In addition to a lack of political support from Albany, the highest barrier to MTA expansion efforts concerns costs. The one-stop 7 line extension clocked in at $2.3 billion, and the only subway expansion effort in the world that’s more costly is the first phase of the Second Ave. Subway. The MTA is spending nearly as much to rebuild the South Ferry station as it did to construct it, and the East Side Access price tag is comically high and ever increasing.
In a vacuum, the probably isn’t just the costs alone. We know everything costs so much, but we do not know why. Over the years, observers and experts have blamed everything from stringent federal regulations regarding emergency access, a costly and litigious environmental review process, corruption in the construction industry and the uncertainties of digging up old New York City streets. To me, this reeks again of New York City exceptionalism as these are issues facing most developed nations. Somehow, some way, other countries aren’t spending $2.7 billion per new subway mile.
In the latest issue of Capital New York’s monthly magazine, Dana Rubinstein went in depth on the cost issue. For long-time readers of my site (or infrequent and new readers), Rubinstein’s piece is a succinct look at an issue that New York City must solve if it is to meet the demands of its population. Without a handle on costs, the money to expand nets fewer and fewer improvements.
Rubinstein frames her piece around the idea that transit agencies have a rich history of low-balling costs to get money to start a project only to return, cap in hand, for more to finish. Robert Moses deployed this strategy to great effect throughout the city, and the MTA and Port Authority have essentially done the same with their recent construction binges. Think, after all, on how Phase 1 of the Second Ave. Subway should have cost $3.5 billion or how the Port Authority WTC station was originally budgeted at under $2 billion. Once shovels are in the ground, it’s hard to stop, especially if federal grants are involved, and local politicians are forced to fork over the dollars.
What I found even more intriguing though was this excerpt that shows how few people are engaged in this issue:
How New York City’s megaprojects compare in cost to those in similarly developed countries around the world is a question that is, somehow, very rarely studied. Stringer’s spokesman said the comptroller relied for his numbers, in part, on a mathematician named Alon Levy, who’s now completing his post-doc at the Royal Institute of Technology, and who notes, in his blog Pedestrian Observations, that, mass transit is a “side interest” for him and “entirely unrelated to my work.”
The experts at the Regional Plan Association, who are looking into the problem of megaproject cost overruns as part of their latest survey of regional infrastructure, directed Capital to a blog post by Levy, too. The post, from 2011, reported that the Toei Oedo Line in Japan cost $560 million per mile. The Berlin U55 cost $400 million per mile. The Paris Metro Line 14 cost $368 million per mile. New York’s construction costs blew all of that away, the study found. The Second Avenue Subway is coming in at $2.7 billion per mile. The 7 train extension to the far West Side? $2.1 billion per mile.
David Schleicher, an associate professor at George Mason University School of Law, has analyzed Levy’s numbers and says that his analysis basically confirms Levy’s. Barone, of Regional Plan Association, said, “The question is always why, why, why is it so expensive?” said Barone. The answer always seems to come back to a limited universe of issues, in varying combination: labor costs, work rules, managerial incompetence, the spaghetti of infrastructure tangled beneath Manhattan’s streets, a political firmament without incentive to tackle hard issues.
I’ve never met anyone who’s had reason to doubt Alon’s numbers (and you can read the post in question right here on his site). What’s surprising is how few comparative studies have been done to highlight these cost disparities. For its part, the MTA talks about a design-build process that’s supposed to mitigate costs, but working hand-in-hand with the parties responsible for the high costs (that is, the contractors) won’t lead to meaningful reform.
Meanwhile, it’s Chris Ward, a former head of the Port Authority, who has seized on this issue. “It is time to recognize that the delivery model for big projects is broken and fiddling on the margins will not build the kind of projects the region needs,” he said to Rubinstein. Without a better handle on costs, the MTA’s request for $15 billion in capital funding is a tough one to stomach, and future megaprojects are doomed to an expensive limbo at a time when the city and its current and future residents need them the most.