Tag: transportation

NY-NJ Should Put Up or Shut Up

New York Governor Andrew Cuomo is upset that the Trump administration doesn’t want to fund new tunnels under the Hudson River. Cuomo sent an angry letter to Trump earlier this week accusing the president of being prejudiced against New York and New Jersey because they didn’t vote for him. Cuomo claims the tunnels should be federally funded because “the Northeast is home to 17 percent of the entire population and contributes 20 percent to the national domestic product.” 

But gross domestic product and regional populations aren’t among the criteria Congress established for federal funding of transit infrastructure. Instead, one of the most important criteria that the Department of Transportation is required to use is whether the project is “supported by an acceptable degree of local financial commitment.” Based on the lack of local support, the Federal Transit Administration’s 2020 New Starts funding recommendations gave the project a “medium-low” rating, and under federal law, that makes it ineligible for funding. Not counting some very small projects (such as the downtown Los Angeles streetcar), the only other project to get a medium-low rating was the Portal North Bridge, which is also part of the Hudson Gateway megaproject.

Cuomo argues that Trump has ignored “the financial commitments made by New York and New Jersey.” The FTA’s profile of the project reveals just what those commitments are.

First, the states are asking the federal government to put up $6.7 billion, or 49 percent of the projected $13.6 billion cost. Second, they want the federal government to make them a loan of $2.3 billion that will be “repaid with PANYNJ [Port Authority of New York and New Jersey] funds.” Third, they want another federal loan of $2.0 billion that will be “repaid with project revenues.” These two loans total to 32 percent of the projected costs.

Another billion dollars (7%) is supposed to come from “unspecified private capital sources” who will be “repaid with project revenues.” Further, $1.4 billion (10%) would come from “GDC funds” derived from “project revenues.” GDC is the Gateway Development Corporation, which consists of Amtrak, New Jersey Transit, the Port Authority, and the U.S. Department of Transportation. It currently earns no revenues of its own, so it will have a hard time paying $1.6 billion in construction costs. Finally, $178 million, or 1.3 percent of the total, would come from the Port Authority of New York and New Jersey.

In short, New York and New Jersey are nobly committing themselves to cover 1.3 percent of the cost of the project, while they are relying on the federal government to fund a mere 81 percent. Of course, some of that would be loans, but the states may not be obligated to repay those loans unless the project earns sufficient revenues to do so. The private capital sources who are supposed to put up 7 percent are almost purely imaginary, and even if they existed they would demand that they be repaid out of project revenues before the federal government. But before repaying anyone, these mythical project revenues are supposed to cover another 12 percent of the cost.

Pardon me if I sound naive, but what project revenues are we talking about? Amtrak, New Jersey Transit, and the Port Authority are all money-losing operations. Amtrak claims to make money in the Northeast Corridor, but that’s only because it ignores depreciation and the corridor’s $51 billion infrastructure backlog, only part of which is the Hudson Tunnels. New Jersey Transit trains don’t even earn enough fares to cover 60 percent of their operating costs, much less any to pay for maintenance or capital costs.

In other words, Cuomo is asking Trump to have federal taxpayers pay nearly all the up-front costs and to take nearly all the risks of this project. What if self-driving buses put New Jersey Transit and Amtrak out of business – or at least reduce their ridership enough that they have no surplus revenues to repay federal loans? What if many of the firms now located in Manhattan realize that the subway system is never going to be repaired and decide to move away? Who is going to pay for the inevitable cost overruns? New York and New Jersey are clearly trying to get these tunnels while putting up as little of their own money as possible.

The FTA has long had a policy that applicants for transit capital funds must put up half the cost in matching funds, and federal loans don’t count as matching funds. Following this policy, it rated the Hudson Tunnels “medium low.” Congress made the rules, so Cuomo is complaining to the wrong party when he writes Trump, as the Department of Transportation just followed Congressional direction when it gave the project a medium-low rating. If anything, the DOT was generous: the project really deserves a “low” rating.

Is This Infrastructure Really Necessary?

The United States has “at least $232 billion in critical public transportation” needs, claims the American Public Transportation Association (APTA). Among the “critically needed” infrastructure on APTA’s list are a streetcar in downtown Los Angeles, another one in downtown Sacramento (which local voters have rejected), one in Tempe, and streetcar extensions in Tampa and Kansas City.

Get real: even ardent transit advocates admit that streetcars are stupid. The economic development benefits that supposedly come from streetcars are purely imaginary, and even if they weren’t, it would be hard to describe streetcars – whose average speed, APTA admits, is less than 7.5 miles per hour – as “critically needed.”

