Why Is Infrastructure So Expensive to Build in New York? | Hacker News Reader

Why Is Infrastructure So Expensive to Build in New York?

nymag.com

76 pointstptacek59 comments

CTRL+F "debt" - nothing. CTRL+F "interest" - nothing.

Lets take a quick look at some numbers.

[1] "The result is a massive run-up in debt. Though the MTA spent only $848 million on debt service in 2004, according to RPA, it is projected to spend more than three times as much, $2.67 billion, in 2014. Debt alone will eat up 17.6 percent of the MTA’s operating budget by 2014; worse, RPA says that an alternative calculation shows the 2014 debt load at 23.1 percent of the operating budget."

[3] "By way of comparison, Syria has $30.1 billion in debt. Cuba has $28.9 billion. Twenty-eight other countries, from Ecuador to Jordan, Jamaica to Kenya, have less debt than the M.T.A."

[1] https://nyc.streetsblog.org/2011/09/07/where-does-your-fare-... [2] https://www.politico.com/states/new-york/albany/story/2015/0...

This article is about why it is so expensive to build new infrastructure in NY. Debt service comes out of the operating budget.

If the question at hand was why the MTA provides such poor ongoing service with such a high budget, debt service would be part (but only part) of the answer. However, in terms why construction costs are so horrifically expensive as compared to literally anywhere else in the world, debt service plays no role in answering that question.

Debt is part of the financing of a project, not a 'challenge in building them'.

Comparing the debt of one group to an arbitrary other doesn't help so much, because what matters are interest rates, revenue to pay principal and interest rates, stability of tat revenue, other covenants, penalties, and of course cost of capital.

FYI Jordan, Jamaica and Kenya would carry a lot more debt if they possible could.

If some agency in NYC has a huge amount of debt from credible lenders it might be a 'good sign' they they are actually worthy of it.

FYI, I think the article does a good job at it:

"“People will say to me, ‘Why are MTA construction costs so high?’ And the answer is ‘Everything,’ ” says Julia Vitullo-Martin, a senior fellow at the RPA and co-author of its 2018 report comparing New York’s construction costs to those in peer cities. “Every factor you look at is flawed the way the MTA does business, from the first step to the end.”

I love this level of candor in people who are willing to speak publicly.

I can only agree with her answer.

When I compare (software) projects amongst different locations I worked at, things vary so so much. Making those comparison somewhat misleading at best.

I don’t see how comparing the costs between systems that have so different requirements, labor markets, legacy infrastructure, regulamentation agencies, can help much but I am not an expert on this subject by far.

>“People will say to me, ‘Why are MTA construction costs so high?’ And the answer is ‘Everything,’ ” says Julia Vitullo-Martin, a senior fellow at the RPA and co-author of its 2018 report comparing New York’s construction costs to those in peer cities. “Every factor you look at is flawed the way the MTA does business, from the first step to the end.”

>When you’re doing everything wrong, the best way to fix the problem isn’t usually to go through the list of things you’re doing wrong and fix them one by one. It’s best to step back and ask why you’re so bad at everything, whether a systemic problem is causing you to make so many separate mistakes. And in the case of the MTA, the root cause of its capital-construction failures is usually diagnosed as unaccountability: Nobody knows who’s in charge, so nobody has to be terrified of taking the blame for obscene costs and endless delays.

This is very similar to the explanation for the American healthcare system's turmoil given by David Goldhill (founder of https://sesamecare.com/) in his book Catastrophic Care. Even for those that disagree with his recommendations, he delivers a great analysis of the perverse incentives that gave rise to the broken healthcare system.

