Why can’t we get excited about high speed rail?

I can’t think of anyone (myself included) who has come back from a trip to Germany, France or Italy and hasn’t been astounded by the remarkable speed, convenience and affordability of those countries’ rail networks. In particular their high speed train networks, which support train travel between 150 and approx. 220 mph, are true feats of engineering that power intercity commerce and connection. In the last 10 years, China has built more High Speed Rail (HSR) track than the combined length of every other HSR system in the world and carries nearly 1 billion people every year. Japan is home to the Tokaido Shinkansen, the busiest single stretch of HSR in the world (and a topic of a future blog post following my November trip to Tokyo and Kyoto).

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Frecciarossa 1000 high speed train in Italy, which operates at 186 mph

In America however we settle for slow, meandering and expensive train service, even along the North East Corridor (NEC), which connects the cities of the BOSWASH megalopolis, home to over 50 million people. The NEC is, relative to train service in the rest of the country, a success. It turns a profit and carries more Amtrak riders by far than any other route. But, no one is exactly excited about HSR in America. I’m here to tell you why you should be, why other transportation fads aren’t worth the coverage they’re given and provide a little background on historical attitudes towards rail travel in this country.

In the late 19th and early 20th Centuries, railroads like the Atchison, Topeka and Santa Fe crisscrossed the United States. Thousands of miles of track were laid carrying passengers between destinations as distant as Chicago and Los Angeles. Car and air travel began eating into rail passenger numbers in the first half of the 20th Century and by the second half, passenger rail travel of every iteration was thrown into steep decline. Long distance trains could not come close to matching the speed of air travel and following the passage of the Interstate Highway Act in 1956, shorter trips were increasingly taken by private automobile. By 1971, the National Railroad Passenger Corporation, Amtrak, took over most intercity rail travel in the United States as air and car travel continued to grow and flourish.

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Amtrak diesel train pulls into Saratoga Springs, NY station

Over the same period that passenger rail in the United States floundered, Japan, France, Italy and Germany were putting HSR lines into service connecting the city centers of Tokyo to Osaka, Paris to Lyon, Milan to Rome and Frankfurt to Munich. While America doubled down on highways and cars, airplanes and airports, these countries were investing in fast, safe and efficient HSR, in spite of the growth of car and air travel in those countries too. In Italy, where I studied abroad for 5 months in 2012, trips between Bologna and Milan cost as much as a significantly slower and less comfortable bus trip between New York and Boston. The difference in experience is so broad it defies logic why for a trip of a similar distance anyone would settle for a bus or Amtrak regional train (at a similar price point).

A train that makes the trip from New York to Washington DC in 90 minutes with a decent snack car and room to move around that skips the trip to the airport or commuter traffic is something to be excited about, especially because the technology to do so has been on display across the world for half a century. If given the choice of a bus or a train (irrespective of cost), even the Northeast Regional as opposed to the “high speed” Acela, the comfort of the latter wins every time. And yet, we continue settling for traffic jams, decreasing aircraft leg room and on Amtrak, slower-than-a-car speeds on busy routes that hardly justify steep ticket prices.

Many in America are getting excited about new, futuristic transportation options like Elon Musk’s Hyper-Loop, which touts speeds faster than an airplane, or for shorter trips, self-driving cars. Those technologies however face myriad technological and regulatory hurdles and offer false hope of what transportation of tomorrow could look like. This is all not to say that HSR in America can solve every intercity transportation puzzle; trips over 500 miles would likely continue to be beaten by airlines. But, for trips around 300 miles between dense (and relatively dense) urban cores like New York and Boston, San Francisco and Los Angeles or Dallas and Houston, there is no better answer than HSR, which relies on technology almost as old as the Interstate Highway Act.

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Virgin-branded 16 seater hyper loop

To bring true HSR to America will be an incredible task matched only by its incredible cost. Upgrading just the NEC to accommodate average speeds of 125-150 mph will cost hundreds of billions of dollars. On Amtrak’s website, the current list of NEC projects, most just needed to keep the system operating in its current form, is staggering. The price tag of the Gateway Project alone has been estimated at $30 billion, to say nothing of a current political climate that is inhospitable at best.

Indeed, movement on true HSR for the NEC will go absolutely nowhere without serious excitement and support. Though trains may not be sexy or capture the imagination like the Hyperloop, it is the proven, possible, most energy efficient and best way to connect our major cities. Major steps are being taken in California to connect San Francisco to Los Angeles and even in Texas, to connect Dallas to Houston on the Texas Central Railway using Japanese HSR technology. If successful, though in their infancy today, these projects could provide a road map, or rather a train map to other HSR systems across the country.

