Regional Plan Association Paints Grim Picture if Gateway Project Fails to Move Forward

John Jordan | February 2019

NEW YORK—The Regional Plan Association released a report on Tuesday that put a hefty price tag—$16 billion—if the controversial Gateway Rail Tunnel project fails to secure the necessary financing to move forward.

The RPA in its report entitled “A Preventable Crisis: The Economic and Human Costs of a Hudson River Rail Tunnel Shutdown” calculated that if the Gateway project fails to progress and the Trans-Hudson Rail Tunnel were to be partially shut down for a period of four years to undertake necessary repairs it would also result in a $16 billion loss for the national economy and a $22-billion reduction in home values.

Approximately half of the $16 billion hit to the national economy would be the result of increased work inefficiencies due to longer commutes. These economic impacts could result in the loss of 33,000 jobs per year or more than 130,000 lost jobs during the four-year partial shutdown.

The existing Trans Hudson Rail Tunnel suffered significant damage from Hurricane Sandy. The RPA notes to repair the existing tunnel, the two tubes would need to be closed one by one, reducing the number of trains going in and out of Penn Station by as much as 75%.

The proposed $30-billion Gateway project calls for the construction of a new tunnel underneath the Hudson River before undergoing any work on the original tunnel to mitigate service reduction. However, funding for the project has become a political football between the Trump Administration and New York federal, state and city representatives.

“This report outlines what a grim new reality will look like. Every day that we aren’t building the Gateway project, we’re one day closer to real economic and social calamity that would be felt across the Tri-State area and beyond,” said Tom Wright, president of the Regional Plan Association.

Wright added, “From job availability to housing prices, the price of household goods, and even the cost of air travel, every sector of our economy would feel the effects of a partial shutdown of the trans-Hudson tunnel.” The RPA president stressed that it is time to fully fund the Gateway project.

Without the Gateway tunnel, emergency work on the Trans-Hudson tunnel would result in approximately 500,000 commuters having longer, less reliable and more crowded commutes, the RPA report warns.

The report also estimates that the partial four-year tunnel shutdown would result in the decrease of $1.5 billion in federal tax revenue and $1 billion in state tax revenue outside of New York and Jersey.

“RPA’s Hudson Tunnel report affirms what all of Gateway’s supporters have been saying for years. The costs of delaying this project any longer are too high. Too high for our region’s and the nation’s economy. Too high for the hundreds of thousands of commuters in New York and New Jersey who rely on this century-old infrastructure every day. And too high for our climate and air quality,” said long-time Gateway Tunnel project supporter U.S. Senator Charles E. Schumer.

New Jersey Gov. Phil Murphy said a failure in the tunnel would be “catastrophic,” and added, “Aside from the potential loss of life and injury, it would drain billions of dollars from our regional and national economies, and cause a needless significant increase in air pollution. Only a true partnership between the federal government, New Jersey and New York, and other public and private stakeholders can prevent this disaster. We must build Gateway together, and keep the Northeast Corridor moving.”

Other alarming data points from the report include:

• An estimated 38,000 NJTransit riders would be unable to ride the train, forcing them into a variety of less-desirable options to get to and from work.

• Approximately 250,000 drivers will have longer commutes to work; more than half of these drivers would experience delays of a half-hour or more. An additional 170,000 riders would have longer rides on the PATH train or bus.

• Forcing more than 10,000 drivers onto the roads would result in 38,000 additional car crashes that would result in thousands of injuries and 90 to 100 preventable deaths.

• In addition to the impact on residential housing, the partial rail tunnel shutdown would also lower values of commercial properties in the region,

• An estimated $7 billion would be lost in federal, state, and local tax revenue; including $1.5 billion in federal taxes and more than $1 billion in states outside of New York and New Jersey.

• Many displaced long-range Amtrak riders would fly instead, increasing DC to NYC air fares by as much as 65% and pricing out many leisure, small business and non-profit travelers.

• Truck delays would cost the Northeast economy close to $1 billion.

The RPA was in Washington, DC last month handing out copies of the report to members of Congress.

John Jordan
Editor, Real Estate In-Depth