Why American Costs Are So High (Work-in-Progress)

1. Engineering part 1: station construction methods

2. Engineering part 2: mezzanines

3. Management part 1: procurement

4. Management part 2: conflict resolution

5. Management part 3: project management

6. Management part 4: agency turf battles

7. Institutions part 1: political lading with irrelevant priorities

8. Institutions part 2: political incentives

9. Institutions part 3: global incuriosity

> Canada is not much better than the US. Americans’ world is flat, with its corners in Boston, Seattle, San Diego, and Miami. Canadians’ world includes the United States and Canada, making it flat with the northern ends of the quadrilateral stretched a few hundred kilometers to the north. A study of a long-overdue extension of Vancouver’s Millennium Line to UBC has four case studies for best practices, all from within North America. This is despite the fact that in the developed world the system most similar to Vancouver’s SkyTrain in technology and age is the Copenhagen Metro, whose construction costs are one half as high as those of Vancouver despite cost and schedule overruns.

https://pedestrianobservations.com/2019/03/03/why-american-c...

Perhaps there is an inherent problem with Anglo-Saxon, legal and contracting culture, which causes the management structure of projects to be over complicated and wasteful?

After all, London is still a lot more expensive to build in that other European cities. And it's not a public private thing, it's a legal and management culture thing. Heathrow Terminal 5 (a private sector project) took 20 years and cost twice as much for one terminal building and a short metro extension versus the new terminal, runway and metro at Madrid Barajas (a public project) which has twice the capacity.

Surely, but why don't those problems exist elsewhere?

Building public infrastructure just isn't a priority in the US. We can analyze the differences all we want but at the end of the day it just isn't that important. US society and politics isn't focused on that kind of thing and it is becoming less of a priority in Europe as well.

Addition: I don't know why this would be objectionable. The US has built a lot of infrastructure. Europe has built a lot of infrastructure. So has China, the Middle East, Korea, Japan and whoever else. They all have different system and ways of doing things. And they all fail and fall behind when it is no longer a priority. What the problem then is, is interesting, but not really that relevant. Because the problem is you can't fix the problem. Say you would need to restructure the MTA, who is going to do that? No one because there isn't much to gain, and a lot to lose. It's the same with housing markets. There are dozens of ways you could tackle housing, but it just isn't a priority. While protecting property values and not alienating voters is. It is a social rather than a technical problem.

There’s a whole host of reasons. When the US does something, it goes all out. For example, under NEPA and equivalent state laws, every US infrastructure project spends years embroiled in study and subsequent litigation over environmental impacts. In Spain, they don’t even do environmental review for rail projects. In France, once the legislature decides to build a project, it passes a law that preempts every other law (to keep people from using those laws to sue to stop the project). If you posited the theory that Nixon signed NEPA to secretly destroy the ability of liberals to build transit, that wouldn’t be a crazy theory.

Then there is public unions. Public unions in the US are unusually strong, I think in part because they’re the last bastion of unionism in the US. When the folks who built Paris’s new line went to go check out the Second Avenue subway construction, they remarked that our TBMs are staffed by twice as many people making twice as much money.

Then there is the political buy-in. Transit seems really important to folks on HN, who mostly live in the city. But 5% of Americans take public transit to work (and it’s about 2% for trains). In Paris, 70% of commuters take public transit, and in France overall it’s 30%. In DC, it’s under 40% (mostly bus). Many large cities, like LA, Houston, and Dallas are 5-10%. There is no political will to fix problems in a system that the vast majority of people don’t use. Not only that, but they’ll never be able to use transit.

That brings us to the fourth reason, which is density. The weighted population density of Paris (the population density weighted by where people actually live) is five times as high as for DC (the US city with the second or third highest transit ridership).

"But 5% of Americans take public transit to work"

I used to live a 10 minute drive from work, and I never took the bus because it would take close to an hour.

Now I live a 10 minute nonstop bus drive from work, but the fare is the same, which means it's several times the cost of gas for my vehicle even at 16 mpg. And it still takes about 15-30 minutes by bus, net, because of the time waiting for it.

I can walk home after work before the bus even arrives, but the only way to get there is across 3 highways with no crosswalks and people going 50+ mph.

I'm not happy with any of my choices, but driving my gas guzzler kind of seems rational after I've tried all the options and weighed them.

For the moment, it may make sense to not use my car because if I don't commute in it, I'm less likely to go somewhere after work, but that's more of a psychological trick than a logical consequence.

...and while I'm not in a mega-city, I'm in the middle of a medium to smallish city that's part of an area with a million people or so.

