METRO Rail update: January 2014

Fernando Herrera you have been against the train since you ran for Mayor of Houston. First off I am sure more than 1600 people are riding the train a month. 2) you have to look at the overall impact. Bigger events will want to come I the city once we have an affective mass transit system in place. Lastly as the lines grow the ridership will grow. In my opinion they aren’t getting it done fast enough. Happy to see the progress on it.

So sayeth a young man named Jason Baldwin, a fellow who claims to be a Republican — you know, a member of the political party that claims to be for limited government, or at least skeptical of government — but who has clearly drunk the powerful magic political elixir that is light rail, and a very powerful political elixir it is.

The event being alluded to in this post was none other than the opening of METRO’s North Corridor light-rail line on December 21st, 2013. Predictably, METRO’s political allies at the Houston Chronicle covered the event with glee, as did the local lefty political bloggers. The opening of this second rail line comes nearly 10 years after the start of METRO’s operation of the light-rail line on Main Street. The North Corridor rail line is an extension of the Main Street rail line, running some 5.3 miles, from downtown Houston, across Buffalo Bayou, and into the near Northside neighborhoods, terminating at the old Northline Mall.

Now then, having blown through a publicly admitted $756 million building this light rail line — a more than doubling of the original cost estimates of the line, and I have it on good authority that there were tens of millions of more dollars spent in cost overruns — my deploring of government being involved in the transit business still remains.

Light rail and magical thinking

I’ve been at this issue for over 10 years now, and have heard and read just about every possible argument imaginable about light rail. The political appeal of rail is enormous to many; indeed adding up all these appeals could make light rail appear to be some kind of magic bullet that will solve all of the world’s ills. For environmentalists and downtown/central business district property owners, the hope has been that, somehow, government transit will cause people to quit driving cars, polluting the air, arrest alleged global warming, and that it will arrest urban population dispersion (aka sprawl). For some exasperated car drivers, light rail holds out the hope that everyone else will quit driving cars on the freeways and that it will allow themselves a less crowded commute to work. For area businesses, hope springs eternal that somehow untold thousands of smiling would-be customers will come, freshly having stepped off a nearby light-rail station stop, and stroll into their businesses to have a look around. For the political classes, light rail’s appeal is also immense — ribbon cutting ceremonies and campaign contributions await, contracts are there to be handed out, bond issues and millions (if not billions) in interest payments are there for the finance boys. The higher the cost the greater the political appeal.

Furthermore, as evidenced by Mr. Baldwin’s remarks above, some people possess a strange mode of thought about light rail that, somehow, the more miles of rail track that get laid down, the more this equates to some kind of progress. A transit agency like METRO can operate into the thousands of miles of bus route service for decades, but none of that matters, nor does it count as real transit. What really matters to such people is that the government construct a dozen or two miles of light rail, and suddenly there are all kinds of reasons for the government to hold parades and celebrations. Look at what we did! We’ve made progress!

Progress towards what? If you’ve ever wondered how it was that government has gotten so huge in America, you needn’t look much further than to look at the example of transit.

Transit as an example of the warped incentives of today’s America

Transit was, for many decades into the 20th century, a largely private affair. Some transit lovers fondly point back to the early 20th century, when as Randal O’Toole wrote in his book, The Vanishing Automobile, practically every American town and city with a population of 10,000 or more in the year 1910 had a street-car network. These networks were dismantled in all but a handful of American cities within 30 years after Henry Ford’s engineers figured out how to create an assembly line to mass produce motor vehicles. Within 15 years after Ford produced the Model T, some 50 percent of American households were in possession of a car. Even during the Great Depression, observers were stunned to discover that vehicle miles traveled didn’t drop all that much, and after World War Two, the expansion of the use of vehicles went on unabated until the recent rise in crude oil and gasoline prices.

Transit companies largely reacted to this changing world in the 1920s and 1930s by switching to cheaper and more flexible bus networks. Rail transit all but died, with the exception of a handful of American cities that already had large urban cores before the age of the car — New York City, Chicago, Boston, Philadelphia, San Francisco, and Washington all come to mind.

And so it was until the 1960s, when the political ambitions of America were so great that it seemed that there was no problem on earth that could not be solved by centralized, nationalized power and good intentions. In 1962, President Kennedy sent a message to Congress, telling them to throw tons of nationalized money at local transit operations because transit was now a national problem! Congress didn’t do what Kennedy wanted, but they did when Lyndon Johnson came to power in 1964, creating the Urban Mass Transit Administration (later renamed the Federal Transit Administration). Transit, like everything else in American life, was no longer a private affair, nor was it a local or city problem. Instead, transit had now become a national issue — and it really isn’t.

