How improving transit can price out those who need it most

By John Lorinc - Published on February 2, 2016
blurring of rail lines as a train passes
Multi-billion-dollar transit investments may accelerate gentrification and displace lower income residents.

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When Toronto officials proposed an overhauled Scarborough rapid transit plan last month, featuring a scaled-back version of the $3.56-billion subway in favour of 19 light rail transit stops, they noted the new line would pass through five low-income “neighbourhood improvement” areas.

The light rail transit line will run along Eglinton Avenue East, turn up Morningside Avenue towards the University of Toronto Scarborough campus, with potential longer-term links to another line planned for Sheppard Avenue that would traverse some of the city’s needier communities, such as Malvern.

While municipalities like Toronto have all sorts of priorities when investing in rapid transit — mobility, congestion reduction, intensification, air quality — increasing “connectivity in disadvantaged neighbourhoods” is a now explicit goal in this undertaking. Other Toronto LRT projects, such as the one planned for Finch Avenue West, also promise to deliver rapid transit service to communities where low-income, transit-dependent residents have had to rely on packed buses for decades.

Therein lies the paradox of transit investment.  

There’s a substantial body of evidence to suggest that the presence of a rapid transit line — be it a subway or light rail — can trigger sharp escalations in residential land values and rents, potentially displacing precisely the residents such investments were meant to support.

“This is definitely an issue,” says Cherise Burda, director of Ryerson University’s City Building Institute. “You want to increase economic activity in those areas, but you don’t want to price people out.”

According to maps created by University of Toronto sociologist David Hulchanski, who has documented changes in neighbourhood-level income in the city over four decades, wealth has historically accrued along subway lines. (Voters living in the vicinity of the subway lines were also more likely to vote for John Tory.)

It’s not just a Toronto phenomenon, of course. According to a 2013 study by the National Association of Realtors and the American Public Transit Association, real estate close to fixed rail stations in cities across the United States were far more likely to hold or exceed their pre-2008 recession values than properties farther from transit. In Boston, according to this analysis, homes near transit stations outperformed all others, in terms of value growth, by a whopping 129 per cent over five years. 

Closer to home, some critics of the Cambridge-Kitchener-Waterloo light rail transit line, which was approved in 2014, have warned that the $2-billion, 19-kilometre development will elbow aside lower-income residents.

As a policy goal, social equity has not always figured significantly in the design of rapid transit systems. Early subways were meant to relieve the crushing road congestion in dense downtown cores, although the proponents of New York City’s privately developed late 19th Century subways linking lower Manhattan to Brooklyn recognized an opportunity to use these lines to relieve the brutal slum conditions in the Lower East Side. Toronto’s so-called streetcar suburbs also promised those living in overcrowded downtown tenements an opportunity to buy modest homes at the city’s periphery while continuing to work downtown.

When former Toronto mayor David Miller first broached his Transit City LRT network plan in 2007, he identified the importance of connecting priority neighbourhoods to the city’s economic and employment hubs as a principal objective. Miller’s plan, waylaid during the Rob Ford era, has made a remarkable comeback in recent weeks, and with it the notion that transit should be a tool for improving social justice in a city experiencing accelerating income polarization.

A York University urban studies team this week will release a report, obtained by TVO.org, entitled, “Next Stop: Equity.” It lays out a case for “fairer transit access” across Greater Toronto and Hamilton. The authors – Sean Hertel, Roger Keil and Michael Collens – say Metrolinx and other regional transit players should be explicit about prioritizing social equity as a policy objective, and adopt specific measures such as discounted fares for low-income riders and planning tools meant to protect affordable housing in transit corridors.

“It depends on what kind of city we want to live in,” says Keil, the York Research Chair in Global Sub/Urban Studies. He points out that in many European cities with extensive transit networks, the issue of affordability in the vicinity of stations is less acute because so many people in those cities live in state-owned apartments, which are not subject to market forces.

Here, private real estate speculation near transit corridors kicks in because the state isn’t really an active player in the housing sector. The result is that those landowners with the means and the market insight benefit financially from public spending on transit infrastructure in the form of higher resale prices.

“If you have some control over development,” Keil observes, “then the growth [associated with transit development] doesn’t necessarily lead to gentrification and displacement.” 

The question, of course, is how to control the development. In Mississauga, where Metrolinx plans to build a light rail transit along Hurontario Street from Port Credit’s lakeshore neighbourhood up north to the Brampton border, some municipal politicians sounded the alarm about the potential for displacement. Last fall council unanimously approved an inclusive zoning policy that will require developers to set aside 10 per cent of units in new buildings going up along the route as affordable. Councillor Carolyn Parrish, author of the motion, says 14,000 families are waiting for affordable housing in Peel Region. The south end of Hurontario Street in particular has a high concentration of low-income residents living in older midrise apartments that are likely threatened by the arrival of the new line.

While the City of Toronto undertook an extensive planning exercise to ready Eglinton Avenue for the arrival of the new 25-station Crosstown LRT, council has not identified affordable housing as a goal for redevelopment.

Burda points out that the city does use a range of “land-value capture” mechanisms — e.g., development charges levied on new units – to recoup some of the increases in real estate prices generated by such giant projects and then invest those funds in city-building projects.

Yet development charges can actually work at cross purposes with social equity goals because builders pass on the fees to buyers, thus increasing the price of individual units. “We want to get value capture to help pay for transit-related investments but when we do that, an area’s prices go up and people have to move,” she says.        

The key point for Burda is that well-intentioned planners and policy makers must confront the reality that these multi-billion-dollar transit investments may actually accelerate gentrification and hasten the displacement of those with few alternatives. As she says, “I don’t think anyone is looking at the full picture.”                              

Urban affairs journalist John Lorinc is a senior editor at Spacing Magazine.

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