The Denver, Charlotte, and Minneapolis-St. Paul regions all opened new light-rail lines between 2004 and 2007, aiming to enhance their transportation systems and at the same time encourage efficiently-placed real estate development.
They got much of what they were looking for. “All three transit lines experienced a tremendous amount of new development” — 6.7 million square feet along the Twin Cities’ Hiawatha Line, 7.8 million square feet along Denver’s Southeast Corridor, and 9.8 million square feet served by Charlotte’s Blue Line, says a new report from the Center for Transit-Oriented Development.
The 80-page analysis, Rails to Real Estate: Development Patterns Along Three New Transit Lines, says residential construction came on particularly strong. In the Twin Cities, 86 percent of the development near the 12-mile Hiawatha Line was housing. In Denver, 68 percent was housing, and in Charlotte, 54 percent.
But if anyone expected development to crop up at every station, there was cause for disappointment. Transit-oriented development (TOD) concentrated primarily in areas that already had plenty of jobs or amenities to offer.
Seventy-two percent of development along the Hiawatha Line clustered in downtown Minneapolis. Sixty-four percent of development served by the Blue Line arose in Charlotte’s downtown. Much residential construction along Denver’s Southeast Corridor appeared to be the result of being near the Denver Technology Center, a major employment center.
Rails to Real Estate suggests why some rail-served locations appealed to developers and residents, while others didn’t. The answers vary from one metro area to another.
In Denver’s southeast suburbs, the 19-mile Southeast Corridor line — the second of what will eventually be a regional network of light-rail lines — was built in the right-of-way of Interstate 25. That turns out to have been a bad decision, at least from a real estate and community-building perspective.
Says the study:
While freeway adjacency provides increased accessibility to the area, it also poses major barriers to TOD. The exhaust and noise of the freeway limit the building forms and land uses of parcels that abut I-25 and the stations. New projects are often built in a way intended to mitigate these effects, forming visual and physical barriers between the freeway and nearby areas; unfortunately, because the stations are also next to the freeway, these also form barriers to transit.
Pedestrian bridges have been constructed to enhance access to the stations from both sides of the freeway, but the presence of the highway limits the amount of land that is truly transit-accessible. Finally, the excellent automobile access provided by the highway encourages driving and necessitates the provision of a large amount of parking, which limits both development density and the potential for a vibrant pedestrian-scaled environment.
The most substantial development along the Southeast Corridor emerged around six stations serving the Tech Center. Because much of this new development was residential, “the result was that each of these station areas grew to include a more diverse mix of land uses, where it is now possible to both live and work,” the report notes.
Going where the lights are bright
In both Minneapolis-St. Paul and Charlotte, “the introduction of light rail coincided with a boom in downtown development,” the Center says. The downtown boom in these cities “appears to be in large part an outgrowth of long-standing efforts at revitalization.”
“While the light rail was not a major factor stimulating development in these two downtowns, improved access to downtown entertainment and cultural amenities [was] an important factor making nearby station areas newly connected to the downtown attractive places for development,” the report suggests.
In Bloomington, Minnesota, at the southern end of the line from Minneapolis, a major mixed-use development, Bloomington Central Station, has been planned by McGough Companies for a 43-acre site formerly occupied by control Data Corporation, and for two adjacent properties. Two 17-story condominium towers opened in the McGough development in 2006.
“These condominium towers took many years to sell out, but have reportedly been very popular with empty nesters and second homeowners who value the transit, including accessibility to the airport,” says the report. The developer designed the project to maximize the benefit of being situated near transit. Transit has apparently not boosted the prices of the units, but it has been “a key factor” in generating sales, according to the report.
The Center for Transportation Studies at the University of Minnesota recently found that near several stations of the Hiawatha line, the light-rail line had a significant positive impact on property values — but only on the line’s west side. The geographic limitation was attributed to the influence of major industrial uses and a four-lane arterial road, which largely cut the stations off from residential neighborhoods to the east.
Need for planning
In Minnesota, station area plans were adopted to establish a vision for the areas around each station. These required a more elaborate planning process than had initially been expected. Over time, Minneapolis’s planning efforts grew more sophisticated, and residents became more comfortable with TOD concepts. “As a result,” the report notes, “later plans in neighborhoods along the line were more likely to allow for more intensive development.”
The City of Minneapolis used pedestrian overlay districts to restrict auto-oriented uses and require pedestrian-oriented design features. Zoning changes began in 2006 and are still under way.
Around the stations in some neighborhoods, development has been much sparser than in downtown Minneapolis or in Bloomington. According to the report, development in the Minneapolis neighborhoods ran up against several difficulties: “small and scattered opportunity sites, a need for improved pedestrian connections in the areas surrounding the new stations, and limited neighborhood amenities such as parks or retail.”
“Beyond planning efforts and assistance for affordable housing projects, Minneapolis had limited resources to devote toward pedestrian connections or other neighborhood infrastructure in the neighborhoods,” the report says. The City of Bloomington, by contrast, “has shown a great deal of support for the Bloomington Central Station project, and is working closely with the developer to assist with financing needed improvements.” Such help has been easier to orchestrate because of the project’s large size and single ownership.
“Studies of the Hiawatha line have found that the limited connectivity between the stations and the neighborhoods to the east has limited ridership, and the limited access by these stations has resulted in uneven patterns of property value impacts from the new light rail,” the report observes.
The region appears to have learned from its experiences. The next phase of light rail, now under construction, is the Central Corridor, which will link downtown Minneapolis to downtown St. Paul. “There is widespread acknowledgment by the two cities and other public agencies that it will be important to find ways to be more proactive and coordinated about public investments along the line,” says the report.
Leaders from the cities, counties, the regional planning agency, and the state housing finance agency have formed a working group to develop a Central Corridor TOD Investment Framework. “This framework will consist of a comprehensive, multi-jurisdictional set of strategies to leverage public investment to attract, shape, and accelerate appropriate TOD investment throughout the Central Corridor,” the Center explains.
In Charlotte, where the bulk of new development has been in the downtown and in a nearby historically manufacturing area known as the South End, the challenge is to see whether transit-oriented development can also be brought to station areas that lie farther south. “Areas further along the line will require a significant investment in pedestrian infrastructure and other neighborhood amenities,” the report states.
The outlook for Charlotte, the report suggests, is bright: “The City of Charlotte has been very proactive in its efforts to promote TOD, and voter-approved bonds for station area infrastructure such as streets, streetscape and sidewalks have proved to be very important in encouraging transit-supportive development.”