The problem with “public” transportation

The blog 2nd Ave. Sagas has written something that I think sums up pretty well transit advocates’ poor knowledge of private mass transit history:

Of course, public transit is vital to the city’s well being. Because Manhattan is an island, it can’t handle the traffic. It’s a commercial hub in a geographically isolated area that needs the subway — and requires people to travel for a while — to thrive. That our city’s forefathers had the foresight to build a vast public transit system is a minor miracle, and it’s sort of silly that we have such a love-hate relationship with the subway and the public transit system. Without it, New York City as we know it simply wouldn’t exist.

The biggest problem here is the conflation of “public transit” with “mass transit.” When New York’s rail lines were first built, they were private enterprises, not public ones. And Benjamin Kabak doesn’t explicitly say it, but when people talk about a city’s “forefathers,” they’re almost always talking about lawmakers. And in the late 19th and early 20th century, when New York’s massive transit networks were being built, lawmakers did pretty much everything they could to stifle the budding transit market – the idea that any of them had any “forethought” is absurd.

But secondly, Benjamin Kabak’s reverence for New York City’s subway system ignores the far more important contributions to the city made by streetcar and elevated train lines. As I’m learning in Robert Fogelson’s Downtown, NYC’s publicly-built subways paled in comparison to the privately-constructed elevated trains and streetcar networks that crisscrossed the five boroughs. Even today, NYC buses, which mainly run along the old streetcar routes, have twice the ridership of the Subway.

And although the Subway was heavily subsidized by the government, the truth is that it was a very expensive and ineffective replacement for elevated trains, which are just as fast as subways, and far cheaper to build. The els were quite profitable and transit companies were eager to build them, but the NIMBY interests didn’t like the noise they made and the city resented the limited role that it had in the lines. In fact, it was the city holding out for a subway and the massive spending binge it took to finally build it that contributed to mass transit’s insolvency – a trend which continues unabated today.  If the city hadn’t insisted on the unsustainable luxury of forcing all rapid transit underground (a theme I hope to explore more deeply in the future), then Second Avenue, and a whole bunch of other streets, would have gotten rapid transit a century ago. (And I won’t even get into the fact that much of the NYC “Subway” is actually repurposed old private elevated lines.)

So, in sum, there are very good reasons for even the staunchest transit advocates to have a “love-hate relationship with [...] public transit.” Back around the turn-of-the-century, during transit’s heyday, it was widely acknowledged that municipal ownership would be a disaster. Now that these predictions have panned out, it’s time for liberals to acknowledge the truth: public transportation sucks, and the only reason it’s still halfway decent today is because of the investments made by private companies a century ago.

  • Dan

    “The els were quite profitable and transit companies were eager to build them, but the NIMBY interests didn’t like the noise they made ”

    Noise and obstructed sightlines are real externalities. Maybe they should be acceptable externalities; I’d love to see you try to make the case. But just dismissing externalities that everybody knows exists with a pejorative doesn’t help much.

  • Alex B.

    Public transit to me is transit that’s available to the public. Ownership of the line is irrelevant, the experience is what matters. Airlines today are public transport. Some are private, some are state-owned.

    New York’s subways and Els have always been public transportation, regardless of their ownership. And New York’s “private” transit lines weren’t all that private, they were publicly authorized, operating in public space, etc.

    In short, I don’t think this is a useful distinction.

  • Eric

    Thank you.

    The els may have been profitable, but profit is not the sole criterion for whether something is good or not. It was necessary to put the trains underground, and it’s something that private enterprise was not able to do profitably. Doing something necessary that the private sector can’t or won’t do is the very definition of a public good.

  • Aaron

    “Even today, NYC buses, which mainly run along the old streetcar routes, have twice the ridership of the Subway.”

    Just wanted to clarify. It’s the opposite: the Subway has twice the ridership of the bus system.

    http://www.mta.info/nyct/facts/ridership/index.htm

  • Anonymous

    Of course many of the private mass transit providers in the early 20th century and before subsidized their systems through real estate development. This is an area in which I think public transportation agencies should be moving towards, although it probably would not make enough money for the agencies to significantly subsidize operations.

  • Anonymous

    Of course many of the private mass transit providers in the early 20th century and before subsidized their systems through real estate development. This is an area in which I think public transportation agencies should be moving towards, although it probably would not make enough money for the agencies to significantly subsidize operations.

  • Joseph

    I would love to assume that elevated transit construction is still a viable option today. Depending on who you listen to, the city’s drive to remove the Els in Manhattan was spurred by real estate interests who called the transit a blight. It’s an interesting piece, but sadly the realities of construction a transit system for public use today is infinitely more complicated than it was 100 years ago. ADA regulations, environmental impact statements, noise mitigation and building around dense environments makes the tactics for subway and elevated construction used then very much obsolete.

  • Petrojoh

    There was a tremendous amount of real estate value created by putting trains underground. Moving rapid transit from above ground to below ground created public goods, and therefore needed public subsidy.

  • http://marketurbanism.com Stephen

    For sure, there is value in moving transit underground. But saying that subways “move” transit underground, I think, is misleading – it’s a choice between a few subways or a ton of els, and I’m not quite so sure that 10 subways lines are better than 30 elevated lines.

