Prospectus for PLAN 592: Structural Change and the City

What could light-rail transit do for Toronto? A closer examination of the Sheppard Avenue East Transit Corridor
by Timothy M. Shah

Prepared for

Dr. Tom A. Hutton

April 2012


Transit in Toronto has been a contentious topic of late. Toronto Mayor Rob Ford has continuously shown his unilateral support for building more subways in the city, showing little support for the popular alternative, light-rail transit (LRT) (Grant, 2012). Ford's discontent and condemnation of LRT has been clear with statements including “this is going to be a boondoggle of billions of dollars that makes the eHealth scandal look miniscule" and “people hate the St. Clair. They hate these streetcars. You can call them what you want. People want subways, folks. Subways, subways. They don’t want these damn streetcars blocking up our city" (Grant, 2012).

Mayor Ford has advocated for expanding the Sheppard Subway line further into Scarborough. While at first glance, this may appear to be a sensible option, some have dismissed this as too expensive and impractical given Toronto's current transit priorities and budgetary constraints. In light of this debate, City Council created an independent and non-partisan Expert Advisory Panel in February 2012 to conduct an analysis of transit options on Sheppard Avenue East including an LRT, subway, and an LRT-subway hybrid option. The committee's final recommendation was light-rail transit (LRT) as it performed best on the nine criteria used to assess the transit options for the corridor (Expert Advisory Panel, 2012).

Mayor Ford has recently dismissed the committee's findings as biased, asserting that the committee had a preference for light-rail transit from the beginning. Notwithstanding Mayor Ford's claims, this decision will have large ramifications for shaping growth, investment and population dynamics in Scarborough for the coming years. Whether these impacts will be positive or negative is yet to be determined, but at this stage, there is an opportunity to present cogent arguments for how LRT could be beneficial from an economic and accessibility perspective for current and future residents living along or close to the Sheppard Avenue East corridor.

The Expert Advisory Panel used nine criteria to assess transit options on the Sheppard Avenue East corridor including economic development; cost effectiveness and fiscal sustainability; timeframe; ridership; network connectivity; level of service; equity and accessibility;

environmental sustainability; and community impact. Elaborating on these criteria would be too onerous of a task for this prospectus and thus the paper will exclusively focus on economic development. Criteria such as equity, accessibility and community impact are related to economic development and as such will be discussed.

To assess the potential economic impacts of LRT, precedent examples are offered to show how LRT has influenced local economic development, residential property values, and improved overall access to jobs for a city's citizenry. Gains in job accessibility help measure the total economic impact as peoples' access to job opportunities are important for urban growth and equity. Some key questions, then, include:    how does rail transit attract businesses and stimulate investment? What are the general impacts of LRT construction on property values? If LRT does raise property values and hence rents, how can planners ensure a balance of investment and a minimization of residential displacement?

Finally, the principal purpose of this analysis is to present the positive economic impacts of LRT on the Sheppard Avenue East corridor versus a subway. A subway line could have been selected as the alternative, notwithstanding its large cost implications, it is indeed a widely accepted and popular form of transit in multiple cities around the world including Toronto, Hong Kong, London, New York City and Tokyo, among others. By presenting the key benefits surrounding LRT as a viable alternative, the paper will offer planners more insights into what LRT means on a more holistic level. Further, the paper aims to demonstrate how the differences in economic impacts between subways and LRT are marginal, yet the immediate accessibility gains that can be accrued from an LRT service line can outweigh any potential long-term advantages of subways.

This paper begins with an overview of the Expert Advisory Panel's recommendation of LRT. It offers context into the Sheppard Avenue East corridor through presenting some statistics. Thereafter, the literature on LRT's economic impact and accessibility benefits is reviewed to offer the reader more information about this transit technology. The research design is then explained which draws on census data from Toronto, reports and academic papers that have been

written on this topic. The results present the descriptive statistics of the sample from the census tracts and are complemented with statistics from the Expert Advisory Panel. A discussion of LRT's potential economic impact and accessibility benefits for the Sheppard Avenue East corridor follows. A conclusion is provided with comments on the efficacy of the author's approach and recommendations for decision-makers on how to bring about LRT in an efficient and equitable way.


