Transit Costs Project Audio
The audio and transcript from Matt's conversation with Professor Eric Goldwyn of the Transit Costs Project
Last week I was joined by Professor Eric Goldwyn, who leads the Transit Costs Project at the NYU Marron Institute of Urban Management, for a conversation about transit projects in the US and abroad.
The Transit Costs Project investigates the question of why transit-infrastructure projects in New York have such high costs, comparing hundreds of transit projects from around the world. We discussed over-reliance on consultants, poor planning, overbuilding of stations, and the prospects for reform.
To learn more about their work, visit their website. Audio from the event, along with a transcript, can be found below. Enjoy!
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Matthew Yglesias: So you guys have put out a bunch of sort of case studies looking at trends of costs and construction costs. And your most recent one is on sort of the mother of all American transit projects, the Second Avenue subway, which is interesting because it is incredibly expensive. But as we were talking about before we got started here, it's also actually a really valuable project that a lot of people are using. So, you know, sometimes when you talk about costs, people talk about like cost overruns or their concern with white elephants, like big, expensive undertakings that nobody uses. Second Avenue subway is not that, like this is a really good piece of infrastructure to have. And I think some people in New York will look at it and say, well, you know, at any price, it's it's worth doing. But I mean, it has to cost a lot of money.
Eric Goldwyn: If it had been double, it's still would have been on a per rider basis like, you know, cost effective relative to other American projects, like by a long shot.
Matthew Yglesias: But so I mean, I guess that's maybe a good place to start it, right? So even though it's very expensive, it's actually highly cost effective in ridership terms because demand for mass transit is so large in New York City. So what that comes down to is that if New York could stretch that money further, it could generate an incredible amount of extra transit ridership. Right. Like this is a place, you know, in a lot of the country you have to talk about changing things, whatever. Like New York City is full of people who want to take more subway trips.
Eric Goldwyn: Yeah, I think. Right. The first thing is, you know, it's phase one of a four phase project. And the reason why it was broken up into four phases is because of the high absolute costs. And so phase one is under two miles long. So not a very long project. Three new stations, a rebuilding of part of another station to tie it into an existing line. And with that it's 200,000 riders a day. The full four phase project, at least, you know, in the estimates from the early 2000s, I want to say, is like 550,000 riders, which is a lot. Just to give some perspective on that, we were just talking about WMATA just built the Silver Line extension out to the airport at Dulles, and they're estimating, I think, 30,000 riders a day at the peak, like not today, but in like two or three years when it gets into like it's groove, assuming, you know, things go well. So, it's like it's magnitudes different. And I think the way that we framed our New York case is that, yeah, we want to get more transit infrastructure per dollar spent. And the other piece of it is that a lot of good projects either die on the vine or just never get a serious consideration because those absolute costs are just so daunting, even with phase one assembling the money to build it could take years, right? It was not an easy thing. And we talked to some, you know, pretty senior people at the MTA from that period who were like, oh, there's no way we're going to raise this money. Like there is a bond referendum. And one person we spoke to said we just assumed after that failed, we could sort of like mothball, you know, Second Avenue. And then it passed and they're like, God, we have to build this thing. And, you know, I think there's another component about that that creates a lot of challenges is just sort of how much agencies can handle in New York at that time was sort of ramping up on a number of different capital projects. That created some challenges.
Matthew Yglesias: But so, I mean, I guess this is an obvious question, but it's like, why do something so small? As, you know, three stations, two miles a tunnel. It's like pretty straight. Like, why should this cost? I mean, taking tunnels under cities, you know, is expensive. But around the world, you have examples of subway tunnels that need to curb weird ways, that need to be cut under very old streets.
Eric Goldwyn: Like the geology in New York is in this part of New York is like not that hard. It's not that challenging when people talk about Manhattan Schist as being very challenging. It's a very… I'm not a geologist, but it's a very abrasive rock. So it means your advance rate is not going to be as fast as in like a clay or in a softer earth. But it also is a very sturdy rock, and you don't have to do as much waterproofing, all kinds of other things that aren't relevant to our discussion here. But, you know, to your sort of initial question, I think the number is 77% of the construction costs were sort of in those stations. And, you know, and you've written about this and we've talked about it, and one of the big sort of drivers of that station cost is service, the size of those stations. And this issue of back of house space, which is space that is not for passengers, it's for the people who operate and maintain the trains. And so New York City Transit, the entity that operates the subways, I'm going to get the numbers wrong a little bit here, but there is like 20 plus different operating groups within the agency. So that's like, you know, track maintainers, elevator escalator people, train operators, conductors, you know, so forth. And so each of those groups wanted their own, let me get this right, workspace.. office space. And then they needed, you know, some bathroom changing and eating spaces. And so all of that, you know, fitting all that stuff in required just more and more space. And when you look at the environmental document from 2004, there are some illustrative drawings of the stations. And, you know, these don't mean it's going to be what it is. But what you do see when you look at it is that the designation is for combined rooms, not for everyone having their own room. It's that you would combine it, combining these facilities and so you could sort of do things much more economically that way. And then, you know, as we did the research, we talked to people abroad and we're like, well, what do you do about this stuff? And we had some really good back and forth with people in France. And they were saying that in Paris, where they're building some some new stuff right now, that they build those spaces at the surface. Right. So much cheaper than building it underground. And, you know, we really did try to find examples of places that had as much back of house space as New York does. And we could not we could not find, like we looked in Turkey and Italy, in Sweden, in Korea, in France and Spain. We think the Chinese are sort of the closest, but still not nearly as much as as what we found in New York.
Matthew Yglesias: And so I was a little like, I was confused by the back of the house idea, but I never thought about like the old stations and this like, if I go to the 23rd Street station, I'm on the six. Like, is there some big hidden office complex under there? I mean, because obviously New York has a complicated transfer station that are quite a lot like Union Square where we grew up.
