The Anticipation of Rail Transit and Real Estate Development: Evidence from Green Line in St. Paul

Principal Investigator(s):

Jason Cao, Professor , Humphrey School of Public Affairs

Project summary:

Although previous studies have extensively explored the impacts of rail transit on economic development after its opening, few have examined its impact on real estate development before its opening. Using building permit data from the city of St. Paul, this study investigated the effects of key announcements of the Green Line light rail transit (LRT) by employing location quotient analysis and difference-in-difference models to compare building activity in the LRT corridor and control corridors. Researchers found that the announcement of preliminary engineering had no impacts on the count and value of building permits, whereas the announcement of Full Funding Grant Agreement tended to increase the number of building permits by about 30% and the value by 80%. Researchers concluded that in addition to LRT investment, proactive land use planning policies, public subsidies, and public funded projects are important contributors to building activity.

Project details: