The Issue of Curiosity

We’ve been talking to a lot of Americans in positions of power when it comes to transportation investment about our cost reports, and usually the conversations go well, but there’s one issue that keeps irking me. They ask good questions about corner cases, about some specific American problems (which we do want to revisit soon), about our prognosis for the future. But they don’t usually express curiosity about the non-American cases – and even journalists who write investigative pieces sometimes insist on only using London and Paris as proper comparanda for New York. This is not everyone, and I do know of some civil servants who are interested and have made sure to read the Italy, Stockholm or Istanbul cases. But it is a large majority of Americans we talk to, including ones who are clearly interested in doing better – even they think acquiring fluency in how things work in low-cost countries is irrelevant and are far more passionate about all the barely relevant groups that can block change than about how Stockholm, Milan, and other such cities build cost-effective infrastructure.

Incuriosity and consultants

I recently saw a transit manager in North America who I’d previously had tepidly positive opinion of tell me, with perfect confidence, that “The standard approach to construction in most of Europe outside Russia is design-build.”

To be very clear, this is bunk. Design-build is not used in Southern Europe or in the German-speaking world. Ant6n has only been able to find one such contract in Germany, for the signaling of Stuttgart 21. There’s more use of design-build in France, the Low Countries, and the Nordic countries, and the tendency is toward doing more of it, but,

  • The process of privatization of the state is in its infancy in these countries – for example, Nya Tunnelbanan is mostly procured as build contracts
  • Costs in the Nordic countries are rising rapidly, albeit from very low levels, and this also seems to be happening in France – this minority of Europe that uses design-build (which, again, correlates with other elements of state privatization) isn’t seeing good results
  • As a consequence of the above two points, the current and former civil servants in those countries that I’ve spoken with are familiar with the more traditional system of project delivery and don’t generally think it is inferior to alternative systems that reduce the role of the state and increase that of private consultants, and thus they are familiar with how to do traditional project delivery well
  • Even with the ongoing privatization of the Nordic and French states, more institutional knowledge is retained in the public sector, to ensure it can supervise the consultants, in contrast with the American and British models, where the consultants are supervised by other consultants and the in-house public-sector employees lack the technical knowledge to do proper oversight

So why did this person think design-build is standard, where the majority of Western Europe by population does not use it?

The answer is incuriosity. This person is a generalist Anglo consultant. What they know of Europe is what Anglo consultants know. They never stopped to think if perhaps places that build infrastructure cost-effectively publicly would ever have any reason to be legible to international English-speaking consultancies. Why would they? Infrastructure construction is almost entirely at the level of countries, not the European Union; the weakness of cross-border rail planning is so notable that I know a green activist devoted specifically to that issue. If you’re building in and for Germany, you have no real reason to publish in English trade journals or interact with British or American consultants. Another consultant that Eric and I spoke with had the insight to point out, when we asked about a comparison of High Speed 2 with the TGV, that their company gets no work in France since France does it in-house, but the transit manager who shall remain unnamed did not.

The good ones

I am sad to say that, for the most part, the mark of a good American transit manager, official, or regulator isn’t that they display real willingness to learn. Too few do. Rather, the mark is that they don’t say obviously false things with perfect confidence; they recognize their limits.

This is frustrating, because many of these people genuinely want to make things better – and at the federal level this even includes some political appointees rather than career civil servants. The typical cursus honorum for federal political appointees involves long stints doing policy analysis, usually in or near the topic they are appointed to, or running state- or city-level agencies; I criticize some of them for having failed in their previous jobs, but that’s not the same as the problem of a generalist overclass that jumps between entirely different fields and has no ability to properly oversee whichever field whose practitioners have had the misfortune to be subjected to its control.

The good ones ask interesting questions. Some are easy to answer, others are genuine challenges that require us to think about our approach more carefully. And yet, three things bother me.

They are not technical

Traditional American business culture looks down on technical experts, treating them as people who will forever work for a generalist manager – and this is a culture that treats working for someone else as a mark of inferiority.

The most innovative American industries don’t do this – software-tech and biotech both expect workers to be technical, and the line workers do not often respect managers who are technically illiterate; tech and biotech entrepreneurs likewise have a technical background (Mark Zuckerberg coded Facebook’s prototype, Noubar Afeyan is a biochemical engineering Ph.D., etc.), and Elon Musk, one of the less technical ones, still has a physics degree, wrote code in the 1990s, and goes to great pain to affect being part of the culture of tech workers.

However, the government at all levels does do this. The overclass comprises lawyers and public policy grads; engineers, architects, and planners can be trusted civil servants but are expected to lower their gaze in the presence of an elite lawyer (and one such lawyer told us, again with perfect confidence, something that not only was wrong, but was wrong about American law in their field).

The upshot is that even the good ones don’t ask technical questions. I don’t remember having had to answer questions from even the most curious American officials about grouting, about egress capacity, about ventilation, about construction techniques. It’s rare to even see economic questions about managing public-sector risk, about the required size of an in-house construction agency, about how one implements traditional project delivery effectively; we volunteer some numbers but I don’t remember being asked “how many engineers does RATP employ?” (the answer is around 1,200 across all fields combined).

They nudge and do not do

The American federal government is uncomfortable with the notion of doing things directly. One is supposed to make general rules and nudge others. Even regulations take a nudge form – often instead of direct compulsion (say, installing a safety system), the federal government would nudge private actors by threatening to withhold funds or other support if they don’t do it.