The Sheppard Avenue East corridor has received the most political attention in terms of transit development in Toronto. David Miller, former mayor of Toronto, secured funding through Transit City in 2007 to build a series of light-rail transit projects around the city (see Appendix). Among them was the Sheppard Avenue East corridor, widely considered a vital transportation corridor in Toronto with the potential to better connect Scarborough and North York centres through a rapid transit network (Expert Advisory Panel, 2012). Rapid transit has been subject to much political discussion because if done well, it can stimulate growth, attract businesses, generate and support employment, reduce congestion, generate environmental benefits, and influence land use decisions (Expert Advisory Panel, 2012).

Evaluating the efficacy of transit projects is subject to intense scrutiny in the fields of urban planning, civil engineering, economics and urban geography (e.g. see Litman, 2012; Currie, 2006). Transit projects are expensive undertakings and are subject to rigorous cost-benefit analysis to ensure that they are deemed a worthwhile investment. Indeed, the LRT proposal on Sheppard Avenue East is projected to cost $1 billion for 13.6 kilometres of track extending from Don Mills Station to Morningside Avenue (see map in Appendix for reference). The other two transit options that were under consideration included a subway line ($2.7-3.7 billion) and a LRT-subway hybrid ($1.5 to 1.8 billion), both with slightly different distances (Expert Advisory Panel, 2012).

Figure 1 shows the current Sheppard Subway line in purple. The dotted red line is the question of which transit mode will be constructed. Trends in population and employment growth are

critical when considering transit projects. According the official plan forecast of Toronto, from 2011 to 2031, the Sheppard Avenue East corridor is expected to add 33,000 people, and close to 19,000 jobs (Expert Advisory Panel, 2012). These forecasts are used to determine ridership forecasts, which help justify development of a transit project.

Figure 1. Toronto Open File (2012)

About Light-rail Transit

Light-rail transit (LRT) are electrically-powered high-capacity transit vehicles which run on the surface, in their own rights-of-way, but which share intersections (Toronto Transit Commission, 2012). LRT have become established world-wide as a preferred transportation technology for situations which require greater capacity and higher quality than bus service, but which do not warrant the very-high capacity or expense of subways. Light-rail lines are currently being constructed or have recently been opened in over 100 cities world-wide (Grant, 2012).

Some widely accepted benefits of light-rail transit include:

Rail vehicles have higher capacity than buses; can be operated individually or combined into longer vehicles

  

Dedicated right of ways result in reliable and predictable service New rail lines attract more passengers than the bus routes they replace Well designed, modern vehicles are more attractive and comfortable for riders than buses

Rail lines have a sense of permanence which will attract investment and upgraded streetscape treatments

Can operate at surface or underground

Source: Toronto Transit Commission, 2012

Economic Development Impacts: Differences between Subway and LRT

The expert advisory panel gave subways a higher score than LRT for economic development with scores (out of 5) of 4.14 and 3.71, respectively. Based on their analysis and review of planning documents' economic projections, investment in subways is predicted to provide a total economic impact of $3.8 billion compared to $1.6 billion for LRT, generate more than 22,880 person-years of direct and indirect employment compared to 9,500 for LRT, and increase sales by $7.2 billion compared to $3.0 billion for LRT (Expert Advisory Panel, 2012).

Other groups such as the Pembina Institute have conducted similar analyses on the Sheppard Avenue East corridor and have found different findings. Table 1 below is a summary of their findings and projections.

Table 1. Comparing Sheppard Transit Options (Burda & Haines, 2012) Length (km) Cost ($B) Torontonians Served 81,600 122,400 Construction cost per Torontonian served $33,100 $8,300 Low-income residents served 4,800 7,200

Sheppard East Subway Sheppard LRT Phase 1

8 12

$2.70 $1.01

The findings from the Pembina Institute and the Expert Advisory Panel are complimentary. Table 1 offers more metrics on accessibility as given by categories such as 'Torontonians served' and 'low-income residents served'. Construction cost per Torontonian served is also valuable to know because people value transportation differently, and if a majority of people undervalue subways, this could be a vast misallocation of funds expended for the benefits per person received.


The metrics from the Expert Advisory Panel portend a noticeable difference with subways suggesting a higher positive economic impact. Their indicators for this criterion include city planning growth forecasts, economic uplift, and economic development (as measured by employment and investment impact). While at first sight these numbers are better for subways, a closer examination of accessibility, community impact and equity is needed for a holistic planning assessment. Figure 2 shows the land value premiums associated with transit modes by land use designation (e.g. residential).