Much of the nation’s transit infrastructure is falling apart, and the Department of Transportation has identified $100 billion of infrastructure backlog needs. (Page l – that is, Roman numeral 50 – of the report indicates a backlog of $89.9 billion in 2012 dollars. Converting to 2019 dollars brings this up to $100 billion.) Yet APTA’s “critical needs” list includes only $24 billion worth of “state of good repair” projects. Just about all of the other “needs” listed – $142 billion worth – are new projects or extensions of existing projects.

In fact, few if any of these new projects are “needed” – they are simply transit agency wish lists. For example, it includes $6 billion for phase 2 of New York’s Second Avenue Subway, but no money for rehabilitating New York’s existing, and rapidly deteriorating, subway system. Similarly, it includes $140 million for a new transitway in Alexandria, Virginia, but no money for rehabilitating the DC area’s also rapidly deteriorating Metrorail system. (In case anyone is interested, I’ve converted APTA’s project list into a spreadsheet for easy review and calculations.)

The $166 billion total on APTA’s “Project Examples” list is less than the $232 billion APTA says is needed, but even if all of the difference is “state of good repair” projects, that difference plus the $24 billion on APTA’s list doesn’t add up to what the DOT says is needed to restore transit infrastructure. This shows that even APTA doesn’t take public safety and “crumbling infrastructure” seriously.

I’ve previously pointed out that the best-maintained infrastructure is funded out of user fees. For example, Federal Highway Administration data show that only 2.9 percent of toll bridges are “structurally deficient,” compared with 5.5 percent of state-owned bridges funded mainly out of gas taxes and 12.2 percent of locally-owned bridges that are funded mainly out of general tax dollars. Gas taxes are a user fee, so state bridges are better maintained than local bridges, but tolls are an even better user fee so toll-funded bridges are in the best shape.

Politicians allow infrastructure funded out of tax dollars to deteriorate because they would rather spend money on new projects than maintain old ones. APTA’s list simply confirms this: APTA is trying to entice politicians into funding all sorts of new projects rather than maintain the existing ones that are falling apart.

To justify this spending, APTA claims that transit produces $4 in economic benefits for every $1 spent. This is based on a report prepared for APTA in 2009. This report includes two kinds of benefits from transit spending.

First, when anyone spends money on anything, the recipients of that money turn around and spends it again. That’s called “indirect” or “secondary” benefits. Spending money on digging holes and filling them up would produce similar secondary spending. That doesn’t mean the government should pay people to dig holes and fill them up (although that’s really what it’s doing for many rail transit projects). For one thing, if government didn’t spend that money, there would be more money in the hands of taxpayers, who would spend it, generating just as many secondary benefits.

Second, the study counts cost savings to transit riders and other travelers, such as the savings from not having to own a car, from getting to destinations faster, or from congestion relief. But transit costs far more and travels far slower than automobiles; there is no cost or time savings from substituting expensive, slow methods of transportation for inexpensive, fast methods of transportation. Transit also does not provide a significant amount of congestion relief; in fact, large buses, streetcars, light rail, and commuter trains that have many grade crossings often do more to increase congestion than reduce it.

The study’s arguments are even less plausible today, when transit ridership is shrinking, than they were in 2009, when transit ridership had been growing. Charlotte, Los Angeles, and Portland recently spent hundreds of millions or billions on new light-rail lines or light-rail extensions, yet transit ridership in those regions dropped after the new lines opened. There is no way that can that be good for transit riders or other travelers.

APTA’s wish-list is just one more reason why Congress should only pass an infrastructure bill if it is one that is funded exclusively out of user fees. An infrastructure bill funded out of tax dollars or deficit spending would impose huge costs on taxpayers in order to build unnecessary projects that we won’t be able to afford to maintain. 

Yesterday’s Technology the Day After Tomorrow

The apparent death of California high-speed rail has led to a spate of stories asking, “What went wrong?” The answer to that question is a lot simpler than most people think: what went wrong is that the state even considered building the project in the first place.

Back in 1997, a graduate student at the University of California, Berkeley named David Levinson – who has since gone on to do a lot of incredible work on transportation access – asked whether high-speed rail would cost more or less than flying or driving. The state had not yet made cost estimates, so Levinson estimated that the line from San Francisco to Los Angeles would cost about $10 billion. Based on that, he found that high-speed rail would be “significantly more costly than expanding existing air service” and also more expensive than driving.