One consequence is that federal agencies don’t really try to learn how to do things themselves. I caution that one official who I spoke with and have a good impression of reacted well when I pointed out how, in Sweden, there’s mobility among the civil servants between state and county governments, so some of the people who built Citybanan working for the Swedish state are now building Nya Tunnelbanan for Stockholm County. This official said they were working on a program that doesn’t quite do this but does something similar, which stands to be successful if done well; I don’t know if it will be done well but there was not enough time in that conversation to get enough detail and I reserve judgment even on the aspects I am more pessimistic about until I know more. So it’s possible that this criticism I have of the federal government is going to do away in the next few years, and if so, I do expect better federal infrastructure investment, perhaps for intercity rail on the Northeast Corridor, which is a federal-led program.

This is not purely an American problem. The EU has the same problem, which is related to the poor state of cross-border rail; even when the European public wants more integration (see, for example, polling on an EU army), eurocrats respond with soporific abstraction, not out of political fear of backlash, but because none of them can actually do anything more than a light nudge – the doers remain at the member state level. The difference between us and the US is that member states like Germany do have some doers around, whereas New York can’t do anything.

They still only look inward

This is the part that I am most worried about in the future. I’ve had to take interesting questions about policy from people who, again, I think well of – if I didn’t, I’d speak of them the way I do of the official in the section on consultants above.

And then none of these questions is about, say, how Italy has set up its bureaucracy for protection of monuments, ensuring there is no risk to millennia-old Roman ruins under the aegis of professional archeologists and historians rather than third-party lawsuits. There’s ample interest among Americans in how to do better, reaching the highest levels among the people I’ve directly talked to, but so far it’s based entirely on internal thinking. Foreign examples can inform them but are not to be investigated as closely. I do know of some officials who’ve read the non-American reports we’ve put out, but it’s not common even among the good ones.

The problem, I think, is twofold. First, Americans are used to being in charge in their interactions with foreigners, and Western Europeans are about the least impressed people in the world by American pride. Why look up to a country that we know has worse public transportation and is, on net, probably about comparable in overall living standards? (Yes, Americans, I am aware that your SUVs are larger.) The average Western European doesn’t think about the United States much and when they do they’re not awed, so the American who asks questions puts themselves in an inferior position, and this is hard to handle.

The second issue is that the public sector draws from within the country’s borders, in almost all cases. The pipelines into working for Deutsche Bahn are completely different from those into working for any American outfit. This means that an official in a country has weak ties to other countries. This, again, is also a European problem – there’s too little knowledge of France in Germany and vice versa, too little curiosity about Southern Europe in higher-cost Northern Europe, and too little curiosity about Asia with disastrous results. But the European railroads have exchange programs among them and even with Japanese railroads, and Americans don’t participate in either; the insularity I see in Germany when I mention the capabilities of high-speed trains in France and Japan is considerably less bad than what I see among the worst Americans and Britons.

We Gave a Talk About Our Construction Costs Report

Here are the slides; they are not in Beamer format but in Google Slides. They’re largely a summary of the New York report with analysis informed by the overview with more direct comparisons with other cities, and for example the recommendation section won’t tell you anything you didn’t know if you’ve read the overview or heard me talk about this issue before.

But I want to highlight one addition: the cost history of New York, on slides 5-8. Costs were elevated even in the 1930s; the references are JRTR for New York, Pascal Désabres for Paris, and Tube History for London. Midcentury New York costs are sourced to New York Magazine, with a Wikipedia article providing some references that match those numbers. The excessive costs of works in the 1930s ensured that the budget would not be sufficient to build desirable lines like Second Avenue Subway, an extension of the Nostrand Avenue Line to Sheepshead Bay, and a line under Utica; those costs kept growing into the 1950s and 60s, and the total amount of money at hand for Second Avenue Subway in the 1950s, about a fifth of the intended budget, would have built the entire line at the then-current costs of Milan or Stockholm. At even semi-reasonable costs, the budget identified for Second Avenue Subway in the late 1990s would have built the entire line, where instead it was cut into four phases with the money only sufficient to build the first.

The overall presentation was a bit stressful for me, especially at the beginning; the talk started at 3 in the afternoon and we finished the slide deck around 2:45. It was better afterward. One caution is that while the talk was recorded, it was a cellphone recording from the back, so Elif and I were not easy to hear. Another is that there were people I was hoping to talk to after the presentation that I didn’t get to; the attendance was on the order of 80 people, and we needed the full two hours we had the room booked for the presentation and Q&A afterward.

A number of people asked us if anything was changing. Eric seems more optimistic that people are listening. I’m less so; we’re talking to some people at government agencies but I can’t tell how important they are (I do not speak Washingtonian and cannot tell from the name and title of someone I talk to where they are on the spectrum of “someone who follows me on social media” to “Pete Buttigieg’s closest confidant”). At the MTA, things are not changing for the better; union head John Samuelsen is under the impression that French employers don’t have to pay pensions, MTA Construction and Development head Jamie Torres-Springer thinks the Second Avenue Subway stations have higher ridership than the stations of Citybanan, MTA head Janno Lieber is in full denial mode, and so on. The excuses might be getting more sophisticated, but, fundamentally, an American manager whose gut reaction to any kind of global benchmarking is to assert with perfect confidence that European employers don’t have to pay benefits needs to be fired and retrained, not given advice on how to come up with more plausibly-sounding excuses. Lieber and Torres-Springer are worth negative billions of dollars to the city and the state while they remain employed.