Figure 2. Land Value Premium Associated with Transit Modes (Expert Advisory Panel, 2012)

As shown in Figure 2, subway does perform better than LRT for land value premiums on all land uses. Yet, the differences for office land uses between LRT and subway is only marginal as the absolute land value premium depends largely on the type of office use and the degree to which employees value transit as a mode of transportation. Furthermore, considering the marginal differences between LRT and subways, it is worth factoring in the construction costs and timescale of both transit modes. According to the Expert Advisory Panel and the report by the Pembina Institute, the construction costs for subway are higher and the timescale for construction is longer. This means that the rate at which land value premiums could be achieved through the provision of transit may differ considerably.

Thus, while theoretical, the shorter timeframe and lower construction costs for LRT may generate more immediate term investment, and attract businesses (in the form of retail or office) which can enhance the overall appeal of certain neighbourhoods along the corridor. This

theoretical statement will be tested later on the paper but is worth thinking about carefully as we move forward. Depending on the popularity of the LRT, this can also lead to construction of residential units which makes LRT even more valuable from a land value premium perspective. Therefore, the differences in absolute land value premiums between LRT and subways could start to diminish if LRT is developed well, connected to other transit forms and accessible to residents along the route.

One final component of discussion is worth including before delving into previous research. The Expert Advisory Panel recommended LRT over subway for several reasons including the land use and population characteristics of the corridor. The current and projected density along Sheppard is insufficient to support a subway. Sheppard Avenue East currently has a density of about 68 people and jobs per hectare, which is well below the density threshold of 115 people per hectare that is required for a subway to be economical. Figure 3 below shows other transit projects in Toronto by density.

Figure 3. Transit Line by Density (Burda & Haines, 2012)

Figure 3 indicates that the current and projected density metrics for the Sheppard Avenue East corridor are more suited for LRT than for subways. This is critical to determine when deciding upon transit modes and infrastructure and can influence or shape decisions for where businesses

and firms choose to locate. One could argue that while density projections are not currently suited for subway, the construction of subway could induce further commercial and residential construction thereby satisfying the density requirements later in the future. This is a reasonable claim but given the urgent need for transit expansion on Sheppard Avenue East, LRT may be the better option. This will be further explored in this prospectus. The next section draws on the literature to offer empirical evidence of the economic impacts of LRT.

Previous Research

This section draws on the literature to highlight 1) theoretical and empirical research on how public transit improves job accessibility; 2) the relationship between LRT and property values.

Public Transit and Job Accessibility

Litman (2011) defines 'accessibility' as people’s "ability to reach goods, services and activities, which is the ultimate goal of most transport activity. Many factors affect accessibility, including mobility (physical movement), the quality and affordability of transport options, transport system connectivity, mobility substitutes, and land use patterns" (p. 1).

Extending Litman's definition of accessibility, it is worth mentioning that examining the relationship between public transit access and job opportunities is not new (Kain, 1968). A number of scholars have been interested in this question for decades, particular how lowerincome groups benefit from access to transit. In a study by Baum-Snow & Kahn (2000), the authors explain how better transit may disproportionately improve the quality of life and the quality of job opportunities for the urban poor. Public transit potentially increases the access of the poor to better labour market opportunities (Kain, 1968). This comes in addition to reduced commuting times for people served by better transit.

Baum-Snow & Kahn (2000) explore 5 major U.S. cities (Atlanta, Boston, Chicago, Portland, Washington D.C.) that upgraded their public transit systems from 1980 to 1990. They estimate new rail transit’s impact on usage and housing values, using distance as a proxy for transit

access. They find that extending transit lines makes public transit more accessible and reduces the time cost of commuting by public transit (Baum-Snow & Kahn, 2000). Commuters who live in census tracts now closer to public transit have a greater incentive to use it. Public transit use in such areas may rise both due to incumbent mode switching and due to population sorting.

As transit access improves, public transit users have a greater variety of communities to choose among (Baum-Snow & Kahn, 2000). They explain that part of this increase in transit use is attributable to new migrants to these census tracts having higher probabilities of using public transit than tract incumbents. Transit improvements also lead to a small but significant amount of mode switching toward public transit.

