The Hiawatha Light-Rail Disaster

One of the arguments for light rail is that it is supposed to have lower operating costs than buses. But Minneapolis’ Hiawatha light rail is losing so much money that Hennepin County wants a region-wide sales tax to cover the costs of what Minnesota Governor Pawlenty calls “these very expensive transit projects.” The feds were subsidizing it with a $10 million grant, but that ended last year.

This one 11.6-mile light-rail line costs more than $20 million a year to operate. Farebox revenues cover only about a third of that. Half the rest is paid by the state of Minnesota and most of the other half comes from Hennepin County property taxes.

The light-rail line does not go outside of Hennepin County, so clearly most riders are residents of that county. But some commuters from Dakota and other nearby counties drive to park-and-ride stations and use the rail line. “There is no rational basis why the property taxpayers in Hennepin County ought to be paying for people from Dakota County to use the LRT line,” says one official.

But are they? Half the operating costs are paid by state taxpayers, including taxpayers from Dakota County. All of the construction costs were paid by federal and state taxpayers, including taxpayers from Dakota County. Considering the subsidies Hennepin County transit riders have received, they should pay Dakota County riders to take the train.

The Hiawatha light-rail line has received positive reviews, mainly because ridership exceeded the anemic projections made for it. Transit agencies have learned that politicians and editorial writers are basically innumerate, so instead of making unrealistically high projections of future ridership, they lowball the numbers.

The Hiawatha line was projected to carry only 9,000 riders a day who weren’t previously taking transit. Since Twin Cities daily auto travel grows by 9,000 trips about every two weeks, 9,000 riders a day (not all of whom would otherwise have driven a car) hardly justified the $480 million the line was projected to cost. Yet Ted Mondale (son of the former vice president and then-executive director of the Twin Cities’ regional government) touted the line as the solution to congestion.

Minnesota residents, who had to pay most of the construction costs, were in for a series of shocks after the legislature approved the project following rancorous debate. First, construction costs quickly escalated: the project ended up costing $715 million. Transit officials claimed these weren’t cost overruns and that they could have built the line for close to the original budget. But the local congressional delegation happened to “find” extra money for the project, so they spent it on things like station-area art. Even if true, it raises the question of why the transit agency so willingly spent hundreds of millions of taxpayer dollars on things they claim they didn’t need.


$200 million worth of station art? Photo by Stephan Louis.

When the rail line opened in 2004, auto drivers who expected congestion relief were stunned to find that light-rail significantly increased congestion. The line parallels Hiawatha Avenue, AKA state highway 55, and crosses many of the streets that cross Hiawatha. While signals on Hiawatha had previously been coordinated to allow smooth progression of traffic, the new arrangement gave the light-rail line signal priority over autos. This disrupted the signals on Hiawatha, adding 20 to 40 minutes to people’s commutes.

“This is not a sinister plot to make traffic as miserable as possible and move everybody onto the train,” a Minnesota Department of Transportation official told the Minneapolis Star-Tribune. He was soon proven wrong. Documents uncovered by state Representative (and rail critic) Phil Krinkie soon proved him wrong. In 1999, the documents revealed, a consultant warned that giving light-rail signal priority would severely disrupt traffic. Yet the state decided to give the trains priority because, said a state planner, “transit had to have an advantage” over autos. After studying the problem for months, the state finally concluded that the traffic would have to stay disrupted because they did not want to interfere with their precious light-rail schedules.


Light rail opened for business on June 26, 2004. First fatal accident on September 26, 2004. Photo from Minnesota Daily

The Hiawatha light rail was involved in its first fatal accident just a few months after it opened. Transit officials blamed the late auto driver. The accident certainly was not the fault of planners who put 200,000-pound rail vehicles in the same grades and intersection as 2,000- to 3,000-pound automobiles.

The next shock came to transit riders who believed that light-rail would improve the entire regional transit system. Instead, the transit agency began cutting bus lines throughout the region. The agency claimed that these economy measures were unrelated to the cost of light rail. But if they did not have to spend $20 million on one transit route, they could have spent that money improving bus service elsewhere.

In 2000, before light-rail construction began, Twin Cities transit carried 73.5 million transit trips. In 2005, the first full year of light-rail operation, transit carried 69.7 million trips. Light-rail’s legacy is a 3.8-million trip decline in annual ridership.

Of course, none of these things bother rail advocates, who claim the Hiawatha line is a success story. Success for who? The pork-barrelling interests who built it? The transit officials who want a rail empire? It is certainly not a success for taxpayers, commuters, or transit riders.

