Enjoy this short excerpt from Philip Mark Plotch’s new history of the Second Avenue subway, while you ride the Second Avenue subway! “For nearly three quarters of a century, the Second Avenue subway was notorious as the most famous thing New York never built. Now Phil Plotch takes you into decades of political struggle for a glimpse on how megaprojects can beat back the million-to-one odds against them.”—Gene Russianoff, Senior Attorney, NYPIRG Straphangers Campaign “Philip Mark Plotch beautifully details the complex history of the Second Avenue subway and takes you behind the scenes of the project’s many twists and turns.”—US Congresswoman Carolyn B. Maloney, New York’s 12th District “Philip Plotch details the complexity of realizing a subway dream that was deferred by close to a century, and he highlights how politics derailed, again and again, the building of the Second Avenue subway. A must-read for all straphangers!”—Jose Martinez, Senior Reporter, THE CITY • • • • •
Fascinating and dramatic story behind New York City’s struggle to build a new subway line under Second Avenue. Reveals why the city’s subway system, once the best in the world, is now too often unreliable, overcrowded, and uncomfortable. Explains how a series of uninformed and self-serving elected officials have created false expectations about the city’s ability to maintain and expand its transit system. Shows how false promises, redirected funds and political ambitions have derailed subway improvements. The Second Avenue subway may well prove to be the last subway built in New York City.
Philip Mark Plotch is the award-winning author of Politics Across the Hudson. Follow him on Twitter @profplotch.
Available March 15, 2020 | $29.95 | hardcover
THREE HILLS
AN IMPRINT OF CORNELL UNIVERSITY PRESS threehillsbooks.com
EXCLUSIVE SAMPLE NOT FOR SALE
LAST SUBWAY The Long Wait for the Next Train in New York City
Philip Mark Plotch
AN IMP RINT O F CORNELL UNIVE R SITY PR E SS ITHACA AND LO NDON
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Copyright © 2020 by Cornell University All rights reserved. Except for brief quotations in a review, this book, or parts thereof, must not be reproduced in any form without permission in writing from the publisher. For information, address Cornell University Press, Sage House, 512 East State Street, Ithaca, New York 14850. Visit our website at cornellpress.cornell.edu. First published 2020 by Cornell University Press Printed in the United States of America Library of Congress Cataloging-in-Publication Data Names: Plotch, Philip Mark, 1961– author. Title: Last subway : the long wait for the next train in New York City / Philip Mark Plotch. Description: Ithaca [New York] : Three Hills, an imprint of Cornell University Press, 2020. | Includes bibliographical references and index. | Summary: “The story of the Second Avenue subway, as it symbolizes New York's inability to modernize its infrastructure and reveals the ingredients necessary to build a twenty-first-century megaproject"— Provided by publisher. Identifiers: LCCN 2019019068 (print) | LCCN 2019021840 (ebook) | ISBN 9780801453663 (cloth ; alk. paper) Subjects: LCSH: Subways—New York (State)—New York—History. | Subways—Economic aspects—New York (State)—New York. | Subways—Political aspects—New York (State)—New York. | New York City Transit Authority. | Transportation and state—New York (State)—New York. Classification: LCC HE4491.N65 P58 2020 (print) | LCC HE4491.N65 (ebook) | DDC 388.4/2097471—dc23 LC record available at https://lccn.loc.gov/2019019068 LC ebook record available at https://lccn.loc.gov/2019021840 ISBN 978-1-5017-4502-7 (epub/mobi ebook) ISBN 978-1-5017-4503-4 (pdf ebook)
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CONTENTS
Introduction: A Long Wait for a Train 1
1. From a Compact City into a Metropolis 10 2. An Empty Promise 27 3. The Billionaire’s Ambitions 49 4. Construction Begins and Construction Ends 73 5. Saving the Subway 96 6. Planning from the Bottom Up 124 7. A Twenty-First-Century Subway 157 8. Building a Subway and Unleashing the Plagues 192 9. Andrew Cuomo’s Finish Line 221
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viii Contents
Conclusion: Delays Ahead 247
Acknowledgments 271
Key Dates in the Second Avenue Subway Saga 273
Notes 277
Index 341
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INTRODUCTION
A Long Wait for a Train