In a study of the Hiawatha LRT line in the Twin Cities, Minnesota, proximity to light-rail stations and bus stops offering direct rail connections are associated with large, statistically significant gains in accessibility to low-wage jobs. These gains stand out from changes in accessibility for the transit system as a whole. The authors found that after light-rail construction, low-wage workers located near station areas. The number of low-wage jobs also increased near station areas. These previously underserved areas of the Twin Cities have benefited from frequent, all-day transit service (Fan et al., 2010).

However, what is more relevant about this study is that both low-wage and high-wage earners benefitted from the implementation of the LRT line. What is more, the LRT line in the Twin Cities is well connected with the rest of transit such as bus rapid transit which offers a premium and leads to overall accessibility gains. The authors of the study conclude that in planning future transit development for the Twin Cities region, it is critical to keep in mind that high quality transit service (both bus and rail) can be a powerful tool for improving the lives of poor and rich alike.

LRT and Property Values

A number of studies have assessed the economic impact of rail transit. These studies have largely come from scholarship in urban economics, planning, and transportation. It is useful to

summarize some of these papers' findings to highlight precedent cases for the City of Toronto, in light of the Expert Advisory Panel's recommendation of LRT. Many of these papers have focused on the impacts of LRT on residential and commercial properties (e.g. Landis et al., 1995; Chen et al., 1998). Very few, if any, have actually assessed how LRT stimulates investment, attracts businesses or impacts job creation.

In a recent study of Buffalo, New York, Hess & Almeida (2007) used 2002 assessed value of properties provided by the City of Buffalo. They used hedonic price models for residential properties within an half-mile of 14 LRT stations and independent variables such as property characteristics, neighbourhood, and local amenities. The authors examined homes located in the study area and found that every foot closer homes were to LRT stations corresponded with an increase in average property values by $2.31 (by geographical straight line distance) and $0.99 by network distance (Levinson, 2011). Further, the homes that were located within a quarter mile of LRT stations can earn a $1300 to $3000 premium (Levinson, 2011). Landis et al. (1995) using a different method in their study of San Diego found homes sold for $272 more for every 100 metres closer to LRT stations; they found no effect on commercial properties.

Lewis-Workman & Brod (1997) looked at 4,000 properties within 1.6 kilometres of three LRT stations in Portland, Oregon. They found that property values increase by $2.49 for every metre closer to light-rail within 762-1609 metres distance to transit range. Furthermore, they found that homes 305m closer to transit are worth $760 more than other homes, on average (LewisWorkman & Brod, 1997).

Many of these papers have focused on the impact of LRT on residential properties. Only a few have explored commercial land uses such as Weinberger (2001). This author, using Santa Clara County, California as a case study, collected over 3,000 lease transactions from 1984 to 2000. The author explored the effect of LRT on commercial rents in office and research and development buildings. The study found that properties that lie within 0.8 kilometres of a lightrail station command a higher lease rate than other properties in the county (Weinberger, 2001).


While the above studies offer an idea of the impacts of LRT on property values, each city is different and thus context matters. Nonetheless, presenting a diverse array of studies can help illuminate the general benefits of LRT. Toronto's demographic patterns, labour and housing markets and transit ridership are all different than the cities mentioned above. Also, the aforementioned studies have the benefit of assessing the before-and-after economic impacts of LRT stations because they are complete, whereas Toronto is only in the initial stages. Nonetheless, the evidence is generally positive and could have implications for current and future properties that are in propinquity to Sheppard Avenue East.

Theory of Rail Impacts on Property Values

One relevant study by Knaap et al. (2001) found that municipal plans for light-rail investments have positive effects on land values in proposed station areas in Washington County, Oregon. Again, generalizing their findings should be done with caution. However, a couple of insights are worth noting. They found that information about light-rail plans is generally observed by the development community and capitalized into land values (Knaap et al., 2001).

Drawing on economic theory, Knapp et al. (2001) explain how higher land uses tend to discourage low-density housing in station areas. Higher land values can encourage higher density development or transit-oriented development (TOD) which can support transit ridership targets and generate transit revenues in the near-term (Knaap et al., 2001). All of this is to support their hypothesis that planning is a behaviour by a rational local government that can be used to alter urban development patterns for the purpose of increasing social welfare (Knaap et al., 2001).

