Open Thread 13: Hope

I am not entirely sure what folks are “hoping” for. I watched the video of a guy standing in his apartment in a T-shirt and it sounded like “optimism” to me in the Joni Earl way. I am guessing this Urbanist article summarizes the hope for urbanists: https://www.theurbanist.org/2023/08/17/op-ed-how-to-plan-for-seattles-transportation-future/ but is that really the hope for those who must ride public transportation?

I think “hope” if it is going to have anything to do with reality and the future depends on the following:

1. Ridership. Transit ridership determines farebox recovery (along with fare payment), and it should determine how much an area allocates to transit. This is the number one objective data point of the success and future of transit. If not many are riding transit then less should be allocated to transit. The metric is dollar per rider mile. I don’t subscribe to the induced demand, build it and they will come, line of thinking because it isn’t true, and think that is the root of many of our poor transit decisions, especially with Link. Without a doubt reduced ridership is transit’s biggest issue today, especially since the peak commuter had such a high fare payment percentage. Link ridership has declined since 2019 despite the addition of Northgate Link, and ST originally estimated 600,000 to 750,000 riders on Link when ST 3 is completed, around 10 times ridership today. https://en.wikipedia.org/wiki/Sound Transit Unfortunately urbanists and transit advocates still pursue a policy of disadvantaging cars as the holy grail to increasing transit ridership when the car is the least of transit’s problems.

2. Urbanism. Transit is really designed for urban areas that have the housing, retail and work density to provide the ridership without spending a fortune on first/last mile access. Especially post pandemic when so many transit trips are now discretionary. When an urban area declines — especially safety — transit ridership will decline which reduces general tax revenue and farebox recovery. Two good examples are:

A. https://www.msn.com/en-us/money/realestate/san-francisco-prices-are-sinking-and-property-owners-want-a-tax-cut/ar-AA1ffCVk?ocid=hpmsn&cvid=e56640c8170e4540a6bfada0f4b97e24&ei=15

B. https://www.msn.com/en-us/money/realestate/manhattan-real-estate-is-in-crisis-as-new-construction-flatlines-borough-president-says/ar-AA1f54Sj?ocid=hpmsn&cvid=e36343261b014315a6ca4a4d9b051364&ei=26

(A third good example is downtown Seattle).

Pre-pandemic these two cities were the most vibrant urban areas in the U.S., filled with work commuters, but now they must depend on discretionary travelers and transit riders, and not surprisingly Bart and MTA are experiencing huge declines in ridership and revenue. Transit for decades had become arrogant based on the transit slave: those too poor to own a car or use Uber or afford very high parking rates; and peak work commuters who didn’t want to live near work in an urban area and subsidized the transit system for those who could not afford a car.

3. Transit deficits. Some legacy transit systems like MTA have such staggering maintenance deficits they are not sustainable. Unlike the video, it becomes a death spiral of unsafe and dirty graffiti splattered train cars. The CA legislature gave Bart 2 years and 1/2 the needed revenue to figure it out, and I doubt a congestion tax will be implemented in NY City or found legal, and still it is trying to stop the tide. MTA needs RIDERS. Mass transit needs mass riders. If this region has around 5-10% of trips by transit that tells me transit is getting almost no discretionary trips.

Although ST is a relatively young agency it recently increased future O&M costs by $1.2 billion, and stated it will need billions more for trains and OMF than originally estimated. There is no way ST can pay for real future O&M with a 20% farebox recovery rate when its assumption was 40% with a lowballed future O&M figure.

It does not help that the national debt is now $31 trillion, and with rising interest rates 20% of total federal revenue will go toward interest on the debt in 2033. https://www.cnn.com/2023/02/16/politics/national-debt-tax-interest-what-matters/index.html That is like an infrastructure bill EVERY YEAR toward interest.

