Transit Induced Demand: If You Build it, Will They Come?
Transportation planners often use the term induced demand to describe the impact of a highway project on increasing demand for travel over short-term and long-term periods. This well-documented pattern has the unfortunate outcome of causing planners to over-estimate the benefits of highway expansion projects on congestion and emissions since it fails to account for these cumulative, long-term impacts on demand for travel. Although the amount of attention focused on it is far less, the same induced demand concept applies to transit infrastructure investments, but with a twist.
In the case of transit investments, long-term induced demand for use of the transit system is a positive outcome. One that increases the value of the transit investment and lowers its capital and operating costs per added rider. Transit planners, in short, want induced demand to happen, and may at times be somewhat too optimistic that it will come. But why would this induced demand response from the market be asymmetrical compared to highway expansion projects?
The answer lies in the geography of the impact of changes in accessibility. Highway expansion projects have a large and diffused area of impact for increased travel speed from the project. Households and businesses perceive a change in relative accessibility for more outlying areas, where housing and land costs are less expensive, and at the margin, tilt their choices towards those newly advantaged areas. And because the areas impacted are broad, developers have many opportunities to find developable sites with generally low density zoning, to build housing and non-residential buildings.
But how is this different for transit investments? First of all, the geographic area impacted is much more compact. A single station is accessible for pedestrians within a very short walk radius - roughly 1/2 mile, or less. Local circulation options and active modes such as bikes and scooters can extend this impact area to perhaps a mile, or more. But the point is, it is a concentrated area. Why does this matter for induced demand? It means that there are far fewer sites available for development, and these sites will need to be used at much higher intensity, than the low-density housing and commercial development generally stimulated by highway projects.
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A second side-effect of the concentrated impact area is that it requires far greater cooperation between the transit infrastructure agency and the municipality in which the transit station or corridor is being built. If the area around the transit station is zoned for low density uses, and the city and community do not agree to intensify zoning to allow greater density, the opportunity for transit induced demand is potentially lost, which can translate into a very costly outcome in terms of infrastructure capital and operating cost per added transit rider. And very little impact on mode shifting from more emissions and congestion generating modes to more efficient transit and active modes. We might call this missing the TOD opportunity.
At UrbanSim, we have been working on these issues of Induced Demand for both highway and transit investments, and developing tools to support more informed planning that accounts for these long-term, cumulative impacts. Our models are now widely used across North America and Australia for operational planning to appropriately account for these impacts, and to help avoid the expensive consequences of ignoring them.