America’s public transportation agencies cannot be profitable in the 21st century due to a political economy that isolates these agencies from municipal zoning and land use policies, and from forming value capture mechanisms – from tax increment financing to joint development and the transfer of development rights. This siloization of zoning, land use, taxation, and transportation operations is largely due to American fears of density alongside protections of private property, but it limits the potential for transit-oriented and transit-owned joint development, and it hinders the formation of public-private partnerships. Local, state, and federal structural reforms are necessary in order to streamline value capture processes, such as up-zoning transportation assets and relaxing land use requirements, in order to facilitate T.O.D. While value capture will provide marginal financial benefits due to the limited assets that U.S. agencies possess, it literally stands on its own merits as a vehicle through which the urban fabric can be renewed and enhanced. Transportation agencies cannot be profitable, but they can be organized more efficiently, if given the resources necessary to effectively practice value capture.
New York’s Metropolitan Transportation Authority (MTA) is constantly running trains, but it is also constantly running a deficit. Unlike profitable transportation companies, such as the Hong Kong Mass Transit Railway (MTR), the MTA has few valuable real estate assets which could be adequately transformed into transit-oriented and transit-owned joint development hubs. Similar to other U.S. public transportation agencies, space for pragmatic and profitable commercial activities – including shops and offices operating on agency-owned land – is limited to a few select stations, yards, concourses, and passageways, because most profitable assets from private predecessors were sold decades ago. While the MTA’s ability to remain revenue-positive or self-sufficient through real estate development is stymied, the MTA has been capitalizing upon its few existing assets for additional revenue. This process, however, in coordination with the City of New York in order to develop value capture mechanisms, is lengthy and cumbersome. The MTA has not developed the resources needed to develop property. This Senior Honors Thesis elucidates how the MTA can overcome organizational barriers in order to contextually ‘transport’ the MTA’s limited portfolio of assets into ‘transformation hubs’, and in order to do so, advocate for a privatized, profitable, and independent real estate development division of the MTA, chartered for real estate development. While there is ‘room’ for improvement, institutional barriers ranging from NIMBYism and a fear of density to antiquated zoning laws, financing requirements, and a lack of communication among the City, State, MTA, and developers would need to be transcended through coordinated reformation efforts. The MTA’s collective mindset must be renewed for a 21st century narrative, in which the MTA also considers itself a real estate developer.
Born and bred in Brooklyn, I was the first person in my classroom to notice that Tower 1 had been hit. I watched as Tower 2 was hit, and once they fell, I helped to close the windows in order to keep out the dust. Later, I collected fallen papers, not knowing if they could be returned or not. But even later, I realized that this moment catalyzed my interest in cities, in skyscrapers, in transportation, in urban planning, and in real estate development.
Al Qaeda destroyed one of America’s most prominent transit-owned, transit-oriented, development hubs. The Port Authority of New York and New Jersey developed the World Trade Center and the PATH transportation hub below, as well as the underground mall that was one of the highest revenue generating properties anywhere in the world. The Port Authority, legally self-sufficient, cannot receive taxpayer dollars. It relies on real estate revenue from the World Trade Center as well as retail revenue (and transportation fees) from New York’s three major airports and two major bus terminals. The PA also charges hefty tolls on its bridges and tunnels, as well as fees at its many ports. Controlled by both NJ and NY, politicians routinely send their expensive legacy projects to the PA, because they know that taxpayers will not foot the bill directly. Instead, users of the PA’s bridges and tunnels foot the bill, with ever-increasing tolls.
The Metropolitan Transportation Authority (MTA), North America’s largest transit network, has also been increasing its fares. The MTA moves 2.4 billion New Yorkers every year, 8.7 million customers every day, and accounts for one third of all transit riders in the U.S. Ridership has been increasing steadily, and has not been this high since the 1940s, with MTA ridership exceeding the next 16 largest U.S. transit networks combined. The New York metropolitan region has more people than the total population of Australia.
Portions of the subways of New York City are over 100 years old, and most of the subway was not built by the MTA, or even by the City of New York. Indeed, private, profitable railroads, such as the Interborough Rapid Transit Company (IRT) and the Brooklyn-Manhattan Transit Corporation (BMT), built the subway, in coordination with the City. At the time, few owned automobiles, and there were few highways, either. Cities were denser, and residents had only recently begun to rely on trolleys and trains, instead of horses, to move around the city. There was ample demand for subways in order to relieve congestion on the streets; in fact, the City helped pay for sections of the subways that went into the outer boroughs, in order to alleviate slum-like-conditions in Lower Manhattan.
