The Decades-Old Roots of New York’s Subway Crisis

New York’s 7 Train. Photo by Adam Moreira.

As New York City recovers from the COVID-19 pandemic, the subway, a key vein of the city’s mobility, is struggling once again. Even with a $3.8 billion federal bailout, the Metropolitan Transit Authority faces an operational budget deficit of $8.5 billion. While before the pandemic, the New York City subway had recovered from the depths of a 2017 “State of Emergency” with lower delays and increasing ridership; now the subway faces a city where half of the population say they will avoid public transit.  

However, in a city like New York where having a car is infeasible for most, the decreasing revenue and ridership is cause for fear about where the system is headed. Already, the M.T.A. has begun looking into using tax revenue originally meant for subway infrastructure improvements in order to fund day to day operations. Yet in a system that is visibly falling behind its European and Asian peers, further delaying critical improvements is a dangerous step backward.

Westminster Station (London). Photo by Wikimedia user Emcc83.

J/Z Chambers Street Station (New York). Photo by Wikimedia user Gryffindor.

Shanghai University Station (Shanghai). Photo by Adrian Pingstone.

While cities such as London and Shanghai are still investing heavily in new subway construction, platform edge doors, and automation. New York is once again at a crossroads over whether it can fund improvements. However, this is not the first time New York’s subway has faced a crisis of fiscal decision making. In fact, rather than being the outlier, the common narrative behind New York’s subway is decades upon decades of bad decisions and political convenience that have created a system with transit deserts, delays, and dilapidated infrastructure. The problems the system faces today are not new, and the impacts felt for generations. 

Rapidly Slowing Expansion

On March 24, 1900 Mayor Robert A. Van Wyck broke ground near City Hall on the first New York City Subway line. Four years later, his successor, Mayor George B. McClellan, officiated the opening of what is today the 4/5/6 trains at Harlem-145th Street. This quick development of the subway—which was rarely seen thereafter—illustrates the city’s expansionist attitude towards building public transit. The new lines that sprawled across undeveloped areas of Upper Manhattan and the outer boroughs catalyzed the rapid outward growth of New York City. As new subways were built homes and people came with, dispersing the population of New York across the 4 main boroughs.  

While the city government oversaw the development of the subway, individual lines themselves were each owned by different independent private operators—creating today’s numbered and lettered lines. Unfortunately, even as the subway expanded, these private operators were in trouble. The city’s “dual contract” public-private partnership with the Interborough Rapid Transit Company (I.R.T.) and Brooklyn Rapid Transit Company (B.R.T.) included a clause preventing a fare increase without city approval. As a result, the city held the fare at five cents from 1904 to 1948. While keeping the fare cheap was a politically popular move, the fixed fare meant that the companies running the subway were receiving less than half the original fare value by the end of this period.  

From 1918 to 1925, Mayor John F. Hylan also used the five cent fare as a tool to put the private operators out of business and gain municipal control over the subways. Hylan theorized that a city owned subway could make a profit that could then be invested into other public work projects. Mayor Hylan blocked any new public-private contracts that could have expanded the system further, and created a new city owned subway: the Independent Subway System (I.N.D.). The new system was entirely publicly funded, but lacked the foresight to build outward. New lines were built in already populated areas adjacent to existing tracks because the city viewed the privately owned lines as competing entities. As a consequence, the city had effectively conceded the function of increasing development in the outer parts of the city to highways. 

In 1940, the city bought the I.R.T. and B.M.T. (the reorganized successor of the B.R.T.) after both had faced a decade of bankruptcy. Although this purchase united the subway under public control, it cost the government $326 million and didn’t add an inch of subway track. Further development of the subways was also left unplanned and unfunded as Mayor Fiorello H. La Guardia’s affinity for shiny projects such as airports, bridges, and highways drained the city’s New Deal funds. Only one subway line was built from 1940-1950; at the same time, both the LaGuardia and John F. Kennedy airports were built.   

