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New Starts Faster!

02/06/2012

From Dave Van Hattum, Policy and Advocacy Program Manager

President Obama, in his State of the Union address (1/31/12), put forward two initiatives that would have huge impacts on transit projects. Firstly, the President proposed using future savings in the defense budget to rebuild our nation’s physical infrastructure; and secondly, he directed all federal agencies to reduce bureaucracy and waste, including the New Starts program that funds major transitways, including light rail transit, bus rapid transit, and commuter rail. TLC's first look at the new rules yields the following summary.

The proposed changes to the New Starts program are designed to speed up the start-to-finish process. This is to be accomplished by granting pre-qualification warrants (based on ridership and cost estimates based on census data and post-data from comparable corridors), reducing the complexity of cost-effectiveness calculations, and eliminating repetitive analyses. This is smart policy that could help speed up the build out of our metro transitway system (pdf).

New Starts projects are competitively funded based on cost-effectiveness, environmental benefits and economic development benefits. The proposed rules place greater emphasis on social equity and economic development impacts. Social equity receives higher priority in three ways. 

  1. The benefit side of the cost-effectiveness calculation will be based on total rides rather than total travel time savings. This change reduces the emphasis on attracting new riders, shifting the focus to those locations where there are the largest number of riders. This will tend to advantage core city and first ring suburbs, where housing and employment density is greater. There also are more low income residents and people of color in these areas (though the demographic makeup of the core and first ring suburbs is changing). The environmental rating will continue to include a calculation of car travel (VMT) reduction, which will still confer benefits to longer transit trips.
  2. Transit dependent riders are counted double. Low-income individuals and people of color are far more likely to be transit dependent.
  3. Higher scores will go to transitways where “policies maintaining or increasing affordable housing are in place.”

The proposed rules also tweak the assessment of economic development resulting from a proposed new rail line. The local economic development impacts of a new LRT line are typically significant. The Central Corridor Investment Framework, for example, projects $6 billion in mostly private investment along the corridor over the next 20 to 30 years. Accurately predicting these outcomes, however, is quite challenging, as many factors (global and local economy, road investment, etc.) besides the increased transit access are in play. 

The proposed rules ultimately make a relatively small change in the assessment of economic development impacts. Applicants, per the new rules, would have the option to make the case “beyond current land use plans” for broader economic impacts that would improve the overall rating for their project. FTA suggests that applicants develop scenario-based estimates of how greater density decreases car travel. The agency also commits to a broader inclusion of the economic development impacts of higher housing and employment density, “once better measures for agglomeration effects are developed.”

It seems fair to conclude that regions able to show how a proposed transitway will result in more dense or compact land use will be better positioned to receive federal funding via the New Starts program. Of course, there is a chicken or egg quality to the timing of building new rail lines and changing local land use plans and zoning. That’s why TLC will continue to advocate both for the investment necessary to speed up the build out of regional transitways and for a new regional plan (see Met Council update of Regional Development Framework) that provides incentives for locating more housing and employment near transitways (LRT, BRT, and commuter rail) and high frequency bus service.

US DOT press release about streamlining New Starts

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