But at the time, the outer boroughs were far from developed. In fact, many elevated railroads were zooming over farmland, and goats could not pay fares to ride the subway. Even still, the City kept the IRT and the BMT from raising fares. Coupled with the Great Depression, inflation, and white flight, these private railroads could no longer stay afloat by the mid-20th century. The City unified these railroads, and Mayor LaGuardia hoped that this would increase efficiency. But it only destroyed the profit motive and gave more power to labor unions, creating more “financial waste and irresponsibility”, which the Mayor had not foreseen. When the City, too, went bankrupt, the State took over the subways and the MTA was formed. Urban renewal projects largely ignored public transportation (i.e., Robert Moses’ highways), and ever since, costs have skyrocketed and funding has been unstable and unsustainable.
The consolidation of the Manhattan Elevated Railway Company, the Metropolitan Street Company, and the IRT created a monopoly of fixed-rail rapid transit. This provided the rationale for the dual contract to fix the fare at five cents. The consequent constraints caused by a politically expedient fixed fare and wage inflation led maintenance to be deferred. The fixed fare destroyed the incentive for the companies to invest in quality, or even to maintain quality. The fixed fare also prevented expansion in that only those lines with very high ridership can be profitable if the fare is set too low. Lines which would have been economical at higher prices were not built. The transfer of ownership into the public sector compounded the problems. The incentive to control costs was removed and was replaced by the political need to placate an organized labor force (Hakim 289, 1996)
Hakim, Simon, Paul Seidenstat, and Gary W. Bowman. Privatizing Transportation Systems. Westport, Conn: Praeger, 1996.
Today, the MTA receives funding from fares, and from the City of New York and State of New York, but the relationship between the City and State is tenuous and strained. The MTA spends approximately 11 billion dollars on operational costs yearly, and an additional 5 billion dollars are spent on maintenance and improvement annually. The MTA owes $34 billion, which is more than the debt of most developing countries. Congestion pricing has been proposed to alleviate some of these dire financing concerns, but it is politically difficult due to resistance from outer boroughs and Long Island. Staten Island, for instance, has successfully advocated to remove outbound tolls from their bridges, in order to reduce congestion pollution in their borough, but this has created a loop for truckers through Staten Island, to Brooklyn, to Manhattan’s Chinatown, and then back to New Jersey without tolls. Congestion pricing would equalize tolls, but many do not like change.
MTA funding remains unstable. The MTA receives a lot of revenue from the MTA’s bridges and tunnels, which are the ones that were once controlled by Robert Moses, but DOT roads are not controlled by the MTA. The MTA also receives an “urban tax” from mortgage and property sale taxes, and this swings dramatically depending on the economy. It surged in 2007, resulting in $900 million; in 2009, it was only $149.7 million. Even though the MTA fuels the nation’s largest economy, it is consistently cash-strapped because balkanized municipalities often do not share their prosperity with their transportation agencies.
Many pundits have proposed that the MTA can fill its financial gap through real estate development. They see the Fulton Center, and they think that, if only the MTA developed a taller building there and elsewhere, they would have no problems. They see empty yards, ventilation structures, concourses, and passageways, and they blame the MTA’s bureaucracy for not seeking to capitalize upon existing assets. They say that private passenger railroads had been profitable, and they used their real estate in order to stay in the green. Only the latter part of their argument is correct, because today, the U.S. political economy has changed. Privatization would raise fares, as it has in the U.K., and I don’t think that’s something that politicians would easily get behind. After all, do we also charge fares to enter public parks?
Indeed, railroads developed land, especially at hubs, forming cities from San Francisco and Dallas to Atlanta and Miami. Pennsylvania Railroad built New York Penn Station and developed nearby Hotel Pennsylvania. New York Central Railroad built Grand Central and developed Terminal City atop its rail yards. The Hudson and Manhattan Railroad built the Hudson Terminal in Lower Manhattan, which is the predecessor to the World Trade Center. Elevated railroads connected Manhattan with Coney Island, building resorts at their terminals. Similarly glamorous hubs with offices, residences, and retail were built throughout the country.
But then came suburbanization, the Interstate, and the Jet Age. Plus, freight and mail were carried on railroads, but when USPS switched to trucks, it was the end of profitable passenger railroads. People switched to cars and moved out of cities, with assistance from the federal government, thus contributing to the decentralization of America’s segregating, rioting, deindustrializing cities. Why shop at Grand Central when the modern, safe, enclosed, AC shopping mall is nearby?
In order to try and stay afloat, Pennsylvania Railroad allowed Madison Square Garden and Penn Plaza to be built, thereby demolishing Penn Station. The preservationist movement was founded after the 1960s Penn Station joint development in order to save Grand Central, and while Grand Central was saved, the MetLife Building (Pan Am Building) was still built atop GCT, literally signifying the Jet Age. When the private railroads went bankrupt, they sold their profitable assets to the private sector. Today, one man owns Grand Central and its air rights, Andrew Penson, and the MTA leases Grand Central for hundreds of millions every year.
