The causal story people need to understand here is that transit investment increases land values.
SEPTA renovated an important rail station at Wayne Junction. Now it is more convenient and useful for people. Naturally more people want to use the land around the station now for housing and business to take advantage of the increased usefulness. But there is only so much land, so land values are getting bid up.
The higher land values are a signal to developers that they can earn a profit selling and leasing space to people and businesses, so we are seeing more investment in residential and commercial space:
The Wayne Junction SEPTA Station renovation has been underway for a little over a year and already developers and community groups are buying up nearby property, anticipating increased demand for living and working close to one of Philly’s busiest transit hubs.
The Frank Furness-designed station was rebuilt in 1900. It sits at the nexus of Germantown and Nicetown, and serves five different regional rail lines, making it one of the most heavily trafficked train stations in the city. Now, a $25 million renovation will bring the neighborhood anchor into the future, and hopefully spark the area’s transformation.
Though progress has been slow, private investment has begun to pick up on the Germantown side of the station, notably in the Wayne Junction Industrial Historic District. Lower Germantown has tremendous potential — it is rife with beautiful, historic, underutilized buildings. Last year, developer Ken Weinstein of Philly Office Retail bought the former Max Levy Autograph Co. building on Roberts Avenue.
It’s the same story with all the SEPTA stations. The land around all of them is valuable. Developers would build a bunch of mixed-use buildings around many of them if they were allowed to.
But in many cases they are not allowed. SEPTA owns the land around some of the stations, and operates them as big surface parking lots – totally wasting the high land values they’ve created on dead space and idle vehicles instead of useful buildings.
In many cases local governments have zoned the land around rail stations for low density uses, squandering the high land values on a needlessly small amount of usable space.
One thing I find incredibly frustrating about the state-level debate over transportation funding, and transit in particular, is how divorced it is from questions of land use.
Everybody claims to want cost-effective transportation infrastructure, and there’s always a lot of political squabbling over which mode of transportation is sucking up the most subsidies. But an equally important issue that never gets addressed is whether the land uses near transit are cost-effective.
Are the land use regulations around rail and bus stations contributing to low ridership numbers? Is SEPTA’s prioritization of convenient car parking over convenient pedestrian access contributing to low ridership numbers? Obviously they are to some degree. So why isn’t the state making transit funding conditional on local zoning rules that encourage development patterns like the kind around Wayne Junction? Why aren’t we funding transit by taxing the higher land values created by the public’s investment in transit?
(via Greg Meckstroth)