Rural Commuter Rail

[acottawa]

Originally Posted by Horus

Unless I've completely misinterpreted some of Joseph Potvin's comments, fare revenues are irrelevant in the MOOSE model. MOOSE gets funding from stopping fees from local station authorities. Presumably, more stop events at a given station equates to higher fees. Theoretically then, MOOSE can run all-day two-way service to its network of stations, although I'd expect that there would have to be some formula to balance the increased operating costs that would result.

Whether or not the promise of frequent service to these MOOSE-serviced communities ends up driving ridership, and therefore value to the stations, remains to be seen.

But the revenue source is a stock (a cut of the increase in property value) not a flow. If it isn't fares, what is paying the day to day operating expenses?

[Dado]

Originally Posted by roger1818

True but the western one (removed in 1967) has been obliterated by the cloverleaf for the airport parkway, so there is really no hope of recreating it.

Not so: take a look at the geoOttawa aerial image from 1976 of Ellwood Diamond: the tracing of the west connection railbed is still visible, untouched by the cloverleafs.



That image actually shows the three connections that existed at Ellwood: there was one in the east as well.

The east connection has a larger radius than the west connection, but you can see that there is sufficient room on the west side for a connection equal in radius to the east connection, though the pathway would have to be relocated.

[Horus]

Originally Posted by acottawa

But the revenue source is a stock (a cut of the increase in property value) not a flow. If it isn't fares, what is paying the day to day operating expenses?

Hopefully Joseph is still monitoring this thread and can respond.

If MOOSE gets cash from the station operators (at whatever interval they deem necessary) the question is really where do the station operators get the cash to pay to MOOSE? Increases in property values are neither liquid nor immediate so there would certainly have to be some capitalization requirements on the part of the station operators. In the short-term, that would definitely put a serious financial strain on whoever is backing a MOOSE station.

[Allandale25]

Originally Posted by Horus

Hopefully Joseph is still monitoring this thread and can respond.

If MOOSE gets cash from the station operators (at whatever interval they deem necessary) the question is really where do the station operators get the cash to pay to MOOSE? Increases in property values are neither liquid nor immediate so there would certainly have to be some capitalization requirements on the part of the station operators. In the short-term, that would definitely put a serious financial strain on whoever is backing a MOOSE station.

Wasn't he quoted as saying that for some stations, there would be a fee added to the common element/maintenance fee to help pay for operations. My question is how high that fee would have to be to make up for the operational costs, in addition to the normal fee condo owners pay. The normal fee also includes the reserve fund fee and as a building ages and stuff needs to get replaced, it's important to fund the reserve fund at a proper level and not cheap out.

[Joseph Potvin]

Originally Posted by Horus

If MOOSE gets cash from the station operators (at whatever interval they deem necessary) the question is really where do the station operators get the cash to pay to MOOSE? Increases in property values are neither liquid nor immediate so there would certainly have to be some capitalization requirements on the part of the station operators. In the short-term, that would definitely put a serious financial strain on whoever is backing a MOOSE station.

Horus,

From the PPR white paper:

"The PPR formula for the train stopping fee remains the same generally-negotiated proportion of the marginal increase in real property income and asset value within a short walk of the station, approximating a 0.8 km radius. Increased rent/lease values provide a predictable monthly revenue stream linked to demand. And, increased asset values are realized as a percentage upon each sale, which has a predictable turnover rate in most markets. ... A structured model can be used to assess the amount of money that can be reliably generated on both ways from a given set of stations."

We are developing that model presently.

Joseph Potvin
Director General | Directeur général
Moose Consortium (Mobility Ottawa-Outaouais: Systems & Enterprises) | www.letsgomoose.com
Consortium Moose (Mobilité Outaouais-Ottawa: Systèmes & Enterprises) | www.onyvamoose.com

[acottawa]

I don't know about Quebec, but in Ontario rent increases are pretty strictly controlled. Even if there is an increase in demand for rural rental units, it could be years before landlords see actual cash increases and can pay their special levies.

[FutureWickedCity]

It's true that any new development in these satellite communities are likely to be charmless suburban style houses, but sadly that's the world we live in. We don't build elegant Victorian houses anymore, we build ugly cheap houses and condos. The MOOSE network won't be to blame for our generation's poor aesthetic tastes and predeliction for building the cheapest possible housing. And I don't think these towns are opposed to population growth. More people means more tax revenue. Look at all the dying towns in the maritimes..

