Transit-Oriented Development

The Detroit Transportation Corporation commissioned a study with HDR to determine the impact of the Detroit People Mover on downtown development. During a 28-year period, the People Mover generated millions of dollars in beneficial impact in the areas of economy (property value), environment and mobility.

The Transit Oriented Development (TOD) Benefits Assessment Study takes a look at the presence of the Detroit People Mover and its contributing role to downtown Detroit. The People Mover's value had not previously been specified in real dollars.

Public transportation enhances the economic competitiveness of a central business district (CBD) by improving mobility within the study area as a result of reductions in generalized travel cost.

Estimation of Safety Benefits The DPM can reduce the likelihood of surface transportation-related accidents, as roadway conditions are expected to improve with fewer automobiles.

Estimation of Other Benefits

The affordable mobility benefits of DPM can include providing an affordable and high quality alternative for commuting to work, accessing medical, educational, recreational, and shopping facilities. The benefits under this category can include the impacts on key mobility vulnerable sectors for seniors and persons with disabilities.

Regional Economic Models, Inc. (REMI) model, a dynamic system that relies on econometric equations and an input-output (I-O) model. REMI captures stable and long term employment changes due to the DPM within related industry sectors in the Detroit, which are derived from temporal and spatial impacts occurring over time

To assess the economic development benefits of the DPM, a hedonic pricing model of property values is used. The model accounts for factors that contribute to changes in property prices, including transit investment near real estate properties. The types of properties analyzed in hedonic pricing models usually include residential and commercial parcels. Prices of civic and institutional parcels such as places of worship and schools are not considered to be influenced by transportation-related economic development and are therefore not part of the assessment.

The Transit Premium

A hedonic pricing model is constructed for assessing the impact of the DPM on property values. For the DPM, one output of the hedonic analysis is the transit premium – the amount of DPM livability or economic development benefit that has been capitalized in property prices.

  • The model considered DPM station locations (13 created using ESRI street map); and parcels within one-mile radius of DPM stations with distance (measured in feet) from nearest DPM station, DPM route, and proximity to nearest highway on- / off-ramps
  • DPM contributes to 34.3 percent increase in property prices (90 percent likelihood)
  • DPM contributes to 38.6 percent increase in commercial property prices

Through a hedonic pricing analysis, the DPM is found to have contributed to increases in commercial property price by over 38 percent, while other price determinants are held constant. There is also some evidence that the DPM has contributed to increases in residential home prices. This finding may be strengthened with the addition of structural and property type information that are missing from or incomplete within the parcel data. Differentiation of condominiums (one owner per unit or parcel) within the Apartment (many units with one owner or under one parcel) property type category may also increase the robustness of the study.

The REMI TransSight model analyses the effects of transportation improvements on economic development. For the first time, the tool was customized for automated guideway transit (AGT) to study the resulting influence of the construction and operation of the People Mover. The tool's success has been documented and verified by Michigan Department of Transportation (MDOT) and replicated by HDR with other U.S. public transportation properties.