4. Funding. This includes farebox recovery which depends on riders and payment of fares which are down around 50% overall, and general tax funding. As the links above show, nearly every major urban center is looking at very large budget deficits due to WFH and declining office building valuations, on top of the staggering transit system maintenance deficits. If ridership on transit is still down 30-50% in 2023 and 2024 does it make sense to use declining general tax revenue for transit?

5. Inflation. Inflation from 2009 to 2021 was almost flat, and many transit agencies assumed near zero inflation and interest rates in their capital and O&M budgets (as did many private developments), and not surprisingly some very bad decisions were made. Today’s interest rates for T-bills of 5.25% are not even high by historical standards, but it is hard to get folks to understand the corrosive effect of compounded inflation and interest rates, and the effect that has on future capital and O&M estimates over 20 or 30 years if originally based on 1% inflation. As some on this blog have pointed out, the catch-22 for the transit driver shortage is if you increase salaries to attract more drivers due to inflation you drive up operating costs which means you must cut service hours somewhere.

6. The reallocation of tax revenue. Two huge tax changes were allowing states and cities to require online sellers to collect and remit sales tax revenue when online sales keep on rising, and WFH which shifted a lot of urban commuter tax revenue to where the suburban worker lives, including sales, income, head tax, B&O, and so on. Today more and more tax revenue is shifting to the suburbs while progressive politics in large urban areas like sanctuary cities or defund the police or tolerance toward crime and drugs are burdening the urban cities with huge social costs. For example, the huge costs for immigrants in cities like NY and the cost of homelessness could fix all their transit systems, except transit has less priority.

7. Future technology. Four years ago, no one ever mentioned WFH. By 2017 the incredible popularity of Uber/Lyft was becoming known, because in an urban area they serve the same discretionary riders who owns a car but are relatively the same price as transit for a short trip, faster, safer, no first/last mile access, and no parking. Plus they count as a HOV.

The next big change will be driverless technology, and no one knows how that will work out. And what no one really knows is the future technology we don’t know, which will likely be more WFH BECAUSE WORKERS DON’T LIKE COMMUTING TO WORK, ESPECIALLY ON TRANSIT. If we can glean anything from WFH and Uber it is folks don’t like to take a lot of trips (peak commuting) in any mode if they don’t have to, hate waiting or sharing their space, want zero first/last mile access, are afraid of crime, and they don’t find the experience on public mass transit today to be satisfactory enough for a discretionary rider.

8. Demographics. Folks are getting older and didn’t have enough kids, and those kids are not keen on working 60 hours/week to afford the elderly who didn’t save enough and are now weak and sick and broke. Social Security. Medicare and Medicaid (assisted care for the poor elderly) will consume more and more of the budgets, and that money will come at the expense of other programs like transit, while servicing the debt will rise to 20%.

I personally think transit was ill served when it was co-opted by “urbanists” and transit became a proxy for class warfare which progressive politicians used to their advantage. The real person who got screwed was the non-discretionary transit rider, and there are very few of those on this blog. A perfect example of this co-opting is the Transit Riders Union, which has almost nothing to do with transit, and whose views on transit are so unsophisticated it is a shame those who must use transit are represented by these folks. Suddenly the favorite villain, the suburban work commuter and car owner, was gone, and so was the money, which didn’t solve anything.

Locally I don’t see a lot of hope for transit, except it will need to do more with less which is why ST 3 is so unfortunate. Ridership is down 50% and that is the new normal. ST 3 simply is not affordable based on new project cost estimates, but the Board will never admit that. Four subareas simply won’t have the future O&M revenue to run Link. Metro suddenly is supposed to be a feeder system in which it gets 47% of the fare but must run the most difficult routes with much more costly drivers, fuel, healthcare, etc. when truncation has realized a fraction of the savings claimed. Seattle will see $250 million operation budget deficits beginning at the end of this year and has $3.5 billion in unfunded bridge repair. The one true urban hub, Seattle, will take decades of hiring police and good politicians to reverse its ingrained perception of too dangerous to visit when Seattle is surrounded by better experiences, from U Village to Bellevue to Northgate Mall in the future, all of which are based on free parking.