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LRT and BRT and CRT and SCT… Oh My! A sneak peek into the development outcomes associated with different fixed-guideway transit systems Arthur C. Nelson, Ph.D., FAICP University of Arizona & University of Utah November 4, 2014
Transcript

LRT and BRT and CRT and SCT… Oh My!

A sneak peek into the development

outcomes associated with different

fixed-guideway transit systems

Arthur C. Nelson, Ph.D., FAICP

University of Arizona & University of Utah

November 4, 2014

Themes

• Get Over, and Beyond, the Half-Mile Circle – Surprising residential market responsiveness

– Even more surprising office market responsiveness

• Transit and Economic Development

• But do Lower-Wage Jobs Follow?

• Transit and Economic Resilience

• A Streetcar with Desires

• Stay Tuned …

• The Dream Team

Get Over, and Beyond, the Half-Mile Circle

• First there was the ¼-mile walk based only on the 10-minute “walk-in-the-park”

• Then there was the ½-mile circle based on the 10-minute “business walk” with scant empirical evidence

• Now, based on NITC research, we need to rewrite the TOD planning book based on the evidence

Hedonic Studies of Market Responsiveness to Transit Station Location

• Residential – Apartments (published)

– Townhouses

– Condominiums

– Single Family detached

– Single Family detached by lot-size categories

• Office

• Industrial (preliminary)

• Retail (perplexing)

Data: Salt Lake County Assessed Value Accuracy

98.21%

98.49%

98.50%

100.44%

50% 60% 70% 80% 90% 100% 110%

Residential

Condos

Commercial

Apartments

Assessed Value/Sales Price Ratio Sales Price

Source: Salt Lake County Assessor’s Office, Statistical Division, June 2012

Hedonic Model

Stru

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acte

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ics

•Bldg. Area

•Units

•Property Tax Rate

Loca

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•CBD

•Freeway Exit

•Schools

•Shopping

Nei

ghb

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•Income

•Household Size

•Race/Ethnicity

Dis

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•Nearest station in ¼ mile bands to 1-1/2 mile

Val

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per

sq

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Residential Premium/Sq.Ft. with respect to 1/4-mile bands to 1.25 miles

Distance All

SFD <5k 5-7.5k 7.5-

10k 10k+ TH Condo Apart*

<0.25 -2.857 -3.07 -2.808 0.638 2.834 20.629 3.19 7.276

0.25-<0.50 -0.217 -3.502 1.170 4.268 3.663 12.807 0.68 3.628

0.50-0<0.75 2.882 3.796 5.718 6.095 4.65 7.714 -0.19 4.739

0.75-<1.00 5.377 6.780 12.754 4.894 3.36 9.861 -0.15 3.621

1.00-<1.25 3.515 3.896 9.471 2.946 4.312 1.087 0.04 3.647

1.25+ 0.930 0.114 3.114 2.162 1.382 17.221 -1.01 1.678

R-Squared 0.455 0.685 0.699 0.622 0.411 0.563 0.625 0.526

Source: Data from Salt Lake County Assessor. Note: Bold figures are p < 0.05,1-tailed t-test. Apartment study published: Petheram, Susan J; Nelson, Arthur C; Miller, Matt; Ewing, Reid (2013), “Use of the Real Estate Market to Establish Light Rail Station Catchment Areas: Case Study of Attached Residential Property Values in Salt Lake County, Utah, by Light Rail Station Distance”. Transportation Research Record 2357: 95-99.

Residential Premium/Sq.Ft. with respect to 1/4-mile bands to 1.25 miles

Office Rent Premium With Respect to LRT Station Distance—Case Studies

• Dallas and Denver

• Extensive systems throughout metro areas

• More than a decade of experience

• Reasonably uncomplicated landscapes

• Major downtowns

• Moderately to fast growing

Office Rent Premium With Respect to LRT Station Distance—Data & Method

• CoStar median building rent per square foot

• Fall 2012

• Addresses allow geocoding

• Hedonic rent analysis

• Gobs of degrees of freedom (n=1400+)

