It's clear from some of the comments about BRT that many people are unclear about what it means.
By Ryan McGreal
Published September 24, 2014
As the debate over Hamilton's rapid transit plan heats up, some people have been asking why we don't reconsider choosing bus rapid transit (BRT) instead of light rail transit (LRT) for the 14-kilometre east-west line between Eastgate Square and McMaster University.
Cleveland's Healthline BRT (Image Credit: Wikipedia)
It's clear from some of the comments about BRT that many people are unclear about what it means. Some people seem to think BRT amounts to express buses. If that were true, Hamilton would already have BRT: the B-Line bus, which has been running along the rapid transit route since 1986.
However, BRT is a lot more than just a bus that makes fewer stops. Properly designed, BRT is a rapid transit system of express buses running on dedicated lanes that are physically separated from automobile lanes.
BRT has passenger boarding stations rather than bus stops, and it runs at a high enough frequency that passengers can just show up at a station and wait for the next bus.
It's important to understand that BRT is nearly as disruptive to the street as LRT. The roadbed needs to be rebuilt and the asphalt surface replaced with concrete to handle the wear and tear of heavy buses running constantly on the road.
BRT is a little less than half the capital cost to build as LRT, but it has a significantly higher per-passenger operating cost. Most of the cost to operate a rapid transit system is paying drivers, and BRT needs more drivers to carry the same number of passengers as LRT.
Since the province has said it will pay 100 percent of the capital cost for Hamilton's rapid transit system, choosing BRT means the province saves money upfront but Hamilton ends up saddled with higher operating costs for every year thereafter.
According to the city's Rapid Ready comprehensive transit plan submitted to the province last year, the net levy cost for an HSR system including LRT will be $7.1 million lower than the cost of a bus-only system by 2031. The overall net operating cost per passenger will be $1.51 in a system that includes LRT but $2.28 in a system with just buses.
In other words, running the LRT will generate enough surplus revenue from riders to offset some of the cost of providing bus service across the rest of the city.
Perhaps even more important, LRT will do a much better job of attracting new private investment to the city than BRT.
A recent study by the Institute for Transportation and Development Policy — a consultancy that promotes BRT — has generated headlines about the potential for BRT to attract new investment as well.
When you dig past the headlines and read the full report, it finds that a full, top-of-the-line "Gold Standard" BRT system attracts a similar relative return on investment to LRT.
That is, it reconfirms the conclusion that BRT costs less to build but attracts less new investment, while still costing more per passenger to operate.
In contrast, LRT costs more to build but attracts more private investment. All of the new developments that occur in the 800-metre corridor on either side of the LRT line will mean new property tax assessments on land that is already serviced.
Consider that last year, a small, three-storey office near City Hall was demolished. It went from paying $77,000 a year in property taxes to just $7,000. That's lost tax revenue we need to run the city and pay for our infrastructure.
Now think of that process in reverse.
The property at 123 James Street North (at Vine) was assessed at a value of $371,000 in 2012 when it was a vacant lot. It paid $12,527.81 in property tax, of which $9,169.49 went to the city and the rest to the School Board.
New development at James and Vine under construction (RTH file photo)
Once its redevelopment as a new three-storey commercial building is complete, its assessed value is estimated to be $3,800,000. It will pay an estimated $144,459.24 in property tax, of which $93,919.24 will go to the city.
That's an increase of more than ten times in annual property tax revenue for the city.
Or consider 68 George Street at Caroline, the site of the Staybridge Suites Hotel. As a vacant lot in 2010, it was assessed at $436,500 and paid $17,955.66 in property taxes, of which $11,210.86 went to the city.
Sign going up at the Staybridge Suites Hotel (RTH file photo)
After redevelopment, the same site was assessed at $9,643,750 in 2013 and paid $350,273.11, of which $228,761.86 went to the city.
That's an increase of 20 times in annual property tax revenue for the city.
Here's one more example: 40 Bay Street South at Main, the site of the Homewood Suites redevelopment. As a vacanat lot in 2012, it was assessed at $760,000 and paid $28,434.02 in property taxes, of which $18,122.86 went to the city.
Homewood Suites and 150 Main (RTH file photo)
Once its redevelopment is complete, its assessed value is estimated to be $13,000,000. It will pay an estimated $473,796.18 in property taxes, of which $309,996.18 will go to the city.
That's an increase of more than 16 times in annual property tax revenue for the city.
|Assessed Value||Property Tax||Municipal Portion||Assessed Value||Property Tax||Municipal Portion|
|123 James St N||$371,000.00||$12,527.81||$9,169.49||$3,800,000.00||$144,459.24||$93,919.24|
|68 George St||$436,500.00||$17,955.66||$11,210.86||$9,643,750.00||$350,273.11||$228,761.86|
|40 Bay St S||$760,000.00||$28,434.02||$18,122.86||$13,000,000.00||$473,796.18||$309,996.18|
Now think of all the empty buildings and vacant properties along the east-west LRT route that are just waiting to be redeveloped and generate new value and additional property tax assessment.
Hamilton needs a lot more of this kind of investment to get its long-term infrastructure obligations in order. We have spent the past several decades investing heavily in expensive, low-density suburban infrastructure that does not generate enough property tax revenue to pay for itself.
If we want to reduce our infrastructure life cycle deficit, we need to generate a lot more value out of the infrastructure we have already built.
The good news is that the city has already done the important work of developing a land use policy for the area around the LRT line to encourage high quality new private investment that leverages the LRT line.
What we need to realize this promise is strong local political leadership that will hold Queen's Park to its promise of full capital funding.
A version of this article was published in the *Hamilton Spectator on September 23, 2014.*
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