Diaz et al. document a number of cities in the U.S. who have brought about rail transit. They find that the primary advantage of properties near rail over those not near rail transit is the additional accessibility they bring (Diaz et al.). Table 2 offers more of their findings.


Table 2. Summary of Benefits Associated with rail transit (Diaz et al.,)

  

Residents near rail have more convenient access to regional employment, retail and cultural opportunities Properties holding employment uses such as offices and industrial sites experience higher property values because such properties have increased access to a labour market Office development may see a larger property value increase because office buildings tend to cluster in dense concentrations Retail properties benefit from the fact that rail transit contributes to the concentration of activity and increases pedestrian traffic in transit-accessible areas


Canadian census data from 2006 was used to investigate sociodemographic, housing, labour and transit data for the Sheppard Avenue East corridor. First, the GeoSearch function from Statistics Canada was used to obtain census tract IDs from various neighbourhoods along or close to Sheppard Avenue. GIS was not used in this project and thus buffers around planned LRT stations were not created (e.g. 400 metres, 800 metres).

Census tracts were obtained from each major intersection along Sheppard starting from Don Mills Road in the west and ending at Morningside Ave in the east (the proposed route for the LRT). The proposed LRT route includes several stations (25 total) along Sheppard, but for simplicity, only major streets were included for obtaining census tract IDs (e.g. Victoria Park, Kennedy, McCowan, Neilson etc). City planning documents were also used to collect data on transit ridership and sociodemographic characteristics.

Figure 4. Sample Census Tract ID, Sheppard and Birchmount, Toronto (Statistics Canada, 2006)


After obtaining the census tracts (n=15), descriptive statistics were computed including the median, minimum and maximum values. The results in table 3 show differences between the census tracts and the Toronto CMA.

Table 3. Descriptive Statistics on Sample from Census Data Variable Median Income Unemployment Rate Labour Market Participation Average Value of Dwelling Number of owner dwellings Number of rented dwellings Public Transit mode share Median for CTs (n=15) $54,652 8.4 62 $319,086 1,075 435 29% Toronto (CMA) $64,128 6.7 68.3 $403,112



Within the sample of 15 census tracts, there is variation in income, housing prices, labour market participation, and public transit ridership. Indeed, median income ranged from $37,591 to $74,658; public transit ridership (as measured by mode of transport to work) ranged from 15 percent to 46 percent; labour market participation ranged from as low as 53 percent to as high as 70 percent. The median value of a household's dwelling was $319,086 with a low of $210,290 and a max of $402,254. MLS real estate data was used to gather a sense of home prices along the corridor as a cross-validation. Randomly selecting 19 homes distributed along the corridor, the median was $242,000 with a large standard deviation in the output.

As this is aggregated census data from 2006, the results should be interpreted with caution as new trends may have emerged or changed in the past six years. Further, zonal-aggregated variables (such as census tract IDs) for gross spatial units are not homogenous with respect to neighborhood design characteristics, land-use, and socioeconomic characteristics and thus this could cloud the effects of the specified variables and lead to less accuracy (Badoe & Miller, 2000). By using more disaggregated data such as census dissemination areas, along with a larger sample, this would have provided more precision in the results. In sum, the descriptive statistics, while using census tract IDs, indicate that there are significant differences in sociodemographic, labour and housing data along the Sheppard Avenue East corridor.

Where are people travelling to?

In the Expert Advisory's Panel's report, they included an analysis of trip distribution. Figure 4 and table 4 show the overall share of trip distribution for residents in Scarborough living in Planning District 16. As seen in figure 4, a majority of the trips are within the district (33 percent), with 15 percent to the rest of Scarborough and 13 percent to the downtown (City of Toronto, 2012). The forecasts indicate a marginal increase in trips to the downtown, MarkhamWhitchurch Stouffville, and a slight decrease in trips to the rest of Scarborough.