  • Jeremy H.

    No, the definition of a public good is non-rival and non-excludable. The Subway is both rival (trains get full) and excludable (turnstiles).

  • Michael Lewyn

    Private transit was nice while it lasted- but unfortunately it was driven out of business by government-funded highways.

  • http://marketurbanism.com Stephen

    But with the advent of congestion pricing and reducing the limitations on density, it might yet be a possibility again! I know it seems like something that seems impossible now, but given how dramatically the state has failed at maintaining and expanding the private systems, it seems like something we should be thinking about.

  • http://marketurbanism.com Stephen

    Ooh, embarrassing! Thanks for the correction. Damnit, and that was a favorite factoid of mine, too. :-(

  • http://marketurbanism.com Stephen

    Thanks…it always kind of irked me when people used transit as an example of a public good. Though nowadays it looks like the definition has been expanded to “Anything I think the government should provide.”

  • http://marketurbanism.com Stephen

    Like I said further upthread, it is not (and never was) a simple choice between subways and els – if the government were burying every single elevated line, then that would be a different story. But in reality, only a small number of els (/potential els) became subways.

    Also, Downtown didn’t get into the specifics of why subways were unprofitable, but one reason it cited was the city’s insistence on operators maintaining a uniform 5¢ fare (something which apparently the city did away with once it realized that was totally impractical) and all the other restrictions it levied on potential franchisees. Not sure if easing up on the demands would have made subways profitable, but it’s something to think about.

  • http://marketurbanism.com Stephen

    Perhaps I should have. But in the future I’d like to write something more specifically about the els vs. the subways, so I think I’ll save that argument for then. But just as a preview: Chicago’s Loop real estate doesn’t seem to be suffering from its elevated lines, and upper Manhattan and the outer boroughs have many reasons for which they haven’t grown like lower/Midtown Manhattan, but I don’t think their elevated lines is the primary reason.

  • Anonymous

    You can’t forget that the IND lines of the New York Subway, including the 6th Avenue, 8th Avenue, Queens Boulevard, Culver, Fulton St, and Crosstown Lines (generally Lines A-G), were built by the city. While it’s true that there was enormous private sector involvement in subway construction at the beginning of the century, by the 30s, it was all being built by the government.

  • Aaron

    No worries. Doesn’t affect the overall point of the post. Here’s an article (from I think the early 2000s) about why the Second Ave Subway is a bad idea and a better alternative is to run light rails down 1st and 2nd Ave.

    http://www.gothamgazette.com/iotw/subway/doc2.shtml

  • http://marketurbanism.com Stephen

    I think it’s a useful distinction in that gov’t-run public transit is a huge money pit and that requires lots of (as of yet) politically unpalatable subsidies just to maintain (forget expansion), whereas private mass transit was profitable enough to fund its own expansions (when allowed to, that is – an increasingly rare occurrence as the century wore on).

    Also, I’m not sure that the gov’t simply “authorizing” a transit line detracts significantly from its private-ness. If they are granting it an exclusive monopoly and shielding it from competition, then it’s relevant, but even the franchise monopolies of the late 19th/early 20th centuries weren’t that exclusive. Also, a lot of the elevated lines actually were built on private land – some of them ran in between alleyways of private lots. And finally, a lot of the streetcars nominally ran on public roads, but many of those roads and the neighborhoods that they ran through were actually constructed and maintained by the streetcar companies.

  • http://marketurbanism.com Stephen

    No doubt much of the currently-existing NYC Subway was built by the government. But remember that the private sector was ready, willing, and able to build these segments – it just wanted to make them elevated rather than underground, whereas by the early 20th century cities across America had basically refused to accept new els. So rather than a very extensive el system, we’re left with a relatively extensive subway system with a few elevated segments. In retrospect, with advances in noise reduction technology (nevermind the technology that would have been developed if we had more of them), it sure seems like the wrong decision to me.

  • http://marketurbanism.com MarketUrbanism

    Loop real estate is interesting. In general, it benefits hugely from the L,
    but property adjacent to the L tends to be have a slightly tougher time – at
    least the ground and 2nd floor space. (This tends to be a bigger problem
    further outside the loop where buildings are only a few stories high.)

    The 2 obvious reasons are the permanent shadow, and the noise. The noise
    could be mitigated with technology that already exists, or tubes like
    Koolhaas’ at IIT. I think the noise mitigation would be a better investment
    than new lines…

    In feasibility studies of a circle line “outer loop”, they did consider
    building the L above ground, because the costs of underground are so much
    greater. (though digging in Chicago doesn’t require blasting like
    Manhattan) I assume those plans are on hold, but haven’t kept up with
    them…

  • Angel

    The most important contribution of subways is the one you casually dismiss as unimportant and a NIMBY attitude: building els would’ve driven affluent and middle class people out of the city, in the same way Moses’ superhighways through the city would have. The subway has allowed Manhattan streets to stay connected and therefore has contributed to the vast wealth derived from walkability (real estate, retail, etc.). It is no coincidence that els today exist only in the poorest neighborhoods of NYC. Ask someone living in the Bronx or Jackson Heights how they like to live next to the E line. And how does it feel when you walk outside and there’s no sky to look out because it’s covered by a rusted iron behemoth. The best thing els did is to keep RE prices from going through the roofs as in Manhattan. Urban Design is just as important as counting beans. That’s the kind of money you cannot write them in an accounting sheet when you plan these things.

