Funding

Does Portland Still Care about Transit?

I’m in Portland’s Oregonian today on the topic of the budget crisis affecting TriMet, the region’s transit agency.  If you’ve arrived from the link on that article, welcome!  This blog’s resources to help you understand transit issues are organized here.)  If you haven’t read the article, please read it first, and then let me expand on a few points.

TriMet’s overall budget hole is over 30% of its 2025 service level.  The cuts made today are dramatic, but they close only about a 5% gap, so there is a long road ahead to bring the transit budget into balance.  This is not a small problem.

It is also not TriMet’s fault.  In our work we stay in touch with transit agencies all over the US, and they are all having the same problem, escalating costs of offering each vehicle-hour of service, due to (a) competition for qualified staff, (b) higher spending on security to satisfy demands for a greater perception of safety.

Let me expand on each of these because they are both inflamed by a lot of crazy talk on social media.

Transit agencies are having difficulty hiring qualified staff — drivers and mechanics — mostly because the exploding delivery industry is hiring such huge numbers of these people.  The job of a bus driver, in particular, has also been growing more difficult and at times dangerous, and this also makes hiring harder.  All those things are pushing up the cost of labor.  Sometimes you can find statistics about individual employees getting eye-popping compensation by doing lots of overtime, but this is noise.  It is the free market for labor, not the influence of unions, that is making transit so expensive.

Security is an even harder issue, because TriMet is being expected to solve large societal problems with its meager budget.  Social media blowhards will go on about needing cops on every bus, but that would more than triple the cost of running the service, so immediately TriMet would have to cut 2/3 of the system to pay for it.  TriMet already more than doubled its security budget from 2022 to 2025, but at this point, the biggest danger to the agency is runaway demands for more and more security spending that can only lead to more service cuts.  Police-recorded calls for service on TriMet are down 52% since 2021.  The situation is better than most non-riders perceive from what they see on social media, so the question is how much to spend, on security instead of service, to move a perception.  Please don’t pretend this is easy.

Finally, are you hearing people complain that the buses are “empty”?  This complaint expresses a common confusion about how transit’s costs work.  To knock that one down, see here.

Over the next few months I will be writing more and larger pieces on the challenges facing US transit agencies.  To make sure you see them, click the envelope icon on the black bar above, and you’ll get these posts by email.  It’s free!

 

An Instructive Win for Transit in Spokane

Downtown Spokane is really spectacular, by the way. Photo by William Jacobs vs Pexels.com

In many US cities, voters will soon be asked to invest in public transit, if only to sustain services as operating costs rise.  So it might be useful to look closely at the just-completed battle in a very “purple” place, i.e. a place with plenty of Democrats but also lots of Republicans.  What’s interesting is the specific arguments that the opposition made.  You can expect these arguments when this issue comes up in your community.  This post provides some responses to them.

Spokane, Washington’s transit agency faced the voters on August 4 in a special election in order to renew their 0.2% sales tax.  This renewal does not let them expand the total quantity of service very much, but it does ensure that they can maintain the current level of service well into the future.  The measure looks like it has passed although the State of Washington takes a long time to confirm, but it was a nail-biter — currently 51.5% in favor.  (You can follow the results here.)

Again, the Spokane metro area is not an especially progressive place, although there are concentrations of progressives especially in the City of Spokane and the college town of Cheney.  It is in a safe Republican congressional seat.   Spokane County (85% of whose population is in the transit agency boundary) voted 50.6% for Donald Trump in 2024 and 54.6% for the Republican candidate for governor the same year.

Knowing that, it’s striking that the leading opponents of the measure all emphasized how much they support public transit.  You’ll see that in

The Downtown Spokane Partnership statement gives the essence of these business-based arguments:

After careful consideration about fiscal priorities and timing, the DSP Board voted to oppose Proposition 1 on the August 2026 ballot. Consistent feedback from DSP members and the broader community indicates that the community’s highest priorities remain focused on addressing urgent public needs that affect safety, economic vitality, and quality of life. The DSP believes those priorities should remain the primary focus of new public revenue commitments at this time.

