More on Eno and Construction Costs

I spoke with Paul Lewis yesterday about the Eno study of construction costs that I criticized over a statistical error, and he pointed something out to me: the line that there is no US cost premium does not come from him or from elsewhere at Eno. Streetsblog’s coverage was just bad – it claims there is little to no US premium and quotes Lewis, but the quotations from Lewis do not actually say that, it’s Streetsblog’s own editorializing.

What’s more, Streetsblog took this editorializing into directions that were not mentioned by Eno or by me. On top of calling high US costs “a persistent myth” and “mostly bunk,” it turns it into a labor issue, saying that other countries get away with paying lower wages by linking to an article about construction costs in China, and talking about “hard-won wages of union construction workers.” Streetsblog even does so while linking to a 3-year-old article of mine in CityLab that states clearly that,

European subway construction uses union labor, just like American construction, but the work rules that have accumulated over the decades permit higher productivity and fewer workers doing each task.

The other source that transformed Eno’s analysis into “the US doesn’t really need to learn more from foreign countries” hurt more than Streetsblog. This was Beth Osborne, who spoke on a panel for Tri-State alongside BART’s president of the board of directors Lateefah Simon and consultant Peter Peyser. Osborne and Simon generally said the right things on the panel, while Peyser seemed pretty useless. But in between talking about good transit reforms, Osborne took my audience question about costs and said that per the Eno study there may not be a US cost premium – if I remember correctly her exact words were “there is no need to self-flagellate.”

Well, there is a need to self-flagellate. American mainline rail planners are barely aware of trends in other American cities; $200,000/year managers are unaware that FRA regulations permit buying standard European train, and people all over the industry say things are impossible that happen thousands of times daily in Central and Northern Europe. In urban transit the situation is better but not by much. Agencies make assumptions that are unwarranted about station footprint, fare collection, and similar engineering-level cost raisers and are usually unaware of economic research into best procurement practices.

And there’s the rub. Eno wrote a study – one that seems honest, even if it did make a statistical error of the kind that every data scientist abstractly knows they must avoid and yet every data scientist still makes. The clear text of the study – and I want to emphasize that Eno’s direct quotes to the media are in line with the clear text – is that the US has a small premium for light rail and a large one for subways. This turned into a screed about how the US cost premium is a myth and people just say this out of hate for organized labor. To the sort of American who has no interest in learning how the rest of the world works, everything boils down to internal American politics, it can’t possibly be that someone might get curious about why the Nordic countries do infrastructure so efficiently or how Italy brought down construction costs in the 1990s as part of the mani pulite process.

And the reason it hurts the most when it’s Beth Osborne is, she’s generally good on transit reform. I’ve never met her, and the panel alone was not enough to make an impression, but I know people who’ve met her who would not have a reason to give unwarranted praise, and they describe her as curious and sharp. American public transportation advocates who I trust were hopeful that she might even get appointed secretary of transportation in President Joe Biden’s administration, until Biden announced he picked Pete Buttigieg. And even she can’t get into a mindset in which the US really needs to learn to imitate places with lower costs and better outcomes.

In a sense, then, it’s not Eno’s fault, even unintentionally. In the last few months I’ve gotten to meet a number of American advocates who I otherwise think highly of who seem completely closed to any discussion of construction costs. They tell me that nobody cares, by which they mean they don’t care. They also insist, for political reasons, on including domestic and not foreign comparisons even when foreign ones work better. There’s so much demand out there in the American advocacy sphere for someone to come in and say that the US is doing fine, all it needs is more money with no oversight, that any criticism of high costs is equivalent to pro-car advocacy. Eno didn’t even say that, but Streetsblog could squint its eyes until it found something in there approximating the desired conclusion, and it appears that, regrettably, so did Osborne.

