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What Happens to a Capital Investment in Public Transportation? It sparks an economic chain reaction that generates business activity, creates jobs, boosts property values and tax earnings, maximizes transportation spending, and gets more people to work. At a time when competition for resources is fierce, capital funding for public transportation is an investment in America's business that makes economic sense. Public Transportation Pays Off
Sparks Business Activity In project after project, a capital investment in public transportation sparks a chain reaction in business activity that far exceeds the initial investment. The dollars flow to hundreds of industries, from specialized rail or bus construction firms to maintenance and software suppliers. In St. Louis, a 25-year modernization and expansion of the public transportation system is expected to bring a $2.3 billion return in business sales. In Chicago, the Metra commuter rail system's 20-year "good repair" strategy could add up to an estimated $4.6 billion in business sales. New businesses and developers are drawn to transit stations, where a solid customer base and consumer demands create a robust business environment. The Virginia Railway Express station in Manassas Park near Washington, DC, has jump-started commercial activity, helping revitalize the community. In South Orange, NJ, North Hollywood, CA, and dozens of communities in between, transit villages are springing up around transit stations, which are becoming hubs for new businesses as well as cultural activities. The $16 million transit village in construction around DART's new Downtown Plano Station features 238,000 feet of housing and commercial space. Generates Jobs A capital investment in public transportation translates into thousands of private-sector jobs in the design, construction, and manufacturing industries and in the retail and retail/wholesale trade sectors-not just in the regions served but throughout the country. Champion Bus, Inc. of Imlay City, MI, puts 365 people to work every day, building buses that serve rural and mid-size communities across America. In places such as Plattsburgh and Hornell, NY, and Sacramento, CA, hundreds of workers are assembling orders for rail equipment. The list goes on and on, but the message is the same: public transportation products that serve communities every day also help boost the business activities of other states.
Beyond the jobs directly created by new construction or renovation are the jobs created by the ripple effect of a capital investment in public transportation. Consumer spending by transportation workers and riders attracts new businesses that hire new employees. In New York, the East Side Access project, bringing the Long Island Rail Road to Grand Central Terminal on Manhattan's east side, will strengthen ties between Manhattan and growing business centers in neighboring Nassau and Suffolk counties, and support regional employment growth-with expectations of 375,000 jobs and $26 billion in wages. New Orleans expects the economic activity generated by its Canal Line to create over 1,661 new jobs. Add to this the jobs created at the system level. For example, Tri- Rail of South Florida expects its five-year transit development plan to generate 6,300 ongoing system-related jobs, in areas such as operations, maintenance and other industries. And as systems attract riders, corporations set up shop around transit stations. Motorola's new cellular phone factory in Harvard, IL, at the end of the Chicago Metra, draws on a large labor pool with easy access to Metra. In Atlanta, BellSouth is consolidating all its suburban offices into three downtown locations convenient to the city's public transit system. Boosts Property Values, Tax Revenues When capital investments are made in public transportation, property values near transit stops swell, as do tax revenues. The 19.2 percent return on investment that the Metrorail system is expected to generate for the Commonwealth of Virginia includes additional tax revenues of $2.1 billion. The impact is felt on the regional level as well. NJ TRANSIT's Kearny Connection has raised the values of homes near rail stations in towns on the Morris & Essex Lines by $30 million, and boosted local tax revenues by nearly $6.7 million. In the Chicago area, homes within a half mile of a suburban rail station on average sell for $36,000 more than houses located further away. Fannie Mae now even offers special mortgages for buyers of homes near public transit.