While some things are improving, the procurement problems are getting worse due to the growing privatization of the state, and, fundamentally, none of those people is willing to admit their mistake. There are some ongoing experiments in New York with itemized costs, but only as part of a PPP privatization, and only as pilots, where the place where itemizing costs and technical scoring are the most helpful is in the biggest and most complex contracts. Government-by-pilot doesn’t work any more than any of the other gimmicks that dimwitted political appointees use to avoid taking responsibility for decisions.

I’m Giving a Talk in New York on 3/3

We’re launching the Transit Costs Project conclusion and New York case this Friday at 3 pm. Unlike the October panel, this will not be moderated – Eric, Elif, and I will just talk about our report and take questions from the audience. While the talk will almost certainly be recorded, if you’re in the area you should still come in-person in order to be able to ask questions and interact.

As in our October event, the location is room 1201 of 370 Jay Street in Brooklyn, right on top of the subway stop that carries its name with A/C, F, and R service, and not far from other Downtown Brooklyn stops like Borough Hall on the 2/3/4/5, DeKalb Avenue on the B/Q, and Hoyt-Schermerhorn on the G. The building has access control so please tell us your name and email on this RSVP form so that security will know you can get in. If you crash the event you may still be allowed in but I won’t know until the day of, so do RSVP if you think you may attend; technically the room is capped at 180 people, around half seated, but I don’t expect to fill to even seated capacity, so don’t worry about taking someone else’s place.

The Issue of Consultants

Henry Grabar at Slate just wrote about our construction costs report. He centers the issue of consultants; the article is called Consultants Gone Wild, and he includes quotes from Eric and from our report about the contrast between in-house capacity and the privatization of the state to private engineering firms. I was asked for a followup, since the exact wording of our synthesis does not explicitly say “consultants” very much. And yet, Henry is broadly correct; the overuse of consultants is a problem, and should be restrained in most cases in favor of a professional civil service, unencumbered by politicization or an overclass of political appointees.

The formula for high New York construction costs

Based on around 100 interviews and many diagrams and reports, we managed to decompose the New York construction cost premium over low-cost countries, which is about a full order of magnitude, into the following items:

  • The stations are overbuilt by a factor of 3, which contributes an overall factor of 2 cost premium
  • The systems are not standardized, which contributes a factor of about 2.3 cost premium for the systems and 1.35 overall
  • Labor costs (including supervisors and other white-collar workers) are 50% of hard costs in New York where they should be about 25%, contributing a factor of 3 premium on labor costs and 1.5 overall
  • Procurement problems including the privatization of risk, change order risk, agency micromanagement of contractors, general red tape, and profit stemming from too little competition double overall costs
  • Soft costs are depending on what one counts either 21% on top of hard costs where they should be 7%, or 46% where they should be 20%

Where are the consultants?

On its face, nothing in the above formula says “consultants.” At most, the soft costs can be attributed to them – but the comparison cases involve some use of external consultants as well, they just charge 7-8% of the hard costs in fees rather than 21%. So what gives?

So, first of all, the difference between 21% and 7% is significant. It’s in fact more significant than 1.21/1.07, because the 21% is on top of an inflated base cost, some of whose items (namely, labor) don’t create more work for the consultants, so in effect some of the labor premium should be thought of as an extra consultant premium that is allocated to the hard costs.

The reason for this difference is poor oversight capability. In most cases, some use of external consultants is unavoidable: in Spain, famous in the comparative cost community for its low costs, ADIF projects employ consultants, who charge 5% extra, and then a small force account adds a few percent on top of that. The difference is that competent managers can competently supervise consultants. The use of consultants in Italy, France, Spain, Turkey, and Sweden coexists with strong internal capacity by agencies led by technocrats and professionals.

In contrast, the American (and British) way is to privatize the state to consultants root and stem. The agency managers are generalists who look down on technical people and treat the consultants as an infinite resource, who they can ask to study everything. Eric is quoted as saying “They studied everything” of Second Avenue Subway: every conceivable possibility was studied just in case, and there was nobody in charge who knew enough about planning or engineering to prune the search tree and save some money. In effect, what we’re seeing is unusually low office productivity, in tandem with low blue-collar laborer productivity in tunneling.

The connection with procurement

Okay, so the soft cost factor is still only about 1.2, which is nowhere near enough to explain an order of magnitude’s worth of cost difference.

However, procurement is another factor of 2, and has much of the same cause. The same technically illiterate overclass (Janno Lieber, Jamie Torres-Springer, etc.) that treats consultants as an infinite resource also abuses contractors with red tape. This overclass leashes the technical experts – the planners, engineers, even the economists who study these issues and conclude transparent itemization produces lower final costs – and won’t let them make quick decisions about contracts. This leads to the red tape and micromanagement that the contractors, consultants, and technical agency staff constantly complain about.

Because this overclass can’t adjudicate geotechnical disputes and doesn’t trust those who can, it prefers mechanisms that privatize risk to huge design-build contracts, a system that we call the globalized system in the synthesis and the Sweden report and has led to a large increase in absolute costs wherever it was tried (which is approximately every place legible to the Anglo-American overclass, which is unemployable in a place like Germany or Italy or France, where the pipeline to managerial jobs is local). Then, when costs rise, those political appointees react by including a large contingency factor, at times rising to 40-50%, nearly all of which will be spent.