Just three years later, California’s first official estimate was that the SF-LA line would cost $20 billion. The state should have stopped right there. Yet, having made that estimate, the momentum was in place to continue even as estimates rose to $33 billion, then $68 billion, then $77 billion and more.

High-speed rail is presented as some kind of new technology race that America is in danger of losing if it doesn’t start building right away. In fact, American railroads began experimenting with high-speed trains back in the 1930s. Japan’s bullet trains date to 1964, 55 years ago. By that time, we had already surpassed them with jet airliners.

Today, air travel is far less expensive than train travel, with airfares averaging under 14 cents a passenger mile, barely more than a third of Amtrak fares even though Amtrak receives much bigger subsidies, per passenger mile, than the airlines. Racing to build a faster train would be like subsidizing the manufacture of new IBM Selectric typewriters because China developed a faster electric typewriter – no matter how fast, typewriters have been rendered obsolete by word processors.

The reason high-speed rail is expensive is that it requires a lot of precision infrastructure that is costly to build and costly to maintain. By comparison, airlines require very little infrastructure and while highway infrastructure is relatively inexpensive: for the cost of one mile of high-speed rail, California could build eight to ten miles of four-lane freeway.

Moreover, the growth in costs was totally predictable. Bent Flyvbjerg has shown that megaprojects like this just about always go way over the original projected cost because planners are guilty of optimism bias — they always make optimistic assumptions about each part of the project. Flyvbjerg went even further, saying that often planners weren’t just optimistic but engaged in “strategic misrepresentation” in order to get the projects approved. 

California rail planners, for example, justified the high costs with unrealistically high ridership projections. Although the California corridor has a lower population that is less optimally arranged than the Boston-to-Washington corridor, California was predicting that its high-speed rail line would attract 55 million riders a year, fifteen times the number carried by Amtrak’s high-speed Acela. Based on this, the planners predicted the trains would collect so much revenue above their operating costs that private parties would gladly invest $7.5 billion in the project. Such private money never materialized.

Whether light rail, heavy rail, commuter rail, or high-speed rail, it turns out to almost always be true that construction and operating costs are higherridership and revenues are lower, and projects take longer to complete than the original projections – a combination of problems known as the planning fallacy. Moreover, maintenance costs are almost never considered since rail infrastructure wears out after about 25 to 30 years, by which time the original planners are retired and won’t be blamed when the systems start falling apart. This is why rail transit today is suffering far more from crumbling infrastructure than the nation’s highways.

Though these problems are repeated over and over, many cities and states today are planning more such urban and intercity rail projects. The state of Washington is thinking about starting a state high-speed rail authority. Cities like Austin and Durham want to build light rail even though transit ridership in those regions (and just about everywhere else) is declining. 

The reason these projects go forward is the city or state hired some engineering firm to do a “feasibility study” – and then that firm spent part of its income from the study to lobby for the project, knowing that if it goes forward it is likely to get some of  the future contracts. A plan to extend Portland’s light rail into Vancover, Washington died after it was revealed that the main lobbyist for the project was paid by the contractor who was hired to write the environmental impact statement.

Such revelations rarely come in time: Honolulu is building a rail line whose costs have tripled partly because the transit agency turned most project administration over to consultants – paying them $505,000 a year per person – who made more than 270 contract changes that added a half a billion dollars to the total costs.

The bottom line is that states and cities should not even ask whether urban or intercity passenger rail projects are feasible. I can tell you at the start that they are not: unless you are in Tokyo or Hong Kong, buses, cars, and planes are always superior to passenger rail. Once you start spending money on it, it is hard to stop. The only thing that stopped California is that it literally didn’t have any more money to spend.

Census Data Detail Transit’s Decline

Transit ridership has been declining now for four years, and the latest census data, released last week, reveal that the biggest declines are among the groups that you might least expect: young people and low-income people. These results come from the American Community Survey, a survey of more than 3 million households a year conducted by the Census Bureau. Here are some of the key findings revealed by the data.

Young People Are Deserting Transit

Those who subscribe to the popular belief that Millennials and other young people prefer to  transit over owning and driving a car were shocked last week when the Washington Post published an article indicating that “a Millennial exodus” was “behind [Washington] Metro’s diving ridership.” This was based on a study that found that, from 2016 to 2018, young people had reduced their use of transit for commuting by 20 percent, while older people had reduced it by smaller amounts or not at all. The study used cell phone records from one of the nation’s largest wireless carriers, probably Verizon or AT&T.

Young people seem to be deserting transit more than older commuters.

