Public Finance and Transit-Oriented Planning: New Evidence from Southern California

Abstract

Local governments seem to be continually strapped for funds. While the revenue-generating role of their planners is often discussed, it is rarely investigated in any detail. We address this research gap by considering the fiscal nature of land use policy in transitoriented development. A massive and influential literature has explored the potential for leveraging rail system investments by locating high density residential developments near commuter rail stations. The feasibility and focus of these strategies have been questioned, however, in the face of evidence that local government support for these projects is mixed at best. To explain this behavior, we examine the role basic fiscal conditions play in the decision to zone land near all existing and proposed commuter rail stations in southern California. The analysis indicates that stationarea zoning depends significantly on community public finances. The results underscore how the practice of transitoriented development must account not only for travel behavior and the broader goals of any given urban design, but also for the selfinterested nature of municipal planning.