Land Development Transport Investment Accessibili ty The Role of Transportation Investments in Shaping Land Development Robert Cervero UC Berkeley

Five Points (“Truths”?) 1) 1)Regionally, impacts are mainly Redistributive.  Highways:   California County Investments (Boarnet)   Beltway Studies

Highway Investments & Economic Productivity: Output in California Counties:

Beltways: Intra-Metropolitan Impacts  Regional: The Beltway Study (Payne-Maxie, 1980) – –No effect on regional growth rates – –Modest effect on retail sales differentials between CBDs and suburbs  Hartgen (1999):  Hartgen (1999): Non beltway cities (Charlotte, Nashville) have economically performed as well as beltway cities  Economic Development Research Group (1999):  Economic Development Research Group (1999): Review of bypasses in small & medium size cities: net effect is relatively small (neither devastating or savior of area)

2 nd Point 2) 2)Growth is a Prerequisite for “Big” Land Use Changes (i.e., has to be something to redistribute).  Transit (New Growth Nodes):  Transit (New Growth Nodes): Arlington County’s Metrorail  Transit (Redevelopment):  Transit (Redevelopment): New Jersey (Jersey City; Commuter Rail Towns)

Arlington County Office-Retail Development Trends : : 26,550 housing units/25.5 million sq. ft. commercial space added Corridors:Corridors: 52% of County tax base on 11% of land area Density: Density: Suburban standards would require 7 times area

The Ridership Payoff 39% of employed-residents rail-commute 39% of employed-residents rail-commute 37% of office workers rail-commute 37% of office workers rail-commute Balanced Development = Balanced Flows Balanced Development = Balanced Flows ~ 2/3 access by “non-motorized transport” ~ 2/3 access by “non-motorized transport”

LRT Redevelopment: Jersey City’s Hudson-Bergen Line

3 rd Point 3) 3)Timing/Congestion Levels Matter  Transit:  Transit: Santa Clara County’s Land-Value Premiuims  Highways:   California: Freeway Expansions Induce Big Land Use Changes   Ohio: Road investment have little impact

2000 Expanded, mature system Economic Boom/Congestion TOD:   4,500 Housing Units   9+ million sq. ft. of commercial space Cervero Study: Appreciable Capitalization benefits Santa Clara County LRT 1991 New, minimal system Recession/Little Congestion Landis Study: No capitalization benefit for housing

Transit Proximity & Value-Added: Santa Clara Valley, (24 % ) (103 % ) (28 % ) (17 % ) COMMERCIAL PARCELS RESIDENTIAL PARCELS

Land Use: Elasticities Elasticities No. Years Lagged Coefficient Residential Single- Family Multi- Family Non- Residential Office Retail-- Industrial Other %  in Share of County Building Permits %  in Share of County Building Permits %  in Freeway Lane-Mile Capacity %  in Freeway Lane-Mile Capacity Building Activity – Freeway Expansion Elasticities 24 California Freeway Segments:

Land-Use Shifts Behavioral Shifts Absorbed:InducedDemand Preserved Absorbed: External Factors What Happens to Added Road Capacity in 5-8 Years? California’s Experiences

Road improvements weakly correlated with growth Road projects generally follow growth Akron Ohio: Changes in Population & Road Improvements, Major Growth Areas

4 th Point 4) 4)Given Growth, Proactive Planning is Key to Leveraging “Smart Growth” Outcomes  Transit: San Diego   “Tiajuana Corridor”: No Growth, Little Planning, No Impacts   Mission Valley Corridor: Substantial Growth, Proactivism, Big Impacts

San Diego Rail Stations MF Housing Commercial SAN DIEGO TROLLEY & COASTER’s VALUE-ADDED

5 th Point 5) 5)Finance Connection: Value Capture – Makes Sense in Theory, Hard in Practice  Happens:   Indirectly: Property Tax Intake   More directly: Joint Development   Most directly: Benefit Assessment

Los Angeles: Mixed Experiences Multi-Family Housing Premium/Discount Benefit Assessment Benefit Assessment 9% of funds to retire Red Line Capital Bonds

Fiscal Policy Lessons? fiscal consequence – smart growth (e.g., TOD) reduce costly sprawlTransport investments, under the right conditions, are potentially powerful tools to shape growth: fiscal consequence – smart growth (e.g., TOD) reduce costly sprawl congested urban settings, commercial usesGovernments can and should participate in the value-added by transportation infrastructure, under right conditions – congested urban settings, commercial uses Benefit Assessment Joint Development Land-Banking/Co-Development