Remote work makes commuter rail even less viable
A commuter rail line from New Hampshire to Boston would need increasing taxpayer subsidies to serve a shrinking number of riders, recent data on transit ridership and commuting patterns suggest.
Health concerns are not the only reason commuter rail ridership remains a fraction of its pre-pandemic levels. Work and commuting patterns have changed, leaving public transit systems — especially commuter rail — with massive, long-term revenue shortfalls and shrinking pools of potential riders.
The New Hampshire Department of Transportation’s proposed “Capitol Corridor” commuter rail project would extend the Massachusetts Bay Transportation Authority’s Boston-Lowell line to Manchester (and possibly to Concord). It would undertake this expansion, at a cost well north of a quarter of a billion dollars, just as remote work begins to reshape commuting patterns.
Remote work and vanishing commuters
“The desire for hybrid work models, defined by part-time telework, remains strong,” a City of Boston survey of commuters found last year.
Only 7% of Boston commuters said they never want to work remotely in the future. More than half, 54%, said they preferred to telecommute a few days a week. Sixteen percent said they wanted to telecommute every day.
Boston employers also expect that work arrangements will not return to the pre-pandemic norm.
A MassCompetes survey of Massachusetts employers last year found that 75% are considering hybrid work models after the pandemic, 61% reduced capacity, 59% hybrid practices, 55% hybrid physical space, and 48% staggered schedules. (Respondents could choose multiple options.)
Regarding public transit use, 51% of employers said they expect their employees’ dependence on mass transit to decline after the pandemic, 30% said they expect it to stay the same, and only 3% said they expect it to increase.
A March 10 Upwork survey of 23,000 Americans found that 2.4% said they had already moved because of remote work since 2020, and 9.3% said they planned to do so. Those percentages translate to 4.9 million and 18.9 million people.
“People are moving outside commutable distances: 28% of people said they are moving more than 4 hours away,” the survey found. “Another 13% said they are moving between two and four hours away.”
And this is just the tip of the trend, the data suggest.
“The effects of remote work on geography are just beginning to unfold: The number of people who have relocated is likely just the start of a larger reshuffle, since our data suggests that there are strong reasons to suspect longer-term moves will rise,” the Upwork study concluded.
Commuter rail suffers huge ridership declines
Transit officials nationwide report that they, too, see a future with fewer riders.
As we reported in January, the DOT expects lower Capitol Corridor ridership after COVID than it had projected in 2014. Nationally, commuter rail operators expect emptier trains.
“The nation’s biggest commuter railroads are preparing for potentially permanent shifts in daily ridership, declines that in some cases could threaten their long-term viability,” The Wall Street Journal reported on March 6.
“The changes are based on expectations that many office workers will continue to work from home at least part-time for years after the Covid-19 pandemic subsides.”
The American Public Transportation Association reports that weekday ridership counts for commuter rail are down to between 25%-55% of pre-pandemic levels.
“The MBTA commuter rail system is averaging about 45,000 weekday passenger trips versus roughly 120,000 before Covid-19, and officials don’t expect a full rebound even after companies bring most workers back to offices,” the Journal reported.
“We’re going to have to figure out a way to operate with lower fare revenue, and it remains to be seen how much lower it’s going to be,” MBTA General Manager Steve Poftak told the paper.
Lower fare revenue means larger taxpayer subsidies for an organization already dependent on taxes.
Tying N.H. taxpayers to MBTA’s financial woes
The transit ridership collapse has put the MBTA into a dire financial situation. In December, the authority projected that its expenses would exceed its revenue until 2027, and even then fare revenues would remain below pre-pandemic levels.
Fare revenues in 2027 will range between 68% and 93% of 2019’s numbers, the MBTA projected.
On March 10, the MBTA projected a budget gap of between $201 million and $458 million next year, growing to between $341 million and $550 million by 2027, without one-time revenues such as federal bailouts.
The cash-strapped MBTA is the N.H. DOT’s chosen partner to operate the Capitol Corridor commuter rail line. The state’s plan is to hand the operation of a New Hampshire taxpayer-funded enterprise to a Massachusetts organization hundreds of millions of dollars in the red, desperate for cash, and entirely reliant on growing levels of taxpayer subsidies for its survival.
Fares cover only 9% of the MBTA’s fiscal year 2022 revenue, the authority’s March report showed. Non-operating revenue, which the MBTA itself calls “subsidy” revenue, accounts for 91%.
This revenue situation places tremendous pressure on the MBTA to increase both fares and taxpayer subsidies.
Could the lost revenue be made up by raising fares? Automobile commuters told the City of Boston’s commuter survey that they would be most likely to switch to transit if offered a free or reduced-price commuter rail pass. They are price-conscious. Higher fares would only drive more commuters away.
That leaves additional taxpayer subsidies as the only way to keep the MBTA operating as ridership remains below 2019 levels.
A publicly financed commuter rail line from Manchester to Boston would funnel New Hampshire taxpayer money into the financially troubled MBTA just as teleconferencing software has begun to decimate demand for city-to-city commuting. That’s not what anyone would call a wise investment.