Congress started offering grants to local operators, but it occurred to local political elites that they had no way of capturing this money, and hence state governments started amending their transportation codes to allow for the creation of local transit agencies, something that was done by the Texas Legislature in 1973. The following year in 1974, the local political classes in Harris County organized an election to create a transit agency, but they ran into a problem. The vote failed! Now, one of the unwritten rules of the world of politics is that if at first you don’t succeed, you try try again — and again, and again, and again, and again, until you get what you want. So, the political classes waited for four years and held a second election in 1978 to create a local transit agency. They held the election in the middle of August 1978, when few people were looking, and this time they got what they wanted. METRO was officially born.

Almost immediately, METRO started talking about building rail. It took the agency nearly 25 years, but the political classes finally got what they wanted, and rail started getting built. METRO doesn’t have to worry very much about whether they actually satisfy customers who will willingly pay out of their own pockets to ride METRO, but they do worry quite a bit about anything that threatens the flow of tax dollars and their relationships with state and federal legislators, and they have to worry about kissing the backsides of the federal bureaucrats working at the U.S. FTA, lest they run into problems in getting the rest of America to pay for a local METRO rail line. You can apply this dynamic to just about any other political issue in today’s America where the federal government has so much money and wields so much power.

The North Corridor rail alignment and the fraud METRO committed in obtaining the federal grant

Since many people hold the idea that transit isn’t supposed to be a profit-making venture, that allows the government transit industry and their political masters to get away with all kinds of fraud, something that Progressive political theory tries to cover up by advocating what I call government by expert. Applying this theory to modern-day American government, Congress has charged the U.S. FTA with a pile of rules and regulations that are supposed to insulate the U.S. FTA from political pressures in evaluating which of the dozens of local agencies get handed out grants, which I should note are funded by taxes on gasoline paid for by motor-vehicle drivers that are supposed to be used to maintain the federal road network.

To this end, the U.S. FTA has incorporated, as part of the federally mandated environmental impact studies that must be done to capture a federal grant, a kind of checklist that has to be completed in order to capture the federal grant. For METRO, $450 million of national taxpayer money was at stake. Now then, did METRO lie about anything during the environmental impact study in order to get that grant? They sure did. In fact, they lied about just about everything. The initial costs of the project ended up being double the original cost estimates. METRO’s published future financial forecasts describing future tax revenues turned out to be wildly over optimistic, and were completely blown off course by the recession of 2008 – 2009. Indeed, METRO’s tax revenue estimates were off by well over $100 million per year, every year, for the entire 20-plus year time horizon that was published in the study. As I posted to Tory Gattis’s blog, METRO also lied about reported travel-time savings that would ensue, were a rail line to be built in comparison to the existing bus service in the area. Briefly, the U.S. FTA requires that the local agency publish how transit service would be improved if they were to build a rail line. METRO published wildly exaggerated travel time estimates for future bus service in the corridor, painting a picture of a completely overloaded transit corridor where buses would hardly be able to move in an area of town that had been depressed for decades. Indeed they didn’t even list their existing bus service in the study area correctly, something that was easily checked simply by looking at published bus routes and schedules on METRO’s own website.

To reiterate the overall point, if the U.S. FTA had done actual due diligence and had followed their own rules, METRO would never have been awarded the federal grant to build this rail line. The same goes for the Southeast Corridor rail line that is to open probably next year. The only thing really stopping METRO from committing more fraud in building a rail line on Richmond Avenue, a project that will likely cost $1.5 billion or more (half of which would have to come from METRO), is that the agency will be financially broke for the near term future.

Transit in the North Corridor — before and after the rail line

The Houston Chronicle reported that the newly opened North Corridor rail line attracted some 22,000 boardings in its first few days. It remains to be seen what ridership will ultimately be, but in case someone really wants to know if this represents some kind of progress, one only needs to remember that METRO operated no less than seven bus routes in the corridor study area before the advent of the rail line. I’ll have to check how many riders were on all those bus routes, to see if there is any net improvement in ridership, but METRO itself has admitted that overall transit agency ridership has dropped by some 25 percent since the latest burst of light-rail construction began. METRO will most likely get overall ridership back to where the agency was before rail construction started after the rail lines are completed, calling into question whether there has been any improvement at all from spending billions on light rail.

However, one thing is already clear: Transit agencies that build light-rail networks usually funnel bus routes, which previously would have run their entire routes uninterrupted, towards the rail lines. This forces a would-be transit rider into making a transfer to ride on the rail line, whereas previously the transit rider might have had an unobstructed trip to his or her destination. Put it another way — imagine if you want to take a flight to Paris from Houston. Would you prefer to fly on a nonstop flight straight to Paris, or would you prefer to take a flight that would require you to land at one or more airports and transfer between one or more planes before you finally get on a flight that actually goes to Paris? METRO is forcing transit patrons into essentially doing the latter. Why? Because the tax dollars were there, and it is important to find a way to burn through other people’s money, even if it makes the lives of transit riders more difficult. And that is what happens when you turn some function over to government and the political process.

This is admittedly a long post, and it’s taken me a while to write it. I apologize for the lack of links in the story, something I may go back and add in later. There will be more on METRO to come.