Lampiran :
Retailers choose locations to maximize profit considering location within the city and proximity to other
Journal of Planning Education and Research
OnlineFirst
© The Author(s) 2020, Article Reuse Guidelines
https://remote-lib.ui.ac.id:2075/10.1177/0739456X20908945
Planning Research
Retailer Behavior Near Fixed Transit Lines in Los Angeles: A
Spatial Autoregressive Probit Model to Evaluate Retail Clustering
Craig T. Olwert 1, Chih-Hao Wang 2, Vicente Arellano 3, and David Oulrey 4
Abstract
Aggregate studies of retail uses around fixed transit lines and in transit-oriented development are scarce. In
total, 8,402 retail locations were identified within half mile of twenty-seven stations in Los Angeles County,
USA. Sixteen spatial autoregressive (SAR) probit models help us identify five retail categories (everyday
uses, opportunists, rivals, hotels, and large footprints) based on how the retail uses self-cluster, cluster with
other uses, choose transit station type preferences, prefer building types and are influenced by
gentrification. The results help planners understand that aesthetic improvements and zoning changes are
likely to lead to increased restaurant presence and specialized retail clusters, while strip malls further from
stations beneficially provide locations for everyday uses.
Keywords
retail uses, spatial probit model, fixed transit lines, transit-oriented development, gentrification
Keywords
Usos minoristas, modelo espacial Probit, líneas de tránsito fijo, desarrollo orientado al tránsito,
gentrificación
1 CaliforniaState University, Northridge, Los Angeles, CA, USA
2 CaliforniaState University, Fresno, Fresno, CA, USA
3 New York City Department of Housing Preservation and Development, New York, NY, USA
4 Willdan Engineering, Elk Grove, CA, USA
Corresponding author(s):
Craig T. Olwert, California State University, Northridge, 18111 Nordhoff Street, Northridge, CA 91330, USA. Email:
craig.olwert@csun.edu
Introduction
Los Angeles County has invested heavily in its fixed transit system to reduce congestion and increase
sustainability for the region. Since Metro opened the light rail Blue Line, connecting downtown Los
Angeles (LA) to downtown Long Beach in 1990, the system has been constantly expanding with wide
public support (Metro 2018; Spears, Boarnet, and Houston 2017). With the increased number of stations and
the high-cost housing in the LA metropolitan area, transit-oriented development (TOD) has been pursued by
both developers and planners (Loukaitou-Sideris, Gonzalez, and Ong 2017). The region is encouraging half
of new housing and employment growth to be located near transit (Houston et al. 2015). With more
residents and employers around stations, retailers around the stations are reasonably expected to change to
meet the demands of the new customers who may walk to the stores (Lee and Moudon 2006).
retailers. Major commercial centers form along busy arterial streets with many potential shoppers.
Traditional commercial cores have small on-street storefronts along these busy commercial roads. The
buildings provide a continuum of storefronts, creating a walkable shopping experience. The buildings are
generally small, and stores choose the best location and negotiate with individual property owners for leases.
However, there is a lot of inconsistency in uses and quality of the properties. So, developers build strip
malls, indoor malls, lifestyle centers, and mixed-use areas which are operated by one leasing agency that
optimizes the retail mix to maximize shopper traffic. While there has been research on clustering uses within
shopping centers, research on spatial autocorrelations of clustering effects around transit stations has not
been performed.
Retailers use aesthetics to attract shoppers. Larger malls focus on high-quality aesthetics to make
shopping a leisure activity, increasing length of shopping trips and frequency of visits. However, few studies
examine external aesthetic effects, which should increase foot traffic. Together with the effects of store
clustering, understanding these built environment effects (i.e., building type and external aesthetics) would
allow planners and decision makers to design or legislate for a better shopping environment and increase the
success of stores around transit stations.
This study is designed to investigate how retail uses cluster or compete around transit stations and each
other. In total, 8,402 retail uses were recorded across twenty-seven stations on the LA fixed transit system.
The observations in the survey cover the retails’ store uses, outside physical conditions, building types,
transit features, and station types. Gentrification status was also computed for the neighborhoods of each
store. To control for the effects of neighborhood qualities, socioeconomic characteristics were obtained
using Census data. Spatial autoregressive (SAR) probit models were estimated for each retail use to account
for the clustering or competitive effects among the 14 different uses. The SAR models were also used to
examine the effects of physical attributes on the retail uses. The model results provide new insights into the
problem of urban design and land-use planning that can be used to promote commercial activities around
transit stations.