Bring back the bureaucrats

I hesitate to say back because the United States never really had an apolitical civil service; in the 1950s already it had thousands of political appointees forming an overclass. But the rest of the Anglosphere only lost its mind in the last generation, in my lifetime. I’m encouraged especially by some things I’m hearing in the United Kingdom, which seems interested in moving on, perhaps because it was the first place to adopt the globalized system, perhaps because it has less cultural cringe than Canada or Australia (if anything, Britain’s problem is the opposite: excessive pride), perhaps because it is more proximate to Continental Europe with its lower construction costs.

In such environments, what’s needed isn’t to literally get rid of consultants. But the role of consultants must shrink. The state must hire a large in-house team, sized based on the magnitude of expected projects, and retain the team in the long run to enable public-sector learning. This team can use consultants but must be able to do the work itself if needed, and should be technical enough to know how to answer questions about the scope of work and avoid both micromanagement and underspecification.

Ironically, the consultants themselves prefer it that way. Yes, they get more money out of a project run as poorly as American procurement is than out of one run as well as in our non-Anglo comparison cases. But they also have to do more work and take more risk, and the projects rarely actually end and provide a sense of closure. They charge more money precisely because it’s such bad work, and governments should take heed and build in-house state capacity to make sure the oversight can be smoother and more technical.

The RENFE Scandal and Responsibility

I’ve been repeatedly asked about a RENFE scandal about its rolling stock purchase. The company ordered trains too big for its rolling stock, and this has been amplified to a scandal that is said to be “incompetence beyond imagination” leading to several high-level resignations, including that of the ministry of transport’s chief civil servant, former ADIF head Isabel Pardo de Vera Posada. In reality, this is a real scandal but not a monumental one, and Pardo de Vera is not at fault; what it does show is both a culture of responsibility and a degree of political deflection.

What is the scandal?

RENFE, the state-owned Spanish rail operating firm, ordered regional trains for service in Asturias and Cantabria on a meter-gauge mountain railway with many narrow tunnels of nonstandard sizes. RENFE did not properly spec out the loading gauge, which vendor CAF noticed in 2021, shortly after the order was tendered but before manufacturing began; thereafter, both tried fixing the error, which has not led to any increase in cost, but has led to a delay in the entry of the under-construction equipment into service from 2024 to 2026.

The head of the regional government of Cantabria, Miguel Ángel Revilla Roiz, demanded that heads roll over the spectacular botch and delay. The context is that regional rail service outside Madrid and Barcelona has been steadily deteriorating, and people outside those two regions have long complained about the domination of the economy and society by those two cities and the depopulation of rural areas. Frequency is low and lines are threatened with closure due to the consequent poor ridership, and there is deep mistrust of the central government (a mistrust that is also common enough in Barcelona, where it is steered toward Catalan nationalism).

The other piece of context is the election at the end of this year. Nearly all polls have the right solidly defeating the incumbent PSOE; Revilla is a PSOE ally and so Asturias head Adrián Barbón Rodríguez is a PSOE member, and both are trying to save their political support by distinguishing themselves from the central government, which is unpopular due to the impact of corona on the Spanish economy.

What is Pardo de Vera’s role?

She was at ADIF when the contract came down; ADIF manages infrastructure, not operations. She was viewed as a consummate technocrat, and I became aware of her work through Roger Senserrich’s interview with her; as such, she was elevated to the position of secretary of state for transport, the chief civil servant in the ministry. Once the ministry became aware of the scandal in 2021, she tried to fix the contract, leading to the current result of a two-year delay; she is now under fire for not having been transparent with the public about it, as the story only became public after a local newspaper broke it.

This needs to be viewed not as incompetence on her part. The scandal is real, but moderate in scope; delays of this magnitude are unfortunately common, and Berlin is having one on the U-Bahn due to vendor lawsuits. Rather, the success of Spain in infrastructure procurement (if not in rail operations, where it unfortunately lags) has created high expectations. In the United States, where standards are the worst, a similar mistake by the MBTA in the ongoing process of procuring electric trains – the RFI did not properly specify the catenary height – is leading to actual increases in costs and it’s not even viewed as a minor problem as in Berlin but as just how expensive electrification is.

I urge Northern European and American agencies to reach out to Pardo de Vera. In Spain she may be perceived as scandalized, but she has real expertise in infrastructure construction, engineering, and procurement. Often boards, steering committees, and review panels comprise retired agency heads who left for a reason; she left for a reason that is not her fault.

Cost and Quality

From time to time, I see people assume that low-construction cost infrastructure must compromise on quality somehow. Perhaps it’s inaccessible: at a Manhattan Institute event from 2020, Philip Plotch even mentioned wheelchair accessibility as one factor leading to the increase in costs since the early 1900s; one of my long-term commenters on Twitter just repeated the same point. Perhaps the stations are cramped: I can’t count how many times I’ve heard the “transit riders deserve great stations” point from various Americans (there are several such examples in the thread in the last link alone), or for that matter from the people who built the Green Line Extension, and even Korean media got in on the action, falsely assuming that the spartan, brutalist stations of the Washington Metro were cheap (in fact, Washington is building an above-ground infill station for around an order of magnitude higher cost than Seoul’s cost for an underground infill station).

Please, stop.