I had an epiphany in February 2005, across the street from a gaping hole in the
ground where the World Trade Center towers once soared. I was interviewing for a position at the Lower Manhattan Development Corporation, a State of New York agency set up after the September 11 terrorist attacks. The agency’s senior vice president, Stefan Pryor, liked my background. At the time, I was manager of planning at the Metropolitan Transportation Authority (MTA), working on plans to extend a subway line to Manhattan’s far west side, expand New York City’s convention center, build a new NFL football stadium, and lure the Olympics to the city in 2012. Pryor asked me what I thought about the proposal to build a rail link connecting the World Trade Center in Lower Manhattan with Long Island and Kennedy International Airport. This project was a high priority for George Pataki, the governor of New York, who wanted Lower Manhattan to be more convenient for air travelers and suburban commuters, as part of his revitalization plan to keep the world’s largest financial institutions from fleeing to Jersey City, Chicago, London, or Frankfurt. I thought about telling Pryor that I had the skills and experience he needed to finalize the rail link’s plan and help secure the $6 billion needed to build it. But I knew the rail link was unlikely to be built, because it was not a high-enough priority for the transportation agencies that were expected to finance and construct it. As my mind raced through other possible answers to his question, I realized for the first time that the planning and politics of transportation megaprojects were divorced from reality. So, I answered Pryor, “it doesn’t matter
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2 INTRODUCTION
whether or not the rail link gets built.” As I pointed out his window to nearby office towers, I continued, “The important thing is that Goldman Sachs and Merrill Lynch and American Express all think we are going to build it.” Pryor smiled broadly, banged his fist on the table, and exclaimed, “You’re the only one who gets it.” A few weeks later, I was hired to serve as his director of transportation policy. For the next nine years, I contributed to the redevelopment of the World Trade Center and the renaissance of Lower Manhattan, while the rail link proposal quietly faded away. Ever since that interview, I have discovered many other instances when elected officials raised false expectations about transportation improvements. Sometimes politicians are simply too optimistic about completing a project. Other times they lack an understanding of the enormous obstacles involved in constructing and financing large transportation projects. Most troubling are those occasions when politicians simply do not care about the truth, because their announcements about grand projects garner them so much favorable publicity.
THE NEAR-MYTHICAL SUBWAY LINE New York once had the world’s greatest subway system, but for decades elected officials have not fulfilled their promises to improve facilities and expand routes. False promises have led to unreliable service, obvious neglect, and abandoned tunnels. One of the best ways to understand why New York’s subways have so many problems and what can be done about them is by learning about New York’s near-mythical subway under Second Avenue. Every city has its own fanciful project. In the nineteenth century, a London architect proposed building a ninety-four-story pyramid to accommodate more than five million dead bodies, a bold solution to the problem of overcrowded graveyards. When Frank Lloyd Wright was eighty-nine years old, he unveiled plans for a mile-high Chicago skyscraper, 528 stories tall, with parking for fifteen thousand cars and one hundred helicopters. Although construction never started on the London and Chicago towers, the Soviet Union did begin erecting steel for the world’s tallest building in the 1930s. The Palace of the Soviets was designed to be a symbol of a new country and a thriving socialist economy. With twenty-one thousand seats in the main hall and a three-hundred-foot-tall bronze statue of Vladimir Lenin above, the palace would have been Moscow’s version of the Statue of Liberty standing on top of the Empire State Building resting above Madison Square Garden.1 In the capital of capitalism, New Yorkers have been talking since 1903 about building a subway under Second Avenue, on Manhattan’s East Side.
