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Forward Thinking Plan to Prevent Central Corridor’s Economic Displacement

November 04, 2010 By Riordan Frost, Policy Associate

The Central Corridor is many things to many people. It is progress for the transit community, exciting but worrisome for the business community, and a world of potential for the real estate community. That last part has some current residents nervous.

The Twin Cities have been awarded a variety of funds to aid real estate development, and many communities are bracing for a major change when the light rail comes through their part of town. While the Hiawatha line was a success, both for transit and development, the Central Corridor is a significantly different situation. Additionally, developers have realized light rail corridors’ potential and are determined to invest in St. Paul’s Central Corridor.

Transit-Oriented Development (TOD) is the new emphasis for city planning. This form of dense, urban development focuses on access to various modes of transportation. TOD is essentially the planning antithesis to the car-dependent suburb, and it is proving very popular with progressive cities, especially those with a healthy population of young professionals. While the idea pre-dates the Interstate Highway boom (remember when the Twin Cities had streetcars?), its current push gained significant momentum when three federal agencies joined forces for the cause.

The Department of Housing and Urban Development (HUD), the Department of Transportation (DOT), and the Environmental Protection Agency (EPA) all officially joined together under the ‘Sustainable Communities Initiative’ in June, 2009. Their goal is to “help American families in all communities – rural, suburban and urban – gain better access to affordable housing, more transportation options, and lower transportation costs,” according to the partnership’s press release. The EPA is there to make sure that “these housing and transportation goals are met while simultaneously protecting the environment, promoting equitable development, and helping to address the challenges of climate change.”

HUD’s sustainable communities planning grant program is awarding $100 million to cities nationwide that support TOD. The Twin Cities recently received a $5 million grant from this program for housing along transit corridors in the metro area. Additionally, a “collaborative of 22 of the world's largest foundations and financial institutions” called Living Cities, recently announced a $16 million award to the Twin Cities in a very competitive program, which chose only five metro areas in the United States. This award will focus in part on housing development along the central corridor.

With only one other light rail line to draw comparisons, it is easy to think of the Central Corridor in terms of the existing Hiawatha line. The two corridors have very important distinctions, however, especially when it comes to housing. There was much more housing development than expected along the Hiawatha line, but a great deal of the line was built through sparsely populated areas. The Central Corridor, on the other hand, is full of small businesses and low to middle-income neighborhoods.

That area of St. Paul also has a history of being disadvantaged by transportation improvements. The Rondo neighborhood experienced a serious upheaval when Interstate 94 cut through the neighborhood, and they have anxiety for the light rail as well. “There is a lot of fear of economic displacement because the community remembers the construction of 94,” Shawntera Hardy, a former St. Paul city planner, explained.

On the other side of town, Interstate construction also split the West Bank, and as Steve Berg of MinnPost writes, the proposed LRT station is going to connect and transform the neighborhood.

The transformation of these neighborhoods is exciting but also concerning. The fear of economic displacement is real. Property values around light rail stations will likely rise, just as many did for stations around the Hiawatha line. A study by the University of Minnesota entitled, “The Hiawatha Line: Impacts on Land Use and Residential Housing Value” reported that the “development of the Hiawatha Light Rail Line has produced an average $5,229 price premium per single family home in the station areas” as well as “an average $15,755 price premium per multifamily property in the station areas.”

Though there are many different factors at play, higher property values tend to bring higher property taxes, which might cause some low-income owners to sell. They’d take advantage of more revenue from their home’s sale but would lose the long-term transit option providing a better connection to opportunity. For low-income renters, it could mean higher rents will force them to move without ever reaping the transit line’s benefits. It is a complicated situation, but there is a possibility of economic displacement.

Fortunately, both aforementioned grants focus in some part on affordable housing, and the city of St. Paul is paying close attention to the community’s anxieties. Nancy Homans, the St. Paul mayor’s policy director, says the city is doing several things to keep affordable housing on the Central Corridor. For one, the city is securing lots along the corridor, on which it plans to build affordable housing. Secondly, St. Paul already requires that 30% of the units on any publicly financed project are affordable units. The city will also focus on sustaining affordable units already in place. Of course, it is not certain low-income residents will be displaced. “The data is not clear that it will necessarily happen,” Homans said, but the city is “looking at a number of different strategies … to sustain long-term affordability.”

If the community, the city, and developers work together to balance affordable housing with market-rate properties, then the Central Corridor will be home to equitable development, which is a hallmark of Transit-Oriented Development. If accomplished, the line will still transformed the corridor, but a strong, equitable community will emerge, making St. Paul even more livable and progressive.

Photo credit: Doug (singerish), creative commons

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