The numbers are useful for understanding where the residents of Scarborough are travelling to. Unfortunately, there are limitations to this data as it does not reveal whether trips are for work or non-work purposes. This would be useful for gathering a sense of labour market participation rates and where people are travelling to for work. Such data could, inter alia, offer more information to planners who can design for multi-modal integration of LRT and buses, for example. Recall that a key insight from the Fan et al. (2010) study was the importance of having a connected LRT and bus feeder system to make travel and accessibility easy for low and high income earners alike.
Figure 4. Scarborough North of 401 (Planning District 16) Trip Distribution (% of AM Peak Trips), 2006 survey data (City of Toronto, 2012)


Figure 5. Labour Force by Occupation, Scarborough Community Profile (City of Toronto, 2006)

Figure 5 shows labour force by occupation for the Scarborough Community Profile. As shown, the majority of jobs are either in business, finance and administration or sales and services at 23 and 24 percent respectively. There are also lower wage jobs in processing, manufacturing and industry. This was cross-validated with the 15 census tracts used in the study and the results show that most occupations are indeed held in those professions. However, certain census tracts including 378.05, 378.07, 378.02, 378.11 and 378.03 all have a significant number of jobs in processing, manufacturing and utilities. The purpose of revealing these data is to illustrate how the census tracts have both lower earning and higher earnings jobs alike. As reported by the Expert Advisory Panel, the construction of LRT stations will be close to these neighbourhoods and could benefit these workers differently.


Jobs/accessibility analysis

Given the data on labour market participation, housing, and transit trips, there is some level of discussion required. Accessibility should be part of any economic analysis as it provides a measure of where people are accessing jobs, where they can access jobs and the gaps in where

jobs are in the network. Data from the city indicates that in the LRT growth scenario between 2011-2031, population and employment trends will increase by 6,100 and 7,700 respectively between highway 404 and Agincourt which is a neighbourhood along the Sheppard Avenue East corridor. For the 15 census tracts included in the analysis, the 2006 public transit ridership rate was 29 percent which is above the Toronto CMA average of 22 percent. This portends that transit use is significant for people living along the corridor. Yet, the numbers indicate that labour market participation is below the Toronto CMA average along with a higher unemployment rate overall.

As we are relying on aggregated census data, we unfortunately cannot detect which job occupations use public transit as a mode of transport for work and non-work purposes. Thus, we can assume, like the Fan et al. (2010) study that transit modes like bus rapid transit, and LRT will be used by lower and higher income groups alike insofar as the benefits, accessibility gains and time savings accrued from transit outweigh the costs of using a car. In Minneapolis, they reported that the number of low-wage jobs accessible by 30 minutes of transit travel in morning peak hours increased by 14,000 jobs in light rail station areas and by 4,000 jobs in areas with direct light-rail bus connections after the addition of the Hiawatha line and related transit network upgrades (Center for Transportation Studies, 2010).

The City of Toronto (2012) has found that commercial office development generates 4 to 5 times more transit ridership than an equivalent amount of residential floor area. With the implementation of LRT, this could increase the number of jobs in sales and services, business, finance, administration and other occupations. In terms of accessibility gains, the Expert Advisory's Panel explains that a key corridor of deep poverty is Birchmount Road which would not have been serviced by the proposed subway option. Two census tracts around Sheppard and Birchmount have median income levels around $40,000 and unemployment rates above 10% compared to the medians of $54,652 and 8.4 percent unemployment rate for the 15 census tract sample. Both are in close proximity to Sheppard Avenue.

Under the LRT plan, there is a station at Birchmount and Sheppard which will provide greater access to residents who require and rely on transit the most to access employment and other

economic and social opportunities in the city and region (Expert Advisory Panel, 2012). Furthermore, the panel concluded that LRT has more stops/stations than the proposed subway option and this can result in many more people being within short walking distances of transit. Both census tracts at Sheppard and Birchmount are mixed in terms of rental and homeownership housing and based on the evidence from the literature, it is expected that homes that are within closer proximity to the LRT stations will see increases in property values. Thus, based on the evidence, we can posit that property values for homes close to Sheppard will rise and stimulate demand for retail, commercial and office spaces. This would have to be re-visited when LRT is actually built, but the purpose of this prospectus is to illustrate what could happen based on prior research.

The Diaz study has relevance here. Recall that they found that residential properties become more attractive when transit locates nearby:

"residents near rail have more convenient access to regional employment, retail, and cultural opportunities. Properties holding employment uses such as offices and industrial sites experience higher property values because such properties have increased access to a larger labor market. In fact, office properties demonstrate a larger property value increase compared to industrial sites because office buildings tend to cluster in more dense concentrations, allowing for the benefit of rail to be more acutely felt" (Diaz, p. 4).

