Building public transit infrastructure in the United States is considerably more expensive than in other countries. For what? Eric Goldwyn, Alon Levy, Elif Ensari and Marco Chitti dig into case studies for answers in Transit Cost Project: Understanding the Costs of Transit Infrastructure in U.S. Cities (New York University, Marron Institute of Urban Management, February 2023).
The primary focus of the report is to examine in detail mass transit expansions in Boston and New York, as well as projects in Sweden, Italy, Istanbul and Istanbul. The downside of a case study method, of course, is that you have to be careful about drawing conclusions from a small number of examples. The advantage of counterbalancing is that you can drill down into the details of each individual case. But they also offer general statistics.
The problem of high costs is national. According to our database (Transit Costs Project .d.) of over 900 projects in 59 countries, including Hong Kong, the United States is the sixth most expensive country in the world to build rapid transit infrastructure. This, however, is slightly misleading, as construction costs scale with the percentage of tunnel tracks, which is more expensive than building rails at ground level. The five countries with higher average costs than the United States build tunnel projects at more than 65%. In the United States, on the other hand, only 37% of the total track length is in tunnels (Figure 1). … Therefore, it is useful to understand what, in the physical, institutional and social situation of American cities, frustrates the dreams of metro expansion.
What kind of factors explain the difference?
American railroad transit stations are often “overbuilt”, meaning they are built much longer than actual train platforms, and are also sometimes built with beautiful high vaulted ceilings. Moreover, the Boston and New York stations were not standardized: for example, “three stations [in New York] used two different escalator contractors and had a different number of exits, crossings and lifts, which increased design costs as each station had to be customized rather than using a slightly modified standard design. So when you compare the costs of “station systems and finishes” to the costs of “tunnels and station civil works”, the ratio of those costs is about 50:50 in New York, but 25:75 in Paris Milan and in Sweden. .
Labor accounts for a much larger share of public transit construction costs in the United States: “In New York City as well as the rest of the American Northeast, labor accounts for 40 to 60 % of essential project costs, according to cost estimators, current and former agencies. insiders and consultants familiar with national projects. Labor costs in our low-cost cases, Turkey, Italy, and Sweden, are between 19 and 30 percent; Sweden, which has the highest salary among them, is 23%. The difference between labor at 50% of construction costs and labor at 25%, holding the remainder constant, is a factor of 3 difference in labor costs… »
Overlapping and redundant bureaucracies also increase the costs of building public transportation in the United States. “[W]We also found white-collar overstaffing in New York and Boston (40-60% in Boston), due to general inefficiency as well as interagency conflict, while a small portion of the difference (at most a quarter) comes from differences in pay. . … We have identified many cost drivers that arise from US sourcing standards. These include a pervasive culture of secrecy and confrontation between agencies and contractors, a lack of internal agency capacity to manage contractors, insufficient competition, and a desire to privatize risk that drives private contractors to bid higher. Dear. Overall, this increases costs by a factor of 1.85, with the extra money spent on bureaucracy, wasted contingencies, paying workers during delays, defensive design and, due to the risk of the entrepreneur, and profit.
There are also “soft costs”: “Soft costs include design, planning, management, insurance, construction management and contingencies; the distributions differ according to the city. However, we have harmonized the definitions regarding design, planning, and third-party project management costs. These add 5 to 10% to the costs of firm contracts in our comparison cases, most often 7 to 8%. But in English-speaking countries, ancillary costs add much more; for Second Avenue Subway, it was 21%.
So if you want to know why it’s so difficult and expensive for American cities to build mass transit systems, and why such systems seem to be built and extended to other cities much more easily, a big part of the problem is that the model that US cities have used to build such infrastructure has resulted in high costs.
A common proposal here is to try to set up construction contracts so that the risk of higher costs and cost overruns is borne by private companies, not taxpayers. The authors find little evidence that these types of reforms work:
Moreover, many ongoing reforms hailed as breakthroughs, which we call the globalized system in the Swedish report, at best do nothing and at worst actively increase costs; these reforms are all aimed at privatizing risk and have been popular in the English-speaking world, and although consultants, managers and big contractors love them, the costs rise sharply wherever they are implemented, such as in England, Singapore , Hong Kong and Canada. … The good news is that high-cost countries can adopt the practices of low-cost countries and build metros at costs more in line with low-cost Scandinavia, southern Europe and Turkey. This requires rethinking design and construction techniques, the use of labour, procurement, agency processes and the use of private real estate, consultants and contingencies. . If it implements the best practices we detail in the rest of the overview, the costliest city in our database, New York, can reduce its construction costs to match those of Italy and equal or even do better than Scandinavia.
Of course, America’s inability to build mass transit at reasonable costs is part of a larger problem: In many ways, the U.S. economy has a diminished capacity to build, whether it be it public transport, green energy or housing.
For example, if the United States is serious as a society about a vast expansion of solar and wind energy (a proposition which I am beginning to doubt), then we will need not only very large commitments of land for solar and wind projects, but also a vast physical expansion of the electricity grid, as well as facilities for manufacturing and recycling equipment and a willingness to extract copper and other necessary raw materials. A report on some of the permit reforms needed to achieve these milestones is here.
Likewise, if we are serious as a society about affordable housing (a proposition which is also possible to doubt), then many cities need a vast expansion of their housing stock, not primarily built at the extremities cities where land is cheap, but rather concentrated in locations within city limits where a combination of underutilized office and retail space, surface parking lots, and even some areas in neighborhoods Residential properties (for example, those near public transportation or the empty air space above some local stores) will need to be committed to additional accommodations.
None of this should mean a free-for-all building. Zoning can still count! But current US building rules in many areas often look remarkably like the rules you would have put in place if you wanted to discourage and slow construction and increase its costs, rather than the roles you would have put in place to facilitate such projects.