The’s DSP’s opposition to Prop. 1 is not a reflection of the value of public transit, or the quality of the services STA provides. Our position reflects the reality that taxpayers are being asked to fund a growing number of important public needs at a time when available resources are limited. In this environment, difficult choices must be made about which investments should take precedence.

None of the leading business arguments claim that transit is unimportant, or that it’s obsolete because we’ll soon have driverless cars.  Instead, they affirm how much they support transit, and then give these arguments, which we should expect in city after city:

  • “There are other more urgent priorities.”  They emphasize other obvious needs — help with public safety, homelessness, etc.  This gives opponents the opportunity to give speeches about those problems as though the transit agency has anything to do with them.  This is going to be a common issue.  In city after city, transit seems to be everyone’s seventh priority.  Business leaders are going to keep saying “this isn’t the right time,” as though they would be more supportive at some other time.  Other urgent priorities are not going away, and at some point it’s going to be necessary to deal with this one even though those others are still urgent too.
  • They think that the agency doesn’t need the money.  In some places you’ll hear opponents imply that transit agencies should just crush their labor unions and pay people less.  Some senior workers are certainly highly paid, but overall the current salaries of bus drivers and mechanics are mostly market-driven and reflect the difficulty of hiring those positions.  In Spokane, thanks to years of responsible management, the agency has a substantial reserve.  Opponents demanded that the agency spend down that reserve, moving the system closer to the real fiscal cliff that many agencies face.

What can we learn from this near-disaster? First, the opponents of the measure were smart: they focused their message entirely on the swing voter.  Their political base includes people who think transit is evil because it brings crime or communism or immigrants, but their message ignored those people.  Instead, they spoke to people who think transit is good but are worried about taxes.  Every part of their argument is talking to that person.

If you are an urban progressive socializing mostly with other urban progressives, you must remember that even in your city, your social circle is unlikely to make the difference in a transit election.  The swing voter is someone who supports transit but worries their taxes are too high.  Be ready with responses like the ones I’ve given above.  Above all, don’t talk about transit as though it were a progressive thing.  Don’t talk about free fares or structural racism or overthrowing capitalism when you’re trying to get people to vote for transit, unless you’re 100% sure that everyone who hears you cares about those things.  Emphasize instead the diversity, including political diversity, of the people who find it useful.

In most communities (yours may vary) the swing voter is politically moderate and often respectful of local business leadership.  In Spokane, this swing voter probably voted for Trump but cares about their community and is open to taxes that provide efficient investments that deliver outcomes they value.  In this election, Spokane Transit’s good management and a careful “yes” campaign appears to have won the day over very well-organized, well-funded, and strategically savvy opposition.  It will be a victory worth learning from.

“Should We Let Public Transit Die?” My New Piece in Bloomberg

It’s been embarrassing to be traveling in Europe during critical weeks when several states I care about — including Pennsylvania, Oregon, and Illinois — are going through major transit funding crises.  But the same crises are coming for much of the US in the next year.  So I wanted to lay out everything I could offer in the way of arguments for why US transit deserves funding, why it’s going to need more, and what arguments we can make to win this difficult battle.  Bloomberg Citylab published it today.

I’m especially proud of the line, “If you drive to the mall, bus riders subsidize you.”  But there’s a lot there and I hope you find it useful.

Again, it’s here.

The Fall of Philadelphia

The Pennsylvania State Senate has decided that the transit system of America’s fifth largest city should be substantially destroyed.  Similar dramas are playing out in Illinois, Oregon, and Rhode Island.  Each crisis has arisen from the state legislature’s refusal to find new funding to save public transit, but Pennsylvania is the first state to actually push its biggest transit agency over the cliff.

(Oregon will be next to decide, at a special legislative session in late August.  Look for action in Illinois later this fall.)

