Archive for Public Transit Policy

Here’s an interesting question for you: Should public transit systems and the public authorities that run them be trying to turn a profit? In other words, at what point should authority heads such as Jay Walder cease running a transportation network as a public good and start running it as a business?

The answer to this question isn’t an easy one in an age of austerity. By and large, public transportation networks are inherently not operated as a business as the service level. In New York, for instance, the MTA runs mostly empty trains at 3 a.m. and allows buses to run routes with a cost-per-passenger high enough to make any private CFO cry. That’s how New York City exists as a huge economic hub and tourist destination today, and that’s how mass transit is operated as a public good.

On the other hand, though, are a few competing demands. First, the MTA must operate these services efficiently through a streamlined bureaucracy and a procurement process that isn’t beset with red tape. Second, it cannot become an organization beholden to pension costs and lifetime benefits. Third, it will require public subsidies from a government whose constituents depend on public transit for their daily lives, and politicians will have to recognize that the MTA or a similarly situated organization may not operate as efficiently as a corporation that answers to stock-holders. The demands are different, and the expected benefits are different.

Recently, a few good minds in the transit realm have been debating the way transit authorities operate. David Levinson has called for financially sustainable mass transit systems while Jarrett Walker has called upon those funding transit systems to better outline their goals. The competing demands of ridership vs. coverage are at odds with financially self-sustaining transit systems. I’ve simplified their arguments, and it’s worth reading their pieces at length because we’re seeing this debate play itself out in real life on Long Island.

The Long Island Bus saga has been a debacle. In its original agreement with Nassau County, the MTA agreed to operate the service as long as the county paid for it. Over the years, the county’s contributions had decreased while the MTA’s had increased, and the authority threatened to pull out of Nassau if County Executive Edward Mangano didn’t agree to upping the county’s contributions from $9 million to $26 million. Mangano called the MTA’s bluff and decided he could run the bus system for less by farming it out to a private company. He claimed no service cuts or fare hikes would follow.

From the start, the privatization process has been a mess. The county used a non-transparent process to pick Veolia, a company with close ties to Mangano’s campaign, and they failed to meet a July deadline for an agreement. The MTA will operate the buses until December 31, and at that point, Nassau County will reduce its contributions to just $2.5 million — $6 million less than the cost of fuel alone. Veolia will then be expected to cover the difference. Without subsidies, no one, including the company’s CEO, knows how.

Earlier this week, Michael Setzer spoke about how the company would save the millions it stands to lose from the MTA and state when it takes over the LI Bus network. “You can’t save $35 million by turning off the lights,” Setzer said. In other words, there’s virtually no way Veolia can operate the bus system with its current route structure and fare system while breaking even or turning a profit.

On their website, if you read closely enough, Veolia has said as much. They are threatening “adjustments” of bus timetables that will reduce frequency, and while they say there is no plan in place to raise fares next year, they also say that “it’s possible that modest service redesigns and fare increases will be recommended.” You can’t just save $35 million by turning off the lights.

Veolia is a private company long used to operate bus systems with large public subsidies. If they can’t turn a profit in Nassau County with a meager subsidy and the current route plan or fare structure, something will have to go. Relatively empty buses that provide a transit lifeline for people who can’t afford anything else will be cut, and fares will go up. A public good won’t be so public any longer.

As this grand experiment rushes toward a launch, we’ll watch Nassau County closely. It could be a model for how transit agencies can operate, but it sounds as though it’s going to be an example in government failure and the decline of a once-proud bus system. Perhaps Nassau County will come to its senses and recognize the purpose of its bus system before it’s too late, but I’m not counting on it.

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Over the years here, as I’ve tried to develop a semi-coherent argument for public transit investment at the expense of automobiles, I’ve occasionally returned to the idea of the parking space. Two years ago, I said the city could fund transit by raising on-street parking rates, and I’ve argued in favor of residential parking permits as a way to raise revenue for anything from street repair and maintenance to public transit investments.

