Changed Federal Funding Policy Expected To Shift Money To Projects Promoting 'Livability'

WASHINGTON DC – U.S. Department of Transportation Secretary Ray LaHood has announced a change in the criteria on which federal transportation funding decisions are based that moves away from “very narrow cost and performance criteria” to a consideration of “all the factors that help communities reduce their carbon footprint, spur economic activity, and relieve congestion.” These considerations would include economic development, mobility improvements, environmental benefits, operating efficiencies and land use – in addition to cost effectiveness. LaHood promised that the Federal Transit Administration would initiate a rulemaking process to accomplish this change shortly. The new rules will be used to award some $2 billion a year in funding through the New Starts and Small Starts transit funding programs.

The federal government has long been criticized for putting too much emphasis on “cost-effectiveness” when evaluating proposed transit projects for funding, and for very narrowly defining “cost-effectiveness” as whether a project can reduce commute times at the lowest possible expense. As a result, the projects that get funded tend to be suburban-serving commuter rail and bus rapid transit projects, as opposed to projects built in more compact communities like light rail and especially streetcars, which are smaller and slower but serve other purposes including promoting economic development and helping to create walkable communities where people don’t have to drive.

LaHood’s official blog, “Welcome to the Fast Lane,” stated that the federal government’s “current narrow requirements . . . have excluded many good projects – popular projects like light rail and streetcars. Measuring only cost and how fast a project can move the most people the greatest distance simply misses the boat and . . . has slowed down transit expansion.”

LaHood made his remarks in Washington DC on January 13. The news has been enthusiastically received, especially by the more than 40 cities that are in various stages of planning streetcar projects, which are considered a more affordable way to promote transit use as well as walking and biking.

Reconnecting America and its partners in the Center for Transit-Oriented Development – Strategic Economics and the Center for Neighborhood Technology – have been working with the federal government on these changes for several years.