If you want to know what very low-cost metro construction looks like, recall that the existing about 104 km (about 57 underground) Stockholm Metro was built in the middle of the 20th century for $3.6 billion in 2022 dollars. Here’s how the stations look:

Source: Wikipedia, by Tim Adams; description in text below

Stockholm is famous for its exposed rock: the hard gneiss forms natural arches, and the T-bana elected to paint it over from the inside, producing the bright blue-and-white contrast with dark blue leaf paintings depicted above at T-Centralen. The stations look drastically different from one another, with many examples available from UrbanRail.Net, Flickr user Dyorex, Flickr user Kotka Molokovich, and the travel site Walk Slow Run Wild.

Swedish construction costs today are several times higher, but remain below world average, and are nearly a full order of magnitude lower than in New York. The stations remain artistic, but this coexists with consistent, standardized engineering specs, modified based on local conditions only when necessary. Citybanan’s Odenplan is not at all spartan; the entire station, berthing 214 meter trains mined below the T-bana station by the same name, cost $250 million in 2022 dollars, which cost includes not just the station but also 2 km of mined tunnel. The data that I’ve seen while researching our Sweden case suggests that Nya Tunnelbanan station costs are dominated by civil infrastructure and not systems or finishes, which look like they’re about a quarter of overall station costs, rather than nearly half as in New York. Nice art is not expensive; for that matter, New York’s subway stations have pretty tiles, and this includes old stations predating the 1930s’ cost explosion.

Moreover, I doubt it was the case when the system was first built, but nowadays the entire T-bana is accessible to wheelchair users. In fact, a number of metro systems have made themselves fully accessible or are in the process of doing so, generally at low costs; I have some numbers from 2019, and the programs cited for Berlin and Madrid are behind schedule, but Berlin seems to be sticking to a budget of 2 million € for an ordinary station, and even taking into account inflation that Berlin needs one elevator per station and most cities need three, this isn’t quite $10 million per station, a cost similar to that of Madrid’s ongoing program. In New York, the cost cited for accessibility is $70 million per station.

What goes on here isn’t really a matter of high quality for high cost. In fact, when Eric, Elif, and I researched the New York case, we were stricken by how little of the problem concerned actual quality or safety regulations (for example, the fire code in New York in practice requires mezzanines at the depth of Second Avenue, but does not require them to be full-length). The oversize stations are neither grand public atria nor revenue-generating commercial spaces, but rather conventional stations flanked by excessive amounts of back office space. The lack of standardization concerns fittings, not art. The massive costs of New York elevator installation are barely about redundancy (a requirement driven by low but fixable reliability) and largely about utility conflicts, bad-and-worsening project delivery, and the soft costs crisis.

Making the user experience worse is an easy way to signal that one is cutting costs. It’s a combination of vice-signaling and prudence theater. It also has little to do with how actually low-cost infrastructure construction programs look like. They can be highly standardized even without the artistic component found in Sweden and Finland, and then people may complain that the system looks bland and corporate – but bland and corporate is not the same as spartan, it just means it looks like the 21st century and not the imagined 20th.

Good systems are certainly not willing to make compromises on human rights and build inaccessible infrastructure. In Seoul, there are massive protests by disabled people demanding that the Seoul subway go from 93% to 100% accessible and that the bus fleet immediately be transitioned to low-floor equipment, and meanwhile, New York and London both loiter around 25-30% accessibility. The conservative governments of the state and the city both dither, but past competence by Korea has led to high expectations by users, in the same manner that people in developed country protest inequality and poverty even fully knowing that it’s nowhere near as bad as in the third world. While I don’t know Seoul’s accessibility costs, I do know a deep-bored Line 9 extension with an undercrossing of Line 5 is budgeted at $180 million/km.

The Transit Lobby and Fares

Randal O’Toole has a weird blog post about our construction costs report. I say weird, because it complains that we didn’t ask certain questions that we actually did, in the executive summary: “what kind of political and decision-making process allows for such expensive projects to be approved in the first place?” in his language. It also is under the impression that Sweden and Italy are authoritarian states. I bring this up because the post suggests two reasons: the transit lobby, and user fees. These are both wrong, and I’d like to cover why.

The user fee issue

O’Toole harps on user fees:

At heart, and I keep harping on this, the real problem is the disassociation of costs from user fees. If costs have to be paid for out of user fees, then expensive and obsolete technologies will automatically be rejected. But if there is no relationship between costs and real measurable benefits, then there is no need to control costs at all. Any agency leader who supports lower-cost solutions loses out because their agency’s budget will be smaller and any politician who tries to control costs loses out because they bring less money into the pockets of potential campaign contributors.

The reason we don’t talk about this in the report is that high-subsidy transit systems don’t generally cost more to build and operate than low-subsidy ones. The norms in Asia are that rapid transit service should be operationally profitable; Japan won’t even build subways unless they can show a 30-year payback period, i.e. 3.3% financial return on investment in an economy whose natural rate of interest is maybe 1.5%. The norms in Europe are that intercity rail should be profitable but anything else is a social service that should receive subsidies.

And as it happens, there’s no systemic cost difference between Europe and rich Asia. Construction costs span the entire non-US range in both places: South Korea has very low construction costs and so do Southern Europe, Turkey, and the Nordic countries; Singapore and Hong Kong compete for highest costs outside the United States and so does Britain. In Hong Kong, if anything, the MTR’s development profits have enabled it to waste more money on construction, since it still gets state money for construction on top of the development profits, which have no accountability.