26 comments

  1. michaelrjames

    The Streetsblog article, reproduced in ggwash.com, was a real mess with a terrible title, terrible lede and contradictory statements all over. The title included “A new study says no (sort of)” but it should be noted that was specific to the version in GGWash and can be attributed to its sub-editor. The lede para had “but costs quickly balloon when we start building them underground” so it really was a sloppy bit of ‘journalism’ with mixed and ambiguous messages. Further I am not impressed by the author’s previous job at StrongTowns a.k.a. Church of Chuck, nor the byline:

    [the author] has more than 10 years experience as a writer telling emotional, urgent and actionable stories that motivate average Americans to get involved in making their cities better places.

    It suggests an attempt to appease an “America First” mentality based on pure emotionality rather than facts.

    Having said all that, other pieces by the same author don’t seem nearly as bad so at least a little bit might be attributable to a bad day–everyone has occasional brain fades especially under pressure of deadlines. And perhaps with good intentions … paving the road to hell (of excessive costs). The worst thing is the publicity this is getting, to become a citation for fake-news by people who won’t probe any deeper. If it wasn’t for this, I would have advised to leave it alone. But that hasn’t happened. Surely as a regular contributor to Streetsblog and a probable regret by the author (who seems to do a lot of the daily grind there), it would be better to address this in an article there? Or GGWash …

  2. Luke

    Seems to me the next question, then, is why this happens. As an American, I certainly can’t deny the feel-goodness of seeing more money going into transit in a country that is mostly categorically opposed to transit. However, as I don’t work in any sort of planning-related industry, I also have little stake in ensuring my transit advocacy is as efficacious as possible; I do so anyway because being ideologically-consistent requires that I figure out how best to use resources to better the lives of as many people as possible. Ergo, the most, best transit for the least money is what I’d preach for. Are transit and rail planners in the U.S. in such precarious states that securing financing is the only thing that they can care about? Is it–as you seem to think is the primary reason–simple provincialism, and that anything outside of American planners’ own cultural background is too foreign to be considered? Is it a worry that someone further up the chain then them will realize how poorly the job’s being done and fire the lot of them? Is it plain incompetence? What’s the motivation, endogeneous or otherwise, for American planners to not draw on all available resources to do their jobs better?

  3. mrpresident1776

    The sentiment in your last paragraph sadly runs deep. I got no traction trying to do an audit on construction costs at USDOT, everyone seems much more interested in putting their fingers in their ears and ignoring any constructive critique. It required an admission that you screwed for years before. For the smartest managers, there is a wilful ignorance not to rock the boat because the system “works”. Things are built, albeit more expensive, slower and more delayed than virtually anyone else and sadly, no one cares enough to change that.

  4. Gok (@Gok)

    > the US is doing fine, all it needs is more money with no oversight

    We’ve touched on this before but in general American have come to worship the idea of increasing public spending in and of itself, irrespective of outcome. It really runs across the political spectrum and into almost all areas of spending. It is so often repeated that the state is completely impoverished that just hearing that money is being spent poorly inspires knee-jerk denial.

  5. Jhonny

    Totally off-topic, but I think both of you could gain and it would be entertaining to watch to have you have a debate or chat or whatever with https://www.youtube.com/channel/UCFdazs-6CNzSVv1J0a-qy4A Justin Roczniak who knows quite a bit about transit and railroading (and shares your critiques of buff strength rules among other things) and I think you could inspire each other – and maybe earn a bit of patreon money if you make it a patreon exclusive or pay per view thing….

  6. Reedman Bassoon

    One of the idiosyncrasies of large US government projects is that the unions have separate negotiations ahead of the bidding. The work rules are set in place ahead or time specifically to prevent one bidder from undercutting another bid by using fewer people, more mechanization, or lower cost/non-union labor. Do the Europeans do this?

    • Max Wyss

      I can just say it from the Swiss point of view (other countries may be considerably different).

      For many industries (Construction is one of them), the Industry Organisation and the according Trade Union agree on a standard contract, which becomes mandatory for the whole industry, even for non-members of the Organisation (German term: Gesamtarbeitsvertrag). The wages are set in that document, among many other things, such as paid vacation, working hours, provision of working clothes, and so on. Important is that in 99% of the cases, the negociations may tough, but a mutual agreement is sought (and found). There is a will to work together, as working against each other is counter-productive. And that’s also why Switzerland has almost no strikes. The Union bosses are (compared to other countries) way less power hungry.

