Progress and Public Transit: Density by Design

How many people should live over a station? As many as possible

This series is about what ‘progress’ might mean for public transit. 

We began by exploring the Endless Emergency, the permanent crisis in North American public transit. Briefly, the Endless Emergency stems from the fact that 

1. Transit operators’ dependence on external subsidy creates a raft of perverse incentives

2. These incentives encourage a bad local equilibrium, where service can only range from poor to barely adequate

3. Neither decreasing nor increasing the subsidy changes this equilibrium, so the fundamental problems are never resolved

We would make progress in public transit, I argue, by breaking this cycle. 

Last time, we considered one solution to the problem, which is to reorganize transit agencies as regulated utilities. Ending all subsidy, and setting fare levels at a rate that would permit cost recovery, would properly align operators’ incentives to desired outcomes, breaking the status quo and permitting improvement.  

Permitting operators to change fares high enough to cover their costs would certainly help, but is unlikely to be enough. After all, about half of new businesses fail within five years of inception; these businesses have perfect freedom to set their own prices, and presumably would set their prices at a level that could permit them to cover their costs; they just can’t find enough customers willing to pay that much. 

For a transit operator, that means that cost recovery depends on there being enough fare-paying riders. Where there aren’t, the city will need to provide them, by creating enough density around transit stops to ensure sufficient ridership. This is ‘transit-oriented development’: housing, as dense as possible, within walking distance of transit stations.

Put another way, instead of building transit to serve our cities, perhaps we should build our cities to serve transit.

That seems backwards, and provocatively so. Why should we reshape the urban environment just to make transit work better? If a friend suggested he was going to remodel his kitchen to fit his refrigerator, you might think that he’d be better served to buy a refrigerator that fits the kitchen he already has. 

But you might change your mind if he pointed out he plans to start a catering company, and needs both the right fridge and the right kitchen, complementing each other, for the business to succeed. 

In the same way, the land-use system and the transport system in our cities complement each other, and always have. For at least the past century, that transport system, in most cities, has been the automobile, and we have chosen to subordinate all land uses to it. That decision has proved costly: not only to the good operation of public transit, but also to city living generally.

This is a problem we can fix.

Importantly, if we do, we will go a long way to solving a separate problem that also plagues the cities of the West right now, namely the housing shortages that threaten our growth and prosperity. These problems are connected, and so are their solutions. By ensuring that transit and land development work together, we can ensure that both systems, and the cities that host them, are able to flourish. 

Land Use and Transport: Two Sides, Same Coin

To understand both the problem and the opportunity, consider Toronto's Bloor-Danforth subway line (Line 2). The city spent billions (in today’s dollars) to build it, but fifty years after its construction, most stations are still surrounded by two-storey buildings, neighborhoods that could exist anywhere, with or without transit. That’s because the subway was built along pre-existing commercial corridors, already built out with single-family homes and low-rise shops. That built form has been frozen by local zoning by-laws, preventing infill.

Intersection of Yonge and Bloor, home of the Yonge subway stop on Line 2. In 2019, this stop had daily ridership of 208,626. Image from Google Maps.

Intersection of Chester and Danforth, home of the Chester subway station on Line 2, only four stops away from Yonge. In 2019, this station had daily ridership of 6,470, or 3% of Yonge Station’s ridership. Given the intersection’s urban form, it’s easy to see why. Image from Google Maps. 

As a result of these land uses, a remnant of a time when there was no subway, Line 2 has ridership far below what it could support. It’s unsurprising that the TTC can’t cover its operating costs with fares, when it provides expensive subway service to quiet commercial strips like this. 

If Line 2 is a cautionary tale of what happens to higher-order transit without corresponding land-use density, most North American cities illustrate the opposite problem: land-use density without higher-order transit. Northwest Los Angeles, for example—Van Nuys, Valley Glen, and North Hollywood in the San Fernando Valley—has almost no rapid transit, despite population densities approaching 10,000 people per square mile. To get around, most people there drive, and those that can’t take slow surface buses. Given this neglect of rapid transit, it’s unsurprising that Los Angeles has the worst traffic congestion in North America. 

Taken together, these examples illustrate the fundamental fact that transport planning and land-use planning are, ultimately, the same thing. Consider a simple example: a new department store, like Walmart or Canadian Tire. Its viability depends entirely on how customers can reach it. How much parking will it have? In an urban area, well served by public transit, it might thrive with limited parking, taking advantage of existing parking assets.

A Canadian Tire in downtown Toronto, Bay and Dundas streets. It is served by two subway stops, on separate lines, each located one block away; one to the east and one to the west. Note that the upper storeys of the building are all university facilities; this is urban mixed-use development in action. Photo by Steve Harris, licensed under Creative Commons

If it's in a car-dependent area, it needs vast parking, which pushes other buildings farther away, making walking difficult or impossible, and driving required. 

A Canadian Tire in Aylmer, Ontario (population ~7,500). Note the large parking lots and wide streets, typical of suburban automobile-centric urban design. Photo by Peter Giesbrecht, licensed under Creative Commons

This same dynamic plays out across entire cities. When we build assuming everyone will drive, we create spaces that make driving necessary.