Transit ideology and modal warfare

O’Toole and other Americans with similar pro-car, anti-rail views like Wendell Cox and Robert Poole has an obsession with counting some kind of subsidy metrics. He talks about the transit lobby, and he ends up misunderstanding how the politics of mass transit works elsewhere. But, in short, modal warfare is not usually about construction of subway lines, but about road diets and bike lanes.

For example, in Germany, Kai Wegner just did very well in the Berlin election on a platform of more parking spots and opposition to everything the Green Party does. CDU came first for the first time since 1999. But Wegner supports more U-Bahn construction and attacked the left-wing coalition for dithering on the subject. His transport ideology is not the same as that of American mode warriors; it’s cars-and-trains urbanism, with cars getting more attention than trains. Social democracy for that matter has the same ideology, but with a greater role for trains – and it’s this ideology that built around 100 km of majority-underground metro in Stockholm for $3.6 billion in 2022 dollars.

I bring up Germany because we’re seeing the linkage between fares and operations vanish in real time, due to fallout from the 9€ ticket from last summer; see coverage on this blog here and here. Before corona, public transport fares covered around half of operating costs Germany-wide (source, p. 36), and some of the big city rapid transit system broke even (at least the Berlin U-Bahn and I think also the Munich U-Bahn). The perceived success of the 9€ ticket is changing Germany’s transit advocacy ideology – but in the exact opposite direction from more construction, whatever the cost. No: the same advocates who center low fares oppose subway construction, viewing it as a sop to cars-and-trains urbanism and preferring surface light rail instead. The same is true in the United States: the sort of people who support free transit and sue agencies that raise fares usually also think rail investment is racist and money for transit should go to bus operations.

The transit lobby

As soon as it’s clear that there are different ideologies of mass transit, the question of the transit lobby gets murkier. O’Toole, rooted in modal warfare, says of construction costs “The real answer, I suspect, is that the transit lobby has persuaded the public that transit is all good and no bad. This in turn persuaded politicians that they can spend as much as they want on transit (unlike freeways) with no political backlash.” But there’s a strong lobby in support of urban rail construction everywhere, across the entire cost range, including in our low-cost examples.

The US doesn’t really have a stronger transit lobby than Sweden or Italy or Turkey (or Germany or France or Japan, etc.), unless one defines “transit lobby” as “builds unusually expensive transportation infrastructure.” The typical federal funding formula in the United States is 80% cars, 20% transit; in Germany it was around 55% cars, 42% rail, 3% canals in the Grand Coalition. In Sweden, cities have transitioned to tolerating more disruption for drivers and less for pedestrians on the feminist grounds that drivers are disproportionately men. The ability of transit riders to both get a larger share of the funding and make the cities more walkable and bikable at the expense of the convenience of car drivers is unusually weak in the United States by developed-world standards.

In some cases, it goes the other way: a weak transit lobby leads to higher costs, due to political impositions. In Tampa, an attempt by the transit agency to increase bus frequency somewhat and provide bus shelter had to be pitched as BRT, and then the DOT extracted surplus and demanded that the agency get federal BRT funding for repaving all lanes used by the buses with concrete – lanes that were to be shared with cars and trucks, rather than dedicated to bus service. This has led some advocates to propose that a stronger transit lobby is what’s needed to improve transit efficiency… except that New York is the worst.

There are real political reasons for why the US has such high infrastructure construction costs; this is not just transit – road tunnels cost a lot more per km in Boston and Seattle than in Berlin and Stockholm and Paris and Madrid. We go over them in the report. I urge people to go read it and focus on issues of politicization, bad-and-worsening procurement norms, lack of interest in interagency coordination, and the subordination of expert civil servants to incurious political appointees. The modal warfare that O’Toole engages in is pretty irrelevant in either direction; in countries with functional infrastructure construction programs, people who are that political never have any input other than a very broad yes-or-no decision over megaprojects, and not even that level of input over smaller projects (Nordic decisionmaking about road construction is notably depoliticized).

How Failed Leaders Can Look Like Doers

Congratulations – you’ve finally finished a major project. The project was not done well – it cost too much and took too long. But somehow, the people responsible for the mess get to claim credit for success and are treated as great leaders who took tough decisions. Why?

The issue here is that poorly-executed projects look like great challenges. Maybe it’s a very short subway line that somehow cost like a multi-line megaproject. Maybe it’s a replacement-level city airport that took three times as long to build as anticipated. Maybe it’s a tank that’s only been used in parades even as the military is fighting a land war where it would be useful if it worked – a land war that is itself a major project even when the target is a poor country less than one third the population of yours. Maybe it’s a corporate IT project that’s dragged for so long that the software is almost out of support; this is far from a purely public-sector problem – every corporate manager and every person who’s worked for a corporate manager knows many such examples.

These are not, objectively speaking, huge challenges. Objectively speaking, Second Avenue Subway was 2.7 km of tunnel and three stations in a dense but not historic urban environment, under a straight avenue much wider than the width of a two-track tunnel with station platform, with no undercrossings of older subway tunnels, in conventional hard rock geology. A medium-cost city like Paris or Berlin would build this and a few other similar lines at once (to be fair, Berlin would probably be building other lines and not Second Avenue Subway, judging by its project prioritization). But New York can’t build, and therefore this 2.7 km tunnel is in today’s money a $6 billion project.

