Does Transit Promote Urban Development?

Back in 1995, the FTA asked transit advocates Robert Cervero (of the UC Berkeley planning school) and Samuel Seskins (of Parsons Brinckerhoff) whether transit let to changes in urban form. After reviewing the literature, they concluded that “Urban rail transit investments rarely “create” new growth, but more typically redistribute growth that would have taken place without the investment” (page 3). They added that this “redistribution” mainly favored central city downtowns at the expense of the suburbs.

I’ve been citing that study as definitive for many years, but recently someone asked me if there is anything more recent. As a matter of fact, there is.

In 2010, Brookings published Urban and Regional Policy and Its Effects (volume 3), which included a paper by USC planning professor Genevieve Giuliano and one of her colleagues that addressed the same question. Based on “more than three decades of research,” they “found little evidence that transit investment has had significant impacts on urban structure.”

Even more recently, the latest edition of the University of California’s Access magazine includes a report by UCLA urban planning professor Matthew Drennan and New York University planning professor Charles Brecher asking, “can public transportation increase economic efficiency?” “In theory, public investments in mass transit can make urban economies more efficient by enhancing employers’ access to a larger labor pool at lower transport costs,” they say. But, the Antiplanner would say, that theory would only be valid if the new transit is faster, more convenient, and/or less expensive than existing transportation–which is almost never true.

The results of the research by the authors of this paper support this notion. “Our analysis did not show that expanding public transit would achieve large gains in economic efficiency,” Drennan and Brecher say. “Even in cities with a high concentration of office space in the CBD, we estimate that increasing transit ridership by 10 percent will increase office rents by no more than 0.5 percent. For all other cities, we estimate that increasing transit ridership will have no effect on office rents.”

Cervero and one of his grad students also have an article in Access that attempts to calculate the minimum-density thresholds needed to make light- and heavy-rail cost-effective. While some may quarrel with their definition of “cost-effective,” they conclude that “many recent [rail transit] investments have failed” to be cost-effective because they were built in areas that weren’t dense enough to support them.

So why do so many urban leaders seem to believe that anything from streetcars on up will lead developers to spend billions on urban redevelopment? Or, as the Antiplanner asked recently, do these “officials know that they’ll have to spend hundreds of millions of dollars to get . . . redevelopment they think will come from” rail transit, “or are they just building it because the federal government agreed to pay X percent and they don’t want to lose that federal funding?”

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17 thoughts on “Does Transit Promote Urban Development?

  1. Dan

    So why do so many urban leaders seem to believe that anything from streetcars on up will lead developers to spend billions on urban redevelopment?

    It was answered in part of a paper you “forgot” to discuss, Randal:

    Even in cities with a high concentration of office space in the CBD, we estimate that increasing transit ridership by 10 percent will increase office rents by no more than 0.5 percent. For all other cities, we estimate that increasing transit ridership will have no effect on office rents. On the other hand, public transportation has many benefits beyond increasing office rents. For example, it can increase access for people without cars, reduce traffic congestion, and improve air quality. It does not appear, however, that increasing transit ridership will significantly increase agglomeration economies.

    That is: there are more things to consider than just money.

    DS

  2. sprawl

    That is: there are more things to consider than just money.

    DS
    —————-

    We expect this kind of thinking from someone spending money, that is not their own.

    Frank Reply:

    Indeed. If there were truly more things to consider than just money, Dan would abandon his SFH on a fifth of an acre in the ‘burbs.

    Dan Reply:

    If there were truly more things to consider than just money, Dan would abandon his SFH on a fifth of an acre in the ‘burbs.

    Wrong again. It’s like a tic. And totally to be expected that you have to make it up to have something to say!!!!!!!!!!!!!!!!!!!!!!!!!!1!one!

    DS

    Frank Reply:

    Make up what, Dan? That you live in a single-family home on a fifth of an acre in Aurora?

    Here’s making something up to have something to say: “there are more things to consider than just money.”

    See, Dan, you’re coming on a libertarian blog and spouting Keynesian/Socialist nonsense. Then, when someone calls you on that, you say they’re just making shit up.

    Truth is though money is the primary factor in all rational decisions. Unless, as others have pointed out, it’s not YOUR money.

    Because, Dan, admit it, while you’re underwater on your suburban mortgage, you have to stick it out for financial reasons, like the rest of us. But, boy-sir-ee! If you could get a bailout from good ol’ Uncle Sam, you’d be outta da suburbs liketysplit. Right to a 750 square-foot condo in Belltown or The Pearl or LoHi or wherever planner utopias exist.

    So. As long as you are going to come onto a libertarian blog and spout your central economic planning BS, expect to be called on your BS.

    Dan Reply:

    We expect this kind of thinking from someone spending money[ ]that is not their own.