Most passenger railroads can no longer be profitable. The MTA operates a 100-year-old system with plenty of maintenance costs. Transportation finance cannot rely on real estate development, which now has a marginal impact on the MTA’s finances, because the authority has limited assets. Even though T.O.D. public-private partnerships are becoming more and more common, this is because T.O.D. makes sense for other reasons. It increases density, fueling ridership and raising property values, thereby increasing revenue from property taxes. But it also supports sustainable livelihoods, creating more dynamic places to live, work, and play.
The MTA’s property tends to be zoned for industrial use, which prohibits development. Selling air rights is only viable in hot markets, such as Manhattan. Most assets are needed for operations and cannot be sold. When it comes to decking over yards, most do not realize that it is extremely expensive and in most cases, not worth it. Overbuilds require support structures, and most yards do not have room for these columns. To deck requires shutting down operations, which is extremely expensive and inconvenient. Yards tend to be located in far-flung locations, where the market is not hot enough to justify development. Onerous financial regulations are time-consuming and expensive. And, the MTA Real Estate Department lacks resources, with only 3 people in the TOD Group.
Unlike the legally self-sufficient Port Authority, the MTA does not view itself as a real estate developer. Developers must take on a lot of risk, and the MTA, as a public authority, does not want to take on this risk. Imagine if they built a taller Fulton Center, and then it remained vacant? The public would be enraged. This is also why the MTA will usually adhere to local zoning laws even though, as a state authority, it could possibly get away with ignoring them, while developers cannot ignore these laws. But, the MTA is chartered for transportation projects, and development often requires approval of the FTA and the MTA Board before property is developed or disposed. Plus, the MTA Board has many members appointed by the City, and NIMBYists are powerful. They can defend their land, but all of the people that would be living there in the future cannot defend themselves, because they aren’t there yet.
MTA Real Estate Department
Today, zoning can incentivize developers to build transit amenities so they can build taller. Yet often, they will improve station entrances, but not maintain them upon completion. Still, Vornado Realty is exploring developing 15 Penn Plaza and potentially improving subway connectivity. SL Green is exploring developing 1 Vanderbilt nearby GCT and improving subway connectivity. The transfer of development rights (TDR) can allow developers to buy the MTA’s air rights. But the MTA has limited assets and cannot be self-sufficient by disposing of available assets.
The Fulton Center in Lower Manhattan contains four stories of retail outlets. Air rights may be sold, but as it ‘stands’, the Fulton Center is a stump in Lower Manhattan. Why? It was planned after 9/11, and no one knew if Lower Manhattan would bounce back. Plus, the MTA did not want to compete with any office towers being planned by the Port Authority, and no one realized people would actually be moving to Lower Manhattan in order to live. The World Trade Center itself, of course, had also been plagued by vacancy problems, and it had only seen relatively full occupancy a few years prior to 9/11. Today, Lower Manhattan and the WTC compete with Midtown (and even Brooklyn), where many creative industries have been moving.
The MTA is a public authority, and it is risk-averse. It is easier to sell air rights than to develop property; speculative development is difficult for the public sector. Because the MTA is a public authority, it would rather dispose of property than develop it. It received a lump sum payment for the Hudson Yards, and developers have paid for the extension of the 7 Line to Midtown West. Soon, the Hudson Yards will be competing with the World Trade Center for tenants.
This mindset is common for American transportation agencies. But in Hong Kong, the MTR Corporation is a profitable, privatized railroad and real estate developer. This model cannot be easily transported to New York’s NIMBYist, political climate. Hong Kong is denser, and the central government willingly gives the MTR land to develop atop stations. The MTR is privatized and incentivized by shareholders to develop property. In China, the government owns all land, and leases it out for decades. This lease-hold system varies significantly from our system.
Unlike Hong Kong, we have a democracy, with technocrats held at bay by politicians that are supposedly doing what the voters want, such as funding trillion dollar wars in the Middle East while starving transportation infrastructure at home. In the U.S., eminent domain is only rarely used, and euclidean zoning codes keep our transportation agencies from developing property. In China, if you dislike density, it does not matter. In America, if you dislike density — and most Americans do — then you’re likely to (literally) derail a project. Progressives are supposed to support change, but they often hypocritically fight against change if it effects them personally.
The City and State must be pressured to reform the MTA for the 21st century. The Real Estate Department must be expanded. NIMBYism must be tackled by advocates in order to allow for greater density along subway corridors, thereby increasing the housing supply in our city. Zoning laws must be reformed and streamlined in coordination with the DCP, EDC, and MTA. But if affordable housing and parking requirements make decking projects unaffordable, the MTA should be exempt. If overbuilds are not feasible due to low floor-area-ratio (FAR) requirements, MTA property should be up-zoned. If a transfer of development rights (air rights) is not feasible due to zoning lot districts, the MTA should receive an exception. The benefits “FAR” outweigh the costs.
