Friday, December 4, 2009

What is "Economic Development"?

What comes to mind when someone says that light rail, streetcars, or BRT will bring economic development? My first guess is that people imagine that more buildings will be constructed along the route and the economic impact of that construction is what comes to mind. But what about other measures of economic development like worker productivity and connectivity to the regional employment pool?

I think too often economic development comes in one form when we're talking about transit, which I think might be going down the wrong path. We know that transportation decisions which provide or increase access to a place are likely to increase its value and ability to develop. But what about all the other benefits such as fostering denser employment clusters or connecting workers of all economic levels to regional jobs? Increases in the quality of workers that an employer has access to is another measure of economic development. Allowing workers to save money on transportation in order to spend it elsewhere is local economic development as well.

The related issue is who gains from this economic development. With the building construction based economic development, its easy to assume that developers and the people that buy the new condos are the only ones who benefit. This type of thinking creates a flash-point on which opposition to your project can zero in on to say you're not helping the people that need it the most. It's a valid concern but it's also missing out on the creation of tax base that goes back into the budget for the whole city to use. Denser areas for their part are huge economic engines. Not discussing this larger view of economic development is doing a disservice to the project, especially when you think through how the specific project will or will not help the situation.

If the main reason for a project is economic development, it would be helpful to describe the economic outcomes that you expect to achieve with the project. A streetcar or light rail line is going to provide a mobility benefit, but it is how we talk about those benefits that ultimately allow people to understand what the project is really about. Many projects don't do a good job at this and are maligned by the opposition. Many bad projects get oversold, hoping that "economic development" will save the day. I believe the key is to figure out whether the project is doing what its supposed to be doing, and move forward from there.


Matt Fisher said...

Yes, I agree that BRT brings development almost on a scale like rail does: For example, some TOD has occurred in Ottawa around Transitway stations and has been attributed to BRT. There are other examples I don't want to list here, but of course rail does better at it than a busway.

Faith said...

It seems as though there are different components of economic development:
- TOD development (typically housing with some retail, although sometimes office)
- Job growth (often encouraging small businesses to start or relocating large departments/facilities of major firms)

With the first, the relationship to transit is clear; with the second, transit is not required nor is there often a correlation made. I think the job growth component should be brought closer to the discussions around transit.

The jobs (or lack thereof) in a particular corridor or region affects transit ridership projections significantly. Furthermore, there are substantial reprocussions in other areas to the decrease in jobs. One example is the inability to solve the foreclosure crisis: no housing program can successfully address many individuals facing foreclosure for lack of a well-paying job.

While growth in tax base is important, it is often described in terms of the value of new housing. Perhaps other measures should be included such as the number of new jobs (and the average wages paid), number of new businesses, and the potential to maximize the use of new transit infrasture and minimize the cost of commuting by paying close attention to the location of those businesses.

Matt Fisher said...

Besides Ottawa, there's also Cleveland and the Euclid Corridor as an example. I wish there was rail, but BRT can sometimes bring development on a positive scale like rail does. And BRT is a "green" transit mode.

Matt Fisher said...
This comment has been removed by the author.
Matt Fisher said...

Okay, BRT is not as "green" as, or greener than, rail.

G.P. Edwards said...

We also forget that many transportation planning or operating agencies engage in more direct forms of economic development than providing the transit infrastructure around which growth will (or will not) occur. To take perhaps the most famous example, the Port Authority of New York & New Jersey—which operates just about everything that moves in NYC—owns the WTC property, which once was (and still might be) the most important symbol of the US economy.

BruceMcF said...

When a transport mode is more energy efficient, and especially if it can allow a shift from imported to domestic energy resources, there is also the increase recirculation of income inside the region and increased regional employment multipliers for whatever base employment exists.

Scottieie said...

Apologies if this was already mentioned in the article or comments, but am catching up on my reading. I think the important role of transit, BRT, LR, CR or otherwise is to shape a community.

Good transit is an anchor for good development. The development is going to happen regardless of whether we have good transit or not. If we don't have good transit, you get sprawl, parking lots and streets designed to whisk you from one place to another with little concern for those without vehicles.

Transit projects are about place building and serve to shape the overall pattern of development. In that respect, they serve to revitalize cities long since neglected. This serves as an economic engine of sorts, not only during the initial reconstruction/construction but afterward creating an agglomeration of skilled people in an area (repeating this from paragraph 2), thereby bettering the cities economic potential.

+1 to BMcF on keeping the economic engine more local too!