Tag Archives: transit-oriented development

Take the T Out of TOD and What’s Left?

The latest issue of the University of California Transportation Center’s Access magazine has an article that asks, “Does Transit-Oriented Development Need the Transit?” Noting that previous studies found that people who live in TODs are less likely to own cars, the authors dare to ask if the observed changes in travel behavior had anything to do with having rail transit near the TOD.

Since you are reading this here, the answer, of course, is “no.” Instead, the biggest influence on travel behavior is the presence or absence of parking. (The paper didn’t mention the self-selection issue, which is that differences in travel behavior are largely accounted for by the fact that people who don’t want to drive are more likely to live in TODs than people who do.)

In any case, whatever benefits may come from TODs, the authors conclude, “may not depend much on rail access.” That’s good news, the authors claim, because rail lines are expensive to build, so the benefits of TODs could be attained without that expense.

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TOD Coming to Pittsburgh

Yet another example of light rail spurring economic development comes from Pittsburgh, where the Port of Allegheny County has approved $12.5 million in public subsidies for a $42.5 million transit-oriented development. Since the development will include 152 apartments and 15,000 square feet of retail space, that’s a subsidy of more than $82,000 per apartment. The subsidies will also help pay for a 541-space parking garage.

Don’t be impressed by 15,000 square feet of retail space: that’s about the size of a new Trader Joe’s. The average Trader Joe’s is about 12,000 square feet, but the newer ones are bigger. Of course, if they actually attract a Trader Joe’s, they might be able to fill the apartments, but the fact that Pittsburgh has one of the most affordable housing markets in the country probably means there is little demand for stack-and-pack living.

So once again it is proven that light rail doesn’t stimulate economic development; it merely stimulates subsidies for economic development. Pittsburgh officials complain that “transit-oriented development is very difficult in Pennsylvania” because “there is no dedicated funding source” that can be used to subsidize it. So why are they bothering? Apparently just because they want to follow the latest fad.

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TODs and Subsidies

Transit-oriented developments (TODs) are supposed to promote economic growth because the demand for it is so high. But if so many people want to live in dense, mixed-use developments, why do they so often need subsidies?

The latest proposal to subsidize TODs comes from Senator Cory Booker (D-NJ). He wants to expand use of the Railroad Rehabilitation and Improvement Financing (RRIF) program to allow the funds to be used for TODs. RRIF was created mainly to provide low-interest loans to smaller freight railroads improve their facilities and restructure debt so shippers along those rail lines would not be stranded (or have to resort to trucks) if the rail lines failed.

However, some of the money has been used for passenger rail, including $663 million for Amtrak and $72.5 million for the Virginia Railway Express commuter trains. Considering that these are perpetual loss-making enterprises that have no hope of repaying the loans except out of other tax dollars, expanding this fund for money-losing TODs may seem a natural next step to Booker. But Booker’s fundamental assumption, like that of many Democrats, is that the federal government has an infinite capacity to give away funds, which is what these “loans” are if they can’t be repaid.

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Transit-Oriented Developments Not So Transit Oriented

The evidence continues to grow that so-called transit-oriented development (TOD) is more oriented to subsidies than it is to transit. A new GAO report found lots of places where rail transit failed to stimulate new development. In many if not most of the places it found TODs, “supportive zoning, planning, infrastructure investments, and tax incentives” played a major role in seeing them built.

Based on this, it is not surprising that a suburb along the Minneapolis-St. Cloud NorthStar commuter rail line has had to reduce density expectations in order to attract any development near a station on that line. Similarly, Denver RTD’s latest TOD update admits that one of the lessons RTD has learned is that “trains don’t create markets” (p. 4), and the update proceeds to outline many of the incentives RTD and local governments are providing to see TODs built.

So it is disappointing when The Economist, a magazine that usually does its homework, accepts without question transit agency claims that the Atlanta streetcar will lead business “to soar” for shops along its route. The magazine-that-calls-itself-a-newspaper considers the streetcar to be proof that “Americans are slowly warming to public transport,” when in fact all it proves is that American cities will take federal dollars for any crackpot scheme the feds are willing to fund, even if that scheme involves disrupting traffic and building housing that few people would live in unless it was subsidized.