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A LONG WAIT FOR A TRAIN 3
When the Second Avenue subway has not been a main character in the debates about improving transportation in New York City, it has been an ambitious understudy waiting to take its place center stage. Since the 1930s, the line has symbolized New York’s inability to modernize its infrastructure and accommodate its residents. While the number of people living and working in New York City has grown, its rapid transit system of underground and elevated rail lines has shrunk. Train lines above Second and Third Avenues were torn down in the 1940s and 1950s, in anticipation of the Second Avenue subway. With less capacity to accommodate even more passengers, overcrowding would eventually become one of the leading causes of subway delays.2 While two subway lines run the length of Manhattan’s West Side, only the Lexington Avenue line trains (numbers 4, 5, and 6) operate along the entire East Side. That is why the East Side’s trains are the most crowded in the country, with ridership rivaling the number of passengers who ride San Francisco’s, Chicago’s, and Boston’s entire transit systems combined. During peak periods, passengers crowd the subway cars, platforms, and stairwells—which slows down trains at stations, reduces the frequency of service, and exacerbates the crowded conditions. New York’s leaders blame external forces for their repeated failures to build the Second Avenue subway. After all, the project was delayed by the Great Depression, World War II, and the city’s fiscal crisis in the 1970s. Although those were contributing factors, promises of improved subway services have always exceeded available resources. While politicians have repeatedly promised a Second Avenue subway to help advance their own careers, they have failed to acknowledge the enormous challenges involved in paying for it. The media have been complicit in raising false expectations and misleading the public into thinking unrealistic plans are achievable. After decades of promises, New York actually started building the new subway line under the streets of East Harlem, the East Village, and Chinatown in the early 1970s. But to pay for the new subway, the city diverted resources from more critical work. As a result, the infrastructure on the existing system deteriorated and riders experienced frequent service delays. In 1989, the Second Avenue subway was resurrected. Planners agonized over its exact route, engineers designed thousands of components, civic activists mobilized support, and elected officials allocated billions of dollars for the project. Thanks to thousands of workers who toiled underground in difficult and oftentimes dangerous conditions, the first three of sixteen planned Second Avenue subway stations opened to the public on New Year’s Day in 2017. This 1.5-mile-long rail line was the subway’s first major service expansion in more than fifty years, and has alleviated some subway crowding and reduced travel
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4 INTRODUCTION
time for tens of thousands of New Yorkers. The spacious new stations, featuring dramatic works of art, have been widely acclaimed.3
CONCERN FOR THE FUTURE Time will tell whether these stations were worth their $4.6 billion cost. The section of the Second Avenue subway in service has been disparagingly dubbed a “stubway,” and a New York City deputy mayor, Dan Doctoroff, referred to it as “a silly little spur that doesn’t generate anything other than some convenience for people who are perfectly happy to live where they lived before.” Moreover, accelerating the construction schedule to meet a politically imposed deadline contributed to a subway crisis several months after its 2017 opening.4 On a per-mile basis, the completed section of the Second Avenue subway was the most expensive subway extension ever built anywhere in the world. Costs were high because of inefficient phasing and high real estate costs, powerful unions earning high wages and dictating costly work rules, and extensive regulations and environmental sensitivities. If the Second Avenue subway’s thirteen other planned stations are ever completed, the 8.5-mile line would be one of the world’s most expensive infrastructure projects, surpassing the $21 billion rail tunnel between England and France. Given the extraordinary cost and lengthy construction period, the Second Avenue subway will more than likely be the last subway line built in New York for generations to come. The modern stations draw attention to the dirt, noise, and cramped conditions in the rest of the city’s subway stations. In even more dire need of improvement are the vital subway components that passengers neither see nor appreciate, such as train signals that prevent trains from crashing, ventilation systems that keep smoke from asphyxiating riders, and pumping equipment that protects sensitive equipment from water damage. For most of the subway’s history, politicians have preferred postponing upgrades to this critical equipment rather than raising fares. New York’s high costs and slow progress rebuilding and expanding its transit system are worrisome for New York’s future. There is no guarantee that New York will always be able to attract the people and businesses that have made it a global center for business, media, and the arts. Throughout human history, once-great cities have lost out to competitors that were more nimble, farsighted, and aggressive. New York’s competitors around the world are not satisfied with the status quo, or with relying on hundred-year-old transit facilities. For instance,
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A LONG WAIT FOR A TRAIN 5
while New York was constructing its 1.5-mile-long Second Avenue subway line, Beijing added more than 250 miles of new subway lines between 2007 and 2017. New York’s leading business organization, the Partnership for New York City, recognizes that safety, affordability, and livability are essential to New York City’s global competitiveness. Many of New York’s elected officials have long understood this. Scott Stringer, Manhattan’s borough president in 2011, warned, “We cannot build a 21st-century city and compete globally if we continue to spend five, even seven times as much on construction projects as compared to our competitors.”5 Just as skyscrapers need working elevators, New York City depends on a reliable and safe subway system that can accommodate more than five and a half million riders per day. Apartment buildings, office towers, hotels, universities, hospitals, and entertainment centers have been built around its 472 subway stations. The subway system is so extensive that laid end to end, its tracks would stretch from Times Square to Atlanta. MTA officials justifiably take great pride in all the improvements they have made to the subways since the 1980s, when every station and subway car was covered with graffiti. New Yorkers, though, no longer use the 1980s as a benchmark. Instead, subway riders want something done about overcrowding, unreliable service, and noisy stations with narrow passageways, cracked tiles, and peeling paint. To see what a modern subway looks like, they do not need to get on an airplane. Anyone in Manhattan or Brooklyn can simply take the Q train and get off at one of the three new spacious, clean, and quiet stations on Second Avenue.