Background
The Los Angeles Transit System
Since the first line opened in 1990, Los Angeles has invested in a fixed transit system to address congestion
and pollution concerns. The light rail, subway, and bus rapid transit system has received significant public
support, including two major sales tax initiatives that have raised billions of dollars to continue the system
expansion (Metro 2018).
New fixed line stations can change retail through three different mechanisms. First, new stations can
increase consumer presence, increasing sales but possibly changing the retail mix to cater to transit riders.
Pagliara and Papa (2011) found higher retail property values near new rail stations. The opening of Los
Angeles’ Expo tripled rail transit trips of those living within 1 km of a station (Spears, Boarnet, and Houston
2017) which should impact retailers. Second, new TOD with residential components can increase transit
commuters who walk to stations and shop along their walk. Dill (2008) found transit commuting rates of 26
percent in Portland, Oregon area TODs versus 7 to 13 percent for the surrounding areas. Lund (2006) found
that 35.4 percent of all new TOD residents chose to live there because of access to shopping and services.
Built environments with high walkability (such as in TODs) have generally been shown to increase walking
to the store (Cao, Mokhtarian, and Handy 2009) Third, the new development and higher income residents
can trigger gentrification as was found for Toronto, Montreal, and Vancouver (Grube-Cavers and Patterson
2015). Kahn (2007) found that walk and ride stations generally experience gentrification. Retail stores will
change to accommodate the new residents; small independent stores are likely to be replaced by chain
stores, especially the new mixed-use buildings. Increased rents frequently drive low-margin independent
stores out of business and get replaced by uses serving the new higher income residents. Some of the new
everyday uses that move into the area can be beneficial to the preexisting residents, but other new stores no
longer serve their needs (Monroe Sullivan and Shaw 2011). One example is the formation of food mirages,
where gentrifying areas attract high-end supermarkets that are not affordable to low-income residents
(Breyer and Voss-Andreae 2013).
While case studies have been performed on change in retail uses in gentrifying areas (Loukaitou-Sideris,
Gonzalez, and Ong 2017; Monroe Sullivan and Shaw 2011), and the effect on rental rates and property
values of commercial and residential properties around fixed transit systems has been studied (Pagliara and
Papa 2011; Pan 2013; Pivo and Fisher 2011), no studies look at the aggregate retail mix around transit
stations. The Los Angeles system is continuing to expand, and recent TOD laws will increase residential
development. Between the new residents and the new buildings with modified retail spaces, understanding
retail patterns around transit stations is beneficial for planners.
Factors Effecting Retail Uses
Retailers choose their locations based on the optimal mix of factors, including neighborhood characteristics,
stations types, aesthetics, and building types, to maximize profits.
Retailers want to conveniently serve their customers and consider neighborhood characteristics that
affect customer visitation and purchasing patterns. While areas with higher incomes and education levels
have more disposable income and a greater likelihood of purchasing experiences, Schuetz (2015) found
these higher income areas had less retail employment. Areas with higher black and Asian populations are
likely to have different store mixes due to income and cultural differences; Schuetz (2015) found areas with
higher black populations had less retail employment. If TOD includes residential development, the new
potential customers increase population density which Schuetz (2015) found to be a significant predictor of
retail employment. Rosiers, Theriault, and Menetrier (2005) found higher rents were charged in shopping
centers that served larger populations using a normal gravity model, but when accounting for income, lower
income areas have lower rents. So, if a TOD starts causing an influx of new middle- and high-income
residents, gentrification may occur. Gentrification of older and originally poorer neighborhoods is likely to
have significant changes in the neighborhood retail mix (Monroe Sullivan and Shaw 2011).
The TOD literature has recognized that station types are important in predicting transit usage and
development that occurs around the stations (Atkinson-Palombo and Kuby 2011; Bollinger and Ihlandfeldt
1997; Hess and Almeida 2007; Houston et al. 2015; Ratner and Goetz 2013; Zuk et al. 2018). Station types
are a measure of the built environment which influences residential travel behavior (Cao, Mokhtarian, and
Handy 2009). Ratner and Goetz (2013) found that all of Denver’s transit stations had some new retail
development, but most occurred at the downtown stations. Different station types included in the literature
(Atkinson-Palombo and Kuby 2011; Ratner and Goetz 2013) include downtown stations with high-density
commercial uses, urban centers with a smaller commercial core surrounded by high-density residential uses,
campus stations with many students that make a unique clientele mix, urban poverty stations with high
transit ridership and low personal vehicle ownership, and urban and suburban residential neighborhoods that
are not destinations due to little retail development or employment opportunities but the source for many
riders. No study has evaluated how retailers respond to station types.
Aesthetics attract shoppers as evidenced by corporate architecture and higher rents for aesthetically
pleasing areas. However, studies have not evaluated the impact of street trees and sidewalk quality on
retailer location choices. Forsyth et al. (2008) found that residents walked more miles per day with the
presence of sidewalks, transit, and less litter and graffiti. Pivo and Fisher (2011) found that office and retail
properties paid a 0.9 percent market value premium for each increase in Walk Score. In looking at shopping
center rents, Rosiers, Theriault, and Menetrier (2005) identified aesthetics of centers as important in
determining rent levels, but only measured it by the income levels of the shoppers.
Building types can offer aesthetic and clustering advantages that attract customers. Larger facilities, such
as lifestyle centers, indoor malls, and strip malls, have a more consistent aesthetic controlled by one
landlord. Large shopping centers optimize their store mix to obtain the highest rents (Eppli and Benjamin
1994). Indoor shopping malls use anchor stores, which pay lower rents, to attract customers to smaller
specialty clothing stores, which pay higher rents (Rosiers, Theriault, and Menetrier 2005). Lifestyle centers,
a newer shopping format, focus on a mix of restaurants, specialty retailers and entertainment venues (Little
2006). The lease agreements frequently require enough specialty stores to create a cluster that will attract
customers (Little 2006). Mixed used, stand-alone and on-street buildings are generally smaller stores that are
not controlled by one landlord, so aesthetics are highly variable and there is no coordinated effort to provide
clustering benefits (Eppli and Benjamin 1994).
Spatial Modeling in Discrete Choice Studies
Retailers can benefit from clustering near each other as it allows for more convenient comparison shopping
(Eppli and Benjamin 1994; Rosiers, Theriault, and Menetrier 2005). In deciding on locations, retailers are
influenced by the presence of other retailers (Larsson and Oner 2014; Oner and Larsson 2014). Some
retailers self-cluster, as classically suggested by auto malls, while others are competitive and will locate
away from each other where they can serve the local customers (Eppli and Benjamin 1994). Similarly,
retailers may benefit or be disadvantaged by being near different types of retailers, which is why landlords
optimize store mix in larger facilities (Eppli and Benjamin 1994; Little 2006).
Spatial statistical modeling allows researchers to better understand neighborhood effects that affect an
individual’s decision. Discrete choice models use utility theory to understand individual behavior but do not
account for spatial autocorrelation and the complex spatial relationships between individuals (Paez and Scott
2007). SAR models have explained behavior among individuals in the same neighborhoods. A SAR model
can be used to study clustering behavior between different retail uses. Larsson and Oner (2014) use a
discrete negative binomial model to explain retail location and evaluate proximity to similar and other retail
activities; however, they did not use SAR for the spatial analysis. SAR can provide new insights into
retailers’ clustering behavior with themselves and other uses. The findings can be used to group retailers that
share the same physical environment and provide implications for urban design and land-use planning near
transit stations.
Data and Methods
Data Collection
To better understand retail behavior around transit stations in Los Angeles, retail locations were collected for
all stores within half mile of twenty-seven randomly selected stations in the Los Angeles Metro heavy rail,
light rail, and bus rapid transit system as shown in Figure 1. Retail data were collected by five trained
individuals between the May 2014 and May 2015. We collected all retail uses, non-retail stores located in
retail locations, and vacant parcels (and parking lots) that could be developed as retail. If a building was
primarily office, only the retail uses were mapped. The primary entrance to the store was mapped. For larger
indoor malls, the stores were located approximate to their location within the buildings.
Figure 1. Los Angeles fixed transit system with only the sampled stations labeled.
Source: https://www.metro.net/riding/guide/system-maps/.

