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Beijing China Guangzhou Hong Kong Infrastructure Metro Rail Shanghai

In response to growth, Chinese cities choose metros

» With rail rapid transit construction in virtually every major Chinese city, the country is betting on an urban future focused on transit.

Faced with limited political will for increased infrastructure funding, the debate over transportation planning in the United States has become increasingly dominated by an austerity-driven understanding of how to respond to growth. Unwilling or unable to develop ambitious plans for the future, many cities and their public officials have contented themselves with doing more with less.

Doing more with less is a strange maxim for an incredibly wealthy—and still growing—nation. Nevertheless, it is a pathology that has so altered many American planners’ sense of the acceptable that the mere idea of a master plan of significant investment attracts little more than dismissive scoffs. With blasé planners and uninterested politicians, “doing more” is readily transformed into actually doing very little.

Undoubtedly the overwhelming problems that infect that very core of the American planning apparatus—excessive reliance on consultants, acceptance of rapidly growing costs, failure to adapt to new technologies, compulsive regression to benefits for small groups over for the common interest—have encouraged this approach to understanding what is possible. And there are some cities (Los Angeles and Seattle come to mind most quickly) where these issues seem less acute.

But it is perhaps only in the act of comparison that the illness of American planning is made apparent. For in examining how one place acts in the context of another we can see whether the malignant cancer to which it has become resigned is, in fact, a factor of unavoidable shared inheritance, or if, rather, it is the consequence of its own poor choices that others have not made.

Evidence, indeed, suggests that there are choices when it comes to planning, that it is possible to have more, not less. I point to Chinese cities, which over the past ten years have acted to seize the reigns of transport planning through aggressive investment.

Having been reliant on bicycle transportation for much of the 20th century, Chinese cities were models of unmotorized mobility. But the country’s opening to capitalism in the 1990s brought massive motorization and the purchase of millions of automobiles. Millions of rural inhabitants streamed into urban cores. Many of the cities were woefully unprepared to respond to the sudden changes that ensued; until 1995, only one Chinese city—Beijing*—had any metro line, by which I mean fully grade-separated rapid transit.

What has occurred since then, however, has truly altered the way people use transportation in Chinese cities, and the changes will keep on coming.

Metro construction in these cities has exploded, rising exponentially especially since 2008. A country largely bereft of metros in the 1990s now has more than 5,000 kilometers of metro lines, more than four times the U.S. figure, which has increased very slowly since the 1960s. 25 Chinese cities now have systems, and the number is rising every year.

Of the 12 largest metro networks in the world by length, seven are now in China. As of December 2017, Guangzhou’s metro passed New York’s Subway in length, and Beijing and Shanghai have by far the longest systems.

Some estimates suggest that Chinese cities will have more than 10,000 kilometers of metro lines by 2020. That’s in addition to the almost 1,000 kilometers of bus rapid transit, hundreds of kilometers of tramways, and massive commuter rail systems that have been built in cities around the country—not to mention the enormous high-speed rail network that has been constructed since 2007.

This investment in metro capacity has been met by a popular shift in how people get around. Current Chinese metro lines collectively carry about twice as many riders as the entire American public transportation network, buses, trains, and all.

The “riding habit”—the frequency of transit use per capita—has risen quickly in city after city. Guangzhou and Beijing now have greater use of their systems than any American city except for New York, with the average resident there taking 189 and 167 rides per year, respectively, compared to 230 per year in Gotham. Beijing and Shanghai systems now each carry more than ten million daily riders, the two highest figures in the world. And they have both doubled their ridership since 2010. It seems likely that the other cities following their path in line construction will eventually follow their lead in ridership, too.

Metro construction in China is largely the product of a massive central government investment. Between 2010 and 2015, the nation spent the equivalent of $189 billion on such lines, and between 2016 and 2020, it is expected to spend between $262 and $308 billion more. The U.S. government dedicates about $2.3 billion per year in total for all transit projects, so less than one-fifteenth of the Chinese investment.

The story of Chinese investment in metro systems might be chalked up to processes of urbanization that were familiar, too, to U.S. cities in the early 1900s. It is easy to forget that American residents of major cities were the most reliant on transit in the world at the time, and that before the Great Depression, efforts to build subways and elevated rapid transit were widespread (if ineffective).

Yet actions in Chinese cities today are examples of contemporary planning, not simply responses to a particular historical moment that all cities eventually go through. The unabashed commitment to investment in rapid transit in city after city through support from the national government is an effort that never had its equal in the U.S. The growth in metro systems is being conducted in response to, not before, the increase in automobile dependence. Line construction is being undertaken in parallel with massive creation of dense new neighborhoods, a legacy whose hysteresis will produce generations of transit riders.

While Chinese cities have frequently been poor models of urbanism—massive highways, malls, and tower-in-the-park apartment blocks have taken root in too many places—they appear to be at least minimally cognizant of the reality that a future of unlimited automobile growth is unsustainable. Unlike any American city, for example, cities from Harbin to Shanghai to Shenzhen have implemented caps on vehicle registration and are examining congestion fees. Thus the growth in metro construction is being implemented in line with restrictions on overuse of cars.

The feats of Chinese infrastructure development are often dismissed by Western critics as the unrealizable actions of an authoritarian, illiberal country with no property rights, a poor citizenry, too-dense neighborhoods, and sheer government power. Its actions, then, are supposedly not meaningful for the deeply democratic American context.

Yet this is too much of a gross exaggeration of what is actually happening in China. While it is true that the country is authoritarian, land cannot simply “be taken” with no response from residents. Incomes have increased dramatically many of the larger cities, creating a middle class of individuals ready to contest projects they don’t like. Investment isn’t cheap; Chinese metros, while not as pricey as American ones, aren’t much cheaper to build than their European counterparts. And the residential areas that have been created around metro stations are intentionally dense, the product of a decision to be dense, not the product of poverty.