      In a Request for Proposal, one condition is that the terms of the Gesamtarbeitsvertrag apply (also for foreign companies). So, all are bound by those rules.

      So, there are trade union negociations, BUT they are industry-wide, and NOT aimed at a specific project, and the wages are the same for unionised and non-unionised workers.

  7. RossB

    This is the problem with a radicalized and polarized electorate. In the post war period, there was a general consensus that unions were good for society, and the government could do good things, like provide transit. No responsible politician would say that the problem is the unions, or that we don’t need transit at all. Those were radical positions, and demagogues arguing that were on the fringe of society. Yet now those same demagogues not only have a bigger voice, but the power. For most of the last fifty years, the far right have controlled America, and the moderate left has largely been stuck defending reasonable, common sense policy (e. g. keep Social Security, avoid cuts in Food Stamps, etc.).

    So when an honest debate occurs about a process problem, people assume it is another right wing attack. A criticism of spending is assumed to be an attack on unions. A criticism of a poorly designed transit line means you hate transit (and love cars). Right wingers use every opportunity to morph the idea, so that it really does fit their agenda (in this case an attack on unions). Nuance is dead.

    I can only imagine what would happen if someone called for more responsible spending by the military — i. e. to get more “bang for the buck”. They would be labeled a hippie, of course, and asked why they hate the troops. Never mind the fact that the person who helped coin that term was the Supreme Allied Commander and first head of NATO. It doesn’t help that so few people have now served, just as it doesn’t help that very few people who defend the unions have actually been in them (or that very few people ride transit, etc.).

    We are left with identity politics — American tribalism. I’m afraid trying to be more cost efficient when it comes to transit spending just doesn’t make for a good tribal chant.

    • SB

      How was the post-WWII consensus in US wasn’t about supporting transit? The post-WWII era was the age of automobile.

      • RossB

        There was no post-war consensus about supporting transit — that is what makes the situation so sad. The era of “getting things done” lasted from roughly the depression to the election of Ronald Reagan. Towards the tail end we had very high inflation, which lead to cutbacks in government spending. It really was only the Nixon era where this era overlapped with the emerging environmentalism in this country. The EPA, the Endangered Species Act and the Clean Air Act were all signed by Nixon (with a strong push from a Democratic Congress). From a public transportation standpoint, Kennedy created the FTA (with essentially no funding); LBJ signed the Urban Mass Transportation Act of 1964 (which authorized $375 million in aid to the capital costs of transit projects) and Nixon signed the Highway Act of 1973, which gradually allowed states to abandon planned freeways and use their Trust Fund allocations for the capital costs of mass transit projects. BART*, MARTA, and the DC Metro were all built in this era.

        I’m not trying to suggest that there was a golden era of public transportation in the United States. There wasn’t. But there was an era when the debate was less polarized, and a simple criticism of costs would not be seen as being anti-labor, or a criticism of a project would not be seen as anti-transit. Moderate Republicans and moderate Democrats would hammer things out — instead of demagogues on both sides making unfair assumptions.

        * While BART can be seen as largely a mistake (they should have built a more urban subway) it has to be viewed, in my opinion, as a giant experiment. The idea that huge numbers of suburban riders would use transit despite a very slow system in the core city was worth a try.

    • Alon Levy

      There’s political polarization in other countries too – Korea, Taiwan, Italy, Greece, Israel… Conversely, state-level politics in New York and California is depolarized, since there is a dominant party and no coherent party factions that fight in primaries, and yet people in neither seem to care very much about cost-effective delivery. In the context of New York and California, “ZOMG right-wing attacks” is a deflection tactic by people who know they do bad work and cannot defend what thy do even to people who are openly non-right-wing.

      • Gok (@Gok)

        It says a lot that for the last decade the debate over an American Infrastructure Plan has not been how many miles of new construction, or even what should be built, but how many trillions of dollars it should be. Maximal spending is literally the goal.

        • Eric2

          Um, no. There’s a debate over how much spending, which means that some people want more spending but others want less spending (possibly zero).

