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Free Resources | Land Use | Articles |
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Why Build Near Transit?by Paul Zykofsky, AICP Director, Center for Livable Communities Published: Transit California; December 1998/January 1999
Transit stops are not just places for riders to get on and off the bus or train. In recent years communities all across the nation have begun to recognize that transit, and the areas around transit stops, can play a major role in revitalizing older neighborhoods and in creating new neighborhoods that are more livable. This article will explore some of the economic and social benefits of transit oriented development. A subsequent article will discuss how we can help insure that development around transit stops contributes to creating more livable communities. The Economic Reasons Development near transit helps to maximize public investment in transit. To make a transit system economically viable, a sufficient number of potential riders must live and work near transit stops. To get the most economic benefit from our transit systems we need to ensure that residential and office development is focused around them. The common sense view that people living close to transit stops use the system more frequently has been bolstered by several studies including one conducted by the National Transit/Residential Access Center (NTrac) at the University of California at Berkeley in 1993, which included extensive surveys of people who live near rail transit stations. The study found that approximately 33 percent of the residents living near Bay Area Rapid Transit (BART) stations used rail to get to work compared to only 5 percent of residents in areas not served by BART.1 A 1989 study by JHK and Associates for the Washington Metropolitan Area Transit Authority found that residential use of transit declines by 0.65 percent by every 100 feet in distance from the transit stop.2 Building near a transit stop is not only good for the transit system, it is good for the developer and property owner. Residential and commercial projects near transit typically appreciate in value more rapidly than other projects. As demand for scarce properties near transit stops increases, this trend will continue. A report by Economics Research Associates (ERA) in 1995, documents significant increases in property values for medium density apartments and condominiums and commercial and retail properties located near rapid transit stations. Similar findings have been made in the case of commercial properties. The 1995 ERA study analyzed a sample of commercial buildings in San Francisco and Oakland and found that "walking distance to a BART station and office rent per square foot are linearly related."3 A similar trend was found by the ERA study for retail rents. In this case, retail rents close to transit were almost three times higher than in other areas! An article by University of California at Berkeley Professor Robert Cervero in the Winter 1994 issue of the Journal of the American Planning Association concludes that: "Average office rents near stations rose with system wide ridership; joint development projects added more than three dollars per square foot to annual office rents. Office vacancy rates were lower, average building densities higher, and shares of regional growth larger in station areas with joint development projects... Combining transit investments with private real estate projects appears to strengthen these effects."4 Development near transit stops -- especially rail transit -- also increases tax revenues for cash-strapped local governments. As pointed out by Australian professors Peter Newman and Jeff Kenworthy, while "freeways usually lower the value of much land along their routes, and disperse commercial developments to their ends... rail systems increase land values all along their routes, and concentrate commercial development (and compact housing) around stations."5 As the value of property near transit appreciates, property taxes collected by local government also increase. In fact, some cities take advantage of this by using tax-increment financing to help fund expansion of the transit system. A 1987 study prepared by the Joint Center for Urban Mobility Research at Rice University analyzed property values in transit areas in ten cities and found that in many cases the increase in land value due to the introduction of rapid transit was more than 100 percent of the total construction costs of the transit system investment.6
Pedestrian activity around transit stops is also a natural environment for retail activity. Not only does this improve the viability of small businesses, but it also translates into increased sales tax revenues for local governments. A study prepared in 1992 found that in Atlanta, Georgia "approximately 61 percent of businesses located at downtown stations reported an increase in monthly sales volumes during the first year of transit system operation."10 The Social Reasons In addition to the economic benefits, transit-oriented development can help improve the social conditions in decaying downtowns and bypassed neighborhoods. Suburban expansion during the past 50 years has robbed many city centers of their vitality and has created a vacuum at the heart of many communities. As growing numbers of cities try to restore community centers and reassert the importance of the public and civic realm, more attention is being given to transit. Portland, Oregon revived a downtown that was in decay in the 1970s through a well-planned strategy centered on improving transit services and focusing development near transit stops. The result, according to G.B. Arrington, Jr., Director of Strategic Planning for the regional transit agency, Tri-Met, "is a vital, vibrant downtown, anchored by the Transit Mall and MAX [the light rail system]. The downtown area has grown from some 50,000 jobs in 1975 to 86,000+ jobs today... Transit has done its share. Nearly 40% of downtown work trips arrive on transit."11 Portland also reestablished the preeminence of the public realm in its downtown by converting a parking lot into Pioneer Square, a gathering place for citizens from all across the region. It is no coincidence that Pioneer Square is bounded by light rail on two sides and by the bus mall on the third side. The City of Denver pumped new life into its downtown by putting in a light rail line and creating a bus transit mall. Free bus service along the mall, together with the preservation and re-use of historic buildings along the mall and in the Lower Downtown district have reversed the area's decline and turned it into an inviting location in which to live, shop, work and play. Smaller cities and towns have also been able to revitalize their downtowns and "main streets" through transit oriented development. City officials in Concord, California, credit a redevelopment project around the BART transit stop with transforming their deteriorating downtown into a commercial center with several major employers.12 The City of Carlsbad, north of San Diego, is using the construction of a commuter rail transit station to revive its "Village Center." The Carlsbad Village will include a variety of districts combining shopping, and living facilities within a compact, pedestrian-oriented environment. Page: 1 | 2 |
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In
Portland, Oregon a 1993 study found that the assessed value of different
station area properties had increased by 112% to 491% from 1980
to 1991, compared to a national average increase of 67.5%.7Portland's transit agency, Tri-Met, estimates that its light
rail line has generated over $1.2 billion dollars in development
exceeding ten million square feet, immediately adjacent to MAX,
its light rail line. Another $440 million worth of improvements
are being planned.8
And in Washington, DC, during the first three years of operation
the Metrorail system attracted $970 million in new development to
locations near transit stops. This new investment yielded an increase
of $50 million dollars in local tax revenues in 1985 alone.9