We want to take you straight to Washington, DC, where President
Biden is about to sign the bipartisan infrastructure bill into
law. More than $1 trillion.
Let's listen in. Okay, here we go.
On November 15th, 2021, President Biden signed the bipartisan
infrastructure law, which included America's largest investment in
public transit ever.
Between that and other federal money from fiscal year 2022 through
2026, the US government is expected to spend between 91 and
$108 billion on local public transit.
I believe that that with the money coming in from infrastructure, it's
going to actually help us rebuild American transit.
With that much money at stake, using it effectively will be key.
After all, the impact is expected to be enormous, from connecting
people to jobs and economic opportunities to reducing
greenhouse gas emissions, city congestion and accidents.
Data also support the idea that the prosperity of a major city like
New York or Boston is closely tied to the strength of its subway
system. According to some estimates, economic gains could
equal about 10% of GDP.
But building infrastructure in the US and in this case subways is very
expensive. In fact, it is the sixth most expensive place to build
rail transit in the world, and even that is likely an
understatement. So what is it that makes building subway
infrastructure so expensive in the US and can anything be done about
it?
When you think about the complexity of the system, what's going on
above the street, what's going on below the street, there's really
nothing to compare it to in the world.
This is Carmen Bianco.
He was the vice president of subways at MTA New York City
Transit from 2010 to 2013 before becoming the president of the
agency that year.
He retired two years later.
And then the interesting part about New York is there are so many
tunnels underground that were built years past that, you know,
you have to realize as you're going through that there are other
tunnels down there that you have to avoid.
So you're going above and below.
And it's it's it's really that modern Marvel kind of thing of
engineering. It's it's just very complex.
But I look at our engineering team up in New York and I just say, my
goodness, how did you how do you all figure this out?
During Bianco's time, the Second Avenue subway expansion, the most
high profile New York City transit project in decades, was in the
works. While first proposed in the 1920s, it didn't materialize until
the early 2000. The full project is planned as a 16 station, 13.7km
line running from Harlem all the way to Hanover Square in the
southern tip of Manhattan.
To make it more manageable cost wise, it was split into four
phases. Phase one was completed and opened in January 2017 and runs
through the Upper East Side.
Phase two is slated to run through Harlem.
The third and fourth phases will cover Lower Manhattan.
Phase one was by itself the biggest expansion of the subway
system in 50 years.
The full project, Yeah, that's expected to cost $16.8 billion or
2.6 billion per mile.
That's almost three times more than the cost of San Francisco's
central subway and three times the cost of the purple line in Los
Angeles. The transit Costs project at New York University compiled a
database of 900 rapid rail projects across nearly 60 countries
and found the Second Avenue subway to be the most expensive subway
project in the world.
There are some who argue that New York's density makes this pricey
subway a better value per person.
The impact it has on a massive population makes it worth it.
You're looking at a population like New York where you know you have 8
million people in the city.
Imagine, imagine what a day in New York would look like without the
mass transit system.
How would people be able to move around the streets even with
transit, even one a day when you're moving 6 million people on
the subway? It doesn't look any different on top side.
I mean, the number of cars on any of the any of the avenues in
Manhattan are still very complex, still, you know, still congested.
And so just imagine what would happen if transit wasn't there.
560,000 riders are expected to be served by the full four phase
buildout. Phase one cost per rider was $26,000.
Almost a quarter of the Los Angeles Metro's Purple line
extension. It is also comparable to the per rider cost for the
planned $39 Billion Grand Paris Express in France.
Unfortunately, the cost to rider ratio more than doubles for the
$7.7 billion second phase of the project through Harlem, which is
also one of the most crowded neighborhoods in the city and one
that has long, desperately needed better public transportation
options. New York's public transit system is mostly run by the
Metropolitan Transit Authority, or MTA.
It's the largest such agency in America.
It serves a population of 15.3 million people across a 5000 square
mile area. That includes New York City, Long Island, southeastern New
York and parts of Connecticut.
Ridership accounts for 40% of all public transit trips in the entire
United States.
We ran 8000 trains a day, 5500 busses on the road a day.
And on our best days during my tenure, we were actually hitting 6
million, hitting that that bogey of 6 million customers on the on
the subway. And in many, many different days.
More trips are taken on the MTA subway system than on all of the
other 14 top heavy rail systems in the US combined.
It is also likely the world's largest system in terms of cost.