      • RossB

        ” In the context of New York and California, “ZOMG right-wing attacks” is a deflection tactic by people who know they do bad work and cannot defend what thy do even to people who are openly non-right-wing.”

        That is exactly what I’m talking about. The national environment is so polarized, and dominated by the right wing, that you have pockets of the left with little to no opposition. There are exceptions of course (Bloomberg) but generally speaking, the right is reactionary, and the left can propose anything — no matter how bad — and sound quite reasonable in comparison. All they need to do is accuse the other side of being right win reactionaries (e. g. anti-transit or anti-union) and it is an excuse to build crap.

        • Alon Levy

          I don’t think it’s about dominant-party government in New York and California, either. We have dominant-party states and cities here too. Bavaria has been run by CSU since forever, Berlin is SPD-Land, Hamburg is even more SPD-Land. In the long run this does lead to governance problems, but when it comes to construction costs I’m not seeing any obvious differences with more competitive Hesse and NRW. And for what it’s worth, Armin Laschet’s corona quango is about as terrible as Andreas Scheuer’s future-of-transport quango, so the politicization of the state seems to be happening even in a competitive environment. And with all of these problems we’re having some pretty bad costs, like 200-300M€/km, just nothing like the fiscal black holes seen in the US.

          • RossB

            I don’t think it leads to higher costs, necessarily, but I do think it makes it harder to criticize projects. Consider this scenario:

            There is a transit project that is universally seen as stupid by transit or fans. The vote takes place in an urban area. It has the support of the Democratic establishment in that area. Opponents are seen as “anti-transit”. Republicans will oppose it — and may actually raise good arguments against it — but those same Republicans have no history of supporting any transit proposal. The same is true of editorial boards that have become more extreme. Subtlety is dead, and the middle is gone. This, in a nutshell, is how the U. S. gets away with building crappy transit (until the money runs out, and we wonder why it doesn’t work that well and everyone still rides the slow, infrequent buses).

            It also explains why this criticism — a valid one — is misinterpreted as an attack on labor. Of course it would help if the criticisms came from labor itself, or at the very least, people who have been in labor unions. But with labor gutted, and barely surviving (mostly in public sector unions) in the U. S., that is what we are stuck with. I’m not saying the political situation explains the high cost, I’m saying it explains why the debate over it is so dysfunctional. This is just not a good time to have a debate over something as nuanced as this.

    • adirondacker12800

      It’s not tribalism. There are people who agree reality exists and people who live in a fantasy world. To the people living in their fantasy world it seems like the people in reality are all one group. We aren’t .

    • Onux

      “For most of the last fifty years, the far right have controlled America”

      Democrats have controlled the House for 30 of the last 50 years, the Senate for 28 of the last 50, and the White House for 20 of the last 50. I don’t see how that equates to the far right controlling America, especially since many of the top Republican figures during this time (Paul Ryan, Romney, McCain, the Bushes, etc.) are actively demonized today as RINO’s etc. by those actually on the far right. It is true that there has been a rightward shift in the US over that time (insofar as the first 25 of those 50 years saw almost complete Dem control of Congress, as well as trends at the state level) but I don’t think the period that has seen
      defense funding cut more than in half as a % of GDP
      universal health care go from a fringe desire of the far left to a serious policy argument
      the passage of Obamacare
      the first minorities as President & VP
      an almost ten-fold increase in the number of women in Congress
      two major series of bailout/stimulus packages a dozen years apart
      exactly represents a right-wing paradise.

      Also, I don’t know if anyone said “we don’t need transit at all” at the time, but as SB pointed out, the previous 25 years of the post-war era (1945-1970) were probably the worst period for transit in US history. Ridership plunged, systems closed or were downsized all over the country, and there was enormous spending on highways (especially the Interstate system) instead of investment in passenger rail, subways, streetcar systems, or other transit.

      • adirondacker12800

        I don’t think the period that has seen….exactly represents a right-wing paradise.

        The head of the one party and his sycophants incited a violent armed insurrection and the rest of the party is apologizing or ignoring it. Some one is living in a paradise.