In 1946, a year after La Guardia left office, the subway reached its peak ridership: a staggering two billion passengers. However, the expansion of highways into the suburbs initiated the phenomenon known as “white flight,” and people began leaving the city in droves. Between 1940 and 1960, the population of Nassau and Suffolk County in suburban Long Island tripled, while Manhattan’s population growth slowed and even reversed. Car registration increased 140%, while subway ridership fell by 700 million, making an already unsustainable financial position worse. 

Decade-on-decade changes in population. Data from New York City and the U.S. Census Bureau. [1] [2]

In 1948, La Guardia’s successor, Mayor William O’Dwyer, finally raised the fare from five to ten cents. But by then, the declining population and ridership made the fare increase insufficient in funding further expansion of the subway. New York also faced high costs due to a policy of deferring subway maintenance during World War II. As a result, the proceeds of the fare increase were redirected to immediate maintenance needs, and projects like the Utica Avenue and 7 train extensions were put on hold, leaving subway deserts throughout New York City to this day. 

The differences between areas with and without subway access were stark. The opening of the I.N.D. Queens Boulevard Line in 1933 on undeveloped land fueled the population growth of Queens for the next two decades, illustrating the known potential of the subway to grow the city. However, the rest of Mayor Hylan’s I.N.D. lines opened on land that was already developed. Without further expansion outward, even as Queens grew, the subway felt the impact of suburban white flight. As other North American cities expanded public transit to reverse the decline in ridership, New York chose to chase the aura of highways, causing ridership to fall and an era of decline to begin.

New York City Subway Ridership 1901-2018. Data from the M.T.A. [1] [2]

Running on Borrowed Time

In the post-war period, subway construction ground to a halt and more funds were poured into the highways, leaving little for anything else. Only one new line was built between 1950 and 1987.  

The subway system fell into disrepair with frequent accidents, high crime, and slow service. Surprisingly, the new M.T.A. leadership was able to lobby and convince the state to turn it around. By July 1981, New York State had passed five separate transit taxes totalling $7.7 billion for new trains and maintenance which brought the subway back into a state of good repair. After spending $50 billion in a decade on subway revitalization, riders started to return.  

Yet oddly enough, it was during this time of growth that the city let the subways deteriorate once again. In 1994, New York City Transit posted its first ever budget surplus of $103 million. In response, Mayor Rudolph Guliani decided to cut the agency’s budget by the same amount to help fill a gap in the city's total budget deficit. His successor, Michael Bloomberg, continued this trend by not increasing the city’s contribution to keep pace with inflation. While historically the city had funded 10% of the M.T.A. total budget, in 2017 the contribution was a quarter of what it had been during the 90s—$750 million less. As the city cut the agency’s budget, the state followed suit. Over 20 years, the state government has diverted $850 million in tax revenue planned for the M.T.A. into tax breaks and other projects.  

This cycle has occurred without public repercussions partly due to the quagmire that is M.T.A. leadership. While the governor appoints less than a majority of the M.T.A. board’s members, the state still controls most of the M.T.A.’s budget. Hence, the state has de facto control over the transit authority. At the same time, the city and surrounding counties contribute a significant amount to the M.T.A. and appoint the remaining board members. Shared leadership allows both the city and state to take responsibility for improvements in the subway while diverting criticism to each other in crises. 

Faced with funding shortfalls and an increasing ridership, the M.T.A. resorted once again to a system of deferred maintenance and borrowing. By 2017, 17% of the transit authority’s budget was devoted to debt coverage, forcing the agency to shorten maintenance windows. As trains and tracks were checked less frequently, the subway began spiraling into another cycle of increased delays and slowing ridership. In June 2017, when Governor Cuomo declared the system in a “state of emergency,” only 65% of weekday trains were reaching their destinations on time. 

The M.T.A.’s inability to fund day-to-day operations also left planned improvements on standby. Today, the system still relies on World War II-era signals whose failures cause a large proportion of “major” delays. A modern signalling system would increase the number of trains per hour that can run on lines, reducing overcrowding and solving for the main cause of “minor” delays. 

