What Is Equitable TOD?
Equitable TOD is an economic development strategy that incentivizes mixed-income residential development and commercial development along existing or new transit corridors to promote several important policy goals such as access to employment opportunities, essential services, and a safe environment for other modes of transportation like walking and biking.
A common approach to equitable TOD is the preservation or creation of affordable housing in developments near transit. For example, this approach has been pursued in coastal and mountain metropolitan areas (metros) where extensive transit systems already exist (e.g., Boston and Washington, D.C.) or are feasible to build or expand (e.g., Denver and Seattle), and where transit-rich, walkable neighborhoods near growing job centers are at risk of gentrification. The challenges, however, are different in many Sun Belt and Rust Belt metros and nonmetro areas where transit is either less robust and/or jobs have moved away from the transit network during decades of suburbanization (e.g., Orlando and Detroit). In these places, it is often difficult to connect residents in low-income urban neighborhoods to large suburban job centers, attract jobs back to the urban core along existing transit corridors, or build workforce housing in job-rich suburbs with restrictive zoning codes while balancing other TOD objectives.
Rainier Vista, one of Seattle’s first public housing developments, was redeveloped in the early 2000s under the HOPE VI program and in coordination with the building of Sound Transit’s Link light rail. It now includes a mix of public housing, other affordable rental housing, affordable for-sale housing, and market-rate housing.
Photo Credit: Tonkin Architecture.
Academic researchers often refer to the sets of challenges targeted by equitable TOD as the spatial mismatch hypothesis, which was first posited by John Kain.1 The spatial mismatch hypothesis was originally an attempt to explain high unemployment levels in low-income black neighborhoods due to the movement of jobs away from city centers and the inability of black households to relocate to suburban areas owing to housing discrimination. A large body of literature around the spatial mismatch hypothesis has emerged during the past 50 years and provides considerable evidence that poor job accessibility does, in part, contribute to poor labor market outcomes — particularly for low-skilled workers — but significant debate still exists in economics and other fields about the magnitude of the effect and the policies that should be pursued to improve economic prospects for vulnerable populations.2 Policy solutions have generally been grouped into three categories:3
- Mobility strategy: improving transportation options
- Urban development strategy: moving jobs closer to workers
- Desegregation strategy: moving workers closer to jobs
A review of the recent literature focused on how a mobility strategy impacts economic success can offer insights helpful to the work of community and economic development practitioners — as a way to reassess the aspirations of equitable TOD and to guide more effective approaches to achieve its policy goals.
Transit Accessibility Can Improve Economic Outcomes
Even if there were no racial discrimination in the labor market, and white and minority workers initially lived on average the same distance to jobs, Gautier and Zenou showed that wealth differences between white and minority workers — which disproportionately impact the transportation options of minority workers (e.g., the ability to purchase a car) and thus their search area for available jobs — would be expected to result in higher unemployment rates, longer unemployment spells, lower wages, and longer commute times for minorities, even when traveling fewer miles to work.4 They maintain that improving public transportation or increasing car ownership among minorities should lead to a greater geographic job search, although perhaps by varying degrees, and thereby improve labor market outcomes. They cited discrimination in the automobile insurance and credit markets as possible barriers to implementing policies focused on car ownership. There is a large body of research demonstrating the positive impact of car ownership on the employment outcomes of low-income adults.5
Fredrik Andersson et al. overcame major methodological challenges in testing the spatial mismatch hypothesis by using administrative data that employers report as part of unemployment insurance filings and compiled by the Census Bureau’s Longitudinal Employer-Household Dynamics program.6 The authors’ sample included around 247,000 low-skilled jobseekers across nine metro areas,7 and they used a job accessibility measure that was weighted by a jobseeker’s likelihood of commuting by car or transit. They found that better job accessibility significantly decreases unemployment spells and leads to better-paying jobs. More specifically, an increase from the 25th to the 75th percentile of job accessibility reduced the search duration by 4.2 percent for any job and 7.0 percent for finding a job that paid at least 90 percent of prior earnings. All jobseekers were sensitive to job accessibility, but black people, women, and older jobseekers experienced the largest gains in labor market outcomes when job accessibility improved. The improved job accessibility could have been due to better transit service, access to an automobile, or the distribution of jobs across or within the different metropolitan statistical areas (MSAs), but the authors were unable to distinguish these nuances in their results.
