Land closest to Chicago's El stations most valuable in Chicago
By Chrissy Mancini Nichols
Apr 17, 2015
This post first appeared at metroplanning.org
One of Chicago’s greatest strengths is its rapid rail transit system. The Chicago Transit Authority operates the second largest public transportation system in the nation, with 146 rail stations providing almost 730,000 rides each weekday. It’s also one of the few cities in the world that has rail service to two major airports.
When I first moved to Chicago my number one requirement for choosing where to live was it had to be within walking distance of a train station. I’m not alone—data shows that people are flocking to transit more than ever before. The growth in Chicago Transit Authority rail in particular is astonishing. Daily boardings were up 165,000 a day from 2008-2012, almost 33.4 million new rides a year. Trends suggest the trajectory will continue: Controlling for population and employment growth, transit ridership in the Chicago region has grown more than driving over the past decade. Combined with a substantial drop in the number of 16- and 18-year-olds applying for their driver’s licenses, people are forgoing vehicle ownership and retiring baby boomers tend to choose transit over driving.
Because transit access, particularly rapid transit, increases people’s access to desirable destinations, like work and fun, people want to live within walking distance of a train station. In Chicago the total amount of land within a half-mile of a Chicago Transit Authority rail station is 24.6 percent. And on that 24.6 percent of land—walking distance to the train—lives 35.3 percent of the population. Because of that demand, land near transit stations often commands higher land prices. An analysis of land values across Chicago shows that the closer a property is to a Chicago Transit Authority rail station, the higher its value. Properties near rail transit have also retained more value over time.
Properties one-fourth mile from a train station—roughly two blocks—have almost 160 percent more value per square foot than those one mile away and, while property values city-wide fell from 2010 to 2014, land near transit retained more value than land farther away.
The trend remains the same for all property classes, including retail, office and commercial. Below, data shows residential property values per square foot are 134 percent higher within a quarter-mile of transit and 65 percent greater within a half-mile than the city-wide average.
Transit-oriented development = growth
Clearly land near Chicago Transit Authority stations is one of Chicago’s most valuable assets. For our city and region to grow, we must capitalize on it and consider where and how people want to live when making land use policies. How do we do that? By promoting transit-oriented development. Just like some of Chicago’s current housing stock is a hundred years old, the decisions made today will impact the next 100 years. The City and Chicago Transit Authority must consider trends in how people want to live and get around, focus on integrating planning for transit-oriented development into their transit projects and create a plan to develop the land they own but do not use.
The benefits of transit oriented development are clear. Number one it will grow transit ridership without having to spend a public dime. Transit-oriented development produces a virtuous cycle for the Chicago Transit Authority: The agency can sell land, thereby contributing revenues to its budget, the City can zone the land for more density and developers can build new housing and commercial space, which will attract more customers to the transit system. And because land near transit is more valuable, more density means money for local government and schools, without having to raise property tax rates.
And it’s about more than transit riders and money. Transit-oriented development is one of the best catalysts for growth.
Chicago has 77 community areas, and 60 of them lost population from 2000 to 2010. Even those neighborhoods that seem to be in demand and have lots of transit access—Lincoln Park, North Center, Lakeview, Lincoln Square—have lost residents. How’s that possible, you ask? Well, the zoning code actually creates barriers in neighborhoods where transit is most accessible.
The 2013 Transit-Oriented Development Ordinance was a first step in changing zoning requirements to respond to people’s demands for living in denser areas near transit, as my colleague Yonah Freemark points out. However, the decline in the share of the region’s population living near transit, even in desirable neighborhoods, is a consequence of city zoning policy that limits how many residential units a developer can build. In fact, a large majority of land in the City doesn’t qualify for the incentives passed in the 2013 ordinance. The law doesn’t allow mixed-use developments with a combination of retail and residential in some areas near transit—which undermines business’ desire to locate near the train. The data shows that almost 50 percent of land area within a fourth-mile of a transit station is used for commercial activities, mostly retail, while city-wide retail only accounts for 15 percent of land use.
We’re not giving the people what they want.
The result? We’re not making Chicago as attractive as it could be to keep current residents from leaving and attracting new. We’re not maximizing development, housing and retail near train stations and we’re forcing the construction of expensive parking when people are choosing to put off or forgo car purchases. We’re not giving the people what they want.
It’s an easy fix, and an important one. People young and old want more access to transit, so cities offering access will get the people. And with big transit projects in the works like the Red and Purple Line Modernization, the transit system is one of the best opportunities to catalyze economic and population growth.
Further, more residential density, combined with allowing ground floor retail, will be a catalyst for neighborhood economic development with more residents to spend their income at local businesses. For example, a quick look at Census data in Lakeview shows that the new transit-oriented development at the Paulina station would add approximately 12 people and about $1 million in potential total income per floor. If even 10 percent of that income were spent in the neighborhood, local businesses would greatly benefit.
Chicago’s transit system is one of the best opportunities to catalyze growth. More than most other places in the country, it’s one of the few cities where transit provides access to jobs and fun. MPC is working to revise local land use policies to orient them toward increased density in areas near transit, extend the Ordinance passed by the City of Chicago in 2013 and develop regulatory incentives and financing tools to encourage transit-oriented development projects accessible to people with a variety of incomes. It seems easy: Chicago has one of the best transportation systems in the country, so let’s capitalize on it and give people what they want.
MPC Research Assistant Ryan Anderson contributed to this post.