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Author’s Note: Much of the information included in this post I have recently received directly from Metro. Under the new leadership team there has been an openness in terms of answering questions and providing documents to a degree I have never seen in my 20+ years of following Metro. It is a refreshing change and should be applauded.
Metro’s previous leadership proposed the construction of two bus rapid transit (“BRT”) lines. At an estimated cost of over $3 billion, these two projects, if constructed, would be the most colossal waste of taxpayers’ money in the history of the City.
If you are not familiar with the term "bus rapid transit", it is the construction of dedicated lanes for buses. The only example we have in Houston is the disastrous Silver Line in Uptown. After spending about $200 million to construct the project, and who knows how much to operate, it is attracting about 800 riders per day, just over 5% of the 14,000 Metro had projected. The ridership is so bad that Metro recently announced it intends to reduce the service. Based on this rousing success, Metro has proposed to build these two additional BRT lines.
The "The University Line" would begin at the Westchase Transit Center and travel along Westpark to Edloe, then turn north to Richmond. It would then run east along Richmond to the Wheeler Transit Center. From there it follows a circuitous route through midtown to intersect with Lockwood and then follows Lockwood north to the Tidwell Transit Center. The estimated cost is $2.43 billion.
The "Inner Katy Line" would begin at the Northwest Transit Center where it would connect to the Uptown Line and travel along the south side of Katy Freeway to downtown and make a loop using Capitol and Rusk to EADO. The estimated cost is $735 million.
The Ridership Projections
Metro originally did preliminary ridership projections for about 130 potential projects in 2019, as part of their planning for the MetroNext program. Both the University and Inner Katy Lines were included. This report estimated that the University Line would add about 30,000 new daily riders and that the Inner Katy line would add about 8,200 new riders by 2040. These projections are for ridership increases across the entire Metro system assuming the construction of these projects.1
However, in July, 2022, Metro in a filing with FTA lowered its ridership projection to 15,000 on completion and 19,400 by 2040. Then last August, Metro updated the projections for the University Line again. That projection (p.26) is that the line would increase systemwide ridership on completion by 7,536 by 8,248 by 2040!
Let me pause for a moment to comment on ridership projections. Generally speaking, transit ridership projections are almost always too high. But Metro has been in a category of its own when it comes to overestimating projected ridership. This 2020 FTA study, comparing projected costs and ridership to actual results on about 20 projects around the country, found Metro’s ridership projection for the Purple Line to be, by far, the worst of any project they studied. The Purple and Green light rail lines are carrying about 25-30% of their projected ridership. And, as I mentioned earlier, the Silver is running a little over 5% of its projections today. So, we certainly have every reason to be skeptical of any ridership projection just based on Metro’s history.
When you look at the assumptions in the projections, there is even more reason to be skeptical. First, the projections are based on HGAC’s outdated population projections for the region.2 Metro also used 2019 as the base case for actual ridership. Of course, 2019 was the last year before transit ridership collapsed due to the pandemic. The implication is that projection is assuming that ridership will quickly return to pre-pandemic levels, an assumption that many question. In 2023, Metro’s ridership was 86% of the 2019 ridership.
But there are other weird anomalies as well. For example, the Inner Katy projection shows that the base case, which is supposed to be the actual ridership in 2019, for the Silver Line to be 1,800 per day. Last year, the number was half that.
For the balance of this article, I am going to use Metro’s ridership projection to analyze these two projects, but keep in mind that it is quite likely they may turn out to be too high. I am particularly skeptical of the Inner Katy projections.
Cost of Construction
While Metro’s current estimate for the University and Inner Katy projects are $2.43 billion and $735 million, respectively, Metro’s previous estimates of the cost to construct fixed guideway projects have also been unreliable. The cost of the Purple Line, for example, came in 33% higher than estimated ($591MM→$787MM).
