.

    So in this context, even an expensive, deep subway would be 5 to 10 times more cost-effective than the road widening.

    • Tom West says:

      One lane of traffic can be expecetd to carry about 12-15,000 people ona a week day, which works out as between $67,000 and $83,000 per user. So, transit is the cheaper option. :-)

  2. Steve says:

    This article seems to provide a justfication for considering transportation costs in per-rider terms, rather than total terms. Per-rider justification would incentivize projects with the highest projected ridership, as higher ridership naturally brings per-rider costs down.

    This, of course, should be implemented with more accurate ridership models, which take into account the fact that actual line ridership is, on average, double current model projections. Doing this (doubling projected line ridership to match realized averages) by itself halves per-rider costs.

    • Alon Levy says:

      Steve, do you have a citation for the claim about projected line ridership? I know of individual examples, but not of an average. It was a pleasant surprise that the Lynchburg line overperformed, but at the same time BART to SFO and VTA light rail missed ridership projections by so much that together with the Bay Bridge replacement disaster they helped create a class of permanent curmudgeons who don’t trust anything the agencies say.

      • Steve says:

        I don’t know that the figure actually exists, but the majority of new starts over the past 20 years (in St. Louis, Milwaukee, Denver, Salt Lake, and even New Jersey’s River Line, and so on) have had ridership so much higher than projections that I believe my assertion is justified. Like any average, you’re going to get outliers, and the human condition is to treat the outliers, both positive and negative, as exemplary of the system rather than its oddballs.

        When you have failures like the ones you cite, I would guess that there’s an issue with the project–misguided in either conception or implementation. St. Louis’ system seems to be the exemplar we should be looking at, in terms of planning and implementation.

      • Alon Levy says:

        Sure, and you could also add the Hiawatha Line and the LRT in Charlotte. But on the other hand the Main Street Line (which still has lower cost per rider than all of these) did not much better than the projections, the LA Blue Line got about the same ridership in 2000 as the projections said it would, DART got 10% more ridership than predicted (and even then it’s a disaster), and the LA Gold Line underperformed.

        As a first-order approximation, the FTA tends to underestimate ridership on inner-urban lines and overestimate it on suburban lines. The outbound BART extensions, VTA, and the Gold Lines don’t really serve dense, walkable urban areas. (Neither does DART, but its ridership is awful even if it exceeded projections a bit.)

    • Steve says:

      That paper seems to explain the phenomenon Alon and I were noticing. Suburban mass transit typically has lower ridership than urban mass transit, and the lines I was citing are predominantly urban mass transit.

  3. Nathanael says:

    This is an excellent and well-written piece. I hope we can get more distribution for it.

    I’ve become suspicious that most of the cost problems (in areas other than transportation as well) are essentially bureaucratic, or more accurately due to the bad structure and bad culture of most of our bureaucracies (public or private). We have the opposite of a streamlined, trustworthy legal system and in the bureaucratic arena (public or private) we generally have the opposite of a lean, trusted bureaucracy. Health care is the most egregious example, where the private bureaucracies not only eat 20% of the money and reduce the availability of care, but also allow and even encourage all manner of additional cost-increasing shenanigans by individuals within the fighting bureaucracies.

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  7. “At worst, the high costs of transportation in the US imply that government should spend its money elsewhere – on health or education, or perhaps tax cuts. Even then I’m personally skeptical about the efficiency of the marginal dollar: American health care is infamously expensive, tax expenditures are byzantine and in such cases as the mortgage tax credit create the wrong sort of incentives, and so on.”

    We’re really screwed on everything, now that you mention it. We pay too much for executives, too. Basically, everyone who has their hooks into our public and private institutions is getting too much relative to everyone else, so everyone else can afford less of them.

    FYI when asked to find savings on capital projects, the MTA game plan is to cut project scope. Using the word “savings” for less of a project is misleading.

  8. Ian Mitchell says:

    I know ridership remains to be seen, but isn’t sunrail an FRA-complaint commuter rail whose per-km costs are just astoundingly low?

    • Alon Levy says:

      SunRail is $1 billion for 50 kilometers. No, it’s not astonishingly cheap.

      • Adirondacker12800 says:

        Wikipedia says 432 million of it was to buy the right of way from CSX. That’s odd. Very odd. NJTransit paid 67.3 million for the same length – in New Jersey, where real estate prices are higher – in 1999, for the RIver Line ROW.

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