An article in yesterday’s Wall Street Journal nicely contrasts the transportation benefits versus development benefits of Streetcar.
The Federal Transit Administration is having trouble understanding the two sets of benefits, as illustrated by the fact that all the projects funded so far under the new ‘Small Starts’ category have been BRT projects.
That should change with Portland’s application for the Streetcar Loop. We’ve got a Streetcar that provides both great transportation benefits (10,000 riders per day in the latest sampling) AND development benefits.
29 responses to “Wall Street Journal Smarter than FTA?”
This raises interesting questions. Presumably, FTA is putting emphasis on the transit benefits, and projects whose primary strength is development-driver don’t necessarily pass muster. It’s not even so much that they have trouble understanding the benefits; it’s simply not their mission to pursue development benefits. They’re programmed to seek projects that move people, first and foremost. Obviously in Portland we get that you can’t separate transportation and development, but doesn’t the way our federal bureaucracy is set up suggest that they’re right to pass on those? Should funding for Development Oriented Transit come from a program whose target is economic/residential development, like something in HUD or Commerce? Unless you take the blinders off of these departments, projects with dual benefits really won’t be fully appreciated and funded.
In Seattle, a new $52 million streetcar line is scheduled to open in December that will shuttle riders between downtown and South Lake Union, a formerly industrial area that is being redeveloped by Microsoft Corp. billionaire Paul Allen.
And billionaire Paul Allen is paying for this, right?
Part of FTA’s mission is to shift people from cars to transit. They measure this with a complex formula called TSUB (Transit System User Benefit that boils down to to how far you move people how fast). Since Streetcar delivers relatively short trips (and not particularly fast) we don’t do well on this metric.
What we do extraordinarily well is get people to live in environments where they use their cars much less. This is the ‘trip not taken’ argument. The Streetcar Loop will help create 4,000+ housing units in the inner eastside. If the 6,000 or so people who live there moved to Bethany instead, they would each generate FAR more vehicle miles each year than they would living in the central city. This travel savings does not make it into the TSUB calculation in any form.
And billionaire Paul Allen is paying for this, right?
I don’t know how Seattle does their financing, but $15M (10%) of the Streetcar Loop will be paid for by the property owners along the alignment.
I was in Tampa in 1993 and went to a Tuesday evening streetcar club work party in a warehouse off some forgotten side street. The single streetcar was authentic antique, stripped to the rusty frame, no glass. They were laying plywood subflooring and rivetting a few sheet metal panels. My shared affection for Portland’s great Brill cars earned points. It was great to learn years later that they’d finished the first car and the line. I think the Gomaco Company made replica streetcars that completed the Tampa-Ibor streetcar fleet. I remember the edge of Tampa facing Ybor was a hodge-podge of parking lots and 1st floor remnants of long-ago demolished buildings, obvious development potential. The line follows a body of water with a mostly unimpeded view. I believe an Aquarium has been built along the line. Ybor is mostly a shopping district, converted historic structures and a plaza or two, but it’s surrounded with development potential. I’d expect streetcar ridership to grow with predictable development.
I wonder if the problem in Tampa is that the line is just too short and doesn’t serve enough destinations? Here in Portland the experience is that attracting the residential development increases the ridership dramatically as the residents use Streetcar for their daily trips. I wonder if the Tampa residents are doing that or if they get in their cars to go to work and to the grocery store?
I don’t know how Seattle does their financing, but $15M (10%) of the Streetcar Loop will be paid for by the property owners along the alignment.
Paul Allen owns pretty close to 95% of the business and land around the line, so if you look at it that way yes, he is paying for it. It will be nice when finished, I was just there recently and it is amazing how nice it is looking.
[Moderator: Duplicates removed and quote italicized for clarity. B.R.]
Chris said: “I wonder if the problem in Tampa is that the line is just too short and doesn’t serve enough destinations?”
It may have something to do with the fact that on weekdays, service does not even begin until 11am and it is only offered at 30-minute intervals… it is being operated more as a tourist attraction than as a transit system.
(Which is fine, if that’s what they want… but a couple of extra cars and some reasonable operating hours combined with new development could really transform that system.)
Interestingly, on Friday and Saturday nights, the system runs until 2AM for the bar-hopping crowd.
See:
http://www.tecolinestreetcar.org/about/maps/map.pdf
(Note that the map refers to both a “trolley” system and a “streetcar system”… but in this case “trolley” appears to be referring to a decorated tourist-style bus, not a real trolley.)
