At this point I think everyone understands the basics of the main mechanism underlying the current financial crisis: financial institutions lent money to people who really didn't have the ability to pay it back. The result was that when people tried to cash in on their investments with places like Bear Stearns and Lehman Brothers, there wasn't enough money. Result: collapse.
A similar crisis is brewing in the railbanking sector. As I've discussed previously, with the intense government investment in competing road infrastructure over the past fifty years, one rail line after another has failed. In 1983 Congress passed a law that allowed the rights-of-way to be used as trails, with the explicit aim of preserving them for future rail use.
Well, the future is now. Across the country, people are thinking about rail travel again, and establishing - or re-establishing - light rail and commuter rail lines. Some, like New Jersey Transit's River Line, reestablish passenger service on active freight lines. Others, like the southern end of the Hudson-Bergen Light Rail, run on tracks within an active rail right-of-way, next to freight lines. The vast majority of new light rail systems, like the central portion of the Hudson-Bergen line, have at least some new construction along city streets.
Many systems obtain rail lines from existing freight operators: New Jersey Transit took over a section of the former West Shore Line from Conrail for the northern section of the Hudson-Bergen line. Some purchase the line years before any attempt to reestablish passenger service: Dallas and Fort Worth purchased the former Rock Island line between the two cities in 1983 and continued to allow freight trains to use it, but didn't start the Trinity Railway Express service until 1996.
To this day, the only attempt I know of to withdraw any right-of-way from a railbank has been successful - somewhat: according to a report by the Rails-to-Trails Conservancy (PDF), the Heritage Rail-Trail County Park in south central Pennsylvania allowed a company to reconstruct a single rail line and run a dinner train three times a week. According to a trail review on the Conservancy's website, though, the dinner train hasn't run since 2001. Almost every other rail-with-trail in the Conservancy's report seems to have come about by adding a trail to the rail right-of-way.
Now there are some attempts to reactivate rail lines. The most famous is the Georgetown Branch in the Maryland suburbs of Washington, DC, which was railbanked by Montgomery County in 1988 and developed into the Capital Crescent Trail. There are currently plans to use the right-of-way for the Purple Line, a planned circumferential light-rail line, converting it to a "trail with rail." Opponents of the light rail have argued that it would endanger trail users, cut down old trees and disrupt the trail experience, but since much of their funding comes from the adjacent Columbia Country Club, rail advocates have suggested that their true motives are to avoid the restoration of active rail service through their golf course. The project has taken some steps forward recently, but its success is not guaranteed.
In other places like Bellevue, Washington and Humboldt County, California, there are abandoned rail lines with active groups pushing to see passenger service restored. Meanwhile, there are trail advocates pushing for formal abandonment and railbanking for trail use. They have stated that they believe rail service will not happen for many years, or perhaps never, and that the corridor should be converted to a trail, with the possibility of restoring the railroad at a later date.
Some rail activists have said that they don't want to see the rail lines taken out because it would be politically difficult to remove a trail, or even to restore the rail line, converting the structure to a rail-with-trail. Certainly, the existence of the trail is being used to cause problems for the Purple Line. To the extent that this is true, these railbanks are failing. By law, they were set up to preserve the line for transit service, but they may have the effect of preventing transit service.