How Cities Can Get More Development For Their Transit Dollars

Winter 2013
Cleveland made a concerted effort to channel new development to the route of its HealthLine BRT system, leveraging a $5 million per mile transit investment into $5.8 billion in new development.

Transit-oriented development (TOD) has long been promoted as a way to combat congestion, pollution and other problems associated with sprawling, auto-dominated suburban growth patterns. City leaders typically believe that developers will only invest in TOD projects located along rail-based transit lines, including light-rail transit (LRT) and streetcars. Yet a recent report demonstrates that the type — and even the quality — of transit matters less than how much government support it gets.

The Institute for Transportation and Development Policy (ITDP) report, titled “More Development for Your Transit Dollar: An Analysis of 21 North American Transit Corridors,” showed that bus rapid transit (BRT) can play an enormous role in stimulating economic development. In fact, it often leverages more investment than rail projects. Every $1 spent building Cleveland’s HealthLine BRT system, for instance, generated more than $114 in TOD investment, compared with Pittsburgh’s “the T” LRT, which generated nominal investment in TOD projects.

Even the quality of the BRT system mattered less than several other factors in attracting TOD. The study found that what mattered most was government support. When local government did almost nothing to promote TOD along two new busways in Pittsburgh, those lines produced little TOD investment. But when Cleveland — despite a weak overall economy — made a concerted effort to channel new development to the HealthLine, it succeeded in leveraging a $5 million per mile transit investment into $5.8 billion in new development.

The report’s key findings include the following:

  • Government support for TOD — for example, by rezoning a corridor to encourage mixed-use development, creating a comprehensive plan for the area, reaching out to investors, marketing the program and/or offering financial incentives — is the strongest predictor of TOD investment.
  • Per dollar of investment and under similar conditions, BRT leverages more TOD investment than LRT or streetcars.
  • Both BRT and LRT can leverage many times more TOD investment than they cost.
  • The strength of the land market around the transit corridor is the secondary indicator of success; because downtowns tend to have strong land markets, new transit systems that pass through downtowns typically result in more TOD than those that do not.
  • The quality of the transit investment — how well it meets best practices as detailed in “The BRT Standard” (a design guide and rating system for BRT developed by the Institute for Transportation and Development Policy) — is only the tertiary indicator of TOD investment.

What lessons can cities learn from this report? The first, and most important, is that if local government does nothing to support TOD along an emerging transit corridor, there will be little or no TOD impact. Cities seeking TOD investments should build strong plans for government intervention, then identify a transit corridor with good land potential. The type or quality of the transit system should be the final consideration, not, as is usually the case, the first. Indeed, the report concludes that LRT, BRT and streetcars “all led to similar TOD investment outcomes under similar conditions.” 

For more information:

Walter Hook, Stephanie Lotshaw and Annie Weinstock, “More Development for Your Transit Dollar: An Analysis of 21 North American Transit Corridors” (Institute for Transportation and Development Policy, 2013)