• Very few studies of office markets and transit

• First study to use rent data

Office Premium/Sq.Ft. with respect to Distance from LRT Stations

Variable Coefficient Std Err of Coef. t-score p

Constant 0.400 3.971 0.101

Class A 7.929 0.409 19.381 .01

Class B 3.209 0.320 10.025 .01

Gross Building Square Feet 0.000 0.000 0.881

Floor Area Ratio -0.164 0.051 -3.196 .01

Stories -0.003 0.034 -0.092

Vacancy Rate -0.026 0.004 -6.079 .01

Effective Year Built 0.007 0.002 3.372 .01

Median Household Block Group Income, 2010 0.040 0.004 10.091 .01

Percent Not White Non-Hispanic -0.013 0.009 -1.470 .10

Compactness Index 1.054 0.263 4.008 .01

Distance from CBD, miles -0.260 0.035 -7.492 .01

Distance from Interchange, miles -0.148 0.475 -0.311

Square Distance from Interchange, miles 0.123 0.178 0.690

Distance from Nearest LRT Station -1.092 0.318 -3.432 .01

Squared Distance from Nearest LRT Station 0.232 0.067 3.461 .01

Denver 0.780 0.280 2.789 .01

Adjusted R Square 0.503

Std. Error of the Estimate 3.643

F 89.717

sig. F 0.000

Observations 1,403

Degrees of Freedom 1,386

Source: Rent data courtesy of CoStar.

Office Premium/Sq.Ft. with respect to Distance from LRT Stations in Miles

Metro Distance

Threshold 50%

Decay 75%

Decay

Dallas 1.85 0.50 0.90

Denver 3.30 0.75 1.20

Combined 2.35 0.65 1.10

Accepted as lectern presentation January 2015 TRB, and revise/resubmit for Transportation Research Record.

Retail Premium/Sq.Ft. with respect to Distance from LRT Stations

Variable Coefficient Std Err

of Coef. t-score p

Constant -184.1570 26.4120 -6.9720 .01

Gross Leasable Square Feet 0.0000 0.0000 -0.0650

Floor Area Ratio 1.3320 0.4350 3.0650 .01

Stories -0.2860 0.5240 -0.5460

Vacancy Rate -0.0360 0.0080 -4.6040 .01

Effective Year Built 0.1000 0.0130 7.4600 .01

Median Household Tract Income 0.0550 0.0110 5.0730 .01

Percent Not White Non-Hispanic -0.0310 0.0140 -2.1100 .05

Compactness Index 2.6520 0.5200 5.0960 .01

Denver -1.8540 0.7010 -2.6450 .01

Distance from CBD, miles -0.0690 0.0700 -0.9850

Distance from Interchange, miles -0.5120 0.3330 -1.5370 .10

Squared Distance from Interchange -0.1050 0.0580 -1.8240 .01

Distance LRT Station -0.7930 0.2700 -2.9380 .01

Squared Distance LRT Station 0.1200 0.0320 3.7960 .01

Adjusted R Square 0.2310

Std. Error of the Estimate 5.1720

F 16.1720

Sig. F 0.0000

Observations 737

Degrees of Freedom 722

Source: Rent data courtesy of CoStar.

Retail Premium/Sq.Ft. with respect to Distance from LRT Stations in Miles

Metro Distance

Threshold 50%

Decay 75%

Decay

Combined 3.30 1.10 1.60

Industrial

• Work in Progress

• “Flex” more sensitive than land-extensive industrial

• Results working for Denver only

Metro

Distance

Threshold 50% Decay 75% Decay

Denver 4.26 1.75 3.10

Theory of Transit & Economic Development

A purpose of transportation systems is to improve accessibility which increases economic activity.

Sometimes transportation investments can reduce economic development such as when beltways disperse to densities lower than the economic thresholds

In theory, adding new transportation modes in built-up urban areas should increase aggregate economic activity.

If so, transit should improve output and productivity; reduce production costs; increase income, property values, jobs, and real wages; and raise the overall rate of return to real estate investments.

Whether these economic development benefits apply to CRT and BRT is not known, and need to be refined for LRT.

First round of studies close this gap through corridor comparisons over time.

Method: Shift-Share Analysis

Decomposes regional employment growth:

SS = MA + SM + TSA

Where

Metropolitan Area (MA): Measure of transit station area growth in relation to metropolitan growth

Sector mix (SM): Growth that is attributed to the metropolitan area’s mix of industries.