David Phillips evaluated a program coordinated by a nonprofit employment agency in Washington, D.C., that offered transit subsidies to a randomly selected group of clients in addition to standard employment services offered to all jobseekers.8 By providing a modest transit subsidy of $50 at the beginning of the job search, results showed that a jobseeker’s search intensity (a measure of the number, timing, and location of job applications and interviews) increased 19 percent within the first 14 days of the three-month study period — the effect roughly doubled to around 40 percent for jobseekers living the furthest from job opportunities (i.e., on average more than 9 miles to a job). Although statistically less precise than the effects on job search, labor market outcomes also improved. Jobseekers with a transit subsidy were 9 percentage points more likely than those without a subsidy to find employment within the first 40 days of the study period; over the entire 90-day study period, differences were still positive but not statistically significant. The average unemployment duration of jobseekers receiving the transit subsidy was 13 days shorter compared with jobseekers without a transit subsidy, and those receiving the subsidy earned $575 more on average during the three-month study period.
Evelyn Blumenberg and Gregory Pierce evaluated the impact of transit accessibility on labor market outcomes for participants in the Moving to Opportunity (MTO) demonstration, the most prominent example of a desegregation strategy to date that intended to help low-income families in five metro areas move out of high-poverty neighborhoods.9 MTO did not include any kind of transportation assistance to households, and the authors seek to assess how this may have limited participants’ economic outcomes by comparing the employment status of household heads at the start of the program (October 1994–May 1996) and their status at the interim evaluation (four to seven years later). Their results show that the probability of maintaining employment during the study period relative to being unemployed during the entire period was 16 times higher for participants who moved to a neighborhood with better transit.10 However, improved transit access was not associated with job gains, i.e., participants who were initially unemployed and moved to a neighborhood with improved transit, were no more likely to find employment than initially unemployed participants who did not move to a neighborhood with improved transit. Access to a car was found to be important for both job gains (by a factor of two) and maintaining employment (by a factor of four).
Justin Tyndall estimated the impact of transit access on employment outcomes in New York City following an unexpected service reduction due to Hurricane Sandy, which resulted in the suspension of subway service connecting Brooklyn and Manhattan between August 2013 and September 2014.11 Overall, results show that the unemployment rate among labor force participants in the affected neighborhoods increased 1.4 percentage points following the subway closure. Among individuals without access to a car, unemployment increased 2.2 percentage points. Hispanics experienced the most adverse impacts, with a 3.4 percentage point increase in unemployment, whereas whites experienced the smallest impacts — but still a significant 0.7 percentage point increase. The unemployment rate in all other New York City neighborhoods fell by 1.4 percentage points during the same period.
The previously mentioned studies focused only on relatively large metro areas in their analyses. The few studies that have included smaller regions (e.g., fewer than 500,000 residents) find limited evidence that job access impacts employment outcomes, suggesting that spatial mismatch is primarily a problem of larger cities and their surrounding counties.12 However, a recent study attempted to measure the impact of bus transit on employee turnover using data from 39 small metro or nonmetro counties with bus transit systems in Illinois, Indiana, Michigan, Ohio, Pennsylvania, and Wisconsin.13 The study found that every additional $10 per capita investment in bus transit would reduce county-level employee turnover by a modest but not immaterial 0.29 percentage point. Accordingly, in counties currently served by public transportation, bus transit is estimated to reduce annual employee turnover costs by approximately $6.1 million compared with otherwise similar counties without bus transit.
Effective Policies Anticipate the Future
Several recent studies have demonstrated the positive impact of transit accessibility on employment outcomes for low-skilled workers. Using better data and more robust methodologies than previous research, these studies extend the spatial mismatch literature to provide evidence that transit-oriented mobility strategies can achieve real economic gains. These studies, however, stress that any policy solution should be deeply aware of local context, because some strategies are more likely to succeed in certain places than others, and the best solutions for improving labor market outcomes are likely to be multipronged, because low-skilled workers living in neighborhoods isolated from economic opportunity often face multiple barriers to employment beyond just transportation challenges.