T.O.D. will not make the MTA profitable. We cannot transport transportation practices from the MTR, but we can translate them. We can do our best with the assets that we have available.
Many will tell you that America remains the land of the automobile. They may say that Americans continue to fear density (and displacement), following in the footsteps of Thomas Jefferson, who wrote that “the mobs of great cities add just so much to support of pure government as sores do to the strength of the human body”. After all, they say, America definitely had the room for this Manifest Destiny, so long as Native Americans were sent to reservations, inspiring South Africa’s apartheid policies in the 1950s. They say our public transportation gets worse and worse because Americans consider it a service to the poor, like public housing, instead of as an investment for our collective prosperity. Americans have sprawled because our country’s culture of individualism has latched itself onto the automobile, and because suburbs were America’s response to dense Soviet planning.
But railroads allowed for U.S. expansion, and railroad hubs produced clusters of activity that would become cities from San Francisco and Dallas to Atlanta and Miami. The U.S. government gave land to these corporations, so that they could develop land, just as the central government in Hong Kong gives land to the MTR today. But our political economy has changed. Culture plays a role, but more important factors are at play, such as the relationship between the City and State, land ownership, and zoning. The MTA cannot be profitable, but T.O.D. should still be supported due to its proven role as a catalyst for strengthening the urban fabric, by providing job accessibility through public transportation, and by bridging the gap socially, economically, politically, and physically. So what can we do?
These are common sense proposals which do not require Albany’s support, but most New Yorkers are oblivious to the core problems facing our transportation network. Many do not even know that the MTA is a State authority, and not controlled by the City, even though the City controls zoning and land use. So we must advocate for change, and mobilize New Yorkers to pressure their elected leaders, and raise awareness about the dangers of NIMBYism. We must show New Yorkers that even though we cannot transport best practices from abroad, we can translate them to our local context. We can transform our transportation infrastructure.
So, how do we mobilize, for mobility’s sake? How do we compromise between community and individual, public and private, and expert and local concerns?
Planners point to the Equitable Building as the catalyst for the 1916 New York City Zoning Resolution, but it was one of many skyscrapers soaring towards the sky in the Big Apple. As construction technology improved, the value of Manhattan’s land began to drastically increase, making it feasible for skyscrapers to be developed. Some suggest that it was Manhattan’s bedrock that was conducive to the early development of skyscrapers, but it was really, quite simply, the fact that Manhattan was the economic center of the Northeast and, arguably, one of the lead anchors of the global economy. The Erie Canal connected the Hudson River with the Great Lakes, Chicago, and the Mississippi River. Ports connected New York with Europe and the Americas. Gotham’s skyscrapers were built on landfill, atop subway tunnels, and above countless utility lines. Surrounded by one of the world’s largest natural harbors, New Yorkers have always been squeezed for space, but the city became a global city because of its geography. Skyscrapers are eponymous with New York, but these buildings have become more and more threatened by exclusionary, micro-managed zoning.
The United States was founded in 1776, as Adam Smith published The Wealth of Nations. America was one of the world’s first democracies in order to protect “life, liberty, and estate”, as prescribed by John Locke’s Two Treatises of Government in 1689. As an agricultural society, the U.S. granted rights only to white men with property, and even though voting rights have been significantly expanded over the past few centuries, America’s property-oriented values remain far more powerfully entrenched in our policies than in other developed countries.
In Hong Kong, the central government owns all land, and leases it out to private lease-holders, including the local transportation company, the Mass Transit Railway. The MTR is a privatized, profitable company, partly because it is given land by the government in order to develop dense, mixed-use, transit-owned developments. In the United States, eminent domain is difficult to practice, and even without it, transportation agencies rarely seek revenue-generation on transit-owned properties. Part of this has to do with the fact that they do not have a profit motive and the fact that they lack development expertise and resources, but it mainly has to do with dangerous zoning and land use laws, and Not in My Back Yard (NIMBY) activists. Indeed, America’s affair with private property has ironically transformed into an affair with zoning, which is intended to protect the value of property and the public interest. Zoning was originally enacted by erroneously arguing that sunlight and air were important for public health, but it was also enacted because American cities were far more chaotic, dirty, and industrial. Today’s cities no longer have factories next to homes, not only because of zoning but because industry has relocated away from downtown cores (and from the country entirely) due to advances in transportation technology. Today, zoning is used in order to exclude classes of people from neighborhoods, and keep the supply of housing artificially low in order to raise costs. Strangely, progressives have latched onto zoning, even though progress implies change.
In 1916, New York City enacted the country’s first local land use zoning laws with its Zoning Resolution. Unlike nuisance laws, zoning codes forced developers to design building setbacks, and kept factories and warehouses from fashionable districts. Lower Manhattan’s business district, for instance, instead of expanding immediately north into tenement districts, leaped into Midtown Manhattan alongside Grand Central Terminal and Pennsylvania Station.