My biggest complaints about parking spaces concern the way we use space and the way we charge for it. In New York, everything costs a lot. Housing prices are high; office rates are high; parkland is at a premium; even sidewalk space has whittled down over the years. Yet, cars get away with parking for free. In essence, you have around two tons of inert metal taking up precious urban space and paying nothing for in exchange for the privilege.

In his City Room column today, Clyde Haberman plays off of the deactivation of the last Manhattan parking meter to wax poetic on parking spaces. Much like the death of the token brought about thought-provoking reflections on mass transit, so too has the death of the parking meter. Muni-meters, after all, free up space. No longer are cars bound by parking meters, and that can be both good and bad for on-street parking.

Haberman’s point, though, is a different one. “Why,” he asks, “is public space, a most precious commodity in this city, allowed to be used as a private storage area?” He continues:

Years ago, I asked in a column if it would be all right for a New Yorker in a crowded apartment to put a chest of drawers on wheels and leave it at curbside — observing all parking rules and taking a chance on theft. The very idea was, of course, absurd; you can’t store personal property on the street.

Why, then, is it O.K. to do that when the wheeled property is called a car?

If public space is to be used for this private purpose, perhaps what the city needs to do is greatly expand the areas where people must pay for the privilege.

Not that this could be done without fierce resistance from some on the City Council and in the State Legislature. Generally speaking, when it comes to the proper place of the automobile in this crowded city, what we have, as Cool Hand Luke found out in his own way, is a failure to communicate.

I don’t believe cars are inherently evil. My family has lived in New York City for my entire life, and we’ve always owned a car. I’m enrolled with the AAA and and card-carrying member of ZipCar. I’m also sympathetic to those who say that fees and taxes in New York are getting out of hand. Parking, though, is a market-based solution. If the market is willing to support significantly higher parking rates, why does New York continue to squander a money-making resource while it gives premium space away for free?

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The other day, when I took my painfully slow ride home from LaGuardia Airport, I clearly chose the worst route possible. As many commenters here pointed out, taking the Q33 to the Queens Boulevard line or hopping on the Q train in Astoria would have sped up my trip by a few minutes, but the fact remains that the trip was sluggish and slow from the US Airways terminal to the exit from the airport. No amount of better planning would have improved that trip, and a taxi will always be faster, if significantly more expensive.

An article I came across yesterday had me revisiting that commute. It’s a piece from The Globe and Mail in Canada about some transit reluctance. Despite traffic in two big Canadian cities, commuters aren’t embracing transit alternatives because they’re just too slow.

According to a recent Canadian study, a whopping 82 percent commuted by car while just 12 percent rode public transit. The Canadian Press explained the why of it:

“Commuters who used public transit took considerably longer to get to work than those who lived an equivalent distance from their place of work and went by car,” says the study. Nationally, users of public transit spent 44 minutes travelling to work, compared with 24 minutes for those who went by car.

Commuting times are door-to-door, StatsCan notes. Times for public transit are generally longer because its use can involve walking to a transit stop and waiting for a bus, it says. In the six largest cities, the average commuting time was 44 minutes for public transit users and 27 minutes by car. The gap in average commuting time was slightly larger in mid-sized metropolitan areas — 46 minutes on public transit and 23 minutes by car.

“The gap was not a result of distance travelled,” the agency says. “Among workers in (cities) with at least 250,000 residents who travelled less than 5 kilometres to work, car users had an average commute of 10 minutes, compared with 26 minutes for public transit users. The same held true for longer commutes.”

Now, on the one hand, this isn’t a surprising result. By and large, public transit is going to be slower than personal automobiles. They stop more frequently than cars do; they don’t deliver commuters directly from point A to point B; and despite pre-board payment technologies, bus in particular aren’t adept at picking up passengers in a speedy fashion.

