Wednesday, January 13, 2010

Ding Dong the Witch is Dead

Well sort of. Today the 2005 dear colleague letter that then FTA Administrator Jennifer Dorn released on the world requiring that all New Starts projects have a medium rating on their cost effectiveness has been rescinded. Many have hailed this as a huge step forward for livability advocates but honestly its only half of the picture. One of the reasons I believe that the medium rating was imposed was to build more cheap BRT projects and cut out subway and lrt projects. But another reason was to cut all the junk projects out of the funding loop. With only about $8 billion dollars available for new starts projects in the last transportation bill, it leaves the need for regions to pick up the hundreds of billions more needed to build out transit networks. One estimate pegged the total at approximately $250 billion dollars. That is a huge gap.

So while some newspapers including the New York Times believe that this is opening up the funding floodgates, they are sorely mistaken. It does however change a few dynamics that have been holding projects back. The Central Corridor in Minneapolis is a curious case. They have been wanting to add a station in St. Paul to serve lower income community however it slowed down the travel time just enough to push the line over the index. This is just one example of how suburban to downtown speedy travel is emphasized over shorter trips in denser communities by the existing cost effectiveness index. Yonah has specifically mentioned another Minneapolis project that I also believe is headed in the wrong direction.

Dropping the medium requirement also takes a step towards making us think harder about what we're really building transit for. Is it for existing population or the future population or both? A common comment about the current cost effectiveness rating is that it would have never funded the DC or New York Subways. But DC and New York would not have gotten to where they are now in terms of density without the investments in the subway. Really this is a chance to start thinking about how to make transformative investments in transit around the country. It's an opportunity we've been waiting for, but as with all big ideas, it needs money.

14 comments:

Jerard Wright said...

I'm on the fence with this because the Medium Cost-effectiveness level is the one thing the Bush Administration got right.

Let me explain. It does limit projects in terms of funding, however it also forces those cities and regions into that hard question of Transit investment for today or tomorrow a lot more seriously and have them od the following;

1) Invest more money locally (through Bonds, Sales Taxes, User fees)

2) Restructure and reallign development plans to serve the investment of the transit mode (BRT, LRT, HRT, Commuter Rail)

3) Have more nodal, denser development in place whether the corridor is built or not meaning that if a city/region is serious about they should put their money where their mouths are and make the hard choices and decisions.

Do we need example of this? Charlotte, NC LRT rings a bell for me.

To clarify another point that was made at looking at NYC and DC of examples that their systems would not have been built due to cost effectiveness and I'd argue that FTA New Starts would have benefited these cities from the start because of their beginning developement patterns and conditions. In DC's case zoning restrictions limit the development at the core to only 13 stories in height meaning that it would have had to sprawl out in a more radial fashion along the corridor and needing these radial conduits to spur more higher density development immediately outside the core and to limit the highway access through DC.

At the start of the NYC subway, Lower Manhattan had a density close to 150-200K persons/acre or persons/mile (I need to check) with open developable land outside of that area. The New Starts requirement would have been ideal for NYC because it would have meant they would have ridership from the start and the "organized sprawl" that the subway created would have meant strong ridership. It also would have made the subway a key land-use development tool that would have paid for itself. The one change I think that would have been made was that the stop spacing would be closer to every 1/2 mile apart in the core and every 3/4 mile to a mile outside of Lower and Midtown Manhattan and the streetcars wouldn't have been abandonded.

Jerard Wright said...

The one thing I forgot to add to the post, is that for higher capacity, grade separated systems funding an Infrastructure bank should be the goal for these systems so that local/regional enties can again put their monies where their mouths are and mkae the hard choices and decisions to make their own cities more livable.

M1EK said...

The 'common comment' is nonsense; both the NYC subway and DC Metro would have blasted right through the cost-effectiveness gatekeeper. The first line of each provided massive speed increases to lots and lots of people.

Pantograph Trolleypole said...

Jerard I think you're making my point. That if projects were forced into a medium rating, they wouldn't get funded even with land use considerations. Charlotte wouldn't have been funded under today's conditions because it got a medium low. It was raised up by land use and other measures in the New Starts project evaluation.

Yes Mike the lines provided a faster trip for a lot of people, but the land use that exists now for many of those suburban lines didn't exist. My point is that the current land use around the orange line in DC and many of the suburban subway lines in NYC would not have been funded because the models never would have predicted the amount of development that happened and thus future ridership. That's all I'm saying.

They aren't getting rid of the cost effectiveness measure all together. If you have a dog you have a dog. The red line probably wouldn't be funded under the new regs either.

Jerard Wright said...

"Charlotte wouldn't have been funded under today's conditions because it got a medium low. It was raised up by land use and other measures in the New Starts project evaluation."

But why did those land-uses raise it up, because they were ACTIVE around that condition. They were under construction with Private $$$ along the corridor and they were scheduled to open within 3-5 years of the completion of the line so it makes it easier to make that consideration and factor in higher ridership.

In NYC case, I believe the land-use new development aspect was built at roughly the same time as the subway-elevated lines so that it would have worked, it has continued to work as over time the density and density style shifted from Courtyard mid rise density to some high-rises.

DC, I can concede on that one in the case of the Orange Line to Ballston, however once that extension was made even without the redevelopment, ridership was near 250K riders a day, the full course of the redevelopment occured when they extended the line to Vienna in Fairfax County and shifted all the park-riders and transit center from Ballston to Vienna and Falls Church. The Blue Line between Stadium and National Airport through Rosslyn and Metro Center is what made the system's ridership take off

Jerard said...

