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Portland's Red Line (to the airport) was funded in large part by that sort of arrangement--Bechtel foot quite a bit of the bill, and got to build CascadeStation right along the line. The line itself is owned by TriMet, and well-integrated into the MAX system.

One downside of landowners/developers building transit lines to drive real estate speculation is that in the past, they'd often abandon the lines when they no longer cared about the property values--having sold everything. Obviously, such an arrangement would not be tolerable today.


My brief first-hand observation of Asia (i.e., a 2-week trip to China in 2001) gave me the impression that Asian cities are rushing head-first into a program of car-centric urban design with an enthusiasm that hasn't been seen in North America since the mid-20th century--despite the still low rates of car-ownership there. I saw cities where whole swaths of downtown were torn down for Vegas Strip style towers, where there was nowhere to walk except the street because the frontage was all parking lots. Walking was perilous everywhere, and transit was somewhat frustrating, unless you were a pampered tourist like me whose destinations were near the few existing subways. Yet... later years have seen a truly unprecedented expenditure of money on subways and other transit in nearly every Asian city. It truly boggles the mind how much money they're spending there on infrastructure. When I visited Shanghai and Beijing, each city had around 2 or 3 subway lines. Now there are 10 or more each--plus a vastly expanded network of expressways. I have no idea where this is all leading, and while I'm heartened that despite some, er, lingering problems, China and its people continue to prosper, I also fear that they're making some of the same mistakes the US made half a century ago in urban design. Running subways everywhere is great, but the scale and programming of nearly all the recent built environment is decidedly inhuman.

Alon Levy

Rhywun: Beijing is implementing car-friendly policies, such as freeway construction. Shanghai is implementing anti-car policies, such as license plate auctioning. Shanghai's rationale is reducing congestion and pollution; Beijing's is that the politically connected upper class likes driving.

Jarrett: I question how many of the cities Barter talks about have significant park-and-ride facilities in the same sense that American commuter railroads do. He brings up Singapore's park-and-ride scheme, but in reality, parking in Singapore doesn't look like in the US; land values in Singapore are so high that it's contained in compact carpark buildings, which can coexist with a pedestrian-friendly streetscape. In fact the program was completely invisible to me, even though one of the park-and-rides is right next to one of the stations I used regularly. The huge bus depot next to the station was much more visible.

Jarrett at HumanTransit.org

Alon.  I don't have a problem with structured Park-and-Ride, as long as it's properly priced to capture not just the cost of construction but the opportunity cost of the land.  If it's free, then it's clearly open to being called just another subsidy of driving, no?


Beijing has five freeways encircling the city. Five. A freeway map of the city looks like a dartboard. :)

Aaron M. Renn

Hasn't Hong Kong financed some of its transit from real estate development?

Part of the challenge is that back in the day there were large greenfields that were already owned by the developer, who needed the transit lines to make the land developable. Today, the land adjacent to urban lines is already owned by other people, and the automobile means it can already be developed. Some selected development rights on city-owned land near stations might be good, but I'm not convinced the whole scheme could be financed this way. A land value tax would be a better approach.


Rhywun: the enthusiasm for cars is not despite the low rate of car ownership but because of it. Because the more cars other people have, the less useful your own car becomes, as they compete for the same limited highway and parking space. And that's what makes exclusively car-based transportation systems fundamentally unsustainable in urban areas.

Alon Levy

Jarrett, the Singapore park-and-rides aren't free. I don't know if they're priced according to the value of the land, but knowing how things generally work in Singapore, they probably are.

Aaron, Hong Kong has done the opposite of what American developers did back in the day. The MTR's core business is transportation, and is profitable on its own. The real estate business provides extra profits, and makes the stations more attractive as destinations. It's in line with the stated aims of American TOD projects, rather than with the practices of a hundred years ago, when many cities' urban rail lines were loss leaders for real estate.


To Mr. Leinberger: Not. Gonna. Happen.

The high concept of developers building transit lines ignores the plot line that transit itself was a component of either a land speculation or a public utility play.

Even in the private era, many transit systems couldn't recover their costs through the farebox and needed real estate or electricity to cover the losses.

This was acceptable back then because these private entities helped to tame the urban hinterlands and had access to capital because the upside investment was lucrative.

It's virtually impossible to pull off in North America. Just take the actions of the investment world. Investors want >100% farebox recovery or the transit component is shut down. They won't tolerate continuous losses on the books.

Second, if there is a spread between the earnings of the transit system and the earnings from real estate, the company will be broken apart into separate concerns.

Alon Levy

The MTR was kind of broken apart, too. When it was privatized, it lost a lot of its real estate income, which seriously cut into profits. However, the privatized company remains profitable. It doesn't actually need to run the real estate - it just needs it to be near the stations.

Tom West

The only recent developer-funded lines I can think of are all airport links with premium fares. However, I think the authorities could do well to learn from the Heathrow Express experience in London. Although the headline service is an expensive non-stop trip form London (Paddington) to Heathrow Airport, there is also a local stopping servcie branded 'Heathrow Connect'. This charges more reasonable fares, except for journeys to the airport.

Based on this, I think that the Sydney shoudl ahve instsed that regular transit fares apply on the Airport line, except for trips to the airport itself.

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