The new demographics are found in two generations deeply influenced by suburbia. First there’s the 20-30 something’s who grew up in suburbia and, like all generations, do not want what their parents wanted. The second demographic are their parents, who are now becoming empty nesters with a five-bedroom McMansions in the suburbs.

According to housing and location preference surveys, the younger crowd wants to be in the center of things — downtown. They want cafes, restaurants, entertainment, and other young people to socialize with. They want walkable communities with parks; they want bike trails; they want to bike to work; and they want transit.

At the aging boomer cutting edge, what are we interested in? For boomers, preferences split almost down the middle. Half of the 50-60 somethings want to move to a larger house in a semi rural area. They wanted to build their “Dream House”, the house they wanted all their life, but deferred it to raise their children. The other half want to move to a central urban area with a walkable, transit- accessible life style. They want easy access to shopping, food, music, art, and health care. I always thought that this split speaks volumes about my generation. I do not know what impact the great housing collapse has had on those dreams, but my guess is that they are still the same, only deferred.

Where might we see these generations going after we recover from this housing collapse? Further out suburban growth seems handicapped by long-term increases in energy prices and no market mechanism to create the capital to build new suburbs. There actually seems to be an over supply of McMansions. Energy costs and maintenance costs make them unattractive. Denser development, more walkable neighborhoods, better small-scale retail, sophisticated transit, and neighborhood amenities like parks, and the “new” libraries, seem to be the right market response.

What we need to do is change the way we think about non-motorized transportation and transit. When freight railroads were reshaping America and when, later, highway building did the same, we witnessed the power of transportation to shape our economy, our cities, and our concept of mobility.

I would suggest that walking, biking and transit are about to become the next wave of transportation to shape our urban areas. And that combined, they are a new mode of transportation. Looking at the location and lifestyle preferences of Gen X and Y, as well as the preferences of aging boomers, it seems clear that a distinct advantage is going to go to urban areas that can meet that market demand. However, we are still captive to the notion that these modes are fringe, “green” and non-essential. and “soft”. A hundred years ago the automobile was considered a rich man’s toy that was unreliable and scared the horses. Change is a constant in transportation.

So, how do we begin to think about this new mode as an economic development tool, in the same way we use to think about highways? If the transportation component of your local economic development planning is uninspiring, if it puts vague hope in some new roads, if it ignores transit, and if less than one percent of your combined transportation investments are in the growth modes of biking and walking, you do not have a transportation component to your economic development strategy.

If you think about this as an economic competition for the location choices of two of the largest generations in American history, then you can begin to ask questions. Transportation for what? Transportation for whom? What about transportation cost effectiveness? New York City is betting its transportation (and economic future) on a new way of looking at mobility. Portland, Ore., has created an entire economy at the regional level by thinking in new ways about light rail, biking and walking. I was recently in Amsterdam where more than 50 percent of the population takes transit, bikes or walks to work every day. These places made those decisions not because they felt good. They made them for rational economic reasons.

It ultimately comes down to how we think about the use of the public right of way. Most successful regions start with mapping the way people are walking, biking and using transit in the same way we used to count cars: Look at the flow and the demand. Plan sidewalks with walking in mind. Repair the sidewalks that are falling apart. (It is actually pretty cheap to do.) And how about transit that allows riders to track buses and trains in real time on their cell phones? How about bike accessible transit? How about signal coordination for buses? How about setting a goal for the percent of commuters who bike to work? Most planners say that their weather is not conducive to biking, but the second highest percentage of commuters who bike to work is in Minneapolis (winter) 3.4 percent. Portland, Oregon (rain) is, of course, first with 4.5 percent.

We have all thought of these opportunities as not real transportation issues. All things change, even the role that auto mobility plays now regionally and nationally. You can see the change on the horizon. It means seeing things in a different way about how we make our transportation investments. Think of biking, walking and transit working together as a new new mode. It has not yet jelled. It is driven by demographics, energy prices, and competitive advantage. Think of these developments as more important that highway or aviation investments now. Think of them as your future. Think of them as one of the lead components in your economic development strategy.

