When it comes to their subway, New Yorkers tend to not sweat the small stuff. That’s why the fundamental problem with the MTA isn’t the rats or the summer stench.
The problem is that, more and more, the country’s largest transit agency seems to be in a sort of malaise, bending like a reed in the wind as it finds itself unable to finish current projects, and incapable of even just conceiving of new ones.
The MTA cannot plan for the future.
Not when it is still building the Second Avenue subway—eighty-five years after it was first proposed.
Not when the East Side Access—the fabled tunnel that will bring the Long Island Rail Road into Grand Central Terminal and shorten the commute for hundreds of thousands of riders—is expected to cost well over $10 billion (twice the original estimate).
Not when the problem holding back the long-awaited extension of the 7 train is—wait for it—an inclined elevator made in Italy.
It’s no surprise, then, that such desperate times have prompted calls for even more desperate measures. Some of them are not so fully thought out, such as Rohit Aggarwala’s cringeworthy idea of a $4.25 subway fare (which this blog debunked last week).
Still, details of his plan notwithstanding, the spirit of Aggarwala’s proposal is right: whatever the MTA does in the coming years to make itself a more effective organization, it needs to be far more aggressive about how it does it.
In this three-part blog series, I will examine three ways the MTA can make that happen, while keeping the public welfare paramount.
Part One: The Developer MTA
Every day, thousands of commuters and tourists alike pass through Grand Central Terminal. While they wait for their trains, many stop in the station’s vast underground food court to grab a burger from Shake Shack, a slice of pizza from Two Boots, or a scoop of gelato from Ciao Bella. Others might even buy an iPad from the Apple Store that overlooks the main concourse.
What they probably don’t know is that a portion of the money they spend is helping subsidize the trains that run out of the station, through the rent that the MTA collects from Grand Central’s tenants.
It’s a relatively small drop in the bucket that is the MTA budget: $22 million in net income last year. But it’s nonetheless an important example of “value capture,” where a transit agency reaps some of the ancillary value created by the presence of its transit service.
With Grand Central, the MTA is picking the low-hanging fruit—it’s easy to sell space in the prestigious station, and the MTA didn’t play a role in building the terminal.
But what if the MTA actually did develop land around its stations, particularly those in the outer boroughs that are seldom used?
Taking Grand Central to the Boroughs
The idea of planning for value capture is not as crazy as it may seem. In fact, New York actually pioneered the concept. Many of the original attractions at Coney Island were built by railroad owners to convince New Yorkers to ride their trains out to the beach. Transit systems in Hong Kong and Tokyo have also used this model for years, and Atlanta’s subway has plans to do the same.
Without a doubt, the MTA would have a harder time than those agencies at playing the role of developer. For starters, the existing population density even around poorly used subway stations means that the authority would probably have to purchase land that others currently own, a strategy that would ruffle far more feathers than simply redeveloping station parking lots (as in Atlanta). Moreover, even the revenue bump from a beautifully planned, walkable, transit-oriented shopping development in, say, the Rockaways would only go a little way toward closing the agency’s massive budget gap.
Everyone Is at Times Square
Still, MTA-owned developments in the outer boroughs would help fix a major problem: asymmetric ridership. Despite the common public perception of crowded subway cars, much of the MTA system is actually underused. In fact, half of the system’s ridership come from only 14 percent of its stations.
Of those riders, 80 percent are in Manhattan, meaning that, while the MTA loses money as a whole on its subway lines, it loses even more money than average serving the vast outer reaches of Brooklyn and Queens. The system’s busiest station—the Times Square–42 Street station—handles more commuters every day than the eighty-one least-used stations combined.
As the chart below demonstrates, this discrepancy is greater than on many other subway systems, and is a significant part of the reason why the MTA loses more money per-ride than its counterparts in other cities.
But perhaps most importantly, an MTA-as-developer model would instill confidence in New Yorkers that some of the value derived from New York’s incredible taxpayer-funded transit access is actually being funneled back toward the public good. In a time when New York’s real estate market is as bullish as ever, the value “captured” by such a policy would be more profound than numbers can measure.