  • http://marketurbanism.com Stephen

    Could it be that the causality between poor neighborhoods and els actually runs the other way? That poverty caused the neighborhoods to not get subways, not the other way around?

  • http://marketurbanism.com Stephen

    Could it be that the causality between poor neighborhoods and els actually runs the other way? That poverty caused the neighborhoods to not get subways, not the other way around?

  • Dave

    Does this mean that you think that public roads are a public good? Why do you think transit
    is not a public good?

  • http://marketurbanism.com MarketUrbanism

    The commenter explicitly stated why transit is not a public good: it is
    excludable, and when done properly, is rivalrous. The same goes for roads.

    Of course, if any good is grossly over-provided and offered at no cost (such as transportation) you can falsely categorize it as non-rivalrous and non-excludable.

    For a silly example: if the government literally manufactured mountains of free marshmallows, they would be just us non-rivalrous and non-excludable as roads in the US….

  • Sammy Finkelman

    Second Avenue *did* have rapid transit a century ago!

    But they tore down the el.

    Promising to replace it with a subway.

  • Sammy Finkelman

    The number 7 line is elevated in Queens and was built BEFORe there were many buildings there. Like the transcontinental rail road, it created value. Only when there is a high crime rate is mass transit something bad for real estate.

  • Jim654

    No, private transit was driven out of business by the enormous superiority of private automobiles. This happened not just in the U.S. but throughout the developed world. Highways are funded mostly from user fees. Transit use today is subsidized at a vastly higher rate than automobile use.

  • http://conflatedautomatons.wordpress.com Adam

    Same thing happened more recently – 90’s and 00’s – in Canary Wharf in London.

  • http://marketurbanism.com Stephen

    Haha, you must be new here.

    I’ll try to make this brief: Highways are now subsidized (mostly!) out of user fees, but this was not always the case. Furthermore, eminent domain was used very liberally to create the highways. And finally, local roads – the ones that actually have the ability to take down private mass transit – have never been funded out of user fees, and to this day are still not.

  • Jim654

    I think highways have always been funded mostly out of user fees. In any case, they are now. And subsidies for local roads are a quibble. Transit struggles to maintain its tiny share of the transportation market despite its overwhelming advantage in government subsidies. If transit users were to pay anything close to the full cost of providing them with their rides, fares would need to be tripled or more.

  • http://marketurbanism.com Stephen

    A quibble? Why are subsidies for local roads a quibble, but subsidies for mass transit are relevant to the conversation? Do you have some data on local road spending that you’re not sharing with the class?

  • http://marketurbanism.com Stephen

    A quibble? Why are subsidies for local roads a quibble, but subsidies for mass transit are relevant to the conversation? Do you have some data on local road spending that you’re not sharing with the class?

  • Jim654

    “Why are subsidies for local roads a quibble”

    Because they are tiny in comparison to transit subsidies. If you think you have data showing otherwise, please present it. In fact, how much are you claiming is provided in subsidies for local roads per year, and where are you getting your numbers from?

  • http://marketurbanism.com Stephen

    I don’t have any, because such data does not exist, due to the bajillions of local municipalities doing the subsidizing. I’m only going by my personal experience and observations about America, which is obviously wildly at odds with yours, so I guess we’re going to have to end this debate here.

  • Alon Levy

    The histories I’ve read of the subway have it different. The city’s patrician elite planned for rapid transit from the 1850s. It permitted the els as a makeshift solution, but preferred subways because they’d be much faster. In addition, at the time, in the 1860s, there was no electric train traction yet, so els were run on dirty steam power, whereas subways could be pneumatically powered. By the time electric traction was feasible, in the 1890s, the limited speed of the els was already a serious problem. The intention behind rapid transit was to suburbanize immigrants and the working class, sending them to single-family detached houses with separation of uses in order to turn them into proper middle-class Americans; speed was crucial, to maintain adequate range (that’s why it took until the 1920s to build crosstown subways in Manhattan).

    After 1900, municipal control was more supported in New York. The politics of subway construction revolved around the city’s immense corruption; initially the Rapid Transit Commission and Parsons got the support of the reformers, since they viewed them as independent of the political machine, but afterward the reformers grew weary of the IRT and considered it equally corrupt. But to combat that corruption, the city introduced competition rather than municipalization, letting the BRT run some transit lines in Manhattan, and threatening the IRT that if it objected, it would give the BRT even IRT extensions like the Lexington Line.

  • Jim654

    I have no idea how you think “personal experience” can tell you anything meaningful about subsidies for local roads.