That’s what I ask myself. I‘D guess all those challenges exist elsewhere too but at different scales?

The administrative state in the US isn’t as trusted, powerful or competent as in other developed countries. This is partly because of the structure of government in the US, all the checks and balances making getting anything done harder, the US tendency for regulation by judicial settlement instead of legislation and the much more democratic decision making process. There are far more political appointees in the US system, and elected posts, than in other developed countries. The civil service just isn’t as powerful. All of these are self reinforcing. The US is just very different from other places.

The ignorance of international best practices is just imperial disease, a special case of not invented here. I honestly struggle to think of a technology or industry the US has lost leadership in and then recovered but it’s not like Germany is doing well in electrical vehicles. Sometimes your time is past, like the US and semiconductors.

The political and administrative sclerosis is unlikely to get better fast without the kind of pressing need that results in a new constitutional settlement. It could get better slowly I suppose. The inward looking self regard will get better when the US sees itself as an excellent country rather than assuming they’re the best at everything.

the US tendency for regulation by judicial settlement instead of legislation and the much more democratic decision making process

I'd wager that the democratic decision process in Switzerland is far more stringent and the public is far more involved.

On every level, be it a local tram line, a canton wide, or intra-cantonal rail system, or projects of national importance and great expense, like [1], the public is virtually always consulted via referendum and has to green light the project.

This is also a huge strength of the system. Because once a project is approved, the funds are secured and politicians can't pull shenanigans to pull, or divert funding.

I'd wager that a high democratic involvment into major (and expensive) projects is rather an asset, than a liability.

[1] https://en.wikipedia.org/wiki/Gotthard_Base_Tunnel

We have the chance to participate in the US too, now to what extend it is effective, I don’t know.

For example, even in big cities like NYC, there are public meetings about the projects, etc. Yet, I still believe that past certain point, people just stop either caring or not having the energy to follow thru the whole process.

Just a side note, it might sound pedantic but after living in Scandinavia, one thing I noticed that the expectation of “participation” during the decision making is not same even here. I bring this up because somewhat it contributes for more or less polarization and inefficient processes, I’d say.

I think Switzerland with its long history of democratic participation has developed a pretty mature population that generally makes (relatively) informed decisions. If you introduced this in the US I bet people would vote for abolishing taxes while increasing government spending on their pet issues. It would probably take a while until people have learned that this doesn't work.

For the competency and powerful the public administration, I think part of that it is really hard to compete with the private sector in the US, unless for prestige or political capital.

As trust goes, I am not sure if it is any different than most of countries in Europe except maybe Scandinavia?

For international best practices, at least in my subsection within IT, the US is the main driver for it. Most of people I talk to in terms of regulation see the US as its own jurisdiction but it is not like things there don’t make sense from a regulatory stand point, but they are just different?

Anyways, those are just simple observations.

I think the answer is that we just have all sorts of different systems of governance, optimized for different things.

UK underground is ancient, it's part of the fabric of culture, the UK is the birthplace of real rail, maybe they just have a centralized org to pull that off. Maybe they have a historical entente with unions. Maybe for whatever reasons there's less graft. Maybe it's just not politicized. Maybe it's just a lot easier for 'right of way' - or there are ample underground facilities. Maybe they just make things smaller (ie stations) so it's easier.

I find these situations are very enlightening, because it doesn't boil down to a scrum vs. waterfall or static vs. reactive kind of thing ... it's just 'really complicated'.

It's also very frustrating obviously and makes one very cynical of all of the dopes in charge.

I would love to vote for a super competent non-populist city administrator who said 'these are the operational reforms I am going to make', i.e. a leader who's not actually a politician.

I sort of believe that past a certain scale, a leader will have to be political to both get things done and maintain decision power. Even, if everyone agrees in one goal, which is impossible, the execution is rarely an easy division of labour.

The platforms on Vancouver’s Expo and Millenium lines are 80m long. The Copenhagen Metro uses 39m long trains. If you need to build stations twice as big an escalation of double costs doesn’t sound that ridiculous.