The difference between U.S. and Chinese approaches to planning for growth through transportation, then, really gets down to this question: are cities prepared to make the commitment to change, or not? American cities have largely abandoned the effort, hoping and praying that they may eventually wean people out of their cars through such under-supported devices as commuter incentives and tactical urbanism. Chinese cities, aided by massive central investment, are building a new society for themselves.

Data on Chinese metro expansion available here.

* Hong Kong has had extensive rail services throughout the twentieth century, and its metro, beginning in the 1970s, was quite popular, but it was a British protectorate until 1997.

Image at top: Guangzhou Metro, from Flickr user Enzo Jiang (cc).

Categories
Finance Hong Kong Metro Rail

Hong Kong’s Expanding Metro a Model of Development-Funded Transit

» New extensions in central Hong Kong will be mostly funded by development around future stations.

As one of the densest places on earth, it is no surprise that Hong Kong is a transit city, with over 90% of journeys made by public transportation. This concentration ensures high ridership on the city’s extensive MTR metro system. Yet it also increases the cost of line expansions, since building new projects in places that are already packed with people necessitates the creation of tunnels and requires expensive environmental and social remediation.

Hong Kong, however, is going about constructing new projects at a steady pace. At the end of last month, the MTR transit agency approved the construction of the 4.3-mile South Island Line, which will provide service to Aberdeen and other sections of the south side of Hong Kong Island. In addition, the agency will complete a 1.6-mile extension of the Kwun Tong Line to Whampoa. Both will open for operations by 2015, with ground breaking scheduled for next year. The city already has a 2-mile metro extension to the West Island under construction.

All this is being built in the context of relatively high construction prices: The Kwun Tong Line is being constructed at a total cost of HK$5.6 billion, or roughly US$450 million per mile. Though that’s less expensive than what a similar project would cost in New York City, where the Second Avenue Subway is being built for more than $2 billion a mile, it’s on par with most other Western cities building new subways, unsurprising considering Hong Kong’s wealth. So what is this city’s secret? How is it able to continue building new metro expansions — and plan for more — when other cities are being forced to postpone their transit projects due to the recession and the resulting government cutbacks?

The answer is that the MTR, in association with the local government, has become one of the city’s major property developers. It has used profits from those new housing, commercial, and retail schemes to pay for part of the cost of constructing new subway lines. Along the urban rail lines, the MTR has funded dozens of new housing projects with 300 to 7,000 apartments each. The operations of the subway are entirely unsubsidized by the local government.

This approach — called “Rail+Property” by the MTR — does not involve the city simply handing over development land to the transit agency at no costs (land in Hong Kong is all owned by the government, though it is leased out to private individuals and corporations for long-term periods). Rather, it is expected to pay the government the land costs estimated based on a no-rail scenario. Thus the MTR is not forced to deal with the problems many agencies face when they use eminent domain to take land, such as escalating values in anticipation of the new transit service. Rather, it is rewarded for the added value it will produce once its new transportation project is completed.

For the South Island Line, the government has agreed to provide MTR development rights to a site at the former Wong Chuk Hang estate. In turn, the transit agency expects the government to pay for less than half of metro construction costs. The rest of the tab will be picked up by the
MTR. This process, which directly associates transit operator with transit-oriented developer, makes the financing and construction of new underground transportation links far more simple than the typical approach, which requires governments to use public tax funds to pay for most of the cost of transit projects. The latter funding mechanism, common in the U.S. and Europe, is politically difficult and financially troublesome, especially in times of increasing budget deficits.

Of course, the MTR is not alone in using this method to assume some of the costs of construction. In Paris, the government’s grand plans for a network of 96 miles of new lines, costing more than €20 billion, would be partially paid for by the creation of development districts around each station whose own existence is only possible thanks to the creation of the transit line. This is a reasonable way to fund a transit line, as it is paid for by the benefits it produces. In a typical U.S. city, the transit agency provides a significant boost to local property values when it invests in a new rail project and yet it is able to capture very little of that extra wealth created — and when it does, only indirectly through tax revenue increases. This slows down the development of many cities.

One of the difficulties in proposing a similar finance method in the U.S. is that there is a residual fear of letting the public sector (or even the only partially public sector, in the case of MTR) engage in land development. The memories of urban renewal and public housing remain fresh enough on the minds of enough Americans to dissuade them from wanting to repeat the process today. Thus the closest we’re able to get is a financing method like that being used for New York’s 7 Subway extension. There, the city has created what is essentially a tax-increment financing district in the area to be served by the line, and it will use those tax revenues to pay back the initial costs of the project.

Yet this indirect approach, which does not allow the transit agency to reap the full benefits of the value increase it has sowed, leaves too much room for massive developer profits and too little room for actually funding new transit lines. It is worth considering whether it would be worthwhile to allow a transit agency to engage directly in the creation of new developments around the stations it has built. If properly managed, such a system could result in better transportation for all and less of a constraint on the public purse.

I should note that Hong Kong may be a unique case. At the aerial map at the top of this article shows, it is hemmed in from all sides by natural features — the ocean, mountains, and parks — that force all new development to be quite dense. Similarly, most housing and commercial activities are stuck in the relatively narrow strip of land between the ocean and the mountains. That density and linear concentration removes space for potential transportation infrastructure and limits the amount of walking necessary for anyone who lives along a transit line that follows the rough line of urban landscape; this makes transit work better here than most place. All together, you have conditions almost ideal for transit-oriented development. You can’t just transpose the Hong Kong model on any place.*

* This paragraph was added after the initial publishing of this article.