Transit Station’s Don’t Drive Employment Growth

A research report from the Public Policy Institute of California has found little evidence that transit-oriented development (TOD) spurs employment growth. Jed Kolko looked at employment trends within a one quarter and one half mile of 204 transit stations developed between 1992 and 2006 to determine whether the investments goosed employment in those areas. In short, Kolko writes

“Looking across the 200-plus transit stations that opened in California from 1992 to 2006, we find that these new stations were located in areas with high residential density and very high employment density. Yet the opening of new stations was not accompanied by an increase in average employment growth in the areas immediately surrounding these stations (relative to comparison areas), either when the stations opened or several years afterward. What’s more, employment around new stations varied widely: Employment growth increased near 18 new stations and decreased near 20, relative to comparison areas, with the largest increases in areas that had higher residential and employment density prior to the station opening. For the rest of the stations, the difference between employment growth around the station and in the comparison areas before and after the station opening was not statistically significant. Employment growth increased most around stations located in higher-density areas.”

Kolko continues that market forces alone won’t spur employment growth around transit stations. Government will need to actively encourage (e.g., subsidize) investment in these areas and probably also discourage (e.g., penalize) investment elsewhere to make TOD’s work economically.