» Federal Transit Administration intends to expand consideration of economic development and ecological benefits.
After years of criticism from politicians, transportation experts, and local officials, the federal government has reversed course: it will eliminate a policy-making rule that gives projects’ “cost-effectiveness” primacy when choosing how to distribute transit funds. Once the shift has undergone an internal review and been submitted to public comment, the Department of Transportation will give equal weight to livability issues.
It’s a valuable change, but one that won’t do anything to solve the funding woes of transportation agencies around the country.
In 2005, the Bush Administration decided to bar funding for any New Start major transit capital project that did not meet the “medium” rating (currently $24) on the cost-effectiveness index, which measures how much a project will cost per total hours saved daily by the estimated number of riders. As I put it a few months ago when discussing the planned Southwest Minneapolis Transitway,
“The cost-benefit analysis is heavily biased towards the number of annual hours commuters will save by using the new transit system. This means that people who already have longer commutes are seen as more valuable for the FTA than those who choose to live in in-town locations with shorter distances between their residences and workplaces. As a result, transit networks are encouraged to extend out into the suburbs, rather than be densified and reinforced downtown.“
In retrospect, this argument gets it about half right. Urban corridors with very high densities and reliance on existing transit services do just fine on the cost-effectiveness index, as demonstrated by high marks given to New York’s Second Avenue Subway, San Francisco’s Central Subway, and Seattle’s University Link, whatever their individual merits. Each of these projects would come at a huge cost, but the FTA sees them as worthwhile because they’re replacing slow overloaded bus trips or, in the case of New York, massively reducing congestion on another rail line.
Where the cost-effectiveness index goes really wrong is in medium-density cities hoping to cash in on transit as a tool for increasing density and developing a transit-friendly environment. As demonstrated by the Minneapolis example, the index basically forces transit authorities responsible for choosing routes to pick less useful corridors within the inner-city in order to speed commutes from the suburbs. It also requires agencies to reduce spending on lines in order to meet the arbitrary limit imposed by the index, no matter the willingness of local taxpayers to contribute a higher percentage of a project’s construction costs.
House Transportation and Infrastructure Chairman James Oberstar (D-MN) threatened a year ago that he would force a change into the law to reflect his concerns about the Minneapolis projects, among others, if Secretary of Transportation Ray LaHood didn’t change his department’s policy. Hence, today’s action, announced by Mr. LaHood at the annual meeting of the Transportation Research Board, wasn’t surprising.
Indeed, the decision to reduce the influence of the cost-effectiveness index has been a long time coming; the recognition of livability issues such as economic development and environmental improvement is also a continuation of a theme that President Obama’s Departments of Transportation and Housing and Urban Development have been discussing since March of last year. These livability issues are already evaluated by the New Starts process, but their influence in the process is relatively minor.
The rule change is an important one that heralds more thoughtful consideration by the government about how it wants to distribute its money. Nevertheless, the transformation in policy is no panacea and does nothing to resolve the relative dearth of money for U.S. transit in general, as indicated by the large number of projects lining up for both New Start and fixed-guideway modernization funds, most of which ultimately won’t be satisfied with grants.
In her story on Mr. LaHood’s announcement today, Elana Schor quotes Representative Earl Blumenauer (D-OR), who argues that “Rescinding this Bush administration restriction will unleash funding for important transportation projects across the nation… This means quicker and better funding for streetcars, light rail, and bus projects.”
The problem is that the change does nothing of the sort. The cost-effectiveness guidelines do prevent some projects from being built — and, more problematically, reduce the quality of those that are constructed — but they are not the primary culprits in the prevention of a massive investment in new transit systems. Rather, there is simply not enough money going around to pay for all of the bus and rail lines cities would like to build, a disappointment that won’t be cured with this policy. This problem means that some projects that would have been accepted for funding under the cost-effectiveness rules may well now lose their status and be replaced by other projects that are considered more livable. In some ways, this is a worthwhile change, but many American communities are still going to be short shifted.