    Local government spending on all transportation combined except transit is less than $100 billion a year. Even if this were ALL spent on local roads, and NONE of it was funded by road user fees, it would only come to about 2 cents per passenger-mile. This is just a tiny fraction of the subsidies provided to mass transit. For transit buses, subsidies are more than 40 cents per passenger-mile. For heavy rail transit, more than 50 cents per passenger-mile. And for light rail, more than $1 per passenger-mile. You are quibbling about a tiny subsidy to road users, and ignoring the vastly higher subsidies to transit users.

  • Alon Levy

    Congrats, Stephen, you’ve made it big – you’ve got Mixner Gordy garyg DillonS Mixner commenting on your blog.

  • http://twitter.com/theoverheadwire The Overhead Wire

    Hey Stephen have you read Getting There by Steven Goddard? I think it’s something you might be interested in even if it does have a little slant. http://www.press.uchicago.edu/presssite/metadata.epl?mode=synopsis&bookkey=3626177

  • http://marketurbanism.com MarketUrbanism

    Jim,
    I’d be glad to discuss this topic further, as one of the main objectives of this site is to dispel the myths that are commonly held about the current government transportation system. Perhaps a better forum is in the comment section of the article which I think handily destroys the pervasive myths about “roads paying for themselves.” etc. http://marketurbanism.com/2008/07/30/urbanism-legend-gas-taxes-covers-all-costs-of-road-use/
    Perhaps you could read the article, poke some holes in it, provide some analysis that counters what I have to say, and we can have a healthy debate.
    Adam

  • http://marketurbanism.com Stephen

    Actually, I bought it a few years ago and it’s been sitting in a box somewhere unread! But after I finish Downtown, I’ll try to start that one…thanks for the suggestion!

  • Jim654

    The reality is that transit users are subsidized at a vastly higher rate than road users. If transit were priced at anything like the market rate, transit users would have to pay enormously higher fares than they do now. That would dramatically reduce transit demand and make dense, urban, transit-oriented lifestyles even less attractive than they are now. The transportation system in the United States has become overwhelmingly dominated by cars DESPITE government subsidies, not because of them. The same is true in virtually every other industrialized democracy.

  • http://marketurbanism.com MarketUrbanism

    Sure transit is heavily subsidized, and that’s bad.  So far you’ve only asserted an opinion, and not added any substance to the discussion.  I suggest you apply the scientific method to your assertion that automobile use is dominant despite subisidies, and not actually as a result of them.  Please, let us know what you find out, and what specific corrections need to be made to the evidence presented in this blog over the past few years.

    http://marketurbanism.com

  • Jim654

    If you seriously think subsidies favor using automobiles over using transit, I’d like to see your evidence and analysis. The difference isn’t even close. Direct subsidies alone pay for about 70 cents of every dollar in transit spending. As Mark Delucchi put it: “the total subsidy to transit greatly exceeds the total subsidy to auto use, per passenger mile, in both absolute terms and relative to the prices users currently pay.”

    I have no idea how you think cars could have become dominant because of subsidies rather than in spite of them given that subsidies so overwhelmingly favor using transit over using autos. Autos are the dominant mode of transportation even in Europe, where gas taxes are enormously higher than they are in the U.S.

  • http://marketurbanism.com Stephen

    If you seriously think subsidies favor using automobiles over using transit, I’d like to see your evidence and analysis.

    This blog has almost 300 posts. Start there.

  • Jim654

    300 posts, but no evidence or analysis to support the proposition in question. Indeed, there is very little about transit subsidies at all, let alone an attempt to demonstrate that auto subsidies are greater.

  • http://marketurbanism.com Stephen

    We tend not to discuss any subsidies – in our opinions, the regulations are much more important. Randal O’Toole is pretty good with subsidies if those are all you’re interested in (although I’m guessing you’re familiar with his work). We, on the other hand, believe that there’s more to government intervention than just subsidies. Obviously subsidies are an easier concept to grasp and quantify, but if all you do in policy analysis is look for subsidies, you end up missing a lot.

  • http://marketurbanism.com MarketUrbanism

    300 posts, but no evidence or analysis to support the proposition in question.

    You don’t get to just change the proposition and pretend we’re dodging it. Nowhere in this blog does Stephen or I propose or claim know exactly to what extent greater subsidies to one mode causes one mode to be more prevelent.

    The world isn’t a zero-sum game. Just because kumkwats are subsidized 90% and apples are subsidized 20%, doesn’t mean the subsidies to apples are ok.

    My point isn’t that we should ignore subsidies to transit – I said it’s bad. Randal and others already beat that dead horse. My point is, and always been that transportation, in general has been heavily subsidized since the progressive era. That includes cars. You can pretend to deny it, but I think we’ve covered that topic better than any site on the web.

    I don’t know to what extent each cause of the dominance of the automobile is. But I know one thing, roads in America have been grossly subsidized for the past century, and economics tells us that if you subsidize something, you get more of it. So, you have more auto travel than you would otherwise, and more transit travel. The end result is seen in the land use pattern, and cant be definitely quantified in the dominance of uses.

    If you have countr-evidence that roads aren’t subsidized, present it. Otherwise, there is no burden of proof on me to prove your unprovable opinions and speculations.