But longer trains increases capacity, its why a lot of the commuter lines into London now have platforms that can take 12 car sets instead of 8.

Sure, but if you need to excavate twice the station length for trains twice as long it does cost more, probably by a factor of around two. So comparing Vancouver Skytrain to Copenhagen Metro is slightly misleading.

I like how in-depth Alon is, but it's hard to take his arguments seriously because he freely mixes hard facts, anecdotes, and weird subjective analysis.

I’m curious why I never see these kinds of articles going into how unions are bleeding the city dry. Union laborers wages are like 5 times more than other equivalent workers and they do 5 times less work because they know it’s basically impossible to fire them. A good amount of the transit union workers I know will be quite proud to tell you how they get paid a full day for doing 2 hours of work and then going home while their foreman will clock them out for a full 8 hours.

The politics around unions in NYC are pretty fascinating.

Many of the trades and at least some of the public sector workers are making enough money to be upper middle class (or higher) by any reasonable definition. Much more so certainly than many professions requiring college or even graduate degrees--for example publishing is still fairly big in NYC but pays terribly. However the rhetoric coming out of these unions still hits the themes of poor, underdog working class pretty hard. Meanwhile the actual working class is hit the hardest by inflated costs of virtually everything.

You end up with tragicomic situations like the infamous inflated rat protests being manned by poorly paid temp workers because the actual union members can't be bothered.

Unlike the Europeans, who don't have to deal with unions:

> In Europe, too, subways cost less. Madrid's recently-opened Metrosur line is 41 km long, with 28 stations, yet was completed in four years at around $58m per km. Recent expansions in Paris and Berlin cost about $250 million per km.

* https://www.citylab.com/transportation/2011/11/1-billion-doe...

> In Japan and continental Europe, Levy found, tunnels usually cost between $200 million and $450 million per mile; the most expensive, the North–South Line in Amsterdam, still cost only $660 million per mile, more than twice its original budget. Spain, Italy and South Korea were especially economical, building tunnels for less than $250 million per mile. (Since 2011, US inflation has increased these numbers by about 12 percent.)

* https://nypost.com/2018/08/25/why-nyc-is-priciest-city-in-th...

Even LA and Chicago are cheaper AFAICT, they're probably unionized as well.

NYC just seems to be a really weird place where multiple factors are stacking up on each other:

* https://ny.curbed.com/2017/12/29/16829746/mta-nyc-subway-con...

The NYT did a "deep dive" a little while ago:

* http://secondavenuesagas.com/2018/01/01/inside-times-deep-di...

An acquaintance's dad was a fire fighter in NYC, and decided he wanted an extended vacation. So after a fire he walked up to an ambulance, and said "Find something wrong with me!" and hopped in. The end result was 3 years of disability with full pay - a nice long vacation like he wanted!

Like yourself, when he told me this story he was quite proud, fully believing he deserved the time off and happy he put one over on society.

Trying to summarize the parts I read:

Why? Everything. No one (or group) is in charge, no one (or group) has the power to wave a wand and get satisfaction, and no one (or group) seems to actually be doing diligence on figuring out why. Anyone that does have the power has no accountability, but does get to milk the process for political points and defer the costs as externalities from them to the system.

If only politics was about enabling better living and good stuff happening, rather than being a popularity contest.

^this. some things are better done by career bureaucrats. democracy is not a universal tool

> By building this project [CrossRail], London is just catching up to its peers. Paris has had a similar system, the five-line RER, since the 1970s. Berlin’s S-Bahn predates World War II.

I think I lived in London when CrossRail a just an expensive glint in the government's eye. I didn't know that it was an S-Bahn thing. I guess it makes sense, as London always was the city with the most famous of U-Bahns but no real S-Bahn.

Now I live in Sydney, a city that has always had an S-Bahn (of course we don't call it that) but know U-Bahn. But just a few days ago the Sydney Metro (https://en.wikipedia.org/wiki/Sydney_Metro) was opened.

So it seems like the combined approach is what big cities converge on. Although the Sydney metro doesn't even go into the centre of the city, so it's not really equivalent.

Or that S-Bahns were some kind of new technology.