In the Philadelphia area, SEPTA is making a 20% service cut but will eventually have to cut service 45%.  Cutting almost half of a transit system is not a way to make it more efficient.  It more like asking whether you’d like to keep your heart or your lungs.  Back in 2018 our firm did a detailed study of the Philadelphia network, and while we found many things to improve, none of those things would save even 10%, even if there weren’t unmet needs on which any savings should be spent.

So this will be a disaster with far reaching consequences.  A city whose high density makes transit essential for the city’s functioning will soon not function very well.  Service cuts will push transit riders back into cars (either as drivers or as people being given rides) triggering increased congestion.  It will also cause people to lose jobs and opportunities due to lack of transportation.

From what I can tell, the Republican-controlled Pennsylvania State Senate seems to be motivated by pure cultural animus toward urban life.  One state representative has already replied with a proposal to return tax revenues to the county from which they came, to make the point that the rural counties are actually net recipients of government spending that is funded by urban -generated prosperity.

This raises one of the most insidious aspects of how many US states have constructed the powers of local governments.  Conservative state leaders appear to be nearly unanimous in their view that big cities should be prevented from governing themselves.  In particular, they are committed to denying local governments the freedom to ask their own voters to raise their own taxes to pay for things that they value.  The idea is to make city governments helpless while continuing to blame them for everything that goes wrong in cities.  It plays well in conservative media, but it’s not fair and it’s certainly not democracy.  When dense cities are not allowed to fund their services in a way that reflects their needs and values, it guarantees that the city will be a site of failure — failure that will be especially visible to the media because in dense cities everything is more visible.

A good backgrounder on this, which I’m reading now, is historian Steven Cohn’s book Americans against the City.  It’s a history of anti-urbanism the explains how foundational hating cities has been to America’s sense of itself.  None of which changes the fact that cities are engines of prosperity, and that to hate the city is to hate your own prosperity.

Cities need more transit.  Rural areas need more roads.  Let’s let everyone pay for what they value.

time for an urbanist “tea party”? the citylab conversations

The "tea party" US House members who currently dominate the news are unlikely allies of urbanists.  But on one core idea, a band of urbanist thinkers are starting to echo a key idea of the radical right:   Big and active national government may not be the answer.

Images-5Last week, I was honored to be invited to Citylab, a two-day gathering in New York City sponsored by the Aspen Institutethe Atlantic magazine, and Bloomberg Philanthropies.  The event featured mayors and civic policy leaders from both North America and overseas as well as leading academics, journalists, and consultants.  

I expected the thrilling mix of new ideas, compelling stories, and quirky characters, but I got one thing I didn't expect:  A full-throated demand, from several surprising voices, for an urbanist revolt against the power of national governments.

Al Gore said it with his trademark fusion of bluntness and erudition: "The nation-state," he said, "is becoming disintermediated."  If you're not an academic at heart, that means: "National governments are becoming irrelevant to urban policy, and hence to the economy of an urban century."  

On cue, the New York Times published an op-ed on "The End of the Nation-State," about how cities are leaving nations behind.  Citylab also featured a terrific interview with political scientist Benjamin Barber, whose new book If Mayors Ruled the World argues for the irrelevance of nation-states in a world where cities are the real levers of economic power.  (According to Barber, the full title of his book should have been:  If Mayors Ruled the World: Why They Should and How They Already Do.)  When I spoke with Barber later, looking for nuance, he was full-throated in ridiculing the US Federal role in urbanism.   On this view, all the well-intentioned money that the Federal government doles out for urban goodies should be spent by cities as they see fit, or perhaps (gasp) never sent to Washington at all. 

Follow this logic and you might arrive at a radical urban Federalism, perhaps even one that could meet tea-party demands to "Abolish the IRS!"   Pay taxes to your city or state, and let them send a bit of it on to central government to do the few things that only a central government can do.  Push power downward to the scale where problems can be solved. 

