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Enhancing Economic Opportunity through Transit: Lessons Learned from Denver’s Southeast Light Rail Line

Introduction

The Denver region is currently embarking on one of the most ambitious and extensive investments in new rail and bus service in the United States. In less than a decade, the $7.8 billion FasTracks transportation infrastructure project will connect much of the Denver Metro region with 122 miles of new commuter and light rail, 18 miles of bus rapid transit, 70 new transit stations and a variety of other expanded multimodal options.1 This investment has the potential to expand the reach of opportunity for many people, providing better connections between housing, jobs and other essential destinations. New transit service will provide more transportation options to major job centers and educational institutions that provide career ladders and workforce training for people of all incomes and skill levels. Other regions are watching closely to see how the network is built out and if transit can spur new development and redevelopment of existing assets in station areas, as well as how transit will improve social equity for the Denver region’s most economically disadvantaged residents.

Improving access to economic opportunities via transit is especially important to households with lower incomes, who spend a greater proportion of their income on housing and transportation and often have to travel long distances to find good-paying jobs and the training needed to get them. While only around 18% of all trips are made by public transportation, approximately 59% of all trips by public transportation are made for employment purposes.2 Traditionally, however, most research and planning efforts focused on transit-oriented development emphasize residential development, with little consideration of how to attract, retain and grow businesses and jobs by transit. In the Denver region, most station area plans mention economic and workforce development by stating that it is a goal to sustain and grow jobs near the station, but without any concrete action steps to achieve these outcomes.

The purpose of this memo is to examine the economic, workforce and real estate development changes that occurred after the Southeast light rail line (hereinafter the “Southeast Line”) opened in the southeast Denver metropolitan region in 2006 and use the lessons learned to guide future planning and policy decisions along future transit corridors in the region. This memo is part of a larger research project to analyze the current landscape and understand what has been done to date to improve social equity in the Denver region through increased transit accessibility. To date, little research has been done on the impact of the investment in light rail on the Southeast Line on new business attraction and job creation, especially for those workers with less than a bachelors’ degree.

This analysis delves into publicly available data sources, as well as survey data of business owners along the Southeast Line, to gain a better understanding of what happened after the Southeast Line opened and inform planning decisions being made on other corridors and ensure that the Denver region is providing access to opportunity for everyone.

Key Findings

Job opportunities along the Southeast Line are primarily in office-based, professional industries. The Southeast Line runs through the Denver Tech Center, which contains the second largest concentration of jobs in the Denver region, outside of the central business district. The majority of jobs along the corridor are in office-based industries (primarily professional and scientific, healthcare, and finance and insurance). These jobs also are clustered closer to the transit station than jobs in other industries.

Job growth occurred mostly in higher-income careers, but large increases in health care jobs suggest more middle-skill job opportunities. The majority of job growth along the line since it opened has been in jobs that pay more than $40,000 a year, which may suggest that most new jobs require higher levels of education and training. Office-based industries saw the highest job growth after the light rail line opened, though the recession impacted job growth toward the end of the study period and the number of office jobs actually saw a net decrease. Health care was the only industry to see a large increase in jobs after the light rail line opened, and since this industry includes a significant percentage of middle-skill workers, there may be more opportunities available than before the line opened.

Job growth in low- to middle-skill industries remained stagnant or decreased. Besides office and healthcare jobs, job growth in industries with middle-skill jobs did not see a bump after the light rail line opened. The Denver Tech Center has not traditionally been a center for jobs in the manufacturing, construction, wholesale trade, and transportation and warehousing industries, and the number of jobs in these industries remained fairly constant during the study period.

Very few work-supportive services or affordable housing units have been built along the Southeast Line. In contrast to other parts of the region, there is a dearth of workforce training providers, childcare facilities and affordable housing units in close proximity to the Southeast Line. Very few of these resources have been built in transit-oriented developments along the line, so workers have to travel long distances to get the training they need, take care of their children and find an affordable home if they work along this line. The lack of these resources also makes using transit a significant challenge for those who could benefit from using it the most.

Transit is not the driving force in the location decision of employers, but it is a top consideration. Surveys of business owners reveal that few considered the light rail line when choosing their current location, though this is partly because the Southeast Line was a major job center before the line opened and many employers have been there for a long time. However, employers do value their proximity, ranking it third overall from a list of various considerations they make in choosing a location. Employers also ranked other built environment-related considerations such as facility, neighborhood and visibility high overall, in contrast to other employers surveyed in the region who ranked lease rates and access to highways and parking as top considerations.

“Last mile” connections from the Southeast Line light rail stations to workplaces are a major barrier to taking transit. The Southeast Line is adjacent to an interstate highway on one side throughout most of the line, so workers on the other side of the highway have severe connectivity challenges. Moreover, many of the existing office buildings are surrounded by surface parking lots and busy arterial streets, so getting to and from the stations remains a major challenge. Local employers and RTD also do not provide many connector shuttles or bus routes that could get workers to jobs located one to two miles from the station.

Notes

1 Regional Transportation District, About FasTracks. Available at http://www.rtd-fastracks.com/main_26 (last accessed January 4, 2013).

2 American Public Transportation Association, 2007. Public Transportation Fact Book. Available at http://www.apta.com/resources/statistics/pages/transitstats.aspx (last accessed January 4, 2013).