[acottawa]

Originally Posted by FutureWickedCity

It's true that any new development in these satellite communities are likely to be charmless suburban style houses, but sadly that's the world we live in. We don't build elegant Victorian houses anymore, we build ugly cheap houses and condos. The MOOSE network won't be to blame for our generation's poor aesthetic tastes and predeliction for building the cheapest possible housing. And I don't think these towns are opposed to population growth. More people means more tax revenue. Look at all the dying towns in the maritimes..

But if someone wants to live in a "charmless suburban style house" I am still not clear why they want to live in a "charmless suburban style house" 50km further from the city. The current incentive to commute from these communities is that housing is cheaper, but the whole business model is based on housing in these communities getting more expensive.

[waterloowarrior]

Originally Posted by acottawa

But if someone wants to live in a "charmless suburban style house" I am still not clear why they want to live in a "charmless suburban style house" 50km further from the city. The current incentive to commute from these communities is that housing is cheaper, but the whole business model is based on housing in these communities getting more expensive.

I'm not sure if the model will work, but commuters are already paying a more than the suburbs for transportation through rural bus passes (e.g. $245 a month in Russell, $238 in Rockland), gas, parking etc. Potentially a rail pass would just be shifting some of these costs and also improving travel times. From their perspective, there's also the benefit of living in a smaller community with less traffic, larger lots, and potentially greater community spirit/history than a suburban community. Many of the rural communities have a commercial main street with small businesses, not just big box plazas like the suburbs.

[acottawa]

Originally Posted by waterloowarrior

I'm not sure if the model will work, but commuters are already paying a more than the suburbs for transportation through rural bus passes (e.g. $245 a month in Russell, $238 in Rockland), gas, parking etc. Potentially a rail pass would just be shifting some of these costs and also improving travel times. From their perspective, there's also the benefit of living in a smaller community with less traffic, larger lots, and potentially greater community spirit/history than a suburban community. Many of the rural communities have a commercial main street with small businesses, not just big box plazas like the suburbs.

But that willingness to pay higher commuting costs is based on a trade-off for house costs: a new-ish, large-ish detached house in Rockland, etc. costs about what a semi or older house costs costs in Orelans or a townhouse or fixer upper costs in Gloucester or a good sized condo costs downtown (generalizing a bit, obviously). If rail causes properties to appreciate significantly (which they have to for the business model to work) and a house on Prescott and Russel costs what an equivalent house in Orleans or Gloucester costs, then what is the incentive?

[kmcamp]

Originally Posted by acottawa

But that willingness to pay higher commuting costs is based on a trade-off for house costs: a new-ish, large-ish detached house in Rockland, etc. costs about what a semi or older house costs costs in Orelans or a townhouse or fixer upper costs in Gloucester or a good sized condo costs downtown (generalizing a bit, obviously). If rail causes properties to appreciate significantly (which they have to for the business model to work) and a house on Prescott and Russel costs what an equivalent house in Orleans or Gloucester costs, then what is the incentive?

I'm sure property values would increase, but there's no way it would equal that of houses farther in. Commuter rail in other cities proves that

[roger1818]

Originally Posted by Dado

Not so: take a look at the geoOttawa aerial image from 1976 of Ellwood Diamond: the tracing of the west connection railbed is still visible, untouched by the cloverleafs.

I stand corrected. I still don't think it is feasible as once the diamond is grade separated (I seem to remember hearing that they will do so in stage 2 LRT), there may not be room to change elevation without turning the track into a roller coaster (drop and sharp bank ).

Wrong thread I know, but as for the Trillium line grade separation, my guess is while the line is closed they will dig under the Beachburg sub (building a temporary diversion for it) and bridge the Transitway over the Trillium line (it currently dips down to go under it). The creek will be a bit of an issue though.

[Joseph Potvin]

Originally Posted by acottawa

But the revenue source is a stock (a cut of the increase in property value) not a flow. If it isn't fares, what is paying the day to day operating expenses?

I'm curious how this notion persists despite numerous summary, moderate and detailed efforts to explain how the financial flows are designed.

For the record, once again:

1. Real property leases and rents are typically paid monthly, commercial or residential.
2. Real property asset values are paid on average every 20 years or so, commercial or residential.

In each case, obtain the increment statistically attributable to the addition of regional connectivity due to MOOSE passenger rail service, divide that into the two parts at the negotiated proportion, and one of those parts is what the property owners pay to their particular common elements freehold condominium corporation which owns and operates a station. The condominium corporation then pays MOOSE Consortium for the train service subscription, while they also pay for a set of services which they are responsible for, as station operators.

