Transportation investments—whether transitway or highway—typically benefit regional economies over time, but businesses in nearby corridors and neighborhoods may struggle in the short term. In two comprehensive studies, U researchers examined the impacts of highway and transitway construction projects on nearby businesses in the Twin Cities metro.
Focusing on businesses providing retail, food, or personal services, the team used several econometric approaches to examine how both highway corridor improvements and the construction and operation of new transit affected sales, employment, and concentration of nearby businesses. Their primary dataset, aggregated from an INFOUSA survey, focused on establishments in the seven-county metro area in business between 2000 and 2019.
The investigations found that the specific impacts vary widely, depending on many factors—but small business sales take the biggest hit. “We also found that impacts may continue after construction ends,” says Yingling Fan, professor in the Humphrey School of Public Affairs and the studies’ principal investigator.
Noah Wexler, a PhD candidate in the Humphrey School, was the co-principal investigator of the studies.
Their findings suggest that businesses of different sizes are differently able to respond to changes in transportation infrastructure around them. “For example, multiple-location firms may be able to weather construction and take advantage of new traffic patterns and economic growth,” Fan says. “But small, mom-and-pop firms may not.”
The researchers recommend that transportation planners and policymakers pay close attention to small businesses and consider policies to soften the brunt of construction. To aid these efforts, they created an interactive online map that lets users see the predicted impacts of highways and transitways on nearby businesses.
The research was funded through the Transit Impacts Research Program.
—Pam Snopl, CTS senior editor