The data collected included the name of the store, whether the store is a chain (later verified via web
searches), whether a storefront is vacant, the presence of street trees, whether the sidewalk was wide or
good, and the presence of a drive thru. The collector indicated if they thought the building was new (since
the station was opened) and was then was verified by comparing with the year built from the Los Angeles
County Auditor data. Finally, the store types were collected with an assignment of NAICS categories. The
category assignments were checked for consistency before analysis.
To provide explanatory and control variables of retail locations, the U.S. Census American Community
Survey 2013 five-year average data based on Census tracts of the store location was used. Gentrification
status was computed for each store neighborhood using a methodology similar to that outlined in Freeman
(2005). The variable descriptions and descriptive statitics are shown in Table 1.

SAR Probit Model
An ordinary discrete choice model accounts for decision-making dependent on attributes of alternative
choices and characteristics of the decision-maker (Paez, Scott, and Volz 2008). However, decisions can be
affected by neighbors’ choices (Paez and Scott 2007). A SAR probit model accounts for neighborhood
effects (i.e., spatial autocorrelation) based on random utility theory. The chosen alternative (i.e., y = 1) is
assumed to carry the highest positive net utility (i.e., U1 > U0). The probability of the observed choice
outcome (y) from a choice set is (LeSage and Pace 2009):
(1)
where y* is the latent utility, a function of a set of explanatory factors, xp, together with a spatial lag term,
Wy*. βp and ρ (spatial scale) are parameters. The spatial weight matrix, W, is based on a defined
neighborhood structure, which is used to capture the neighborhood effects. In equation (2), the latent utility,
y*, is estimated and the error term follows a truncated multivariate normal distribution (TMVN) distribution.
The choice set is binary: being a certain retail use or not.
(2)
Equation (2) is then extended to include local proximities, Wxq, which represents the spatially proximate
retail uses (see equation (3)). A 100-meter buffer is used to identify all the neighboring retail uses for the
spatial weight matrix, W, with an average of 60.87 neighboring retail uses at an average distance of 58.64
meters. With the defined W, SAR probit models are estimated using the Bayesian approach developed by
LeSage and Pace (2009), using a large random sample simulated from a posterior density function.
(3)
Note that the signs of estimated coefficients, ρ and γq, could be either positive or negative, depending upon
the nature of business relationships between a retail use and other adjacent uses. A positive sign implies a
complementary effect that the same or similar uses would tend to cluster, and a negative sign indicates a
competing effect that a retail use would avoid clustering.
Results
A total of 16 SAR probit models were estimated with the results shown in the Appendix. This section will
present the summarized results of all the models. First, the desire of an individual use to cluster will be
discussed. Because the model results demonstrate patterns between individual uses, store groupings are
created to provide a better understanding of the results. Then results will be presented for variables that
planners can influence: building types, urban infrastructure, and station types.
Clustering Effects and Store Groupings
Retail uses have different preferences about locating near themselves. Table 2 shows the uses that are self-
clustering (ρ > 0), self-competing (ρ < 0) and indifferent (ρ insignificant). Self-clustering uses want to be
close to themselves to attract more customers who can comparison shop before making a final selection.
Retail (RETA) and clothing stores (CLOT) cluster in indoor malls and restaurants (REST) cluster on streets;
however, only a few restaurants or stores in any cluster will make a sale to a particular customer. Health care
(HEAL) uses also cluster, for the convenience of the doctors and patients. Auto uses (AUTO) also cluster,
likely a response to zoning of these more industrial uses. However, being located near one another can
provide more efficient provision of parts, increasing the competitiveness of co-located auto stores. Religious
and educational facilities (RELI) cluster away from transit stations in on-street and stand-alone buildings,
likely looking for low-rent facilities. Chain stores (CHAI) and vacancies (VACA) also cluster. Chains can
pay to locate near other chains and then benefit from the extra draw of the name recognition. Vacancies tend
to end up in certain areas and hence cluster. Self-competing uses include laundry (LAUN), grocery (GROC),
and barber shops (BARB). Customers frequent these locations and are likely to choose the closest ones if the
product and pricing selection are similar, so they do not want to be located close to one another. This logic
can also apply to hotels (HOTE) where dispersion provides more potential guests. It is surprising that
furniture stores (FURN) do not cluster, it may be because the category also includes hardware, paint, and
home centers as well as home-related contractors, which are more likely to disperse. Professional services
(FIRE), art stores (ARTS), and gas stations (GASS) can form small clusters (i.e., four gas stations around an
intersection) but also spread out across the region and therefore are indifferent to clustering or competing
with themselves.