You might even separate urban from rural governance in a way that enables both to thrive, each at its proper scale, replacing the eternal struggle between these necessary opposites that makes today's political discourse so inane.  The "size of government" debate is just a pointless and eternal struggle between urban and rural experience, both of which are right.  Living in cities means relying on government for many things that the rural resident provides for herself, so of course the attitude toward government is different.   But what's really logically different is the role of local government. Both urban and rural experience provide good reason to be suspicious of big-yet-distant national government, which can be as unresponsive to big-city mayors as it is to a Wyoming county official who just needs to get a bridge fixed.

At most of the urbanist and transportation conferences that I attend, though, any shrinking the national government role is met with horror.  And that's understandable.

In the US, the prevailing local response to declining federal spending is outrage and redoubled advocacy.  In Australia or Canada, two countries I work in extensively, working urbanists and infrastructure advocates seem to agree that of course there must be a bigger central government role in everything, with the US often cited as the model.  In the US itself, it's easy to see the current cuts in Federal spending as a disaster for urbanism and infrastructure.  It is, but it could also be something else: an invitation to governments that are closer to the people to have their own conversations that lead to local consensus about funding and solutions.

If mayors do end up ruling the world, it will be because the city, unlike the state or nation, is where citizenship is mostly deeply felt.   A nation's problems are abstract; if they show up in your life you're more likely to think of them as your community's or city's problems.  And that, in short, is why the city may be best positioned to actually build consensus around solving problems, including consensus about raising and spending money.  

And yet …

Before urbanists join the tea partiers in trying to shrink the national government, they have to grapple with the problem of inequality.  As sites of concentrated opportunity, cities are attracting the poor as well as the rich, and are thus becoming the place where inequality is most painfully evident.  But no mayor can be expected to solve a problem that exists on such a scale.

In small-c conservative terms, of course, the problem is not income inequality but rather the declining credibility of a "ladder of opportunity" that convinces everyone that reasonable effort will improve their circumstances.  One reason to care about transit, walking, and cycling — for many points on the income spectrum — is that transportation can form such a formidable barrier to opportunity.

All through Citylab, hands were wrung about inequality and the need to Do Something about it, against the backdrop of a New York City mayoral election that is mostly about this issue.  A rent control debate, featuring New York City Planning Director Amanda Burden and economist Paul Romer, found no middle ground on the question of whether city policy can usefully intervene to help low income people.  Income inequality appeared to be one issue where cities can do little by themselves.

When I asked sociologist Richard Florida about this in the North American context, he pointed me to an article proposing that the US create a Department of Cities.  He has good ideas about how to keep this from being just another bureaucracy, but if income inequality is the big issue that only national policy can address, it's not clear that it should be tagged as an urban issue at all.  Cities are not where the problems are.  Cities are just where people see their society's problems most intensely in daily life, because they get out of their cars.  

The great city in the wealthy parts of the world cannot just be an enclave of success.  It will deserve the self-government that the mayors seek only if it relentlessly inspires, supports, and gives back to its suburban and rural hinterland, creating its own "ladder of opportunity" for access to the riches of urban life.  Only a few people can afford Manhattan or San Francsico, so those cities' money and expertise must focus not just on themselves but on making life in more affordable places incrementally more humane.  Turning Newark into Manhattan would just make it unaffordable, so some of the urgency must lie in less photogenic intervention that works for each place's price-point.  It lies in providing safe places to walk and cycle, and  a safe way to cross the street at every bus stop, even in landscapes of drive-through everything that will be what many people can afford, and what some prefer.  

That's why I'm happy to be working not just in San Francisco but also in Houston, where affordability is a leading selling point.   It's why I'm suspicious of transit planning that defines an elite "choice rider" as the only important customer, including much of the transit-aestheticism that comes out of urbanist academia.  Where are the prestigious awards for the best affordable, scalable, but nonsexy intervention that made low-income inner-ring suburbia more safe and functional?  How do we build not just the shining city behind a moat (San Francisco, Manhattan, Singapore) but a chain of humane and functional places, at every price-point, that combine safety, civility and opportunity?

