I have written many posts about international differences in subway construction costs. They’ve gotten a lot of media attention, percolating even to politicians and to a team of academics. Against this positive attention, there have been criticisms. Three come to mind: the numbers are incorrect, costs do not matter, and the comparisons are apples-and-oranges. The first criticism depends entirely on whether one disbelieves figures given in high-quality trade publications, government websites, and mass media. The second criticism I addressed at the beginning of the year, comparing the extent of subway construction in Sweden and the US. Today, after hearing people invoke the third criticism on social media to defend Ed Glaeser’s remark that it’s possible to cut US construction costs by 10% but not 75%, I want to explain why the comparisons I make do in fact involve similar projects. Some of the specific criticisms that I’m comparing apples and oranges are pure excuses, borne out of ignorance of how difficult certain peer subway tunneling projects have been.
First, let us go back to my first post on the subject: I was comparing New York, where I was living at the time, with Tokyo, Seoul, Singapore, London, Paris, Berlin, Amsterdam, Copenhagen, Zurich, Madrid, Milan, Barcelona, and Naples – all well-known global cities. Going even farther back, before I started this blog in 2011, I first saw the difference between New York and Tokyo in 2008 or 2009, and then looked up figures for London, Paris, and Berlin in late 2009. I was focusing on infill projects in the biggest cities in the first world, specifically to preempt claims that New York is inherently more expensive because it’s bigger and richer than (say) Prague. Until I started looking at third-world construction costs, I thought they’d be lower; see for example what I wrote on the subject in 2009 here.
I bring this history up to point out that at first, I was exceptionally careful to pick projects that would pass any exceptionalist criticism portraying New York or the US in general as harder to build in. With a more complete dataset, it’s possible to rebut most of the big criticisms one could make under the apples-and-oranges umbrella.
Labor costs are of course high in New York, but also in many of the other cities on my list. The best comparable sources I can find for income in the US and Europe cite income from work (or total income net of rent and interest): see here for US data and look under “net earnings,” and here for EU data. Ile-de-France is about as rich as metro New York, and London and Stockholm are only slightly poorer, all after PPP adjustment.
Moreover, within countries, there’s no obvious relationship between income and construction costs. The US is somewhat of an exception – Los Angeles appears to have the cheapest subways, and is also the poorest of the major cities – but elsewhere, this effect is muted or even reversed. The factor-of-2 difference in income between Lombardy and Campania has not led to any construction cost difference between Milan and Naples. In France, a comparative analysis of tramway costs, showing some but not all lines, fails to find significant differences between Paris and many provincial cities, with far lower regional incomes; moreover, this list omits Lyon, the richest provincial city, where the line for which I can find reliable cost data would be squarely in the middle of the national list in cost per km.
Finally, between countries, the correlation between construction cost and wealth seems weak when one excludes the US. My analysis of this is a subjective impression from looking at many case studies; David Schleicher and Tracy Gordon, formally analyzing a dataset with a large overlap with mine, find a positive but weak correlation. PPP-adjusted costs tend to be much more consistent across countries of varying income levels than GDP-adjusted costs; the latter statistic would exhibit a vast gap between the construction costs of much of Europe and those of high-cost poor countries like India and Bangladesh, the former statistic would show them to be not too different.
What is true is that New York specifically seems to have labor regulations that reduce productivity. Little of this is in citable, reputable sources, but comes from quotes given to me from people involved in the industry. One example given by Michael Horodniceanu, president of MTA Capital Construction, is of a certain task involving tunnel-boring machines, which is done by 9 people in Madrid and 24 in New York. However, there’s a chasm between the claim that the US is more expensive because it pays first-world wages and the claim that there are specific labor regulations in the US in general or New York in particular that raise construction costs. The latter claim is if anything optimistic, since it suggests it is possible to improve labor productivity with rule changes and automation.
Land Costs and NIMBYs
People whose only experience with major infrastructure projects outside the US is reading about China think that the US has a NIMBY-prone process, driving up land acquisition costs. Too many proponents of high-speed rail think that it should go in freeway medians to save on such costs; Hyperloop proponents even claim that the proposed system’s fully elevated nature is a plus since it reduces land footprint. The reality is the exact opposite.
In Japan, as Walter Hook explains in a Transportation Research Board paper from 1994, urban landowners enjoy strong property rights protections. This drives up the cost of construction: land acquisition is 75-80% of highway construction cost in Japan, compared with 25% in the US; for rail, both sets of numbers are lower, as it requires narrower rights-of-way than highways. In Japan, acquiring buildings for eminent domain is also quite difficult, unlike in the US. Tokyo is toward the upper end of rail construction costs outside the Anglosphere, and the smaller cities in Japan seem to be at best in the middle, whereas the Shinkansen’s construction cost seems relatively low for how much tunneling is required.
In the last twenty years, land prices have increased in the US cities that build the most subways, including New York, San Francisco, and Los Angeles. However, Second Avenue Subway had few demolitions, for ventilation rather than carving a right-of-way. New York and other North American cities benefit from having wide arterial streets to dig subways under; such streets aren’t always available in Europe and Japan.
Manhattan is dense. Thus one of the excuses for high construction costs is that there’s more development near under-construction subway routes than in other cities. I say excuse and not reason, because this explanation misses three key facts:
1. While New York is very dense, there exist other cities that are about equally dense. Paris has the same residential density as Manhattan, both around 26,000 people per km^2. The wards of Tokyo where infill subways are built are less dense, but not by much: Toshima, Shinjuku, and Shibuya, where the Fukutoshin Line passes, are collectively at 18,500/km^2. Athens proper has about 17,000/km^2, and most of the under-construction Line 4 is in the city proper, not the suburbs. Barcelona has 16,000/km^2. Paris, Athens, and Barcelona do not appear to have much higher construction costs than lower-density Continental cities like the cities of Germany or Scandinavia.
