Why can’t we build anything anymore?

Last week, California governor Gavin Newsom announced that he was intending to aggressively scale back plans for the state’s high-speed rail system, which in its most ambitious routing would have connected Sacramento to San Diego. The immediate cause was ballooning costs, which have risen from $33 billion to $77 billion and looked likely to exceed 1.6 Zuckerbergs within a couple of years (the local CA currency, otherwise known as $100 billion).

Unlike other megaprojects, Newsom — and California — were fortunate on the timing. The costs of the project skyrocketed so much and so early that Newsom still had the credibility and political capital to kill the project. And while a short route from Bakersfield to Merced remains on the table, I don’t expect even that route to be ultimately constructed, since no one knows where either of those cities are.

Why can’t we (i.e. America) build anything? High-speed rail isn’t Silicon Valley whizbang magic technology, it’s definitely not Hyperloop. It’s pretty standard in a bunch of industrialized nations around the world. Clearly that question was on the minds of reporters, because we have been inundated with autopsies on HSR. Yet, the hot takes don’t seem to be adding up to anything meaningful (surprise).

So, we are going to explore this question over the coming weeks, as one of our newest obsessions here at Extra Crunch.

This weekend, I read a book called “Politics Across the Hudson: The Tappan Zee Megaproject.” In the book, Philip Mark Plotch chronicles the 40 years of planning that led to the reconstruction of the Tappan Zee bridge over the Hudson River, which connects Rockland and Westchester Counties north of New York City. If you want to read about the weeds of government dysfunction around infrastructure, this is your book. It’s a telling tale of patterns we see repeatedly when trying to build great things in the United States:

No one wants to talk about finance: Politicians love selling the value of a megaproject without actually discussing the ways they are going to have to pay for it. Yet, paying for it is the project, since it will ultimately affect how citizens enjoy the infrastructure. In the Tappan Zee case, politicians wanted to avoid talking finances because finances meant tolls, and increasing tolls meant losing elections. New York’s current governor Andrew Cuomo ends up avoiding this conversation through luck, as the state received huge indemnities from Wall Street banks related to Iranian money laundering and sanctions that helped fund the bridge (which one planner called “manna from god”).That avoidance has led to the “Willie Brown” model of infrastructure, named for the former San Francisco mayor who wrote about how to get infrastructure projects done:

News that the Transbay Terminal is something like $300 million over budget should not come as a shock to anyone.
We always knew the initial estimate was way under the real cost. Just like we never had a real cost for the Central Subway or the Bay Bridge or any other massive construction project. So get off it.
In the world of civic projects, the first budget is really just a down payment. If people knew the real cost from the start, nothing would ever be approved.
The idea is to get going. Start digging a hole and make it so big, there’s no alternative to coming up with the money to fill it in.

Of course, that model can lead to situations like Boston’s Big Dig, where the final ticket price for a project is so high that it effectively bankrupts an entire city and its transportation system for years to come.

Infrastructure finance may not be a sexy topic, but it is absolutely critical to getting a project done. It’s hard to tuck tens of billions of dollars in a line item in the state’s budget, and it is hard to get the different funding levers of government involved when a project’s finances aren’t clear.

Lack of direction / lack of leadership: Building infrastructure is hard. It’s even harder in the U.S., where a patchwork of regulatory bodies and all levels of government are involved in infrastructure decision-making. In the Tappan Zee bridge case, there were nearly two dozen agencies involved, all with their own agendas and fiefdoms. A dedicated bus lane on the bridge was cut to avoid bringing in the Federal Transit Administration. The Tappan Zee is built at one of the widest points of the Hudson River rather than the narrowest since planners wanted to avoid the jurisdiction of the Port Authority. Here’s the thing though: there were real differences of opinion about the project and what it should accomplish. Some people wanted a rail line, some wanted bus rapid transit, some wanted carpool lanes and still others wanted more lanes of vehicular traffic. Nothing got done because there was absolutely no consensus either from the communities involved or from their elected leaders. One might call a 40-year planning process dysfunctional, but another view would say that this is exactly government working as intended. Things don’t get built if there is no consensus, and that’s the value — and price — of democracy. The challenge though is that you can end up in these counter-veto game theoretic morasses (the book uses “wicked problems”), where no progress will truly ever get made because everyone has an incentive to block a project to get their vision included. Here is where leadership makes such a difference. A leader in these contexts can find points of compromise, build coalitions, set agendas and a vision and create the momentum required to get these projects moving. Unfortunately, finding leaders in American politics is excruciatingly difficult.

Impossibly high expectations / feature creep: Every tech product manager knows the challenges of feature creep. Another person swings by, and they have a choice feature they want added that is going to take time and resources, and has limited benefit to the rest of the user base of the product. Unfortunately, infrastructure projects face many of the same challenges. When a megaproject looks like it has built up momentum, everyone tries to glom on to it, adding their pet project. What starts as a bridge replacement project soon morphs into a bridge replacement with a new 30-mile railroad, multiple train stations, a new bus rapid transit system and a complete zoning overhaul for multiple counties. Yet, those extra “features” also add additional veto points and complications to the original project. They are effectively barnacles on the hull of an already slow-moving ship.Big projects galvanize our imaginations, but they shrink under the weight of their own mass. Better to downscale these projects into more bite-sized chunks with clear goals and deliverables rather than being all things to all people.

One thing I was surprised reading about the Tappan Zee bridge is that the actual construction phase was relatively uneventful. The bridge was built mostly on time and on budget, mostly due to extreme attention from the NY governors’s office to not allow deviations (except to stop construction on July 4th so that construction wouldn’t mar riverfront BBQs).

Four years and billions of dollars to rebuild a bridge might be ridiculous, but so were the 36 years of planning that preceded the reconstruction. Maybe that pattern isn’t true for every project, but the lesson of Politics Across the Hudson is that once the government had a plan and timing on its side, it was (relatively) smooth-sailing to the finish line.

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