The Surprising Key to Making Transit-Oriented Development Work

Turns out quality matters less than government support.

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Today, the Institute for Transportation and Development Policy released a report showing that bus-rapid transit can play a huge role in stimulating economic development — often leveraging more investment than rail projects do. Previous research already suggested as much, but the impact documented in the ITDP report is still eye-catching. Every dollar spent building Cleveland's HealthLine BRT system, for instance, generated $114 in transit-oriented development.

But while the economic success of BRT (especially Cleveland's) may grab most of the headlines, it's not the most important lesson cities should learn from the report. Far more instructive is the odd fact that "transit quality" itself played only a limited role in predicting transit-oriented development. How limited? Well, of the three main TOD factors considered for the ITDP analysis, transit quality ranked third:

The quality of the transit system investment matters, but only marginally.

So what mattered most to TOD success? Government intervention, says ITDP. When local government did almost nothing to promote TOD, a new transit line generated only a nominal amount of economic investment. Case in point: the South and West busways in Pittsburgh had weak support and produced little TOD investment, but the city's (moderately supported) East busway produced $903 million.

Only when strong government intervention occurred was a transit line assured of generating a great deal of TOD success. Rezoning a corridor to encourage mixed-use development, creating a comprehensive plan for the area, actively reaching out to investors, marketing the program, offering financial incentives — these elements of a strong official involvement directly predicted TOD success. ITDP writes:

If a government does nothing to support TOD along the transit corridor, there will be no TOD impact.

The second most-important factor in TOD success was land potential. That term as used by ITDP referred to things like regional market strength (like expected real estate growth) and corridor quality (e.g. a downtown neighborhood with attractive land nearby). Land potential didn't play a strictly direct role in TOD success — a place with modest land potential could still succeed if government intervention was strong — but it was a big factor nevertheless.

Both government intervention and land potential were better investment predictors than the factor you might expect to be at the heart of TOD: transit quality.

When ITDP ranked transit systems using its in-house BRT standard, it found little connection between that score and the size of a TOD investment. In some cases a quality transit system produced big economic gains: Cleveland's HealthLine held a silver transit quality rating and led to $5.8 billion in TOD investments. In other cases that link didn't hold: Kansas City's MAX bus and Portland's streetcar didn't meet even basic ITDP standards but still produced $5.2 billion and $4.5 billion TOD boosts, respectively.

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So what's the lesson here? Well, the basic takeaway is that cities seeking TOD investments should build that desire around a strong plan for government intervention first and foremost, then identify a corridor with great potential as a secondary act. The type or quality of the transit system itself need only be a third consideration; indeed, ITDP concludes that light rail, BRT, and streetcars "all led to similar TOD investment outcomes under similar conditions."

In other words, if your goal is economic development, then focusing on transit is besides the point.

But as usual the broader lesson is more complicated. The idea that TOD doesn't always require the T can be encouraging, since it frees up cities to invest in urban corridors for their own sake. But it's also concerning, because even if transit quality doesn't matter for TOD purposes, it certainly matters for mobility. Cities that see transit systems as a mere pretext for economic development are bound for some sort of disappointment, no matter the monetary gain.

Top image: June Marie Sobrito /Shutterstock.com

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