While earlier laws limited the design of tenement buildings, such as the Tenement Housing Act of 1901, the NYC Department of City Planning credits the Equitable Building with catalyzing the 1916 resolution. The department states that, “rising without setbacks to its full height of 538 feet, the Equitable Building cast a seven-acre shadow over neighboring buildings, affecting their value and setting the stage for the nation’s first comprehensive zoning resolution”. Rather than regulate building height, the law regulated shape by setting the bulk of the building back, in order to permit light and air to reach the narrow streets of Wall Street. This law greatly enhanced the powers of municipalities. By restricting towers to a percentage of the lot size, the setback skyscraper became a style that caught on outside of New York City, where neither function nor zoning dictated that form. Art Deco buildings, such as the Empire State Building, were designed in accordance with zoning laws.
The City of New York no longer adheres to the 1916 Zoning Resolution because, according to the Department of City Planning, “if the city had been built out at the density envisioned in 1916, it could have contained over 55 million people, far beyond its realistic capacity”. This excuse allowed for the 1961 Zoning Resolution to incorporate parking requirements and further exacerbate the flight to the suburbs. During these decades, the city would lose millions of people and would deal with bankruptcy, as Robert Moses built highways and ignored public transportation infrastructure. Rather than increasing density along subway corridors in order to fuel subway ridership and revenue, the 1961 Zoning Resolution promoted Le Corbusier’s ‘tower-in-the-park’ model, which was, in effect, a tower-in-a-park(ing) lot. While the City did begin to implement incentive zoning by introducing floor-area-ratio (FAR) into the resolution, thereby allowing for the trade of density for public amenities, many of these amenities were automobile-oriented and at the city’s edges. In 1916, zoning began to limit New York’s density, but by 1961, it had begun to suck the dynamism out of the country’s largest and most prosperous urban area.
Today, zoning continues to micro-manage New York’s dynamism, block-by-block, hindering free enterprise and transforming structure into shackles. While recent changes have rightly up-zoned swaths of the Big Apple along subway corridors, and have provided FAR incentives for developers that build atop subway entrances and renovate station entrances, zoning continues to hinder growth, accessibility, and affordability. Of course, it must remain to some extent in order to prevent the further crowding of schools, sewers, and subways, but the fact that there is crowding means that there should be growth, not limits to growth. Planners should not just build senior housing projects (because they do not typically incur additional school expenses, and because they have lesser impacts on traffic). Zoning should incentivize developers to build schools below condominiums, or enhance station capacity below office towers. It should not limit growth; it should plan it. Planners should not succumb to the toxic NIMBYist atmosphere so prevalent in American society. Instead, they should advocate for what they know is best for the City. A balance must be struck between development and preservation, compromising between community and individual, public and private, and expert and local concerns.
At the time of the 1916 Zoning Resolution, the City of New York had never experienced such growth. Technologies, ranging from electricity and elevators, to steel skyscrapers and railroads, had moved the United States into a new industrial epoch. Far from the agricultural society that wrote the US Constitution, cities had to find means through which zoning could be legally enforced. The 10th Amendment of the US Constitution did grant general police powers to the States and to local governments, and government had the right to enforce order, protecting general welfare, morals, health, and safety. But the 5th Amendment of the US Constitution declared that no American shall be deprived of life, liberty, or property, and that no private property shall be taken for public use without compensation. Moreover, the 14th Amendment, approved after the Civil War, expanded equal protection of the laws, applicable to former slaves and rebels, upholding their ability to rein supreme over their private property.
Fire safety laws and colonial nuisance laws were precursors to zoning. Governments limited materials that could be used in construction, and they also mandated various fire safety inspections. In Massachusetts, towns were forced to locate slaughterhouses upwind, in non-residential areas, in order to prevent nuisance for residents. At the time, American cities were not as dense as they had become in the 20th century, with waves of immigrants prompting seas of tenements in New York. Indeed, by the 1870s, German and Swedish cities had already developed growth boundaries and height limits; by 1884, Westphalia, Germany, adopted the world’s first official zoning ordinance. The German Empire, founded in 1871, could enact these laws, while American zoning laws continued to be thrown out by federal courts.
Zoning can now be used to inhibit market-led growth entirely. In New York, many areas along subway corridors are zoned for industrial uses, usually allowing for the proliferation of car-oriented repair shops. These owners typically pressure the Department of City Planning to up-zone in order for them to sell their land for a higher value, but nearby residents fear density and displacement. These are valid concerns, but the City lacks an adequate supply of housing, and fewer housing options will merely raise prices even more. It makes complete sense to allow for housing along a subway corridor, but zoning does not abide by common sense; it adheres to politics, and politicians are only concerned with getting elected again.
