This week’s “Daily Journal” guest columnist is Michael Sanera, Research Director and Local Government Analyst for the John Locke Foundation.
The Winston-Salem City Council recently paid a consultant $175,000 for a glossy report recommending that the city spend $52 million to build a 3.6-mile streetcar line. No, the year is not 1900, when most urbanites did not own cars and lived in high-density housing – not by choice, but because of necessity.
The year is 2007, when most people own and want to use their personal cars, and those few who would like to live in a high-density urban environment still demand plenty of parking for their autos. Unfortunately for city taxpayers, some in Winston-Salem government appear to be willing investors in a streetcar line leading not so much across town as backward in time.
Because streetcars, light rail, and commuter rail projects in North Carolina and other states have failed so miserably at their announced tasks, the developers and consultants who are the primary beneficiaries of these projects have shifted their sales pitch. While in the past emphasizing mobility and easing congestion, they now tend to argue that streetcars aren’t so much about transportation; they’re about serving as a catalyst for high-density development.
Charles Hales, vice president of the consulting firm Winston-Salem hired and himself a former city commissioner in Portland, told the city council that streetcars in Portland and Tacoma had spurred significant housing construction downtown. There is no credible research to back up that claim. It is more likely that this high-density housing development was spurred by huge city subsidies, not the streetcar line. Portland’s Pearl District alone received $170 million in government subsidies. And the only way these housing developments work is if they offer plenty of parking, often in city-subsidized parking garages.
Subsidizing luxury downtown housing development is not new to Winston-Salem. The Winston-Salem Journal reported in November that the city is considering offering a $4.3 million subsidy for a luxury downtown high-rise condo project – and it might end up being even more if the city throws in free land. The article noted that an underground parking garage is an essential part of this project.
Should Winston-Salem taxpayers believe the consultant’s claim that the 3.6-mile streetcar line will cost $52 million? Rail-cost overruns are the rule, not the exception. A National Academy of Sciences report found that “the main lessons are that cost overruns of 50 to 100 percent are common for large transportation infrastructure projects.”
An international study of public works projects concludes that the cost estimates are driven by politics. In order to secure political approval, cost estimates are purposely kept unrealistically low. Once projects are approved, the cost overruns start. One transportation expert calls this practice “strategic misrepresentation.” Another expert calls it lying.
Charlotte has first hand experienced “strategic misrepresentation” of its rail cost estimates. In 1998 the voters approved a plan that initially called for an 11-mile, $229 million rail line along the South Corridor. By November 2003 the costs escalated to $386 million, and two years later the cost rose to $427 million. Now the cost for the 9.6-mile (yes, shorter) light rail project is more than $462 million. If Charlotte is any measure, Winston-Salem’s proposed $14.4 million-per-mile streetcar project could jump to $48 million per mile.
Winston-Salem taxpayers should beware. It’s a familiar pattern. City council members promote grandiose “economic development” schemes forcing taxpayers to finance streetcars, convention centers, and luxury downtown condos. Politicians look for ribbon cutting photo-ops that will contribute to their re-election. They hire expensive consultants who they know will produce reports to justify their pet projects.
Government staffers rarely raise a red flag because many see these projects as an opportunity to expand their responsibilities and budgets. This political-insider dynamic was evident when I requested a copy of the consultant’s streetcar report. “We have a limited number of copies which we are distributing to the City Council and involved City Staff,” a Winston-Salem staffer responded. “We have copies available for review in my office and in the WSDOT office…. They are printed on glossy paper and would not duplicate well.” Interesting, copies are easily available to insiders, but the public must travel to city hall to discover what is going on.
Winston-Salem’s mobility needs would be better served by investing scarce resources in improving roads, synchronizing streetlights, and other modern projects. Streetcars are yesterday’s technology for yesterday’s cities. They should be retired, not desired.