The reverse is also true. Successful transit requires density: lots of people, jobs, and destinations within walking distance of stops, so there are enough riders to make the service succeed.¹ But successful density requires transit. Thanks to the elevator and the skyscraper, we can build in three dimensions, putting all sorts of jobs, homes, and shops in a small area; but roads have to be built in two dimensions. You can stack buildings, but you can't stack roads.² Once an area gets dense enough, only rapid transit can move everyone efficiently. 

If we want a city to succeed, we must deliver transportation and land use together, or we will succeed at neither.

The Development-Transit Cycle

This mutual dependency creates opportunities for virtuous cycles—or vicious ones. When transit service is frequent and reliable, developers will build nearby, knowing residents value easy access. More residents mean more potential riders, justifying even better service. Better service attracts more development, and the cycle continues.

But the same process works in reverse. Poor service discourages development near transit. Lack of development means few riders, leading to poor or no service. Bad service encourages people to drive, leading to more car-oriented development. We've seen this pattern play out again and again.

To take only one example: the City of Toronto, supposedly, has a ‘transit first’ policy, meaning that before new density is introduced to an area, it gets high-quality transit service first, even if that service operates at a loss. The city’s idea is that the city only has one chance to defeat automobility, which is to ensure that the first arrivals in a newly-built area use transit immediately. If they do not, then they will drive, which will prompt the introduction of driving infrastructure to accommodate them: parking lots, street parking, and so forth. And the presence of that infrastructure will encourage future newcomers to drive as well. 

It’s a good policy, but the City doesn’t follow it. Toronto’s whole eastern waterfront is under development, and so the ‘transit first’ policy would suggest that light-rail transit (LRT) be introduced to serve it. Indeed, at least one major employer and postsecondary institution were enticed to build in the area on the promise that LRT was coming. And they did build, in 2010 and 2012 respectively; but they are still waiting for LRT. The latest news is that LRT will be in place in 2030.³ And indeed the workers and students at these places drive, because local bus service is poor and there is no transit alternative. 

We can imagine how things might have gone better. Building the LRT when the area was undeveloped would have been cheaper, as dense local infrastructure does impose costs. Readily-available rapid transit would have captured all the students and workers, helping the service make money; which would have encouraged even better service; which would have accelerated real-estate development along the line; expanding the ridership base; encouraging more service. 

The challenge is initiating the chain reaction: creating enough density at the outset to support good service, or enough service at the outset to encourage density.

The YIMBY and the Railfan Should Be Friends

The YIMBY moment creates an opportunity to do the former. 

North American cities face a severe housing shortage, driving up costs and forcing people to live further away from their jobs. Why is that? To quote Will Wilkinson: 

…the zoning and land use planning process tends to get captured by a cartel of risk-averse local homeowners anxious about the value of their largest financial asset. The economist William Fischel calls them “homevoters.” They dominate public zoning and planning commission meetings (and often local government generally) where they vehemently oppose and usually successfully block new construction or housing development deemed threatening to their “neighborhood character” and property values.

“The dominance of home-owners and their touchiness about their main asset,” Fischel writes, “explain why nearly every suburban zoning ordinance puts the single-family, owner-occupied home at the pinnacle of uses to be protected.” Fischel’s “homevoter hypothesis” offers a credible explanation for the all-but-insuperable obstacle of NIMBYism and why it’s nearly impossible to get anything built.

Put very simply, lack of housing in an area benefits local homeowners by making their largest financial asset increase in value. Further, addressing that lack would impose local costs: less availability of street parking, more noise, and more strangers. So homevoters, rationally, block new housing in their neighbourhood. Apply this situation to every community in North America and the result is a housing shortage. 

The YIMBY ("Yes In My Back Yard") movement has a simple solution: build more housing, of all kinds, wherever people want to live. YIMBYs are beginning to earn victories in the USA and Canada, which creates an opportunity: we need to build millions of new homes anyway, so why not build them where they can support transit?

The Swiss have a rule for their railways: electronics before concrete. They believe that before, say, drilling new tunnels through the mountains, they should make the tunnels they have more efficient with better signals. We might appropriate this rule to rapid transit: we should build housing around existing transit lines before building new ones. This is both more efficient and more equitable: it makes better use of infrastructure we've already paid for, while giving more people access to transit. 

Similarly, we should build new rapid transit that goes where the people are. This may sound obvious, but history says it isn’t. Consider the Mississauga Transitway, a rapidway for buses that goes from City Centre, along a power-line corridor; stopping along the way at intersections surrounded on all sides by single-family residential housing; ending in an industrial park. Why build a BRT line this way, such that it doesn’t go anywhere and serves no riders along its route?

Why, because the land was cheap, so it was relatively inexpensive to build. Unfortunately, because it serves virtually no riders, the money that was spent was spent pointlessly. The City would have been far better off to run bus rapidways along a major corridor: that would have been more expensive, but would have served existing riders. And transit-oriented development along the route would have created more of them.