Once the project has been so mismanaged, it looks like something much bigger than it really is. It took many years and had a lot of administrative headaches (which were mostly self-inflicted). Its budget was so large that it was overseen at the highest levels of the government or corporation that built it, by heavyweight leaders who everyone in the organization has learned to lower their head around and who therefore don’t face serious criticism for their own poor decisionmaking. Those heavyweight leaders, insulated from what people really think of their competence level, then go ahead and portray themselves as doers, who managed to get such a difficult project done – when the only reason it was difficult is that they existed.

Good projects don’t have any of this. They look easy. They also tend to be small by local standards, because organizations expand to their limits, and so if you’re Paris and 200 km of Grand Paris Express are just beyond your managerial limit, you will still do that, and then those short Métro extensions of a few stations at a time look trivial and are beneath the notice of the political heavyweights who it’s impolite to speak in the company of.

Good project are also run by professionals who face regular, uncontrolled criticism, and not by heavyweights who surround themselves with lackeys and yes-men. So on top of looking easy, they also tend not to be run by the sort of toxic personality who having sabotaged the organization’s capacity then turn around and claim credit for the completion of the project. Manuel Melis Maynar knows exactly what his value is, but he’s an engineering professor rather than a marketing blowhard.

A better attitude than “at least they got [difficult-looking project] done” is then to look at the project’s true challenge – in the case of a subway it’s its length with some controls for undercrossings, network complexity, and the historic and geological sensitivity of the site. If the project was unduly expensive or lengthy for the challenge, those who claim credit for it are ideally to be treated as lepers rather than heroes, and should be replaced by people who were responsible for less telegenic but better-run comparanda. As always, it’s better to imitate success than to imitate failure.

Quick Note: Catalunya Station

Barcelona’s commuter rail network has a few distinct components. In addition to the main through-running sections, there are some captive lines terminating at one of two stations, Espanya and Catalunya. Catalunya is especially notable for its very high throughput: the system feeding it, the Barcelona-Vallès Line, has two running tracks, fanning out onto five station tracks, of which only three are used in regular service. Despite the austere infrastructure, the station turns 32 trains per hour on these tracks. I believe this is the highest turnback rate on a commuter rail network. The Chuo Line in Tokyo turns 28 trains per hour on two rather than three tracks but it’s with the same two running tracks as the Catalunya system, and with considerably less branching.

I bring this up because I was under the impression Catalunya turned 24 rather than 32 trains per hour when writing about how Euston could make do with fewer tracks than planned for High Speed 2. But several people since have corrected me, including Shaul Picker (who looked at the timetables) and planning engineer Joan Bergas Massó (who, I believe, wrote them).

The current situation is that the Vallès Line includes both proper commuter lines and metro, sharing tracks. The commuter part of the system comprises two branches, Terrassa carrying S1 and short-turning trains on S7 and Sabadell carrying S2 and short-turning trains on S6; some trains skip stops, but it’s not a consistent pattern in which S1 and S2 run express and S6 and S7 run local. A branch entirely within the city is signed as a metro line, designated L7. Currently, all L7 trains use track 4, turning 8 trains per hour, while the other lines use tracks 1 and 2, turning 24 trains per hour in total.

I stress that while this is a commuter line – it goes into suburbia and descends from a historic steam train rather than a greenfield metro – it is not connected with the mainline network. So it’s easier to turn trains there than on an intricately branched system; the Chuo Line is not as hermetically sealed but is similar in having little other traffic on it than the rapid trains from Tokyo to its in-prefecture western suburbs. Nonetheless, there are multiple branches and stopping patterns; this is not a metro system where all trains are indistinguishable and passengers only care about the interval between trains rather than about the overall schedule.

Anne Hidalgo Hates Paris

Paris has depopulated by 123,000 people in 10 years, or about 5.5% of its population. Normally, this should be cause for alarm: it means either mass abandonment of the city, or, if rents are up, insufficient quantity of housing. But not so according to Mayor Anne Hidalgo, who celebrates the city’s depopulation. Hidalgo – and the New Left urban tendency that she’s so celebrated for – manifestly dislikes her own city so much that she thinks it’s a good thing people of lower incomes are displaced from it to the suburbs; she calls it good news. Why?

The standard excuses

There are specific complaints about overcrowding in Paris, but these are conflated with density. Paris is famously very dense – around 26,000/km^2, excluding the Bois de Vincennes and Bois de Boulogne, both of which extrude from the Périphérique, which otherwise acts as the city’s limit. It is also rather overcrowded: in 2013, INSEE reported that the average dwelling size per person in the city was 31 square meters, which may be the worst in the developed democratic world – Tokyo is at 33 by one calculation, and I believe Seoul is about 32 nowadays, while German and Dutch cities are in the 40s (Amsterdam is at 49).

However, Paris’s overcrowding is not about density, and Hidalgo’s dream of sending the working class to the suburbs is hardly going to give them space. Per the same INSEE source, the dwelling size in the Petite Couronne was actually lower per capita than in the city: Val-de-Marne and Hauts-de-Seine, both fairly wealthy departments, are at 31 just like the city, and infamously poor Seine-Saint-Denis is at 27. Note that Paris is richer than its suburbs – this is how Seine-Saint-Denis is so overcrowded – but the same income gradient is found in Stockholm, and there, the city is at 33 and suburbs like Huddinge and Södertälje are at 35.

