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A Station Area Typology of Economic Opportunity: A Guide to Better Connecting Transit, Jobs and Workforce Development in the Denver Region

Introduction

Most of the emphasis to date on TOD has been around residential development – building compact, mixed-use, mixed-income housing near transit, with shops and services nearby and a variety of transportation choices. Yet economic and workforce development are just as important to incorporate into transit-oriented communities. People who can take transit to work often spend less on transportation costs, saving them money to spend on other things. Employers also benefit by locating near transit in a variety of ways, from gaining access to a larger labor pool, saving money on things like parking and health care and greater convenience to clients and customers. Workforce training providers that locate near transit give potential workers greater access to their services and also lower the cost of taking such training courses in order to find a job. This is especially important for low- to middle-skill workers, who often need training beyond high school to get a good paying job but often do not have the information or resources to get these jobs or access the training for them. It is also important for small, local, neighborhood-serving businesses that often lack the resources to locate or remain in a transit-oriented location that could be beneficial to their bottom line. The purpose of this report is to provide an overview of the benefits to employers and workforce training providers of locating near transit, as well address the barriers that often prevent them from choosing a transit-oriented location. It includes academic research, applied research from think tanks and advocacy groups and case studies from several regions that have programs in place to promote businesses near transit. The review also addresses the gaps in the research and recommends tools and strategies for overcoming the barriers to locating near transit. The report concludes with a typology tool for local practitioners and policymakers to use to attract, retain and grow more businesses in transit-oriented locations, using Denver’s East and West lines as case studies. The audience for this report includes local government staff responsible for planning and investment decisions, employers seeking information on location choices and other stakeholders who are seeking to improve economic opportunity.

Structure of this Report

The first part of this report outlines the benefits of connecting workers to jobs via transit for employers, local government, transit agencies and the workers themselves. The report then addresses the major barriers that workers and employers face in taking transit to work and choosing a transit-oriented location, respectively. The report then provides a roadmap for local practitioners to address these barriers and begin to attract, retain and grow businesses near transit stations. The final section presents a typology tool, using Denver’s West and East Lines as an example, that local governments and other key decisionmakers can use to evaluate and categorize station areas by economic and workforce development opportunities available, and thus identify places to prioritize and focus resources on transit-oriented employment.

Why Does the Denver Region Need This and Why Now?

There are many reasons that firms choose a certain location. The most common rationale for placing jobs and businesses by transit is the sustainability factor – it promotes smart growth and sustainable transportation modes like public transportation, biking and walking. There is also the “cool factor” of being in vibrant, walkable neighborhoods where employees, mostly younger workers, increasingly want to work in these types of places. Few efforts have documented the benefits for locating jobs and businesses that improve the economic outcomes for disadvantaged communities. Yet without such an argument, we risk developing regional transit systems that only support access to high-skill jobs and/or high-end businesses. This is especially critical to the Denver region, where several lines under construction run through communities with a high number of small businesses (West Corridor) and middle-skill jobs (East Corridor). Without an emphasis on these job opportunities, resources will be allocated mostly to the high-skill workers at anchor institutions and business travelers going to the airport. The Denver region also has not focused on economic or workforce development along existing transit corridors – the Southeast Corridor runs through the Denver Tech Center, which is made up mostly of high-skill jobs, while the Southwest Corridor runs through an industrial corridor with poor connections to the light rail stations from job centers. Decisionmakers can learn from these examples, and others across the country, to mitigate the risks of further isolating those workers and communities most in need of access to economic opportunities.

Why Small to Mid-Size Businesses?

We focus on small to mid-size businesses (<500 employees) because Colorado is a small business state – small businesses comprise 98% of the state’s employers and employ 50% of the states employees. Indeed 50% of employees in the state work in a business with 1 - 500 employees and 20% work in firms with fewer than 20 employees.1

Why Locally Owned?

We focus primarily on locally owned small businesses because according to national research, $68 out of every $100 spent at a locally-owned business remains in the local economy versus only $43 for non-locally owned firms.2 Economic impact studies show that money spent with local businesses recirculates at least 3 times more in the local economy than money spent at non-local firms.

Why Key Growth Industries?

Working with the City of Denver’s Office of Economic Development, we have identified key a sub-set of industries (Manufacturing, Transportation/ Warehousing, Finance/Insurance, Professional/Scientific/Technical Services, and Health Care/Social Assistance) that are forecast to be key drivers of our regional economy going forward and that are most likely to produce good quality jobs for middle skill workers.

Why Good Middle Skill Jobs?

We focus on middle skill jobs (defined as those requiring more than a High School diploma but less than a 4-year bachelor’s degree) because 49% of our state’s workforce is a “middle-skill” worker.3 Middle-skill jobs acct for 47% of CO’s jobs today and will acct for 39% of job openings in the next decade.4 Additionally, we are focused on growing good middle skills jobs, which we define as those that meet Denver County’s regional self-sufficiency standards. We've mapped these standards, determined by hourly wage as well as salary, to the region’s growth industries, leading us to identify the sub-set of industries noted above as our area of focus. Why High-Frequency Transit?

Finally, Mile High Connects is focused on proximity to high frequency transit because it creates opportunities for those without an automobile, who are disproportionately low-income, minority, and non-college educated, workers. Using public transit instead of personal automobiles can save households thousands of dollars annually.

Notes

  1. US Dept. of Commerce, Bureau of Census, Statistics of US Businesses
  2. Civic Economics, 2005. The Andersonville Study of Retail Economics
  3. National Skills Coalition, 2011: Colorado Fact Sheet.
  4. Calculated by National Skills Coalition from the Bureau of Labor Statistics website.