Does Transit Spur Economic Development? Maybe “Yes,” Maybe “No”

The Center for Transit-Oriented Development has published a report, Rails to Real Estate, on the potential economic development benefits of light rail. For a positive, pro-transit view of the study, take a look at the article in the New Urban Network. The study looks at land development along three relatively new light-rail transit lines in Minneapolis, Denver, and Charlotte. Both transit supporters and transit critics will find ammunition in this study.

I think the results are consistent with my own thoughts on transit-oriented development, namely:

  • Transit investments alone don’t drive economic development. Transit access is more of an amenity for new development projects, not a fundamental driver of investment decisions
  • The land development effects are uneven. While some light-rail stations experience a burst in development, the effects are not uniform and downtowns seem to benefit more than other locations;
  • Developoment around rail-transit stations appear to redistribute investment in an area, not necessarily generate new real-estate value on a citywide or regional scale;
  • Urban planning that allows the market to capture the value from transit accessibility and infrastructure improvements (e.g., allowing for mixed uses) is essential for successful project development.

Ironically, the one variable missing from the analysis is transit ridership. At no point (that I could tell) did the authors try to directly link transit ridership (or thresholds) to station-area development. In fact, at one point, they note that the Charlotte Blue line is considerd a very succesful new rail project because ridership exceeded forecasts. The intial target was 9,100 riders per day and ridership had grown to 15,000 riders per day. That’s great growth, except that these levels of ridership are amazingly low. I doubt they are sufficient in and of themselves to trigger new investment and, while more realistic, are far below targets set by rail transit forecasters in the 1980s and 1990s. I’ve discussed the forecast issue elsewhere on this blog along with the problems with TODs.

Also, it would have been useful to see the authors engage in more rigorous quantitative analysis to determine what factors or variables were the most important for influencing development around the stations or along the corridor. David Hartgen analyzed the LYNX line in Charlotte and found that the light rail line could at most get credit for less than 13 percent of the corridor’s economic growth.

So, I’m still left looking for the study that answers the fundamental question: Where’s the Transit in Transit-Oriented Development?

Samuel R. Staley, Ph.D. is a senior research fellow at Reason Foundation and managing director of the DeVoe L. Moore Center at Florida State University in Tallahassee where he teaches graduate and undergraduate courses in urban planning, regulation, and urban economics. Prior to joining Florida State, Staley was director of urban growth and land-use policy for Reason Foundation where he helped establish its urban policy program in 1997.

Staley is the author of several books, most recently co-authoring Mobility First: A New Vision for Transportation in a Globally Competitive 21st Century (Rowman & Littlefield, 2008). Texas Gov. Rick Perry aid Staley and Moore "get it right" and world bank urban planner Alain Bartaud called it "a must read for urban managers of large cities in the United States and around the world."

He is also co-author, with Ted Balaker, of The Road More Traveled: Why The Congestion Crisis Matters More Than You Think, and What We Can Do About It (Rowman and Littlefield, September, 2006). Author Joel Kotkin said, "The Road More Traveled should be required reading not only for planners and their students, but anyone who loves cities and wants them to thrive as real places, not merely as museums, in the 21st Century." Former U.S. Secretary of Transportation Mary Peters said, "Balaker and Staley clearly debunk the myth that there is nothing we can do about congestion."

Staley's previous book, Smarter Growth: Market-based Strategies for Land-use Planning in the 21st Century (Greenwood Press, 2001), was called the "most thorough challenge yet to regional land-use plans" by Planning magazine.

In addition to these books, he is the author of Drug Policy and the Decline of American Cities (Transaction Publishers, 1992) and Planning Rules and Urban Economic Performance: The Case of Hong Kong (Chinese University Press, 1994).

His more than 100 professional articles, studies, and reports have appeared in publications such as The Wall Street Journal, The New York Times, Washington Post, Los Angeles Times, Investor's Business Daily, Journal of the American Planning Association, Planning magazine, Reason magazine, National Review and many others.

Staley's approach to urban development, transportation and public policy blends more than 20 years of experience as an economic development consultant, academic researcher, urban policy analyst, and community leader.

Staley is a former chair for his local planning board in his hometown of Bellbrook, Ohio. He is also a former member of its Board of Zoning Appeals and Property Review Commission, vice chair of his local park district's open space master plan committee, and chair of its Charter Review Commission.

Staley received his B.A. in Economics and Public Policy from Colby College, M.S. in Social and Applied Economics from Wright State University, and Ph.D. in Public Administration, with concentrations in urban planning and public finance from Ohio State University.