Although the census data only go as far as 2017, they seem to confirm this finding. As shown in the above chart, the largest declines in transit commuting, both nationally and in the Washington DC urban area, are among younger people. Commuting forms only a part of transit ridership, but to the extent that declining ridership is due to ride-hailing services such as Uber and Lyft, those services disproportionately used by people the age of 35. For more information about transit declines by age class, including links to data files for 2017 going back to 2005, see my longer post on the subject. In addition to national data, the files show how people in various age classes commuted to work in each state and each major county, city, and urban area.

2. Low-Income People Are Deserting Transit

Although transit subsidies are often justified by the need to provide mobility to low-income people, the reality is that transit commuting by people in the lowest income classes is shrinking while transit commuting is growing fastest among people in the highest income classes.

Transit commuting in the lowest income classes is shrinking faster than the total size of those classes while in the highest classes it is growing faster than the total size of those classes.

Transit commuting is increasingly skewed to people who earn more than $75,000 a year. Even though only 19 percent of American workers were in this income class in 2017, they made up 26 percent of transit commuters, an increase from just 14 percent in 2005. Both the average and the median income of transit commuters are higher than those of all workers. For more information on transit commuting and income, including links to data files from 2006 through 2017, see my more detailed post on the subject.

3. Vehicle Ownership Continues to Rise

While ride hailing is probably responsible for much of the decline in transit ridership among young people, increasing auto ownership is responsible for much of the decline among low-income people. Between 2014 and 2017, the share of households that lacked access to a motor vehicle declined from 9.1 to 8.6 percent. Moreover, the share of workers who live in households with no vehicles declined from 4.6 to 4.2 percent.

In 1960, more than 20 percent of American households had no motor vehicles while only a small percentage owned three or more, figures that have practically reversed themselves today.

While a few tenths of a percent may not sound like much, remember that in all but a handful of urban areas more than 90 percent of commuters get to work by car while less than 2 percent take transit. Thus, a small increase in auto ownership can lead to a large percentage decrease in transit usage.

Curiously, most American workers who live in households without cars don’t take transit to work. In fact, in most states and urban areas, more workers who live in households without cars nevertheless drive alone to work than take transit to work. How do they drive alone if they don’t have a car? Probably in employer-supplied vehicles. In any case, this is just one more indicator of transit’s declining relevance. For more information on increasing auto ownership, including data files, see my detailed post on the subject.

4. Transit Is Increasingly Irrelevant

Transit agencies and their supporters act as though transit is somehow vital to the national and local economies. That may still be true in New York City, but it is only marginally true in Boston, Chicago, Philadelphia, San Francisco, and Washington, and not at all true elsewhere. The decline in transit ridership among young people who were supposed to love transit the most, and among low-income people who were supposed to need transit the most just reinforces this declining relevance and argues against any further subsidies to this obsolete industry.

Commuting in 2017

The total number of American workers who usually commute by transit declined from 7.65 million in 2016 to 7.64 million in 2017. This continues a downward trend from 2015, when there were 7.76 million transit commuters. Meanwhile, the number of people who drove alone to work grew by nearly 2 million, from 114.77 million in 2016 to 116.74 million in 2017.

These figures are from table B08301 of the 2017 American Community Survey, which the Census Bureau posted on line on September 13. According to the table, the total number of workers in America grew from 150.4 million in 2016 to 152.8 million in 2017. Virtually all new workers drove to work, took a taxi-ride hailing service, or worked at home, as most other forms of commuting, including walking and bicycling as well as transit, declined.

Transit commuting has fallen so low that more people work at home now than take transit to work. Work-at-homes reported for 2017 total to nearly 8.0 million, up from just under 7.6 million in 2016. 

Two other tables, B08119 and B08121, reveal incomes and median incomes of American workers by how they get to work. A decade ago, the average income of transit riders was almost exactly the same as the average for all workers. Today it is 5 percent more as the number of low-income transit riders has declined but the number of high-income – $60,000 or more – has rapidly grown. Median incomes are usually a little lower than average incomes as very high-income people increase the average. In 2017, the median income of transit riders exceeded the median income of all workers for the first time.

For those interested in commuting numbers in their states, cities, or regions, I’ve posted a file showing commute data for every state, about 390 counties, 259 major cities, and 220 urbanized areas. The Census Bureau didn’t report data from smaller counties, cities, and urbanized areas because it deemed the results for those areas to be less statistically reliable. 

The file includes the raw numbers plus calculations showing the percentage of commuters (leaving out people who work at home) who drive alone, carpooled, took transit, (with rail and bus transit broken out separately), bicycled, and walked to work. A separate column shows the percentage of the total who worked at home. The last column estimates the number of cars used for commuting including drive alones and carpoolers.