Metro has already made massive changes to the estimates for both of these lines. Just 18 months ago, in a request for funding Metro filed with the FTA, it represented that the total cost of the University Line would be $1.57 billion, which is only about two-thirds of the current cost estimate. In 2018, Metro told HGAC the Inner Katy Line would cost $281 million, barely a third of the current estimate. So, there is no telling what these projects would actually eventually cost.
Cost per New Rider
Even if we accept Metro’s estimated costs and future ridership, the cost to generate a new rider shows what absurd an “investment” these projects would be. The numbers are jaw dropping:
And that is before we even start talking about operating costs or the interest costs to financing these projects. In the November 2022 submission to the FTA, Metro estimated the annual operating cost at $35 million. Metro would probably have to borrow about $1.5 billion to finance the projects, so that would be about another $60 million per year in interest expense. That would put the ongoing cost per new rider at about another $11,000 per year. We could easily buy a car for every new rider and pay for their insurance, gas and maintenance for the rest of their lives, and not come close to spending this much money.
Financial Consequences for Metro and the City of Houston
These projects would devastate Metro finances and seriously impact the finances for the City of Houston and the other constituent cities.
Due to robust sales tax collections and a billion-dollar federal COVID windfall, Metro is currently in good financial shape. However, these projects would soak up almost all of its current cash reserves and about double its current debt. That means that the Metro would not be able to do any additional projects probably for decades. It would also be strained to continue to operate a decent bus service, which continues to be the backbone of our system on which most transit-dependent Houstonians rely.
It would also put the general mobility payments to the City of Houston and the other cities that participate in Metro in jeopardy. Under the current referendum, Metro is authorized to spend up to 25% of its sales tax revenues to assist its member cities with mobility. The cash-strapped City of Houston is particularly dependent on these funds. I do not see how Metro would be able to pay for these projects, fund their existing operations and continue to make the general mobility payments to the cities.
Travel Times and Speed
Metro’s updated ridership projections also projected that the end-to-end travel time on the University Line would be 1:28 during peak and that the buses would travel at an average speed of about 17mph. (p.17) This morning at 7:30AM Google Maps estimated that trip using the existing Metro service would take 1:29 and by car it would take 40 minutes. In other words, after spending $2.4 billion we would save transit riders one minute and the someone in car would get there 48 minutes sooner.
Local Disruption & Opposition
Interestingly, there is little support for either project along the neighborhoods they would supposedly serve. In some areas, like lower Richmond, there is fierce opposition because of the disruption it would cause both during construction and the draconian effects it would have on traffic in the area. The plan currently calls for Richmond to be reduced to one lane each direction from downtown to Edloe. The left turn across Richmond at Edloe alone would be a nightmare. I think it is quite telling that the very people the project is supposed to serve are either ambivalent or vehemently opposed to it.
Conclusion
I have never seen this stark of a case against a public investment. Frankly, only a financial illiterate would support such an irresponsible expenditure of taxpayer money. And to make matters worse, after spending this reckless amount of money, few people would use the system and it would cause all sorts of collateral problems because it is so ill-conceived.
Fixed guideways are not the future of mobility. The paradigm of attempting to gather a large number of people on a single vehicle is rapidly becoming obsolete. The future is going to be door-to-door, on-demand service, which will eventually be provided autonomously and directed by AI controlled smart grids. Metro needs to be looking to that future, not building more white elephant projects. We already have enough of those.
Note 1 – To estimate the effect of a new transit line, its effect on other existing lines must be taken into account. For BRT or light rail projects this is particularly important because of their ridership mostly comes not from new riders but from riders being transfer from existing bus routes. Frequently advocates of these projects will omit this critical factor. For example, shortly after the Red/Main Street Line opened transit advocated trumpeted that it had exceeded ridership projections. They omitted that Metro estimated that 80% of the ridership came from five bus routes it discontinued.
Note 2 - I have recently discovered that HGAC has not updated its population projections since 2018 and those are significantly higher than those produced by the Texas Demographic Center. I will be writing on this soon.
