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Role of Transit Service Providers in Land Development

A July 2013 report by the Department of Civil, Construction, and Environmental Engineering at the University of Alabama exploring the use of land development as a funding mechanism for transit operating expenses has been added to the Resource Center best practices database.

Compared to transit operations in the United States, several foreign counties have been very successful in transit development. One particular strategy is to encourage (and subsidize) transit service providers to compete and invest in land development.

While various transit development initiatives, such as integrated transit and land development and transit-oriented development, have been proposed in the past, many transit agencies in the United States are experiencing declining ridership and increasing dependence on government subsidies for operating costs.

"Role of Transit Service Providers in Land Development" identifies barriers that need to be overcome in order for transit agencies to reap the benefits from investing and participating in land development.

This study also conducted a cost-benefit analysis on data from the financial reports of two agencies praised in the literature for their involvement and investment in land development, the Washington Metropolitan Transit Authority and the Mass Transit Rail Corporation. The analysis showed that participation yields significant profits, but participation coupled with investment is extremely profitable, with a calculated internal rate of return for the MTRC‘s property development activities being 571%.

Read the executive summary and download the full report.