Putting the brakes on TOD enthusiasm

By Ariel

In this month's Atlantic, Chris Leinberger suggests that private developers should fund the development of street car lines because of the higher values that proximity to transit brings.

Over at the Next American City, Yonah Freemark has some pretty scathing criticism of Leinberger's enthusiasm. He writes that "Leinberger’s solution — that developers could benefit by spending their own money to build transit — is problematic. For one, it fails to account for the fact that most land speculators move on to new work once they’ve sold off their projects to home buyers. Who would continue to subsidize the operations costs of the new transit systems once the land has been sold? Is it fair to expect municipal transit operators to take over the servicing of privately developed systems? Second, Leinberger’s argument assumes that developers would be either wealthy enough or powerful enough to assemble the necessary right-of-way for said transit and then build it. Noting Detroit’s recent public-private streetcar deal, he posits that the federal government should be more willing to fund private-initiated public transportation, and it’s true that involvement from Washington would make such investments far more feasible."

Yonah's criticisms are pretty spot on, but they miss even bigger problems that would actually squash any of Leinberger's lovely dreams. When you actually look at the costs of building a light rail line, and you look at the scope of profits, and even the marginal growth in value induced by TOD, you still don't cover the costs of building a light rail line.

Even more importantly? The lead time to build a light rail line is HUGE, and long, probably much longer than the time a developer wants to spend building. Developers want no more than five years of pre-development commitment. Assuming that the costs justified the TOD, which I doubt, the amount of time required to build a light rail, is so long that it’s just not worth it for developers.

Finally, Leinberger who uses the early developers of regional rail and light rail as his model, forgets that they had a few different things going for them that made their 19th century projects a success:

• low labor costs
  
  
• control of LOTS of land. (Now its scattered sites, and even if you could control all the land, the market for people to move into these new neighborhoods would be a HUGE risk that no developer would take on, at least not in a city, maybe for greenfield development, and definitely not in this economy)
  
  
• fair grounds: Lots of these developers had fairgrounds at the end of their lines, transit use was actually much higher on the weekends when people went to the fairs. That won’t work these days with much more competition for our entertainment dollars.
  

This isn't to say that there is not a role for the private sector in TOD, but we can't think we should just abdicate the role of the government in building our cities from the ground up.

Transit Works

By Ariel Ben-Amos and Matt Crespi
Our sometime guest Matt Crespi brings us a thoughtful look at the importance of transit: namely that transit means jobs and more jobs than highways. Crespi does a great job of outlining the issue, and implicitly raises some more questions

- What does the investment in transit jobs mean for job growth and a tax base... How many more jobs would we need to create in transit for their to be a noticeable increase in the tax rolls for a city? Which leads to another question, what kind of transit service would we get out of that?
- More importantly, what kind of jobs are needed to maintain ongoing transit operations. Transit systems across the US are facing a critical staffing gap. As more and more engineering minded students go for hi paying jobs developing computer programs, there are fewer highly trained people able to maintain and fix the increasingly complex transit cars and subways.

What Crespi ultimately points to is that Philadelphia faces a challenge: how do we invest in people and transit for the betterment of both.

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For decades we’ve known that investment in public transportation is often money well spent. In addition to encouraging more environmentally friendly behavior and serving as a keystone to any urban plan for sustainable development, it comes with numerous economic benefits. From attracting businesses to making a local labor market more efficient, good public transportation is a boon to residents in all socioeconomic strata. Now, thanks to a study by Smart Growth America, we can add one more fantastic claim to the list of benefits provided by that magic civic elixir: investment in public transportation creates almost twice as many jobs as other transportation projects.

Studying data from the American Recovery and Reinvestment Act, SGA found that a billion dollars devoted to public transportation produced 16,419 job months, where the same amount of money spent on a highway project produced a comparatively meager 8,781 job months. (What's a job month? A "job month" is a unit equal to one month of work for one person. The ARRA is less than a year old, so determining the exact retention rate, or creation of full-time jobs that are here to stay, is not yet possible. Estimates and experience, however, suggest that public transit creates at least as many jobs as investment in roads.)

Why the big difference? Building roads and highways requires significant amounts of land, while public transportation is more compact, complex and labor-intensive. Public transportation often requires a greater variety of skills to implement, which not only leads to more job creation, but also faster job creation (especially in areas with existing systems). Pennsylvania has been especially effective in turning stimulus money into jobs, and in less than a year has 100% of its Recovery Act funds under contract.

For Philadelphia, this affirms one of Mayor Nutter's key messages: improving sustainability doesn't have to be at odds with fighting a recession. Public transportation investment bring more jobs faster, and the jobs themselves are also greener. While a new highway and new public transportation can both reduce congestion, buses, trains and subways have a smaller environmental footprint, and the behavior they incentivize is far more sustainable.

Even ignoring superior job creation and environmental compatibility, the infrastructure itself would provide our region with a great return on investment. With SEPTA ridership increasing dramatically, more Philadelphians are prepared to embrace public transportation as a way of life than ever before (a trend holding true across the nation--the study points out that since 1995, transit use has grown at almost triple the rate of population growth). And now that we know the investment isn't just good for commuters and businesses, but also for the tax base and the city as a whole, the only thing stopping us is limited resources.

With this revelation, it is my hope that funding for public transportation will come in even more rapidly, as the rate of job creation currently seems capped only by limited government commitments. It would be nice if legislators in Harrisburg would wake up to the fact that allowing state transportation money to fund SEPTA projects is not a waste, but a way to raise state revenues and employ Pennsylvanians. That may be a pipe dream, but I think there is real hope that Washington will take notice. As the White House tries to get Americans back to work, future transportation funding initiatives might just include more funding for public transit than ever before.

The public opinion war is being won, and it's time for the supply to catch up with the demand. Public transportation too often seems to fall in the category of important but not urgent. But now, as we discover that these green investments create almost twice as many jobs as their land- and carbon-consuming counterparts, expanding public transit seems an ideal way to meet an urgent policy need while getting ready for a future which Philadelphians--and increasingly all Americans--are optimistically seeking.