Commentary

Portland Rail Fiasco: Hawaii Should Hear the Whole Story Before Committing to Multi-Billion Rail Project

Recently, Debbie Bischoff, a representative of the city of Portland, spoke to the Honolulu City Council about the transit-oriented developments that have been built along Portland’s light-rail lines. Unfortunately, she left out a few important facts about those developments.

Before Honolulu commits any more funds to a multi-billion dollar rail transit program, it needs to know the whole story about what happened in Portland.

Bischoff told the city council that many developments have been built near Portland’s rail lines. What she did not mention is that not a single transit-oriented development was built in the 10 years after Portland’s first light-rail line opened. Developers told the Portland city council there was no market for such developments.

So the Portland Council decided to subsidize these developments. To date, the city has given out about $1.5 billion in subsidies, and more subsidies have been granted by various Portland suburbs. Without these subsidies, there would be almost no transit-oriented development in Portland.

Bischoff told the Honolulu City Council that the purpose of transit-oriented development is to reduce driving and increase transit ridership. What she did not tell the Council is that Portland’s transit-oriented developments have failed to do either of these things.

Portland developers have learned that so-called transit-oriented developments only work if they have plenty of parking. One development with inadequate parking has bankrupted three successive developers. Others have high vacancy rates.

Surveys show most of the residents in these developments continue to drive for most of their trips. These denser developments are merely adding congestion to Portland’s already-congested roads and streets.

Bischoff lied when she told the Honolulu City Council that Bechtel built one of Portland’s light-rail lines “in exchange for the right to develop land along the line.” In fact, Bechtel also received $95 million in a no-bid contract that was arranged for the company by a former Portland mayor.

The land that Bechtel also received remained vacant for nearly six years because planners had zoned it for transit-oriented retail developments (no stores larger than 50,000 square feet). Only after they rezoned to allow big-box stores did any development take place on the site. IKEA built a 280,000-square-foot store with 1,200 parking spaces; I doubt many shoppers will carry their furniture home on the light rail.

Bischoff also failed to tell the Honolulu City Council that the former Portland mayor who arranged for Bechtel’s no-bid contract was identified by Portland newspapers as the “godfather” of Portland’s “light-rail mafia.” This mafia consists of politicians and developers who work together to direct more and more subsidies to a handful of developers who make kickbacks to the godfather and campaign contributions to the other politicians.

This revelation naturally enraged many Portlanders who have seen budgets for important services cut in order to provide more subsidies to development. Almost all of the subsidies to transit-oriented developments come from property taxes that would otherwise go to schools, fire, police, and other essential services.

Bischoff suggested to the Honolulu City Council that Portlanders love the light-rail system. She did not mention that less than 1 percent of all travel in the Portland area is by rail transit.

Bischoff also neglected to point out that the share of Portland-area commuters who ride transit to work shrank from 9.8 percent before Portland built its light rail to 7.6 percent today. Why? Because the rail lines cost so much that Portland raised bus fares and cut bus service, forcing many former transit riders to take up driving.

When gasoline prices increased in 2006, transit agencies all over the country gained 5 percent to 20 percent more riders. Yet Portland’s transit ridership grew by a pathetic 0.1 percent. Even in the face of $3 a gallon gasoline, Portland-area residents would rather drive than take transit for more than 97 percent of their travel.

A small percentage of Portland residents who enjoy living in high-density housing and taking light rail to work have benefited from the billions of tax dollars spent building rail lines and supporting the developers. For the vast majority of Portlanders, however, light rail and transit-oriented development translate to increased traffic congestion, higher taxes, and lower urban services.

That’s why Portlanders voted against building more light rail in 1998. But the city is building it anyway, which shows how much it respects the voters. Portlanders voted against more density in 2002. But the city continues to rezone more neighborhoods to higher densities, and to offer developers more subsidies to build high-rise condos and other high-density developments in those neighborhoods.

If you like traffic congestion, higher taxes, and special breaks for favored developers, then by all means support rail transit in Honolulu. Otherwise, the lesson to learn from Portland is: don’t waste money on rail fantasies.

Randal O’Toole is senior fellow with the Cato Institute and author of the recent report titled “Debunking Portland: The City That Doesn’t Work.” He is also a member of the Board of Scholars, Grassroot Institute of Hawaii.