– Bob R.
but $15M (10%) of the Streetcar Loop will be paid for by the property owners along the alignment.
Exactly.
90% of the Streetcar Loop will be paid for by people who currently have substandard transit, and TriMet/Metro has next to ZERO interest in providing it, despite that both agencies are REGIONAL agencies. That’s right, they serve communities like Tualatin equally to residents of Portland, and areas within Portland such as Lents equally to the Pearl.
Yet 99% of the attention goes towards placating rich developers who only pay for a fraction of the infrastructure they ask for.
Do we allow homeowners who build in the suburbs to only pay for 10% of the cost of their infrastructure? Absolutely not. So why does the Streetcar get a free pass, but surburban residents who have paid for years into TriMet get nothing – not even a lousy bus? If the goal is to encourage more transit use, then the outcome should be more transit service where people already live and work, not to ignore people already here.
“90% of the Streetcar Loop will be paid for by people who currently have substandard transit”
Really? My understanding is that the streetcar is not fully funded by TriMet. Do you have numbers to back that up?
“and TriMet/Metro has next to ZERO interest in providing it, despite that both agencies are REGIONAL agencies.”
Er, not sure how many times you need to be told this. TriMet and Metro are different agencies. Metro is not a transportation agency. And again, a regional approach does not mean that funds get distributed equally according to geography- even if you use all caps. There are a few more people living in Portland.
“Yet 99% of the attention goes towards placating rich developers”
Ever been to a meeting at Metro where decisions are made? I’ve never seen many rich developers there and very little talk about their interests.
“Do we allow homeowners who build in the suburbs to only pay for 10% of the cost of their infrastructure? Absolutely not.”
Actually it is very true. System development charges hardly pay for the cost of infrastructure needed- this has been hard fought by various construction and developer interests who want to keep the charges as low as possible.
Breathe deep, check your facts.
Erik –
You’re jumping to the conclusion that the other 90% of the Streetcar Loop money would be coming from TriMet or those “who have substandard transit”, but you offer no facts to back this up. Certainly, City of Portland money (such as parking meter revenues) will go to the project… why should Tualatin care how Portland spends its local dollars?
I direct your attention to the minutes of the Portland Streetcar CAC from April, where preliminary funding sources for the streetcar loop project were identified:
Most of the local funding is City of Portland, the LID, or developer contributions.
– Bob R.
Bob’s numbers are a snapshot on a moving picture. There will be much less MTIP money (regionally allocated federal dollars) and probably more of a state contribution, which will be focused on creating jobs building vehicles locally. Much of the benefit from that will be in Clackamas County, but there will probably be subcontractor work all over the region and state.
There are NO TriMet capital dollars.
What are Tri-Met’s annual revenues and profit margins? What are the Streetcar’s annual revenues and profit margins? I’m just curious to know. Do they even make money or are they propped up by subsidies?
TriMet is a government, and as such has no profits. You can find their revenues and expenses on their web site.
If you’re asking about Portland Streetcar, Inc., the private non-profit that operates the Streetcar, as a non-profit, they have no profits. If there is a surplus at the end of the year, they give it back to the City.
It’s probably more appropriate to think about Streetcar as a City of Portland service, and again, governments don’t earn profits, they provide services.
Is transit service subsidized? Absolutely, no one here has claimed otherwise.
So I looked up Tri-Met’s site and learned a lot I didn’t know. According to one report the fare ratio is just under 25% system wide – does that mean if they quadrupled the fares they could actually break even?
does that mean if they quadrupled the fares they could actually break even?
Probably not, because some people would shift to other modes if the fare price became too steep, too fast.
While I do support taking steps to boost the fare recovery ratio, transit for the foreseeable future will continue to be operated as a subsidized public service.
Bob R.
What is the far recovery ratio in metro areas of a comparable size to Portland Metro?
What is the far recovery ratio in metro areas of a comparable size to Portland Metro?
Here is the 2005 report from the National Transit Database (PDF Format):
http://www.ntdprogram.com/ntdprogram/pubs/dt/2005/PDF/2005_Table_26.pdf
It lists many cities, alphabetized by state/city. The last column is the fare recovery ratio. Note that for agencies operating multiple modes, each mode is listed separately. LR = Light Rail, DR = Demand-Response (LIFT service), MB = Motor Bus.
