The plan started simply, as many plans do: The Massachusetts Bay Transportation Authority would extend one of its light rail lines from Cambridge to Boston’s northern suburbs. It was estimated to cost less than $500 million when planning began in earnest in 2005. And it would provide transit access to some of the region’s most densely populated neighborhoods that didn’t already have it.
Then things veered off track. By 2015, state lawmakers temporarily canceled the Green Line Extension (GLX) after costs had ballooned to a staggering $3 billion; progress resumed after an internal audit and management overhaul that reduced the price tag by several hundreds of millions.
These escalating costs were not an anomaly. Mile for mile, studies show the U.S. spends more than all but five other countries in the world on public transit, and more on roads than any other country that discloses spending data.
Now, as the U.S. prepares to spend some $1.3 trillion on public works projects under President Joe Biden’s new infrastructure law, the lessons of how a once-modest transit expansion metastasized into one of the most expensive rail projects in the world are worth recounting. Otherwise, if history is a guide, the U.S. may not get much of a return on its investment.
“If we don’t bring costs under control, this generational investment will yield much less than what a generational investment should yield,” said Eric Goldwyn, an assistant professor at New York University’s Marron Institute of Urban Management and co-investigator of the Transit Costs Project.
Since 2020, Goldwyn and his colleague Alon Levy have been interrogating a question that has plagued journalists, economists, government accountants and even project leaders themselves: Why does building infrastructure cost so much in the U.S. compared to other parts of the world?
Research doesn’t point to a single particular cause. Instead, a confluence of factors have contributed, from lack of expertise and ineffective project management, to processes for citizen input. “It’s death by a thousand paper cuts,” Goldwyn said of a case study of the Green Line Extension he led with Levy and Elif Ensari, an NYU transportation and land use research scholar.
Goldwyn and Levy have focused their research on urban rail projects because they tend to be large and distinct, whereas road projects tend to consist of numerous, smaller efforts. And with transportation generating 30% of U.S. greenhouse gas emissions, mostly from private vehicles, there is an existential urgency to build more public transit.
Yet the extraordinary expense of construction is a significant barrier to that need. The first phase of the Second Avenue Subway in Manhattan, the most expensive subway project in the world, cost $2.5 billion per mile, nearly five times the cost of a similar extension in Paris.
While tunneling underground in New York City is bound to cost more than most projects, comparatively modest undertakings in other U.S. cities are still much more expensive than they ought to be: In 2013, Portland’s 7-mile Milwaukie light rail extension cost more than $200 million per mile, as much as a full subway system would cost in many European cities, according to Levy. And costs tend to rise as projects proceed, beyond the rate of inflation: In Los Angeles, the third phase of the Purple Line extension is set to cost twice as much as the first, based on current projections.
The anatomy of a cost overrun
In their case study of the GLX, Goldwyn, Levy and Ensari found that there was no single cost center that spiked the project’s price tag. Instead, spending swelled across three problem areas: over-design, inefficient project management and misaligned politics.
The first was the most visible. In the original 2005 plan, the stations were envisioned as open-air platforms with wheelchair ramps, estimated at $535,000 each. But that cost increased nearly a hundred-fold over the course of design, the NYU team found, as bespoke features such as a bigger station footprint, redundant elevators, fancy landscaping and additional street grading were tacked on. More wiring and communications systems were also needed to network the larger station. In interviews with the researchers, planners and officials described the challenge of saying no to requests for add-ons, both from the public and from agency brass. “We could have been stronger at holding the line on some stuff,” said one quoted in the report.
MBTA’s dearth of staff capacity and project management expertise was a thornier issue. Despite GLX being Boston’s costliest rail project in history, only a handful of dedicated staff members were working on managing it at any given time, the researchers found. Stretched thin and lacking institutional knowledge about the nuances of rail construction in metropolitan Boston, the agency struggled to maintain budget oversight with contractors and to resolve issues and requests in a timely manner. Meanwhile, the number of consultants ballooned, with plans calling for more than twice the number of supervisors normally required for construction crews.
Finally, the politics of public input added time and expense to the project, particularly in the form of a bike-pedestrian path that was included late in GLX plans, thanks to an active base of supporters who advocated for it at meetings. Whether or not the addition was a good idea, its arrival after the project’s original scope had been locked in came with more costs: It required reopening engineering plans to add extra ramps and support walls, and excavating a wider trench, the researchers found.
