Local NewsTransportationAustin Light Rail Project Cost Estimate Rises to $10.3 Billion, a 77% Increase

The estimated cost for construction of the light rail’s phase has risen 77 percent, eclipsing $10.3 billion in total.

In 2020, Austin voters approved a 20 percent increase in city property taxes to partially fund an ambitious public transit rail plan. The original plan called for $7.1 billion of investment, $5.4 billion of which would be paid for by the tax increase.

But now, before the project has even broken ground, the designers have increased their estimated costs for completion.

The first phase includes an orange line stretching initially as far north as North Lamar down to Stassney Lane in South Austin; a blue line connecting Austin-Bergstrom International Airport to the North Lamar Transit Center; and a subway center downtown.

Also adding to the cost is a planned tunnel under Lady Bird Lake extending a mile north of the river — rather than a bridge over top — to connect north and south Congress Avenue. Part of the reason for this change and the need for such a long underground tunnel is that any other option would obstruct the view of the state capitol across the river, something known as the Capitol Corridor that is protected by the state.

The plan also includes renovations to and interconnection of the currently existing red line, a metro commuter rail that connects Leander to downtown Austin. The cost estimate for that is at least $61 million.

Rather than the initial estimates of $5.8 billion combined for the two new light rail lines and the under-river tunnel, the designers now estimate the collective cost to be nearly double that.

A large part of the projected cost increase comes from the drastic growth in property valuations, inflating the cost of acquiring land for the project.

Residential and commercial properties increased in value by over 50 percent this year, according to the Travis Central Appraisal District. The designers also point to inflation as a driver of material and labor cost increases.

During the Project Connect campaign, city officials stated that the rest of the funding would come from federal sources. But with the now-greater cost, either that federal funding, which wasn’t secured in the first place, must extend further or city taxpayers will have to shoulder more of the burden than originally thought.

This design stage will be finalized over the summer and actual construction on the project is not yet on the horizon. After this phase, the plan still entails a new commuter line stretching out to Elgin along with Metrobus expansions.