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Why is transit in the US so expensive?
The starting point for this video is an upcoming report on why transit, most notably subways, cost so much more in American than in other developed countries. However, the discussion covers much more than just transit, and discusses how cost disease effects pretty much all public works projects, from roads to sewage. While there are many individual pieces that contribute to inflated prices (outside consultants, unions, red tape, bureaucrats, etc.), they don't really like this explanation. As Chuck points out shortly after 31:00, each of the 2 major political sides can point to a few of these issues to fuel their particular narrative. But, he says, they're incomplete, and miss the real underlying causes. If I were to summarize their description, it seems like the question is mostly one of attitude:
No one cares about cost. People will say they do, but their actions say otherwise. Voters don't, especially with the ability to borrow from the future by issuing bonds. Which means politicians don't, because why would they? And the appointed heads of agencies don't consider it their responsibility to account for cost; they treat cost as fixed and let the legislature decide how to pay for it. Possible sub-point: We treat a lot of these projects as jobs programs and so end up hiring more people than necessary.
There's an underlying assumption everywhere that everything has to be the best, no matter what. Roads in rural areas, that in other countries would be very narrow and winding, are in the US flat, smooth, paved asphalt with 2 lanes in each direction. We don't treat money as a constraint, we just decide we want a thing and then go and get it without regard for the future. Of course, this attitude depends on what one is used to. Boomers, especially, are not used to having these sorts of constraints; Millennials also feel a certain sense of entitlement, but at least have more experience with these constraints. (The latter sentence seems to be more or less speculation, they don't cite any research here).
The conclusion is that nothing will really get fixed until it accumulates to the point of a major economic recession or depression, at which point we'll be forced to actually do something, but not until after we have wasted enormous amounts of time, effort, and resources on poorly planned public projects. Or, if we collectively decide to actually care about these things before then.
I have some recent experience with this. I was at a meeting yesterday afternoon with a state park that an outdoor nonprofit whose board I serve on deals with extensively. Towards the end of the meeting, after all the main items of business had been discussed, the whole thing always devolves into a general Q&A/Airing of grievances with the park and the topic of bathhouses came up. The park is primarily known for whitewater and built a bathhouse several years ago following visitor complaints about bare asses in parking lots. Part of this complaint was making outfitters stage on their own property while the park would provide a bathhouse for private boaters. A friend of mine who serves on this board owns an outfitter and built a nearly identical bathhouse on his property the same year the park built theirs. The park's bathhouse cost $750,000. His cost $35,000 and required more earth work. The topic came up because the bathhouse the park built was torn down a few years ago as part of a PennDOT redevelopment project that everyone was against. Part of the project was that PennDOT would replace the bathhouse they tore down, which still hasn't happened 3 years later. The cost of the new bathhouse? $1.9 million.
The explanation that we got for this kind of discrepancy is that it's the nature of the open bid process. When using outside contractors, the specifications are strict and inflexible, prevailing wage rules apply, there are strict time constraints, etc. This is much different than one guy trying to get a building constructed who can make compromises at his discretion and hire his brother-in-law's company without raising ethics concerns. For stuff that doesn't involve a bidding process, the costs are fairly reasonable. For instance, one of the items at this meeting was that we wanted to construct a couple of information kiosks. We were really just looking for the park's permission to build and install them ourselves with perhaps some guidance into how they want them to look. At the very least we expected to have to kick in some money. Instead we were told that the park maintenance department could build them during the slow winter season with lumber that they either had on hand or could acquire cheaply from their distributor.
This is a topic that really makes me mad. Government spending is 40-60% of GDP (i.e. of all money spent) and they overspend by 10-20x on just about everything they do. Conservatively that's 36% of GDP wasted, every single year. And that's not even mentioning all of the delays government regulations add on to private construction. Why should a permit take more than a week to come through?
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I have another explicit example of the same. A public restroom on Alki Beach in Seattle was recently rebuilt. This is a three stall restroom, entire building is something like 250-300 square feet. Cost? $638,000. Look at the photo. For this price, in the private world, you can buy a quarter of acre, hire a contractor to build a high quality 2000 sq ft 3 bed/3 bath house with great finish, and sell it with a good profit. The restroom took an entire year of construction time, not even counting planning.
It can get a lot worse: San Francisco was planning to build a $1.7 million toilet before the story went semi-viral and they paused it.
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