Transit: Economic development for the 21st Century
A study of development around three recent light rail transit lines in Denver, Minneapolis-St. Paul, and Charlotte found 24 million square feet of residential and commercial construction (see Graph 1). That’s a tremendous burst of transit-oriented development (TOD), especially given that much of it occurred after the US housing market began to collapse (see Graph 2).
The development was largely focused near downtowns and other employment areas of the three cities. Factors besides transit contributed to this construction, but transit was a major impetus to growth. If the construction industry throughout much of the US had behaved as it did within a half-mile of these new transit stations, we would have had no recession in real estate.
Therein lies a way out of our economic malaise. The US building industry is currently on pace to add a quarter-million new houses this year, the lowest since records have been kept for nearly 50 years. That figure will rise substantially only with the right kind of transportation investments, which have historically spurred new housing and commercial development. Since World War II, new infrastructure has consisted mainly of highways. The massive highway construction fueled growth through the first half of the last decade, but that approach won’t work anymore.
When highways were built through countryside close to compact cities, they spurred huge amounts of construction. That, however, was when gas was cheap and the room to spread out was plentiful in rapidly growing metropolitan areas. Highway-oriented development tends to be low-density development, because nobody wants to live in a compact place close to a highway. So a buffer is built, and, beyond that, what Christopher Leinberger has called “drivable suburbia.”
In America’s already sprawled-out metro areas, the drivable suburbia has long since been built — in fact, we are looking at a long-term oversupply of large-lot housing. In this context, there is little room for new highways. On the outer edges of a few metro areas, such as Charlotte, some officials still dream of new beltways, but most are long shots. Now that the federal government is no longer paying 90 percent of the cost, local officials will think hard before paying billions for these behemoths.
If an outer beltway did go forward, the best-case scenario is that it would promote a new round of sprawl, compounding our greenhouse gas emissions problem and adding to our dependence on uncertain oil supplies. The worst-case scenario is that the highway would end up as a road to nowhere — because the “drive ‘til you qualify” approach to real estate is dead and gas prices are on a long-term upward trend.
How about adding lanes to, and widening, highways? That’s a much more likely outlet for billions in transportation dollars, but from an economic development standpoint this is a bust. If someone doesn’t already want to live near a four-lane thoroughfare, why would they want a house next to a five- or six-lane highway?
Transit, on other hand, can be inserted directly into the heart of metro areas, near existing employment opportunities. Transit doesn’t tear apart, divide, or scatter the urban fabric like highways do — instead transit connects and diversifies communities. The Southeast Corridor line in Denver, for example, connects the central city to highway-oriented employment centers in the suburbs — formerly consisting of single-use workplaces. “Because much of the new development was residential in nature, the result was that each of these station areas grew to include a more diverse mix of land uses, where it is now possible to both live and work,” according to the report, Rails to Real Estate, by the Center for Transit-Oriented Development. In other words, the light rail line is helping this corridor to grow from office parks to communities — a transformation that is just beginning.
The development along these light rail lines has the potential to carry on for decades. “All three corridors offer significant areas of development opportunity that represent unmet potential for TOD,” the report states.
Critically important to this process, however, is the planning that takes place. In order to truly take advantage of the beneficial economic impacts of transit investment, we need to foster diverse and compact development that is appealing to pedestrians. That’s what the market is going to require in the next two decades. The trouble is that most of our metropolitan areas are zoned and planned for spread-out, drivable suburbia that is exactly the opposite of what we need.
This issue has arisen in Denver, Charlotte, and the Twin Cities, where extensive replanning and rezoning has been required — often delaying development at many of the stations. A related challenge is the large block sizes and disconnected street patterns of sprawl. In order to create successful TOD — as opposed to development that is simply adjacent to transit stations — the blocks must be made smaller and the streets more connected where rail transit is built through suburban areas.
When these challenges have not been met, conventional sprawl has been built near the stations — a result that the report authors call “missed opportunities.”
Here’s where road and street investment can support TOD. Any road project that takes an automobile-oriented thoroughfare and makes it pedestrian friendly and/or more connected will tend to support transit and the transformation of suburbia. These new and redesigned streets — which support multimodal transportation — will offer the biggest return when coordinated with transit stops.
Rail is the most proven transit form to foster TOD. Bus rapid transit has potential, as well. Developers want visible, permanent infrastructure in order to invest. Highways at one time provided this impetus. Transit lines now can do the same. Bus stops are not enough.
Development that took place along the three cities’ transit lines was highly compact relative to the way cities have been growing in the last six decades, but mostly it did not take the form of high-rises. In Denver, for example, growth consisted mostly of 3-to 5-story wood frame residential buildings. This kind of development can often achieve 50 to 80 units per acre — plenty compact for lively urbanism and energy-efficiency — yet it is relatively cheap to build. As such, TOD is a viable alternative to expensive skyscrapers near downtown.
There is much room to grow within US metro areas. Their low-density form, as built over the last 60 years, means that vast lands are underutilized. We need to make metro areas more compact, and in doing so, they will get better. That goal can be achieved through new transit lines, targeted street improvements, and better planning. All three strategies, coordinated, are necessary.