Transitway Development and Commercial Gentrification

Summary

This report examines how the construction and operation of Light Rail and Bus Rapid Transit corridors in the Twin Cities metropolitan area affected commercial gentrification. Using data on establishments providing retail, food, or personal services, we use several econometric approaches to examine how both the construction and operation of new transit affected sales, employment, and concentration of nearby establishments. We estimate separate models for small single-location firms and establishments affiliated with larger multiple-location firms. Overall, we find that robust evidence that the Green Line reduced sales for single-location firms. We also find some evidence that the A Line BRT slightly reduced sales and employment for the same types of firms. By contrast, the Blue Line did not have significant effects on nearby stores. We use the Green Line as a case study to examine the mechanisms of transit-induced commercial gentrification, finding that gentrification effects are correlated with positive residential construction effects. These findings suggest that transit-induced gentrification is dependent on transit's affects on surrounding physical infrastructure, pointing to actionable policy remedies that can protect small firms during periods when nearby construction may disrupt business.