Tom Downs is chairman of the North American Board of Veolia Transportation and a former president of Amtrak. His e-mail is tmdowns1@aol.com.

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I will show my age when I say that I remember the last of the streetcars being ripped up to make way for the automobile. Fifty some odd years latter, it seems every city in America is betting its economic future on new light rail systems. Therein lies the story of the modern American experience with transit.

After throwing transit away, we now want it back. We just don’t want to pay for it.

Public transit — bus and rail — has experienced its first decade-long ridership expansion in over half a century. With people moving into older neighborhoods, with auto use growing ever more expensive, we seemed to be stumbling toward national support for transit.

But national political and economic trends are pointing toward a potentially grim future for the nation’s transit systems. At the operating level, 90 percent of all transit systems report flat or declining local financial support. Ninety percent of transit systems indicate state support for their systems was flat or declining. Costs, in the form of petroleum and electric power, are continuing to rise. Transit ridership for this most recent 12 months has declined by 4.5 percent, not really too bad considering the 10 percent unemployment rate, but still a decline in revenues. The net result is that 84 percent of all transit systems report that they reduced routes or raised fares in the last year.

Nationally, revenue into the Highway Trust Fund, which helps support the nation’s transit systems as well as roads, is experiencing a continued decline. The trust fund’s revenue comes from an 18.7 cents per gallon gas tax. Because cars and trucks are getting more fuel efficient, there is less revenue coming into the fund. In addition, the total vehicle miles of travel in the U.S. for this calendar year seems to be down slightly, compounding the trust fund’s revenue problems. Congress has dodged the problem of declining revenues, instead choosing to pump general fund revenues into the fund to keep it afloat, now to the tune of $70 billion.

The surprise for Congress has been the lack of pressure to raise revenue for the road and transit programs. The authorization for these transportation programs expired last October and have been on a series of life support extensions ever since. The old magic of expanding the programs with larger authorizations and heavy infusions of earmarked projects (pork to us) has collapsed. The current House transportation reauthorization bill envisions a massive expansion in the program, but has no way to pay for it. The result is that there is no movement on reauthorizing these two programs and no way to expand the existing revenues. It is certain that there will not be a bill this year, and almost as much certainty there’ll be none next year. There may not be a real reauthorization bill until 2013.

Lest we label the Congress as the sole culprit here, the White House has been totally disengaged on this set of issues. It just insists there will be no tax increases for transportation. It’s even rejected a study of the vehicle miles of travel tax issue. The administration story is that the necessary financing for transportation will come thru public private partnerships (the ghost of the George Bush position).

Why does this matter to transit? The outcome of this gridlock is that there will not be any addition revenue going to highways and transit, and that the gap will once again be filled with general fund appropriations for FY 2011. If there is no new revenue coming into the trust fund and there is tremendous pressure on reducing the deficit, there is a great chance that these programs will have to shrink in FY2012 to live within lower appropriations level (perhaps a 20 percent reduction).

The reality of this struck the highway industry with a mild sense of panic. Some highway leaders have begun to talk openly about one solution to this dilemma: to have the current gas tax pay solely for the traditional highway programs, while transit and some other smaller programs would be pushed out of the trust fund and into the general fund. That move might cover the next five or six years of highway funding and keep its contract authority intact.

It would also fully expose transit to the pressures that the entire general fund budget is going to be facing in the next five years. At a time of growing long-term transit ridership and demands for new investment, it would be an unmitigated disaster. There would no longer be the flexibility to shift funds from highways to transit. There would no longer be contract authority for transit to enter into multi-year projects, and there would be the unmistakable message that highway projects are more important than transit projects.

There was a hope that a climate change bill would be able to create a funding source for transit, since transit has so many energy benefits. But the climate bill seems to be as dead as the highway bill.

Any move by the highway industry to push transit out the door would destroy 40 years of an urban/rural alliance that supported both highways and transit. It would also ignore the nation’s newfound interest in building new transit systems and capacity.

