American Dream

Ever the innovator, my home town of Portland, Oregon has developed a new form of transportation cost overruns. Under pressure from Oregon Health Sciences University, a state teaching hospital, the city agreed to help pay for a $15 million, 3,300-foot aerial tramway connecting the hospital (which is on a hill) with a waterfront housing-and-office development (including hospital outpatient clinics and other medical facilities).

As reported in today's Oregonian, the cost of the tram has now risen to $34.5 million, more than double the original projections. The aerial tram is only a small part of the subsidies the city expects to provide to the waterfront development. It also plans to extend its 7-mile-per-hour streetcar to the development and add other subsidies. In total, it expects to spend $255 million in subsidies on this development alone.

The city shrugs off worries about cost overruns for the aerial tram and streetcar because it intends to pay for them by hiking downtown parking fees. The hospital will also pay for its share of the tram costs in part through such parking fees. Ironically, if Portlanders really did stop driving, as planners wish, the city wouldn't be able to fund all the projects that are designed to allow people to drive less.