Forward-looking policies could seek a combination of solutions that break down barriers to automobile ownership but also leverage emerging transportation technologies in ways that are more complementary to equitable TOD.14 Traditional fixed-route transit, although obviously an essential component of equitable TOD, might not always be the optimal solution in terms of improving job access — especially in less densely populated places. Car ownership would certainly improve the ability of low-income jobseekers to find employment, likely more so than transit.15
Technology is rapidly changing the kind of transportation that is possible, with on-demand microtransit, ride-hailing, and/or carsharing programs more feasible now than in the 1990s and early 2000s, when reverse commuting vanpool strategies such as Bridges to Work and the Federal Transit Administration’s Job Access and Reverse Commute (JARC) program produced subpar results.16 As a result, reverse commute strategies that better leverage new technologies should not necessarily be discarded.
Transportation and the nation’s cities and regions are changing, with residential and workplace preferences shifting back to the urban core.17 Proper management of these changes could serve to improve job access for vulnerable populations. Thus, the challenge for community and economic development practitioners and policymakers is to craft solutions that do not merely react to problems of the 20th century, but anticipate the opportunities of the 21st.
Useful Resources for Practitioners and Policymakers
The following resources provide additional case studies or online tools to help practitioners better understand the extent of spatial mismatch in your region and policies that could improve job accessibility.
- Accessibility Observatory, University of Minnesota
- AllTransit online portal, The Center for Neighborhood Technology
- Moving to Access initiative, Brookings Metropolitan Policy Program
- Reconnecting America (2012). Putting Transit to Work in Main Street America: How Smaller Cities and Rural Places Are Using Transit and Mobility Investments to Strengthen Their Economies and Communities
- Shared-Use Mobility Center (2015). Shared-Use Mobility Reference Guide
The views expressed here do not necessarily represent the views of the Federal Reserve Bank of Philadelphia or the Federal Reserve System.
John F. Kain, The Effects of the Ghetto on the Distribution of Nonwhite Employment in Urban Areas. Washington, D.C.: National Academy Press, 1964; John F. Kain, “Housing Segregation, Negro Employment, and Metropolitan Decentralization,” Quarterly Journal of Economics 82(1) (1968), pp. 32–59.
Keith Ihlanfeldt and David Sjoquist, “The Spatial Mismatch Hypothesis: A Review of Recent Studies and Their Implications for Welfare Reform,” Housing Policy Debate, 9(4) (1998), pp. 849–892.
Karen Chapple, “Overcoming Mismatch: Beyond Dispersal, Mobility, and Development Strategies,” Journal of the American Planning Association, 72(3) (2006), pp. 322–336.
Pieter A. Gautier and Yves Zenou, “Car Ownership and the Labor Market of Ethnic Minorities,” Journal of Urban Economics, 67 (2010), pp. 392–403.
Charles Baum, “The Effects of Vehicle Ownership on Employment,” Journal of Urban Economics, 66(3) (2009), pp. 151–163; Robert Cervero, Onésimo Sandoval, and John Landis, “Transportation as a Stimulus of Welfare-to-Work Private Versus Public Mobility,” Journal of Planning Education and Research, 22(1) (2002), pp. 50–63; Tami Gurley and Donald Bruce, “The Effects of Car Access on Employment Outcomes for Welfare Recipients,” Journal of Urban Economics, 58(2) (2005), pp. 250–272; Marilyn T. Lucas and Charles F. Nicholson, “Subsidized Vehicle Acquisition and Earned Income in the Transition from Welfare to Work,” Transportation, 30(4) (2003), pp. 483–501; Paul M. Ong, “Car Ownership and Welfare-to-Work,” Journal of Policy Analysis and Management, 21(2) (2002), pp. 239–252; Steven Raphael and Lorien Rice, “Car Ownership, Employment, and Earnings,” Journal of Urban Economics, 52(1) (2002), pp. 109–130; Steven Raphael and Michael Stoll, “Can Boosting Minority Car-Ownership Rates Narrow Inter-racial Employment Gaps?” Brookings-Wharton Papers on Urban Affairs (2001), pp. 99–145; J.S. Sandoval Onésimo, Robert Cervero, and John Landis, “The Transition from Welfare-to-Work: How Cars and Human Capital Facilitate Employment for Welfare Recipients,” Applied Geography, 31(1) (2011), pp. 352–362.
