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Costly Lessons from the Second Avenue Subway

The incredibly high costs of phase one of the Second Avenue subway highlight three problems that plague transit-infrastructure costs across the country.

Astrid Riecken For The Washington Post via Getty Images)

A crowd entering the 96 St station of the Q line extension of the Second Avenue Subway on opening day of phase one, New York City, January 1, 2017

I celebrated New Year’s Day of 2017 by riding the Q train from 63rd Street and Third Avenue to 96th Street and Second Avenue. I traveled with thousands of other New Yorkers eager to make their maiden trip on the new Second Avenue subway—a project almost a century in the making. At each new station—72nd Street, 86th Street, and 96th Street—I exited the train and gleefully inspected each escalator, elevator, mezzanine, and mosaic. Later that year, The New York Times reported that the final cost of the project had surpassed more than $2 billion per mile, making it the most expensive mile of subway on earth.

As expensive as this nearly two-mile project was, as early as 2016 the Metropolitan Transportation Authority (MTA) announced that phase two, of a proposed four phases, would cost closer to $4 billion per mile. At this rate, it’s too costly to build at more than a mile or two at a time, let alone complete the remaining three phases of the 8.5-mile Second Avenue subway, which is planned to run from 125th Street and Lexington Avenue in East Harlem to Hanover Square in the Financial District.

In our research on transit-infrastructure construction costs at NYU’s Marron Institute of Urban Management, my colleagues Alon Levy, Elif Ensari Sucuoğlu, and I have collected data on more than five hundred urban rail projects in fifty countries and found that New York’s are consistently the most expensive in the world. Outside of New York, new subways and extensions typically cost between $250-$450 million per mile. While every project is unique, it is not immediately clear why digging a subway on the Upper East Side is twenty times more expensive than in Seoul or ten times more expensive than in Paris.

The effect of these runaway costs is dire: first, they inhibit the expansion and development of high-capacity rapid-transit systems at a moment when concerns about climate and unequal access to affordable housing, jobs, education, and services are paramount. The New York City subway, which opened in 1904 but has hardly expanded since 1940, helped to distribute the incredible population density of the Lower East Side more evenly across the city by allowing New Yorkers to move out of tenements downtown and into new housing in neighborhoods like Jackson Heights and Washington Heights, while supporting intense commercial concentration in Midtown and Lower Manhattan.

Second, money funneled into capital expansion—i.e., building new subway lines and extending existing ones, as was the case during phase one of the Second Avenue subway—is often diverted from maintaining and upgrading the existing network, which leads to mechanical failures and unreliable service. If New Yorkers lose faith in the subway’s ability to get them where they need to go, the logic of New York breaks down and it becomes impossible to fill office towers in Midtown without building acres of new parking lots.

On top of the cost concerns, the Covid-19 pandemic has challenged underlying assumptions that transit will continue to operate at its current capacity into the future. As hospitalizations peaked in New York, daily ridership on the subway declined by more than 90 percent and even now is down 70 percent from last year. With many fewer MetroCard swipes at the turnstiles, the federal government provided nearly $4 billion in operating assistance in March to make up for the loss of revenue. Even with this enormous operating grant in hand, the MTA estimates that it needs an additional $4 billion to continue running service through 2020. Even though there is no imminent plan for another round of bailouts from D.C., transit agencies across the country have banded together to lobby for an additional $32 billion in aid due to Covid-19.

If all goes according to plan and New Yorkers continue to come out of isolation as summer turns to fall, will they return to buses and subways? This open question hinges on two issues: first, will there be jobs and schools to return to in the near future? With the unemployment rate still at historic highs, many non-essential workers continuing to work from home, and city schools offering remote learning options, it is likely that millions of New Yorkers will not need to return to mass transit on a daily basis in the coming months. Second, does the subway help spread the coronavirus?

Recent studies out of Paris, Austria, and Tokyo have been unable to trace virus clusters back to crowded public transit. Furthermore, Asian cities like Seoul, Beijing, Shanghai, Taipei, and Hong Kong have experienced ridership rebounds as new cases of coronavirus have diminished, which suggests that transit can be managed safely during this pandemic. Public health officials are encouraged by the data and argue that with short trips, good ventilation, lack of socializing, and compulsory mask usage transmission rates can be kept low.

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As bleak as the future of transit looks, the promise of a Second Avenue subway remains eternal. In Last Subway: The Long Wait for the Next Train in New York City, published earlier this year, just as the pandemic hit New York, political scientist and former manager of planning and policy at the MTA Philip Plotch examines the nearly ninety-year history of proposals to build a Second Avenue subway. In the book’s final pages, Plotch describes the Second Avenue subway as “too popular to be canceled and too expensive to build.” The book shows that historically, the promise of the Second Avenue subway has been used to gain New Yorkers’ support to raise fares, approve bond acts, or accept inconveniences—and explains why we only have one extremely expensive and small portion of the line to show for it.  

One of the biggest lessons of Last Subway is that crises, like the one we are currently experiencing, crystalize focus around the system’s most urgent priorities. In 1929, the same year as the stock market crash that precipitated the Great Depression, the Second Avenue subway was billed as a vital plank in a one-hundred-mile expansion plan, but it eventually lost out to construction on the Sixth and Eighth Avenue lines. In the 1940s and 1950s, elected officials dangled the Second Avenue subway in front of New Yorkers as the shiny new train that justified raising fares for the first time in the system’s history. After the fare increase was approved, those new funds were in fact used to address decades’ worth of deferred maintenance, such as replacing dilapidated train cars, rehabilitating stations, and repairing the power and signal systems.