These factors clearly matter to many. People in New York dislike the bus system because for many routes, it’s faster to walk. Once you calculate waiting time and travel speeds, buses aren’t great time-savers. Even the subways over great distances at off-peak hours provide little to no time savings. It’s only during congested rush hour commutes that public transit can save significant time.

While I’m not as familiar with the ins and outs of Canadian transportation policies and politics, in New York, cost as well as speed plays another factor. I was willing to take the bus to the subway on Monday because I had all the time in the world and didn’t feel like dropping $35-$40 on a cab. For Manhattan-bound commuters, the costs of daily parking often outweigh any time benefits that may accrue from driving, and those costs help push commuters toward environmentally and socially friendly transportation options.

Yet, it’s important to note the results of studies such as these. Speed and the perception of speed matters. New York City buses — and buses in various locations through the world — are artificially slowed because transit agencies haven’t yet embraced pre-board fare payment systems. They don’t have enjoy dedicated lanes or signal prioritization. Some subways — such as those old IRT routes that run through Downtown Brooklyn and Lower Manhattan — simply stop too frequently. These factors create inefficient and slow systems.

As the MTA looks to encourage more transit ridership, it would do well to assess travel speeds. It shouldn’t take me 20 minutes to leave LaGuardia because everyone waiting to board the bus has to dip their MetroCard as lines form. Buses, especially during peak hours, shouldn’t be at the whims of surface traffic. If you make the rides faster, they will come.

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Someone once thought it was a good idea to build a bridge across the widest part of the Hudson River.

Over the past few years as New York and New Jersey have engaged in infrastructure expansion project, planners on both sides of the Hudson River have had to make some key decisions, and in nearly every instance, the decision has been to trim back and cut. The future is going to pay for this dearly.

The obvious example of course concerns the ARC Tunnel. Claiming concerns over cost overruns and, later, project design, Gov. Chris Christie pulled the plug on a project that had been funded and planned. Instead of redesigning it to save money or reengineering it on the New York side to improve it, the New Jersey executive cut it without proposing an alternative. The future is left with nothing, but that’s only the most egregious example.

In New York City, the MTA’s major subway expansion project has seen something fall off from the original plans. The 7 line has lost a key station at 41st St. and 10th Avenue while the Second Ave. Subway, being built in phases, has gone from four tracks to three to two. As I joked on April Fools, they might as well just cut it down to one.

Now, why is this important? After all, we need these projects to open sooner rather than later, and if the choice is between a smaller version of the project and nothing at all, I’d take the smaller version ten times out of ten. Costs aren’t going down any time soon, and it’s too much of a hassle to get a major initiative off the drawing board.

What we forget today when we cut though is the future. Planning decisions we make in the here and now have ramifications practically forever. Take, for instance, this NPR story about the location of the Tappan Zee Bridge. As David Kestenbaum noted, the Tappan Zee Bridge is in a terrible location. It’s amidst a 15-mile stretch of the river that is the Hudson at its widest. Four miles south and 15 miles north, the Hudson tapers off significantly, and the decision to build a bridge there seems foolish. Kestenbaum explains why:

I started digging through newspaper clippings from the 1940s and 1950s. It turns out, the bridge was part of a much larger project: The New York State Thruway, one of the first modern highway systems. The clippings also reveal something suspicious. There was an alternate proposal for a bridge at a narrower spot nearby. The proposal was put forward by top engineers at the Port Authority of New York and New Jersey. But that proposal was killed by New York governor Thomas E. Dewey. The New York Thruway was his baby; in a 1954 speech he proclaimed that it would be “the world’s greatest highway.”

…If the bridge had been built just a bit south of its current location — that is, if it had been built across a narrower stretch of the river — it would have been in the territory that belonged to the Port Authority.

As a result, the Port Authority — not the State of New York — would have gotten the revenue from tolls on the bridge. And Dewey needed that toll revenue to fund the rest of the Thruway. So Dewey was stuck with a three-mile-long bridge.

