By Efram Stone, MSCE & MPL 2017

My previous two columns explored technical issues that are important to understand when using data for transit-related projects. In this article, I decided to discuss a sensitive topical issue that has been discussed in two recent publications. This issue is the impact of transit on rents. Transit is an amenity, and all additional amenities in a neighborhood are expected to increase the price of housing there, whether the amenity is transit or something else entirely, such as a new park. In New York, rents are expected to be higher near transit, and even higher near “express” stations (which have faster, more frequent service). Increases in rents can push out the people who lived there previously, causing gentrification and displacement. In the context of historically high rents in cities such as Los Angeles, increased displacement due to transit development has been a growing topic of concern.

These worries are spotlighted by an article that appeared in the April issue of the UCLA Magazine, which discussed the research of the Urban Displacement Project. This is an on-going collaborative research effort between researchers at UCLA and UC Berkley which looks at the causes of displacement in the Los Angeles and San Francisco areas. Rent is only one of the variables they examined, with direct indicators of displacement such as with change in low-income and minority households being key to the analysis. However, their detailed methodology for the Los Angeles area has not been published at this time (although an interactive map is available on their website http://www.urbandisplacement.org/map/la), and the article in UCLA magazine consists mostly of anecdotal evidence gathered by the journalist who wrote the article. As such, although the preliminary results seem sound and intuitive, the study may have deeper issues which would only become apparent upon reading the full study, so it is best to reserve judgement for now.

The Urban Displacement Project study is not the only recent study of the impact of transportation on housing prices. In May 2016, the Los Angeles Metro released its quality of life report. This report looked at the changes in rents between 2008 and 2015 near Metro stations, as compared to the corresponding “submarkets”, which are large areas such as the San Fernando Valley or Downtown LA. The Metro report concluded that “generally, lease rates near stations did not increase more quickly than the corresponding submarkets.” This conclusion seems counterintuitive and contradicts the previous report.

However, there are multiple possible reasons why this may be the case. Firstly, most of the Metro lines included in the study opened at least 3 years prior to 2008 (with the exception of the Expo Line and the eastside extension of the Gold Line), so it is likely that proximity to those stations had already been factored into the price of housing in 2008. As such, it is possible that average rent increases could be disproportionately effecting people who live near transit if rents in those locations were higher to begin with, pushing renters past endurance and causing displacement.

The second possibility is that the conclusion that rents near Metro stations are not increasing faster than they are in the corresponding “submarket” is affected by the choice of “submarket” boundaries and size. In the first article in this series, I discussed how averaging over large areas can smooth out data points, giving the illusion of false uniformity. However, it is possible that using smaller areas would give different results. Additionally, it is possible that the choice of boundaries for submarkets is skewing the results. For example, I note that the Burbank/Glendale/Pasadena submarket includes the entire eastern San Fernando valley, which is not included in the San Fernando Valley Submarket. It is possible that choices like this impact the results. It should also be noted that this analysis is brief and does not explain methodology in detail.

In conclusion, although two new reports have been produced showing seemingly opposite conclusions regarding housing prices near transit, the lack of detailed methodology on either report, as well as the fact that “increase in rents” and “displacement” are different enough goals to cause ambiguity, makes it hard to determine which report is more accurate for the Los Angeles region. However, the fact that transit stations cause rent to increase is backed up both by common sense and the evidence of other places such as New York. Of course, these other cities are different enough that we can’t be sure until a detailed study that specifically covers Los Angeles is published, such as a METRANS study about affordable housing and transit oriented development which is currently being printed.

The fact that Metro stations cause displacement is perhaps harder to prove, but would seem to follow from high and rising prices, coupled with a decline in income. The policy prescriptions to fix this problem are much murkier. The general prescription given by the Urban Displacement Project is “lots of dense development with lots of affordable housing,” which is the same general solution usually applied to the county at large to fix the housing crisis. That being said, it is wise for transportation planners to take note of this effect when constructing new transit projects.

Sources:

Los Angeles Metro. How Is Metro Measuring Up? 2008-2015 Quality Of Life Report: The Full Study. Accessed at: http://media.metro.net/docs/report_qualityoflife.pdf

Urban Displacement Project. What Is The Nature Of Gentrification In The Bay Area and Southern California?  Accessed at: http://www.urbandisplacement.org/

Berg, Nate. “Neighborhood Watching: What Are The Unintended Consequences Of Building The City Of Tomorrow” UCLA Magazine, April 2017. Accessed at: http://magazine.ucla.edu/features/neighborhood-watching/

Efram Stone

Efram Stone is a dual Masters student in the Transportation Engineering and Transportation Planning programs at the University of Southern California who is also working on a GIS Certificate there. Efram’s interest in transportation began at a young age when he attended elementary school next to a major infrastructure project, and has continued unabated since. Efram plans to graduate in May, 2017. He can be reached at [email protected].