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‘Social Equity’ to Be Weighed in U.S. Transit Funding Rule

Jan. 25 (Bloomberg) -- The U.S. Department of Transportation wants to give more weight to factors including affordable-housing policy in deciding which local mass-transit initiatives will get federal money.

Its proposed rules, published in the Federal Register today, are part of a move over the past two years to alter the criteria that President George W. Bush’s administration used to award grants for light-rail, subway and rapid-bus systems.

“This proposed rulemaking is moving in the right direction,” James LaRusch, chief counsel to the American Public Transportation Association, said in an e-mail. The Washington-based trade group represents transit agencies and companies that design, build, finance and operate transit services.

The Federal Transit Administration will use the new criteria to evaluate applications for grants from the agency’s New Starts and Small Starts programs to local governments and transit agencies. The programs get about $2 billion a year from Congress.

The proposal will also move more projects “from the drawing boards into construction sooner and with less red tape along the way,” Transportation Secretary Ray LaHood said in a statement posted on the department’s website. It could reduce the amount of time the transit agency needs to consider projects by at least six months, according to the statement.

Effect on Pollution

Under the proposal, the agency would consider a project’s effects on air pollution, energy use, greenhouse-gas emissions and safety, and “social equity impacts” such as affordable housing and job creation.

Project elements that don’t improve transportation while providing benefits such as “extra pedestrian access to surrounding development or aesthetically-oriented design features” wouldn’t be counted in project cost calculations, according to the notice.

The transit agency would determine a project’s cost effectiveness by how many trips it would generate and the cost per trip, instead of by how much time travelers would save compared with a hypothetical alternative, according to the proposed rule.

The new criteria are “more speculative about the benefits of transit projects,” David Horner, senior counsel to London-based law firm Allen & Overy LLP, said by phone.

Forecasting Error

The Federal Transit Administration “is opening the door to an evaluation that is more subjective than it has been in the past and more prone to forecasting error,” said Horner, a former chief counsel to the agency during the Bush administration.

The public will have 60 days to comment on the proposed regulations before the transit agency writes final rules.

“By focusing on broad social benefits and broad environmental benefits, this administration is fixing a misstep of the previous administration in a way that’s going to be helpful to transit riders, transit agencies and the environment,” Deron Lovaas, transportation policy director for the Natural Resources Defense Council, a New York-based environmental advocacy group, said in a phone interview.

To contact the reporter on this story: Lisa Caruso in Washington at lcaruso7@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net

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