Where is the money in that?    If mayors ruled the world, I hope that would be obvious.  So let's hope they already do.

using development charges as a transit funding mechanism

Travis Allan and Cherise Burda over at the Pembina Insitute, a Toronto-based energy think tank, have an interesting post up on the prospects of using real estate development charges as a funding mechanism for transit. Development charges are fees developers pay to municipalities meant to offset the capital costs of extending or improving services like water or sewage systems that are imposed by new construction. However, the manner in which these fees are calculated is not always conducive to the type of development a city may be trying to encourage. Moreover, transit is rarely a serious consideration in assessing the charge. This is particularly important when development occurs in a place or a pattern that is difficult or impossible to provide good transit service to, such as those that violate the "Be on the way" rule. The original post explains some of the problems the authors observe in Ontario's development charge:

The development charge, as currently implemented in most Ontario municipalities, is crudely designed. There is a strong chance that it is subsidizing less-dense, single family homes while making compact, transit-friendly development more expensive. Development charges also likely overcharge some commercial development, and this could be contributing to the flight of office space to the suburbs, in locations underserviced by transit.

In many Ontario municipalities, including Toronto, new development is charged based on who will use it. For example, many municipalities have a per-unit rate for apartment building units, and another rate for detached single-family homes, regardless of where the buildings are located within the municipality, how much land area they occupy and the cost necessary to service them.

No matter the amount of new road or sewer needed to adequately serve a place, the development charge is assessed based on the number of residents or users.  This is obviously perverse.  Actual development impacts on the public purse vary based on location and density than by the number of residents or users.  

If a city like Toronto wants to make it easier to developers to build a certain type of development, changing the fee structure is one way to create an incentive. But what does this mean for transit?

The authors propose to use a portion of this revenue to pay for infrastructure investments needed to provide transit service to new developments. At the same time, the city could make changes to the structure of the development charge to incentivize the construction of transit-supportive development. If it worked, and there were no unforeseen consequences, the effect could be self-reinforcing: development charges encourage the type of development that transit needs to work well, and pay for some of the cost of providing that service. The supply of housing and commercial buildings that are accessible and designed to work with transit increases, more people are able to live and work in them:

 Developers continue to build in sprawling greenfields because it is often cheaper and easier than building developments in walkable, transit-oriented neighbourhoods. Lack of supply means homebuyers are priced out of these locations and are literally “driven” to the urban and suburban fringes, where long and stressful auto commutes are required — and this only leads to more congestion.

Since the vast horizontal distances of greenfields require much more infrastructure person, why should this be as cheap, in development charges, as building compactly??

are free fares realistic? it depends on the alternatives

In response to my post on Tallinn, Estonia's experiment in free transit for all city residents, a freelance reporter asked me:
The idea I'm most interested in exploring from your post is your proposal that smart farecard systems can be used to easily subsidize fares and "opening up a huge range of subsidy possibilities for any entity that sees an advantage in doing so." I'd like to get more of a sense of what you mean by that and whether this is possible even in today's austerity-obsessed environment.  
What I mean is that as long as the transit agency sets a price for an unlimited ride pass — with appropriate discounts for bulk purchasers — anyone can buy those passes for anyone.  Universities can buy them for their students, companies for their employees, and as in Tallinn, cities can even buy them for their citizens.  Any other entity can also buy them for any group of people it cares about, yielding possibilities that we can barely envision now.
 
Is this realistic in an age of austerity?  It depends on what the alternatives are.  The alternatives may include building wildly expensive parking, or losing out in a competition for the best people.  