Most of MTA's $54.8 billion capital plan for 2022 2024 goes to
subways, smaller shares go to commuter rail projects and busses.
The rest goes to bridges and tunnels, among other things.
As late as May 2023, ridership continued to sit well below
pre-pandemic levels and all time highs of the mid 20th century.
From 1975 to 2019, just before the pandemic.
Ridership had increased by 76%.
Though other American projects may cost a lot less per mile than the
Second Avenue subway, when measured by the number of people
served per dollar spent.
They look quite expensive.
The sound transit's Lynnwood Link in the Greater Seattle, Washington
area costs about $50,000 per rider.
Los Angeles Metro's Purple Line extension Section one costs about
$83,000 per rider.
Researchers are worried high construction costs will make voters
skittish about supporting public transit in all but the densest
areas in America.
As we see the cost per rider numbers increase, it just makes
individual projects look less attractive.
Even American projects cheaper than New York's on a per mile basis are
eye watering compared with transit rail in Copenhagen and Paris and
Madrid. The Transit Costs project found the US is the sixth most
expensive country to build a rail system, though that stat is
deceiving. The five countries ahead of it have rail systems that
are far more heavily dependent on tunneling, which dramatically
raises costs.
A 2021 report from the Eno Center for Transportation found the United
States spends $1.3 billion per mile on projects that are mostly
tunneled like subways.
New York does skew that average considerably.
Without it, the average drops to $582 Million.
Still, that is higher than Japan, Germany, Mexico, Chile and several
other countries, many of which are developed economies with similar
challenges such as high labor costs and dense cities.
According to that data, America is not always the most expensive place
to build. However, many at grade or ground level projects in the US
cost about as much as tunneled projects in other countries.
Even without New York City, American rail projects aboveground
are 48% more expensive than the average and tunneled ones 57%.
There are several reasons why us subways cost so much.
For one, the planning and funding process is slow.
If you look across America, there's all kinds of worthy projects in
different towns, different cities.
New York, of course, being the biggest, but.
You know, you wind up in these these arguments.
If you live upstate in New York, you don't want to be funding, you
know, New York City projects.
So you got all these competing kind of arguments you've got.
You know, lawyers get involved and, you know, you've got to deal
with all the. The court cases that come out of wanting to start a
project like Second Avenue.
There are a lot of issues just pulling together the needed funds
in many other parts of the world.
A federal entity will simply pay for a project up front or guarantee
money. In the case of a lot of American projects, money tends to
come in phases sporadically.
Just take the example of the latest announcement by Secretary of
Transportation Pete Buttigieg.
Phase two of the Second Avenue subway was among them.
The total grant $500 Million.
The total cost of this phase is about $7.7 billion.
I think the local share is supposed to be 3 to $4 billion, and it's not
clear where that money's coming from.
And I think the federal government, very understandably is
is skeptical that the MTA is going to be able to raise that money.
And so it doesn't want to write the big check until that's that's
that's there.
Now, you're reaching out to the federal government for a match,
right? You're you're reaching out to the state for the basic funding.
You're always in that mode.
And that's why I say, you know, you each 4 or 5 year period when
you're going to have the capital program, it's so important to make
sure that you have the projects that people really want and need.
The United States also doesn't build as much transit as other
countries. When a major capital project comes along, which is only
about every 15 to 20 years, there just isn't as much practice or
institutional knowledge.
In other parts of the world, in parts of Western Asia and and in
Europe, where they're routinely building a lot of projects.
They have people on staff, they have the expertise.
There's a familiarity that comes with these with these projects that
we seem to have to reinvent here in the United States time and time
again. Other other places in Europe will just pull up standards
and designs from other metropolitan areas and plop them
into their saving a whole lot of time, saving a whole lot of money.
But here in the United States, we customize things, we customize
stations, we customize trains, we customize the interiors of trains.
But a lot of the problems stem from the construction process itself.
There are always unforeseen issues below ground.
When you open up a street in New York City, all of the
infrastructure is below ground.
It's, you know, so you know, all the sewers and electrical venting
system for different tunnels.
It's all below ground. So all of that needs to be moved in order for
a project to even begin.
Controlled explosions underground, also known as blasting, are needed
to dig out tunnels.
Phase One's three stations used two different escalator
contractors, and each had a different number of exits,
elevators and other features.
The ratio of station costs to tunneling costs on the subway was
far higher than on other projects in Paris and Milan, a reason why
projects are so overbuilt.
