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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.
Oh boy. This is one of my pet political peeves. It got discussed a few times on /r/slatestarcodex with the head of this project (Alon Levy) even chiming in a few times. I've got a bunch of ideas.
1. Institutional incuriosity
Transit agencies in the USA and Canada are super myopic. There are of course entire regions of the world where transit is built and operated cheaply and effectively, but very curiously North American transit agencies seem to make absolutely no attempt to figure out how they do it. When you read about the planning reports done for projects in North America, what they are compared to are almost always other North American projects. Right down the line, from things like technologies to bid structuring to consulting to public-private partnerships to art design, the "best practices" that are emulated are not in fact the best practices, but the best North American practices (which pretty severely limits your potential from the get-go). I could draw from dozens of examples in this regard, but maybe the most egregious case study for this is the California high-speed rail project which decided to ignore the accumulated six decades of HSR experience elsewhere in the world in lieu of creating a "made in America" solution to every problem they encountered. Part of this institutional incuriosity I think is a result of over-regulation; in the past North American rail projects were severely handicapped by onerous safety rules which forced them to use trains much heavier than those of Europe and Japan, but those regulations were spiked during the Trump administration so it's no longer an excuse. It also doesn't help that since there have practically been zero privately-run new rail projects since the 1970s in North America, an entire generation of people who might have had experience working with this has disappeared.
2. Infighting between relevant governments/agencies
There's a German planning proverb that goes "Organisation vor Elektronik vor Beton", literally organization before electronics before concrete. The idea being that when you want to do a project, the biggest gains in productivity and cost savings come from getting everyone on the same team first. North American transit politics often sees the opposite: where different transit organizations that overlap in jurisdiction see each other as competitors for funding and riders. In lots of North American cities the different transit organizations are downright hostile to each other; they refuse to share transfers, they won't show each other on their route maps, they bicker and fight about everything and won't share any infrastructure. Meanwhile in cities like Tokyo where most of the transit is privately-run the various organizations see each other as complementary hubs in a wheel, vital to the other's success.
This translates often into poorly-run transit with little cooperation, obviously, but also contributes to cost overflows. Amtrak wanted $10 billion (read: actually $30 billion) to dig a new tunnel under Philadelphia for high-speed rail... because SEPTA refuses to give them any space in their under-capacity 4-track tunnel.
Or in Europe and Japan you often see regional transit authorities band together when ordering new buses or trains, because the economies of scale offer significant savings when they order 200 trainsets together rather than each insisting on bespoke custom runs of 10. That kind of larger-scale cooperation effectively does not exist in North America. Not only is there a lack of standardized design and operational practices, there is outward hostility to any form of cooperation.
3. Inability or unwillingness to manage cost overruns
There are political dimensions to it. Part of it is I think that in the North American context, especially in the age of diminishing state capacity, politicians kind of like to throw big amounts of money around - it's a proxy for how much they care. Therefore it's not really a bad thing if you spend $5 billion on a project that should cost a quarter of that - look how important transit is!
I think it would be naïve to discount organized crime elements here. At least in Toronto the 'Ndrangheta silently have their hand in just about every public works contract (for a good laugh check out which Ford donors own land along the proposed new highway 413). If there isn't an organized crime element to how much we pay for transit than we're getting ripped off much worse than we think, especially because Italy actually builds transit quite cheaply.
There's also some institutional culture going here. There has been more and more investigative journalism about the extent to which governments rely on private consulting to make decisions for them; where to put the benches and exits in stations, notes about architecture, technology choice, etc. Part of this is in general an erosion of state capacity: the best and brightest don't work for the government, and there aren't many to begin with. (By contrast the Paris transit corp RATP has about 2,000 engineers on-staff). But the worse element, at least according to the people I know who've worked in these roles, is that the consulting groups are paid to provide cover for the people in charge when decisions go wrong and costs inevitably balloon. Then you can trot out this study you paid $15 million for and say well, this was what was suggested to us, we just confirmed their decision.
4. Political interference
Municipal politicians tend to have a lot more influence in what does or does not get built in North America. This is generally the opposite of what happens in Europe, where long-term plans are either established by arms-length governing bodies or by some kind of binding referendum. But largely what does not happen is that some new person gets elected and the existing plans get chucked. Planning is done for the long-haul, not for short term changes in opinion or cash windfalls. Part of this is the distribution of revenues and funds; transit organizations in Europe tend to get long-term budgets which give them the capacity to chart their own course with respect to new projects and maintenance, instead of hapharzardly injecting funds according to campaign promises.
The role of individual politicians in the transit-building process also increases potential for corruption and lobbying. It's not that NIMBYs don't exist in Europe: they do, and they try their best to hamstring projects (like the UK's probably ill-fated HS2, or Stuttgart 21). But the political levers they have at their disposal tend to be larger (like referendums) rather than things like the environmental assessment process or community engagement which are more vulnerable to people who disproportionately care (meaning: hate) the project. Common law might have a role in this.
I could go on about all this forever. But my general point is that North America desperately needs to look inward on this. If the idea is that we have to shift our transportation off fossil fuels (and we do), and that a good chunk of the transition to electric transport means new transit (and it does), then we have to get much better at getting bang for our buck, because right now it is downright pathetic. Look to the countries that build transit cheaply (Spain, Sweden, Italy, Korea, are all positive examples). Look to the countries that build transit expensively (North America, China, Russia). Figure out what people are doing right, and what people are doing wrong, because in general the correlations between high-cost and low-cost countries are not wages, or systems of government, or geology, but rather institutional competence.
I loved the story from California's HSR where they talked about the french rail builder coming to the US to bid, throwing in the towel after finding their time here wasted, leaving, and completing a new HSR project in Morocco, while California spent twice their expected budget to build nothing.
If that's not a great illustration of the US problems, I don't know what a better one would be.
OTOH, the French company's recommendations -- such as to run the route along Hwy 5 in the Central Valley rather than Rte 99, where people actually live -- would not have effectively served Central Valley residents. It is easy to save money by building a less effective system.
California HSR is LA->SF, that is close enough to 100% of the economic value. Failing to serve central valley residents is entirely irrelevant.
Plus, transit brings development. It might be the case that people currently live on rt 99, but once transit to places that matter becomes available, folks may choose to live near it. This is literally what happens in China: they build a subway stop in an empty field and a few years later it's a walkable mass of 20 story mixed use buildings. Then again, China has legalized the construction of 20 story mixed use buildings, unlike California.
Well, as I noted in my response to Supah_Shemendrick, the official ballot pamphlet argument in favor of the 2008 bond initiative explicitly said it would serve downtown Fresno and the San Joaquin Valley in general. Since CA courts look to the ballot argument in order to interpret ballot initiatives, People v. Floyd, 31 Cal.4th 179, 187 (2003) ["Our construction is also supported by the ballot argument distributed to voters for the November 2000 General Election."], that implies that CA HSR was not supposed to be LA->SF.
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