Although the M.T.A. has included signal modernization within its 2020-2024 capital budget, the budget still has a $16 billion funding gap that the federal, state, and city governments have yet to fill. Even still, signal refurbishments could still take upwards of ten years, meaning other priorities can easily derail its progress. 

The Most Expensive Subway in the World

New York’s Second Avenue Subway, which opened in 2017, is the city’s largest subway expansion in over 50 years, aiming to significantly expand service to the Upper East Side of Manhattan by 2029. But it also happens to carry the dubious title of being the most expensive subway line in the world. While the average cost of subway construction in Europe and Japan falls between $100 million to $1 billion per mile, the Second Avenue Subway cost a staggering $2.5 billion a mile.  

When it comes to construction, the M.T.A. lacks any sense of direction. A New York Times investigation found that construction companies, which have donated millions to Albany politicians, have “increased their projected costs by up to 50 percent when bidding for work from the M.T.A.” Contractors credited 15 to 20 percent of these increases to the difficulty of working within the transit authority’s bureaucracy. 

To make matters worse, worker wages and labor conditions are determined in negotiations between unions and companies—both of which have an interest in raising the cost of the project. Although this may appear corrupt, these groups have an obligation to the people they represent. Without giving the M.T.A. itself a place at the table during these negotiations, the government has no one to blame but itself, and capital projects will continue to have four times the number of workers than counterparts in Asia and Europe. 

New York Second Avenue Subway (Blue); Paris Line 14 extension (Red) comparison. Data from the New York Times.

While poor contract negotiations contribute significantly to the high cost of MTA construction, deeply flawed project designs are another major source of budgetary challenges. To avoid existing underground utilities, the M.T.A. choose to build the Second Avenue tunnel unusually deep. While the cost of tunneling would’ve been relatively static no matter the depth, deeper station caverns are extremely expensive to blast and excavate. Out of the Second Avenue Subway’s $4.5 billion dollar price tag, $2.4 billion went to the 3 new stations themselves. Building shallower tunnels and stations could have saved significant amounts of money, but would have required coordination between several governmental organizations and private utility companies for which the political will doesn't exist. Laziness on the part of New York City’s government and politicians left the M.T.A. to foot a bill that was significantly more expensive than a similar project in Los Angeles, where shallower stations only cost $120 million each.

Where the political will does appear to exist is in funding the artistic ambitions of politicians. The Second Avenue subway features expansive but unnecessary full length mezzanines, effectively adding a second story to stations and raising the price of the project by millions. In another case, the M.T.A. spent $1.4 billion to complete the Fulton Center, a subway station that was originally budgeted at $799 million. The center’s 120 foot tall “Oculus” glass roof looks like it belongs more in an art museum than any subway station.

Despite protests by several M.T.A. board members to scale the project down as it ran over budget, the project was still completed with major features, like its 120-foot dome, intact. As it would turn out, the station was the pet project of New York Assembly Speaker Sheldon Silver, who threatened to cut off the M.T.A.'s budget if the project was not completed.

Combined with the World Trade Center Oculus and the new Moynihan Station, these three projects rack up a total cost of $7 billion. This is enough to build around two Second Avenue Subways, 15 miles of subway in Paris, or modern signaling on 35 subway lines. 

Fulton Center “Oculus” roof. Photo by John Cunniff.

Deja vu

Although we find ourselves in a pandemic that is unprecedented, the subway’s fiscal crisis is not new. By allowing New York to use COVID-19 as an excuse to stop investing in the subways, we are once again choosing to ignore a system that is critical for everyday New Yorkers and has proven to increase economic mobility. 

For a permanent fix, New York City can no longer rely on decades-long cycles of decay and revitalization. The city and state governments can no longer treat the subway as a short-term problem to blame on one another. At the same time, political pet projects cannot take precedence over critical infrastructure. By remembering how politicians have reacted towards the subway in the past, we can collectively engage with effective solutions. Then, hopefully, New Yorkers will have a subway to be proud of. 

Oliver Niu is a staff writer at CPR and a first-year in Columbia College studying Economics and Political Science. He can typically be found waiting for a delayed 1 train.