Urban universities with constrained sites often subsidize transit because without it they would need unmanageable amounts of parking.  One common reason that universities get into transit subsidies is that they want to build on their surface parking lots, and the cost of structured parking (and its impacts) turns out to be higher than the cost of buying transit passes for many years.  So it can be a logical business decision.
We're used to the idea that companies leave the cost of commuting to their employees, but companies that are competing for the best talent don't have that luxury.  Witness the huge fleets of shuttles that ferry employees to Silicon Valley giants like Google and Apple from as far away as San Francisco.  Companies that compete for talent can find transit subsidies to be a reasonable part of a total compensation package. And of course, corporate campuses can have expansion crises much like those of universities, where they'd like to build on their parking lots and look for alternatives to expensive structured parking.
City governments are the hardest to imagine financing free fares in the US, if only because of how broke most of them are.  But if it goes well in Tallinn the idea will spread.  One problem in much of America, and notably in California, is that residents are net consumers of government services while employers are net subsidizers of them; this motivates cities to minimize their populations and maximize their employment.  (This explains many odd shapes of city boundaries that seek to include jobs but exclude residents.).  In those distorted tax environments, cities don't want people to live there so much as to work there, so subsidies to residents don't make much sense.  But of course residents are the voters, and wealthy cities that value green credentials may sometimes see merit.  And of course cities aldo benefit if it can reduce their parking requirements, which may increasingly be the nexus that makes fare subsidies make sense.
Remember, though, that massive fare subsidies don't just require the replacement revenue for the fares but also the revenue needed to add service to handle the crowding that the free fares will generate.  I will be interested to see how this plays out in Tallinn.  This has been the barrier to free transit in big cities that have studied it, and the main reason that only small towns — especially university towns — have made large scale fare subsidies work.

what if a city wants more transit than its neighbors, but they’re all in one transit agency?

Large North American transit agencies generally have some revenue raising authority over an enormous and diverse urban area, and feel obliged to serve the same enormous area with something that can be justified as an "equitable" distribution of service.  (As I explain in detail in Chapter 10 of my book Human Transit, there's no objective definition of "equitable," but that's another story.)

Most agencies rely on their voters to approve their basic revenue raising authority.  So what happens if the voters over the whole agency area give transit a resounding "no," but parts of the area — a core city for example — does value transit and is willing to pay for it?  And what should happen in the many urban regions where the whole region will pay for a low level of service but certain communities within it — usually including the core city — want to pay for a higher level of service?

In many areas, it's legally impossible for a transit agency to impose a higher rate of taxation of part of its service area and deliver a higher level of service in response.  But why not?  The ability to respond to local needs and desires is the core of what we usually think of as successful local government. 

This, for example, is the current situation of Pierce Transit in the Tacoma, Washington area, which covers an urban county south of Seattle.  Voters over the whole service area have refused to support new sales tax revenues that would present a truly devastating service cut.  The agency has already shrunk its boundaries to remove some communities who did not value transit service and that were especially expensive to serve.  Now, conversation is turning to an "Enhanced Transit Zone," which would allow parts of the region that value transit more to tax themselves more at higher rates for better transit service.

But this story is not about one agency, because it goes to why core cities whose people would value more transit are often prevented from getting it.  The default approach of regional transit agencies has been for the agency to impose one level of taxation everywhere, and then to have endless arguments about how to distribute that resource over vastly dissimilar communities where some think of transit as critical and others don't.  The result is almost always a special problem for older core cities, because as I argue in Chapter 10, core cities need more service per capita than newer suburbs.  Because regional transit boards are often dominated by suburban interests that have trouble voting for what they see as disproportionate investment in the core city, it's mathematically inevitable that under big regional agencies, core cities will be underserved relative to their values and demand.  The result is typically lots of empty buses running in outer suburbs while core city buses are overcrowded and turning people away.

The only solution I see to this problem is for core cities to be ready to start subsidizing transit service directly, over and above the level that their regional government can fund, to ensure that they get their fair share.  (In theory they could also rebel and secede from the regional agency, but good networks are so fused across multiple cities that it's very hard to take them apart at city limits without massive losses in efficiency and usefulness.)