As Kestenbaum notes, now that the bridge has aged and degraded, someone is going to have to spend a few billion dollars to repair it. We can’t now correct the mistakes of the past either because “it’s too late now: Highways and towns have grown up based on the bridge’s current location.” The replacement bridge will cost a lot, and eventually, it too will be pared down. Already, the transit options are being threatened with elimination.

And so as the city looks to build and expand, we must remember that what happens today matters. It matters in the short term because we have to pay for it, but it also matters in the long term because eventually someone else will have to pay even more to fix or replace it. Repairing the Tappan Zee Bridge would seem less onerous had it been moved one way or another in the 1950s, but leaders too concerned with photo ops and ribbon-cutting ceremonies never want to take into account someone else’s future.

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Since the Port Authority announced its new budget on Friday, the New York City transportation scene has been a-flutter with interesting takes on the situation. Yesterday, we discussed how the new toll and fare structure could usher in a congestion pricing scheme that would generate more revenue for transportation and transit while reducing the traffic that currently chokes Manhattan. Today, I want to pick up a different thread involving the lessons New Yorkers should take from the Port Authority’s situation.

While the MTA and the Port Authority are intertwined, the two agencies operate off of a set of very different assumptions. The Port Authority is entirely self-sustaining. It relies on the revenue from PATH fares and bridge and tunnel tolls — mostly those bridge and tunnel tolls — to fund its capital and operating budget. The MTA, on the other hand, does not. While MTA Bridge and Tunnel revenues have long been used to subsidize bus and subway operations, they don’t come close to covering the operating and capital costs associated with running the MTA.

At Transportation Nation last night, Andrea Bernstein wrote an encompassing look at the fare proposal, and she discussed the differences between the PA and the MTA and how they impact each other. She writes:

Unlike, say the NY MTA, which gets (dwindling) subsidies from the government and from taxes, the Port Authority raises all its own revenue from tolls and fees. The bi-state authority is controlled by two governors, in this case, NJ Governor Chris Christie and NY Governor Andrew Cuomo. Both men have cut taxes, and have made it clear they don’t intend to raise any more. Which means the Port Authority revenues look increasingly attractive to both men — who, after all, do have to pay for infrastructure one way or another.

Governor Christie has asked the Port Authority to use the $1.8 billion it would have contributed to the ARC tunnel to improve roads, which solves part of the budget hole created by Christie’s decision not to raise the gas tax to fund the state highway trust fund, which is broke. And the NY MTA — controlled by Cuomo – has asked for $380 million from the Port Authority for the NY MTA’s capital plan. “These raids are pressuring the fares,” says Kate Slevin, executive director of the Tri-State Transportation Campaign. “Christie is using the $1.8 billion to plug holes in the state’s transportation program.”

But Tom Wright, executive director of the Regional Plan Association, backs the plan to raise tolls. “Tolls should not be off-limits. There has to be some way to pay for surface transportation.”

This difference inevitably leads to another question: Should the MTA be self-sustaining? Should New York’s authority pull a PA and raise tolls and fares to the point where everything can pay for itself? The answer to that question gets to the heart of the meaning of public transportation, and rational minds can certainly disagree.

The general nationwide perception about mass transit is that it’s a way to improve mobility for poor people. In the City Hall News article about congestion pricing, one source even says as much: “How does transportation affect the ability of the region to grow in a sustainable way? It’s a way to invigorate a center city and bolster mass transit, which is what poor people use.”

But in New York, that perception does not align with reality. Because jobs are concentrated on the isle of Manhattan and parking space is necessarily at a premium, people from all classes need public transit, and our city’s economy depends on it. The cost of use then must be low enough for the stereotypical poor people, but it also must be low enough to disuade people who might consider driving from doing so. (Similarly, the costs of driving must be high enough to do the same.)