Real Estate and Transportation Funding

How to pay for large scale infrastructure projects, particularly public transportation in cities like New York, has been a historically vexing proposition. It is both a problem of funding capital expenses, such as expansions and improvements and of operating revenue. The Interborough Rapid Transit Company, which built and operated the first subway in Manhattan, fed real estate speculation by building lines, such as the 7 in Queens, essentially to nowhere.

“When it opened in 1915, it was meant to spur growth in Queens and expand the city eastward. It did just that, and in a really big way. The population of the borough increased from 284,000 in 1910 to 1,079,000 in 1930, 25 years after the launch of the 7 train.”

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7 Line along Queens Boulevard in 1917 (Source: Curbed NY via G.W. Pullis)

This attitude of “if they build it they will come” worked out well for these early subway pioneers. The Queens Boulevard viaduct pictured above surrounded by empty fields was quickly filled in by the dense, midrise apartment buildings that characterize the Sunnyside and Woodside neighborhoods today. Though initial capital construction may have been achievable through cooperation with real estate developers, the IRT lines fell into disrepair by the 1930s. City policy to depress fares decimated the finances of the IRT and of the competing Brooklyn Manhattan Transit Company (BMT), which eventually led to their purchase by the city and consolidation with the Independent System.

Aside from fares that were kept below inflation by city policy, why else did these private companies fail to remain profitable and cede to purchase by the city after only a few decades? Not unlike the NYC Subway today, outside of farebox revenue, our public transportation systems have no guaranteed revenue source and are beholden to state lawmakers (often those that live hundreds of miles away from New York City) for vital capital dollars. It is almost cliché to say that the NYC Subway is the backbone of the city; the great circulatory system of the greatest city in the world. Yet, private employers reap enumerable benefits (and dollars) from the presence of the NYC Subway, a one way relationship that attracts employees and investment to gleaming office towers, while the subway rots in its 100 year old hole.

The decay of the NYC Subway, a victim of its own relative success and the success of New York City in the past 25 years, is not an uncommon story for American transportation systems. Chronic problems stemming from lack of capital investment in equipment improvements with sometimes deadly consequences plague BART in California, MBTA in Massachusetts and most painfully, Metro in Washington DC. However, in other cities, most notably Hong Kong, transportation systems are models of efficiency, capability and financial strength. “How can Hong Kong afford all of this?” asks The Atlantic’s Neil Padukone, “The answer is deceptively simple: “’Value Capture.’”

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Hong Kong Subway station with full height platform screen doors

Hong Kong recognizes the value that its subway operator MTR offers businesses, and in exchange receives a cut of their profits. Hong Kong MTR is also a developer and a landlord, which generates profits just like a normal developer or a landlord; except that money is put towards the good maintenance and technological improvements that make the Hong Kong subway so clean, fast and reliable. By capturing the value that the Hong Kong subway lends to private entities in an incredibly dense metropolis of over 7 million people, it is not subject to the same political whims nor is it as depending on farebox recovery as other systems (although fares in Hong Kong do cover an almost unfathomable 185% of operating expenses compared with just 41% in New York).

The New York City Subway has in the past decade attempted to leverage the value it provides to the real estate sector in two notable ways. To build the 7 Line extension to Hudson Yards, the city floated almost $3 billion of bonds, which were expected to be paid back in full by the massive commercial and residential development on Manhattan’s Far West Side, which was only achievable with such a subway link. However, the taxes to be collected on Hudson Yards developments could fall hundreds of millions of dollars short of paying the New York taxpayers back. Separately, developer SL Green has committed to $200 million of improvements to the Grand Central Subway station, one of the city’s busiest, in exchange for allowance to build a 1,500 foot office tower. Though these improvements are not unnecessary, they do not tip the scale in the grand scheme of transit improvements that the NYC Subway needs.

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Hudson Yards development under construction this year (Source: Curbed NY via NYConstructionPhoto)

What is stopping the New York City Subway from capturing some of the value it lends to private entities? The MTA is already a huge real estate presence in the city, with hundreds of stations, many with stores, newsstands, coffee shops and barber shops. The TURNSTYLE mini-mall, which was built in an underutilized corridor of the 59th Street-Columbus Circle station is a great example of what could be. However, what is stopping it from expanding into more substantive real estate development that could provide a consistent revenue stream? How does the NYC Subway avoid missing out on the benefits of the value it adds to the city and on real estate and investment booms that would not be possible without its existence?

Answering those questions to be the topic of a future blog post, but until then, your comments, ideas and opinions are welcome! Thanks for sticking with me on my first blog post.