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8 thoughts on “The Hiawatha Light-Rail Disaster

  1. Urb. Pl. Overlord

    Three questions (or sets of questions) for the anti-planner:

    1. As traffic congestion continues to grwo and becomes even more intolerable, do you think there is any benefit to providing a transit alternative? In other words, given the current Minneapolis road system, do you think traffic will continue to grow by 9,000 trips per day? Or isntead will more and more of those new trips be diverted to mass transit, such as the Hiawatha Line, if it is available to them? And have you done any cost analysis of what the equivalent amount of new roadway construction for those new automobile trips would cost vs. what the Hiawatha and other mass transit costs? I am assuming that, as a good libertarian, you would require any new roadway capacity to be tolled instead of “free.”

    2. Have you done any research on the new mass transit exclusive bus line recently opened in the San Fernando Valley of Los Angeles, or, for that matter, the exclusive bus routes in Curitiba, Brazil? It seems to me that such alternatives to fixed rail provide a lot more flexibility for buses to enter and exit city streets to and from the exclusive bus route. One of the primary problems with bus transit is that buses are captive to the same traffic jams plaguing automobile drivers (as an aside, I would note that the Portland Stretcar was quite stupidly mixed with auto traffic, thus negating an advantage light rail has over buses)

    3. Do you have any thoughts on the claim that light rail provides incentives to new development along its route and adjacent to its stations, thus paying for itself through increased property tax revenues (assuming the local government hasn’t given them all away through abatement schemes)?

  2. pdxf

    “One of the arguments for light rail is that it is supposed to have lower operating costs than buses. But Minneapolis’ Hiawatha light rail is losing so much money…This one 11.6-mile light-rail line costs more than $20 million a year to operate.”

    What are the operating costs for buses in that serve the same amount of people in the same area. You state the thesis that light rail is more expensive to operate, yet you only include data for light rail.

    “There is no rational basis why the property taxpayers in Hennepin County ought to be paying for people from Dakota County to use the LRT line,” says one official.”…Considering the subsidies Hennepin County transit riders have received, they should pay Dakota County riders to take the train.”

    Not sure I understand all of this…Let me know if I get this with another example: should I not expect to pay for Washington resident’s use of state funded roads in Oregon? …Since some state roads in Oregon receive federal funding, should the state of Oregon pay Washingtonians to use our roads? I don’t quite get it.

    “The Hiawatha line was projected to carry only 9,000 riders a day who weren’t previously taking transit. Since Twin Cities daily auto travel grows by 9,000 trips about every two weeks”
    Sources?

    “The Hiawatha light rail was involved in its first fatal accident just a few months after it opened. Transit officials blamed the late auto driver. The accident certainly was not the fault of planners who put 200,000-pound rail vehicles in the same grades and intersection as 2,000- to 3,000-pound automobiles.”

    I agree, it would be nice to have total separation of light rail and autos, perhaps we should separate semi trucks as well. A loaded semi-truck can weigh up to 80,000 pounds, which is still drastically higher than the weight of automobiles, do you think that they should be separated from cars as well?

    Just to add some more info on the accident, the driver, 87, drove through the safety arms that drop when a train approaches an intersection. (http://www.mndaily.com/articles/2004/09/27/61395)

    “In 2000, before light-rail construction began, Twin Cities transit carried 73.5 million transit trips. In 2005, the first full year of light-rail operation, transit carried 69.7 million trips. Light-rail’s legacy is a 3.8-million trip decline in annual ridership.”

    Had transit ridership been dropping prior to 2000? How is transit ridership this year so far? Is one year enough to make a conclusion that it is a failure?

  3. The Antiplanner Post author

    Reply to Urban Planning Overlord:

    1. I support cost-effective transit for those people who can’t drive. I suspect that transit is rarely if ever cost effective as a way of reducing congestion. If an analysis showed somewhere that it was cost effective, I wouldn’t object to it — but I seriously doubt that it would be rail transit. My measure of cost effectiveness, by the way, is the dollar cost per hour of congestion delay saved.

    2. I do not think that bus-rapid transit needs its own exclusive lanes. Such lanes are expensive and will be wasted since they would only be used by a few buses. Instead, build a network of toll lanes with the tolls set to guarantee no congestion. Open the lanes to anyone — buses go free, others pay a toll. This would have the practical effect of exclusive bus lanes but would move a lot more people and the tolls would pay most or all of the costs.

    3. At least in Portland, with which I am familiar, light rail has not generated any new development. In fact, in the ten years after the first line was built, no new transit-oriented development was built near stations even though they were zoned for it. Since 1996, Portland has offered huge subsidies to development along rail lines. It is the subsidies, not the rail lines, that have spurred development.

