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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


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Introduction

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 dont 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;


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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


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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.

Context

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


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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 thesurface, 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 combinedinto 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


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

Can operate at surface or undergroundSource: 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 salesby $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) TorontoniansServed

Construction costper Torontonianserved

Low-incomeresidents served

Sheppard EastSubway

8 $2.70 81,600 $33,100 4,800

Sheppard LRTPhase 1

12 $1.01 122,400 $8,300 7,200

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.


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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


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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


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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 peoples "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 lower-

income 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 transits impact on usage and housing values, using distance as a proxy fortransit


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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


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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 (Lewis-

Workman & 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 light-

rail station command a higher lease rate than other properties in the county (Weinberger, 2001).


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While the above studies offer an idea of the impacts of LRT on property values, each city is

different and thus contextmatters. 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.


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

Residents near rail have more convenient access to regional employment, retail and culturalopportunities

Properties holding employment uses such as offices and industrial sites experience higherproperty values because such properties have increased access to a labour market

Office development may see a larger property value increase because office buildings tend tocluster 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

Method

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)


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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 for CTs (n=15) Toronto (CMA)

Median IncomeUnemployment RateLabour Market ParticipationAverage Value of DwellingNumber of owner dwellingsNumber of rented dwellingsPublic Transit mode share

$54,6528.462$319,0861,07543529%

$64,1286.768.3

$403,112

22%

Results

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 thecorridor 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.


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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, Markham-

Whitchurch 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)


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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.

Discussion

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


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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


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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


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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 decisionsand investments

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

May increase rents per square foot and lower vacancy rates for office developments thatare 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


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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.


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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


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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.

Conclusion

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 Torontos 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


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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.


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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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Documents

592 Prospectus Final_TimShah