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What Would High-Speed Rail Do to Suburban Sprawl?

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What Would High-Speed Rail Do to Suburban Sprawl?

New York Times Economix Blog August 18, 2009
Urban PolicyOther

Will the economic and environmental benefits of President Obama’s “Vision for High-Speed Rail” exceed the costs?

Over the last three weeks, I have tried to put together figures for a hypothetical high-speed rail line between Dallas and Houston. A link between Dallas and Houston is not one of the designated corridors, but a link between the country’s fourth and sixth largest metropolitan areas is not obviously less sensible than many of the proposed links.

In one blog post in this series, I estimated that if the rail link had the same ridership as all airlines now connecting the two cities (1.5 million), then annual costs would exceed the direct benefits to riders by $546 million. In another post, I estimated the environmental and other social benefits from 1.5 million riders to be $21.6 million, excluding the environmental costs of building the rail line.

These numbers suggest that costs will exceed benefits each year by $524 million if the rail line has 1.5 million customers, and by $401 million if the region’s rail demand has a huge rate of growth and attracts three million riders.

Now I turn the larger economic and environmental benefits that are not related to direct ridership, but rather come from rail’s potential reshaping of the American economy. The easiest argument to dispatch is that high-speed rail is sensible stimulus spending. There is an iron rule of infrastructure that it is impossible to build massive projects wisely and quickly. Serious rail projects take years to build, and it is impossible to tell whether that spending will come during a recession or a boom.

A second economic argument for high speed rail is that it will revitalize troubled regions of the United States. This argument would never be made about Dallas or Houston, which are booming, but some argue that high-speed rail can save Buffalo, Detroit and Cleveland. Transportation can have a significant impact on urban growth. Josh Gottlieb and I estimated that counties with access to a rail line in 1850 grew 20 percent more over the next 40 years. Gilles Duranton and Matthew Turner found that a 10 percent increase in a metropolitan area’s stock of highways in 1980 caused a 2 percent increase in population growth over the next 20 years.

But there are reasons to wonder whether rail’s impact today will be that large.

Any transportation investment can create large economic ripples only if it significantly increases the speed at which an area with cheap real-estate gains access to a booming place that doesn’t have any comparable, closer available land area. For example, in Spain, the city of Ciudad Real seems to have gotten a big lift thanks to high-speed rail because people can now live in Ciudad Real, where housing is cheaper, and commute into Madrid.

This logic has led some to think that high-speed rail will do wonders transforming Buffalo into a back office for Manhattan. Buffalo is 376 miles from Manhattan, so a 150-mile-an-hour rail line will take two and a half hours, which is not going to be significantly faster than air. Moreover, vast amounts of low-cost space are closer to Manhattan than the shores of Lake Erie. Faster connections between Buffalo and Toronto might do more, but in that case speed is hampered by the burdens of border crossing.

Philadelphia is the more natural beneficiary of high-speed rail access to Manhattan; there are already people who live in Philadelphia and commute to New York. Yet even in this most propitious setting, the coming of Acela seems to have had little impact on the population decline of Philadelphia or growth of Wilmington. Perhaps the absence of any trend break in population growth around 2000 just reflects the incremental nature of the Acela investment, but there is little here to bring confidence that rail lines revitalize cities.

Moreover, I don’t see why is it in the national interest to disperse economic activity from Manhattan to Buffalo or Philadelphia. I have long argued that the economic case for directing economic aid to declining regions is weak.

A third possible benefit of rail is environmental. Can high-speed rail bring people closer to city centers and thereby reduce carbon emissions?

My work with Matthew Kahn on the greenness of cities suggests that each household that moves from Houston suburbs to the central city reduces carbon emissions and creates $164 of global-warming-related benefits each year. Each household that switches from suburb to city in Dallas creates $133 of benefits annually. Those benefits represent both reduced electricity usage (associated with smaller urban homes) and reduced driving.

But there is little evidence documenting that rail has strong positive effects on land use.

Unfortunately, all of the evidence on this question comes from intraurban, not interurban rail lines. Atlanta’s rail line had little impact on population or employment within the metropolitan area. BART, the Bay Area Rapid Transit system serving the San Francisco region, seems to have done more, but the effects are still modest.

Nathaniel Baum-Snow and Matthew Kahn have done the most comprehensive look at new intraurban rail systems in 16 cities. I asked them to examine whether population levels rose close to new rail stations, and they found no evidence for that.

Moreover, the story of Ciudad Real should make us question the presumption that rail will centralize. If a Dallas-Houston line stops somewhere between the two cities, and fosters the growth of a new exurb, the result will be more, not less, sprawl.

Despite the lack of any positive evidence linking centralization to high-speed rail, I certainly accept that there is a great deal of uncertainty. To give rail the benefit of the doubt, I’ll assume that high-speed rail will cause 100,000 households to switch from suburb to city in both Dallas and Houston. This change would create extra, annual environmental benefits of $29.7 million. These benefits would be real, but they would still do little to offset the $524 million or $401 million net annual loss discussed above.

I’m going to write on something completely different for the next two weeks, but return to this topic in three weeks to revisit some of my main assumptions, and discuss other rail links besides Dallas and Houston.

This piece originally appeared in New York Times Economix Blog