Outrageously Expensive Transit

The average cost of light-rail construction has grown to nearly $200 million per mile, according to data in the Federal Transit Administration’s 2016 proposal for capital grants to transit agencies under the “New Starts/Small Starts” program. This is up from $176 million a mile in the 2015 plan.

San Diego, which started the light-rail craze when it built the nation’s first modern light-rail line in 1981 at an average cost of well under $10 million per mile–less than $18 million per mile in today’s dollars–wants to spend $194 million per mile on a new Mid-Coast line. Boston, which can’t afford to maintain its existing increasingly decrepit rail system, wants to spend $489 million per mile on a 4.7-mile extension of one of its light-rail lines. The least-expensive light-rail line in the budget is a 2.3-mile extension to an existing light-rail line in Denver costing a mere $98 million per mile, nearly twice as much as the least-expensive new light-rail line in the 2013 plan.

Streetcars, which were supposed to be cheap, are costing an average of $59 million a mile, up from $46 million a mile in last year’s plan. That’s less than a third the average cost of light rail today, but still more than three times as expensive as San Diego’s original light-rail line. (I’m counting the Tacoma rail line as a streetcar, as it uses equipment that is nearly identical to the Portland streetcar; Sound Transit and the FTA call it light rail mainly to justify taxing Tacoma residents to help pay for the outrageously expensive light-rail lines being built in Seattle.) The FTA proposes to fund another streetcar line in Charlotte, and streetcars in Sacramento and Fort Lauderdale are also in the plan though not recommended for immediate funding.

Vancouver4th PlainBR535.99
Ft. Laud.WaveSR1622.858
LansingGr. Rvr.BR2158.525
Fort WorthTEX RailCR89227.233
El PasoMontanaBR4616.83
El PasoDyer AveBR36123
DenverSE ExtLR2242.398
Reno4th StBR533.117
San JoseBerryessaHR2,23010.5212
San Fran.CentralLR1,5781.7928
San Fran.Van NessBR162281
San RafaelSMARTCR432.120
San DiegoMid-CoastLR2,11210.9194
Los AngelesReg. Cnct.LR1,4031.9738
Los AngelesWestside 1HR2,8223.92720
Los AngelesWestside 2HR2,3742.6913

The FTA didn’t recommend all of these projects for funding in 2016, but all are considered in the 2016 New Starts plan. Costs and $/mile are in millions of dollars. The “XBR” etc. in the last five rows is so that they will appear on the bottom if you sort by city name or at the end of the list for each mode if you sort by mode.

Heavy-rail projects average $339 million a mile. This is down from $441 million a mile last year because New York City’s $2.2-billion-per-mile Second Avenue Subway isn’t in the 2016 plan.

Commuter-rail projects average $36 million a mile, the same as last year. Commuter rail is usually less expensive because it typically uses existing tracks that were recently or are currently used by freight trains. However, the FTA classifies a brand-new line being built in Denver at a cost of $68 million a mile as commuter rail.

The average cost of 118 miles of proposed bus-rapid transit projects in the plan is less than $9.5 million per mile. Based on projected opening year ridership (a number available for every project in the plan), the cost per trip on bus-rapid transit will average about $3; light rail and streetcars will average about $11; heavy rail $15; and commuter rail $20.

The most insane project is a proposal to extend the existing Orlando commuter rail 12 miles further north. It uses existing rail so the total cost is only $69 million, but it is also projected to attract just 600 new weekday riders in 2030. Adding operating costs to annualized capital costs brings the total to more than $200 per ride. Fortunately, this project isn’t one of the ones recommended for funding, but that’s not because of low projected ridership but because “questions remain on the capital and operating costs submitted by sponsor.”

The FTA has thrown any notion of judging projects based on their cost effectiveness out the window. Not only has the agency emasculated the rules regarding cost effectiveness, for most projects it no longer publishes pertinent information such as how many new riders a project will attract, how much time it will save travelers, or even, in some cases, how many total riders the project will carry in the future. These numbers are needed to calculate the cost per new rider or the cost per hour of time saved, which is how the FTA used to measure cost effectiveness.