The modeling results not only determined the self-clustering behavior of retail uses but also identified
complimentary (γ > 0) and competing (γ < 0) retail uses. With major consideration given to self-clustering
behavior and complimentary and competing uses, and less consideration to preferred building types and
station types, five store groupings were designated to help explain retail locational choices (see Table 3).
 likely to be located. The urban centers, and especially areas with high ridership, provide guests with a
convenient way to arrive at the hotel.
Large footprint uses include religious, auto industry, furniture, gas stations, and health care uses because
their lot sizes are larger than the other uses except hotels (not shown here). They do not like locating near
restaurants, retailers, and clothing stores or locating in mixed-use, strip malls, indoor malls, or lifestyle
centers. In fact, auto industry and gas stations both prefer stand-alone buildings. However, three of the uses
(religion, auto, and health care) do cluster with themselves; furniture stores do not, similar to Oner and
Larsson’s (2014) finding that household appliance stores like retail diversity. Most of these uses prefer not to
be downtown, where land prices are at a premium, except for gas stations, likely due to the inclusion of
parking lots in this category.

Building Types
Everyday uses are store types that people need on a regular basis and visit frequently. This being the case,
these retailers locate near residents and each other to promote foot traffic. Restaurants, grocery, laundry, and It is good for planners to understand what store types are likely to locate in different building types (see
Table 4).
barbers best fall in this category, which is similar to Lee and Moudon’s (2006) finding that more walking
occurs in neighborhoods where grocery, restaurants, and retail uses are nearby. Oner and Larsson (2014),
using factor analysis, also identified a category “mix of mostly small-scale stores selling common goods”
which fits the everyday store grouping. Of these four uses, restaurants are the most different, because they
like to cluster with themselves, whereas the other uses do not like self-clustering. Popkowski Leszczyc,
Sinha, and Sahgal (2004) found that single-purpose shoppers do frequent the closest grocery stores leading
to a location strategy of dispersing grocery stores. They all prefer being in strip malls and mixed-use
buildings. They have no preference for station types because they want to be everywhere; the only exception
is that restaurants prefer campus locations.
Opportunists include FIRE and arts uses. They have few preferences. People infrequently purchase from
these store types, so opportunists do not pay for premium locations. The arts retailers co-locate with gas
stations, an unpleasant next-door neighbor but not near high ridership stations with higher rents. FIRE uses
are located at most station types, but slightly prefer suburban stations, which have less office space
alternatives. Opportunists have some quality requirements: they do not like being near auto uses.
The rivals are retail and clothing stores. They both like to cluster with themselves so much that they
exclude the other, consistent with Larsson and Oner’s (2014) finding that clothing stores do not like retail
diversity in their immediate neighborhood. Arentze, Oppewal, and Timmermans (2005) also found that of
their three categories, the clothing and shoe category did not benefit from the presence of grocery and other-
goods categories. However, retail and clothing stores tend to behave similarly. They like to cluster around
barbers, perhaps due to a luxury effect; customers willing to spend at barbers, salons, and spas are more
likely to continue the beautification process with new clothes or other goods. However, they do not like
locating near health care facilities. They both prefer indoor malls, with retailers preferring lifestyle centers
and clothing stores preferring mixed used opportunities, but neither likes being in stand-alone buildings.
They also like wide sidewalks, a measure of improved aesthetics. Retailers are strongly attracted to
downtown stations while clothing stores are more broadly spread with a dislike for campus and industrial
areas. Part of the retailers’ downtown preference is due to the large number of jewelers in the downtown Los
Angeles Jewelry District.
Hotels are not a true retail use, but influence retail uses and compete for commercial locations. Hotels do
not like to cluster but do like being near restaurants so that their guests can have access to convenient food.
They do not like wide sidewalks or mixed-use, strip malls, indoor malls, or lifestyle centers. But they do like
to locate in urban centers and industrial areas. Industrial areas have larger lots that allow building new
suburban style hotels with easy auto access and surface parking, also an area where wide sidewalks are not

On-street stores, used as reference in the models, are classic city development with the building fronting
onto the sidewalk and street but focusing on retail uses. These traditional uses are desirable locations for
Barbers, Opportunists (FIRE and Arts), Hotels, and Large Footprint (Auto, Religion, Health Care, and
Furniture) facilities. Independent stores, not chains, are likely to be on these classic on-street locations.
