Though many countries have invested additional funds into their transit infrastructure systems over the past few decades, cities in the US, and the Bay area in particular, have invested significantly less into their transit systems, at a great cost to both their local and regional economies. By some estimates, some experts project that the Bay area economy has lost around $3.1 billion USD from traffic congestion alone in 2014, with experts arguing that this is a conservative estimate. While the introduction of rail lines, metro systems, and bus routes served as the initial foundation for the explosive economic growth of US cities, the 1970s and onwards saw government spending at both the federal and municipal levels shift towards automobile-oriented infrastructure, which resulted in increased congestion and a wide array of negative externalities at both the city and regional level. As a result of the continued neglect of cities’ public transit systems, residents not only experience greater inefficiencies and inconveniences while navigating the city, there has also been a depression of long-term economic growth of US cities, with the Bay Area suffering in particular from a particularly stark lack of transit infrastructure, with some experts claiming that it has cost the economy up to 5 percentage points of GDP growth since 2010. A lack of viable transit options both within the city and out of the city to other important hubs has led to a decrease in the labor market’s growth in the regions, and the overall depression of the city’s industries and wage levels. While in the past, there has been a great deal of economic research on how the introduction of transit lines leads to increases in property prices near transit stations, there has been even more research on how the introduction of transit leads to the growth of businesses within the city, increasing not only the value of pre-existing businesses in the city, but also fostering the birth and growth of smaller and medium enterprises. Even as the COVID-19 pandemic has led to drops in transit budgets across the country, the federal government’s recent two trillion dollar infrastructure plan has brought forth a new wave of funding for both local and state transit projects. Even before the infrastructure bill, Marin County was already in the process of introducing new transit nodes into the region, starting with the addition of the two SMART stations of Larkspur and Novato, which ushered in a new era for San Rafael as an emerging economic force within the region, and which saw some of the highest riderships numbers peaking in 2020, before the start of the pandemic.
As Marin County continues to expand its economy, there remains a great deal of incentives for the local government to invest more heavily into the region’s transit infrastructure. Currently, there has been an increase in the amount of research linking the geography of transit nodes and the growth of new networks of business activity, with the introduction of transit infrastructure not only connecting labor forces more efficiently, but also encouraging economic diversity among the types of businesses that open up. Past studies have shown transit’s role in fostering growth in retail and service industries, mainly by driving a greater volume of foot traffic to downtown neighborhoods and commercial districts. Past studies and transit interventions in New York have resulted in instances where the installment of a single bus line raised retail revenue by an estimated 73 percent. Overall, the presence of public transit allows for greater density of movement across wider expanses of the city, and decreases the amount of lost time that possible consumers spend ‘in transit’ when they are moving through congestion, as is often the case for more car-oriented cities. This then leads to high possibly density of economic activity not only within a single time period, but also over a smaller urban space, and has particular benefits for downtown areas which are focused on leisure and entertainment, where foot traffic plays an enormous role.
Additionally, studies have also linked the presence of transit infrastructure with growth in more knowledge-oriented, high skill, and high-value industries such as in tech, healthcare, and financial services. More robust public transit leads to the more efficient sorting and matching of people to jobs, as a better commute lowers the barriers to certain jobs within the decision-making matrix which determines whether or not a person can take on a job. A faster commute saves time, with the estimated costs of commute time costing the US economy $179 billion USD each year. Aside from the costs of commute which accumulate on an individual level, studies have also found a strong relationship between lower single-person automobile usage and increased economic activity on the city level, as many smaller and medium-size businesses often rely on cars for certain parts of their operations. Perhaps most importantly, aside from robust public transportation within a city and its surrounding suburbs, investments into more large-scale urban transit increases the exchange of individuals between cities, which has been shown to be a key mechanism for increased industry productivity and growth. As a city’s regional network physically opens up through a wider array of transit connections, the city’s potential labor market not only grows, thereby increasing the pool of skilled workers and the overall competitiveness of the industries’ hiring practices, but these industries are also more easily able to create business ties with other cities in the region, and expand the geographic reach of their operations.
Perhaps more subtly, there have been studies linking the creation of social networks, and how “social networks, trust and ‘weak’ ties fostered by face-to-face contact and relationship building are important components of contemporary business success, especially for firms in industries that require strong interpersonal client relationships”. The creation of these social networks and the overall ‘social embeddedness’ of businesses is especially significant for the creation of small and medium enterprises, who often both gather their workers and customers from the most immediately surrounding population, and “rely on local networks and personal contacts to survive”. Overall, there are a variety of ways that these knowledge spillovers contribute to the larger regional economy, but in general, there have been a great deal of studies linking these broader knowledge networks with more diverse, innovative economic systems, which also prevent negative shocks from permanently damaging the regional economy.
Transit-oriented development on a low-level urban planning scale also plays an important role in decreasing the physical frictions within a city, “decreasing congestion, automobile pollution, traffic deaths and other negative externalities associated with suburban environments”. Additionally, studies have shown how the psychological stress stemming from long commute times has a negative impact on both individuals’ mental health, as well as their work performance and overall productivity. There are also other side-effects of more efficient public transit systems and fewer cars on the road. The decrease in air pollution from exhaust fumes, as well as the decrease in noise pollution have both been found to have a significantly positive effect on residential populations. Particularly for children, who breathe in a greater amount of air per unit of body mass, a decrease in air pollution has been found to not only increase their respiratory health, but newer studies have shown how air pollution is linked to neuro-inflammation, which has been linked to effects which are equivalent to a loss of a year in school learning. A decrease of cars on the roads also leads to a decrease in the number of traffic accidents, which altogether, costs the U.S. economy an average 3 billion USD per year.
As Marin County plans for a more robust economic future, the San Rafael city council has passed a range of policies which support investment into economic-oriented transit planning, such as Policy H-15, which focuses specifically on infilling near transit nodes. By increasing the density of both residential and commercial spaces surrounding the Priority Development Area of the San Rafael Transit Center, and connecting SMART rail service directly to San Rafael’s Downtown, the city plans to not only enhance the local economy and encourage business growth, but also increase the overall social vitality of the city’s center.