With these data, the authors are able to identify individuals who are only looking for a job owing to a “mass layoff event,” defined as employers that lost over 30 percent of their workforce during one year, which allows the authors to reasonably assume that a jobseeker’s residential location is unrelated to his or her current employment status. Fredrik Andersson, John C. Haltiwanger, Mark J. Kutzbach, Henry O. Pollakowski, and Daniel H. Weinberg, “Job Displacement and the Duration of Joblessness: The Role of Spatial Mismatch,” NBER Working Paper 20066 (2014).
The nine areas are Buffalo, Chicago, Cleveland, Columbus, Detroit, Indianapolis, Milwaukee, Minneapolis-St. Paul, and Pittsburgh.
Most participants in the study were African Americans who held a high school diploma or less, did not have access to a car, and resided in southeast D.C. or D.C.’s eastern suburbs; participants lived an average distance of 6.7 miles to low-wage job vacancies, which tend to be located downtown or in D.C.’s western suburbs. David Phillips, “Getting to Work: Experimental Evidence on Job Search and Transportation Costs,” Labour Economics, 29 (2014), pp. 72–82.
The five metro areas are Baltimore, Boston, Chicago, Los Angeles, and New York City. Evelyn Blumenberg and Gregory Pierce, “A Driving Factor in Mobility? Transportation’s Role in Connecting Subsidized Housing and Employment Outcomes in the Moving to Opportunity (MTO) Program,” Journal of the American Planning Association, 80(1) (2014), pp. 52–66.
Transit accessibility was measured by the number of jobs within a 30-minute transit commute using data from Adie Tomer, Elizabeth Kneebone, Robert Puentes, and Alan Berube, Missed Opportunity: Transit and Jobs in Metropolitan America, Washington D.C.: Brookings, May 2011.
Residents of the affected Brooklyn neighborhoods represented a diverse income mix but were less racially diverse than New York City on average. Importantly, though, 43 percent of workers in the affected neighborhoods commuted to Manhattan for employment and, of these, 84 percent reported using the subway to commute. Justin Tyndall, “Waiting for the R Train: Public Transportation and Employment,” Urban Studies, 54(2) (2017), pp. 520–537.
Keith Ihlanfeldt and David Sjoquist,”The Spatial Mismatch Hypothesis: A Review of Recent Studies and Their Implications for Welfare Reform,” Housing Policy Debate, 9(4) (1998), pp. 849–892.
Dagney Faulk and Michael Hicks, “The Impact of Bus Transit on Employee Turnover: Evidence from Quasi-experimental Samples,” Urban Studies, 53(9) (2016), pp. 1836–1852.
Rolf Pendall, Evelyn Blumenberg, and Casey Dawkins, What if Cities Combined Car-Based Solutions with Transit to Improve Access to Opportunity?, Washington, D.C.: Urban Institute (June 2016).
Evelyn Blumenberg and Gregory Pierce, “A Driving Factor in Mobility? Transportation’s Role in Connecting Subsidized Housing and Employment Outcomes in the Moving to Opportunity (MTO) Program,” Journal of the American Planning Association, 80(1) (2014), pp. 52–66.
Anne Roder and Scott Scrivner, Seeking a Sustainable Journey to Work: Findings from the National Bridges to Work Demonstration, Philadelphia, PA: Public/Private Ventures (July 2005); J.S. Onésimo Sandoval, Eric Petersen, and Kim L. Hunt, “A Case Study of Job Access and Reverse Commute Programs in the Chicago, Kansas City, and San Francisco Metropolitan Regions,” Journal of Public Transportation, 12(4) (2005), pp. 93–115.
Richey Piiparinen, Jim Russell, and Charlie Post, “The Fifth Migration: A Study of Cleveland Millennials,” Cleveland, OH: The Cleveland Foundation; Richey Piiparinen and Jim Russell, “Center for Population Dynamics Quarterly Brief January 2017: Transportation’s Role in Economic Restructuring of Cleveland,” Urban Publications, 0 1 2 3 1427.