Congestion was the root cause being addressed by zoning. Congestion of the air, of the sun, of the streets, of the minds. People were overwhelmed by change, just as they continue to be, and always will be. But zoning has become a tool to prevent progress. It has expanded far beyond its original intention in order to prevent basic, common sense development. New York has begun to grow again, after decades of divestment, and it needs a new zoning code that was not created in 1961, at the start of suburbanization and white flight. The new zoning code must also empower public authorities to practice transit-oriented development independently. Without zoning, T.O.D. will naturally occur, because density fuels development. But since we need to manage growth, manage traffic, and manage school populations, we should promote growth near transit and limit it elsewhere… We can plan and plan but if zoning is not changed, these plans won’t become reality.
In the future, I will create a “Riel Estate” firm in order to develop spaces that will bridge the gap physically, socially, economically, and politically, advocating against NIMBYism in order to improve urban dynamism. Our buildings could be LEED certified, with green roofs and vertical farms, community spaces and place-making efforts. We could ‘translate’, and not ‘transport’, development policies for different contexts, in order to ‘transform’ communities, advocate for T.O.D., and showcase potential through our sites.
The firm would work with developers, transportation agencies, and municipalities in order to bridge the gap between stakeholders and conduct joint development projects. We would have expertise dealing with transportation agencies, and we would understand their mindsets, allowing for developers to get their feet in the door for their transit-oriented projects, and ‘tackle’ the unwillingness of transit operators. We also would have connections with municipalities in order to advocate for zoning reform and FAR bonuses for developers. We could conduct feasibility analyses for joint development projects, which require a particular set of skills (dealing with decking, ventilation, circulation, and so on and so forth). Moreover, we would know how to organize public-private partnerships, leases, and asset management, be it on transit-owned property or transit-oriented property.
Similar to the Transit Realty Advisors and TRA Brokerage (formerly Transit Realty Associates) and the Massachusetts Realty Group, our expertise in “transit property management, property accounting, database development and geographic information systems, public private partnerships, brokerage, right-of-way/eminent domain, appraisal, planning, economics, law, and procurement and disposition” would allow for us to create transformative transportation infrastructure. There need to be more groups akin to the TRA, focusing on T.O.D. entirely. Surely, if it was easy, it would have been done a while ago. But I accept the challenge!
In conclusion, America’s public transportation agencies cannot be profitable in the 21st century due to a political economy that isolates these agencies from municipal zoning and land use policies, and from forming value capture mechanisms, from tax increment financing to joint development and the transfer of development rights. This siloization of zoning, land use, taxation, and transportation operations is largely due to American fears of density alongside protections of private property, but it limits the potential for transit-oriented and transit-owned joint development, and it hinders the formation of public-private partnerships. Local, state, and federal structural reforms are necessary in order to streamline value capture processes, such as up-zoning transportation assets and relaxing land use requirements, in order to facilitate T.O.D. While value capture will provide marginal financial benefits due to the limited assets that agencies possess, it literally stands on its own merits as a vehicle through which the urban fabric can be renewed and enhanced. Transportation agencies cannot be profitable, but they can be organized more efficiently, if given the resources necessary to practice value capture.
The Move NY team – based on hundreds of conversations with labor, business, community groups, transportation experts, and elected officials across the region – has come up with an innovative plan to make NY’s transportation system better for ALL New Yorkers.
By simply making the City’s tolling system fairer – reducing tolls that are too high and adding and restoring tolls where traffic is worst and transit options are plentiful – we can generate the revenue we need to maintain, modernize, and expand our aging transit system and improve our road and bridge network, creating 30,000+ new, local, annually recurring jobs in the process. What’s not to love?
New York City was once the model city for transportation infrastructure in the entire world, and its public authorities were the epitome of progress, building feats of engineering that remain impressive decades later, from America’s longest bridge span and longest contiguous underwater vehicular tunnel, to the world’s busiest vehicular bridge. As one of the largest natural harbors in the world, the region built a complex and innovative port network, connected by railroads and highways. Our skyscrapers, from the Empire State to Rockefeller Center, were the envy of the world. And of course, our subway remains the most intricate, by far, in the United States, moving more people than the next 16 largest public transportation networks, combined. The city continues to lead the world in commerce, finance, media, art, fashion, research, technology, education, and entertainment, and it also continues to host the United Nations.
But today, our roads are congested, our subways are crowded, and our infrastructure is decaying, while tolls and fares continue to increase. We need a visionary plan to pull ourselves up by our bootstraps and get back to work, in order to renew, enhance, and expand our subways and roadways.
