It's Not Always a Bad Thing for Rents to Rise With Transit Growth

If displacement is kept in check, there are great social benefits to reducing household transportation costs.

Image
David Crummey/Flickr

Residents of Somerville, Massachusetts, are beginning to fear that the Green Line extension may also produce gentrification and displacement. Locals do have reason to worry, as Cities reported earlier this week, but there's also reason to be optimistic about the future. The planned light rail line will provide a major transit upgrade over the patchwork of slow buses that serve most of the city. With high densities and low car use, Somerville is the perfect place for new mass transit; no wonder advocates have been pushing for the project for years.

Many cities around the United States are trapped in the same dilemma between a desire for transit growth and a fear of rising rents. It's true that one often leads to the other. A 2010 report found that between 1990 and 2000, rent increased more quickly in transit areas across the country than in the surrounding metropolitan areas. The change doesn't always take long: another study, examining the effects of the construction of Chicago's Midway Orange Line in 2004, concluded that property values along the line increased even in advance of opening.

But are rising housing prices as a result of mass transit development necessarily a bad thing? The real story is more nuanced.

The desirability of living near transit reflects, in part, the fact that better transit options allow households to reduce transportation costs by replacing car trips with cheaper public transportation trips. Sometimes residents can eliminate car use entirely. So if families redistribute their costs from transportation to housing, they should be able to afford more expensive rents or mortgages. The average car owner spends about $9,000 a year on the vehicle, versus roughly $900 to $1,300 for an annual unlimited transit pass. A complete switch from private automobile to transit could leave a family up to $700 for additional monthly housing spending.

Higher housing values around transit also usually translate into more development in those areas. That’s a good thing for locals. Regions that emphasize growth around public transportation lines produce more livable communities. The more growth that is concentrated in areas near transit, the less it will be shuffled out to exurban, car-dependent communities — where commute times and transportation expenses are high, public services are expensive to provide, and ecological impacts are considerable.

Despite these potential savings, displacement of low- and moderate-income families too often does occur, at least in the aggregate. Economist Matthew Kahn of UCLA recently found that in Census tracts near new U.S. rail stations, the share of people with college degrees increased significantly in areas with stops designed for people to walk up and ride. (The share of college graduates living near Davis Station in Somerville, for instance, sextupled from 1970 to 2000, after the station opened.) As housing in such neighborhoods becomes more expensive and residents become wealthier, the original residents find it harder to stay in place.

But there's another problem: even those original residents who do stay in place might not benefit directly from the new transit service. While the Green Line will attract new residents who work in downtown Boston, easily accessible by the train, current residents who moved to the neighborhood before the line emerged may continue to need cars to get to jobs in less transit-accessible parts of the metro area. Meanwhile, those that already rely on existing buses might not have the means to pay for more expensive housing, since they won't be shifting car-related transportation savings to housing costs. These people may also be forced to move — often to less-accessible parts of the region.

Between 1990 and 2000, 

in nearly three-quarters of transit-rich developments, neighborhood rents increased faster than those in metro areas. (Dukakis Center for Urban and Regional Policy)

In other words, the availability of cheap, fast transit reduces the transportation costs of only those people who can rely on the connections provided by the line to replace automobile journeys. Cities developing their transit systems need to identify planning mechanisms that both accommodate new growth around transit stations and also recognize that certain existing residents will not be able to reduce their transportation expenses in line with rising housing costs.

So the threat is real. But the neighborhood response to new transit investments cannot simply be a sigh of desperation against the inevitable challenge of gentrification. (Nor can it be the creation of roadblocks to any new growth in the area, a reaction whose long-term consequence is too often more sprawl and inner-city decline.) With a positive, inclusive vision for future growth, gentrification's adverse effects can be held in check without eliminating the benefits of new development.

Consultation processes designed to identify community goals and produce development plans for important sites near transit can begin to address gentrification head-on. Workshops we are conducting at Chicago's Metropolitan Planning Council, starting this month in the Uptown neighborhood, are an example of participatory planning for dense, equitable transit-oriented development in the context of market realities.

Elected officials, working with the private sector and non-profit partners, must also respond proactively by developing regulatory responses, such as requiring affordable housing, as has been implemented in Somerville.

Perhaps the most coordinated effort to prevent displacement is underway in the Twin Cities, where trains will soon roll on the $1 billion Central Corridor. The project connects downtown Minneapolis and St. Paul and is surrounded by moderate-income residential areas and so much parking that within a quarter-mile of just one planned station (Hamline Avenue) there is enough parking to fill six Manhattan blocks. That's plenty of land for new construction and lots of potential for displacement.

The Central Corridor Funders Collaborative was created in 2007 to address concerns about neighborhood change, bringing in a dozen local and national foundations, as well as local governments, to help residents around the rail lines. Through local business support, job training, and affordable housing subsidies, the collaborative expects to spend $20 million over 10 years to keep the neighborhood's existing character intact while also welcoming new growth. Though housing costs continue to rise along the Green Line, the collaborative and others have already funded or preserved 1,738 units of affordable housing in just three years — not an insignificant accomplishment.

When planned appropriately, new transit investments offer the possibility of substantially improving mobility for many, but cities have a responsibility to identify those who are at risk of being displaced thanks to rising housing costs. The initial success on that front in the Twin Cities provides insight into how other regions can welcome transit investments while counteracting the negative effects of gentrification.

Top image: David Crummey/Flickr

This article is part of 'The Future of Transportation,' a CityLab series made possible with support from The Rockefeller Foundation.

About the Author

  • Yonah Freemark is the creator of The Transport Politic and has contributed on urban issues to the New York Times, CNN, Next City, and other outlets, including CityLab. He is a project manager at Metropolitan Planning Council in Chicago.