  • Jim654

    I think it is ridiculous that you claim to favor market-based transportation but almost completely ignore the fact that mass transit is subsidized 70 cents on the dollar in direct subsidies alone. That enormous subsidy provides a huge incentive for transit-oriented patterns of travel and urban development. Yet you regularly criticize what you claim to be government incentives for car use, such as parking minimums and road subsidies.

  • http://marketurbanism.com MarketUrbanism

    OK.  Yes, the huge subsidies to transit causes sprawl too.  

    Some day, I’ll address that in a fundamentals of urban economics post.  In the meantime, you can read plenty about transit subsidies at Randal’s blog.

    http://marketurbanism.com

  • Jim654

    Sorry, but the fact, if indeed it really is a fact, that roads are subsidized is simply irrelevant to the point that the evidence overwhelmingly shows that transit is subsidized to an enormously larger extent. So even if we do get a bit more driving than we would without subsidies, we get an enormous amount more transit use. What do you think would happen to the market for transit, and transit-oriented development, if bus and train fares were tripled? It would create a huge incentive for current and prospective transit users to choose car travel — and car-oriented forms of urbanism — instead.

  • Jim654

    I didn’t say transit subsidies promote sprawl. I said they promote transit-oriented patterns of travel and urban development. I’m not sure why you think that means sprawl. Transit-oriented urban development generally means denser, more compact urban forms, where trip distances are shorter and car travel is more difficult and expensive. The examples most often cited by proponents of TOD are developments near rail transit in places like Arlington, Virginia and Portland, Oregon. Without transit’s massive subsidies, such places would be even less common than they are now.

  • Louis

    Not to the extent you’re imagining. The reasons are more historical than all that. For instance, Jackson Heights has both subway, the E/F/R/G, and elevated (the 7). The same goes for Brooklyn, where there exists both the M (elevated) and the L (subway) in the same neighborhoods.

  • Louis

    Technological triumphalism? Also, can you imagine the nice 3-track stacks and flyovers that would be necessary wherever lines crossed? Imagine the interchange of Times Square above ground. It exists in East Brooklyn, and it’s not a pretty site.

  • Louis

    So what is an example of a public good? I’m trying to think of something with zero scarcity and zero cost. Library books can be checked out, rivalrous. Water costs money, excludable. Police protection? Free fire protection?

  • Louis

    Obviously, the original construction of highways and Interstates, indeed the original roads, were constructed at great cost. Such great cost that we could probably not reconstruct them today with user fees. The original roads were constructed before there were users, and the gas tax pays for some maintenance at the very most. You can’t argue with the fact that there is a huge road network and a really really crappy piddly transit system in this country. Obviously, obviously the greater incentive is towards driving. We don’t even have legitimate sidewalks in many communities, but there is always pavement for vehicles.

  • Alon Levy

    The standard examples of public goods are police protection, national defense, and street lights. More broadly, public health (herd immunity, etc.).

  • Al

    What do you think would happen to the market for autos, and auto-oriented development, if private businesses were no longer required to subsidize parking, and if cities raised street parking to market rates?

  • Jim654

    The fact that the transit system is “really, really crappy and piddly” does not mean that incentives favor driving. As I have already pointed out umpteen times, government subsidies overwhelmingly favor using transit instead of using automobiles. The transit system would be even more crappy and piddly were it not sustained by these huge subsidies. If transit users had to pay even close to the full cost of their rides, fares would need to be tripled, and ridership would plummet.

  • Jim654

    The premise of the first part of your question is false. Private businesses are not required to subsidize parking. They are free to charge their customers for it.

    As for street parking, the market rate for parking in most places at most times is zero, or close to zero. Unpriced street parking can only have a significant effect on demand in dense urban areas where the market rate for parking is significantly higher than zero. Street parking in such areas is already often priced via parking meters. The effect of raising the price of street parking in these areas to market rates would depend on the difference, if any, between current rates and market rates. In areas where the difference is large, it might significantly reduce car use in that area. In areas where the difference is small, it would probably have little effect. With respect to car use in total, the effect would probably be negligible. Indeed, raising the price of street parking in dense urban areas might actually increase the amount of auto-oriented development by shifting demand from those areas to the suburbs, where land is cheaper and parking is already mostly free. People who are willing to pay, say, $5 an hour to park downtown when they go shopping may not be willing to pay $10. Instead of driving downtown to shop, they’ll drive to the suburban mall instead.

  • Jim654

    The premise of the first part of your question is false. Private businesses are not required to subsidize parking. They are free to charge their customers for it.

    As for street parking, the market rate for parking in most places at most times is zero, or close to zero. Unpriced street parking can only have a significant effect on demand in dense urban areas where the market rate for parking is significantly higher than zero. Street parking in such areas is already often priced via parking meters. The effect of raising the price of street parking in these areas to market rates would depend on the difference, if any, between current rates and market rates. In areas where the difference is large, it might significantly reduce car use in that area. In areas where the difference is small, it would probably have little effect. With respect to car use in total, the effect would probably be negligible. Indeed, raising the price of street parking in dense urban areas might actually increase the amount of auto-oriented development by shifting demand from those areas to the suburbs, where land is cheaper and parking is already mostly free. People who are willing to pay, say, $5 an hour to park downtown when they go shopping may not be willing to pay $10. Instead of driving downtown to shop, they’ll drive to the suburban mall instead.