How will this be financed? Well, Robert Moses’ TBTA was able to build bridges and tunnels and, as a public authority, use toll revenue in order to remain self-sufficient. The Port Authority, meanwhile, remains legally self-sufficient today. TBTA roads are now part of the MTA as MTA Bridges and Tunnels, and in terms of traffic volume, it is the largest bridge and tunnel toll agency in the United States serving more than a million people each day and generating more than $1.5 billion dollars in toll revenue annually as of 2011. But NYCDOT East River bridges have remained without tolls for more than a century. As a result, these bridges are heavily trafficked, and truckers use city streets, causing countless deaths and other public health concerns, such as higher rates of asthma. Moreover, these bridges have, historically, not had enough funding for maintenance; the Manhattan Bridge was about to collapse in the 1980s due to inherent flaws in its design (subways on the sides, causing excessive swaying) and a lack of maintenance. (At least the Manhattan Bridge and Williamsburg Bridge were designed for subway lines, unlike Robert Moses‘ bridges and tunnels, which did not provide any right-of-ways for rapid transit. And where rapid transit existed, he allowed for divestment and deferred maintenance to become commonplace. To him, and many other New Yorkers, subways were as archaic as horse-drawn carriages, and they did not belong in the modern era).
But if the DOT’s East River bridges had remained tolled, the revenue would have totaled $31 billion today. This would have been more than enough for maintenance, and, according to Sam Schwartz, “we could have built a subway from Staten Island, we’d have the Second Avenue subway from the Bronx to the Battery and trains from the airports to Midtown and downtown.”
However, Mayor Gaynor, in 1911, rescinded the fees on these bridges. Since the City of New York had only recently been consolidated, he felt as though this gesture would further unify the city, and of course, help him get reelected. “For my part,” he said, “I see no more reason for toll gates on the bridges than for toll gates on Fifth Avenue or Broadway.”
While tolls for pedestrians may not have gone over well (they had to pay a penny to cross the Brooklyn Bridge), the City also removed tolls for horse-drawn carriages and automobiles. And Mayor Gaynor was not even renominated, because Tammany Democrats chose someone else. Sadly, he died before the election, of wounds sustained during an assassination attempt three years prior.
But this decision, made over one hundred years ago, severely impacts our city today. Back then, we built quickly, constructing subways throughout the five boroughs in order to alleviate chaotic congestion in Manhattan. We built parks and parkways, formalizing transportation and separating heavy rail from our industrial streets. Elevated railroads for passengers and for freight (today’s High Line) became commonplace, but these lines used to all be at-grade, or in open cuts below the street, with adequate ventilation prior to the advent of electrification.
Akin to highways decades later, railroads only took efforts to minimize effects in wealthy neighborhoods, because these residents had power. Thus, railroads to Grand Central along Park Avenue were eventually dug underground, while railroads in port districts largely remained at-grade, with cowboys trying to keep people from getting mangled. (The High Line was eventually built as an elevated line, going directly into factories and adjacent to streets, unlike elevated subways, which were built directly above streets, and, as a result, were being taken down throughout Manhattan due to real estate interests and technological obsolescence; subways were planned to replace these routes, some of which were built, and some of which remain to be built, such as the Second Avenue Subway).
We began to stop leading when our highways began ramming into our neighborhoods, leading to mass protest. Of course, elevated railroads also divided neighborhoods, but these structures required less space, and they also produced less pollution and served communities more efficiently. For instance, passengers could walk up to a platform, while drivers needed plenty of space for ramps for their cars. And a six-lane highway in the South Bronx could be a two-track railroad. Plus, most importantly, local residents could use public transportation. Most New Yorkers do not own vehicles, and these highways were built for suburban commuters, not for local residents.
At the same time, the city became indebted from white flight and deindustrialization, and only relatively recently has reemerged from ruin. Today, our Hudson Tubes need to be replaced, and so do our roadways. Plus, climate change will only get worse, and we saw how Hurricane Sandy impacted our infrastructure. Our renewed infrastructure will also need to be equipped with 21st century security technology in order to defend against Islamic terror.
We need the Move NY campaign to get passed by the City Council, State Assembly, and State Senate. This will allow for fair tolling into Manhattan’s CBD, alleviating congestion and providing funding for mass transit and bridge maintenance. But how does Move NY push through the white noise in the City and State? How can momentum be built in the outer boroughs and suburbs? The Move NY plan is, strategically, not termed congestion pricing. But how can the campaign continue to provide a cognitive shift, and change how New Yorkers see the problem and see the solution? How can the campaign continue to reframe key values?
New York needs a narrative for the 21st century. In centuries past, we devised Manhattan’s grid system and we built the world’s tallest buildings. The Move NY plan will be seen, in the future, as the stepping stone that allowed the city to continue to grow tall and strong.
In lieu of Hudson County seceding from New Jersey to join New York, and the PA and MTA joining forces (with an integrated PATH and NYCT network), we need to focus on New York’s bridges and tunnels. We need to focus on our transit gaps. We need to introduce more variable, electric tolling. More ferries. Tolls on our East River bridges in order to fund the MTA Capital Plan, and get more drivers onto trains, thereby further decreasing congestion even more. For suburban commuters, the LIRR and Metro-North will also need to be renewed, enhanced, and expanded. East Side Access will be done relatively soon, but Penn Station commuters are also going to be getting modest public-private Moynihan improvements soon.