Transit Station Advantage (TSA): Job shift associated with introduction of transit Identifies economic sectors attracted to and repelled by transit.

CRT & BRT compared to metropolitan areas.

LRT compared to comparable corridors.

Arthur C. Nelson, Reid Ewing, Matt Miller, Shyam Kannan, Bruce Appleyard. 2013. Bus Rapid Transit and Economic Development. Journal of Public Transportation. 16(3): 41-57.

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-1000

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500

1000Jobs BRT Shift 0.25-0.50 Mile

BRT Shift 0.25 Mile

The forgotten mode: Commuter Rail Transit

Rail Runner Tri Rail Front Runner Coaster Sounder

The forgotten mode: Commuter Rail Transit Shift-Share Analysis <0.25 mile

Sector CRT 2002 CRT 2011

MSA 2002

MSA 2011

Metropolitan Area Share Industry Mix CRT Advantage

Utilities 165 434 25,588 26,045 150 18 266

Manufacturing 4,682 2,761 510,933 446,468 4,259 (168) (1,330)

Wholesale 2,856 3,148 299,692 314,026 2,598 394 155

Retail 4,535 3,879 683,883 755,159 4,126 882 (1,129)

Trans/Warehousing 1,935 3,380 221,190 218,494 1,760 151 1,469

Information 3,123 1,592 220,314 208,150 2,841 109 (1,359)

Finance, Insurance 2,855 2,723 260,446 263,702 2,597 293 (168)

Real Estate 1,682 1,168 131,799 127,427 1,530 96 (458)

Prof., Sci, Tech 6,845 6,737 410,442 489,427 6,227 1,935 (1,425)

Management 1,100 1,225 91,727 93,331 1,001 119 106

Administrative 2,978 3,629 392,193 417,573 2,709 462 458

Education 3,477 3,797 521,892 566,754 3,163 613 21

Health, Social 3,987 3,485 619,885 820,876 3,627 1,653 (1,795)

Arts, Ent., Rec 695 872 119,630 137,550 632 167 73

Accomm, Food 6,730 7,108 493,243 563,762 6,123 1,570 (584)

Other Services 2,206 2,247 217,810 241,163 2,007 436 (196)

Public Admin 6,466 7,040 246,823 320,029 5,882 2,501 (1,344)

Total 56,317 55,225 5,467,490 6,009,936 51,234 11,230 (7,239)

The forgotten mode: Commuter Rail Transit

Shift-Share Analysis 0.25-0.50 mile

Sector CRT 2002 CRT 2011 MSA 2002 MSA 2011

Metropolitan Area Share

Industry Mix

CRT Advantage

Utilities 3,709 4,106 25,588 26,045 3,374 401 331

Manufacturing 10,716 6,496 510,933 446,468 9,749 (385) (2,868)

Wholesale 8,099 7,780 299,692 314,026 7,368 1,118 (706)

Retail 13,524 11,174 683,883 755,159 12,303 2,630 (3,760)

Trans/Warehousing 6,922 7,199 221,190 218,494 6,297 540 361

Information 10,990 7,023 220,314 208,150 9,998 385 (3,360)

Finance, Insurance 6,703 5,734 260,446 263,702 6,098 689 (1,053)

Real Estate 2,322 4,354 131,799 127,427 2,112 133 2,109

Prof., Sci, Tech 17,436 19,185 410,442 489,427 15,862 4,929 (1,606)

Management 1,141 2,584 91,727 93,331 1,038 123 1,423

Administrative 10,324 12,040 392,193 417,573 9,392 1,600 1,048

Education 5,813 3,569 521,892 566,754 5,288 1,024 (2,744)

Health, Social 9,498 15,320 619,885 820,876 8,641 3,937 2,742

Arts, Ent., Rec 5,346 4,854 119,630 137,550 4,863 1,283 (1,293)

Accomm, Food 13,826 14,302 493,243 563,762 12,578 3,225 (1,501)

Other Services 5,109 5,137 217,810 241,163 4,648 1,009 (520)

Public Admin 55,847 68,175 246,823 320,029 50,806 21,604 (4,236)

Total 187,325 199,032 5,467,490 6,009,936 170,417 44,246 (15,632)

Accepted as poster presentation at January 2015 TRB meetings.