  • http://marketurbanism.com Stephen

    As I have already pointed out umpteen times…

    Yes, you definitely have pointed it out many times. Have you ever considered the possibility that people are reading your statement and simply disagreeing that it’s the most relevant fact?

  • Jim654

    Then what do you claim is the most relevant fact? You don’t seem to be able to make the case that subsidies favor using automobiles over using transit rather than the reverse. But you still seem to think that, despite this enormous advantage in subsidies, transit is still somehow massively disadvantaged overall in the transportation market compared to automobile use. So what fact or facts substantiate that view? You vaguely alluded to other forms of “government intervention”, but you haven’t described what you think they are, or provided any evidence or analysis to suggest that other forms of government intervention favor autos over transit at all, let alone to such a degree as to more than offset transit’s huge subsidy advantage.

  • Jim654

    By the way, here’s an example of a non-subsidy form of government intervention that also massively favors transit: immigration policy. For a number of reasons — income, culture, the location of immigrant communities — immigrants use transit at a much higher rate than the native-born population. In California, immigrants comprise about a quarter of the population, but more than half of all transit commuters. In recent decades, the foreign-born share of the population has increased significantly as a result of the liberalization of immigration law. This has helped to sustain transit demand in the face of the continuing shift to automobiles among the native-born population. I’m not saying that sustaining transit was a goal of changes to immigration policy, but it has been one of the effects.

    Most evidence suggests that the immigration rate is likely to slow in the future. And existing immigrants become less likely to use transit over time, as they assimilate and increasingly adopt the lifestyles of the native-born population. This does not bode well for transit, or transit-oriented urbanism.

  • http://marketurbanism.com Stephen

    http://marketurbanism.com/2010/11/30/how-local-property-taxes-discourage-density/
    http://marketurbanism.com/2010/11/29/mandates-that-fall-only-on-multifamily-development/
    http://marketurbanism.com/2010/09/18/a-comment-on-rolling-stock-protectionism/
    http://marketurbanism.com/2010/11/28/li-dem-insiders-to-councilwoman-oppose-density-so-we-can-get-reelected/
    http://marketurbanism.com/2010/11/26/development-as-preservation/
    http://marketurbanism.com/2010/11/24/nyc-to-raise-on-street-parking-rates/
    http://marketurbanism.com/2010/11/15/environmentalism-vs-density-federal-style/
    http://marketurbanism.com/2010/11/09/this-is-why-dc-cant-have-nice-things/
    http://marketurbanism.com/2010/10/27/mortgage-interest-tax-deduction-cuts-on-the-table/
    http://marketurbanism.com/2010/10/13/darien-ct-gets-sued-by-the-doj-over-inclusionary-zoning/
    http://marketurbanism.com/2010/10/08/when-will-new-jersey-reverse-its-sprawling-ways/
    http://marketurbanism.com/2010/10/07/a-comment-on-nyus-proposed-superblocks/
    http://marketurbanism.com/2010/10/06/zoning-blighted-manhattanville-before-columbia-did/
    http://marketurbanism.com/2010/09/30/the-folly-of-measuring-transportation-costs-per-passenger-mile/
    http://marketurbanism.com/2010/09/27/environmentalism-vs-density/
    http://marketurbanism.com/2010/09/23/the-great-american-streetcar-myth/
    http://marketurbanism.com/2010/12/11/private-parking-contracting-giving-privatization-a-bad-name/
    http://marketurbanism.com/2010/12/10/free-parking-outside-the-1000mo-garage/
    http://marketurbanism.com/2010/12/10/parking-politics-in-the-1920s-and-a-bleg/
    http://marketurbanism.com/2010/12/09/environmentalism-vs-density-clean-water-act-edition/
    http://marketurbanism.com/2010/12/04/environmental-review-vs-congestion-pricing/
    http://marketurbanism.com/2010/12/02/seattles-land-use-liberalization/

  • http://www.cat-bus.com ant6n

    Your argument that most transit expansion was built during a time when the subways were owned by private companies – so private companies are the best constructors of transit is a non sequitor. In many other places of the world (and in the US) this phase of rapid expansion happened while the system was owned by the public – citing one example where rapid expansion happened during a time when it was owned privately does not make a very strong argument. The pro/con el debate is largely unrelated to the issue of who owns the system (although one could make the argument that the public tended towards the more longterm solutions – in this case the subways).

    The corollary of your thesis is that privatization of the system will suddenly make it profitable is advantageous at best. Privatization is not a magic solution that will somehow bring you from 40% to 100%+ fare recovery ratio. If it is able to do it, than mostly by shutting the whole system down except the few profitable lines — which means many people will be cut off from service (and network effects from shutdowns will make the remaining lines unprofitable as well). And that is where transit is a public service — you want to provide the service to everybody as best as possible, instead of cutting off whole neighborhoods because of a lack of profitability. A public system should accept _some_ unprofitable service in order to reach more people.

