Long-run rising cost of American Infrastructure

[ProgressiveModerate]

As a long time New Yorker and subway nerd, I've always been frustrated by the insane price tags of proposed subway projects - especially when the current price tags (inflation-adjusted) for single stations used to build entire 30 station trunk lines. I had always attributed these high costs to overbuilding, political micro-management, corrupt unions, and other inefficiencies. However, as I've become more politically engaged, I've realized this cost problem seem to be pretty universally true in many sectors of American infrastructure, where money just doesn't go as far as it used to (inflation adjusted).

I'm not going to go through all the examples right now, but it's easy to see how in many infrastructure categories, there has been some degree of cost disease for bridges, airports, roads, public transit, ect. In many of these cases, advancements in science, technology, and engineering would be expected to increase efficiency and bring down cost, but they haven't. Especially with the bigger projects like large bridges, long tunnels, and new subway lines, it seems so much harder to accomplish things on the scale we did 50 or 100 years ago. Here's a pretty stark visual/video aid for the NYC Subway example: https://www.youtube.com/watch?v=vP0J6xPvPBg

What is going on here? Are all infrastructure mega-projects becoming more inefficient? Have certainly policy changes been driving up the cost of infrastructure? Will costs continue to increase?

And probably most importantly, what, if anything, can we do to bring down infrastructure costs?

[Open Source Intelligence]

You need to separate the costs into like-for-like categories. So look at how much costs are actually spent on material, actually spent on labor, actually spent on engineering studies, actually spent on administration, etc., to compare to the past.

Think of the subway lines on the past, there was probably a heckuva lot less planning done for those compared to now. Planning being everything including bureaucratic activities. Advancements in technology aren't going to help you with red tape.

We had a school referendum where I am and a teacher I knew was on the committee to make sure it got passed and then on the building committee. And she remarked later how much things like ADA compliance cost for building the school. Sure, that's necessary because it's federal law and most people probably believe it's good law, but what laws like the ADA do is increase the costs to build the same thing you were going to build. Talking at a very general level, an item with 6 requirements should cost more than the same item with 5 requirements, everything else being equal.

[oldtimer]

You need to separate the costs into like-for-like categories. So look at how much costs are actually spent on material, actually spent on labor, actually spent on engineering studies, actually spent on administration, etc., to compare to the past.

Think of the subway lines on the past, there was probably a heckuva lot less planning done for those compared to now. Planning being everything including bureaucratic activities. Advancements in technology aren't going to help you with red tape.

We had a school referendum where I am and a teacher I knew was on the committee to make sure it got passed and then on the building committee. And she remarked later how much things like ADA compliance cost for building the school. Sure, that's necessary because it's federal law and most people probably believe it's good law, but what laws like the ADA do is increase the costs to build the same thing you were going to build. Talking at a very general level, an item with 6 requirements should cost more than the same item with 5 requirements, everything else being equal.

It's true.

Regulatory requirements are the main drivers of cost and delays.

But who decides which regulations need to be cut ?
Perhaps a committee of only Unions and Accountants would do ?

[Benjamin Frank 2.0]

One reason why things take so much longer to get built, and I'm sure add to costs, is that there are many more processes to go through. People in the abstract say these things should be cut, but they tend to say otherwise when it comes to specific cases (and not just ones 'in their back yard.')

There are, as mentioned, compliance with the ADA, there are public meetings that have to be held, there are environmental impact studies...

Do you think people would or should give up on these things in order to get more stuff built?  
For instance: Between the 1960s and 1980s, BC Hydro completed six large hydroelectric generating projects.

From wiki on the building of the WAC dam (the first of the six):
The building of the dam and the reservoir were not without controversy. One controversy was caused by the significant negative environmental effects the project had on the immediate environment. In the process of creating Williston Lake, 350,000 acres of former forest land was flooded. This caused the loss of plant and wildlife biodiversity as well as risking mineral and timber rights.

A second controversy related to the fact that the land had been inhabited prior to its flooding, therefore the flooding resulted in the displacement of the forty or fifty residents located in the Trench. Among them were members of the Tsay Keh Dene First Nation, then known as Ingenika.

From Wiki and from my understanding as well, this was the only study done at the time though:
Gordon Shrum, a physics professor at the University of British Columbia, was chosen to conduct a study on the cost effectiveness of developing dams on the Peace and Columbia rivers.

I wonder if less 'stuff' is actually built though. This was a joke I came up with because I used to be an accountant but maybe it's true:

There was a 1970s tv show called 'The Six Million Dollar Man, but that was wrong. It's clear from the pilot episode the $6 million figure only included his hospital stay (including surgery) and the cost of the materials and assembly needed to make his new eye, arm and legs. But, the actual cost needs to include at least a portion of the research, the prototypes, the rental costs of the building(s) needed to do the research, any machines built needed for the research and manufacturing... If those things were included, even in 1970s dollars he'd have been more like the Sixty Million Dollar Man.

