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Why public transportation is especially expensive to build in the U.S.


Transit projects in the U.S. often come with astronomical price tags compared to similar projects in other countries. So where exactly are the high costs coming from? To find out, Darian Woods from our daily economics podcast The Indicator went to a New York City subway station that cost roughly $837 million.

DARIAN WOODS, BYLINE: The other day I met up with New York University professor Eric Goldwyn at the 96th Street Station on Second Avenue.

Eric, how's it going?

ERIC GOLDWYN: Good, good, good.

WOODS: It's one of three extra subway stations along the Upper East Side of Manhattan that opened in 2017. Eric and his co-authors recently released a report comparing different countries' approaches to building transit. And he found one big explanation for the high costs - station design. Nearly 80% of the construction costs for this extension were from building the stations, not from the train tracks or the tunnels that they built. Eric and I went up to the station's underground mezzanine.

GOLDWYN: What you see that they've done here is there are no columns providing support. It's one big cavern, right? So that means the volume of this station is much larger.

WOODS: And how long is it?

GOLDWYN: Sixteen-hundred feet.

WOODS: OK, so a quick bit of math - 1,600 feet, 800 million.



WOODS: That means every two feet, that's $1 million right there.

GOLDWYN: There you go. It's an expensive piece of infrastructure.

WOODS: There's also lockers, offices and storage, mostly out of sight, that add to the station's size and cost. Eric says another big driver of costs for the station is labor. He says that the U.S. has a tendency to outsource a lot more of the basic design work to consultants in contrast to many European countries.

GOLDWYN: But doing sort of preliminary engineering, early planning work - that is work that we think a transit agency should be capable of doing on its own.

WOODS: Eric says that he also found that the Second Avenue subway extension tended to use more construction workers. Now, of course, wages are just generally higher in New York than in most other places in the world. But that doesn't explain the vast gulf between New York and even other relatively wealthy places like Stockholm.

So this brings us to our third major driver of costs - a lack of coordination between government agencies. It's especially challenging when you have fragmented jurisdictions which Eric says is strong in the U.S. One example in this case - the Metropolitan Transportation Authority, which is an entity created by the state, had to negotiate and pay the City Parks Department $11 million to store construction equipment at a playground. It's not just government departments. There is always a point for some organization or a utilities company or a neighborhood group to hold up construction, and that causes costly delays.

And finally, that brings us to an approach to building that's common in America. Transit builders plan projects in a way that try to annoy as few people as possible. Like, subway stations along this line were built by drilling really deep into the ground as opposed to shutting down the street for a few months and digging from the top. And drilling is expensive.

GOLDWYN: I think the public is completely unaware of it. And I think our elected officials - they know what's going on, but no one is holding them to account over these types of issues.

WOODS: The trouble with not scrutinizing these price tags, though, Eric says, is that you end up with less transit getting built. And that's not the future that Eric or anybody wants. Darian Woods, NPR News.

(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Darian Woods is a reporter and producer for The Indicator from Planet Money. He blends economics, journalism, and an ear for audio to tell stories that explain the global economy. He's reported on the time the world got together and solved a climate crisis, vaccine intellectual property explained through cake baking, and how Kit Kat bars reveal hidden economic forces.