Besides congestion pricing, streamlining value capture and joint development practices can also provide financial benefits. Hudson Yards are a great example for this century, but so was Grand Central’s Terminal City. We need up-zoning along subway corridors in poor neighborhoods and in rich neighborhoods alike. We need to streamline development processes in order to allow for more housing, in order to keep up with demand. The city needs neighborhood improvements throughout, while balancing concerns about displacement.
Unfortunately, joint development had a dark period in our city, when Penn Station was destroyed for Madison Square Garden. This was allowed by the 1961 Zoning Resolution, which divided the city into residential, commercial and manufacturing areas, and introduced incentive zoning and floor-area-ratio (FAR). The resolution also introduced Transfer of Development Rights (TDR), also known as air rights, in order to preserve green space and historical landmarks, without interfering with the financial rights of property owners. But Pennsylvania Railroad sold their Penn Station air rights, and was given a modern, subterranean station, which lost the light and the circulation. Today, the country’s busiest train station remains congested, and through-running no only occurs due to the balkanization of Penn Central into NJT and LIRR, both of which terminate in Midtown Manhattan. Going from Newark to JFK, or from the US Open to Secaucus? Good luck.
Air rights were also used atop highways. The Port Authority’s George Washington Bridge and Bus Terminal funneled vehicles along the Trans-Manhattan Expressway, below the Bridge Apartments. The 4,000 residents of these four aluminum-sheathed high-rises deal with noise and exhaust every day, but like most urban dwellers, they deal with it, and it’s better than leaving a gaping hole in Manhattan.
In principle, air rights go back to early English common law. To whomever the soil belongs, he also owns to the sky and to the depths. Though the air is now a public aviation highway, the practice remains utilized. But it should be easier to build atop assets. Since most railroad assets are in far-flung locations, land values are not as high as in a CBD. Yet zoning also limits potential. Transportation agencies should be exempt from municipal regulations. Technically, the MTA, as a state authority, is already exempt from municipal rules, but it follows them because it does not want to deal with so-called progressive, NIMBY protests.
According to the American Planning Association:
The Zoning Resolution of the City of New York, as amended September 1962, defines railroad or transit air space as “space directly over a railroad or transit right-of-way or yard, which right-of-way [is] open, except for structures accommodating activities incidental to its use as a right-of-way or yard, and not otherwise covered over by any building or other structure at the effective date of this amendment.”9
The Resolution states that the City Planning Commission may permit developments or enlargements in railroad or transit air space for any use permitted by the applicable district regulations, provided that the following findings are made:
(a) That the lot area for such development or enlargement includes only that portion of the right-of-way or yard which is to be completely covered over by a permanent fireproof platform, unperforated except for such suitably protected openings as may be required for ventilation, drainage, or other necessary purposes.
(b) That adequate access to one or more streets is provided.
(c) That, considering the size of the proposed development or enlargement, the streets providing access to such use will be adequate to handle increased traffic resulting therefrom.
(d) That, from the standpoint of effects upon the character of surrounding areas, the floor area or number of rooms is not unduly concentrated in any portion of such development or enlargement, including any portion located beyond the boundaries of such railroad or transit air space.
In addition, the City Planning Commission “may prescribe appropriate conditions and safeguards to minimize adverse effects on the character of the surrounding area, and may require that the structural design of such development or enlargement make due allowance for changes in the layout of tracks or other structures within such right-of-way or yard, which may be deemed necessary in connection with future improvements of the transportation system.”
Thus, air rights developments over railroad yards are permitted by essentially administrative decisions of the Planning Commission, leaving the Commission a certain range of discretion. Approval by the Board of Estimate, the City’s governing body, is not required.
(Besides the PA and MTA, other authorities in the region also toll their roadways, such as the New York State Thruway. Akin to other state turnpikes in the mid-20th century, revenue from the bonds provided the funds, up front, to pay for construction. Toll revenue allowed the toll authority to repay bond holders with interest and finance administration, maintenance, and operation of the highway. Today, while part of the Interstate, these roads remained tolled separately).
So, in the end, it comes down to advocating for these ideas to New Yorkers. The MTA needs a narrative and a champion in City Hall and in Albany, in order to bridge the gap socially, economically, politically, environmentally, and of course, physically. Transportation infrastructure can be transformation infrastructure. But who will be the humane power broker of the 21st century? Is that oxymoron even possible today?Mayor Bill de Blasio has not been a champion of transportation, and he does not seem to understand urban dynamics. Governor Cuomo, too, has used the MTA as his punching bag. Hopefully, our next leader will be better, so we can Move NY.