I don't know, maybe it's the case that cost calculations now take more costs into account and less costs are included on government books as 'overhead' or other 'general expenses.'

I'm just speculating of course, I have no idea, but it is possible.

[Open Source Intelligence]

Great blog post about this subject I remember from mid-last year, talking about regulatory reform in California because all this green energy stuff they've talked about forever actually needs to get built.

https://johnhcochrane.blogspot.com/2023/06/hope-from-left.html

...The part that really caught my eye: Klein complains that Newsom's current proposal is:

...a collection of mostly modest, numbingly specific policies. When a lawsuit is brought under the California Environmental Quality Act, should all emails sent between agency staff members be part of the record or only those communications seen by the decision makers? Should environmental litigation be confined to 270 days for certain classes of infrastructure? Should the California Department of Transportation contract jobs out by type, or does it need to run a new contracting process for each task? Should 15 endangered species currently classified as fully protected be reclassified as threatened to make building near them less onerous? And on it goes.

Maybe, as Klein suggests, this is a measure of the bill being small and marginal. But I think the point is deeper: this is what regulatory reform is all about. Which is why regulatory reform is so hard. "Stimulus" is easy to understand: Hand out money. Regulatory reform, especially reform to stop the litany of lawsuits and dozens of veto points which are the central problem in the US, is all about the mind-numbing details.  "should all emails sent between agency staff members be part of the record" sounds like a mind-numbing detail. But think how these lawsuits work. Is discovery and testimony going to allow this entire record to be searched for an email where staffer Jane writes to staffer Bob one line that can be used to restart the whole proceedings? "Only" 270 days rather than 10 years? That matters a lot. Contracting process, which can be the basis for a lawsuit.

I'll retell a joke. Fixing regulation is a Marie-Kondo job; long hard and unpleasant, each drawer at a time.

The article is also interesting on the fight within the left. There is really a deep philosophical divide. On the one hand are basically technocrats who really do see climate as an issue, and want to do something about it. They believe their own ideology that time matters too. If it takes 10 years to permit every high power line, Al Gore's oceans will boil before anything gets done.

On the other side are basically conservatives and degrowthers. "Conservative" really is the appropriate word -- people who want to keep things exactly the way they are with no building anything new. Save our neighborhoods they say, though those were built willy nilly by developers in the 1950s. (Palo Alto now applies historic preservation to 1950s tract houses, and forbids second stories in those neighborhoods to preserve the look and feel. How can you not call this "conservative?") "Degrowth" is a self-chosen word for the Greta Thunberg branch of the environmental movement. Less, especially less for the lower classes, not really for us who jet around the world to climate conferences. Certainly do not allow the teeming billions of India and Africa to approach our prosperity. I think "deliberate impoverishment" is a better word. Some of it has an Amish view of technology as evil. And some is, I guess, just habit, we've been saying no to everything since 1968, why stop now.
Klein characterizes the opponents:

More than 100 environmental groups — including the Sierra Club of California and The Environmental Defense Center — are joining to fight a package Newsom designed to make it easier to build infrastructure in California.

... opposition groups say that moving so fast “excludes the public and stakeholders and avoids open and transparent deliberation of important and complicated policies.”

...The California Environmental Justice Alliance sent me a statement that said, in bold type, “Requiring a court to resolve an action within 270 days to the extent feasible is harmful to low-income and EJ” — which stands for environmental justice — “communities.” It doesn’t get much clearer than that.

I am delighted to see in the New York Times, finally, the word "communities" adorned with scare quotes. But there is the tension: You can't both be really serious that climate change is a looming existential threat to humanity that demands an end to carbon emission by year 20X in the near future, and the view that in 270 days we cannot possibly figure out how to do so in a way that protects "communities." Climate must not really be that bad, or perhaps it was just an unserious talking point in a larger political project.

These are the beginning stages of a transition from a liberalism that spends to a liberalism that builds. It’s going to be messy. Until now, progressives have been mostly united in the fight against climate change. They wanted more money for clean energy and more ambitious targets for phasing out fossil fuels and got them. Now that new energy system needs to be built, and fast. And progressives are nowhere near agreement on how to do that.

The last three sentences are telling. Did they really want just to announce goals and spend a few hundred billions and feel good? Or did they actually want all the windmills, solar cells, and power lines involved? 

But the fight isn’t just about this package. Everyone involved believes there are many permitting reforms yet to come, as the world warms and the clock ticks down on California’s goals and the federal government begins to apply more pressure.