Last month the Trump Administration released their budget proposal, which among many shifting priorities, included eliminating a long-standing federal program called “New Starts.” New Starts was created in the 1990’s and has funneled hundreds of millions of federal monies to localities to build expensive transit projects, including light rail systems.
It was no surprise that many who have benefitted from the light rail gravy train over the past few decades reacted as if the fields were on fire.
Among the arguments made to attribute value to the New Starts program, was the claim that light rail in the Phoenix Metro Area has generated $9 billion in “real estate activity” surrounding the transit line in the last decade. More than being overly optimistic, this claim has been summarily debunked.
Just a year and a half ago, light rail enthusiasts took credit for $7 billion in development. Upon further investigation however, it was discovered that new development was actually $6.9 billion in development plans. And these plans were mostly submitted prior to the financial crash and prior to the light rail line opening or even being announced.
Furthermore, many of these plans languished and never came to fruition. Specifically, at least half a billion dollars’ were cancelled and as a result, assertions that a boon of development had occurred were pared back from $7.4 billion in 2009 to $6.9 billion in 2013.
Not only did many private developments fall through or cancel, much of the development that has occurred has been subsidized by the government in the way of low-income housing tax credits and other government programs. In many instances the government has had to pay people to build by light rail.
And lastly Valley Metro has included in their figures, development that would have occurred anyway, such as the construction of a new high school and the expansion of the Phoenix Convention Center.
This isn’t just in Phoenix. There is no evidence that light rail spurs development.
According to the independent study commissioned by the Federal Transit Administration itself, light rail does not create growth, but at best redistributes it. The strongest correlation in fact, is the cities that have spent the most in transit have had the slowest growth. Though not spending money on transit is not a guaranteed advantage, spending more on transit has consistently been correlated to slow or stagnate growth.
This should come as no surprise considering the amount of debt cities generally take on when building fancy rail lines. Not only do many cities incur debt to fund capital costs to match federal contributions, but often cities fail to have the necessary funds for ongoing maintenance and operations costs. Of all the rail lines in the country, only one has been built “on time” and “on budget.” And it wasn’t Phoenix.
But set aside the apparent fact that Arizona has wasted hundreds of millions of dollars on a transit system that has increased congestion on the roads, cannibalized bus ridership, and failed to provide any external growth. There’s an even more salient reason tax payers should be thrilled by Trump’s prerogative to eliminate the carrot for more light rail spending.
The country is on the verge of a transportation revolution. The reality is no one knows what transportation, transit, or infrastructure will look like in the next five to ten years with the advent of autonomous vehicles. Government incentivizes to incur long-term debt to invest in century old technology that is already obsolete is an absurd policy decision.
Rationalizing spending more money on a sunk system because we have already spent so much, is throwing good money after bad. It’s past time the outdated New Starts program as well as the old transit line technology be ushered out to make room for the possibilities of the future.