Public transportation also puts the brakes on migration out of urban areas and promotes long-term stability. In fact, it's a magnet for urban growth. Developers are pouring millions into corporate buildings, sports facilities and entertainment complexes near transit stops in northern Virginia, Portland, San Diego, Denver, Chicago, Baltimore, Los Angeles, Dallas, St. Louis, New Jersey, and New York-boosting property values and generating millions in additional tax revenues. Connects Employers to their Work Forces From suburb to city, from city to suburb and from rural areas to metropolitan centers, a capital investment in public transportation links people with jobs. Most suburbanites who ride public transportation are headed for work. And systems are being created especially to reach specific commuters. San Jose's business community were early proponents of the highly popular Altamont Express Commuter Train as a link to Silicon Valley's work force. For service or entry-level employees with limited mobility options, public transportation is an important link to suburban-based employers. The success of the Greater Lafayette, IN Public Transit Corporation in linking workers to jobs in outlying areas is so valuable that local businesses are underwriting the costs of their employees' bus commutes. In suburban Detroit, the Job Express service of SMART (Suburban Mobility Authority for Regional Transportation) connects bus riders with 800 employers and 16,000 jobs. Businesses save in other ways as well. In New Jersey, over 1,200 firms take advantage of NJ TRANSIT's BusinessPassT program, which, by allowing employees to deduct a portion of their public transportation costs from their pre-tax salaries, reduces payroll costs and saves taxes for both employers and employees. The same is true in rural areas. In Canyon County, ID, Treasure Valley Transit helps 91,000 residents dispersed over 583 square miles get to jobs, shopping, schools, and health care providers. Sweetwater Transit Authority Resources in Wyoming helps thousands of residents within a 10,000-square-mile service area reach work sites. Multimodal transportation network moves Silicon Valley, the center of the high-tech world. Although the valley is served by a high-frequency bus network, over 30 miles of light rail, Amtrak's Capitol Corridor San Jose-to-Sacramento service, Caltrain's 77-mile rail route, the Altamont Commuter Express, paratransit and shuttle services, residents are clamoring for more transit. In November 2000, voters overwhelmingly passed a ballot measure to fund more than $6 billion in new transit projects. In Silicon Valley, public transportation is recognized as the smart choice for employers and employees alike.
MetroLink drives revitalization in St. Louis. The 35-mile, 27-station MetroLink stretches from Lambert International Airport in St. Louis to Southwestern Illinois College in Belleville, Illinois. Daily ridership, expected to reach 37,500 after 20 years in service, exceeded that figure after only five years. Ridership continues to grow, averaging 44,500 a day in 2000, with the overwhelming majority-79 percent-new transit riders. Opened in 1993, MetroLink has been extended once, at a total cost of $803 million, and is now undergoing a 20-mile Cross County Extension; three additional extensions are under consideration.
Sources American Public Transportation Association, American Public Transportation Association, Brewer, Johanna M., "'Village' life-Plano, DART, Amicus Partners bring latest development trend to downtown." Plano Star Courier, May 31, 2001. Campaign for Efficient Public Transportation, Dollars & Sense. www.ctaa.org., 2001. Cambridge Systematics, Inc. with Glen Weisbrod Associates, Inc., Public Transportation and the Nation's Economy. Washington, DC, 1999. Holt, Nancy D.,"Railway Agencies Play Bigger Real-Estate Role." The Wall Street Journal, May 2, 2001. Longman, Phillip J., "American Gridlock." U.S. News & World Report, May 28, 2001. Metropolitan Transportation Authority, East Side Access Project Update. New York, NY, Spring 2000. NJ TRANSIT, Business Transit Alliance brochure. Newark, NJ, 2001. Weyrich, Paul M., and Lind, William S., Does Transit Work? A Conservative Reappraisal. Washington, DC, 1999. Telephone interviews with:
For more information, contact: American Public Transportation Association |
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American Public Transportation Association / 1666 K Street NW • Suite 1100 • Washington, DC 20006 • 202.496.4800 • pt2info@apta.com |
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Across
America, investment in public transportation is paying off - in a big
way. In urban areas from Dallas to St. Louis to San Jose, as well as
in smaller communities from Manassas Park, VA, to Sweetwater, WY, the
$27 billion-per-year public transportation industry is putting federal,
state, and local investments to work. This successful public/private
partnership is building systems that are generating thousands of jobs
in the private sector, and stimulating economic development to an extent
that far exceeds expectations. Returning up to six dollars in economic
and other public benefits for every dollar invested, while enhancing
the quality of life for millions of Americans, public transportation
is a sound investment in America's business - and in America's future.
"Indeed,
development atop Los Angeles subway stops already is revitalizing
Hollywood Boulevard... from affordable apartments and neighborhood
retail at Western Avenue to a 640,000-square-foot, entertainment
retail complex and a 640-room hotel at Highland Avenue."
