Realizing the value of stations

The US and UK have both conducted research on the role transit station investment has in the economic development of the surrounding area. We look at how they compare, and the lessons we can take from them.

The rail network in Britain has long been one of its greatest assets, and the role of that network in supporting sustainable economic growth in British cities is well established. But until recently, no in-depth study had been conducted to determine the role of UK rail station investment and its ability to support economic development and urban renewal, particularly in the form of Transit-Oriented Development (TOD). Steer Davies Gleave was recently asked by Britain’s Network Rail organization to investigate the broader economic impact of rail station investment, and we found interesting comparisons with TOD and its economic impact in the US.

The UK report, The Value of Station Investment, showed that stations can play a key role in delivering economic growth through a variety of means. Well-directed station investment can have a transformational effect on an area, especially when coordinated with wider public realm improvements. Looking at specific examples, the report found that:

• Station investment at Manchester Piccadilly, accompanied by an improved public realm and enhanced pedestrian connectivity, created a positive investment climate. New and refurbished office investment in the area increased annual rental values by almost $16 million, and property values in the vicinity of the station increased by 33%.
• Sheffield Station property values increased by 65% between 2003 and 2008 based on station improvements, more than three times the corresponding increase for Sheffield as a whole.
• Overall, the study noted that redevelopment of major city center stations can result in early property value increases of 30% or more compared with properties located elsewhere.

In the US, a few transit systems have examined property value changes as a result of station investment. The Center for Transit Oriented Development (CTOD) published a report in 2008 called Capturing the Value of Transit, which noted:

• Values for single-family residential units close to transit stations showed a premium of up to 32% above comparable properties without transit access.
• Condominiums near transit stations showed a property value premium of up to 18% above non-TOD properties.
• Apartments located near transit stations had a premium of up to 45% above non-transit apartments.
• Office and retail rents near transit had premiums of 100% above similar properties without proximity to transit stations.

The benefits gained from transit station development are very similar on both sides of the Atlantic. The UK report further notes that stations can support economic growth by bringing connectivity and regional access to jobs and housing, providing capacity for local employment growth, meeting travel demand sustainably, acting as a gateway for a city center, offering development opportunities, and serving as a commercial or community center (a destination in its own right). Equally, if stations aren’t planned, designed, and maintained properly, they can be a barrier to growth and investment by restricting physical access across an urban area or creating a poor impression.

These studies have validated the economic value that stations can bring to an area. Having clear, shared objectives from the outset, and a well-articulated case of both the traditional and wider benefits of transit station development, will help ensure that they are actually realized.