That argument is a roundabout way, then, of making the case for subsidies. Earlier this week, I discussed the IBO report on the MTA’s uncertain revenue streams. By relying on a volatile mix of taxes and fees, the MTA is risking financial instability. Fares and tolls provide a far more constant source of revenue, but higher fares risk pricing out people who most need transit.

The MTA then is at the fulcrum of a political fight. Some in the state want to further reduce subsidies raised by taxes and fees. Others understand the need to fund transit but only to a certain extent. Eventually, the MTA will have to rely more and more on higher fares and toll hikes to pay the proverbial bills. Without subsidies, that swipe will only get higher. Just ask PATH train riders how they feel about that.

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The Long Island City ferry stop awaits some passengers. (Photo by East River Ferry on flickr)

When it comes to media coverage, timing is everything, and that old adage certainly held true for the launch of the East River Ferry service last month. When New York Waterway launched its service — free for the first two weeks — riders and the press came out in droves, but now that the subsidized service is losing passengers, its decline has escaped much notice. It shouldn’t though.

The first stories that came out of the media frenzy surrounding the launch were about as glowing as expected. Adriane Quinlan liveblogged a day on the free ferries, and she spoke with some folks who were just joyriding and others who claimed they would take it. The resulting article that appeared in the paper was just as glowing, and others had similarly praising coverage. (Village Voice, Brooklyn Eagle, WCBS)

The initial coverage had a common theme: The ferries aren’t like the subways. They meander in open-air spaces on the water. They don’t suffer from the crowds of the 4 train or the inconsistencies of the L train. It is a more civilized way to travel. That narrative, of course, misses the fact that nearly all of Manhattan and nearly all of Brooklyn is inaccesible from the waterfront without additional subway rides. Once the ferry started charging a $4 fare, I figured ridership would drop.

It did, and precipitously. After notching over 10,000 riders per weekday during the free period, the ferry service didn’t even generate that many passengers over the first three days of paid rides. The Brooklyn Paper tried to spin it as a success. “I would call this a roaring success,” Seth Pinsky from the city’s Economic Development Corporation said. With 2750 riders on a Tuesday — or approximately three mostly full subway trains worth of riders — the bar for success is a low one indeed.

Earlier this week, The Post ran a short piece on the declining ridership. They were the only major New York City newspaper to do so because it’s simply not a novelty anymore. Failing, subsidized ferry services are the norm in New York City. New York Water Taxi couldn’t support a profitable venture because commuters found the ferries slow, inconvenient and, during the winter months, cold. Even with $3 million per year in city subsidies, the ferry service won’t stay afloat if ridership continues to drop. If fewer than 3000 commuters will take the boats in late June, how many are going to ride in December with a wind whipping across the East River?

In theory, ferries are a great idea for New York City, but these East River routes, heavily trafficked by surface transit and subways, aren’t ideal. It is, as commuters have noted, a slow road that lags behind bikes and trains for travel time. It is also isn’t integrated into New York’s vast and complex transit network. A MetroCard swipe with a free transfer would be far more convenient than another fare that drops most riders off nowhere near a connecting subway.

Better options would ferry service would have focused on the true problem commutes. A ferry from the Rockaways to Lower Manhattan or Bay Ridge to Wall Street would have the potential to cut travel times for many commuters left stranded are the wrong ends of slow subway routes. For now, though, this yuppie-centric East River diversion will continue, with city subsidies, to represent the poor planning that goes into new interborough transit routing.

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Once upon a time, cities reached only as far as people could walk and horses could ride. In the early days of New York City, Washington Square Park was for the rich while Washington Heights was the country, far out of town. Slowly, the arrival of railroads changed that perspective.

At first, in the late 1880s, the elevated lines allowed folks to commute to downtown from 14th Street and beyond. By the dawn of the Twentieth Century, the subways started to open up even more frontiers. The Upper East and West Sides were no longer 90-minute elevated rides away from downtown. Instead, they were 25-minute subway rides away. As the subway expanded, the neighborhoods filled with people sprang up all over town. The jobs were concentrated in certain areas in Manhattan, but one could live a life by walking around the area near subway stops.