The terrible thing here is that the transit industry does not seem to recognize the dire threat before it. Congress appears incapable of negotiating a solution to this crisis and the administration, which should be at the front of this debate, is too distracted by other issues to take any action at all. This is like watch a train wreck in slow motion.

Tom Downs is chairman of the North American Board of Veolia Transportation and a former president of Amtrak. His e-mail is tmdowns1@aol.com.

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There is an old saying that Americans will always do the right thing, but only after they have tried everything else first.

Unfortunately, it’s hard to make the transition. Latest example: visceral opposition to high-speed rail by those who should be thinking more innovatively. Consider Robert Samuelson’s recent column in the Washington Post– “A Rail Boondoggle, Moving at High Speed.” Samuelson cites the usual statistics–that we are an auto culture, that not enough people ride trains, that the costs are high. So, he concludes, President Obama’s commitment to high-speed passenger rail is a fool’s errand.

But Samuelson’s among those who has been playing this song for over 20 years. Their message has turned into a weird anomaly given what is happening around the rest of the globe.

First, lets look at the true subsidy costs of a mono focus on highway investment. At least $100 billion of state, county, and city general funds are invested every year in highways and highway costs. Those are direct subsidies to the highway system, outside of any “user pay” trust fund. The federal government has started to invest general funds into highways, in part because no one wants to actually have to pay for the costs of highways with an increase in user fees.

Second, there are over 2 million Americans injured every year on America’s roads, at an annual medical cost of over $200 billion. Saving half of that cost would pay the entire cost of health care reform over the next decade.

Third, the energy and environmental costs of our auto culture drive our defense and medical costs in ways that we have all agreed to turn a blind eye to–though the true cost is probably in the range of a half trillion dollars a year.

If we can manage to ignore the $750 billion cost of our highway fixation, then Samuelson’s argument makes some kind of weird sense–though you have to suspend logic, economics, and global experience to get there.

Why has every industrialized nation in the world made, and continues to make, large scale investments in high-speed rail? That’s what Samuelson’s argument can’t reach. If you look at the roll call of nations with high-speed passenger rail, it includes Germany, France, Spain, Italy, Japan, China, and South Korea. Could all of them be wrong? China alone is pursuing a 3,000-mile high-speed network. What propels all of these industrial nations to invest so seriously in this mode of transportation? They are making hardheaded decisions about their nation’s future and their economic self-interest. We have just started to do so.

In the U.S. House of Representative, the Transportation and Infrastructure Committee has marked up a reauthorization bill for highways and transit. The bill proposes to spend $550 billion over the next 6 years. The vast majority of those funds would go to the highway program. The bill would allocate $50 billion over the life of the bill for high-speed passenger rail. That’s less than 10 percent of our national transportation funding. The Samuelsons of the world may call it a waste. I see a humongous greater waste–the $750 billion we’re incurring, year-in and year-out, in the indirect costs we incur by failing to build alternatives to our transportation monoculture. That’s the unconscionable economic waste.

I am not suggesting that highways are going to be anything other than the dominant mode of transportation in the United States for a long time. I am suggesting that there are corridors, less than 500 miles long, where density and economic activity make high speed passenger rail the only viable mobility investment. The total trip time of air travel in those corridors, combined with the energy costs, makes high speed rail the logical choice and a far better choice than the costs of expanding highway capacity in those congested and dense corridors. For those trips, high-speed rail delivers you to the heart of the city, not to a remote airport. I am also suggesting that there is simply no comparison between the safety of a train trip verses the safety of an auto trip. In the end, we need a broader set of mobility choices than we have created for ourselves. The public seems to understand this, as editorial and public opinion polling is making clear.

What is discouraging in this debate is that someone as bright as Samuelson cannot think in broader, more expansive terms about the American future. We can do better. Yes, we can!

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For public transit in America, 2008 has produced a vivid “best” and “worst” of times scenario.

After 50 years of sagging ridership and lost stature, buses and transit trains are back in heavy demand. Nationwide ridership is 4.5 percent higher than 2007, with some cities experiencing growth of 10 to 15 percent.

