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Cautionary Lessons in Planning Transit-Oriented Development: Avoiding Gentrification and Displacement


A recent report from the Dukakis Center for Urban & Regional Policy at Northeastern University provides new insight into the debate over whether transit-oriented development (TOD) leads to gentrification and displacement.  The report (available in PDF format here) has generated significant media interest because one of its primary findings is that the opening of a new transit station often leads to higher rents, increased home values, and increased rates of auto ownership, and thus primarily benefits wealthier households who are not as reliant on transit and do not utilize it as frequently.  The authors note that this is a troubling trend, but caution that there is no cause-and-effect relationship between TOD and gentrification or displacement.  In fact, it is often an unintended consequence that can be mitigated with a variety of policy tools that aim to preserve and enhance opportunities for mixed-income housing near transit stations.  By planning ahead, communities can ensure that neighborhoods maintain their diversity while enhancing transportation options for people of all backgrounds and incomes.

The researchers derived their sample from 42 transit stations in 12 different metropolitan areas.  All stations opened between 1990 and 2000 on new or existing systems.  They then obtained Census data for the one-half mile radius surrounding each station for a number of variables, including population growth, racial and ethnic composition, housing costs, household income, auto ownership, and use of public transportation for commuting.  There were three rounds of analysis, looking at the percentage change in the aforementioned variables between 1990 and 2000, as compared to the corresponding metropolitan area as a whole.  Among the many findings, the researchers discovered that after a new transit station opens:

  • The neighborhood surrounding it sees as influx of higher income residents and higher-priced housing, two general indicators of gentrification.


  • Rents and housing values increase, making it more expensive for low- to moderate-income households to stay in the neighborhood, which can lead to displacement.


  • Racial composition did not change in the majority of the 42 neighborhoods.


  • Public transportation use actually decreased in many neighborhoods, and auto ownership increased, especially among households owning two or more cars.


  • Light rail has the strongest effect on the market of the surrounding neighborhood, leading to significant increases in housing values and rates of auto ownership.  At the same time, neighborhoods built on light rail lines tend to be poorer at baseline compared to heavy and commuter rail neighborhoods, which could explain the larger effect.



The authors stress that these findings do not conclusively prove that new transit leads to gentrification and displacement, and their sample contains only 42 stations out of an estimated 3,000 stations across the United States.  The Census data was also from the years 1990 and 2000, and more recent transit stations may have had different impacts.  Nevertheless, the findings of this study are important for communities to keep in mind when planning transit-oriented development.  The authors call it a “Hobson’s Choice”: invest in transit and accept the loss of neighborhood diversity as collateral damage, or avoid transit expansion projects serving diverse, low-income neighborhoods and leave those residents with poor public transportation or none at all. However, there are tools that may preserve and enhance ethnic and income diversity in communities receiving substantial transit investments.  Many of the tools identified by the authors are in the Center for Transit-Oriented Development's (CTOD) Mixed-Income TOD Action Guide, available on the MITOD website.  The report groups these tools into three categories:

  • Planning tools, such as community benefits agreements, comprehensive TOD strategies, and transit corridor planning activities
  • Housing market tools, includnig TOD acquisition funds, housing trust funds, and inclusionary zoning policies
  • Transportation management tools, like car sharing, reduced parking requirements, and unbundling of the price of parking from rent.


The full report is available here.