Cars, of course, changed the city landscape as well. Now, even the areas with no subway access weren’t that far away, and the suburbs become the idealized American Dream: two cars, a garage and a backyard. Those living in Westchester and Long Island and New Jersey could make it into the city. Slowly, the city had to accomodate cars. Highways tore apart neighborhoods, and sidewalk widths decreased to make room for parking. Urban population decreased.

Today, the pendulum has seemingly swung back the other way. Urban life is more desirable than ever, and more of the U.S. population than ever before resides in cities. Still, the battle goes on between cars and pedestrians. The livable streets crowd say that cars are a drain on urban resources. They take up space and cause pollution and congestion. Our investment priorities should be in mass transit in order to free up road space for vital trips and discourage auto use. Others say the car is a personal choice and one that should not be taken away from Americans. Where I fall on this divide is obvious.

Over the weekend, The Times looked at the new focus on pedestrians in cities except they do so through the lens of Europe. Elisabeth Rosenthal wrote:

While American cities are synchronizing green lights to improve traffic flow and offering apps to help drivers find parking, many European cities are doing the opposite: creating environments openly hostile to cars. The methods vary, but the mission is clear — to make car use expensive and just plain miserable enough to tilt drivers toward more environmentally friendly modes of transportation.

Cities including Vienna to Munich and Copenhagen have closed vast swaths of streets to car traffic. Barcelona and Paris have had car lanes eroded by popular bike-sharing programs. Drivers in London and Stockholm pay hefty congestion charges just for entering the heart of the city. And over the past two years, dozens of German cities have joined a national network of “environmental zones” where only cars with low carbon dioxide emissions may enter…

While some American cities — notably San Francisco, which has “pedestrianized” parts of Market Street — have made similar efforts, they are still the exception in the United States, where it has been difficult to get people to imagine a life where cars are not entrenched, [Stanford's Lee] Schipper said.

I found this article to be a strange one because of the way it almost fetishizes “pedestrianization.” Those kooky Europeans in Zurich where 90 percent of elected officials ride public transit might be deprioritizing cars, but that’s just a European thing, says the article. In fact, Rosenthal seems to miss a major component of congestion alleviation efforts: It’s all about economics.

As cars sit in traffic, they impact the environment around them. I waste time inching across Canal Street or up 6th Ave., and time, as we know, is money. Meanwhile, my car isn’t operating at optimal speeds, and I have to spend more on gas while my emissions increase. Furthermore, constant overuse leads to disrepair, and the money invested in roads could be better utilized by promoting vibrant urban life. It’s more than just about the crazy ideas.

Ultimately, road development has been driving American transportation policy for six decades, and that likely won’t slow down. We can’t get high-speed rail off the ground, and transit agencies throughout the country struggle for money. Until Americans embrace city life and recognize what that means for our transportation policies, efforts at curtailing car use in dense urban environments not initially designed for cars will be met with skepticism. It’s too European for us.

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It’s clear from their words that officials within the Obama Administration are well aware of the funding crisis facing local transit authorities. Across the country, vital agencies are short billions of dollars for necessary maintenance, repairs and upgrades, and yet, dollars trickle out of Washington at a snail’s pace. It’s easier and more palatable for the government to spend billions bailing out the auto industry than it is for them to invest in transit operations.

If the Obama Administration has its way — a long shot for sure — that tied could turn. In comments yesterday at the American Public Transportation Association meeting, Federal Transit Administrator Peter Rogoff said that he wants to see transit agencies stem their economic tide. “We are trying to deal with all those challenges at once,” he said. “Not just maintenance but also on expansion, also to provide increased formula funds.”