Eric Goldwyn: Well, Union Square is a great example. Great example in that there are lots of nooks and crannies in that station. There's a police department. And that station, as you know, and there are lots of like doors, and those doors lead to rooms. And when you have that full length mezzanine, which, you know, Union Square does, and that's sort of the level above the tracks for those that don't know. That creates opportunity, right, for to carve out spaces. So we interviewed someone who worked at the MTA in the nineties and there was a big space audit of the different stations because there is this issue about, oh, where do we put the janitors and the this and the that? And what they found was that all these, a lot of the older stations had these rooms where the people had lost the keys and who owned what and how to write to this or that. And when they opened the door, like stuff would be in there, someone had like essentially squatted in these spaces sort of. So, you know, the we talked to some heads of New York City transit during during the phase one construction, and they were like, you know, we just fought for as much as we could get because once you build it, you can't get more space. And, you know, that's just… it wasn't their budget that was on the line, like New York City Transit wasn't cutting those checks. And they also have great stature relative to the other agencies. Well, really, MTA Capital Construction at this time. And so what we were told is that MTA Capital Construction couldn't say no to them, but they could rearrange where the spaces were to sort of optimize, I guess, the flow of the track operator, the train operators and the track maintainers or something like that.
Matthew Yglesias: But so, I mean, that basically the story here is MTA Capital Construction and New York City transit are different. Yes, bureaucracy means even though they're both instrumentalities of the MTA, which is an instrumentality of the state of New York. And one group is paying for the project and another group is using the project. And so they just asked for features that are nice to have. Yeah, a lot of nice rather than must haves.
Eric Goldwyn: Right. And so, yeah, when you're not minding schedule, scope and budget, you know, you are like, Hey, I'd like a kitchen in the station. I'd like, you know, separate changing room for for these people. And you know, in the interviews, the thing that was sort of pretty frustrating was that when we asked, well, okay, you know, this seems crazy. What do you say to New York City Transit and your experience as well? We have these different user groups and they bear responsibility for these rooms. So if they're sharing, how do the different user groups determine who's responsible for what? And you know, I know you have a young kid and one thing that they do is you have a chore or something like that. And so you can figure these things out with.
Matthew Yglesias: Right. We had to figure out who swept the floor.
Eric Goldwyn: Exactly. But it's you know, there's things like that where the head of the agency or maybe it's the governor or the mayor or something like that, is just like, all right, enough with this bullshit. Let's make this happen. We can't be fighting about this forever. Because the other part of it, which I sort of did not mention here, but is in the case study, is that as design advances to final design, right. So like you get many opportunities at New York City transit to see what the design is going to be. And so we're talking about right before final design on some of the stations, New York City transit comes out with like 50 to 60 different things that were like, no, no, no, no, no, no, no. We need to change that. And like the one that, you know, I probably I'm fairly pick on is the size of the tile. You know, the initial design was going to be, I think, 30 inches by 30 inches maybe. And they're like, no, no, no. We only do 12 inches by 12 inches. And I just, you know, in reading that stuff, it's funny, but it also is… so you're just kind of like, oh, this is this costs a lot of money because now this design consultant who's really expensive that we ended up paying $450 million to do that, the design work has to go back and like redo all this design work, not just the tile stuff, other things, too. Yes, the tile redesign stuff is not that expensive.
Matthew Yglesias: And this is layered on top of the fact that the stations were being built without… excavated with an expensive method.
Eric Goldwyn: Yeah, right. Yes. Well, excuse me. They mined out the 72nd Street and 86th Street stations, 96. It was built cut and cover, which is sort of the traditional, cheaper, faster, more disruptive method of building a station.
Matthew Yglesias: So, I mean, if they had done this, I don't know, like on the cheap, if they had done pattern cover and made like normal sized stations by international standards with the money they had, could they have just gone to 125th Street?
Eric Goldwyn: Yeah. I mean, I think you know that yes, we think so. You know, we think that and we write about it in our final report. We write an overview. The thing that I think people struggle with is that if you were to build phase one of the Second Avenue Subway to sort of best practices, like it would just look very different. Like it wouldn't be oh, it's still going to be, you know, 600 foot station. It would be, you know, usually about 20% longer than the platform. So what's that, 720 feet from the station box. And yeah, you wouldn't necessarily have full mezzanines and you wouldn't have maybe crossovers which are, you know, allow for trains to switch from uptown to downtown. And yeah, we think it could, you know, our database where we have a database of around 900 projects. And I think our average cost (and we do a weighted average based on like the only of the projects in our database) is I think there are $350 million per mile. So let's call it two miles. You know, you're talking about in the in the neighborhood of $700 million at average prices. And then if you were to do it at lower prices, you know, like countries that can do it more cheaply, you're talking about, you know, $400, $500, $600 million. And so what that means is, right, instead of building phase one, you could have built all four phases. And the thing about that, and I go back and forth on this a lot, is that the initial idea for a secondary subway was to only go to 125th Street. It was not to build… well, the idea in the in the eighties and nineties, I should say not, you know, going back to the 1920s.
Matthew Yglesias: That was a long time.
Eric Goldwyn: Right? Yeah, exactly. I mean you to tie into like the legacy system. And so that meant you also had to like, follow the… you had to use the same rolling stock that runs on the Q line. Whereas if you could have built it as a standalone line, you could have used maybe an automated metro and had even smaller stations, which is what they do in lots of places now.
Matthew Yglesias: And lower operating costs.
Eric Goldwyn: Lower operating costs, all those types of things. And then you could probably you could build all four phases perhaps, you know, and it's just like the alternative history on it is, I mean, I don't know if your your listeners are that interested in that stuff. But it's pretty interesting to think about, I think.
Matthew Yglesias: Well, I mean, I think it's important, though, because, you know, we're talking, when I first got interested in this topic and I think, you know, when you and Alon and some others were sort of making initial inquiries, I was kind of expecting to find a lot of, like, unit cost waste, no? So, like, on American health care. Like we do an MRI and Japan does an MRI, and the Americans do the same. Right? It is much more expensive. Yeah. And I was kind of expecting that that was going to be the story, right? That there was like some tile guy who was just like sitting on $1,000,000,000 tile wall. But it looks to me, reading your report on the green line, reading this second subway, reading report on Italy, that there's maybe some of that. Yeah, this is much more a question of project management that the decision makers are not making. You know that it's legitimate for a station that big to cost that much money. So the question is, why would you do that? It's like you built this giant, like gold house, but it didn't have to be gold, right? It has no, it has no purpose.