Maybe the aggregate revenue from this method across 40-50 stations is large enough, and maybe it's not. The feasibility study underway will give us some useful guidance. But I trust the basic PPR methodology of revenue generation and collection is clear, and seems reasonably coherent.

Or, please explain if you think anything in the above seems unclear, unreasonable or illogical.

Joseph Potvin
Director General | Directeur général
Moose Consortium (Mobility Ottawa-Outaouais: Systems & Enterprises) | www.letsgomoose.com
Consortium Moose (Mobilité Outaouais-Ottawa: Systèmes & Enterprises) | www.onyvamoose.com

[acottawa]

Originally Posted by Joseph Potvin

I'm curious how this notion persists despite numerous summary, moderate and detailed efforts to explain how the financial flows are designed.

For the record, once again:

1. Real property leases and rents are typically paid monthly, commercial or residential.
2. Real property asset values are paid on average every 20 years or so, commercial or residential.

In each case, obtain the increment statistically attributable to the addition of regional connectivity due to MOOSE passenger rail service, divide that into the two parts at the negotiated proportion, and one of those parts is what the property owners pay to their particular common elements freehold condominium corporation which owns and operates a station. The condominium corporation then pays MOOSE Consortium for the train service subscription, while they also pay for a set of services which they are responsible for, as station operators.

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So the only flow the HOA that owns the station has access to (to pay Moose's operating costs plus its own operating costs) is a cut of rental income from homeowners who rent out their homes, and then only if what they can charge in rent is more than it would be if there was no rail?

[Joseph Potvin]

Originally Posted by acottawa

So the only flow the HOA that owns the station has access to (to pay Moose's operating costs plus its own operating costs) is a cut of rental income from homeowners who rent out their homes, and then only if what they can charge in rent is more than it would be if there was no rail?

acottawa,

In two square km of highly densified land, how many commercial and residential properties might there be, with what total square meters of realizable market value?

What might the aggregate market value of those properties be without rail service?

What might the aggregate value increment of those properties be when they are connected to the region via rail?

Divide that aggregate increment by 20, since in any year, 1/20th of the properties can be expected on average to sell in the market.

The increment part of the total value would be split. (The formula does not touch base value.) Therefore split the aggregate increment by some proportion, say 50:50 retained by the owners/investors and paid for the train subscription.

Please report your low and high number range back to this list.

That's the 'asset value' part that you have been dismissing, perhaps because you have been assuming that it only shows up 20 years later. But properties are bought & sold routinely.

In addition, there's the leases/rents part.

Joseph Potvin
Director General | Directeur général
Moose Consortium (Mobility Ottawa-Outaouais: Systems & Enterprises) | www.letsgomoose.com
Consortium Moose (Mobilité Outaouais-Ottawa: Systèmes & Enterprises) | www.onyvamoose.com

[AndyMEng]

Originally Posted by Joseph Potvin

acottawa,

In two square km of highly densified land, how many commercial and residential properties might there be, with what total square meters of realizable market value?

What might the aggregate market value of those properties be without rail service?

What might the aggregate value increment of those properties be when they are connected to the region via rail?

Divide that aggregate increment by 20, since in any year, 1/20th of the properties can be expected on average to sell in the market.

The increment part of the total value would be split. (The formula does not touch base value.) Therefore split the aggregate increment by some proportion, say 50:50 retained by the owners/investors and paid for the train subscription.

Please report your low and high number range back to this list.

That's the 'asset value' part that you have been dismissing, perhaps because you have been assuming that it only shows up 20 years later. But properties are bought & sold routinely.

In addition, there's the leases/rents part.

Joseph Potvin
Director General | Directeur général
Moose Consortium (Mobility Ottawa-Outaouais: Systems & Enterprises) | www.letsgomoose.com
Consortium Moose (Mobilité Outaouais-Ottawa: Systèmes & Enterprises) | www.onyvamoose.com

Maybe I'm not educated enough on property ownership, but I'm not getting it. How, exactly, do you convince these property owners to give you their money? Is it an increased tax that the villages would levy on all property owners once the station agreement is in place? Once these villagers are paying an increased tax, they're also going to be the sole fare-payers? Seems to me if the lines are going to be subsidized by the public, it needs to be from a larger source, i.e. from feds or province. Double-hits to the paycheque of people will not go over well politically. I can understand if you had a couple of buildings maybe that you could fill with commuters, and the buildings were connected to the property the train station is on, then perhaps a small fee from the condo collections could go to the train upkeep, but you're not going to get much from people who are looking for a cheaper living arrangement by moving further, only to pay extra tax and then a daily fare.