The top reason’s clear: high gas prices. Highway vehicle miles of travel nationwide have taken a 4.5 percent dip in a year — an unprecedented decline even as our population increases.

But sadly, the nation’s transit operators have little chance to celebrate their systems’ new popularity.

Check Miami-Dade County. The county commissioners are in political agony trying to commit themselves to a 50-cent bus and rail fare increase. If they don’t, the financially strapped transit authority will be forced to fire 700 workers and eliminate 4.1 million miles of annual bus and rail service.

“The cuts would wreak havoc on the quality of service to major job centers, including hospitals, the airport and Seaport,” reports the Miami Herald’s Larry Liebowitz. Heaviest hit would be third-shift blue collar workers, seniors, students and transit-dependent domestics.

The Chicago Transit Authority, hit with surging ridership but short on the rail cars and buses it needs, is in a similar dilemma. Example: it’s removing all the seats from some of its rail cars, just to pack in more passengers.

Parallel stories have emerged nationwide — transit agencies increasing fares, reducing service, in the face of a demand surge that the industry has been waiting for a half century.

Why?

First, transit ridership does not cover the cost of providing the service. Transit provides immense benefits: reduced energy consumption, less crowded highways, mobility for people who can’t or don’t want to drive.

But still, fare box revenues provide only 25 to 50 percent of the cost of providing the service. New ridership does not cover its full cost from fares.

Second, fuel costs hit a bus system particularly hard. Most transit systems are as vulnerable to fuel price swings as the average motorist.

So what are local governments — the first-line funders of transit systems — to do? Their choices are all painful: raise fares, raise taxes, or accept service reductions and fare increases.

Last week, Transportation Secretary Mary Peters asked Congress to come up with an $8 billion infusion for the Highway Trust Fund, the federal account that helps states finance highway and bridge projects. The House has already passed such legislation. The nation’s governors are lobbying for it.

It’s understandable why the trust fund is short: the high cost of gas encourages people to buy less. Highway miles traveled have dipped 50 million in the last eight months. The federal gas tax level of 18.4 cents that hasn’t changed in 15 years, notwithstanding inflation. Small wonder the funds seem short.

But let’s think twice. Why respond to state highway departments anxious to keep funding roads and bridges, but ignore the compelling immediate needs of the local transit systems and their riders?

There ought to be a presidential request for an emergency appropriation to the transit account of the Federal Highway Trust Fund that would allow every transit system in the country to fund minor overhauls of bus fleets to increase their fleet’s fuel efficiency and reliability.

Sending enough funds to transit systems to repair buses that are damaged or sidelined for overhaul would put more buses on the street to meet the demand that they are now struggling to meet. Most bus manufacturers have a two-year backlog of orders, so new buses are not the answer in the short term.

Besides, better running maintenance would allow some systems to put more of their reserve fleets (which are often 30 or more buses) into regular service and at the same time reduce fuel expenses.

Another step would be the sponsorship of large cooperative fuel purchases, with some corporate or government security, would allow transit systems to act like Southwest Airlines does in hedging its fuel purchases, guaranteeing some cushion against the wild swings we have seen in fuel prices.

And the timing may be critical. Transit provides an energy-efficient and affordable option for a lot of Americans right now. If we respond to their need by cutting bus lines, packing transit cars to the gills and ordering steep fare increases, we will risk losing critical public support and ridership at a time when our transit systems have their best opportunity in 60 or more years to position themselves for long-term growth.

And we’ll be forfeiting a major opportunity nationally. In a century of looming deep energy shortages and the immense need to cut back carbon emissions to cope with global warming, our local bus and rail systems are a critical shared resource — not just for riders, but us all.

According to the survey, almost all agencies responding (91 percent) report they are facing limitations in their ability to add service to meet increased ridership demands. The survey reveals the most common limitation is budgetary, with 65 percent reporting insufficient revenue to operate additional service. More than half of all agencies reported declining or stable local and state financial assistance over the last year, due to the economic downturn. The survey also indicated that due to the high cost of fuel, more than 60 percent of the responding public transportation systems are considering fare increases and 35 percent are considering service cuts, some for the second time in less than a year.