A High-Speed Rail Line From Atlanta to Charlotte Would Struggle
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Commentary

A High-Speed Rail Line From Atlanta to Charlotte Would Struggle

If high-speed rail boosters want to build an expensive train between Charlotte and Atlanta, it should be completely privately funded.

Every few years, high-speed rail advocates seem to arrive in Georgia and argue that the state needs high-speed rail. Supposedly, Atlanta and the state as a whole cannot become a world-class destination until it has high-speed rail transporting residents and tourists on a train to Charlotte.

Riding the rails may sound romantic, but when the facts are revealed the romantic notion is usually replaced by the cold hard reality of the massive government subsidies typically required to fund the construction and operation of rail projects.

The latest rail renaissance started with a private rail line, Brightline in South Florida, operating on a right-of-way owned by the rail line. The service between Miami and West Palm Beach began as a high-end commuter rail line. Brightline is now extending the line as planned to Orlando, with a future extension to Tampa expected. The project is entirely privately funded. It is too early to evaluate the success of Brightline’s South Florida service but it should be allowed to succeed or fail on its own. 

However, a little over a year ago, Brightline’s original focus appeared to change. The company partnered with Virgin Trains and altered its operating philosophy. No longer would it add passenger service along existing railroad right of way. Now it is looking to develop passenger rail service in places where right of way would need to be leased or purchased, adding significantly to its costs and raising questions about whether those projects could be financed privately. 

Virgin Trains says it now hopes to build passenger rail lines in California, Texas, the Midwest, and in the Southeast, including between Atlanta and Charlotte. Late last year, the Georgia Department of Transportation (GDOT) studied three potential routes for the 280-mile Atlanta-Charlotte corridor, which was estimated to cost $16 billion.

For comparison, it’s important to note that a 240-mile high-speed line in Texas, which was originally estimated to cost $10 billion, has seen its cost estimates rise to $20-$25 billion.

At those prices, there is no way passenger fares alone can cover the cost of building and operating such rail lines. The ticket prices needed to recoup the costs would be astronomical, which would reduce the demand and viability of a private rail system, so Virgin is likely to seek subsidies from taxpayers if it proceeds in places like Atlanta. 

Many Georgia residents visit cities like Paris or Tokyo and wonder why their high-speed rail systems cannot be duplicated in Georgia. The short answer is that development patterns and cultures are very different. 

Most governments in Europe or Asia built high-speed rail systems to relieve over-crowding on their existing conventional rail systems. Some of those conventional rail lines are profitable, and the high-speed rail lines between Paris-Lyon and Tokyo-Osaka are profitable as well. In contrast, Amtrak’s Southeast service is neither popular nor profitable. 

High-speed rail is often most successful in areas with somewhat limited air service. However, commercial airlines operate 20 round-trip flights per day between Atlanta and Charlotte.

High-speed rail has also proven to be less successful in reducing traffic congestion. Across the world, the highest share of folks switching from car to high-speed rail has been 18 percent. Most folks who drive between regions cannot easily switch to planes or trains. They may be traveling to an intermediate destination that is not served by rail, traveling from suburb to suburb, or transporting cargo. 

High-speed rail needs to be in high population areas with high employment-densities if it hopes to fill train seats. Atlanta and Charlotte have low densities. Atlanta is booming but it has just 70,000 people living within two miles of downtown. Charlotte has 50,000 living within two miles of its downtown. These areas rank 44th and 114th in the U.S. on density near downtown. Atlanta has 90,000 people who work within two miles of downtown. Charlotte has 70,000, which puts them 28th and 38th on this measure.

In comparison, New York City has a population density of 520,000— seven-to10 times higher than Atlanta and Charlotte—along with an employment density of 1,700,000, which is 20-to-25 times higher than Atlanta and Charlotte. And, it’s worth noting, that some cities in Europe and Asia with high-speed rail are considerably denser than New York City. 

High-speed rail generally depends on a robust rail transit system to funnel passengers to and from its stations. In Atlanta, just 13 percent of housing is near a rail line. In Charlotte, that number is just five percent.  For employment, 24 percent of people in Atlanta work near rail and 18 percent of Charlotte jobs are near rail.

In New York City, meanwhile, 52 percent of housing and 54 percent of jobs are accessible by transit. Thus, it’s not a surprise that in New York City more than one-third of daily commuters use transit while in Atlanta the number is 3.5 percent and in Charlotte it is only 2.5 percent.

Another reason rail is less likely to work in Atlanta than in other major cities across the world — car ownership is much higher in Georgia than in Europe or Asia. Gas taxes are lower and parking is more plentiful in Atlanta and across most of the United States. Some urban planners want to change this trend, particularly on free or subsidized parking in urban areas, but it will take many years to implement things like that and to see their impacts on transportation and travel patterns. 

Subsidizing some transportation services— if there are no other alternatives, such as subsidizing transit services to help low-income residents reach jobs— can make sense in certain situations. But this is not one of them. There are already multiple ways to travel from Atlanta to Charlotte, all with limited or no subsidies. Airplanes offer customers the quickest trip, buses offer the cheapest trips, and cars offer customizable trips.

If high-speed rail boosters want to build an expensive train between Charlotte and Atlanta, it should be completely privately funded. Taxpayers should not pay for it and should be leery of expensive rail systems billed as private that would likely require taxpayer subsidies to survive. 

Baruch Feigenbaum is assistant director of transportation policy at Reason Foundation and lead author of Reason's Annual Highway Report.