Politics. When big projects do come around, the political bodies
with seats on transit agency boards often want to tack on
streetscape improvements, parks or other neighborhood beautification.
These agencies often have to know how to bargain with local
governments who have jurisdiction over the areas where they want to
build. And the transit agencies often don't have much leverage in
negotiations.
So what that means is that cities will say, Oh, well, if you want a
permit to, you know, do construction in our city, you need
to like give us all these things.
We need to repave our streets.
You need to use these types of pipes.
You need to, you know, build us a park and so on and so forth.
And, you know, in New York, we had that problem with the Second Avenue
subway, phase one.
And the MTA can't forcefully push back on the mayor and say, you
know, pound dirt like we need the permit from you in order to, like
legally do this. So then we're going to have to like, you know,
pay the bribe, essentially.
Politics also slows down planning processes.
Seattle's public transit projects like the $12 Million to $15 Million
West Seattle and Ballard Link extensions allow for a lot of
meddling by local officials over things like where tracks and
stations are located.
The transit board, feeling heat from constituents, often delays the
planning process to allow for alternatives to be explored.
But the longer the project is delayed, the higher the cost simply
because of inflation.
Labor costs are also higher, but not necessarily because of higher
pay. Sweden is a high wage country, yet its overall labor
costs are lower projects in the Northeast.
Us employ many more workers, many with jobs that don't always seem
essential. There are more blue collar workers and more white
collar ones 40 to 60% more.
In the case of a project in Boston.
Most sectors in the economy has increasing increasing productivity
over time. Construction is flat or actually slightly falling.
And we go back all the way to 1960 and up until today, that's that's
actually 60 plus years we have data for and we can see that
efficiency is not increasing in the construction sector.
That's a real problem.
And anything where you cannot or do not increase the efficiency,
it's going to be expensive.
Another big piece of it is that in America and in New York, there's a
big overtime culture, right?
So collecting overtime on your pay.
Whereas in other parts of the world there are caps on how much
overtime you can work. And there's also an effort to sort of normalize
that stuff. So it's sort of like, okay, you can't just collect, you
know, 80 hours of overtime in a week or whatever it is.
It's like you can only do you can only work a total of 45 hours,
let's say, I think is the cap in France.
The relationships between agencies and contractors are often
adversarial and secretive, and agencies often have trouble
managing contractors.
A lack of competition among contractors and privatized risk all
inflate bid prices.
A lot of the rest of the cost comes down to soft costs, which
include things like design, insurance, construction management
planning and all other expenses.
In a lot of places, these costs can range from 5 to 10% of the
total. For the Second Avenue subway, they were 21%.
Transit can be extremely valuable for a city's economy in New York.
85% of the people who travel into the business district below 61st
Street take some form of public transportation.
Highways and roads can't match transit in terms of efficient use
of space. You can fit many more people in a subway car than on a
highway in separate vehicles.
It's also much worse for the environment.
Transit projects are inherently more complex than highway projects.
There are trains, tracks, signaling and communication
systems, stations and so on.
Opting for standard designs reduces complexity, which then
reduces costs.
You don't have to make something from scratch every time you can
work off a basic model.
But if you go to other countries, you see.
Stations are much more austere in a lot of cases right there.
They're really utilitarian.
And these are just places to get somebody from from one place to
another and serve the system pretty well.
Here we tend to make them a little bit bigger, a little bit more
grand. Even the more mundane ones.
Standardizing designs and practices also reduces micromanagement and
political meddling simply because there are fewer decisions to make.
Researchers like Goldwin say more of the work ought to be brought
in-house, and those agencies need to be empowered to do their jobs.
We would say we still need the consultants.
We just need a little bit less of them and we need leadership at
agencies that sort of is on top of the project rather than being
guided by the consultants.
Regulations, often well intentioned or understandable, can become
onerous or further drive up costs.
For example, a lot of areas prohibit construction during
certain hours. In some cases this is because equipment makes noise,
but sometimes noise can be mitigated.
The beeping sound a truck makes when it backs up can be silenced in
favor of a flagger on hand to warn traffic or pedestrians.
Labor costs can be cut by tackling America's overstaffing problem and
over time, culture.
We're not advocating for cutting anyone's wages.
Maybe be mindful about overtime.
Try to spread it out more equitably.
And then the other side of it, right? Like don't just like throw
bodies on jobs that it's not adding or making things more
productive.
Finding a way out of the chaotic process of planning and securing
funding is crucial.
Every moment wasted is more money lost.