    And we expect people with no argument to make stuff up. As well as some small ideologies to not understand there is more to think about than money.

    DS

    sprawl Reply:

    When you are not spending your own money, you do not have to worry about going bankrupt, because you are building unsustainable projects.

    Dan Reply:

    Make up what, Dan?

    Making up, oh, that we have an SUV and drive it all over, make it up that you know what our decision processes are, make it up that I have a large carbon footprint, make it up that I made up there are more things to consider than just money (when I even quoted the article that Randal liked), making sh– up that I insist on density for thee but not for me, make sh– up…

    Oh, you know the rest. You make sh– up all the time. You know you make it up to try and discredit the vast majority of the population. Just make sh– up to make yourself feel better, too, maybe.

    But you make it up. That much is clear. Its what we expect from certain ideologies, to make the cognitive dissonance go away.

    DS

    Dan Reply:

    When you are not spending your own money, you do not have to worry about going bankrupt, because you are building unsustainable projects.

    Oj wow! according to your definition, all projects in the US and Canada are unsustainable.

    How sad! None of the clear thinkers can muster an argument that the madness must stop, which may be even sadder!

    DS

    sprawl Reply:

    Dan Reply:

    Oj wow! according to your definition, all projects in the US and Canada are unsustainable.

    How sad! None of the clear thinkers can muster an argument that the madness must stop, which may be even sadder!

    DS

    I think you are making that all up!

  3. FrancisKing

    Antiplanner: “While some may quarrel with their definition of “cost-effective,” they conclude that “many recent [rail transit] investments have failed” to be cost-effective because they were built in areas that weren’t dense enough to support them.”

    I don’t agree. Density is largely a red herring – what counts is the number of people within easy distance of the transit stop – which is dependent on density AND speed of the access mode – why does this have to be walking, why not bicycles/PRT/something else?

    prk166 Reply:

    It doesn’t have to be walking but the other choices tend to have issues. It depends on the city. Most people in places like MPLStown half the days in the year are wiped out due to WX.

    PRT, well, it’s a cost issue, isn’t it?

    Craigh Reply:

    Density is largely a red herring – what counts is the number of people within easy distance of the transit stop – which is dependent on density AND speed of the access mode – why does this have to be walking, why not bicycles/PRT/something else?

    You’re right. Something like cars, maybe! Oh. Once you’re in your car, you might as well keep on going and get there when you want to. If we wanted mass transit, we’d have all we needed. As it is, funnily enough, we have more than we need.

  4. Dan

    Oh.

    Ah. You read the paper or your e-mails or your Kindle while driving just to pretend to be productive. A human hazard imperiling all of us. Great.

    DS

    sprawl Reply:

    I don’t have to read a kindlel when I drive, because My I-pod is full of books that read them to me, as I drive to my destination in about 1/4 of the time. Or less

    Frank Reply:

    Less. One of my 2x daily trips is 1.4 miles. It takes five times longer on the bus, not counting wait and walk times. Plus I don’t have the cargo space I need on the bus. Plus the bus don’t go to the mountains and back.

  5. LazyReader

    Right now the New York City subway is in a state of repair that most would call……….”crappy” And FrancisKing is right and wrong…density does not equate to effectivness. How dense does a city have to be in order for rail transit to make sense. The Subway is a long time money loser for which the taxpayers of that unfortunate City and its surrounding suburbs are forced to absorb. And they pay for a lot and still it’s costly and they’ve yet to fix even a portion of the problems. Several subway lines have reached their operational limits in terms service frequency and passengers; density has essentially choked it to death. The Second Avenue Subway is decades away (having been promised for decades) from providing any real easement and doubts expressed it will be complete within the forseeable future. They have problems with litter, crime (albeit very reduced), vandalism, rodents, flooding, service disruptions, and noise levels. Revenue collected from real estate taxes has been used to pay for transportation purposes to help contain the deficit. However the weak economy and unstable real estate market, money from these taxes has severely decreased. Tax revenue has fallen at least 20% of the projected value. This has led to borrowing money by issuing bonds, which has contributed heavily to the debt. So density goals only serve to exacerbate the city’s transit problem.

    Chicago is the 3rd largest city in America and the Chicago “L” is on the verge of collapse. It’s century old heavy rail transit has hit a dead end, with antiquated tax formulas, rising costs, deferred spending and agency mismanagement has shoved construction and expansion plans onto a back burner just struggling to maintain current levels of service.

    New York is the densest city in America yet on the global top 50, New York isn’t even on the list and low on the list (19th place) in terms of population so the city is actually small by international standards. Of course unlike most of those global cities NYC is considerably more wealthy yet with it’s “low density” it’s rail system loses money hand over fist. The best New York can do is cut it’s lowest hanging fruit or essentially close it’s least used stations or even lines.

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