Policy Study

San Jose Demonstrates the Limits of Urban Growth Boundaries and Urban Rail


Cities around the nation struggle to cope with citizens’ concerns about suburban development and traffic congestion. Recent years have seen urban-growth boundaries and light rail systems become very popular policy tools of urban planners and some municipal leaders.

The theory behind both urban-growth boundaries and light rail systems seems sensible at first. Growth boundaries stop development from “sprawling” beyond the limits it sets and forces new development and growth into denser development within the boundary. Light rail systems can carry a lot more people to and fro on a strip of land than can two lanes of cars with one occupant.

But from the beginning, reality has not matched theory. Urban-growth boundaries don’t allow the kind of suburban house with a yard that most Americans want to own. Instead, they drive up the costs of all homes to increasingly unaffordable levels. And to frost the cake, by increasing density, they increase traffic and congestion. Likewise, light rail systems just don’t meet any of the goals envisioned for them. Very few people can both live and work on a single thin line drawn by a planner for a light rail route. Very few people are willing to take a bus to the train, the train to a bus, the bus to work, and vice versa on the way home. So, light rail systems all carry vastly fewer passengers than expected as all transit systems keep losing market share to automobiles.

San José, California, provides an excellent case study of how the realities of urban-growth boundaries and light rail systems come home to roost. In the 25 years preceding the middle of 2001, San José housing prices grew by 936 percent, more than any other major urban area. And one consequence is that the city has spent hundreds of millions of dollars to provide housing subsidies to offset rising costs.

Meanwhile, San José’s light rail system has flopped. Passenger miles of travel have remained below 1992 levels in every year through 2000 except 1998, and light rail ridership on the first line never exceeded half the riders projected in the original study. The system’s operating costs are more than twice the national average for similar light rail systems and are more than the city’s bus system measured either per passenger or per vehicle mile.

San José is a cautionary tale about believing the theory of urban-growth boundaries and light rail systems. The proponents of these polices prefer to talk about the theory, the logic, and the projections, and to ignore the harsh realities exposed by cities like San José that have implemented them. The story of what happened in San José can help policymakers evaluate urban-growth boundaries and light rail systems and understand why they have not lived up to their promises.