Interestingly, TriMet’s fare recovery ratio for light rail is nearly double that of buses.
TriMet’s fare recovery is about middle-of-the-road for regions this size.
– Bob R.
It’s better to compare mode-to-mode rather than system to system. For example, DC’s subway gets 60% fare recovery, while their buses get closer to 30%. NYC gets 67.3% on rail and 40.9% on bus. Portland’s mix is different in terms of miles of rail, number of lines & stations, and mix of modes, so it’s better to compare our bus system to theirs, our Light Rail to Denver’s or some other LRT system, and so forth. It’s also worth comparing fare systems. For example, I’d bet DC and NYC have far fewer freeloading riders, given the turnstile fare enforcement.
http://www.rff.org/documents/RFF-DP-06-21.pdf
whoops, left out the most important part: average cost recovery over all transit systems nationwide was 39% in 2000 (FTA 2000).
Once again, turnstile is magic.
It’s better to compare mode-to-mode rather than system to system. *** our Light Rail to Denver’s or some other LRT system, and so forth.
LRT fare recovery (rounded off):
San Diego 53%
Boston 47%
Portland 34%
Salt Lake City 32%
Philadelphia 31%
Denver 30%
St. Louis 26%
San Francisco 21%
Sacramento 21%
Los Angeles 16%
Houston 14%
Dallas 12%
MAX does pretty well compared to other cities with light rail. Boston’s numbers aren’t that surprising, being that Boston grew up around the horse & buggy. But I wanna know how San Diego Trolley pulls off better than 50% fare recovery, and what can Tri-Met do to emulate that?
San Diego charges higher fares (including no free zone) and, I believe, also gets heavy use to/from the Mexican border. In addition, they probably aren’t limited to a maximum train length of 2 cars.
Overall, the best way to increase the fare recovery ratio is to get more people to use the system. Filling empty seats increases revenue at very little additional cost. It would also help if TriMet got trains off of the street in central Portland. Not only do slow trains increase the time/money it takes to complete a trip, but they also discourage longer-distance riders.
But even today, people that use a ticket to board MAX once generate, on average, more revenue than the actual ~$1.50 operating cost of their trip.
people who live there moved to Bethany instead
(Getting back on topic) Why don’t we quit subsidizing people to do that? For example, Washington County road widening is getting paid for with property taxes. It seems that this is the real problem.
“San Diego charges higher fares (including no free zone) and, I believe, also gets heavy use to/from the Mexican border. In addition, they probably aren’t limited to a maximum train length of 2 cars.”
>>>> I understand that SD uses 4 car trains and operates FAST. And maybe fare enforcement is better? Security better?
How many people on MAX are not paying? I bet a lot. Part of this problem may be the result on non-fuctioning ticket machines.
What gets me is that MAX is touted as the “model” for LRT in this nation. What hypocrisy!
San Diego charges higher fares (including no free zone) and, I believe, also gets heavy use to/from the Mexican border. In addition, they probably aren’t limited to a maximum train length of 2 cars
I understand that SD uses 4 car trains and operates FAST. And maybe fare enforcement is better? Security better?
Fair points, and probably worth considering over the long term. Would Tri-Met’s overall fare recovery improve if they ran four-car trains at rush hour? Or speeded up service? The former option could be achieved by a tunnel through downtown; the latter by eliminating and/or consolidating stations. Would greater speed from eliminating stations bring in more riders than Tri-Met would lose by getting rid of stations?
How much does MAX lose to fare evasion, and what would be the costs and benefits of increasing the number of fare inspectors? More fare inspectors would also equate to better security. To what extent do perceptions of security (or lack thereof) affect potential ridership?
Would increasing fares bring in more revenue, or scare riders away? For that matter, would decreasing fares bring in more revenue by encouraging more ridership? Some systems charge different fares for peak and off-peak ridership — do lower off-peak fares bring in more net revenue?
MAX actually does pretty well, second only to San Diego, in fare recovery (leaving out Boston) despite running 1 or 2 car trains.
MAX scores well on the ridership side well according to Metro Magazine.
San Diego: 35 million rides per year
Portland: 33.6
Denver: 12.5
Salt Lake: 14.8
Dallas: 18.6
Of course Vancouver BC jumps out at 77 and SF Muni is 53 million rides per year.
San Diego runs 3-car trains, on surface streets ‘slowly’ through downtown, where there is no fareless square.