Don't get me wrong, I think it's an awesome idea. Good luck!

[acottawa]

Originally Posted by Joseph Potvin

acottawa,

In two square km of highly densified land, how many commercial and residential properties might there be, with what total square meters of realizable market value?

What might the aggregate market value of those properties be without rail service?

What might the aggregate value increment of those properties be when they are connected to the region via rail?

That describes a steady state that might exist in 20 years once the neighbourhood has filled out (Ottawa-Gatineau has a growth rate of about 1%, so development in the region happens slowly), but who pays the carrying costs from the time the development is a small number of early arrivals until the development fills out (plus all of the capital costs to get the service going)?

But even in steady state situation, population densities in newish suburbs in the region are in the range of 2000 people per square km, so once the neighbourhood if fully built out there would be about 4000 residents, and maybe about 1300 units. About 95% of houses in newer suburbs are owner occupied, so there are maybe 65 rental units. Say an average house price of 300k, if you get a 10% increase in property values (which is generous to me, that's the premium on a house near the subway in Toronto), so each household owes the HOA 15k for their rail subscription (based on your 50/50 scenario). So if 5% of houses sold every year, the HOA would get about 81k a month from property value increase, plus a cut of the rental income (say 7k). There might be some commercial rent as well (coffee shop or something) but most commercial landlords (big box type developments) would want to locate outside of the 2 sq km area so they don't have to pay the HOA. I don't know how many stops per day they could afford to pay for with that kind of budget, but it doesn't sound like it would be a lot.

[Truenorth00]

@acottawa

The case looks even more sketch to me when they start talking about stations inside the city. With several of them overlapping the station catchments on Trillium or Confederation lines.

What homeowner or business would agree to fund stations when there's a substantially more frequent transit service right there.

And that's of course, all presuming they can actually work out a successful sharing agreement for the Trillium Line. With no news about that so far, this looks like vaporware.

[AndyMEng]

Originally Posted by Truenorth00

@acottawa

The case looks even more sketch to me when they start talking about stations inside the city. With several of them overlapping the station catchments on Trillium or Confederation lines.

What homeowner or business would agree to fund stations when there's a substantially more frequent transit service right there.

And that's of course, all presuming they can actually work out a successful sharing agreement for the Trillium Line. With no news about that so far, this looks like vaporware.

I still don't understand how a homeowner would gladly fork over lump sums of money beyond a regular transit pass? Other than a new suburb tax to enforce a contribution.

On another topic, and maybe this has been discussed already. What's happening with Stage 2, and why can't the old rail lines be used to extend the tracks from Bayshore, to the North-West to Arnprior, and to the South-West to Carleton Place or even Smith's Falls? I was just in Stockholm, Sweden not too long ago, and multiple types of inter-and inner-city rail transit travel on the same tracks heading in-and-out of downtown. I could go to several places far and near from the same platform, with a different train heading out every 3 minutes. (just make damn sure you know where your train is headed! lol)

But seriously, with Moodie station being built, and then an extension down the friggin highway for the Stage 2, are we completely ignoring extending these tracks from an inter-city point of view? Wouldn't that just be easier to accomplish a similar feat (heading west only, of course... i haven't thought about east, south or north).

[acottawa]

Originally Posted by AndyMEng

I still don't understand how a homeowner would gladly fork over lump sums of money beyond a regular transit pass? Other than a new suburb tax to enforce a contribution.

On another topic, and maybe this has been discussed already. What's happening with Stage 2, and why can't the old rail lines be used to extend the tracks from Bayshore, to the North-West to Arnprior, and to the South-West to Carleton Place or even Smith's Falls? I was just in Stockholm, Sweden not too long ago, and multiple types of inter-and inner-city rail transit travel on the same tracks heading in-and-out of downtown. I could go to several places far and near from the same platform, with a different train heading out every 3 minutes. (just make damn sure you know where your train is headed! lol)

But seriously, with Moodie station being built, and then an extension down the friggin highway for the Stage 2, are we completely ignoring extending these tracks from an inter-city point of view? Wouldn't that just be easier to accomplish a similar feat (heading west only, of course... i haven't thought about east, south or north).

It was studied maybe 10 years ago (that was supposed to be the "phase 2" after completing the North-South LRT plan). I think it was found to be unworkable, I can't remember why (I wish it wasn't so hard to find old studies). I think part of the problem is that a lot of these old lines are "teardowns" and upgrading is basically a complete reconstruction.