{"id":51051,"date":"2015-03-11T07:30:53","date_gmt":"2015-03-11T11:30:53","guid":{"rendered":"http:\/\/spacing.ca\/toronto\/?p=51051"},"modified":"2015-03-11T14:44:02","modified_gmt":"2015-03-11T18:44:02","slug":"spadina-subway-overrun-means-scarborough-pt-2","status":"publish","type":"post","link":"https:\/\/spacing.ca\/toronto\/2015\/03\/11\/spadina-subway-overrun-means-scarborough-pt-2\/","title":{"rendered":"What the Spadina subway overrun means for Scarborough, pt. 2"},"content":{"rendered":"

\"feature-lorinc\"<\/a><\/p>\n

EDITOR’S NOTE:<\/strong> Read part one of this series<\/a> published\u00a0yesterday<\/em><\/p>\n

When private firms invest in new equipment, the managers must pay close attention to the all-in-cost and how those capital outlays impact the eventual price of the goods being produced. As every CFO knows, one determines the other.<\/p>\n

But for reasons that I can\u2019t fathom, our political leaders blithely ignore this practical financial framework used by private investors when it comes to building costly rapid transit projects. They employ magical thinking (\u201cbuild it and they will come!\u201d) or ignore sensible land-use planning advice in order to score political points. Later, we all pay, but the decision-makers by that point are long gone.<\/p>\n

Even though transit doesn\u2019t operate at a profit, there are nonetheless approaches to mitigate those losses, which, as it happens, are also ways to maximize the broader social\/economic benefit that flows from such huge public outlays.<\/p>\n

By way of counter-example, consider the reported $400 million overrun on the $2.5 billion Spadina extension. When the line is finished and open, the fare for commuters who use it won\u2019t differ from anywhere else on the system, because that\u2019s not how we price transit. The TTC estimated that the annual operating cost is expected to run to $33.7 million, with a net figure of $14.2 million (i.e., expenditures less fare revenue), which will be shared between the City and York Region (thanks to Steve Munro for the reference). As for the capital overruns, residents across the City and York Region will have to absorb them in the form of higher debt charges, reduced services or increased taxes for years to come.<\/p>\n

There are valuable lessons to be learned, as becomes crystal clear from a brilliant new report by University of Toronto geographers Andre Sorensen and Paul Hess<\/a>. Their study looks at the implications of the rapid transit projects that have been proposed for the apparently neglected people of Scarborough.<\/p>\n

Sorensen and Hess have carefully examined the various corridors proposed for the Scarborough subway, Smart Track, and the three LRT proposed<\/del> routes (the approved\u00a0Sheppard East LRT, and the proposed Eglinton-Morningside line as well as the ill-fated Scarborough RT replacement to Malvern) in terms of accessibility of stops to local communities as well as re-development potential.<\/p>\n

In other words, they\u2019re doing what our planners and elected officials should have done all along, which is focus on how to make these massive investments as financially viable and effective as possible by situating the lines close to commuters as well as properties that can be intensified. City staff never delivered any of this kind of granular analysis to council when it made its ill-considered 2013 decision to go ahead with a $3.5 billion\/three-stop subway and kill the Scarborough LRT.<\/p>\n

\u201cBuilding a high-capacity rapid transit line in an area with low or moderate intensity of land uses will make sense only if it is possible to redevelop and intensify lands within walking distance of the transit stops,\u201d Sorensen and Hess write. \u201cUnfortunately, this consideration has not been a significant part of transit planning debates in the Toronto region.\u201d<\/p>\n

Their key conclusions:<\/p>\n