Eric Goldwyn: It reflects the sun.
Matthew Yglesias: Right. So, you know, then the question is like, well, as a politician, like, why don't you get in there and crack some heads and tell people, no, you got to do it this other way that you want to do. And well, you understand. I mean, politicians don't like to pick fights with people. They like to go along with broad coalition. But at the same time, if you could have delivered a much longer subway like this, that obvious political upside to that. Right? Andrew Cuomo, like, wanted this to be his. And the governor gets things done and it's like, great, if you happen to be my brother who lives right by these stations, but it's only three stations.
Eric Goldwyn: It's only three stations.
Matthew Yglesias: He's built a long ass thing. Now, I know so many people who are like, oh, this is great, I have Subway.
Eric Goldwyn: Yeah. So all this is true. I think, you know, it's a lot of it is about time horizons. Right? And so, you know, one of the primary design criteria for the stations and well, for the alignment was to minimize surface disruption. And so that puts you in that deep mining category. You have to, you know, build a cut and you have to build a launch box to get a [tunnel boring machine] into the ground. So and that has to be done and cover. And to go to your unit cost price issue, you know what? I think one of the most interesting stats about that is, you know, a launch box is pretty much just a launch box because TBMs are relatively similar. So where the length of it, the depth of it, all that stuff, I mean, depth has some variation, but they're the same wherever you go. Yeah. And so in New York for phase one, it took three years to, to dig the launch box. And I was like, that sounds like a long time. I don't know. But we asked people in Turkey and Italy, Spain and in India. I somehow got some data point on and they're like six months to a year, right? So three times longer using the one year. And then when you look at our labor costs, they are higher. Absolutely not that necessarily are in our from our Swedish case… But then you're like, okay, if it's two times higher, three times or whatever it is, you're now multiplying three times two and you're like, Oh, it's now six times more expensive to build this exact same thing. So there is your your M.R.I. example. And we did, so the thing is that your question about the unit costs is those are not really available. We don't deliver projects that way. Labor unit costs are available. We know what hourly wages are. We know what how overtime works. We did dig into the infamous sort of “how many” is a joke that we tell our children? How many people does it take to operate a TBM? And we found out that in New York, you know, about 50% more people than from what we found in Spain, in Italy. And I think it was also from Turkey. And, you know, there there are things like that, too.
Matthew Yglesias: And it's also I mean, to some extent, right, it's appropriate that the labor costs would be higher in the United. But that's like all the more reason to not use 50% more.
Eric Goldwyn: This is it. That's exactly my point, is that if you know that you have an input that's expensive, what's the answer? To do the most labor intensive thing or to try to do something that's not the most labor intensive thing? And I think there's like a long sort of aside in the New York case that people who read it, the whiner, like you got to cut this, which I refuse to do, but it was about sort of like the early, you know, railroad builders. Well, you know, those are decisions they made, right? It's like, is land expensive or is labor expensive? If land is expensive, we're going in the straightest line possible. And, you know, so that meant like building tunnels and viaducts and things of that sort. And so, you know, I think some of that sort of cost sensitivity just is not there. We're sensitive to other things.
Matthew Yglesias: Right. Is is there like a clear reason why it takes them three years to build that launch box?
Eric Goldwyn: So in the New York case, as soon as they started digging the launch box, they discovered that the foundations of the buildings sort of in the zone of influence were, you know, too fragile and they had to figure out how to support those buildings. Before they could dig more. And when you do this kind of work, you do a lot of, you know, sort of like early, preliminary like what is it going to be like when we, you know, start jackhammering? And they did not do a great job of that. And in fairness to MTA Capital Construction on this, they had this plan where they were doing they were taking photographs of buildings and things like that and reporting it to the Department of Buildings and expecting them to sort of enforce. And then there's this… famous is really not the right word, but there is an egregious example of like I think a building was leaning. It was like 18 inches over. And, you know, they got an immediate stop construction order and, you know, they had to like bind the building and he had to pay for all this stuff, right? Because it was like it was more cost effective, just like, screw it. I'll spend $750,000 on this building. I spent, you know, $1,000,000 on that thing and like, keep the machine moving, because once you tender those contracts, anything that delays your contractors opens you up to claims. And, you know, I think for the tunneling contractor, they estimated that, you know, every day of delay was going to cost something like $25,000 in claims. And I don't know if anyone's been following DART, but the head of DART, Nadine Lee, she just came out guns blazing against Dallas and accused them of holding up permits for her project, a project she's doing. And she's like, it cost us $100,000 a day when you delay us and we have an agreement with you that says you have to give us permits within ten days. And we didn't. We waited on this one permit for 290 days. So, you know, you do the math.
Matthew Yglesias: I mean, one thing you see here that I know I was talking to some some French people and they they found that they found this very confusing. But that like the state in an American context is very diffuse. And so DART can be in a dispute with the city of Dallas. Right. Or parts of the MTA could be in a dispute with other parts of the MTA.
Eric Goldwyn: Yeah, that is very strange.
Matthew Yglesias: One example you have in the in the report is the New York City Parks Department sort of holding up.
Eric Goldwyn: They didn't hold anything up. They extracted some money. They were, the DEP one is more of the holdup. I get what you're saying for sure.
Matthew Yglesias: Right. It's not you know, there's some like political theory where you're like, and then the government decides to do a thing, right? But there's not actually kind of community governments.
Eric Goldwyn: Yeah.
Matthew Yglesias: And every place I mean, I'm sure in France, you know, different people in the government may disagree about things and have to negotiate. But the the legal system is different. And the institutional system is is different. But it also just seems like American politicians don't handle this kind of question absolutely appropriately.