  4. The Antiplanner Post author

    Reply to PDXF:

    Many buses in high-use corridors — the corridors where transit agencies tend to build rail lines — cover their operating costs out of transit fares. Unfortunately, it is difficult to get route-by-route cost and revenue data, so I can’t give you any citations. But region-wide comparisons of bus vs. rail include all kinds of low-use buses and so are really comparing apples and oranges.

    My point about who should pay was that it is ironic that the vast majority of light-rail costs were not paid by Hennepin County residents, yet the county official is trying to get others to pay even more of the operating costs. The truth is they are just trying to get a bigger budget so they can build more expensive rail lines.

    Transit ridership has been dropping in the Twin Cities for a long time. The notion that the solution to low ridership is to blow close to a billion dollars on a rail line that will serve a single corridor is absurd. That $715 million (plus operating costs) could have improved bus service throughout the region and led to much larger gains in ridership.

    We can’t compare 2005 ridership with 2004 because the transit agency suffered a strike that cost them lots of 2004 riders. The strike was indirectly caused by the rail line. Due to the expense of the rail, the agency asked transit unions for some concessions. They refused and went on strike.

  5. JimKarlock

    Here is the proof that rail failed (like it has failed on all of its promises) to encourage development:

    Developers have been hesitant to build the type of housing Metro says the region needs to attract more transit riders.

    The tax break also aims to help Tri-Met make the most of the public’s investment in the $214 million Banfield MAX line, which opened a decade ago.

    “We have an investment that hasn’t been well capitalized on,” he [City commissioner Charlie Hales] said. (Oregonian, The, October 24, 1996)

    Full article:
    HOUSING NEAR LIGHT RAIL GETS INCENTIVE
    Oregonian, The (Portland, OR)
    October 24, 1996
    Author: GORDON OLIVER – of the Oregonian Staff
    Estimated printed pages: 2

    Summary: Portland offers tax breaks to encourage residential development close to the eastside MAX line

    The Portland City Council on Thursday approved a tax incentive plan that will give tax breaks to transit-oriented housing projects near MAX light-rail stations and two other Portland eastside locations.

    The program is patterned after a tax break the city has used for years to attract housing development downtown.
    Now it will waive property taxes for a decade on rental or owner-occupied high-density housing projects near MAX stations east of Lloyd Center and business districts around Gateway and Lents near bus or rail lines.

    The tax break, a year in the making, is intended to help contain regional growth to land inside the urban-growth boundary. Developers have been hesitant to build the type of housing Metro says the region needs to attract more transit riders.

    The tax break also aims to help Tri-Met make the most of the public’s investment in the $214 million Banfield MAX line, which opened a decade ago.

    City Commissioner Charlie Hales explained his vote supporting the tax break by referring to a map showing large blocks of undeveloped land near light-rail stations.

    “We have an investment that hasn’t been well capitalized on,” he said.

    The incentive program could serve as a model for Washington and Clackamas county local goverments as the region expands it’s light-rail system, Portland city planner Mike Saba said. The Oregon Legislature made the breaks possible with legislation it approved in 1995.

    The tax breaks, which apply to buildings but not land, will generally have the effect of shifting the tax burden to other taxpayers.

    Randy Webster, a city financial analyst, estimated a tax increase of $1 peryear for the owner of a $145,000 home if five projects under consideration near the eastside MAX line were already built.

    Housing developers, both for-profit and nonprofit, testified that the tax-incentive program would stimulate the market for creative housing and mixed-use projects. Projects with 15 or more units would be required to contain at least some housing for people with low incomes.

    The strongest criticisms came from several Southwest Portland residents who are involved in a fight overthe Planning Bureau’s proposals to increase housing density in the Multnomah neighborhood.

    Michael P. Roche, acting land-use chairman of the Multnomah Neighborhood Association, said several hundred Southwest residents overwhelmingly opposed the tax-break program last week at a heated community meeting. last week.

    “I am both confused and angry that you are even considering tax abatements for housing development during the week I and other homeowners have received property tax increases of several hundred dollars,” Roche said.

    Mayor Vera Katz pointed out that the incentive program could not be expanded into other areas without another City Council vote.

  6. Thehighwayman

    Just to put things in perspective the line north of 54th street is more along the lines of a reconstruction for there were tracks in about the same place in the past, so the capital costs here are neutral. To the south it’s some thing else going under the airport was expensive. Also it’s not a good idea to push transit as a traffic congestion remedy, but as a option other than being forced to drive in many situations.

    Take care, ASD

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