Stand-alone buildings (STAL) offer an opportunity for drive thrus, so it is not surprising that chains
prefer stand-alone stores. Because stand-alone buildings are spaced further apart, they are not conducive to
rivals. Large footprint uses prefer stand-alone buildings because they are willing to accept the lower density.
Of the large footprint stores, only furniture did not like stand-alone buildings. Hotels dislike the four
building types, suggesting they prefer on-street and stand-alone formats. Stand-alone hotels have surface
parking which provides easy auto access.
Mixed use buildings (MIXU) frequently have office and residential uses above retail uses. Everyday uses
like mixed used buildings which provide good access to many potential customers. Rivals also like this
setting. This building type is most likely to have vacancies.
Strip malls (STRI) are preferred by everyday uses and chains. The auto-oriented setup allows for
frequent shoppers to pick-up all types of goods. Shoppers like the convenient parking (Eppli and Benjamin
1994) and multi-purpose shoppers like the opportunity to stop at a few conveniently located stores
(Popkowski Leszczyc, Sinha, and Sahgal 2004). Retailers, health care, and FIRE uses also locate in strip
malls, but do not prefer strip malls to on-street locations.
While indoor malls (INDO) are preferred by rivals, lifestyle centers (LIFE) are preferred by restaurants
and retailers. This is consistent with retail differences expected with lifestyle centers (Little 2006) and the
indifference for the arts for lifestyle, where arts dislike most other building types, indicates the change to
include more entertainment in the lifestyle center mix. Note that some of the indoor malls included swap
meets which mostly contain independent stores. Only one regional mall was in the sample (Westfield
Topanga Mall).
Urban Infrastructure and Aesthetics
The quality of the aesthetic environment can increase the desirability of an area, resulting in more visits and
increased store sales. Street trees and sidewalks are two types of urban infrastructure that influence
aesthetics.
Street trees (TREE) are widely recognized to increase walkability; the shade and psychological release of
being under trees should increase sales as more people walk and linger in the area. The modeling results
suggest that restaurants and chains are responsive to being near street trees. Restaurants and chains also
prefer lifestyle centers, which are known for their high-quality aesthetic appeal (Little 2006). Also, religious
organizations and health care facilities locate on lots with trees but may be due to the organizations having
larger facilities and choosing to plant them, rather than choosing the location because it has trees.
Sidewalks are another facet of urban infrastructure that planners can promote to increase walkability and
that should indirectly encourage more sales. Retailers and clothing stores (rivals) preferred wide sidewalks
(SWWI). Laundry facilities also liked wide sidewalks, perhaps people walk to the facility, so they are better
served by the wide sidewalks. Gas stations and parking lots like both good quality (SWGO) and wide
sidewalks, possibly due to the large number of parking lots downtown and the corporate standards required
for gas stations throughout the city. Chains like both good and wide sidewalks. Hotels and arts facilities do
not prefer locations with wide or good sidewalks, respectively. So better sidewalk conditions are most likely
going to increase the presence of rivals and chains. Corporate standards probably are the reason that chains
also like high-quality wide sidewalks.
It is important to note that chains are the most responsive group to the aesthetic measures of sidewalks
and street trees. They also are the only retail type to prefer being in a new building. Chains prefer the
aesthetics and corporate standards likely require them to maintain and upgrade their facilities to higher
standards than any other store type.
Neighborhood Effects
Retailers are also concerned about the neighborhoods in which they choose to locate. Station types,
gentrification, and socioeconomic status of neighborhoods all effect location choice of a given store.
 Different retail types prefer different station types. Campus locations (CAMP) around University of
Southern California are preferred by restaurants but are the least liked location of clothing stores. Central
city job centers (CENT) are attractive to religious and educational facilities as they have both many workers
and residents along with a central location to provide clients. Urban (URBA) and suburban (SUBU)
neighborhoods are attractive to the large footprint uses, with urban neighborhoods being more attractive to
hotels (which need a large amount of land and like the more central locations) and suburban areas being
attractive to chains and FIRE uses. Urban poverty (URPO) areas also were attractive to health care uses but
were not preferred by any other uses. Downtown, the reference station type, is a preferred location for
retailers and gas stations (more specifically, parking lots).