Eric Goldwyn: Yeah, I like the inter local stuff I think is really interesting. Like I, you know, so using all these the parks for example first, but we interviewed, I don't know, 80 people I think, or something like that. And you know, you talked and a lot of people you talk to just sort of parrot the The New York Times article or whatever about this stuff. And so we talked to a guy who was very involved and very high up at MTA Capital Construction. And, you know, he opened with this Parks Department thing. And I was like, I've never, I don't know what you're talking about. And then I did some you know, we did some FOIA requests to, you know, parks. We spoke with former heads of the Parks Department and, you know, high level staff there. And they're like, oh, yeah, we remember it like it was yesterday. And basically, you know, there's no protocol. And the MTA was like, we need to use this park between 96th and 97th Street in Second Avenue to stage construction for the launch. But you know, not for the long tracks for this, for the station and you know, what's it going to cost us and the parks and people were like, what is it going to cost you? Like if that was the question they like, we don't know. And so they came up with some stuff and it ended up being $11 million plus money for parks staff to work in other parks. And then there's like a whole tree replacement in New York, like a topic people should look at, like parks has like very strict standards, like if you cut down one tree, you don't plant one tree. It's about like the the width of the tree that you've removed. So like a sapling, it's like seven of them to replace one tree. And each tree costs like $2,000. You know, they've ended up planting, I think, 444 trees, something like that. Anyhow, sorry you had a thought?
Matthew Yglesias: I just think, you know, it illustrates the point. It's like, you know, on some level it's a question, right? It's like, does the city want to build the subway? Don't they write like a, they have a bunch of money that's… maybe they've got a bunch of federal government money. So even though it's high ridership, like it's fundamentally just one neighborhood is benefiting. And so to then turn around and have the mentality that like, well we have to at great cost like also…
Eric Goldwyn: Helpful, like the subway is going to allow people to get to the park, like that's the thing that is so crazy right, is that like it's the MTA isn't benefiting from this, like the city of New York is benefiting from this.
Matthew Yglesias: Like specifically like the neighborhood is better.
Eric Goldwyn: Yeah, right. Yeah. I mean, more so than anything else.
Matthew Yglesias: The same neighborhood that uses… I mean, again, everyone in the city is welcome to use the park and everyone in the city is welcome to ride the subway. Like in practice, these are local benefits. We're the same community. Right? So it's like it just seems like there should be a more integrated framework. So I'm going to invite people to use the at the Q&A feature and type the questions in here. We did start with more of a comment than a question, but an anonymous attendee, he says, NYC builds all capital projects to improve quality because they know there will never be enough operating funds to properly maintain them. So they need to hold up for as long as possible in their own operating dollars. Their precious capital funds are much less so. I don't know how true that is?
Eric Goldwyn: It's true.
Matthew Yglesias: Seems to me that maintenance should be a capital expense and operating right.
Eric Goldwyn: But it is an operating expense. Right. So the story in New York with sort of the elevators, I don't know if anyone is that familiar, but our elevators are really expensive. And if you look at them, they're wider and bigger than what you find in other parts of the world. And what we were told is that exactly the point is that you want to build it and forget it, set it and forget it like the rancho is about to go. And so, yeah, you want to not be doing the maintenance piece. And, you know, we write a lot about sort of in the diminishing of agency capacity trading, operating dollars for capital dollars. Right. And one of the things that's nice about hiring Arup and, you know, a AECOM or whatever is it's going to cost you a lot of money. But once the contracts are done, it's not like you don't there's no pension involved. And so if you have uncertainty about how you're going to scrap together, put your your your money and it makes your life you know, there's more certainty, I should say. I don't know if it makes life easier.
Matthew Yglesias: I mean, there's this kind of a chicken and egg, right? Because it's if the projects are built more cost effective than, as we're saying in New York, there's actually lots of high ridership opportunities. Then you could be consistently building stuff in which case relying on contractors rather than permanent employees is less. You know, appealing, right? I mean, I'd be one in the public sector likes contractors because you can just get rid of them when you don't need them anymore. But yes, actually, New York could be consistently building.
Eric Goldwyn: We try to underscore that point with, you know, so while phase one was being built, there is this other project many people have heard of Eastside Access, which just down Bend.
Matthew Yglesias: This is brings LIRR trains.
Eric Goldwyn: To Grand Central.
Matthew Yglesias: Grand Central. Right. Yeah.
Eric Goldwyn: Right, right. So that project was was going on the seven extension to Hudson Yards was going on Fulton Trent Transit, the Fulton Street Terminal was going on. So you had I think it was like 20. You're like $20 billion of sort of these ongoing capital projects. And it's like, you know, you probably could have built, you know, a staff of more than… there were 100 million people at one point is at MTA Capital Construction to effectively manage this stuff. And you know, the group that existed prior to MTA Capital Construction was a group at New York City Transit that had 1600 engineers and they were doing like maintenance repairs, ventilation shafts. They weren't doing sort of build, you know, because we weren't expanding our system really in that way. But, you know, 1600 engineers, you know, that's a lot of people. And sort of to draw in our Italian case study, there is an entity in Milan called Metropolitan Milanesi and they sort of were formed to build sort of the metro system in Milan. And as you know, that got built out. They then were given the responsibility of the sewer system, you know, another underground thing. And so that helped sort of like manage the work flow issues. And so and then they also ended up doing other work around Italy and around the world. But like you could study in like an ideal world, right? Like MTA, you know, the biggest transit agency in New York City being really good at capital construction and then helping out, I don't know, Marta, with some of their projects.
Matthew Yglesias: About your Italian case, the smaller cities like Torino, you know, wouldn't build huge in-house staff. But like, actually, like hired, I think it was Rennes in France to be like you are a similar sized small city with a small metro, like, show us how to do it. And, you know, New York has a lot of well, not so much small cities, but like, small scale mass transit systems. But, you know, an effective agency could be the contractor for other things. Okay so, Lucy, one of my favorite Twitter reply guys. So he wants to know how are you trying to convert these research findings into policy practice? Is there legislation we could pass? Should we hire you to consult better transit projects?
Eric Goldwyn: That's very sweet.
Matthew Yglesias: So I believe in the posting to policy. Yeah.