The transportation bill that Congress passed in 2012 requires that cost-effectiveness be measured in terms of cost per trip. Cost-effectiveness can only be judged by comparing the cost with other alternatives, so a rail project is cost effective only if it costs less per passenger than buses. FTA specifies that capital costs be amortized at a low 2 percent interest rate over (for most costs) 30 years. These annualized capital costs should be added to annual operating costs and divided by the number of annual riders projected at approximately the mid-life of the project, meaning around 2030 to 2035.

The FTA project profiles don’t provide future ridership projections for all of the projects, but for the ones that are available I calculated the total cost per trip. These costs differ from the cost per opening-year trip mentioned above because future trips are expected to be greater than opening-year trips.

I compared the rail cost per trip with the cost per trip of bus service run by the same agency or, where the rail agency doesn’t run buses, for the largest bus agency in the same urban area. Because capital costs fluctuate over the years, I averaged the inflation-adjusted costs since 1992 taken from this capital cost time series spreadsheet from the National Transit Database.

CityProjectModeCost/tripCost/bus trip
Ft. LauderdaleWaveSR10.723.18
Fort WorthTEX RailCR14.235.49
DenverSE Ext.LR3.905.06
San JoseBerryessaHR11.487.95
San FranciscoCentralLR7.802.97
San RafaelSMARTCR9.1412.25
San DiegoMid-CoastLR9.513.74
Los AngelesReg. Cnct.LR2.823.28
Los AngelesWestside 1HR13.903.28
Los AngelesWestside 2HR11.603.28

This table shows rail and bus costs for projects for which the FTA published future ridership projections. Costs are in dollars and count both operating costs and annualized capital costs.

The results show that rail will cost significantly more than bus in almost all cases. In some cases, rail costs are three or more times the cost of buses. If rail construction costs prove higher or rail ridership proves lower than projected, the differences will be even greater.

The Tacoma streetcar is an exception, but Tacoma buses collect fares averaging 87 cents per trip, while the Tacoma streetcar is free, so the cost of buses to taxpayers is lower. In addition, the average bus trip in Tacoma is 4 miles long while the average streetcar trip is just a mile, so on a per-passenger-mile basis, buses are far less expensive.

The 2.1-mile extension to the Sonoma-Marin SMART train is also projected to cost less than buses, but the buses used for comparison are commuter buses whose trips average more than 18 miles long, so again, on a per-passenger-mile basis, buses are less expensive. The same could be said for the Los Angeles Regional Connector, which is only half as long as the average L.A. bus trip. In general, I suspect that after cost overruns and ridership overestimates are taken into account, buses would be less expensive than rail in every case.

New rail construction has become a great tool for transferring wealth from taxpayers to contractors and railcar manufacturers. But it is a poor method of urban transportation. The rapidly increasing costs of light rail and other forms of rail transit are just one more reason why Congress should stop funding this obsolete mode of travel.


5 thoughts on “Outrageously Expensive Transit

  1. metrosucks

    How nice. Look at these absurd costs and profiteering opportunities for corrupt contractors and their political cronies. All money looted from the productive sector and from car drivers and local taxpayers…it is a monumental irony that deceitful rail proponents decry the minuscule car subsidy while ignoring the 100% rail subsidies.

  2. Fred_Z

    Metro, it’s everywhere.

    I do a bit of contracting work, and know and deal with other contractors. We all know how easy it is to talk a bureaucrat into budgeting and/or paying us obscene amounts of money for our services. The bureaucrats are not only the dullards of the business world but self interested as well. The more they spend the bigger the boobies on their secretaries, the more of them, secretaries and boobies I mean, and the bigger the bureaucrat’s pay cheque.

    The politicos depend on the bureaucrats and are plagued with the same self interest problems.

    I have had the opportunity to do some government work, so far I have resisted the temptation, but …

  3. metrosucks

    I know Fred,

    but it seems excessively pervasive in this rail boondoggle industry. I guess, like you implied, that it’s the case working for the government in any capacity, like defense (sic) contractors sponging off the government to the tune of billions for instruments of destruction that don’t even work half the time.

  4. CapitalistRoader

    Move over capital-bloated transit. More over cars. Move over bicycles. These will be cruising past you @ 12mph in bike lanes in the near future:


    4-6 mile range, 20 minute recharge time, 25lbs, $1500. What’s not to like?

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