Project number: MT-11-04

Funding source: USC Lusk Center for Real Estate

Total cost: $89,487

Performance period: August 2010 to July 2011

Project description

Over the past 20 years, California has made substantial investments in intra-metropolitan passenger rail infrastructure, expanding existing systems and building new ones. Such investment has the potential to encourage the growth of mixed-use transit-oriented development, defined as a high-density mix of residential and commercial uses within walking distance of rail stations. Previous studies have attempted to identify the impacts of rail transit investments on land values, residential real estate, and population characteristics. However, little research to date has examined whether rail investment stimulates economic development in the form of retail activity. In this paper, I use geocoded data on the location of retail establishments in California from 1992-2009 to examine whether newly opened rail stations have resulted in a net growth in surrounding retail activity. Results indicate that new rail stations were located in areas with initially high employment density, somewhat outside the city centers, with relatively low household incomes and property values. The impact of new stations on nearby retail activity has been highly varied: while new station openings are associated with increased retail employment in the San Francisco MSA, retail employment decreased around new stations in Sacramento, and did not significantly change in Los Angeles or San Diego.