I’ve also posted similar files for 20162015201420102007 and 2006. The formats of these files may differ slightly as I’ve posted them at various times in the past. Soon, I’ll post more files for commuting by income and other pertinent topics. 

Commuting in 2017

The total number of American workers who usually commute by transit declined from 7.65 million in 2016 to 7.64 million in 2017. This continues a downward trend from 2015, when there were 7.76 million transit commuters. Meanwhile, the number of people who drove alone to work grew by nearly 2 million, from 114.77 million in 2016 to 116.74 million in 2017.

These figures are from table B08301 of the 2017 American Community Survey, which the Census Bureau posted on line on September 13. According to the table, the total number of workers in America grew from 150.4 million in 2016 to 152.8 million in 2017. Virtually all new workers drove to work, took a taxi-ride hailing service, or worked at home, as most other forms of commuting, including walking and bicycling as well as transit, declined.

Transit commuting has fallen so low that more people work at home now than take transit to work. Work-at-homes reported for 2017 total to nearly 8.0 million, up from just under 7.6 million in 2016. 

Two other tables, B08119 and B08121, reveal incomes and median incomes of American workers by how they get to work. A decade ago, the average income of transit riders was almost exactly the same as the average for all workers. Today it is 5 percent more as the number of low-income transit riders has declined but the number of high-income – $60,000 or more – has rapidly grown. Median incomes are usually a little lower than average incomes as very high-income people increase the average. In 2017, the median income of transit riders exceeded the median income of all workers for the first time.

For those interested in commuting numbers in their states, cities, or regions, I’ve posted a file showing commute data for every state, about 390 counties, 259 major cities, and 220 urbanized areas. The Census Bureau didn’t report data from smaller counties, cities, and urbanized areas because it deemed the results for those areas to be less statistically reliable. 

The file includes the raw numbers plus calculations showing the percentage of commuters (leaving out people who work at home) who drive alone, carpooled, took transit, (with rail and bus transit broken out separately), bicycled, and walked to work. A separate column shows the percentage of the total who worked at home. The last column estimates the number of cars used for commuting including drive alones and carpoolers.

For comparison, you can download similar files for 2016, 2015, 2014, 2010, 2007 and 2006. The formats of these files may differ slightly as I’ve posted them at various times in the past. Soon, I’ll post similar files for commuting by income and other pertinent topics.

Commuting in 2017

The total number of American workers who usually commute by transit declined from 7.65 million in 2016 to 7.64 million in 2017. This continues a downward trend from 2015, when there were 7.76 million transit commuters. Meanwhile, the number of people who drove alone to work grew by nearly 2 million, from 114.77 million in 2016 to 116.74 million in 2017.

These figures are from table B08301 of the 2017 American Community Survey, which the Census Bureau posted on line on September 13. According to the table, the total number of workers in America grew from 150.4 million in 2016 to 152.8 million in 2017. Virtually all new workers drove to work, took a taxi-ride hailing service, or worked at home, as most other forms of commuting, including walking and bicycling as well as transit, declined.

Transit commuting has fallen so low that more people work at home now than take transit to work. Work-at-homes reported for 2017 total to nearly 8.0 million, up from just under 7.6 million in 2016. 

Two other tables, B08119 and B08121, reveal incomes and median incomes of American workers by how they get to work. A decade ago, the average income of transit riders was almost exactly the same as the average for all workers. Today it is 5 percent more as the number of low-income transit riders has declined but the number of high-income – $60,000 or more – has rapidly grown. Median incomes are usually a little lower than average incomes as very high-income people increase the average. In 2017, the median income of transit riders exceeded the median income of all workers for the first time.

For those interested in commuting numbers in their states, cities, or regions, I’ve posted a file showing commute data for every state, about 390 counties, 259 major cities, and 220 urbanized areas. The Census Bureau didn’t report data from smaller counties, cities, and urbanized areas because it deemed the results for those areas to be less statistically reliable. 

The file includes the raw numbers plus calculations showing the percentage of commuters (leaving out people who work at home) who drive alone, carpooled, took transit, (with rail and bus transit broken out separately), bicycled, and walked to work. A separate column shows the percentage of the total who worked at home. The last column estimates the number of cars used for commuting including drive alones and carpoolers.

For comparison, you can download similar files for 20162015201420102007 and 2006. The formats of these files may differ slightly as I’ve posted them at various times in the past. Soon, I’ll post similar files for commuting by income and other pertinent topics.

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