2. Suburban subway extensions in the US are quite expensive as well. The projected cost of BART to San Jose is around $500 million per underground km; Boston’s Green Line Extension, in a trench next to a mainline railroad, is currently around $400 million, so expensive it was mistakenly classified as a subway in a Spanish analysis (PDF p. 34) even before the latest cost overrun; Washington’s Silver Line, predominantly in a suburban freeway median, with little tunneling, is around $180 million per km. It is to be expected that a suburban subway, let alone a suburban light rail line, should be cheaper than city-center infill; what is not to be expected is that an American suburban light rail line should cost more than most infill subways in Europe.
3. Density by itself does not raise construction costs, except through its effects on the built form and on land costs. Land costs, as described in the previous section, are not a major factor in US construction costs. Built form is, but Second Avenue Subway passes under a wide arterial street, limiting not only takings but also the quantity of older infrastructure to cross. Tunnels that cross under entire older subway networks, such as Tokyo’s Fukutoshin and Oedo Lines, Paris Metro Line 14 and the extension of the RER E to the west, Barcelona Lines 9 and 10, and London’s Crossrail and Jubilee Line Extension, naturally have higher construction costs; in some cases, it required careful design to thread these lines between older tunnels, with only a few centimeters’ worth of clearance. The 7 extension has no more difficult construction than those lines, and Second Avenue Subway is if anything easier. Even the future phase 3, crossing many east-west subways in Midtown, mostly involves overcrossings, as those east-west subways are quite deep at Second Avenue to go under the East River.
General Construction Difficulties
People who defend New York’s high construction costs as reasonable or necessary like to point out geological difficulties; I recall seeing a few years ago a reference to an archeological site in Harlem as evidence that New York has unique difficulties. As with the other excuses, these problems are far less unique than New Yorkers think, and in this case, New York is actually much easier than certain other cases.
The point here is that the presence of urban archeology is indeed a massive cost raiser. In cities with significant preindustrial cores, lines passing through old sites have had to be built delicately to avoid destroying artifacts. For examples, consider Marmaray in Istanbul, Rome Metro Line C, and multiple lines in Athens and Mexico City. While Turkish construction costs are generally low, Marmaray was about $400 million per km, and a project manager overseeing construction said, “I can’t think of any challenge this project lacks.” Rome Metro Line C has been plagued with delays and is around twice as expensive per km as recent lines in Milan and Naples. In Paris, Metro 14 ran into medieval mines at its southern extremity during construction, leading to a cave-in at a kindergarten; a suburban extension of Metro 4 required some work on the mines as well.
Such artifacts exist in New York, but generally only at its southern end, which was settled first. The Upper East Side urbanized in the late 19th century. It does not have the layers of fragile artifacts that cities that were already large in the Middle Ages were, let alone cities from Antiquity like Rome and Byzantium.
Against this, there is the real fact that Manhattan’s rock is schist, which is hard to tunnel through since its quality is inconsistent (see e.g. brief explanation in a New York Times article from 2012). The rock itself is not too different from the granite and gneiss of Stockholm, but is at times more brittle, requiring more reinforcement; contrary to what appears to be popular belief, the problem isn’t that schist is hard (gneiss is even harder), but that it is at times brittle. That said, by the standards of medieval Parisian mines and Roman ruins, this does not seem like an unusual imposition. What’s more, phase 2 of Second Avenue Subway appears to be in Inwood marble rather than Manhattan schist, and yet the projected construction costs per km appear to be even higher; the rumors I have seen on social media peg it at $5 billion for about 2.7 km, of which about 1 km preexists.
There is Always an Excuse
The sharp-eyed reader will notice that with the possible exception of Paris Metro 14, the projects I am positively comparing to American subways are only discussed in one or two of the four above items – labor costs, land costs, density, and geology and archeology. It’s always possible to excuse a particular high-cost line by finding some item on which it differs from other lines. There aren’t a lot of subway lines under construction in the world right now, complicating any attempt at a large-N study. David Schleicher and Tracy Gordon have looked at a few possible correlates, including GDP per capita, corruption perception, and whether the country uses English common law, but there aren’t enough datapoints for a robust multivariate analysis, only for univariate analyses one correlate at a time.
Were the cost difference smaller, I might even be inclined to believe these excuses. Perhaps New York really does have a unique combination of high density, high wages, difficult rock, and so on. If Second Avenue Subway cost $500 million per km, and if above-ground rail lines elsewhere in the US cost like above-ground rail lines in the rest of the developed world, I would at most hesitantly suggest that there might be a problem in forums with plenty of experts who could give plausible explanations. But the actual cost of subways in New York is $1.5 billion per km, and proposed future lines go even higher; meanwhile, multiple at-grade and elevated US lines cost 5-10 times as high as European counterparts. That New York specifically has a factor-of-10 difference with cities that share most of its construction difficulties suggests that there really is a large problem of waste.
New Yorkers tend to think that New York is special. This is not true of the denizens of every city, though London and Paris both seem to share New York’s pathology. The result is that many New Yorkers tend to discount such cross-city comparisons; who am I to put New York on the same list as lesser cities like Stockholm and Barcelona? I was affected by this mentality enough to begin my comparisons with the few cities New York could not denigrate so well. But with further investigation of what makes some subway tunnels more difficult than others, we can dispense with this chauvinism and directly discuss commonalities and differences between various cities. That is, those of us who care about good transit can have this discussion; the rest can keep their excuses.