I find it interesting that

Sydney metro will go right under the CBD and through Central station [1]. The next stage planned is Parramatta to the CBD.

[1] - https://www.sydneymetro.info/map/sydney-metro-interactive-tr...

From this article: http://gothamist.com/2019/01/22/subway_speeds_signal_timers....

"I have directed my team to identify and resolve every root cause of delay; in doing so, we can then implement the right fix, often for little or no cost,” NYC Transit President Andy Byford said in a statement. “The SPEED Unit continues to examine hundreds of miles of track to find areas where we can safely increase speeds. Their work is absolutely essential and demonstrates that New York City Transit employees are fully committed to making tangible changes that will improve service for our customers."

Which reminds me of a story from this book: https://www.amazon.com/Its-Your-Ship-Management-Anniversary/...

Paraphrasing: "As captain, I kept asking why we had no time for training. I was told because painting the ship took up a huge amount of time. So I asked 'Why do we need to paint the ship?'. I was told because the bolts used on the hull are not stainless so they rust and the ship looks bad so we paint it. 'Can't we use stainless bolts?' I asked. 'No', I was told because the Navy stores didn't have stainless bolts. So I gave my credit card to the supply officer and told him to go buy some stainless bolts. Hundreds of hours saved and now available for training."

EVERY SINGLE PROJECT I have ever worked on could apply this story and I would bet that there are similar examples of this on the MTA. The "speed team" from the article here is a perfect example of how sometimes lots of small fixes in the same direction can have enormous impacts.

It's nasty to say, but the main over-arching problem is that the public sector just doesn't attract very productive Americans, and this situation is amplified in New York. Nothing gets done, wages are uncorrelated with productivity, bureaucracy is crushing, and advancement is nearly 100% political. Someone with the talent and drive to actually get a new subway line built could earn $200K trying to, knowing they're nearly guaranteed to get nothing done, or earn $1M down the street in finance. Easy choice. So instead the subway-building bureaucracy is staffed with people who are indifferent to actually getting things done and often couldn't get the job done if they had to, and are mostly ok with that.

This is reversed in much of the rich world, where the private sector doesn't pay that well, and it's hard to get fired, and there's great prestige in working in the public space.

That's not been my experience at all in Maryland the DC Metro area.

Every time I deal with the public sector, I am pleasantly surprised by the passion and dedication of people working there. I've very recently dealt with the judicial, MVA, MTA, and some WMATA and most everyone has been extremely helpful and efficient.

I cannot say the same for the private sector, whose business model seems to be "provide the minimum amount of service for the highest price you can squeeze out of the customer"

Poor management.

With poor being used in both senses.

Looking at the management salaries (the link is a bit outdated, but should give an overall idea) head of MNRR makes around 300k. That sounds a lot until we realize that a Google engineer makes about the same. A head of a small team in the bank makes about the same.

Your engineers, who (putting my hard hat on) in most cases could've been replaced with an automated system earn about the same if they're willing to do some overtime.

Do we want somebody earning less than a Google engineer fight tooth and close for taxpayers money? Do we want them to take risk for huge infrastructure projects? That all while being engaged in political battles about poor-people-diversity-community-unions? I don't see it happening.

https://www.newsday.com/long-island/transportation/table-of-...

The Montreal subway is my favorite in North America. Anyone have any recent numbers on how much it cost to build it and run it, per mile?

Because of the Joe Pesci observation?

Everyone that can scrambles to take their "commission" from every project they're able to block.

I call it the Joe Pesci observation because of a quote from, I think, the movie Goodfellas.

"Your business burned down and you have no income?" "Fuck you, pay me!"

I submitted this mostly to see how Rayiner would react, since this is one of his beats.

This is a great article! This part really hit home:

> But New York’s transit stations are still overdesigned. All recent stations have full-length mezzanines, which require larger station caverns and therefore more expense. (Why must all these new stations look like the Batcave?)

In DC, you’ve got these cavernous underground stations, a testament to brutalist architecture. In Chicago, you’ve got a wooden platform on some steel girders. Which is more expensive to build and refurbish? Chicago rebuilt 10 miles of the red line in five months for half a billion. DC has spent years just trying to get the tracks to stop catching fire.