The difference in Istanbul
Contrast all of these issues with a city like Istanbul, where the M5, an 18-mile subway line, was built in seven years and for just $630 million. While labor costs and environmental regulations between the U.S. and Turkey certainly differ, those alone don’t account for the delta in price, said Ensari.
The more salient explanations come down to expertise and politics. Whereas Boston might only build one new transit line every few decades, Istanbul builds dozens. That fosters greater expertise within public agencies as well as competition among contractors for construction bids, which drives prices down. And unlike in the U.S., there’s greater acceptance in Istanbul of the irritations that come with the building of a major new public amenity, and fewer opportunities for residents to butt in.
“People are desperate for transit in Istanbul,” Ensari said. “Real estate prices increase when these lines are being built. So people are willing to endure the disruptions.”
Costs escalate with highway projects for similar reasons, minus the lack of know-how. Leah Brooks, an economist and public policy professor at George Washington University, has studied the rapid escalation in U.S. road-building costs since the 1960s and found America’s sky-high per-mile spending to be partly the result of its wealth as a country — the richer it became, the fancier highways it built (think noise walls and stylized overpass architecture).
More cost, fewer projects
The other major factor is what Brooks terms the “rise of the citizen voice.” The 1970s brought a wave of federal and state legislation (the National Environmental Policy Act being the most prominent) that gave residents and activists a greater say in public decision-making. While these new laws surely brought some benefits — particularly to project neighbors — they also added time and expense. Given that the U.S. ranks 13th in transportation infrastructure quality globally, those added costs don’t seem to have yielded better roads. “I find it hard to believe we’re building better highways than countries in western Europe,” Brooks said — or, she added, that the U.S. is taking better care of the environment.
When projects are exorbitantly costly, it inhibits future construction — it means three bridges will be built instead of ten, or five miles of subway instead of fifteen, experts say. Solutions are not obvious: Dialing back citizens’ rights to participate in public projects would seem politically unfeasible. Brooks agreed with the NYU team that one place to start would be with greater transparency by transportation agencies around costs and budgets, and providing clearer information to the public about the trade-offs that come with adding expensive amenities or limiting construction hours. “If we can’t discuss things in this very straightforward fashion, we are lost regarding public participation and understanding the scale of megaprojects,” Goldwyn said.
Romic Aevaz, a policy analyst at the Eno Center for Transportation who led another recent study on transit construction costs, suggested that federal officials offer more guidance to transit agencies that apply for funding — for example, by assessing whether more staff is required to handle the project. Agencies could also invest in better training on how to handle contracts, project delivery timelines and regulatory reviews. Hearing less-experienced transit officials talk about federal environmental protocols, Aevaz said, “was like a murder mystery where everyone is talking about these really complex dynamics.” The infrastructure law includes some provisions to streamline permitting processes, but it remains to be seen how they’ll affect timelines and costs.
In Boston, the MBTA did manage to scale back the cost of the GLX after it was paused and retooled in 2015. John Dalton, a program manager who was brought in to oversee the relaunched GLX project, says that in the wake of the original cost escalation, “we’ve been pretty militant about budgetary management.” To streamline spending, the stations are now closer to the basic design that was originally proposed, and the number of internal staff devoted to the project has grown more than tenfold. The complete Green Line is set to officially open in 2022 — 17 years after planning began — at an estimated price tag of $2.3 billion, including $700 million in sunk costs.
The irony of America’s exorbitant infrastructure spending is that, as a portion of GDP, the country trails behind its peers. So while the U.S. spends more per mile on infrastructure, it’s not building that much — in part because of the extraordinary price. The country is likely to get a lot less infrastructure than $1.3 trillion would suggest, Goldwyn said. Asked whether the Biden administration is accounting for excess costs as it distributes funding, Kerry Arndt, a press secretary for the U.S. Department of Transportation, said that the agency was looking at the problem. “USDOT is establishing a cross-functional working group to find best practices for megaproject delivery domestically and internationally,” which it will share with stakeholders, she said.
Yet more buck for less bang feeds into a vicious cycle: Fewer projects mean less expertise among agencies and — at least when it comes to public transit — less public familiarity with the kinds of projects the country needs, raising the chances that neighbors will protest.
“Maybe my grandparents got it, but I have not lived with seeing the benefits of a whole new subway line arriving in my city,” said Goldwyn. “If people understood what those were, perhaps they’d have less reason to complain.”
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