Rogoff spoke at length about the age of American transit networks and the need to modernize. “There are power substation facilities serving the SEPTA system that have equipment in it dating from the 19-teens and 20’s. Thank heaven they overbuilt those systems back in the 20’s because they actually have been able to endure and serve the service,” he said. “But it is, sometimes it is rather spooky when you see how many tens of thousands of daily commuters that are dependent on the continuing reliability of systems that are approaching 50, 60, 70 years-old in some of these cities. That’s why we really want to surge forward with the investment because some of those systems are going to have to be replaced you cannot keep milking them along another half century.”

Transportation Nation offers more from Rogoff’s press conference:

The tension between just fixing everything that’s broken — or about to break — and all the new transit that’s needed to really give Americans mobility options was fully on display at an APTA press conference at its annual rail conference Monday. Federal Transit Administrator Peter Rogoff argued: “We want to provide the American public in the maximum number of communities with real transit choices, and give them the opportunity to keep more money in their wallet rather than hand it over at the gas pump, but in order to do that the transit service has to be available, it has to be safe and clean. It has to be reliable and desirable.”

…But before thinking about making transit a real option for most, if not all Americans, Rogoff said, there’s a $50 billion hole that needs filling. In the seven largest systems, which carry 80 percent of the rail transit passenger load in the U.S. – including New York, Boston, Chicago, Philadelphia, San Francisco, Washington and Los Angeles — there is a $50 billion backlog of major maintenance needs. Rogoff said the FTA has proposed combing funding streams to “rifle shot” resources to where they are most needed.

“Reliable transit is really the difference between getting home in time to have dinner as a family, or not getting home in time to supervise homework, or not being able to pick your kid up on time from day care, all of these core quality of life issue, which are critical if we are going to entice more people on transit. But for for the millions of transit riders who do not have an automobile option these investments are critical to maintaining a viable transit system,” Rogoff said.

Now, this push to convince Congress to approve billions in transit assistance is one we’ve heard before. Senator Chuck Schumer has worked to wring dollars out of DC while Obama’s officials have spoken about it for years. The money, of course, never materializes. Despite Rogoff’s strident words, I can’t get my hopes up. We’ve seen no amount of leadership on federal assistance.

Meanwhile, on a local level, transit funding is under attack. A growing chorus of voices wants to remove $1.3 billion in the form of the payroll mobility tax from the MTA’s budget. The money to replace those lost funds won’t just materialize, and eventually, we’ll have a transit funding crisis — that is, if we don’t already. The time for talk is over. Where’s the action, from D.C., Albany or even City Hall?

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A few days ago, UBS made headlines when it announced its interest in moving back to Manhattan. While the cynical among us wondered if this was just a ploy to gain more favorable tax breaks by playing Connecticut off of New York, company sources claimed the move is necessary in order to attract young talent. Stamford, after all, isn’t exactly a happening city for good minds right out of college.

In New Jersey, a different story is unfolding: Transit-oriented development has become all the rage. Dana Rubinstein reports in The Journal today:

As New Jersey slowly emerges from the economic downturn, its office market is beginning to transform into one concentrated around train stations. Businesses have been leasing space in areas served by train stations at a higher rate than those only accessible by car, according to real-estate firms. The trend reflects demographic shifts and higher gasoline prices as well as changes in worker priorities.

For example, businesses are beginning to recognize that many employees care less about living in sprawling estates and more about living in diverse areas with restaurants and entertainment within walking distance, notes Robert Puentes, a senior fellow at the Brookings Institution Metropolitan Policy Program. “All these things are starting to add up and companies are very attuned to it,” he says…

The average vacancy rate in so-called transit hubs in New Jersey was 14.7% in the first quarter of this year, compared with 29.7% in areas not considered transit hubs, according to real-estate brokerage Jones Lang LaSalle. The report defines transit hubs as the 40 million square feet comprising office space in Newark, Elizabeth, Jersey City, Hoboken, Paterson, East Orange, New Brunswick, Trenton and Camden, Morristown and Metropark, all cities with rail service.