    A possibly better solution, rather than flat-out privatization, is to privatize operation of the service. One could requests bids to operate parts of the system; and whoever can offer the requested service (schedule+capacity) at the best value, will be able to get the contract. This will still involve subsidies from the one ordering the service (the municipality), but will mean that the infrastructure ownership stays in the hands of the public – to assure the continued existence of the service for one; and keep the control of the system and its expansion with the public. The trick is to leverage the market incentives without giving away control of essential service to the moody market gods.

  • http://homepage.mac.com/jjakucyk/ Jeffrey Jakucyk

    To say driving is not subsidized to the extent of transit is disingenuous at best. Yes it may be more, but even looking at the best case scenario of highway subsidies (which as I’ll illustrate below only covers a very small subset of the overall road network) transit in general gets about 2/3 of its costs subsidized while highways get about 1/3.

    Looking at the statistics below shows just how much roads by themselves are subsidized. That doesn’t even factor in the subsidizing of parking. Even if stores or apartments could charge for parking, they’re still required by government to BUILD it in the first place. In fact, they DO charge for it, by building the cost of that additional land and asphalt maintenance into the cost of the goods they sell or into their rents, etc. The problem is that everyone pays for it whether they use the parking or not. Also, the road statistics below still don’t account for the subsidizing of oil and gas through military protection expenditures and externalized costs of pollution and sedentary lifestyles.

    I suspect the formatting of this might get royally screwed up, but I hope it comes through well enough.

    Funding For Highways and Disposition of Highway-User Revenues, All Units of Government, 2008
    http://www.fhwa.dot.gov/policyinformation/statistics/2008/hf10.cfm

    Disposition of Highway-User Revenue
    67.06% ($122.1 billion) in receipts available for distribution as percent of total disbursement for highways [$36.6 billion Federal, $80.1 billion State, $5.4 billion Local]
    -4.56% (-$8.3 billion) for non-highway purposes
    -8.38% (-$15.2 billion) for mass transit
    -2.35% (-$4.2 billion) for collection expenses
    -0.06% (-$103 million) for territories

    51.72% ($94.1 billion) net total

    So this means that the total receipts for user fees, most of which are State and Federal gas taxes, only cover 67% of of the amount spent on roads. Other uses for those funds decrease the amount available to road projects to just under 52%. That means the remaining 48% must be subsidized from other sources.

    Revenues Used for Highways
    51.72% ($94.1 billion) from user fees (gas taxes and tolls from above)
    4.57% ($8.3 billion) from local property taxes
    22.19% ($40.4 billion) from general fund appropriations [$10.6 billion Federal, $6.8 billion State, $23 billion Local]
    6.84% ($12.4 billion) from other taxes and fees
    9.60% ($17.5 billion) from investment income and other receipts
    10.95% ($19.9 billion) from bond issue proceeds
    -5.86% (-$10.7 billion) to intergovernmental payments

    100% ($182 billion) net total

    Note that the above statistics are only for State and Federally operated roads, which are Interstate and US highways and numbered state routes. The remainder of the local road network, which may or may not include county roads, is entirely funded out of local sources, mostly property taxes. User fees do not fund most streets at all.

  • Jim654

    Sorry, but your links do not address the issue. All you’ve provided is a list of posts, some of which argue that some kinds of government intervention favor autos rather than transit (other posts in your list simply don’t have anything to do with that question at all).

    Again I ask: where is your evidence and analysis suggesting that other forms of government intervention favor autos to such a degree as to more than offset transit’s huge subsidy advantage? Where is your evidence and analysis suggesting that other forms of government intervention favor autos at all? And by “other forms of government intervention”, I mean other forms of government intervention in total, not just isolated examples.

  • Jim654

    Your argument is confused. First, you confuse subsidies for highways with subsidies for driving. The cost of highways is only a small fraction of the total costs of driving. Most of the costs are driving are the costs of purchasing, operating and maintaining automobiles. So even if highways were 100% subsidized by the government, those subsidies would still comprise only a small share of the cost of driving. Transit subsidies, in contrast, account for around 70% of TOTAL transit spending — buying transit vehicles, building railtrack, paying wages for drivers and mechanics, and so on.

    Second, in your analysis of the revenue data you simply ignore the fact that spending covered by highway-user revenues that are diverted to mass transit and other non-highway purposes is not a subsidy to highway users. In 2008, the government took $15 billion of the revenues it collected from highway users for using highways and spent those revenues on mass transit instead of highways. And it took an additional $8 billion of the revenues and spent them on other non-highway users.

    But this doesn’t really matter to the basic point, anyway. Even ignoring the fact that the government “steals” billions of dollars every year from the Highway Trust Fund to spend on non-highway uses, the difference between revenues from highway users and spending on highways is just a tiny fraction of the total cost of driving, and just a tiny fraction of the subsidies provided to mass transit, per passenger-mile, both in absolute terms and as a share of user costs.

  • http://homepage.mac.com/jjakucyk/ Jeffrey Jakucyk

    All subsidies for highways are by definition subsidies for driving, there’s nothing to confuse there. You are right that the cost to operate and maintain a vehicle is a major expense for the user, something on the order of $5,000 per year on average I believe, or roughly $0.50 per mile.

