Transit is more economically efficient than freeway lanes

In Part 6 of David’s Gaithersbungle Series, we looked at a more comprehensive vision to invest in mobility infrastructure in western Montgomery County between Grosvenor and Clarksburg, in addition to more frequent MARC service to Frederick and Washington Counties.

While the combination of the Red Line extension, the light rail Corridor Cities Transitway, a streetcar in a boulevardized MD-355, and improved MARC service would cost approximately as much as widening I-270 to 14 lanes, it has the advantage of being able to be carried out in phases as funding becomes available. It also will generate far more positive economic impact in the long run than just widening the highway.

Spending $3.8 to $4.5 billion on new lanes won’t increase transportation options for additional people. New HOT lanes would only serve motorists who already drive on the highway, in addition to inducing more car traffic that will quickly jam up the new lanes. According to the Action Committee for Transit, the tolls from the new lanes won’t even make up for the cost of collecting the tolls themselves, much less road maintenance. There will be no economic multipliers due to changes in land use like in the Rosslyn-Ballson Corridor and Bethesda.

While spending $4.5 billion on an infrastructure project that won’t provide much economic growth, proportional to its price tag is troubling, the bigger problem is the opportunity cost of locking future funding streams in a project that would have such a weak economic performance. A smarter plan would generate economic multipliers from concentrating jobs, amenities, and residences around existing and new transit. An unwise decision would stunt Montgomery County’s economic growth in the near future.

Montgomery County is facing similar challenges to those Arlington County faced forty years ago. Arlington fought so hard to use the Orange Line as a planning tool because it was running out of undeveloped land within its borders to broaden its tax base. Instead of growing out, it had to grow up in selected places. Today, over 30% of the county’s tax base comes from the Rosslyn-Ballston Corridor, 8% of the county’s land area. Montgomery is much larger, which delayed this process by decades, but it’s now approaching on the horizon. Tysons, too, is hitting a wall in how much economic activity it can support, which is why Fairfax leaders are so eager to build the Silver Line.

Since a highway moves people using cars, development associated with a highway requires acres of car storage. A landowner only builds extremely expensive underground parking if they will collect enough rent to make up for the cost of constructing and maintaing the parking structure. In a purely car-dependent place with very high land values like Tysons Corner and White Flint, the money lost by not being able to collect rent on the land the parking lot occupies is greater over the long term than the cost of redeveloping the property into a walkable urban form. If there is sufficient transit to move people to, from, and within a walkable urban place, it is in a landowner’s financial interest to build buildings on their property with as high as an FAR as they can, to maximize billable square feet. Their constraint, outside of height limits, is how much square feet they think they can keep occupied, given the super-local demand for floor space.

In places like Rosslyn-Ballston, Metro and the county’s planning changed the super-local economic conditions. The parking lots in all the strip malls that used to occupy the Wilson Boulevard corridor became too expensive to keep, when compared to the profits that could be made by putting billable square feet on that land. That is also the reason why both the landowners and Fairfax County are itching to remake Tysons into a string of walkable urban towns. The same applies to the landowners at White Flint.

The highway project would involve enormous economic opportunity costs, not just to the landowners and the environment, but also to the state and local governments. For each square foot of land that is dedicated to parking rather than billable uses, there are fewer tax revenues that would go towards paying for valuable government services. The smaller scale economic activities that exist will face a higher tax burden. A highway and a train have similar maintenance costs, yet the highway generates land uses that guarantee fewer people will be paying for their upkeep. While fewer new social services would need to be built, they would cost more per person since there would be fewer people paying into the system and also higher costs from traveling farther distances to perform the services. For example, Fairfax County has the largest school bus fleet and highest associated fuel costs in the nation because of their low-density car-dependent land uses.

When a society builds infrastructure, it invests in its future. One of the primary functions of infrastructure is to facilitate economic activity. Transportation infrastructure also is a planning tool for how much and what kind of economic activity you want in the future. Similar to taking a loan out to start a new business, the society expects the taxes collected from the economic activity that is generated by use of the infrastructure to pay for its upkeep, along with some “profit” that goes toward other services. However, the Law of Diminishing Returns eventually kicks in for a specific mode of infrastructure. Because of the opportunity costs associated with highways and their resulting car-dependent development put a cap on economic activity induced due to not being able to collect rent on land occupied by parking lots, roads have a much, much lower threshold for when diminishing returns set in.

If our elected officials choose to spend $4.5 billion to widen I-270 rather than on a diversified transit system, Montgomery County, the Washington, D.C. region, and the State of Maryland will be clamoring for a do-over in future decades, just like Fairfax County is now planning to do with Tysons and Arlington already did with Rosslyn-Ballston. However, we will be $4.5 billion poorer, and will be saddled with a huge highway maintenance bill without enough economic development to pay for it. Meanwhile, our successors will ask how we could have been so short-sighted, even after seeing the effect of from widening I-270 in the 1980’s and subsequent induced demand, compared to the model of successful transit-oriented Smart Growth in Bethesda, Rosslyn-Ballson, and its beginnings in Hyattsville.