Study says Blue Line's development impact is minimal

Light rail was supposed to cause a development boom in the Hiawatha corridor, but a new study shows that the Blue Line has had little effect on land use near rail platforms in its first six years.

Sarah West, an economics professor at Macalester College, and Needham Hurst, a graduate student at Harvard, found that the Blue Line, which began carrying passengers between the Mall of America and downtown Minneapolis in 2004, caused almost no increase in the likelihood of new development up to 2010. Their new paper is coming out in Regional Science and Urban Economics.

"The effects of light rail, at least through 2010 in Minneapolis, are very small, and are limited to industrial and single-family parcels," West said in an interview.

Using U.S. census data not released until 2012, as well as Metropolitan Council land use surveys and city of Minneapolis data, the study looked at parcels near light rail platforms and calculated the likelihood of land use change, then compared that with the likelihood of land use change for parcels throughout Minneapolis.

They found "no effect" along the corridor compared with the 1997-2000 period before construction started on the rail line, and found that parcels within a half-mile of rail platforms were only 1.39 percent more likely than parcels citywide to be developed after the line started operating, compared with the years the rail line was under construction.

The paper also finds that light rail failed to insulate the corridor from the effects of the Great Recession.

"If the light rail has a catalyst effect, we would still expect for there to be relatively less of a hit taken within the corridor, and we don't find that," West said.

"It can take decades for the effects of the introduction of new public transit to be felt in a city," West said. "It's too early to close the book on the effects of the Blue Line."

Still, the research is a cautionary note for optimists as Metro Transit readies to open the Green Line from downtown St. Paul to the site of the demolished Metrodome, where it will connect with the Blue Line.

A 2010 study showed that the Blue Line increased property values along its route, particularly for single-family homes. But major redevelopment and development of vacant property have been only slightly more likely to materialize compared with parts of the city not near the rail.

A recent report in the Star Tribune highlighted how little has changed at the intersection of Lake Street and Hiawatha Avenue St., a busy hub on the Blue Line that was supposed to be a prime location for construction.

The Green Line is set to open June 14, and will run through the University of Minnesota and along University Avenue to downtown St. Paul, culminating at Union Depot.

Levinson said that the Green Line — and any subsequent additions to the light rail system — will also improve the value of land along the Blue Line, thus making it more ripe for development as the rail system grows and more people use it.

"That positive feedback system sort of kicks in, and it reinforces the growth," Levinson said.

West said further possible lines of inquiry include determining how much city land use policy has helped or hurt the ability of developers to bunch together parcels for new projects. She also said it would be worthwhile to figure out how much the interactive experience at each platform affects the likelihood of development.

The 38th Street station, for instance, is easy to approach from the west side of Hiawatha, West said, but much less welcoming from the east, where pedestrians have to walk past grain elevators and over nearly 50 yards of freight rail tracks and vacant lots before they hit Hiawatha Avenue, which has six lanes of traffic at the intersection.

"You can't conclude that we'll never measure an effect," West said. "You can't conclude that there's no effect. You can't conclude that the Green Line will be exactly identical to this."

Gauging the success of the Blue Line as a catalyst for development by a study period that ends in 2010 doesn't give an accurate picture, he said, because the recession brought development "to a halt for about three years." The 7,200 new housing units projected for construction along the corridor have already been exceeded, he said.

"Nothing happened in that corridor for 30 years. And then, all of a sudden — I don't think it's a coincidence — you have residential development after residential development," McLaughlin said. "To me, the history is eminently clear."