The New York Times Is Wrong About Transit’s Effect on Urban Development

The New York Times has once again published a report claiming that transit hubs are a "growing lure for developers." The Times published a similar story eight years ago, and I quickly showed that subsidies from tax-increment financing (TIF) and other government support, not transit, was what stimulated those developments.

So has anything changed since then? Nope. The first development described in the recent story by Times reporter Joe Gose is Assembly Row, in the Boston suburb of Somerville. Is it subsidized? Yes, with at least $25 million in TIF along with other state funds. Far from being "free money" as its advocates claim, TIF steals from school districts and other agencies that rely on property taxes to subsidize developers.

Then Gose mentions Chicago's Fulton Market, downtown Kansas City, Austin, and Denver's RiNo neighborhood. Fulton Market just happened to receive at least $42 million in support from the city of Chicago, much of which comes from TIF. 

Supposedly a new streetcar sparked a revitalization of downtown Kansas City. But could it be that revitalization was due more to Kansas City's twenty-four downtown TIF districts?

Gose doesn't specify a particular neighborhood or development in Austin, Texas. Of course, Austin is one of the fastest growing cities in America, so anything that's open for development is going to be developed. But not satisfied to let the market work, Austin has heavily bought into the use of TIF districts. Transit is an afterthought in Austin, carrying less than 1 percent of the passenger travel; the city's sole rail line was a huge flop that cost way more than expected and now carries fewer than 1,500 round-trips per weekday.

Denver's RiNo neighborhood--RiNo being short for River North--is growing thanks to at least $44 million on infrastructure improvements in that neighborhood, plus additional TIF funds for special projects.

In Washington, DC, Gose mentions a $3 million project "in Washington's fast-growing Capital Riverfront neighborhood." That's the same neighborhood that received at least $198 million in TIF subsidies.

Gose also refers to Tysons Corner, which has seen new development since the opening of the Silver Line. What he doesn't mention is that the developers were perfectly happy to do that development without the Silver Line, but planners wouldn't let them do it until the Silver Line was built, saying that transportation to the area couldn't support increased density. The Silver Line didn't stimulate the development, but it did give Fairfax County an excuse to rezone the area to allow for more development.

Transit serves most neighborhoods in most cities while only a few areas are in tax-increment districts. Is it just a coincidence that all of the examples in the Times article are in TIF districts? Which is more likely: that development is being stimulated by transit lines that carry, in most of these cities, less than 3 percent of travelers? Or that it is stimulated by the TIF and other subsidies? And why doesn't the Times even hint that government subsidies, not rail transit, just might be the reason why these areas are getting redeveloped?

To answer these questions, Mr. Gose should have looked at transit corridors that aren't getting huge amounts of redevelopment subsidies, such as Denver's West light-rail line; Portland's streetcar line after it leaves the Pearl District (where, according to page 15 of the Portland Development Commission's latest budget, developers have so far received $344 million in TIF subsidies); or Green Belt, Maryland. None of these areas have seen a lot of redevelopment.

Then Mr. Goes should have looked at redevelopment districts that aren't on major transit corridors. There are a lot of TIF districts in Columbus, Indianapolis, Omaha, Wichita, and other cities that haven't spent much on transit but still got redevelopment. What he would have found is that transit hubs without subsidies see minimal new development, while redevelopment districts with subsidies see lots of new development even if they have minimal transit service.

Of course, TIF doesn't cause an urban area to grow any faster--and it may even cause it to grow slower. All it really does is influence the location of new development that would have taken place somewhere in the area anyway, which is nothing to cheer about unless you are one of the lucky property owners or developers to get the subsidies.

The Times' 2009 article had been inspired by the 2009 annual conference of the Congress for the New Urbanism (CNU), which has an almost religious love of transit. The most recent CNU conference took place just a few weeks ago, and Joe Gose has cited CNU in his articles before, so I have to wonder if he attended that conference. If so, then maybe he'll learn that next time he attends a political rally he should try to get a different point of view before reporting the claims made at the rally as facts.