Pantograph,

As I'm rereading your post, I think we are in some agreement to that rule about the development and how it plays a role, thats why I'm on the fence about it.

njh said...

Somewhat off topic, but very interesting article:


"Mr Lezala said he deliberately did not own a car in Melbourne. ''I am an advocate of public transport. I like the tram network because the frequency is such that you do not need to understand the timetable.''"

Alon Levy said...

It also would have made the subway a key land-use development tool that would have paid for itself.

Um, it was, and it did. The subway stopped paying for itself only after post-WW1 inflation halved the value of the dollar, which halved real revenues as the nominal fare was fixed by contract.

My point is that the current land use around the orange line in DC and many of the suburban subway lines in NYC would not have been funded because the models never would have predicted the amount of development that happened and thus future ridership.

I don't know about the Orange Line, but the suburban subway lines in New York were built through areas that doubled in population every decade. Most of those lines were not through greenfield territory, but instead took over or replaced older lines, which were slower (the els) or more expensive (the LIRR).

Even then, the base population of the subway-developed areas was not always low. When the first subway line was built, the Upper West Side and Harlem were low-density by Lower East Side standards, but not by today's sprawlburb standards.

BruceMcF said...

The point about the medium designation was turning the CEI into a filter, where it did not matter what other benefits the system offered.

Mainstream economists often have difficulty understanding the point, because they work with a technical model in which all things are equal priority: but imposing a first priority like this ensures a bias in favor of projects where the imposed priority is appropriate, and a bias against projects where the real priorities are along different lines.

I'm for competitive funding - but competitive funding based on a single first priority will always result in a worse-than-necessary allocation of resources. Instead, there should be distinct pools of money funded for distinct priorities.

ChiefJoJo said...

To be clear, CATS (Charlotte) was the last project to receive a FFGA under the pre-"dear colleague" New Starts era (literally days before IIRC). So any comments related to that project have little to do with the new FTA rule except to say that what most people consider a successful project would not have been built.

My own feeling is some level of cost effectiveness metric (not necessarily the build vs baseline CEI number) makes sense to keep a check and balance against bad projects. However, it's clear that the CEI has often driven poor decision-making among project sponsors.

Jerard, you suggest that the CEI helped drive good land use decisions, but I would suggest that the new policy will place even more emphasis on station area development and policies that support successful transit projects.

The net effect will be positive for project development, but this isn't a massive windfall for rail transit. Only a much larger appropriation from Congress will do that.

Jerard Wright said...

" but I would suggest that the new policy will place even more emphasis on station area development and policies that support successful transit projects."

Jojo, I think it would do the exact opposite because now a metric that was strongly agnostic becomes a wishy-washy almost TOO specualtive means to support the land-uses and overbuild and gold-plate bad infrastructure projects (a microcosm as to why our economic and social structure is in the shape its in now).

The medium threshold by its limiting design forced cities to make the tough choices and decisions.

The Charlotte example you have to admit they had a lot of the private $$$ investment in line with the project from the onset in new developments and buildings directly along the corridor that did factor into the decision. If they weren't as aggressive I'm sure they wouldn't have gotten any funding.

ChiefJoJo said...

Jerard, you are making a contradictory argument WRT Charlotte, and you seem to assume that the CEI will not still continue to be used in the evaluation process by FTA. Projects will still have to score a medium overall rating to receive funding.

Lots of private development dollars or not, Charlotte would not have a light rail operation today if the medium CEI rating litmus test was in effect in early 2005 when the FFGA was signed. Not only that, but during the value engineering stage, CATS had to trim the 3-car platforms from the project to meet CEI, and now after much success, they are adding the platforms back into the extension project to UNC Charlotte.

There's exhibit A that a rigid CEI prerequisite without reference to good land use planning and other factors in context is a foolish way to select projects.

The real problem is the lack of robust federal funding for the overall program, which led to the need for the medium CEI in the first place.

Jerard Wright said...

Chief,

Actually I'm not contradicting what I said, I'm enhancing what I stated which is that the development component is essential to make projects worthwhile investments for both improved mobility but stimulate better land-uses and planning which means those projects are successful.

I'd argue that the success of Charlotte LRT is due to some of these developments opening up at the same time as the LRT start-up opening now making it possible to consider 3 car trains with the Northern UNC extension.

But let me frame it back to the suggestion you raised which is, How would adding more money make the Cost-effectiveness criteria disappear? That isn't likely in fact you'd have a lot more applicants and probably more stringent criteria to allocate the monies because more money is open

Cavan said...

Here in DC, there has been increases in density in more places than on just the Orange Line in Arlington. The historic downtown (Metro Center, Gallery Place-Chinatown, Federal Triangle, McPherson Square, Judiciary Square, Archives) is far, far denser than before the Metro. After the 1968 riots, much of downtown was left in ruins. The ruins then became parking lots. The Metro provided economic incentives to redevelop those parking lots.

There has also been increases in density through economic revitalization that did not include much new building, just renovating and occupying empty buildings. DuPont Circle, Logan Circle, U St., Adams Morgan, Columbia Heights and Capitol Hill provide the most dramatic examples of increasing density without new building.

The Metro is the reason why the District's population will show an increase in the 2010 Census.

Increasing density isn't only about building new buildings. It's also about using every parcel of land with a human use rather than surface parking lots. That kind of trend is only achieved through a whole system. While the developments on single lines like in Charlotte might be more visibly dramatic, the kind of densification that happened in the District (and also in Silver Spring, MD) outside of the downtown is equally dramatic and positive from an economic and livability perspective.