Neighborhood gentrification status, gentrified (GENT) and not gentrified (NGEN) versus areas that are
not able to gentrify, did not have much effect on location decisions, consistent with Kahn (2007) who did
not observe gentrification effects in Los Angeles. Religious facilities like gentrified areas and grocers do
not. Gentrified areas for religious facilities may be an endogeneity issue, where the possibly higher
aesthetically pleasing religious facilities increase gentrification, rather than religious uses locating here.
Grocers typically find gentrifying areas expensive so are less likely to locate here, but those that do cater to
higher income residents leading to food mirages. Chains are less likely to locate in not gentrified
neighborhoods. There may not be adequate income to justify a chain, but local demand will be met by an
independent store. This is consistent with the literature where the retail mix changes as an area gentrifies
with more chains (Monroe Sullivan and Shaw 2011).
Most uses are indifferent to the commute modes of their neighborhood’s residents. However, restaurants
are attracted to neighborhoods with a higher proportion of transit users (TRAN), and retailers are not.
Furniture stores prefer auto commuting neighborhoods (AUTO), which is likely due to the infrequent
purchases and need to transport the purchased product by vehicle. Auto industry uses like more bike-
friendly neighborhoods (BIKE) rather than walkable neighborhoods (WALK), perhaps because the workers
are close enough to bike to work, but not so close to an undesirable use for a walkable neighborhood.
Neighborhoods with newer housing are attractive to FIRE uses, likely due to a lack of alternative office
space in the area, but not to clothing or health care stores. Higher income neighborhoods attract barbers,
where higher profits can be made, but not laundry facilities (as most housing units have their own
washer/dryer) nor to chains, with higher income allowing more upscale independent shops to be supported.
More highly educated neighborhoods are attractive to restaurants (consistent with the gentrification
literature which explains more income is spent on experiences), hotels, and chains. Black and Asian
neighborhoods are more attractive to arts and health care uses, with health care including both doctor’s
offices and plasma centers. Doctor’s offices may be more likely to locate in retail centers if there are less
medical buildings to lease. The Asian neighborhoods are also more attractive for restaurants, barbers, and
clothing stores, almost creating a lifestyle center with convenience a key aspect. However, the Asian
neighborhoods are not attractive to retailers, furniture stores, or chains.
Discussion
Fixed transit stations have been built and are expanding across the Los Angeles region. By using a variety of
locations and fixed transit modes, an understanding of the behavioral choices of retail space users allows
planners to better estimate the effects likely to occur around existing and future transit. To promote further
transit patronage, there is usually a focus on creating higher density uses immediately surrounding the
station, which can increase walking by local residents (Lee and Moudon 2006).
In preparing recommendations, the effect of zoning and large leasing agencies on the study’s results need
to be considered. Some uses, consider automotive uses, will be in predominately light industrial areas.
However, retail uses are also mixed in these areas. So, while zoning influences location and specifically the
auto clustering effect, it does not change that the zoning is applied throughout the region and the same
patterns will be observed. Large leasing agencies optimize the mix of stores to increase rents in their indoor
malls, lifestyle centers, and strip malls. The question is if they artificially create clustering effects. In the
study area, these large leasing facilities are surrounded by many smaller buildings and storefronts, so that
while a user might be excluded from a large leasing retail facility, there are still opportunities to locate in the
area. In fact, with about 10 percent of all storefronts being vacant, there are ample opportunities to choose
the ideal location. So, both zoning and large lease facilities are unlikely to affect the recommendations
further discussed.
The effects on retail uses from two likely scenarios will be discussed: making simple aesthetic
improvements and making zoning changes.
Aesthetic Improvements
Simple aesthetic improvement frequently includes new and wider sidewalks with street trees and street
furniture. More street trees are likely to make an area more desirable for restaurants and chains, which will
increase the clustering of more restaurants and create a food destination. However, rivals also like wide
sidewalks, so that a very walkable area may attract more retail uses, but only if they can create clusters.
Religious and educational uses as well as health care facilities may also be attracted by the aesthetic
improvements creating some mix of uses. These changes may trigger some new building, but without
zoning changes are less likely to do so. If many of the stores in these neighborhoods started as on-street
buildings, then it is likely that the existing and new users will be independent (non-chain) stores.