Funding of enhanced transit by core city governments is starting to happen, if in some half-concealed ways.  The City of Portland, for example, directly subsidizes half of the operations of the Portland Streetcar, effectively creating an overlay of additional transit with its own operating funds.  The next step will be for core cities to find ways to fund growth in the overall level of service in their networks beyond what the regional transit agency can afford.

Sure, most transit agencies and city goverments face budget crises right now, but budget crises are as good a time as any to make hard choices about what a fare distribution of service will ultimately be.  One key idea is that state governments should quit prohibiting people from raising their taxes to pay for better transit service, if that is what they want to vote for.

 

fare-free transit spreading in europe? can cities do this on their own?

LogoIt's too soon to say, but Tallinn, Estonia (pop. 425,000) is now by far the largest city to offer fare-freefree public transit — not just in Europe but anywhere in the world as near as I can tell.  Most other free-transit communities are either university-dominated small cities (like Chapel Hill, North Carolina and Hasselt, Belgium) or rural networks where ridership is so low that fares don't pay for the costs of fare collection technology, let alone contribute toward operating cost.

Tallinn — along with Hasselt and the small city of Aubagne, France — are also forming the Free Public Transport European Network, to spread the idea and disseminate experience about it.

As the city's webpage explains, Tallinn citizens must still buy a farecard, which will allow them to ride free. This allows the transit network to continue to collect fares from tourists and people living in other cities.

This raises the interesting possibility that any city, inside a bigger metro area with a regional transit system, could elect to subsidize transit fares for its own residents, by simply buying fares in bulk and giving them away to its own residents — just as some universities and employers already do for their own students or staff.  Indeed, smart farecards make it possible for anyone to subsidize fares without much complexity, opening up a huge range of subsidy possibilities for any entity that sees an advantage in doing so.  Yet another reason that city governments are not as helpless about transit as they often think, even if they don't control their transit system.

 

guaranteeing adequate service: developer and city roles

Daniel Feinglos asks:

Hi, Mr. Walker. Question about a way to address concerns about service cuts or reroutings: are you familiar with any examples of a transit provider entering into some kind of contractual arrangement with businesses along a route to guarantee them a certain level of service for a given period of time? If you're not familiar with anything like this, does it sound at all like a workable means of alleviating fears that a route might not be around for the long term?

Developers sometimes make deals with transit agencies to ensure transit to a new development before it would be viable for the transit agency, or even in cases where it might never be viable for the transit agency.  

The sad thing is:  The more useful a transit line is, the more diverse its ridership, and the less likely that any one or two interests will want to pay to preserve it.  The only entity who can do this, frequently, is a city government, and in gradual ways this is starting to happen.  Many of the recent North American streetcar projects, for example, involve operating funds from the city in addition to some from the transit agency.  

If you've read Chapter 10 of my book, you know why this is inevitable.  Transit demand rises exponentially against density up to a certain point, so dense core cities almost always need more service per capita than their regional transit agency is in the position to provide.  The only way this would change is if big regional transit agencies with suburban dominated boards suddenly decided that productivity was more important than each suburb getting is fair share.  Seattle's King County Metro did take a gentle step in this direction a few years ago, dissolving a rigid formula that had required less than 20% of the region's service to go to Seattle even though demand is greatest there.

Another phenomenon that must be understood in the same context is the advent of core city government contributions to the regional transit agency for additional service within the city.  Portland, Seattle, and some other cities contribute operating funds for their streetcars, for example, with the effect that these services don't have to be counted against a broader regionwide accounting of how much service the city "deserves."  City contributions to streetcars must be understood as a toe in the door, which will eventually set a precendent for a broader, more realistic assessment of what core cities must expect to contribute.   Either core cities will pay more, or regional agencies will decide to let core cities have more, or (as in Seattle) a bit of both.  If you have a suburb-dominated regional transit agency in your urban area, watch how this plays out, because the math is inevitable.