TRADE-OFFS AND TOUGH DECISIONS Despite what most New Yorkers think, the subway system does not generate a profit that can be used for improvements. In fact, fares barely cover the salaries of the men and women who operate and maintain it. Annual multibillion-dollar subsidies from taxes and tolls are used to pay for employee benefits, electric power, fuel, supplies, insurance, maintenance, and growing debt payments. Even with the introduction of New York’s congestion pricing program, the MTA will have difficulty borrowing enough for future expansion projects because it already has more outstanding debt than dozens of US states. Asking passengers to pay more is also problematic because fares in recent years have been rising faster than inflation, and New York’s subway riders already pay a higher share of operating expenses than transit riders in nearly every other US city.6 Given its limited resources, New York has to make tough decisions about prioritizing subway improvements. Powerful players in the government, business,
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6 INTRODUCTION
and civic sectors constantly battle over how much the MTA should get to operate and maintain its transportation network. They also fight over which large transportation projects will get funded, and how resources should be allocated between existing systems and expansion projects. The stakes are high in terms of careers, jobs, money, property values, and prestige. Some transportation projects are needed to enhance the subway system’s safety, resiliency, and reliability, while others are important for passenger comfort, travel time, and accessibility. The Second Avenue subway is an unusual project because it provides numerous benefits. It alleviates crowding, improves reliability, reduces travel time, and improves accessibility. Compared to the rest of the city’s subway lines, it was also built to a much higher standard of safety. Moreover, completing the Second Avenue subway would provide critical redundancy because eventually the century-old Lexington Avenue line will have to be shut down for an extended period of time for repairs and upgrades. Because the public tends to ignore the needs of aging facilities they cannot see, obtaining sufficient funds to upgrade hidden infrastructure can be just as challenging as funding major expansion projects. Subway riders care when their trains are delayed or dirty, not whether the train signals are from 1920 or 2020. Likewise, New Yorkers can be complacent about the risks to the city’s infrastructure associated with climate change and another terrorist attack. Subway riders are usually more interested in customer amenities like Wi-Fi service and electronic signs with real-time information. Since the media report on stories that interest the public, most people do not understand the importance of upgrading signals, pumps, and ventilation systems. Those issues and images are simply not sexy. Because neither the public nor the media pay much attention to modernizing the subway’s hidden infrastructure, politicians usually do not make it a high-enough priority. Voters are more likely to reward elected officials for preventing a fare hike. Many infrastructure improvements are actually unpopular among riders because they disrupt regular subway services. While the media tend to ignore announcements about basic infrastructure improvements, reporters and newspaper editorial boards usually praise the vision and foresight of politicians who announce grandiose transportation initiatives such as trains to airports, and subways under Second Avenue. Politicians get media coverage at groundbreaking events and ribbon-cutting ceremonies for new subway stations, not when pumping equipment is installed below the city’s streets. Obtaining sufficient funds to complete the Second Avenue subway has its own set of challenges. Compared to the first phase, which was built on the Upper East Side, each of the next three phases will cost more to build and will carry fewer passengers. Thus, subsequent phases will be less cost effective and not as likely to
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A LONG WAIT FOR A TRAIN 7
secure federal funding. Furthermore, the people who live and work in East Harlem, where the second phase will be built, have less political clout and have made the project less of a priority than their wealthier neighbors to the south.7 Securing enough funding to complete the Second Avenue subway will also be difficult given the slow progress on the first phase. In previous generations, transportation officials promised a relatively quick construction period for new subway lines, but now it appears that the Second Avenue subway’s three remaining phases will each take about ten years to complete. The project has become an investment that may be needed to help the region’s long-term prosperity, but not an improvement from which most current riders will benefit.
