Do Rail Transit Stations Encourage Neighborhood Retail Activity?

Over the past 20 years, California has made substantial investments in intra-metropolitan passenger rail infrastructure, expanding existing systems and building new ones. According to advocates of New Urbanism, such investment should encourage the growth of mixed-use transit-oriented development, defined as a high-density mix of residential and commercial uses within walking distance of rail stations. Little research to date has examined whether rail investment stimulates retail activity, which is a key component of mixed-use development. In this paper, I test whether the opening of new rail stations across California’s four largest metropolitan areas has affected retail employment within one-quarter mile of the stations, compared to similar neighborhoods around older stations or with no rail stations. Results indicate that new rail stations were located in areas with initially high employment density, somewhat outside the city centers. The impact of new stations on nearby retail activity varies within and across metropolitan areas. While new station openings are not significantly associated with retail employment across all MSAs, in the Los Angeles and Sacramento MSAs new stations are negatively associated with retail. Newly opened stations are positively associated with retail employment around suburban stations, but have a negative relationship near downtown stations.