Eric Goldwyn: I do, too. I mean, it's effective. So what I can say is, you know, so I've been working as a consultant with Sound Transit on their capital program, I want to tell you to minimal effect. I wouldn't want to overplay my impact there. I did, we did submit a report being like, do these things. And then, you know, there was just a paper, an article in the Seattle Times being like, we're doing the exact opposite thing. So take that as well. But we have been talking to other agencies, like our research group, and we've been talking to federal partners. And, you know, we thanks to people like Matt get some media coverage of our work. And so I think, you know, we're doing an okay job of getting the word out. But I think the bigger thing that's going on, right, is so if you followed the DOT announced sort of federal funding for the new starts grant program, which is the main mechanism that the federal government gives money to transit projects and then all the products, the cost just went crazy and went up. And, you know, Austin sort of is saying, we're going to scale back what we're doing. Marta in Atlanta said, We're going to scale back what we're doing, you know, in the Bay Area, the costs of the San Jose project, we're going up in New York, the cost of days to have gone up. I think people are kind of like, you know, what is going on and like, we need to figure something out. So we've had a couple calls with agencies where it's like frantic and urgent and it's like, Oh yeah, I went tomorrow and it's like, okay. Like, these are the things that we think you should do. I don't know that you can pull them all off by tomorrow to like this project, but, you know, these are we are absolutely, you know, in trying to be in the ear of whoever will listen. And, you know, neither Alon nor I or we're not tried.
Matthew Yglesias: Yeah. You know, I mean, I will say I think from a distance there's been a sort of a frustrating lack of progress over the past, you know, ten, 15, 20 years on this. I will say as a as a journalist covering this, that comparing the Biden administration to the Obama administration like nothing has been fixed. But the government is now full of at least scattered individuals who are aware of what's going on and of some of the right people to talk to. And it really is actually a quite different situation and the evolution of understanding, unfortunately, it doesn't it doesn't like pivot, you know, on a dime the way the way one would like it to adjust.
Eric Goldwyn: Also, like the timelines are just so long on these projects that that it's just sort of like, you know, when we were doing our, we did our Green line case webinar. You sort of made that point about I forget I misnamed him then and I don't remember his name at all now, with the congressman from Somerville and just sort of like, you know, it's got a minor… Because I have a two year term, you know, it's like this project has been in the hopper since like 2000, like it just opened 2023, like right now.
Matthew Yglesias: And he's gone, you know.
Eric Goldwyn: Yeah, he's gone.
Matthew Yglesias: Here in his career, didn't want to see it. So Alexandrovich says, you know it seems like public sector employees have a kind of private sector narrative toward their public action with their job is to maximize outcomes for their home agency rather than to maximize total value for the public. And he's asking, is that dynamic different in the public bureaucracies in Italy and Sweden?
Eric Goldwyn: So a couple of things, I think. Absolutely. You know, the Department of Environmental Protection in New York, which does the water pipes and sewer they’re, you know, like, oh, we can get some of our capital plan paid for by the MTA. I sat in sort of in Turkey, though, right? It's done by the mayor. And so it's I mean, in New York, too, all the money is the same money. Right. Like it's public dollars. I mean, it comes from a few places. But like in sort of some of the international cases, you have the city of X, you know, leading the project and like that's what it is. So they're not going to like charge… sort of like the equivalent of DEP is not going to say now charge the other agency that is in the city to do this thing, because that doesn't really make sense. And so like when we would ask, we would talk to people abroad, and they found it very confusing because like, I don't get it. And I think, you know, sort of to take Alex's question to maybe a place he was not anticipating, I think from like an existential point of view, like what is a transit agency? Like, they fit very strangely into our system, right? Like, they are not states and they are not cities. They are not counties. They sort of intersect with some of those things. And governors, you know, accepting your example of Andrew Cuomo, like often have nothing to do with them. Like, I wrote something about a project in North Carolina where the Triangle, you know, spent $150 million, I think, on consultants to get this project done. And Duke University would not sign a cooperative agreement, which is saying that you need to get federal money. And the governor didn't say, oh, you know, I'm going to like try to help out here. And like Jay Inslee in Washington is never getting involved in Sound Transit business. And so I think when we say, you know, they're creatures of the state, that's true. But they don't have the full force of the state behind them. And so they are pushed around. And I think the example with Nadine Lee as well and like Dallas can really push DART around, even though maybe DART is a state entity.
Matthew Yglesias: I mean, they're treated almost like private entities that the local jurisdictions have to like, regulate and manage, even though they then subsidize that very heavily. And on the theory that you have a lot of people to ride transit and that's a little you know, I mean, if you go back whatever, to the first subway in New York, I mean, they were built by by private companies.
Eric Goldwyn: By private companies, but they were largely designed and paid for by the city. So, you know, the dual contracts, I think, was like $350 million or maybe $300 million, something like that. You know, the Public Service Commission, you know, designed it, did a lot of the construction management of it. And that's an entity in your city. And the city paid like $200 million. So I think, you know, the romanticization of sort of the private sector did all this stuff is like a little not true, but the Public Service Commission had like over a thousand engineers on staff and like they did the sewers and they did electrical stuff. And, you know, this is 1915, you know, it's just sort of a fascinating like how things have changed. But like, again, it was like the boundaries were much clearer about who's in control and who's in charge. And I think, you know, like the famous Cuomo MTA “hashtag Cuomo's MTA” to sort of remind the governor when he was the governor that he actually controls the MTA is a relevant part of the story.
Matthew Yglesias: I mean, it's interesting, like I know in Paris, the transit agency, it's not the city of Paris, but the larger, you know, Île-de-France. And the president of Île-de-France Mobilités is just the president of the Île-de-France region. It's like an agency of the whole Île-de-France region, which doesn't guarantee that the person in charge will make good decisions, but they are at least aligned.
Eric Goldwyn: Yeah, exactly.
Matthew Yglesias: Whereas, you know, some of this is one of the questions is like, where does the idea of transit agencies come from? I know I assume part of it is that a lot of the times you have like THE WMATA service area, DC region, that doesn't correspond to anything like that, not the city of… it's not the District of Columbia. It includes a significant part of Maryland, but not most of Maryland. And then a lot of the system is in Virginia, but the majority Virginia isn't in the service area.
Eric Goldwyn: I mean, that's a crazy amount. Like how on earth do you manage that? Like, how do you as the general manager I don't know if that's the title at WMATA or CEO. Yeah. Yeah. I mean, what do you do? Like it just seems like an impossible job.
Matthew Yglesias: BART is the same thing, right? They operate in, what, three or four counties. Oh, the MTA is like unequivocally in New York State.
