Does BRT have Economic Development Effects?

In a recent post on Streets.MN, I asked if Streetcars had economic development effects, and concluded we have no evidence to date.

In contrast, for Bus Rapid Transit systems, there is lots of peer-reviewed evidence, though not as much as we might like.

First, obviously the nature of the impacts depends on what kind of BRT you are talking about. Broadly, in the Twin Cities we divide systems into freeway-based BRT systems with stations, and arterial-based BRT systems with stops. The differences are that stations are more elaborate than stops, and less frequent. Worldwide, systems are hybrids.

A 2008 review: Bus rapid transit systems: a comparative assessment by David Hensher and Tom Golob found wide variations in the types of BRT across many dimensions (speed, construction costs, ridership, subsidies, etc.) with some systems offering a peak headway of well better than 1 bus per minute, while others were at 10 minutes between buses.

BRT thus has many distinguishing characteristics, ITDP recently developed a ranking system, the BRT standard. The categories for which points are awarded in BRT Basics are:

  • Busway alignment: 7 points
  • Dedicated right-of-way: 7 points
  • Off-board fare collection: 7 points
  • Intersection treatments: 6 points
  • Platform-level boarding: 6 points

The standard scorecard is more complicated, and includes many other factors as well. The best systems are rated Gold, and so on. I don’t agree with all of the points or categories, but this is a good place to start. The US and Canadian systems (Los Angeles, Eugene, Pittsburgh, Las Vegas, Ottawa) tend to fall into the Bronze Category, though Cleveland’s Health Line makes Silver (appropriate given the color of the buses and its former name “The Silver Line).

[I have not scored the University of Minnesota Transitway (which may or may not be considered BRT (I would, wikipedia is mixed on the matter)), or the Red Line, which were not ranked (but would make a good term paper for a transportation class).]

As many people worry, something can be pitched as a high-quality service, and then whittled down by the time of deployment, or afterwards to save costs. Frankly, this can happen with any technology, just look at what has happened to service frequencies on the Phoenix LRT, which are since 2010 12 minutes, but were 10 minutes at opening in 2008). Clearly as BRT is developed and deployed, this needs to be monitored. But this is true for any service with net ongoing operating costs that can be reduced over time.

Some findings from the peer-reviewed literature are below (sadly some of the papers are behind paywalls, let me know if you wants). Most, but not all of the evidence is favorable to measurable economic development impacts, clearly every system is unique:

  • Bus rapid transit impacts on land uses and land values in Seoul, Korea by Robert Cervero and Chang Deok Kang. “Multilevel models reveal BRT improvements prompted property owners to convert single-family residences to higher density apartments and condominiums. Land price premiums of up to 10% were estimated for residences within 300 m of BRT stops and more than 25% for retail and other non-residential uses over a smaller impact zone of 150 m.”
  • Redistributive effects of bus rapid transit (BRT) on development patterns and property values in Seoul, Korea by Myung-Jin Jin. This study uses simulation, rather than empirical evidence, so keep that in mind. “First, Seoul’s BRT contributes to increased development density in urban centers, acting as a centripetal force to attract firms from the suburbs into urban cores and supporting arguments for Smart Growth proponents. Second, unlike its redistributive effects on nonresidential activities, the BRT has a limited effect on the redistribution of residential activities, implying that residential locations are less sensitive to accessibility improvements made by the BRT than are nonresidential locations. Third, reflecting the transferred space demands from the suburbs to the urban cores, the CBD reaps the highest property value gains, while all of the outer ring zones suffer from reduced property values.”
  • The impact of Bus Rapid Transit on location choice of creative industries and employment density in Seoul, Korea by Chang Deok Kang. “[T]he BRT system is the favorable component for the location of creative industries and service sectors within 500 meters of BRT-bus stops. In addition, the BRT operation increases the employment density within the same distance to the bus stops by 54%.”
  • The Impact of Bus Rapid Transit on Land Development: A Case Study of Beijing, China by
    Taotao Deng and John D. Nelson. “The statistical analysis suggests that accessibility advantage conferred by BRT is capitalized into higher property price. The average price of apartments adjacent to a BRT station has gained a relatively faster increase than those not served by the BRT system. The capitalization effect mostly occurs after the full operation of BRT, and is more evident over time and particularly observed in areas which previously lack alternative mobility opportunity.”
  • Value of accessibility to Bogota’s bus rapid transit system by Daniel Rodriguez and Felipe Targa. “Results suggest that for every 5 min of additional walking time to a BRT station, the rental price of a property decreases by between 6.8 and 9.3%, after controlling for structural characteristics, neighbourhood attributes and proximity to the BRT corridor. “
  • Capitalization of BRT network expansions effects into prices of non-expansion areas by Daniel Rodriguez and Carlos Mojica. “Properties [in Bogota] offered during the year the extension was inaugurated and in subsequent years have asking prices that are between 13% and 14% higher than prices for properties in the control area, after adjusting for structural, neigh- borhood and regional accessibility characteristics of each property. “
  • Walking accessibility to bus rapid transit: Does it affect property values? The case of Bogota ́, Colombia by Ramon Munoz-Raskin . “The main results showed that, with respect to the value of properties in relation to proximity, the housing market places value premiums on the properties in the immediate walking proximity of feeder lines. The analysis by socio-economic strata showed that middle-income properties were valued more if they fell closer to the system, while there were opposite results for low-income housing. Finally, analysis across time reflects slight average annual increases in property values correlated with the implementation of the system in two specific areas analyzed.”
  • Recent developments in bus rapid transit: a review of the literature by Taotao Deng and John D. Nelson. ” In common with other forms of mass transit, a full‐featured BRT has the potential to offer significant effects on land development; the literature review also indicates that more work is needed to investigate this.” (The general cry of the academic – more research is necessary).

All of this is consistent with general observations and what theory would predict about accessibility improvements. A transportation system that adds to accessibility in a significant way warrants a premium in the prices people are willing to pay to take advantage of it.

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