In the late 1960s and the 1970s, the dream of a Second Avenue subway reemerged as the centerpiece of an ultimately disastrous expansion plan designed to gain approval for a $2.5 billion transportation bond and propel Governor Nelson Rockefeller to the White House. To entice voters across the state to support the bond at the polls, Plotch writes, Rockefeller promised something for everyone: “better subways in the city, commuter rail improvements in the suburbs, new rural highways, a bridge across the Long Island Sound between Westchester County and Long Island, and plenty of construction jobs for unions.”

But even after voters approved the bond act, it wasn’t enough to deliver all of the Governor’s promises. Construction costs for the Second Avenue subway ended up being seven times greater than anticipated. The governor turned to the voters again to approve even more debt to build all of the transportation projects he had promised. But voters refused to support additional multibillion-dollar transportation bonds in 1971 and 1973. Rather than abandoning capital expansion altogether, MTA leadership “started siphoning money away from rehabilitating the existing system,” writes Plotch. “The Transit Authority spent more than three-quarters of its capital funds buying new cars and expanding the system, while annual expenditures to upgrade its existing infrastructure decreased by nearly 40 percent.”

Spencer Platt/Getty Images

MTA workers looking at proposed designs for a completed Second Avenue Subway line, New York City, April 12, 2007

With less money available for routine maintenance, the MTA had to cut corners to continue running service and pursing capital expansion. Plotch explains that historically, subway cars were inspected before leaving a storage yard so that minor issues could be addressed before putting it into service. “In the late 1970s, workers waited until subway cars broke down before fixing them. As a result, trains broke down four times more often in 1980 than in 1968,” writes Plotch.

Without additional resources to complete the Second Avenue subway, not only were plans shelved, but also the discontinuous sections of tunnel already built along the Second Avenue corridor had to be sealed off because their lack of connection to an existing line or a train yard made them unusable. Furthermore, service became more unreliable, which caused a vicious cycle of declining ridership, greater operating losses, and more mechanical failures.

Despite these setbacks in the 1970s, the 1980s gave way to new leadership at the MTA that used the crisis as an opportunity to focus on the fundamentals of operating and maintaining the subway system. As the MTA focused on getting the system to a state of good repair, people and jobs flocked to New York. Since 1980, New York has gained more than 1.2 million jobs and nearly 1.4 million residents. This, in turn, led to record-breaking subway ridership in the 2010s.

As subway ridership grew and the MTA’s fiscal outlook improved, plans for the Second Avenue subway reemerged. In 2001 the MTA announced an eye-popping $16.8 billion cost estimate for the entirety of the 8.5-mile Second Avenue subway. As a consequence of these high costs and with little direct financial support from the state and city, the MTA pursued a funding strategy that combined a voter-approved transportation bond and federal money. In order to ensure federal support, the project was strategically divided into four phases at an estimated cost of $4.5 billion each, making the initial request from the MTA less onerous than what it would have been for the full project. In 2007 the federal government awarded the MTA $1.3 billion for phase one but did not commit to funding additional phases of the project.

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The incredibly high costs of phase one of the Second Avenue subway highlight three problems that plague transit-infrastructure costs across the country. First, although phasing projects reduces voters’ and the federal government’s initial financial commitment, this incremental approach creates downstream costs. In the case of the Second Avenue subway, expensive work that could have been done once for the entire project, such as launching the tunnel boring machine or carrying out environmental studies, must now be replicated for each phase of construction. Second, the procurement process has not galvanized robust competition to bring down costs. Only two companies bid on the contract to dig the tunnel for phase one of the Second Avenue subway, making the final cost of digging 20 percent more than the initial estimate. Third, the MTA’s efforts to comply with regulations, mollify people who are impacted by the project, and appease other governmental agencies leads to decision-making that often accepts additional costs unrelated to the project, such as sewer line replacement, noise mitigation, alignment changes, or street rebuilding even for those unaffected by construction.

The larger problem, as Plotch notes, is one of political will. Elected officials rarely champion transit and stick by its side once conflicts emerge. Phase one of the Second Avenue subway had strong support at the local, state, and federal levels of government, but even those supporters were careful not to push back against public criticism regarding needed inconveniences like street closures. Without strong political support from the outset, the planning process focuses on avoiding controversy at all costs rather than delivering high quality transit.  

But if political leaders laid out a strong case to the public, as they have in New York for face masks and public health, I believe New Yorkers would accept and adapt to the inconveniences of construction, which would speed up construction and reduce costs. In 2016, MTA leadership proposed and approved a plan widely supported by transit riders to shut down the L train for eighteen months in 2019 to carry out vital repairs rather than endure a longer partial shutdown. The MTA ultimately pursued a different strategy that avoided a full closure of the tunnel, but the willingness of transit riders to select greater disruption for a shorter window of construction shouldn’t be forgotten as the city and MTA consider new transportation projects.

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I wasn’t surprised that I had to cram my way into the front car of a northbound Q train or wait for crowds to clear to examine Lou Reed’s portrait at the 86th Street station on New Year’s Day, 2017. Like Halley’s Comet or the Mets winning the World Series, the opening of subway service along Second Avenue felt like a once-in-a-lifetime event worthy of celebration.

Phase two of the Second Avenue subway was working its way through final engineering, regulatory approvals, and a federal funding commitment before the Covid-19 pandemic hit. It is impossible to say when construction of phase two will begin, but rest assured that the Second Avenue subway will one day reemerge as part of a transportation bond act for voters to approve, or part of an ambitious politician’s transportation vision. In 1976, when New York seemed on the brink of collapse, former MTA Chair David Yunich was asked in an interview if he thought the Second Avenue subway would ever be built. His response: “Well, ‘ever’ is a long time.”

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