Eric Goldwyn: Yes. And of course, well, it goes into Connecticut, too.
Matthew Yglesias: But yes, okay. It's run by the governor. But again, like New York State is really yesterday. You know, so if you're the governor and it's like, well, you worried about people in the suburbs of Syracuse or something like that, it's weird, right? There isn't a government entity that you would say, okay, this is the one that should be in charge of it.
Eric Goldwyn: Exactly. And I think like using the Bay Area as an example like this, the fragmentation of transit agencies, I think there are like 25 transit agencies in the Bay Area, maybe 27, something like that, I guess.
Matthew Yglesias: Because there's BART, then there's Muni in San Francisco, right? VTA?
Eric Goldwyn: AC Transit, I mean, whatever. I don't know, but it's like, that's nuts. Like, of course it's going to be hard to have like a coordinated project. There's a great academic paper from like the seventies. I don't remember what it is. I've never been able to find it after. But basically someone had done this analysis about public housing, whereas like, in order to get it done, you had to get approval from like 50 or 60 different entities and they're just like, if there is a 2% chance that one of those people would say no, like you've got no project and you know that uphill battle to get things done. It means you're constantly sort of like making deals and making concessions because you don't have the juice on your own to sort of just be like, we're doing it this way. And that's why, you know, like having a governor come in and say… look, like I think about this with the Gateway project as well. It's like they just stood up a new entity, Gateway and Mission partner, whatever the hell it’s called, Gateway. I don't know what's called, but, it's like they're governors of New York and New Jersey. And then there are these agencies within those states that are just going to be like, You got to do it our way or you're not going to get a permit to like shut down X, Y, or Z to do your construction. You're not going to get, you know, a certificate of occupancy to let people into the stations. Like there are all of these touch points that give the municipalities, these counties, whatever it is, sort of leverage over the agency. And when you're like, I got a $5 billion project, it's like, well, you know, you could put in a fire door in this tunnel for $1,000,000 and it's, you know, a rounding error and sort of everyone has that point of view.
Matthew Yglesias: So, okay, a couple of questions here. Is the U.S. an outlier in terms of long environmental reviews? Is that a big issue here? Another question is, do small and disadvantaged business requirements associated with federal funding contribute to the problem? Another question that was broadly similar, does the New Start's program encourage wasteful spending with kind of extra requirements that are that are attached?
Eric Goldwyn: Right. So, you know, my colleague Alon has written a little bit about buy America. We touch on it a bit in our report and we touch on it a bit with disadvantaged business stuff in general. Yeah, we think that those things add costs and add time administratively speaking, especially on both of those things. So we've talked to contractors who I mean sort of the craziest, craziest conversation… One of the craziest conversations we had was with a manufacturer of, I won't say the exact thing, but you know, a small item that goes into a subway station and this product is when they make it abroad and they sell it abroad. And I only got the numbers a little bit wrong, but basically they sell direct to the contractor abroad. And here it's you have manufacturer, distributor, subcontractor, contractor agency. And so all of those people are start, you know, mark up your project. And when you add in the Buy America thing which you know I sort of am getting to here because you have to document that it sort of meets all those standards. And so you need to have businesses that have the administrative staff to comply with all that stuff. Like to, you know, dot all those I's and cross all those T's. And so this one person told us that, like when they do an MTA project, they have to hire like, I think either two or three extra administrative staffers just to, like, deal with the agency. So not just with Buy America type stuff and federal required reporting requirements, but just with like all the stuff that the MTA requires too. And what he showed us bills of sales and it was basically this item was $50,000 in Europe. And it's I think it was $83,000 in New York. I should have maybe used. That's such a precise number. That's 85,000, 80, 85,000, whatever it was.
Matthew Yglesias: Kind of we'll find it right away, probably. But I do think because, because I don't want people to, I don't know, have like, the wrong bottom line.
Eric Goldwyn: We should we should talk about media, too. So on the NEPA side of things. So in my work in Seattle, the thing that I've seen is like they do they do the NEPA process from the very outset. So like when you're a transit agency and you do it, if you do long term planning, you might do sort of some alternative analysis to figure out alignments and modal choices, sort of like for like maybe Subway, let's say you'd say, okay, we want to build the subway on Second Avenue, we want to build a subway with stops roughly here or there. And so then we're going to take all this other analysis, this analysis that we've done on our own time and our planning process. And then we get into the NEPA process. You have to do an alternatives analysis. We're going to say we want to look at this. We want to look at a no build option and maybe, you know, a bus option or something that is really looking at three things. And so that process does not take actually that long. Statutorily, I think it's, you know, 18 months to two years. You can do it in the project I've been working on in Seattle, they look at like 50 alternatives in the alternative analysis that they do because they get all their money from the ballot box. And so they don't do any real long term planning on their own dime, like they're saying that this is all money that is accounted for. And so, like they're at this West Seattle and Ballard project, they've been in the planning stage for over five years and they last month added in a new alternative that they want to look at, which means have to do full engineering you know all of and they're the agency said it's going to take another year just to assess the viability of this alternative and like this should have been done, you know, before you even put this stuff on the ballot. And so I think the way that we use NEPA sometimes is time prohibitive and it just shouldn't be used that way, like to long term needs assessment, planning. To give the MTA some credit, here they are in the middle of trying to do some long term needs assessment and looking at a bunch of different projects, Interior Express being one of them, which is what I'm interested in. And I think that's a really good model and that should help speed up some of that NEPA stuff.
Matthew Yglesias: But so some of this though, seems to go back to the question of kind of like, what's your in-house capacity? Right. Like, yes. Are you as an agency capable of doing this kind of stuff? Yeah. Just have you in general, like scoped out your city, right. And like where transit lines might go, right, as opposed to like every day.