VISIONARY LEADERS OR SELF-SERVING ONES New York can successfully both upgrade and expand its subway system to meet the public’s needs and expectations, if elected officials are willing to look past the next election cycle and if they are convinced that the transit system’s shortcomings threaten the region’s long-term prosperity. Anything is possible. After all, since the Second Avenue subway was first proposed, the city has bounced back, stronger than ever, from the Great Depression, the loss of manufacturing jobs, middle-class flight to the suburbs, a fiscal crisis, high crime rates, the September 11 terrorist attack, and a financial crisis. Generating and maintaining support for ambitious multibillion-dollar expansion projects is a formidable challenge, though, because elected officials come and go, public opinion shifts, fiscal conditions change, and the economy has its ups and downs. The lengthy process of reviewing environmental conditions, obtaining necessary sign-offs, designing projects, purchasing property, and moving utilities makes modernizing and expanding the subway vulnerable to all sorts of unexpected events. The Second Avenue subway story reveals how rebuilding and expanding the subway requires visionary leaders. Transportation officials must develop comprehensive plans, civic and business leaders need to generate public support, and elected officials must champion improvements and secure resources. The story of the Second Avenue subway also reveals what has happened without that leadership. Repeatedly, uninformed and self-serving individuals have fostered false expectations about New York’s ability to adequately maintain and significantly expand the transit system. The subway and its millions of beleaguered passengers are continuing to deal with the repercussions of those false expectations, every single day.
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8 INTRODUCTION
155th St
Bronx
155th St.
8th Ave
135th 135th St St. 125th St. 125th
St
Lexington Ave.
110th St.
Ptarrakl Park ln ae CentrC
72nd St.
72nd St
2nd Av2enue nd Ave
86th St
63rd St
East R iver
Avvee. 5 5tthh A
1st Ave.
59th St
8th Ave
11th Ave.
63rd St.
Queens
1st Ave
9th Ave
96th St
86th St.
10th Ave
Hudson River
11th Ave
96th St.
Times Square
42nd St.St 42nd
2nd Ave
Lexington Ave
3rd Ave
14th14th St. St
St
M
an ha
tta
n
Br
idg e
Wa ter
St
Pea rl
City Hall
S
t
Broadway
.
l St.
City Hall
World Trade Center
Chrystie
st S We
Cana
Chrystie St
Houston St HoustonSt.
Watt erSt James SPl t.
23rd St.
Grand Central Terminal
B
34th St
ay y adw wa Broroad
New JeN rseew y Jersey
2nd Ave
5th Ave
10th Ave
Manhattan
Brooklyn
N
Map I.1. Manhattan (Second Avenue is on the East Side between 128th Street and Houston Street)
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A LONG WAIT FOR A TRAIN 9
Bronx
125th St.
Lexington Ave.
42nd St.
East Midtown
Queens East R iver
2nd Avenue
Upper East Side
9th Ave.
Hudson River
New Jersey
72nd St.
Central Park
East Harlem
14th St.
East Village Houston St.
Lower East Side
Chinatown Tribeca / Civic Center Financial District
Brooklyn
Map I.2. Neighborhoods that would be served by a Second Avenue subway running from 125th Street to Lower Manhattan
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1
From a Compact City into a Metropolis
Cities compete with each other; they always have and always will. They vie
to build the tallest buildings, largest convention centers, grandest boulevards, biggest stadiums, and hippest neighborhoods. In the nineteenth century, New York City created the world’s largest urban transportation system, with ferries, bridges, and horse-drawn streetcars. After private railroad companies built tracks for elevated railroads (Els) above the city’s streets in the 1870s, the city’s population spread out and grew rapidly from Lower Manhattan. The Els were one of New York City’s most popular tourist attractions. For five cents, passengers could peer directly into homes and marvel at the city’s elegant buildings, massive warehouses, tall churches, and ethnic enclaves. New Yorkers, however, complained about the deafening noise from the trains and the dark tunnels under the structures. Until the lines were electrified in the 1890s, people also had to deal with the stench from the passing locomotives and the hot ashes that dripped onto the sidewalks below.1 Manhattan’s East Side had Els on Second and Third Avenues, while the West Side had Els on Sixth and Ninth Avenues. Workers could build railroads remarkably fast before today’s environmental, safety, and labor regulations were instituted. For instance, the 7.5-mile-long Second Avenue El, with twenty-eight stations between 127th Street and Lower Manhattan, was built in less than eighteen months.2 Because the Els typically traveled twice as fast as horse-drawn streetcars, New Yorkers could commute from much greater distances to Lower
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A COMPACT CITY INTO A METROPOLIS 11