But do Lower-Wage Jobs Follow?

LRT Groups Total Jobs

Metro Share

Lower

Wage Jobs

Upper

Wage Jobs

Total Jobs

Metro Share

Lower

Wage Jobs

Upper

Wage Jobs

Oldest 6 LRT Control Corridor LRT Corridor

Base Year 2004 408,165 5.7% 249,950 158,215 673,853 9.5% 401,618 272,235

End Year 2011 437,494 5.5% 219,027 218,467 726,675 9.2% 352,544 374,131

Change 7.2% -3.8% -12.4% 38.1% 7.8% -3.2% -12.2% 37.4%

Newest 5 LRT Control Corridor LRT Corridor

Base Year 2004 359,440 6.5% 202,287 157,153 695,793 12.6% 383,749 312,044

End Year 2011 384,926 4.7% 175,627 209,299 738,770 9.0% 314,802 423,968

Change 7.1% -28.1% -13.2% 33.2% 6.2% -28.7% -18.0% 35.9%

All 11 LRT Control Corridor LRT Corridor

Base Year 2004 767,605 6.1% 452,237 315,368 1,369,646 10.8% 785,367 584,279

End Year 2011 822,420 5.1% 394,654 427,766 1,465,445 9.1% 667,346 798,099

Change 7.1% -15.9% -12.7% 35.6% 7.0% -16.0% -15.0% 36.6%

But do Lower-Wage Jobs Follow?

LRT Groups

Lower

Wage LQ

Upper

Wage LQ

Lower

Wage LQ

Upper

Wage LQ

Oldest 6 LRT Control Corridor LRT Corridor

Base Year 2004 0.92 1.15 0.90 1.20

End Year 2011 0.88 1.16 0.85 1.20

(End Year/Base Year) -4% 1% -6% 0%

Newest 5 LRT Control Corridor LRT Corridor

Base Year 2004 0.88 1.22 0.86 1.25

End Year 2011 0.80 1.27 0.74 1.34

(End Year/Base Year) -9% 4% -14% 7%

All 11 LRT Control Corridor LRT Corridor

Base Year 2004 0.90 1.19 0.88 1.23

End Year 2011 0.84 1.21 0.80 1.27

(End Year/Base Year) -7% 2% -9% 3%

Transit and Economic Resilience

Transit and Economic Resilience During the Great Recession, transit corridors over the first 0.25 mile band outperformed control corridors in half the sectors (manufacturing, retail/lodging, office, and education) and outperformed metropolitan areas in three of them (the same excluding manufacturing). During Recovery, transit corridors recovered more rapidly than control corridors in all but three sectors (nonmanufacturing industries, office and health) and they were more resilient than metropolitan areas as a whole in all but two sectors (nonmanufacturing industries and office). Over the next 0.25 mile results are less impressive for transit corridors during the Great Recession as well as the recovery.

Accepted as lectern presentation January 2015 TRB, and revise/resubmit for Transportation Research Record.

A Street Car with Desires

A Street Car With Desires <1/8 Mile

Year Jobs SCT only SCT+ LRT

2002 31,070 5,674 25,396

2011 38,562 6,744 31,818

Change 7,492 1,070 6,422

County Share 21% 3% 18%

1/8 Mile - <1/4 Mile

Year Jobs SCT only SCT+ LRT

2002 39,676 2,251 37,425

2011 33,800 2,082 31,718

Change (5,876) (169) (5,707)

Total <1/4 Mile

Year Jobs SCT only SCT+ LRT

2002 70,746 7,925 62,821

2011 72,362 8,826 63,536

Change 1,616 901 715

County Share 5% 3% 2%

Stay Tuned

Completing Analysis: Do TODs Make a Difference?

Job change by transit station distance over time:

Economic Sector

Wages

Households and Household Type

Housing Mix

Housing + Transportation Affordability

Before-During-After Great Recession

Thanks to the DREAM Team Keith Bartholomew

Jeannette Benson

Martin Buchert

Nan Ellin

Dejan Eskic

Reid Ewing

Joanna Ganning

Shima Hamidi

Keuntae Kim

Matt Miller

Bob Mutz

Susie Petheram

Brenda Scheer

Allison Spain

Philip Stoker

Guang Tian


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