Eric Goldwyn: Right, right, right. But the thing is, like, we have MPOs (metropolitan planning organizations) and like, that's what they should be doing, right? Like, it seems like there are these ways to, like, integrate with other entities that are, should be, doing that kind of work. Like, it shouldn't be necessary. I mean, Sound Transit should do, they're playing something that like the NPA should be like, oh, these are the issues we need to look at over the next 25, 30 years. And they do have a long term plan. And then like you just draw some lines, you're like, okay, we're going to look at this when we have some money to do it. And that's what we found in both Istanbul and in Italy. They have like master plans and, you know, they do feasibility studies and once money is available, they just sort of like plug it in to the project that's like next on the list and you sort of go forward. In the Istanbul case, they have some waivers for their environmental process. And I think for a rail project, you could… it takes like three months, I think, if I'm not mistaken, to get that waiver, which is obviously much shorter than 18 months to two years. So there is a category exclusion in the U.S., too, by the way. But that's we don't get those for projects where you, like, dig a lot of holes.
Matthew Yglesias: So, you know, speaking of planning, consultant asked about transit construction costs in Los Angeles, which I don't know if you know anything about, but although I would kind of I've looked at L.A. Metro. It just like it seems like a planning failure. Like, I don't like I don't understand what they're doing.
Eric Goldwyn: Well, this is the elected board members who are elected officials issue where everyone needs to get a touch. You know, and so you get these rambling, you know, we were talking before this started like it's a big system and they have big plans and long distances. And so everyone pulls the project, north side whatever, to death their districts. You know, they're bringing home the bacon. What I was going to say is we've been looking at through some of the historic costs. And so L.A.’s initial costs like they got better over time, right, so this with the red line and then they've sort of gone into the stratosphere. And, you know, it's not I mean, it's not New York, but it's you know, they're over $1,000,000,000 a mile on their purple line projects. And you know, what we were talking about earlier, like the estimated ridership is quite low. This doesn't seem to be a cost effective project if you were to compare it to the second half now or to, you know, some international stuff.
Matthew Yglesias: And I mean, what's sad about L.A. is that they for a while were actually on an improving costs.
Eric Goldwyn: Yeah, exactly. Yes.
Matthew Yglesias: It seemed like, you know, it was new and like, maybe nobody was riding it, but they were getting better at building things. And there's also I mean, there's tremendous unmet demand for housing in Los Angeles. And they have not made land use decisions that are appropriate to their transit construction, but like they could tomorrow.
Eric Goldwyn: Yeah, if this guy, Ethan Elkind, Ethan Elkind at Berkeley, has a really nice book. It's called Rail Town about through the history of Transit and like of in L.A. And he talks about there were some land use plans that just never got picked up about sort of densification and sort of not calling it Tod, but, you know, Tod and stuff like that. It's and then, you know, I think it's the Green Line was the project you talked about where just like it's in the median of a highway and it's like it's forbidding, like. Great. Good luck with that.
Matthew Yglesias: Yeah, but, you know, like the red line, I don't know, it's weird. Okay, so Gregory Sanders asks, as someone embedded in the activist side in one of these longstanding projects, The Purple Line in Maryland, is there anything we can do during the late construction phases to push for process improvements?
Eric Goldwyn: Oh, I'm sorry. I like the Purple Line project. Oh, what a mess.
Matthew Yglesias: Yeah.
Eric Goldwyn: I mean, the thing… So there's this cool chart that L.A. Metro put out, and it's basically like, you know, all of the action is in the planning phase in terms of costs. Like, once you've made the decision, right, unless you're going to de scope and, you know, like dramatically change your project, which would probably mean you have to redo your environmental documents or you're not going to do it, like, you're pretty stuck. There's not like, there's not a whole lot you can do. I mean, that project, it just… I don't know much about the MTA in Maryland. It just seems like probably the wrong agency to be in charge. Yeah, I think they mainly do busses. Not to speak ill of anyone there. I don't know anyone there. But just it seems like that project has you know, it also talking about political micro-managing. You know, my understanding is that O'Malley had it one way is that was… And then Hogan was like, no, like, we need to do this as a people. We need to discuss things. We need to, you know, to kill the red line in Baltimore, blah, blah, blah.
Matthew Yglesias: So this leads into Edward Thompson's question, which is, are there any states where the State Department of Transportation takes up more responsibilities of the transit agencies so that helps better decision making?
Eric Goldwyn: So I just learned that in Utah, UTA, which was the Utah Transit Authority, I guess was absorbed by UDOT, I think a year or two ago. I don't know what the results of that have been. It's an it's interesting. I think it's like… so I was just messaging with someone about this today. So there's this article in the Seattle Times about what's going on with Sound Transit. And that was sort of the thing is I could just washed out, take over. And I think, you know, as we were talking about like what's the right scale, it's just the state is not really the right scale. Like. Like you do understand why you want something that's like a little bit more form fitting to be in charge. I think it's the type of thing where,I don't know, but I think it's like the governor got involved a bit and like because the other thing it's so crazy about the West Seattle and our project and this is true of many transit projects is that like these are most likely like the most expensive investments that are made in most cities, right? Like in Seattle. The estimate on West Seattle and Ballard I think is $15 billion. I think the most expensive thing. Seeing us project before was like that tunnel, which was, I think a $3 to $4 billion project. So you're talking about, you know, it's like it's five times, you know, four times, whatever, it is bigger and, you know, no one is really at the wheel. And that just seems really crazy.
Matthew Yglesias: What's interesting to me about these projects in the western United States in particular, is that the the local politics always seems to be based on the idea that like that somebody else is going to ride the train. And it's going to like get cars off the highway in the sense of like out of my way as I drive my car. You know, And I feel like whatever you may say about Second Avenue Subway or New York, right, it was like it was clearly an intention for people who live or work on the Upper East Side.
Eric Goldwyn: It was to get people off of the neighboring subway store.
Matthew Yglesias: But you're right, I remember, you know, I moved to D.C. to U Street in 2003. So it was just a few years after the Green Line opened and it completely transformed those neighborhoods right where it runs, which people then wound up having mixed feelings about. But it was right. Sure, it was intended to be used.
Eric Goldwyn: If, I mean, they built there's, like, shopping and there's taller buildings. That was like a crazy… you know, it's like by the stations, some thought went into it.
Matthew Yglesias: Yeah, yeah. Which, you know, it's not always the case in this kind of situations. No. Okay. What's it Stephen Smith wants to know? He says Ned Lamont campaigned on a 30 minute ride from Stanford to Grand Central Station. I don't know anything about that.
