SUBWAY EXPANSION—ARE NEW YORK’S COSTS EXCESSIVE?

 

 

My City Club colleague John West distributed this, December 14, New York Times article on Friday.  https://www.nytimes.com/2017/12/14/nyregion/mta-funding-real-estate-value-capture.html

 

It argues that the city’s construction of new mass transit lines, with public funds or debt, is a subsidy to property owners, who should instead be contributing.  For the first time, at a recent MTA board meeting, Carl Weisbrod, board member and former head of the City Planning Commission, argued that “some of the cost should be paid by the real estate development that new service will make possible.”  The MTA will now ask for legislation to make this “value capture” possible.

 

 

(Transit oriented development of the early 20th century,  108th Street and Broadway.)

Linking real estate development to transit charges is not a new concept.  As part of the recent Midtown East rezoning, builders of new high-rise office towers, are required to pay for improvements to designated subway stations.

 

These contributions may or may not be adequate, and it may or may not be appropriate to legislate some form of “value capture” tax as new transit improvements are planned.  But it is illegitimate to ask the public, or any particular constituency, be they riders or real estate owners, to stretch their pocket books unless the system is also held accountable for its costs.

 

A simple Google search found three articles that detailed how expensive our transit system has become.

 

Vox–January 2017–This article reports that the second phase of the Second Avenue subway is budgeted at $6 billion, or $2.2 billion per kilometer, with only $1 billion allocated the MTA’s capital budget.  Yet the $1billion should be adequate, with Berlin, Paris and Copenhagen subways budgeted at respectively $250 million, $230 million and $260 million per kilometer.  Labor costs are only part of the problem, as there are certainly strong unions in western Europe. The size of the stations and the depth of the subway line also drive up costs.   https://www.vox.com/policy-and-politics/2017/1/1/14112776/new-york-second-avenue-subway-phase-2

 

Pedestrian Observations—July 2017—Vox reporting relies in part on an article in this public transit blog, written by Alon Levy.  It compares the per kilometer costs of NYC transit projects with those in other countries.  The results are shockingly negative for New York, even when compared to transit construction costs in London and Amsterdam.  Phase 1 of the Second Avenue subway is cited at $1.7 billion, with a London project cited at $450 million per kilometer and an Amsterdam project cited at $410 million per kilometer.  https://pedestrianobservations.com/2011/05/16/us-rail-construction-costs/

 

Curbed—October 2017—This analysis, also by Alon Levy, compares NYC subway’s operating costs to those in other cities.  New York subway’s hourly and per mile costs are exceeded by our PATH system and by the hourly cost of Los Angeles Metro Rail.  They are comparable to the hourly and per mile costs of the Boston T, but exceed cited costs in other cities, including  in western Europe. https://ny.curbed.com/2017/10/13/16455880/new-york-subway-mta-operating-cost-analysis

 

Comments...

3 thoughts on “SUBWAY EXPANSION—ARE NEW YORK’S COSTS EXCESSIVE?”

  1. John West says:

    Larry,
    18 Dec 17

    Your research takes the discussion in a different direction: why does transit construction in NYC cost so much more than elsewhere and, therefore, are the public’s tax dollars being efficiently used. Assuming the transit system needs to be funded in any event, the value capture discussion would seem to ask different questions.

    1. Value capture, whatever the actual mechanism, means “off-budget-financing”. A source of funds — a special assessment, a commuter tax, … — is dedicated in advance to a specific purpose and is not included in the general competition for operating and capital budget dollars. A first question, therefore, is whether transit should compete with other public goods in a general budget allocation. If it competes then the efficiency of the use of funds would help it.

    2. Capture new value, as opposed to a surcharge on all properties that are served by transit, seems to be what most folk are considering. New transit access increases property values and a portion of that increase should be captured to pay for the transit improvements that create that increase in property value.

    3. Capture only the portion of new value related to the transit improvement. Better access encourages development. A portion of the increased property value relates to the transit improvement and a portion relates to the new building. The new building increases municipal expenses for services such as police, fire protection, education, parks, …. The portion of increased property value captured for transit should be the land value, not the building value.

    God and the devil are in the details.

    John

  2. Larry Sicular says:

    Thank you John.

  3. John West says:

    Transit improvements and expansion are expensive. This argues for adding to the system in ways that make the most efficient use of existing facilities. New train tunnels under the Hudson River are now the region’s essential transit improvement and in the 19 January Daily News George Haikalis argues for a more cost effective plan: http://www.nydailynews.com/opinion/better-connect-n-y-n-article-1.3765025

Leave a Reply

Your email address will not be published. Required fields are marked *