These gains could be realized along the Sheppard corridor and help revitalize poorer census tracts like those around Birchmount and Morningside. Current businesses on Sheppard avenue can benefit from LRT provision and stimulate further interest in other firms to re-locate near the stations. LRT stations will be spaced closer together thus enhancing access overall versus farther spread out subway stations.

Another key part of this equation is the frequency of the service. Metro Vancouver's TransLink has recently created Frequent Transit Networks which is a network of corridors where transit service runs at least every 15 minutes in both directions throughout the day and into the evening, every day of the week (TransLink, 2012). The benefits to transit users is convenience and easy to use access and more confidence in reliability. However, these networks provide benefits to

municipalities and developers as well. For municipal planners, frequent transit networks can provide an organizing framework for coordinating land use and transportation. Benefits to developers may include:

Increased certainty about where high-quality transit is located aids development decisions and investments

Makes development near rapid transit stations and along the frequent transit network more desirable and easier to market

May increase rents per square foot and lower vacancy rates for office developments that are within walking distance of a rapid transit station

Source: TransLink, 2012

Toronto need not adopt a similar concept in the interim, but could provide more information about the planned frequency of the LRT service to prospective developers of office, residential and commercial space. This can offer more transparency to planners and developers. Increasing frequency does come with a cost; however, the total savings from not building a more expensive subway line could be used to increase the frequency of the LRT line and thereby bring accessibility gains, potentially more residential and commercial development, and increases in property values.

With the prospect of LRT enhancing labour market participation through more job creation along the corridor, and through increasing residential property values, this may lead to more population and employment growth than was forecasted by the planning department's projections. However, as learned from the Twin Cities, it is prudent to ensure that other transit modes are connected to the LRT network to allow for quick and easy transitions for people traversing the region. Recall that a paper by Knaap et al. (2001) examined whether the relationships between land values and proximity to planned stations changed after their locations were announced. They found that they did; plans to invest in transportation infrastructure can affect property values even before the infrastructure is in place. Furthermore, the information released by planners about proposed light-rail plans had a positive impact on land values, to which developers would capitalize by constructing higher-density units. This is not to suggest that land values will

increase as a result of LRT being selected as the transit mode on the Sheppard Avenue East corridor. But, given the widely available evidence on LRT (over 100 cities worldwide have implemented it), there is reason to believe that development will follow.

However, to be critical of Knaap et al. (2001), government as a 'rational actor' can indeed facilitate growth and help shape demand. But, the government, in this case the City of Toronto, must be wise to ensure that census tracts around Birchmount and Sheppard, for instance, do not see a precipitous rise in land values that displace low-income residents. The literature on gentrification (e.g. Lees, 2000; Maaranen & Walks, 2008; and Slater, 2004) is highly relevant here in terms of the role the local government can play in helping facilitate economic growth while minimizing displacement. However, this discussion is beyond the scope of the prospectus and could be explored in a larger research project on transit provision and displacement.

Impacts on Community A final piece of discussion in this analysis pertains to the construction impacts of transit projects. In general, any rail-based transit project will have some level of impact on a street because of the infrastructure (overhead cables, rail tracks) or underground excavation in the case of subways. Thus, disruption to the community during construction period will likely be a particular concern to businesses and residents of the area. As learned from the Canada Line rapid transit project in Vancouver, BC, completed in 2009, many businesses were impacted by its construction. Indeed, by 2007, 75 per cent of business owners along the 19-kilometre stretch of the Canada Line reported decreased sales, averaging a 36 per cent drop. Several properties also went up for lease during construction because of the lost business (Harbottle, 2010).

Rapid transit projects like the Canada line, or subway extension such as the proposed option on the Sheppard Avenue East corridor pose significant impacts on businesses and communities. While they can bring benefits long-term, LRT could be equally as effective and attractive for businesses and residents while being less disruptive overall. LRT does present some disruption, but its shorter construction time span and smaller capital costs make it a much more convincing alternative.

Planning tools to maximize LRT investment

As this is a prospectus, this final section discusses further areas of research that can be done on this topic. This research would serve to guide planners on decision-making around the proposed LRT option.

