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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
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
ctu
ral C
har
acte
rist
ics
•Bldg. Area
•Units
•Property Tax Rate
Loca
tio
n A
ttri
bu
tes
•CBD
•Freeway Exit
•Schools
•Shopping
Nei
ghb
orh
oo
d A
ttri
bu
tes
•Income
•Household Size
•Race/Ethnicity
Dis
tan
ce t
o T
RA
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•Nearest station in ¼ mile bands to 1-1/2 mile
Val
ue
per
sq
uar
e fo
ot
of
Ren
tal S
pac
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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.
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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0
500
1000Jobs BRT Shift 0.25-0.50 Mile
BRT Shift 0.25 Mile
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 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 <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%
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