At the same time, asking rents in transit hubs were higher, averaging $27.43 compared with the rest of the suburban market’s $23.51, according to the Jones Lang LaSalle report. Since 2009, more than 20% of all leasing has occurred in the transit hubs, compared with 15 percent before 2009. Further, of the 52 leases larger than 100,000 square feet signed in New Jersey since 2008, 22 of them were in transit hubs.

Panasonic recently made headlines when it decided to move from Secaucus to Newark. While the decision has been driven, in part, by a generous tax credit, company officials say accessibility played a role in the move as well. “We have literally 1,000 people driving cars every day,” Peter Fannon, a company VP, said. “The key element for us, which really brought the focus back to Newark, were the environmental benefits, specifically the ability to be in an urban center where there are housing, restaurants, hotels, and most importantly, mass transit facilities, all within a three- or four-block radius of our new location.”

With these trends emerging and with policies in place to encourage hub-based growth and transit-oriented development, it would be an ideal time for New Jersey to move forward with a plan that will greatly improve trans-Hudson commuter rail access while cutting down travel time. Unfortunately, private businesses and state leaders aren’t seeing eye-to-eye. As development policies and economic realities push TOD, the ARC Tunnel plans, which will look more and more necessary as time passes, remain dearly departed.

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Jun
10

A case study in being nearby

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While discussing the suburban payroll tax revolt last night, I briefly alluded to USB’s looming decision to move back to Manhattan. I went to spend a little bit more on that story tonight as it highlights the importance of both fast transit for the suburbs and the allure of being close to it all.

The story goes a little bit something like this: In 1996, UBS garnered headlines when it became one of the first major financial institutions to move its headquarters out to Stamford, Connecticut. Thanks to some generous tax breaks by the state as well as the promise of subsidized office construction, the company parked its trading floor, the largest in the world, nearby the Stamford Metro-North stop.

Now, they want to move back. And why? Because they’re just too far away from where people live. Charles V. Bagli has more and his writing is very telling:

Now, though, UBS is having buyer’s remorse. It turns out that a suburban location has become a liability in recruiting the best and brightest young bankers, who want to live in Manhattan or Brooklyn, not in Stamford, Conn., which is about 35 miles northeast of Midtown. The firm has also discovered that it would be better to be closer to major clients in the city.

As a result, UBS is seriously considering a reverse migration that would bring its investment banking division and up to 2,000 bankers and traders back to Wall Street and a new skyscraper at the rebuilt World Trade Center, according to real estate executives and city officials.

“They just can’t hire the bankers and traders they need,” said one landlord who has spoken with UBS but requested anonymity so as not to alienate a potential tenant.

A piece in today’s Times delves even further into the employee reaction to this news. “I live in Manhattan, so I do the reverse commute,” Jon Gimpel, a UBS employe, said. “The train ride is like 45 minutes, then I ride my bike through Central Park to get home. If UBS moves back to Manhattan, I’ll save $300 a month in train fare and major aggravation. Awesome.”

And that’s the truth of it. Right now, people — especially younger people — want to be close to the city. They want to be able to commute to work with one fare card or walk or bike. They don’t the aggravation of a long train ride to and from work every day. They want, in a nutshell, the pinnacle of transit-oriented development.

Now don’t get me wrong; for some people, the Connecticut suburbs are a few place to live. One of my friends found himself working for a financial institution up there around four or five years ago, and he made it work. But the nightlife was very limited, and the restaurants varied from overpriced to mediocre. And transit-oriented development can work in the suburbs if the jobs draw from the resident base. Here, though, the jobs drew from Manhattan, and that doesn’t work.

I doubt UBS’ actions are going to signal some grand trend of big companies repatrioting to urban areas, but it’s worth dwelling on development priorities. The ‘burbs might be willing to grant the tax break, but the people want an urban life, transit and all. Once-an-hour commuter rail just doesn’t cut it.

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