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Herding the Poor

TransForm, a smart-growth group in Oakland, has analyzed California’s household travel survey data and made what it thinks is a fascinating discovery: poor people drive less than rich people. Moreover, poor people especially drive less than rich people if they live in a high-density development served by frequent transit.


Click image to download the executive summary of TransForm’s report.

According to TransForm’s report, poor households who live in transit-oriented developments (TODs) drive only half as much as poor households who live away from TODs, while rich households who live in TODs drive about two-thirds as much as rich households who don’t live near TODs (see figure 1 on page 7).

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So Much for TOD

Transit agencies are quick to claim that new rail transit lines generate all sorts of new developments, particularly so-called transit-oriented developments, meaning high-density, mixed-use housing. But an objective study of Minneapolis’ Hiawatha light-rail line from economists Sarah West and Needham Hurst found that “neither construction nor operation of the line appears to affect land use change relative to the time before construction.”

Unfortunately, the paper itself is behind a paywall, but it is summarized in this article from the Minneapolis Star-Tribune. An earlier version of the study is also available.

Hurst’s and West’s findings are obliquely affirmed by a recent article in the Journal of the American Planning Association that finds that people living in transit-oriented developments may drive a little less than other people, but it’s not because of the presence of rail transit. Instead, “Housing type and tenure, local and subregional density, bus service, and particularly off- and on-street parking availability, play a much more important role.” Another way of putting it is that people who choose to live in places with limited parking probably didn’t want to drive much anyway.

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Megaprojects Invite Corruption

FBI agents posed as transit-oriented developers willing to bribe the mayor of Charlotte to get his support for a streetcar line, light rail, and related projects. The now-ex-mayor Patrick Cannon gladly accepted bribes in exchange for lying to investors and pushing city planning agencies to fast track the developments. When on the city council, Cannon had opposed construction of a streetcar line, but mysteriously changed his vote when he became mayor.


Who did developers bribe to get this project completed?

The Antiplanner isn’t enthusiastic about police entrapments, but this case brings to light one of the seamier sides of rail transit. These projects cost so much that they make some sort of corruption, if only in the form of campaign contributions, mandatory. The FBI sting has to raise questions about other rail projects and developments, especially considering the current U.S. Secretary of Transportation was the mayor of Charlotte just prior to the one who was stung.

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How Many Subsidies Can Dance on the Head of a TOD?

Rail transit advocates often claim that new rail lines increase the value of properties near rail stations. While the Antiplanner is skeptical of many of these claims, a new report casts a dark light on such increased property values.

According to this report from the Dukakis Center for Urban Policy (yes, that Dukakis), increased property values push out low-income families that tend to be transit dependent and replace them with higher-income households who tend to own cars. This “undesirable neighborhood change,” the report argues, “is substantial enough that it needs to be managed whenever transit investments or improvements are being planned.”

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Throwing Good Money After Bad

TriMet, Portland’s transit agency, is planning to spend $7 million upgrading the 24-year-old Rockwood station in the city of Gresham, Portland’s largest suburb. TriMet officials hope the improvements will “leverage investment in transit into nearby development opportunities” in that neighborhood. Fat chance, especially since it was the light rail that killed the neighborhood in the first place.

The Rockwood Fred Meyer in 2000. Note the light-rail train in the background.

For 45 years, the center of the Rockwood neighborhood was a Fred Meyer store, a “supercenter” selling groceries, clothing, variety, and hardware. Fred Meyer also leased storefronts to other businesses such as coffee shops and locksmiths. When Fred Meyer spent $400,000 remodeling the store after TriMet opened the light-rail line in 1986, TriMet triumphantly counted it as an investment inspired by the light rail. Never mind the fact that Fred Meyer bragged on its web site that it had remodeled all of its 130 stores at about the same time.

The truth was, things were not going well at the Rockwood store. In January 2003, Fred Meyer shocked the neighborhood by closing it even though it was obligated to pay a lease on the site for another 10 years. The store “was in decline for a number of years,” a Fred Meyer official told the Oregonian (article available to those with access to Infoweb). “It was in a decline before the last remodel.” This was the only time in the chain’s history that it closed a store without immediately reopening a replacement nearby.

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