Fast-Growing Light Rail Adds to Transportation Choices

Light rail systems are trains that are lighter and shorter than commuter rail or heavy rail systems. Although light rail represents only a small portion of the public transportation market, it is the fastest growing mode of public transportation and has been shown to provide a significant stimulus to surrounding economies. But the recession is slowing light rail expansion plans and forcing service cut-backs and fare hikes.

The term “light rail” is commonly applied to trains that operate on rights-of-way off the streets or on urban-area streets, have several cars, and are lighter and shorter than commuter rail trains or heavy rail systems. There is generally some distance between light rail stations, perhaps as much as a mile, except in urban centers. Streetcars, also known as trolleys, usually share city streets with cars, trucks and buses, have one or two cars and stop every few blocks. In most cases, light rail and streetcars run on electricity delivered by overhead power lines.

In 1981, the first light rail system in the United States opened in San Diego. Nearly 30 years later, 34 light rail systems are serving communities from coast to coast. Many of them are involved in major expansions of their lines, and three dozen more communities are in various stages of planning and developing light rail.

Light rail and streetcars (including trolleys) still comprise a small part of the public transportation market across the country: light rail ridership accounted for less than 1 percent of total transit trips last year, much less than major public transit modes like buses or commuter rail. Most Americans, meanwhile, still hop in their cars to commute to work, go shopping, take in a movie or haul the kids to soccer practice.

The transportation environment is changing rapidly, Light rail’s success is leading transportation planners and local government officials across the country to propose new systems for their communities, and light rail is now growing faster than other modes. The American Public Transportation Association (APTA) reported that light rail and streetcar ridership increased by 8.3 percent in 2008, highest among all modes of public transportation. Total ridership for the year was 465.1 million. APTA reported double-digit increases in light rail ridership last year in Charlotte, Buffalo, Philadelphia, Sacramento, Baltimore, Minneapolis, Salt Lake City, New Jersey, Denver, and Dallas. Denver is already exceeding its ridership projections for 2020.

The newest light rail system in the United States is Sound Transit’s 15.6-mile Central Link in Seattle, which opened in July 2009. Nearly 62 percent of the voters approved an extension of Seattle’s system in the 2008 election. Before that the latest was the METRO in sprawling, congested Phoenix. Prior to the launch of the METRO in December 2008, Phoenix, the fifth-largest American city, was the largest with no passenger rail service of any kind. Amtrak didn’t even stop there. In the first two days of operation, 200,000 rail-starved people rode METRO’s 20-mile starter line.

A Boost to Local Economies

Light rail has proven to be a major stimulus to the economies of communities that have built new systems in recent years. Transit-oriented development (TOD) is built into the planning for some systems, but is not a consistent factor in the growth of light rail. (See “Developers Are Building More Walkable Neighborhoods Around Transit Systems.”)

“Transit-oriented” refers to developments clustered around transit stations with amenities designed for safe, convenient use by pedestrians. One agency that actively promoted TOD was Dallas Area Rapid Transit (DART), which currently operates two lines on 45 miles of track in Dallas and its suburbs and is planning to add a third, 28-mile line by December 2010.

In November 2007, the Center for Economic Development and Research at the University of North Texas issued a report on the potential fiscal impacts of TOD in the DART service area. The report came to this startling conclusion: “The total value of projects that are attributable to the presence of a DART Rail station since 1999 is $4.26 billion.” The study reported that homes near rail stations increased in value by 39 percent more than homes not served by light rail.

In Charlotte, transit officials say that more than $291 million in new development has been built near stations on a 10-mile rail line that opened last year, with an additional $1.6 billion in development to come. Denver transit officials say 11,000 residential units and 8.4 million square feet of new retail, office, and government space have been built along its existing 35-mile rail network. A U.S. Department of Commerce model estimates that the University Link, a 3.7-mile connection from downtown Seattle to the University of Washington, will generate economic activity equivalent to 22,800 jobs.

The Cost Factor

Even as light rail is growing in popularity and ridership, however, the global recession is creating funding issues that could put expansion plans on hold, or scale them back, until the economy recovers. Many systems are considering fare increases, service cuts, and layoffs.

Light rail construction is financed largely by local tax and federal construction grants with other federal, state, and local funds added into the mix. Fares comprise a small portion of revenue--for example, just 19 percent of operating expenses for Denver’s Regional Transportation District (RTD).

“It’s not a money-making proposition,” says Matt Cohen, a Denver REALTOR® who serves on the RTD Board. “It’s not going to pay for itself in the present model.”

“We’re always seeking federal grant sources,” RTD General Manager Cal Marsella says. “We’ve cut costs here in every way we can. We’re always looking at the state budget. So the only place you can look to really is federal grants, if they’re there, and raising the sales tax.”

But the sales tax increases approved by local voters in referendums are producing less revenue because of the recession.

Charlotte’s LYNX light rail system is funded in part with a half-cent sales tax approved by voters in 1998 with 57 percent of the vote. Last year, 70 percent of the voters rejected a ballot issue pushed by light rail opponents to repeal the sales tax. Yet even so, LYNX’s shortfall has been projected at $260 million over 10 years. 

The federal government has provided major support for construction of light rail systems, coming up with 50 percent of the cost in many instances. Art Guzzetti, vice president of policy at APTA, notes, however, that the federal government pays 80 percent of the cost of highway construction. He says federal support has been increasing, but the government needs to do a lot more.

“I would look at it another way and say they have been under-funding,” says Guzzetti. “There are a lot of good projects out there, and there should be a higher level of investment.”

The federal economic stimulus plan will help, providing $1 billion in capital investment grants for light rail, heavy rail, commuter rail, and high-occupancy vehicle projects. Phoenix, New Jersey, and Charlotte have already received light rail stimulus grants.

Case Study: Denver

Of all the cities where light rail is winning public transportation converts and pulling people out of their cars, none has bigger ambitions than Denver. The RTD, the regional transportation agency that serves the Mile High City and all or part of eight adjacent counties, is planning to expand its existing 34-mile light rail system to 122 miles by 2017.

Unfortunately, the cost of the expansion is pegged at $6.9 billion--$2.3 billion more than voters were told it would be in 2004 when they passed, for the second time, a sales tax increase to help pay for light rail. Denver residents and visitors now pay a 1 percent sales tax to support light rail.

A majority of the 15 members of the RTD Board of Directors favor asking the voters to double the portion of the sales tax dedicated to the FasTracks expansion, as the proposed system is called, to eight-tenths of a percent. 

“The consensus was, essentially, we will vote to ask the voters for a tax increase, but we don’t know whether it will be in 2009 or 2010,” says Cohen. “The best case scenario is the voters will approve a four-tenths of one percent increase in the FasTracks sales tax, and the feds will approve $1 billion in funding as we explore public-private partnerships. If the tax is approved and the feds approve $1 billion in funding, we build out the system by 2017.”

Without the additional local and federal funding, it will likely take until 2034 to complete FasTracks. As this goes to print the board has not decided when it will vote on taking the tax increase to the voters.

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