Good Public Transit Brings Businesses to a City
a reliable, well-maintained transit system is now a requirement
By Paul P. Skoutelas, American Public Transportation Association’s president and CEO
Earlier this year, an Amazon executive called officials in Detroit to explain why the city had fallen out of contention for the retail giant’s new headquarters.
The main reason? The lack of investment in Detroit’s regional public transit. The city doesn’t have enough downtown workers to fill all the jobs the headquarters would create. And without reliable public trains and buses, there’s no easy way for suburbanites to commute into Detroit without a car.
The Motor City’s predicament isn’t unique. Inadequate public transportation networks are hampering the economic ambitions of dozens of American cities. Robust funding for public transit can help them get back on track.
A reliable, well-maintained public transportation system is now a requirement for many businesses scouting for new locations. In 2014, for example, State Farm brought 3,000 new jobs — and 8,000 total — to an Atlanta campus served by one of the city’s MARTA rail lines.
Localities that have invested in public transit have seen those investments pay back in spades. In Chicago, home values along the city’s Brown Line — which was reconstructed and modernized a decade ago — shot up 55 percent between 2000 and 2014.
Higher home values and more development aren’t just good for residents — they’re also good for city coffers, as they result in more property tax revenue.
That’s certainly been the case in metropolitan Washington, D.C. Property values are 7 percent to 9 percent higher near Metro rail stations; that property delivers $3.1 billion in tax revenue a year.
Unfortunately, as a nation, we have largely failed to learn from cases like these. Thanks to a lack of funds and resources, public transit officials have been forced to focus on repairs and maintenance, rather than on expanding economic opportunity with new transit networks. Cities are keeping trains and buses running beyond their normal lifespans.
A 2015 report from the Department of Transportation found that over 30 percent of the tracks, bridges, and tunnels in the United States were in poor condition as of 2012. And the American Society of Civil Engineers gave the nation’s public transportation infrastructure a D minus — the lowest grade given to any category of U.S. infrastructure.
That neglect has real consequences for American businesses. In 2015, a record-breaking Boston snowfall buried the nation’s fifth most-used public transit system. As a result, Boston lost $40 million in revenue and recovery costs. Unless the United States clears its public transit project backlog, businesses will lose a collective $340 billion in sales by 2023.
This dim outlook for public transit and the businesses that depend on it can be reversed. But making that happen will take a commitment from Congress.
Congress’s 2018 spending bill was a step in the right direction. Passed in March, the measure included $1.5 billion in Transportation Investment Generating Economic Recovery grants (TIGER) and $2.6 billion in Capital Investment Grants.
But there’s more to be done. Congress must ensure that its 2019 spending bill matches or exceeds those levels of funding. Lawmakers must also replenish the Highway Trust Fund, which pays for surface transportation projects will face a $20 billion funding gap by 2020.
Ignoring these funding needs will cost us. Without the $90 billion needed to modernize our nation’s public transit system, America will forgo $109 billion in household income and 162,000 new jobs.
By committing to rebuilding our nation’s public transportation infrastructure, Congress can make sure cities like Detroit are ready next time Amazon comes calling.