So the problem isn’t that Paris is too dense – if it were, the Petite Couronne would have the residential space of Amsterdam, or at least Vienna (which is at 36). Rather, the issue is that up until 2013, little housing was built in Ile-de-France.

YIMBY region, NIMBY city

The overcrowding levels for Ile-de-France are from 2013. But in the last 10 years, there has been a building boom, entirely in the suburbs. Yonah Freemark has the best introduction to this issue that I’ve seen in English. In 2014, the housing production in Ile-de-France was around 3.5 per 1,000 people and had been for a generation. In the next two years, this figure doubled, and would stay around 7/1,000 at least through 2019, when Yonah wrote his paper.

Little of this new housing is in the city. In 2021, housing production in Ile-de-France was 72,000, a little less than 6/1,000 people, of which 2,600 units were in Paris, or 1.2/1,000 people. While housing production in the region intensified starting in the mid-2010s, it did not in the city – production in 2019 was lower than in 2014 and has since fallen further. This is not quite a matter of suburbanization and building where there’s more space, because in 2021 the Petite and Grande Couronnes had identical housing production rates (both about 6.8-6.9), and before corona, the Petite Couronne had a substantially higher rate, 8.6 vs. 7.2. Rather, it’s a matter of a growth plan done in tandem with the construction and upgrade of suburban rail, as part of a transit-oriented development plan.

And practically none of this plan concerns the city. This is not because there’s no space: the city is full of high-rise residential housing, typically social projects of around 12-15 floors, and conversely there are sections only built up to 3-4 floors, low enough that the buildings can be replaced. There are still railyards inherited from the steam era that have not been redeveloped yet in the manner of Bercy. Yonah’s paper talks about the top-down nature of the regional growth plan, which has overruled local NIMBYs in the suburbs; but in the city, perhaps the national elites who have little trouble telling a suburb that the needs of the state trump the needs of a mayor are reluctant to do the same out of an emotional reaction to the city.

Hidalgo’s role

Hidalgo has has little trouble overruling NIMBYs on matters that are important to her. The trickle of housing that is built in the city is disproportionately social, often in wealthy areas, where the mayor enjoys needling rich snobs. The same snobs who look down on social housing also look down on taking public transport alongside the hoi polloi; public transport usage in the city is very high, but the wealthiest arrondissement, the 16th, has a fairly large share of drivers, 26% compared with a city average of 12% (see table here). And Hidalgo has little trouble overruling such snobs when she redoes streets to give their cars less space so that there is more room for cycle paths, bike share docks, and wider sidewalks.

So if so little housing is built in the city, it’s not because Hidalgo is powerless in the face of NIMBY opposition. No: she is the NIMBY opposition to growth. No wonder she thinks it’s a positive thing that the working class is moving to the suburbs.

Why is she like this?

The New Left has always been uncomfortable with growth and production. Instead, it centers consumption. Its theory of the city is about consumption, and thus, its take on matters like growth, decline, gentrification, displacement, and housing centers consumption amenities, in which the city itself is what is being consumed. It pays little attention to job growth and instead tells a story of the middle class chasing some artistry, which is not in evidence in either patterns of development or what the urban middle class says drives its locational choices.

In Paris, this is seen in the museumification of the city. It’s a middle class that feels a little guilty about its privileges, and therefore Hidalgo will make sure there’s some social housing in the city for the poor, but the idea that the working class could just afford market rate and live in the city at scale (which it can in YIMBYer cities like Tokyo) is unthinkable to her and to generations of New Left urbanists. If poorer people leave, it’s a victory for the New Left: there are fewer poor people to take care of. Stalin promised socialism in one country; Hidalgo and her left-NIMBY counterparts in the United States and Germany build socialism in one county.

This also cascades to transport policy. Hidalgo has been very good about removing cars from the city – but the city already has a 64% public transport modal split and only a 12% split for cars. It’s more important to grow the city and allow people to move into it rather than out of it than to squeeze those last 12%. Migration out of the city is nothing to celebrate; unless those people are moving to a comparably car-free place like Tokyo, Stockholm, or Barcelona, it’s a net negative for everyone who cares about modal shift.

More broadly, Hidalgo and the New Left care little about how people get to work; Hidalgo is not involved in any plan to improve public transport in the region, and the high-level socialist in the region who was, Elisabeth Borne, is currently serving as prime minister under Macron while Hidalgo allied with far-left forces, including Putin apologists (which she herself is not), to form NUPES in opposition. Instead, they try to create little bubbles where the middle class can feel good about its own consumption while changing little at macro scale. This ideology is, in practice, to the pedestrian, city center, and to the car, the world.

The hate for the city

There are places in the United States that are notorious for their combination of left-wing politics, extreme NIMBYism, high rents, and an entrenched local middle class that looks down on the consumption of the workers who it has displaced. They are never major cities: New York has people with these attitudes but they don’t really run the city – New York’s NIMBYism comes from other interest groups. Rather, they are small places, often college towns or resort towns; Aspen and Boulder are both notorious for it.

The museumification of the city is the product of the ideology of turning Paris from a productive city with millions of jobs that one gets to on the Métro or RER into an enclave for rich people who don’t need to work outside the home. If you want work, you live and work in the suburbs and unless your commute lines up perfectly with the orbital lines in Grand Paris Express, you drive. It’s casual hate for the city, by people who don’t like change and don’t like sharing space with other people, and only differ from the snobs of the 16th in that they are the snobs of the Left Bank instead.