        • RossB

          Not to mention:

          1) Labor laws being gutted, and the subsequent steady decline of labor unions.
          2) Income and capital gains taxes much lower than under Ike.
          3) A minimum wage much lower than under Ike.
          4) Major reduction in social spending programs like Food Stamps.

          It is true that the most extreme parts of the Republican agenda — such as getting rid of Social Security — were thwarted, but not for want of trying. Both George W. Bush and Paul Ryan tried to get rid of it. This is all to be expected when so many take their marching orders from Grover Norquist. At one point 95% of all Republican members of Congress had signed his “Taxpayer Protection Pledge”. This is a man who famously said “I’m not in favor of abolishing the government. I just want to shrink it down to the size where we can drown it in the bathtub.” Journalist William Greider quotes him saying his goal is to bring America back to what it was “up until Teddy Roosevelt, when the socialists took over. The income tax, the death tax, regulation, all that.” John Fund of the Wall Street Journal dubbed Norquist “the Grand Central Station” of conservatism, a man who was key in getting George W. Bush nominated. Steve Kroft, claimed that “Norquist has been responsible, more than anyone else, for rewriting the dogma of the Republican Party.”

          Norquist is the center of the modern Republican Party, which shows how far to the right the party has moved. Ike would be a Democrat right now (not much different than Clinton or Obama) while Reagan would be seen as a moderate Republican.

      • Eric2

        It only takes control of Senate, House, *or* presidency to effectively veto any new controversial legislation.

        Right now the US has more or less the same laws that it had in the 1980s on controversial issues. Not much has changed on economic policy since then. But the economy has changed, with housing/health care/education becoming much more expensive for the average person. And the world has changed, with measures like universal health care becoming the accepted approach in civilized countries. Laws that were reasonably good for the 1980s are pretty bad for the 2020s. But right wing veto power means we are stuck with 1980s laws which get worse and worse by the year.

      • RossB

        I’m sorry, I should have written “forty years”. Sorry about the confusion.

        There have been two major political periods in the U. S. since the Great Depression. The first started with FDR, and continued all the way to 1980. During that time there was great consensus in the value of government. Various issues came up — issues that shook the country, like the civil rights movement and the Vietnam War — but it was an era of faith in government.

        Then came Reagan. Since Reagan — an extreme right wing president — the Republican presidents have been as far right as him (or farther) while the Democrats have been centrists. The biggest policy accomplishment of Democrats in that period — something first proposed by Clinton, and implemented by Obama — is a healthcare plan first proposed by Nixon, and first implemented by Mitt Romney (then the Republican governor of Massachusetts). We’ve had nothing but far right Republicans, and centrist Democrats for presidents ever since. This could change with Biden — we shall see.

        The Democrats took control of the House of Representatives the year FDR was elected. They held it through several Republican presidents, and into the first term of Bill Clinton. The election of 1994 — the so called “Republican Revolution” — was a nationalization of House races, and represented a political realignment. Newt Gingrich — a far right wing Republican in the Reagan mold — was suddenly thrust into power. The party has only moved farther right as a result. Paul Ryan was an “ideological hero” of the Tea Party, while most members adhere to Grover Norquist’s radical-right policies.

        The Senate has been more moderate, but largely feckless. Republicans have been focused on thwarting even a moderate move to the left (under Clinton or Obama) while ignoring the worst excesses of their own leaders until things get messy.

        My point is that in this environment, it is no wonder that people jump to conclusions. It is not surprising that people assume you are anti-labor if you question construction costs, given how many people in power are. Not only are they anti-labor, they are anti-government spending of any sort. They are happy to use any bit of data — including information on websites like this — to pronounce it all pointless.

  8. Reedman Bassoon

    FYI —
    Today, Biden signed a directive strengthening the BUY AMERICAN provisions in government procurement. It is advertised as “closing existing loopholes”. It sounds like waivers will be tougher to get, and will be publicized more. There will be requirements that prime contractors prove they proactively sought-out American suppliers

    • Oreg

      Yeah, “America first” ideology and economic folly are not limited to the far right…

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