The TTC doesn’t make money, and probably shouldn’t

Ed Keenan, at his blog, writes:

There is no business plan I can imagine in which a Finch West subway turns a profit within the next 50 years, or even breaks even. A Sheppard East subway into Scarborough would lose money. The truth is that most of the existing bus routes in Scarborough and Etobicoke and parts of North York lose money. That is why the TTC can often try to save money by cutting service on suburban routes. It is why the TTC under David Miller briefly projected it could save $10 million per year by shuttering the existing Sheppard subway.

This gives me the opportunity to put a few things down on pixels that I’ve been meaning to for a while, so bear with me. But if you don’t want to read this to the end, the TL,DR version of this blog post is a big, flaming “be careful what you wish for”.

1. Imagine harder, boy!

Is there some reason to categorically rule out subways along Finch? Sure, if we’re going to be bound by the present facts. But half of the point of building rapid transit in already built-up urban areas is to change the facts: a Finch LRT is expected to drive redevelopment, just not as much as, say, the Spadina subway extension to Vaughan.

And there’s a lot of reason to think that Finch could, in theory, make a decent subway corridor. Starting at the airport you can easily see a route going north to Finch, past York University, then crossing Spadina and (probably) heading a bit east of Yonge (at least to Bayview?)

So the limitation isn’t on a subway making sense in a geographic sense, it’s on how to make the damn thing make money.

2. A brief discussion of proftable mass transit.

There aren’t that many models for how to make a profitable mass transit system. The classic is to have transit owned and operated by the people who also either own or sell the properties that transit serves. This is how Los Angeles’ red cars worked before the freeway era, and this is how Hong Kong works today.

More broadly, Wikipedia provides a list of transit systems that operate with a farebox recovery ratio of more than 100% (what I’m using “make money” as a shorthand for.) What do they all have in common?

First of all, they’re all super-dense Asian cities: Singapore, Taipei, Hong Kong, Tokyo, and Osaka. Here are the population densities for those cities:

Osaka: 12,877 per square kilometre
Taipei: 9,600 per square kilometre
Singapore: 7,315 per square kilometre
Hong Kong: 6,480 per square kilometre
Tokyo: 6,029 per square kilometre

By comparison, Toronto’s average is 4,149 per square kilometre. And the numbers for those Asian cities certainly and dramatically understate the density around transit service, which is what we’re talking about. Even low-density Toronto sees densities of 9-10,000 people per square kilometre (with some interruptions) along the Bloor-Danforth line.

So how does Finch do? You tell me: noodle around with this census map. There are some high-density tracts (York, Jane & Finch) but there’s also yawning density deserts.

(I’ve gone over these kinds of numbers before at some length, but since some suburban councillors like to insist that you don’t need density for subways, it’s worth repeating.)

3. What would a Finch subway business plan look like?

So with those basic facts in place, a money-making Finch subway would almost certainly need the following:

1. At least doubling the density of people and jobs along Finch, and in some places tripling.

2. Linking the incentives for transit use and development in the most direct way–have the same corporation run both.

Those are the all-but-necessary preconditions. Based on existing systems, distance-based fares wouldn’t hurt. And for the most rapid return on investment, a subway-building company would also demand things like a free hand as far as building height and zoned uses go.

And we’re not talking just along Finch itself. If I were being asked to build a subway along Finch, I’d want building freedoms well north and south of the corridor, specifically to try to introduce more walkable, less car-oriented streets feeding into the subway line. That is, we’re talking about demolishing existing residential neighbourhoods to build something that looks more like downtown.

4. Great, you’ve got a subway, now what?

Before going any further, let’s be clear about one thing: this plan will not happen in any way, shape or form. The pro-density, pro-transit left would hate the privileging of private capital, while the suburban right would hate the towers and disruption to settled communities it would cause. Absolutely nobody would support it, even though I think it’s a realistic-on-paper answer to the question “how can a subway be profitable?” Since it would also require implicit government support (if nothing else, freedom from zoning not available elsewhere in the city), it’s not even a “free-market” answer, really. And we haven’t even raised the possibility of a subway company being granted any expropriation rights.

What it most resembles, actually, is the Bob Moses vision of city-building: the use of state power and private capital to transform “blighted” places. While this plan plausibly serves a place called “Finch”, it almost certainly wouldn’t serve anyone currently living there. Indeed, in most places the plan explicitly requires people to be moved out, by selling their homes or other properties to our hypothetical subway-development corporation. Even the existing towers would probably be demolished for redevelopment, Regent Park-style.

This is what putting the technological cart before the city-building horse gets you: instead of building transit to serve the city we have, you’re effectively rebuilding the city to serve the transit you’ve decided you want, ex ante and for no technical reason.

This is probably why the vast majority of the world’s transit systems don’t make a cent of profit: because we don’t want them to. Instead, we want transit to serve a bunch of different purposes, not all of them cost-effective. “Taking cars off the road” doesn’t actually make money, but it’s worth doing for congested cities.

In short: it’s possible to imagine Toronto’s suburbs as a blank sheet of paper where we can fit subways in and hey with some extra imagination it might not even cost us that much. But anything beyond crayons-on-maps level of sophistication quickly leads us to a scenario that nobody actually wants. It’s possible to imagine a free subway, but nobody would actually want it built.

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