With on-line retailing competing against brick-and-mortar stores, planners need to be concerned about
increased vacancies and expected change in store mixes. A strong aesthetic identity for an area is likely to
increase the shopping experience and result in more sales. Promoting a sense of place and recognizing
natural clusters can help planners decide what new businesses to promote. Some areas can focus on one of
the rivals (shopping or clothing), while others will focus on restaurants. Planners also need to ensure that the
daily uses remain convenient for local residents, so that they do not switch to on-line alternatives. An
aesthetic experience can help increase the preference toward shopping at brick-and-mortar stores.
Zoning Changes
Zoning changes can allow for different uses in existing buildings and is likely to promote the construction of
new buildings. If minor zoning changes are permitted to increase population densities and allow mixed uses
on the commercial streets, but leave the single-family residential uses unchanged, then we are likely to see
changes in retail mixes. Single-story on-street buildings are likely to be replaced with new multi-story mixed
used buildings which are more likely to have chain lessees and restaurants. However, in suburban
neighborhoods, upper stories could accommodate FIRE uses, leaving the first story activated as retail uses
and restaurants. Further from the stations, strip malls should still be permitted to allow for convenient
locations of everyday uses. The strip mall provides convenient access with its associated parking, especially
useful if there is still a large amount of single-family homes in the neighborhood. It is likely that these
changes will cause a loss of independent retailers.
If major zoning changes are permitted, then not only will more multi-story mixed used buildings be built
on the main commercial streets, but higher density residential (and possibly mixed use) buildings will be
built throughout the neighborhood. This could result in a change of station typology. All the new
construction will likely include wider high-quality sidewalks with street trees, which will become very
attractive areas for restaurants, especially with the increase in population and commensurate spending.
Rivals will also like this setting, especially if there are small storefronts that can be provided close enough to
each other to provide a shopping destination. Allowing small boutique malls would likely increase this
effect. Areas that may have started as urban neighborhoods are likely to become central urban locations and
increase their office space as well. With these changes, additional religious and educational uses are likely to
locate in the areas. However, to provide residents access to everyday uses, permitting peripheral strip malls
is recommended.

Conclusions and Further Research

Retail uses at Los Angeles’ fixed transit stations exhibit important trends of which planners should be
aware. Clustering of store types and aesthetic effects need to be understood and documented so planners can
create more livable cities. This is one of the first articles to look at retail clustering and competition between
same and different uses in the planning literature using SARs, and has found that restaurants like to cluster,
but most everyday uses do not. Rivals (clothing and retail) also like to cluster, but to exclude one another.
We should expect that behavior to continue. Using a large data set, rather than just a case study about a
station or two, indicates that this behavior is consistent across the Los Angeles region.
Similarly, improved aesthetics, measured by sidewalks and street trees, attract rivals and restaurants,
creating destination locations. As planners help develop unique identities at each station, it creates more
opportunities for future visiting and use of the transit system, especially during nonpeak hours. It also can
increase the desirability for people to live around those stations. The study did find that chains were
attracted to all measures of improved aesthetics, so protecting unique identity will be essential for planners
to consider in their local planning.
For this study, the dependent variable was the presence of the store. However, more insight as to
desirability of an area could be obtained if the actual leased area, rental rates, retails sales, and employment
by each firm would be available. A breakdown by each individual store would allow a better understanding
of clustering effects, and which store types are willing to pay higher rents and possibly tease out the benefits
of building types and aesthetics. These data were not available at the individual store level, so presence was
used.
Aesthetics are difficult to measure, and to limit data collection time, street tree, and sidewalk data were
the only attributes collected specifically measuring aesthetics. More time-consuming measures can include
percentage of first floor facing the street that is window, some measure of the maturity of the street trees,
and the percentage of the sidewalk that is shaded. These would all create more walkable and defensible
spaces. The extra time collection would be significant. A more difficult and subjective measure would be the
“coolness” of the building and area. Does the place have a unique and fun vibe that is attractive to most
people? While this would provide interesting insights, it would be best administered via survey and was
outside of the scope of this project.

Acknowledgments
The authors thank Jonathan Caballeros and Marisol Zamar for their data collection work.

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of
this article.

Funding
The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this
article: This research was funded by a California State University, Northridge, College of Social and Behavioral
Sciences research Grant.