By Noel T. Braymer
What does most of the rest of the world know, that most Americans don’t? It’s that rail passenger service is valuable for their economy. Most of the major long distance rail passenger services around the world operate at a profit. Often there is competition between companies willing to pay to secure a franchise in order to run passenger trains and make money. This includes high speed rail service. It’s not just running the trains that makes money. In San Diego an unnamed private investor just bought the downtown 102 year old Santa Fe Depot which is San Diego’s train station. Why would this person do this? Because it was a good investment, in other words to make money. Since the expansion of Los Angeles to San Diego rail passenger service in the late 1970’s from 3 round trips to 6, passenger traffic has increased. Today 12 round trips run between San Diego and Los Angeles with 5 of those going to Santa Barbara and 2 of those serving San Luis Obispo. Improved Amtrak service helped spur construction of Light Rail in San Diego serving the downtown station in the early 80’s and Coaster service between Oceanside and San Diego in the mid 90’s. The result of all this added capacity makes traveling in and out San Diego much easier. The result of this has been a major building boom in San Diego around the old Santa Fe Depot in downtown San Diego. This has increased the value of property around the Depot and for the Depot itself. This development has also lead to more housing around the depot, which constitutes much of the new construction around it. It is unlikely that much of this new development would have happened without expanded rail passenger service.
Most advanced economies around the world have decent rail passenger service linked to major cities. Most cities can’t function without rail passenger service. Many older cities around the world realized that they didn’t have the room to handle increased car and truck traffic in their inner cities to build new roads. So rail passenger service was kept and improved in many counties after World War 2 while America built freeways where new suburbs soon were built nearby. In many countries train stations are major centers of retail, employment and services. Outside of the US railroad companies often develop their property at and near their stations to be profit centers. Without this, stations would instead be money losing overhead for their railroads. Not only does development at and round stations make extra money, but it also increases business for their rail services. A good way to increase ridership is to make the station area a destination.
After World War II most development followed the construction of freeways leaving inner cities around the country to fall into decline. With this came the decline of rail passenger service which had never been particularly profitable in the US. A major factor which put the railroads at a disadvantage was tax money spent for roads while the railroads struggled to pay for their infrastructure with declining revenues. The trucking companies benefited from new, faster freeways largely paid for from gasoline taxes paid by motorists in the 50’s and 60’s. What we are seeing now is the start of a new cycle. The population of this country since World War 2 has roughly doubled. Major road building generally came to halt by 1980 and most of our existing roads now are old and poorly maintained. Traffic congestion in most urban areas is worse than ever. The ironic thing is most highway spending is not for repair, but to expand existing or build new roads which are very expensive. The rationale for this is to reduce traffic congestion. But the reality of this is expanding roads doesn’t reduce traffic congestion. As soon as roads are widened or built, people drive more and congestion gets worse.
A major problem for most people, particularly young adults is the high cost of housing and auto ownership. Most people today don’t have much disposable income to spend for much else after paying for housing and transportation. Traditionally people lived in cities with high density housing which reduced housing costs and bought jobs and services closer to where people lived. For many people a traditional house in the suburbs is no longer affordable or it is to far away to travel to work. One of the factors in declining public transportation ridership, particularly for bus service has been the rise of “ride sharing” services. The downturn of these services is road congestion is increasing in urban areas because of these services and because fewer people are riding buses now than in the recent past. Most people who use their cars to make money ride sharing are not employees but independent contractors. This saves ride sharing companies a great deal of money. But for these independent contractor drivers who are responsible for expenses that an employer is usually responsible for, means they would be better off with a minimum wage job.
In Florida the start up of a new privately owned rail passenger service will begin this year. Called Brightline, it will start service between Miami and West Palm Beach. In the near future service will be extended to Orlando. The company behind this is Florida East Coast Industries. It has been for over a 100 years a property development company which also owned a railroad in Florida. The plan for Brightline is to make money. It should have no problem operating the rail service at a profit. The problem for most transportation services is paying the full capital costs of its infrastructure. So how is Brightline going to do that? The primary interest for the Florida East Coast Industries company is in developing property. With Brightline bringing traffic to FECI’s properties and new developments, most of the money will be made from land development. This is nothing new. In America land development was the driving force for most railroad construction in the 19th and early 20th centuries. Rail passenger service will be a driving force again in land development of the 21st Century in this country.
Healthy rail passenger service works best in places with high density housing. What if you don’t want high density development in your back yard? The reality of high density development is more people can live comfortably while leaving more open space available. Central to making this happen is good rail passenger service. Not just San Diego is an example of this. In California most of the cities with train stations are seeing turnarounds from new developments. It helps that there are few people living near railroads until recently. The biggest barrier to development in most places including California is opposition from local residents. Their main objections is fear of more traffic congestion with more people in their neighborhood. But building new development further away is a major cause of congestion because people have to drive further and this adds more vehicles to existing roads. One of the growing problems in the suburbs are massive stores closings at major shopping centers around the country. What is to be done as more people shop online or just shop less as we get more boarded up stores? Those shopping centers have acres of empty parking lots not making money.
As more cities see what is happening with better rail service in places like California, the more cities will want rail passenger service. This is happening with towns all over the United States asking for Amtrak service. Recently several more station stops have been added by Amtrak at towns that requested new stations on existing routes. Towns along the route of the Cardinal and Sunset Limited which run only 3 days a week are requesting daily service for these trains. Towns along the Gulf of Mexico are working to get trains service restored between New Orleans and Orlando. The city of Wichita, Kansas really wants rail service by extending the Heartland Flyer north of Oklahoma City stopping at Wichita on its way to connect to the Southwest Chief at Newton, Kansas. The city of Pueblo, Colorado already has an agreement from Amtrak to extend the Southwest Chief from Chicago to their city. Not content with that, Pueblo is also working with the support of the State of Colorado to get a section of the Chief extended north from Pueblo to at least Denver and maybe to Cheyenne.