BRT Doesn’t Stimulate Economic Development

Five years after spending $35 million on a bus-rapid transit line that opened in 2014, Grand Rapids is upset that the line hasn’t generated the economic development that was promised. In a classic case of throwing good money after bad, it is now spending nearly $1 million to prepare a plan that it hopes will remedy this failure.

The notion that bus-rapid transit would generate economic development was promoted by the Cleveland Regional Transit Authority, which claims that its HealthLine has stimulated billions in new development since it opened in 2008. Transit officials never mention that much of that development has been heavily subsidized.

The bus route traverses what the city calls the Health-Tech Corridor, which in addition to tax-increment financing offers tax abatements, low-interest loans, various job-creation incentives, and a variety of other subsidies. In all the city has spent at least $100 million in the corridor on top of the bus-rapid transit line. If asked, I imagine the transit agency would say it is only a coincidence that the bus route goes through this corridor.

The reality is that Cleveland’s HealthLine is a failure and getting worse every year. It was projected to carry 39,000 weekday riders by 2025, only 6,200 of whom were expected to be “new” riders (meaning the others would have ridden buses even without the $35 million in improvements). In fact, in 2015, its first full year of operation, it carried fewer than 12,500 weekday riders. Total ridership failed to grow after that and by 2018 it had fallen by 22 percent. This makes it very unlikely that the 2025 projections will be met.
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The HealthLine is considered one of the best bus-rapid transit projects in the country, not because people are riding it but because the transit agency is spending so much money on it: Cleveland runs 100-passenger buses 112 times per weekday in each direction. This has earned it a silver rating based on the Institute for Transportation & Development Policy’s bus-rapid transit standards. Yet those giant buses carried an average of fewer than 18 people at at time in 2017, and even fewer in 2018.

Developers may respond positively to subsidies and streamlined permitting processes, but they aren’t going to spend billions just because someone promises 6,200 more people per day, most of whom are too busy trying to get to work or home to stop and shop. By now, developers know that not even that promise has been kept.

When Grand Rapids opened its bus-rapid transit line, it didn’t know it was supposed to offer additional subsidies to developers and so it got no new development. Now it is going to pour another million dollars down the BRT hole in order to write a plan that will no doubt call for spending even more. Taxpayers should be wary of such plans.

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About The Antiplanner

The Antiplanner is a forester and economist with more than fifty years of experience critiquing government land-use and transportation plans.

One Response to BRT Doesn’t Stimulate Economic Development

  1. LazyReader says:

    Transit comes to accommodate density, not the other way around.

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