I. Offer Frequency

This paper has attempted to argue that LRT could be just as good as subways at one-third the cost. As mentioned, LRT stations are typically spaced closer together which enhances accessibility for transit users. High frequency will make the LRT option most successful in terms of generating sufficient ridership, helping people better access employment opportunities and attract businesses to the corridor. Transit frequency is indispensable to excellent quality transit service as people want convenience and value their time highly.

LRT frequency should be coupled with higher operating speeds to maximize the time savings for users. Increasing the frequency means higher operational costs for the TTC, but these benefits will be felt by transit users. It is recommended that the LRT service be provided in high frequency, not least to serve current residents and businesses, but to be an attraction option for future residents and firms. Planners should think about how a frequent LRT service could provide an equally high level of service than subways.

II. Maximize inter-modality

The LRT option, with its greater coverage, provides a greater potential for mode switching than the subway option (City of Toronto, 2012). As seen in the Fan et al. (2010) study, LRT can compliment an existing bus network. The proposed LRT route has a stop that intersects with GO Transit. This is sensible and will allow residents living along the LRT route to gain quick access to GO Transit for commuting purposes to regions outside of Scarborough. However, it is prudent that a bus feeder network be available for most if not all of the 25 proposed LRT stations. Transit users can experience convenient access to destinations through an integrated transit system. This

integration can be done through an LRT and bus network connection which will likely be more cost-effective than the subway option. However, this requires further research.

III. Highlight Walkability

LRT is a neighbourhood building technology (City of Toronto, 2012). International evidence has shown that LRT provision can increase walkability and livability of neighbourhoods. LRT is an amenity and residents and businesses value it. The City of Toronto, in light of the Expert Advisory Panel's recommendation of LRT, should include an addendum to its transit recommendation on how LRT relates to neighbourhood form, design and walkability.


The purpose of this paper was to shed light on the City of Toronto's recent vote on an LRT option for the Sheppard Avenue East corridor. An Expert Advisory Panel was organized and tasked with the responsibility to conduct a neutral analysis of three transit options for the Sheppard Avenue East corridor using nine criterion for evaluation. The panel recommended LRT and the city subsequently voted for the LRT option. Mayor Ford has long been a proponent for further subway expansion in the city. However, many scholars and planning professionals offer caution around too much enthusiasm for subways. Consider Haines (2012):
"when properly situated, subways can move the most people and offer the fastest commutes — but they also come with a price tag which we cannot currently afford. Building new subway lines now would mean that Toronto would have to further delay critical transit construction and deny transit to areas that desperately need it. Expanding Toronto’s subway system requires careful consideration of what corridors can properly support a subway, since building subways in neighbourhoods without the density to support them is needlessly expensive".

This paper went one step further in supporting the recommendation of the Expert Advisory Panel. Specifically, LRT was analyzed from an economic development and accessibility lens. Drawing on the literature, it was reported that LRT has a significant impact on property values. Further, LRT can improve peoples' accessibility to jobs. Census data was used to illustrate

sociodemographic, labour, housing and public transit figures for 15 census tracts along the Sheppard Avenue East corridor. This allowed the author to further elucidate the principal advantages of LRT and what it could mean for this corridor. While census data has its limitations, it does provide an overall picture of the trends.

The data showed that public transit is already popular along the corridor. It showed that there is a mix of occupations with different labour market participation rates. Evidence was used to showcase how LRT can enhance labour market opportunities and influence where workers to decide to live. The prospectus did not include a lot of content on how LRT influences business relocation and stimulates investment because the literature on this is weak.

This prospectus is aimed for the City of Toronto and decision-makers who are now tasked with the responsibility in planning and constructing the LRT line on Sheppard Avenue East. As argued, there are many benefits to LRT which could be realized in Scarborough. The cost savings from not building a subway should go toward provision of higher and more reliable frequency of LRT transit, be consistent with planning efforts to improve neighbourhood walkability and ensure that LRT is well connected to other current and future transit modes. LRT is a step in the right direction and will hopefully allow Toronto to learn from this experience and assist in other transit planning efforts.


Appendix 1. Maps of LRT routes in Toronto

Sheppard LRT Route from Don Mills to Morningside, 13.2 kilometres in Distance

LRT plan for Toronto (City of Toronto, 2012)


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