Academic journal article Cityscape

Can a Car-Centric City Become Transit Oriented? Evidence from Los Angeles

Academic journal article Cityscape

Can a Car-Centric City Become Transit Oriented? Evidence from Los Angeles

Article excerpt

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For most of the 20th century, Los Angeles was the quintessential car-oriented city. Over the past 20 years, however, local and regional governments have invested significant resources in building rail transit infrastructure that connects major employment centers, including downtown Los Angeles, Long Beach, Pasadena, and the eastern Wilshire Corridor. One goal of transit infrastructure is to catalyze high-density, mixed-use housing and commercial development within walking distance of rail stations, known as transit-oriented development (TOD). By increasing the accessibility of station areas, the building of new stations should increase surrounding land values, leading to higher-density development. In this article, we examine changes in employment patterns around Los Angeles County Metropolitan Transit Authority (LA Metro) rail stations from 1990 to 2010. The analysis examines whether station areas have experienced changes in the density or composition of employment following station opening, and explores the time frame in which such changes may happen.

Standard urban economics models yield several hypotheses for how and why economic activity might change in areas where new rail stations are built. Following the standard monocentric city model, land values are highest at the central business district (CBD) and decline moving outward in proportion with increasing travel costs (Alonso, 1964; Brueckner, 1987; Mills, 1967; Muth, 1969). Building a rail station that connects the station's neighborhood with the CBD or employment subcenters should increase the accessibility of that neighborhood, thereby increasing land values and encouraging higher density development nearby (Anas, 1995; Glaeser and Kohlhase, 2004). Neighborhoods around rail stations should be relatively more attractive both to firms and households. Firms can attract more workers due to increased accessibility, as well as more consumers to convenient locations, particularly in household-serving industries such as retail, food service, and healthcare. Households will be willing to pay higher housing prices in exchange for lower transit costs.

How much land values and economic activity increase near stations depends on the extent of improved accessibility to the location; for instance, stations that link to larger and denser rail networks should have greater impacts on land values. Rail lines that simply replace existing bus transit service have little impact on accessibility. Because most passengers access rail stations by walking, station effects will be highly localized. Prior research has also posited some potential negative impacts of rail stations on nearby areas. Rail stations may increase noise, traffic congestion, or crime in the adjacent area; these nuisances are likely stronger disamenities for households than for commercial uses. Land values around stations may fluctuate in the short run, both prior to and immediately after opening, before reaching long-run equilibrium. The relationship between short-run and long-run land values is somewhat ambiguous. For instance, anticipation of increased demand may cause short-run spikes in land values, beyond prices that developers are willing to pay, which can deter or delay development. This is particularly likely if small parcel owners become "holdouts" (Brooks and Lutz, 2016). Conversely, developers may perceive untested locations as excessively risky and delay undertaking projects until some first-mover demonstrates actual profits (essentially underestimating long-run land values in the short run).

A broad empirical literature has attempted to identify the impacts of rail transit investments on outcomes such as transit ridership, land values, housing prices, population and housing density, employment composition, population characteristics, and crime (Baum-Snow and Kahn, 2005; Billings, 2011; Billings, Leland, and Swindell, 2011; Boarnet and Crane, 1997; Bollinger and Ihlanfeldt, 1997; Bowes and Ihlanfeldt, 2001; Cervero and Landis, 1997; Debrezion, Pels, and Rietveld, 2007; Dubé, Thériault, and Des Rosiers, 2013; Giuliano and Agarwal, 2010; Handy, Cao, and Mokhtarian, 2005; Kahn, 2007; Lin, 2002; Mathur and Ferrell, 2013; McMillen and McDonald, 2004; Poister, 1996; Renne and Ewing, 2013; Winston and Maheshri, 2007). …

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