Eric Goldwyn: I do. I do. I do. Oh, that's going to happen. That's a great question. That's funny. I do know about the the 30 minute ride. I have no idea when it's going to happen. I think my understanding was that yeah, they'd like to do it. But do they have the will to do it is, you know, sort of the more important question. I think it needs to do some electrification work and I think that Sweden has estimated those costs to be quite high. Alon has written a little bit about it of course, and is kind of like, this is crazy and you know, I'll string the lines myself.
Matthew Yglesias: You know, it seems like Americans, whether it's labor groups or contractors or whatever it is, have decided that they would rather be paid a lot for a small amount of work rather than…
Eric Goldwyn: Have a lifetime's worth of work.
Matthew Yglesias: Yeah, get rich, just like get more jobs. I know we all face this trade off in our lives, right? I mean, someone's like, Hey, will you do it? Like, for me? And I could be like, Sure, but you got to pay me $10,000.
Eric Goldwyn: And that's how much you're getting paid for this, by the way.
Matthew Yglesias: And then, yeah, but then it's like, Well, I'm probably not going to get the gig, right? Which, like, it can be fine. You just sort of have to decide. And so it's like Connecticut. It's quote unquote, going to cost all this money to electrify the tracks. But far and away, the most likely outcome is that they're just not going to electrify the tracks. And that doesn't help. The greedy contractor, the Feather Bedding labor union. I mean, whoever your hypothetical boogeyman is actually not going to get any money.
Eric Goldwyn: Right. One of the things that we talk about in the case is we would like to see more of a mobile workforce. And so in, you know, in our Swedish case and in the idea in Europe in general, as I understand, is that it is true in Spain is that, you know, people work on projects all over the country. It's not, as you know, regional and local. Right. So in New York, you don't have, you know, like Santiago equivalents from Alabama coming to the get a job on a project. And so your labor pool is constrained and more expensive and, you know, talking to contractors, so there is a prevailing wage. But there were times, I think, if I'm not mistaken, where you had to pay above slot because it's just like too much stuff was going on, There just weren't enough bodies. And so if you really wanted someone to work on your project, you know, you had to pay more for it. And so part of that is, you know, there is a labor issue. And I think one of the things that is vexing is you see that labor productivity in construction overtime is declining. I think since like the 1970s there was a paper that estimated I think it was a 1% decline per year since 1970 for construction labor. So that's like, that goes to the issue of the launch box, right? It's sort of like it just takes us longer to do everything like this. Again, going back to Seattle, like they have an estimate to build a station 10 to 12 years. And I'm like, wow, like, what's going on? I building it because like, you know, like I'm incompetent. So, like, I get it might take longer, but like, just in, like they've built stations there before that have taken seven years. Like, what's the, what's going on?
Matthew Yglesias: This is Jack Jack Harmon's question. I think I would make this the last one and then wrap up. But he asks has labor productivity on transit projects specifically changed over time? And that's like we know about because there was that… it was Goolsbee, it’s sort of been on paper. Construction, productivity, transit… I mean, obviously at some point in time in the past.
Eric Goldwyn: There's been papers about the operating productivity. Right. Yeah.
Matthew Yglesias: So you've done things faster?
Eric Goldwyn: Yes. Well, exactly. So that's I think, you know, I don't have a great answer for Jack. But what I would say is that timelines are longer. But, you know, the stations are also much larger. Right? So like on a per volume basis, I don't know exactly what the answer is. But, you know, I wish I knew the numbers. I've talked my head.
Matthew Yglesias: Like, you know, the point about the station volumes.
Eric Goldwyn: And that's what took know those took you know 7 to 9 years on a ten year project like the tunneling. So after they did that three year launch box, the tunneling was six months which is pretty good. Like actually not nothing to be embarrassed about.
Matthew Yglesias: And that's kind of what I want people to hear about this is whatever the slow launch box or the TBM, it's overstaffed by 50%. It seems like there's a lot of problems in the world, but just the design question of like, we're going to build these stations, we're going to build them in an expensive methodology to not annoy people. And then we're going to just make them bigger than we are. It's just a weird decision, right, that like you, you really without like, fundamentally altering the nature of America or something, you could have just not done that.
Eric Goldwyn: Yes. And in conversations with people at the MTA who we've been able to talk to, they've said, you know, if you look at sort of the amendments that they've made to their ideas. Like there has been talk about, you know, not doing the full length mezzanines, you know, putting combined rooms at the surface. You know, some of these ideas, I think, have filtered through. But I don't want to, you know, pat ourselves too much on the back because some of the station boxes seem like they're quite long. So I don't exactly know what's going on. But what I was going to say is right, Madrid is sort of the famous example where I think it was they built 80 miles of metro and two, four year blocks. So just to give a sense of perspective, I don't know if it was they built 40 and then 40, but like they were able to build the tunnels, the stations in four years and it took to build 1.7, six miles or whatever the number was for Second Avenue and three stations. It took ten years of construction time. And so it's like they were able to build 80 miles in two years less than what we were able to do. And ah, the geology is different there. There are important things there. But they spent a lot of time figuring out their geology. They did their homework, they really did. And I think we rushed the planning a little bit so we can get that federal money right and we need that federal money in our vein. So we will be rushed.
Matthew Yglesias: And then figure it out later. Okay. Well, listen, thank you very much for coming out and talking with us. I think you guys have done tremendous work. I think we're trying to make some headway in a public and official understanding of these problems. Hopefully, everything will be solved in Seattle soon now.
Eric Goldwyn: Yeah.
Matthew Yglesias: And thanks. Thanks, folks for joining us here. Thanks for the great questions. There should be a transcript and audio available for the full readership sometime in the days to come. All right. Thanks, everyone.
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Hey guys — just realized that publishing this to the podcast feed required a separate step so I've done that now.
I feel like public choice economists are just like rolling in I told you so here. At least in the descriptive part, not that countries that have better transit options are some theoretical free market oasis but something has gone quite awry here.
Like every topic here seems like a kind of bland technocratic question but the sum of those works out to a lot of concentrated interests of the few winning every discussion and diffuse benefits of the many getting screwed.