    Still, even if all user fees were used only for highways (which I did not ignore by the way, I clearly spelled it out), that only covers 67% of the total expenditures on highways. The government is spending $182 billion on highways and only taking in $122 billion in user fees per year. The remaining $60 billion is a subsidy, which with 254.4 million passenger vehicles in the US works out to about $235 per vehicle per year in subsidies which doesn’t sound like a whole lot compared to $5,000.

    That $235 per vehicle only applies to highways, as I mentioned before. The local road network isn’t a part of that at all, and that makes up the vast majority of the pavement in the country. Even including that number (which is a pretty elusive one unfortunately) won’t bring it up to the $5,000 level of course, but it’s not insignificant in the equation. Also, that $60 billion in subsidies to highways is less than ALL spending on transit.

  • Jim654

    Sorry, but your first paragraph totally confuses highway subsidies with driving subsidies. You compare what you claim to be the rate of subsidy of highways with the rate of subsidy of transit, completely ignoring the fact that highway costs are only a small fraction of total driving costs. As I said, even if highways were 100% subsidized, driving would still be subsidized at a much lower rate than transit use.

    Like others here, you are quibbling over trivial subsidies to drivers and ignoring the fact that subsidies to transit users are vastly larger. Your figure of $60 billion a year for highway subsidies translates to about 1.2 cents per passenger-mile. Transit, in contrast, is subsidized from about 40 cents per passenger-mile (for buses) to more than 100 cents per passenger-mile (for light rail). There is simply no comparison. Transit subsidies are vastly higher. And adding alleged local road subsidies doesn’t alter that fact either.

  • http://homepage.mac.com/jjakucyk/ Jeffrey Jakucyk

    I’ll say again, there’s nothing to confuse. Regardless of what the rate or actual amount of the subsidies may be, they’re still subsidies. A highway subsidy is a de facto driving subsidy because highways are almost exclusively for cars. If you want to poo poo that for being a small part of the cost of driving, that’s fine, but it’s still a subsidy and it still encourages driving. A big reason for that is because those costs are hidden. Drivers don’t have a little counter on their dashboard that shows how much their trip is actually costing them, so the connection isn’t made in their brains. It’s all perceived as free, so it’s overused, but it’s costing us real money. $60 billion is a lot of money, and breaking it out into a per-mile cost is very disingenuous when comparing driving to transit because transit trips are almost always shorter. It should really be looked at on a per-trip basis, or at least indexed to account for both the per-mile value AND the number of miles traveled.

    Your comment about “alleged local road subsidies” is very disturbing. There’s nothing alleged about it. We have just a hair over 4 million miles of roads in this country, and about 8.5 million lane miles (hence most roads are just two lanes). Only about 23% of those are State and Federal routes that get money from those sources (even interstate highways are owned by their respective states, so very little is actually owned by the Federal Government). County roads make up 44% and municipal roads (township, village, city, etc.) make up 32% with a little left over for weird things like national park roads and such. That 75% of the road network gets no gas tax revenue and must be made up for by the general population.

    Local roads are funded almost entirely through city/township/county property taxes, sales taxes, and local income taxes. Those numbers are huge, something like half of all road expenditures, but they rarely make it into highway statistics because, well, they’re not highways! Yes those roads are needed whether cars use them or not, but that pavement and those storm sewers aren’t free. Roads were widened to accommodate more cars, they were repaved with asphalt instead of brick or dirt, curbs and gutters were added in many places to handle the extra runoff etc. Even if people pay a lot of their own money on their own cars to use these roads, the roads are still incredibly expensive.

    That’s the real issue here. Even if the cost of driving is mostly born by the driver through the operation of their car, we as a society are still spending enormous amounts of money supporting the road network, and we can’t afford it anymore. The owner of that huge McMansion out in the suburbs may be bearing the majority of the cost of owning that house because he’s the one paying the mortgage, but we’re all paying for the extension of the water and sewer lines and the roads to serve it. So many of the indirect costs, the unfunded liabilities, the opportunity cost of using the money or the land for roads instead of other things, the externalities of pollution and sprawl, the war in Iraq, military escorts for tanker ships, these are all biting us in the ass now. We’ve put together a system that requires people to spend a huge amount of their earnings on transportation exactly because they must provide the “rolling stock” themselves. There’s a huge opportunity cost in that as well. That money could be going to a bigger house, or the kid’s college fund, or any number of other goods and services, ones that actually appreciate in value rather than depreciate.

  • Louis Haywood

    Jim, your subsidy/trip/mile voodoo math is really quite irrelevant. Simply look at the total gov’t money spent on freeway (not to mention local road/highway) construction vs. the total amount of gov’t money spent on rail and transit construction. That is the amount of subsidy. You will find (promise) that road money is multitudes greater. Just because it is so incredibly greater that it can leverage a more efficient number of riders means nothing. It is only evidence that the money is in roads. Look at google maps. There is a vast urban freeway system, it is the white elephant in the room. Money was spent on it. And even more money maintains it. More money than building and maintaining transit. Subsidy per user-mile means nothing. 90% of federal money goes to highways, less than 10% to transit. THUS, AUTOMOBILES ARE MORE SUBSIDIZED. Please write this down.

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