Downtown San Diego is not quite as pedestrian-oriented as Portland. During the day, San Diego’s pedestrian activity is more work-related, and its night life more active. Kind of the reverse in Portland, which I’d rather it remain. Should Portland become a so-called 24-hour city? Too much trouble after dark. San Diego’s 5th Ave Gaslamp District is a row of pricey restaurants, deserted during the day, rowdy at night.
San Diego is adding a lot of mid-rise and high-rise housing downtown. Maybe San Diego will create a fareless square to incentivize more ‘downtowners’ to ride rather than drive. Maybe not. San Diegans are stinking rich.
Portland should keep expanding MAX, for sure. “Get ‘er done” – to Vancouver next, then the Milwaukie line. Extend the Blue Line to Mt Hood Community College and Forest Grove. Extend the Green Line to Oregon City. These extensions are way more important than a fast subway downtown.
Keep in mind Greg Thompkins.
Roads don’t make money or even break even either. They’re heavily subsidized by the General Funds of the Feds, States, and Cities of the nation and of course form the Gas VAT/Tax/30-40 cents a gallon. Which also keep in mind, contrary to a lot who scream about it on this blog does not gather enough money in any way to cover the entire cost of contruction of road system let alone maintenance.
In all modes of transportation since the late 40s and beginning in huge part during the 50s, subsidies levels skyrocketed with the bloat of Government. So did our tax burden income from below 10-15% at worse case to today, at approximately 40% for those above the median income of the United States. The bad part too of course is that 40% is a misnoamer because of our graduated tax structure, the fact is that people in the top 50% of incomes (i.e. over the median income which is probably about 35k per year now) pays over 90% of taxes, which one can easily derive the fact that 90% of transportation subsidies are paid by less than 51% of the population. While about 50% gets what equates to an almost “free ride”.
Of course this in turn increases transportation use, increases the pollution associated with such, blows up car purchases to ridiculous levels, and of course the cascading effects of sprawl and all that other mess is contributed to by this lopsided percentage.
But anyway, I rant because I get sick and tired as I see my income seeping away to compensate for the poor who then drive around in their beat up ass cars, tucks, and SUVs polluting the air and driving by while I sit at streetcar stops waiting for the clean non-spewing streetcar. I don’t appreciate the white smoke (burning oil), black sooty mess (??), getting spewed out at me while I mind my own business attempting to use one of the forms of transit that I’ve paid for myself and a few others to ride on!
Please excuse my divergence from the specific topic. The above rant is based on what just happened to me while I sit here at the Streetcar stop in the NW waiting. I got about 2 minutes to go and this blasted 20 year old Suburban just dumped black and white smoke out in front of me. Not cool.
Why don’t we quit subsidizing people to do that? For example, Washington County road widening is getting paid for with property taxes. It seems that this is the real problem.
Yes, but Washington County voters approved MSTIP FOUR TIMES, whereas MAX was only approved by the voters twice, and built without voter approval three times, and had the Portland Streetcar built by the City of Portland but subsidized by the region without a vote of the people at all.
If we are against unfair subsidies, I would expect to find you clamoring for the City of Portland to return to TriMet the millions of dollars in annual subsidies the Streetcar receives ($3M a year).
I’m still trying to figure your position on democracy; if TriMet did get voter approval for MAX then Washington County’s “unfair subsidy” of roads should not be criticized either for it was approved each time by the voters; else may I ask if you are a Washington County resident, or are you jealous of Washington County residents for having the ambition to tax themselves for a quality transportation system that is balanced and well-rounded?
BTW, at least one of these road widenings is to add bike lanes to improve safety for our two-wheeled friends, so is that a good thing or a bad thing? Is it OK that bikes get a benefit from the roadway system or should they be taxed to pay for this widening – and if so, how? A Bicycle Sales Tax? An annual registration fee? Do we need a “Department of Bicycles” in this state? (And almost every recent road project in Washington County has included bike lanes, so should we roll the clock back 15 years, and continue with Washington County’s old practice of not having shoulders, much less bike lanes?)
I think there’s a fundamental difference of opinion here that I want to make explicit.
Erik, you seem to be suggesting that voters should have the right to vote Light Rail systems up or down.
What we have sometimes voted on is whether to approve new taxes for Light Rail. If government can build Light Rail with existing taxes or other revenues, I don’t believe it should have to go to voters. If you don’t like what your elected officials do with your tax dollars you should vote for different officials.