Such development would require more than building the line and hoping for the best, of course. Cities need specific tools to encourage development where it makes sense while protecting what works about existing neighborhoods. Zoning reform comes first: many transit stations are surrounded by land where apartments are simply illegal to build. This must change. There are signs that it is beginning to, in both Canada and the USA, but again, we need to go faster. 

There are all sorts of tools we could adopt for that purpose. The most obvious is value-capture mechanisms: a transit station makes nearby property values go up, and some of that increased value should help pay for the transit that created it. This is how Hong Kong's MTR made itself one of the few consistently-profitable transit agencies in the world, by developing the land around stations and using the profits to fund operations. Picking up on my previous theme, I would not want to see a transit agency become a land bank, as that would confuse its incentives. I think instead that North American cities should have their own public land banks that coordinate with transit operators on system-expansion plans.⁴ 

Here's how it could work: a public land bank obtains land, and then promises to pay the transit agency yearly fees in exchange for new service serving that area. The transit agency uses these guaranteed payments to expand. As transit service improves, the land bank's properties become more valuable, and everyone is better off. 

Build, Build, Build

What does all this cash out to? Some bright-line rules: 

All rapid transit should have dense development at its stations. 

All rapid transit means commuter rail, subways, light rail, and bus rapidways.

Dense development means as much as the market will bear, which means no height limits, no setbacks, no angular-plane restrictions, nor anything similar.

At its stations means within 400m (a quarter mile) radius of the station entrance.

This should be done retroactively at existing stations, and should be required of any new ones. 

Implementing these rules would ensure that the system has a market of riders sufficient to make good, frequent service on the line feasible. Put simply, I’m advocating for real, robust transit–oriented development. 

I can imagine two objections to this. 

Firstly, NIMBYs will complain about the damage done to the characters of their neighbourhoods. Development without height restrictions will overwhelm many existing communities; imagine Danforth and Chester, shown above, with the addition of a 78-storey tower. Wouldn’t new development on such a scale change the community drastically? 

To this I answer: yes, and that’s a good thing. The idea that a neighbourhood is entitled to quiet suburban form but also to subway service is ludicrous. If you want a quiet suburban neighborhood, fine; North America has plenty of those, and you’ll be able to find one to live in that suits you. But subway service is rare and valuable. We can't waste it on areas that refuse to grow.⁵ Lots of people want to live within walking distance of a subway station, and we should let them.

Secondly, and more reasonably, the capacity of local infrastructure might be overwhelmed. Add that many more people, and there will be traffic, a dearth of street parking, slower car trips, and more. But of course, the whole point of transit-oriented development is to enable car-free or car-light living.

There are two alternatives to transit-oriented development. One is continuing our current pattern of low-density development around expensive transit infrastructure, or around anemic local service, which is also expensive relative to the revenue it generates. The other is to build densely without rapid transit, and doom everyone there to endless congestion, seizing up private cars and local buses alike.

By sticking to the status quo, we're failing twice: we're making transit worse and worsening the housing crisis. 

Transit-oriented development is not new; it's the natural form that cities took after the steam engine but before the automobile. What is new is our understanding of how crucial it is to transit's financial sustainability—and to addressing our housing crisis, environmental challenges, and urban livability.

This is the third piece in our exploration of the Endless Emergency and how to fix it. We began by identifying the problem, and continued by exploring how reorganizing transit operations could help. And now we see how changes to our built environment could support that reform. The elements work together: better service encourages development, which provides more riders, which supports better service. We can create virtuous cycles instead of vicious ones. 

We just need to choose to do it.

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This post is part of the series on Progress and Public Transit. The first outlined the problem we have to solve: the Endless Emergency. The second considered how reorganizing our transit operators could help. This one has been about how changing our zoning rules and our urban design could help. Next time, in the last entry in the series, we will consider how technological innovation, and particularly vehicle automation, can help.

Respect to Emma McAleavy, Rob l’Hereaux, and Steve Newman for feedback on earlier drafts.

1. Ideally all of these things at each stop. Mixing uses means that there is steady demand throughout the day and the week. By contrast, separating them means that stops in office areas aren’t used on weekends, for example: that lack of activity creates problems with usage, service, and security, to name only three.

2. The Boring Company might beg to differ, but I’ll believe it when I see it.

3. Again, I’ll believe it when I see it.

4. As one astute commenter on the previous issue in this series noted, “There is no operating cost recovery scenario in the world where transit service generates enough money to be able to build its own separate infrastructure, so governments will continue to have a role in building transit infrastructure… So creating a ‘transit infrastructure investment agency’ that is separate from ‘transit service operating company’ would be a necessary part” of treating operators as regulated utilities. A land bank could be a parallel institution within this system.

5. One exception might be terminal stations, like Greenbelt Station (on Washington, D.C.’s Green Line), which has a staggering 3,400 parking spaces. Very few people live within 400m of it, but serving local residents is not the station’s raison d'être; it is instead to store vehicles for Maryland suburbanites who drive just to the station, park, and take the Metro into the city.