Secretary LaHood’s announcement that the Federal Transit Administration will begin to examine a wider range of benefits and impacts when it decides which projects to fund is a long time coming. One of the areas in greatest need of reform is the process and level of investment in new transit capital projects.
To take full advantage of development opportunities around transit stops many have called on the federal government to revamp the cost-effectiveness index that determines which metropolitan projects receive new funding for rail projects. It now looks like the department is willing to move well beyond the overly simplistic calculation of the ratio of capital and operating costs divided by time saved, and instead weight these scores by the real economic benefits that the proposed investments will achieve, including cost of living reduction, value creation and capture, and job creation. The ability for the right kind of investments to stimulate efficient high-density transit-oriented development and the environmental and agglomeration benefits that accrue should be sufficiently weighted.