September 9, 2013
For the last couple of years, Austin City leaders have been talking up the prospect of an urban rail project. We have been told that the City can expect billions in benefits from the economic impact. And of course it will relieve the terrible traffic congestion that Austinites have grown to hate. The $550 million first phase of the project will carry a local cost of $275 million, most likely from a bond election to be held in November of next year.
Rather than use this space to try to explain the urban rail project, or to take sides for or against it, I prefer to just present some information for everyone to consider. The debate just got a whole lot more interesting, thanks to a provocative new article in the Austin Business Journal. by guest contributor, Jim Skaggs. A subscription is required to read the whole story, but the title and the opening lines reveal the tone.
Urban rail failed in Portland and Austin faces same fate
Jim Skaggs, Guest Contributer
The recently reported Austin study indicating huge tax revenue increases due to the economic impact of rail transit is a total fabrication without foundation.
Portland was an early implementer of modern urban rail in the l980s. Leaders there promoted and projected major tax revenue benefits from economic development near train stations. This did not happen.
For many years in many cities urban rail’s failure to improve congestion and air quality have been generally accepted, and many supporters have again turned to the more subjective economic development carrot to lead rail promotion.
The website www.portlandfacts.com/transit/lightraildevelopment.htm reveals some of the reality regarding …(End)
Here is an excerpt from a different ABJ article, published just a week earlier.
Aug 30, 2013, 12:38pm CDT
Urban rail’s economic impact potential: $31 billion
Robert Grattan, Staff Writer
Austin Business Journal
A fully built urban rail system running through Austin could bring as much as $31 billion in economic impact to the city by 2030, according to a new economic analysis.
The study is one of the first steps toward understanding the full impact that the $1.3 billion mass-transit system would have on the city. Until now, much of the conversation has focused on cost estimates and the size of the financial undertaking, but there hasn’t been much discussion about the return on investment.
The findings are also the first step toward identifying revenue the project could generate, which could be used to leverage private investors to help with urban rail.
Estimates put the amount of increased tax revenue at around $109 million per year, once the whole urban rail system has been built in 2030. By 2020, the city would see around $54 million per year. Most of that revenue would come from the increased value of nearby property, which would be enhanced by additional transportation options.
Those figures are predicted to mesh with and add to the Imagine Austin plans for increased density and the additional 45,000 people and 58,000 new jobs that are expected to be created by 2030.
In addition, an urban rail system – functioning as a segment of a larger mass transit system – is projected to save 25,000 daily trips from 12,500 commuters. Combined with city-wide bike infrastructure, the study projects that Austinites could save $296 million in commuting costs. That money is expected to be invested in the local economy and to create 2,300 new jobs.
The study was done through partnership with a number of transit agencies, including the city of Austin and research partner the University of Texas at Austin – which provided a supercomputer to crunch numbers. (End of excerpt).
There seems little doubt as to which of these assessments is correct. After all, the City’s partner in this study, the University of Texas, “provided a supercomputer” to crunch the numbers! But since I promised an objective treatment, let’s ignore that. I will certainly buy the notion that property values along the rail route will increase significantly. So, will your property taxes if you live near the rail footprint.
Perhaps even that remains an assumption at this point. For the moment I am intrigued by Portland’s urban rail experience. For them, urban rail is no longer a visionary concept. It got built. There is plenty of Portland potpourri to satisfy anyone’s curiosity.
But first, out of fairness, here’s a link to the official “Austin Urban Rail” website, followed by a snippet from the site:
From “Austin Urban Rail” Website
“Because our population continues to grow at a rapid pace and the transportation network serving our business and cultural core cannot meet existing demand or future growth. Transportation impacts everyone, and if people can’t move around our city, we all stand to lose what makes it great. In the same space as six Jeeps, an urban railcar would hold up to 165 people.” (End of snippet)
Here are two links that came up when I did a Google search for “Urban Rail Failed in Portland,” taken directly from the title of the recent news article:
From the Cato Institute, “Debunking Portland: The City That Doesn’t Work” www.cato.org/publications/policy-analysis/debunking-portland-city-doesnt-work
From Oregon Live, Powered by the Oregonian, “The Lost Vision for East Portland’s Gateway”