Manhattan’s factories, warehouses, offices, and shops. A streetcar trip between 59th Street (in Midtown Manhattan) and City Hall (in Lower Manhattan) took at least forty-five minutes when the streets were clear and the weather ideal. A ride on the El covered that ground in twenty-eight minutes, and it was unaffected by traffic and less susceptible to inclement weather. As a result, after the Els were built, semirural parts of northern Manhattan were transformed into new residential neighborhoods. By the early twentieth century, the Els carried about seven hundred thousand daily riders every day, and over 80 percent of the city’s inhabitants lived within walking distance of the stations.3 In the late nineteenth century, the mayor of New York City, Abram Hewitt, proclaimed that New York was destined to be the greatest city in the world. To continue growing, the city would need to build electric-powered rail lines, underground, that would travel faster and further and would accommodate even more people than the Els.4
STARVING THE SUBWAYS Private companies paid for the construction and operation of the elevated lines, but no firm could finance an underground rail line because it was about four times as expensive per mile to build. The City of New York paid the construction costs for its first subway and in 1900 entered into a long-term lease with the Interborough Rapid Transit Company (IRT) to build and operate it.5 Subway service began with a grand celebration in October 1904 when trains first ran from City Hall up Manhattan’s East Side on what is now known as the Lexington Avenue line. When trains reached the Grand Central subway station at 42nd Street, they traveled west to what is now known as Times Square, and then north to West Harlem. Although the early 1900s are sometimes cast as a genteel era, that was certainly not the case under the city’s streets on the day the subways opened. The New York Tribune reported on the spectacle in an article titled “Birth of a Subway Crush”: “Indescribable scenes of crowding and confusion, never before paralleled in this city, marked the throwing open of the subway to the general public last night. . . . Men fought, kicked and pummeled one another in their mad desire to reach the subway ticket offices or to ride on the trains. Women were dragged out, either screaming in hysterics or in a swooning condition; gray haired men pleaded for mercy; boys were knocked down, and only escaped by a miracle being trampled under foot.”6
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12 CHAPTER 1
155th St.
135th St. 129th St.
116th St. 111th St.
Central Park
East R iv e r
Ave. A
Grand Central Depot
75th St.
AV E N U E
AV E N U E AV E N U E
AV E N U E SIXTH
23rd St.
THIRD
59th St.
42nd St.
89th St.
SECOND
72nd St.
NINTH
Huds on River
93rd St.
14th St.
1st St.
Grand St.
Map 1.1. Elevated railroads in Manhattan, 1881
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A COMPACT CITY INTO A METROPOLIS 13
In 1913, after years of acrimonious debate and tense negotiations, the City of New York entered into contracts with two companies—the IRT and the Brooklyn Rapid Transit Company (BRT)—to build more lines in Manhattan, Brooklyn, Queens, and the Bronx. Although a subway under Second Avenue had been under consideration as far back as 1903, the contracts did not include one. But the IRT was allowed to build additional tracks on its Second and Third Avenue Els, and to extend the Lexington Avenue line. A ride on the Lexington Avenue line’s express train between 59th Street and City Hall would take only fourteen minutes, twice as fast as riding the El.7 Both the elevated lines and the subways spurred the population growth that city officials had anticipated and promoted. The number of people living in New York City’s five boroughs rose from 1.5 million in 1870 to 3.4 million in 1900, and to nearly 7 million in 1930. The transit lines also enabled the city to grow upward because they could carry enough workers and visitors to make skyscrapers financially feasible. Before the El was built, Trinity Church on Broadway was the city’s tallest building. In the 1890s, skyscrapers twenty to thirty stories tall towered over the church. In 1913, less than ten years after the first subway opened, the first office workers moved into the fifty-seven-story Woolworth Building on Broadway. The IRT and the BRT expected to reap enormous profits, a portion of which they would share with the city. But their contracts with the city contained one provision that would affect the transit system’s financial viability and the potential for further expansion: the fare had to be kept at five cents per trip for the duration of their forty-nine-year lease agreements.8 New York has long regulated the fees that privately owned monopolies, like the early twentieth-century railroads, were allowed to charge customers. For example, today, the utility company Con Edison cannot raise its electric rates without approval from New York State’s Public Service Commission. The regulators know that limiting rate hikes might be politically popular, but if Con Edison did not have sufficient revenue, it would not be able to properly maintain its equipment and expand its electricity-generating capacity. As a result, residents and businesses would face brownouts and longer waits for new services and repairs. In the early twentieth century, New York’s politicians took a shortsighted approach to the transit system. Instead of raising fares, they raised false expectations that New Yorkers could have high-quality subway service with low fares. The repercussions would last for generations.
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