The new stuff is just so overdesigned. The silver line has these giant stations high in the air over freeway medians, with air bridges to connect them to the entrances. Many METRA stations are just a wood platform on an embankment.

And the article really hits the point. It’s not just the inefficiency. It’s about imagining how much more transit you could build if our costs were lower.

> The new stuff is just so overdesigned

Seconding this. We spent as much as entire cities spend on a new line on a single stupid station in FiDI that looks like a stegosaurus carcass [1].

Add to that the overcapacity in builders on sites and endless reviews and you get the present mess. Some problems, like those owing to our common law system and higher wages, are unavoidable. But a lot of them are.

[1] http://nymag.com/intelligencer/2015/03/santiago-calatrava-wo...

As a side note, the Calatrava hub was a result of federal 9/11 reconstruction money and couldn’t be redirected to normal maintenance or capital projects. They did try; before Pataki left office his big pet project was extending the LIRR from Brooklyn to the World Trade Center to revive Lower Manhattan, but the feds didn’t buy that it was a reconstruction project.

Not to fully excuse the Oculus, but calling it a "single station" is kinda ridiculous. It's a hub connecting 9 different lines, commuter rail, and the WTC buildings themselves, and also is a huge shopping center.

Yeah, unlike most other stations, this one is a bona fide tourist attraction that generates income from the businesses contained within. If we had more like that the MTA's budget might be in a bit better shape even if they cost a little (or a lot) more upfront.

They did the same thing with the bloated, behind schedule Central Subway in SF. Huge lavish stations deep under ground. I'd much rather they do cut and cover subways with stations that look like manholes with escalators/elevators.

Compare that to London’s Crossrail where the platforms are 250m long and many central stations are double ended, a ticket hall/access at either end.

I think subway stations in US are rather spartan by international standards. Whatever the reasons for the high cost, opulence is not one of them.

Opulence and overengineering aren’t the same thing.

They are often spartan in terms of decor, but lavish in terms of space.

Take DC's metro as an example. The stations are mostly raw concrete, but they are massive. The underground stations are cavernous vaults with sprawling mezzanines.

The decor undoubtedly adds a bit to the cost, but it is nothing close to the cost of excavating two or three times as much space.

I guess you haven’t been to the Oculus in NYC...

The oculus is a shopping mall, not a subway station.

By definition that would exclude most train stations in Japan and Hong Kong.

At what point do you differentiate it when a location was literally designed to be a wrapper around multiple train stations.

It's right next to the entrance to the tracks, and was pretty clearly made to be part of that station.

You are right on this one :-) I hope to see it next month and take some stunning photos.

Yeah, it’s pretty amazing. I kind of wish they’d spent the money to do a bit more on the actual subway, though :-)

>In DC, you’ve got these cavernous underground stations, a testament to brutalist architecture. In Chicago, you’ve got a wooden platform on some steel girders.

Meanwhile, in Moscow... https://hypebeast.com/2015/10/moscow-metro-stations https://www.rbth.com/arts/2017/06/19/dont-miss-these-5-stati...

Those are very nicely gussied up but the spaces involved all seem relatively modest. So I'd guess that they cost less to build than the large US stations we're talking about. Those details cost money but I'd guess single digits millions at most, not the half billion a New York subway station can cost.

Tort law. Because everyone has to carry huge liability insurance, everyone needs to go through tons of CYA process, which drives up cost and slows down work at every single transactional point in the entire economy. Hence the success of mega corporations like Amazon, Walmart, Exxon, etc. who don’t need to hedge that stupidly small risk for internal transactions. Same reasons why colleges now have deans of intersectional classism and now charge $60,000 a year.

Tort law is why colleges have "deans of intersectional classism" and charge $60,000 a year?

None of the universities in my states have those or charged near that, but, let's assume they had and did. How does that mitigate the liability insurance and why isn't that showing up in the budgets of state and local governments? Which companies selling that insurance should I invest in, if it is so profitable a buck to make?

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