Transit as Stimulus
Scott Bernstein, President of the Center for Neighborhood Technology, in his presentation on transit in Southeastern Wisconsin:
“According to Bernstein, between 2000 and 2008, gas prices have increased twelve times faster than income rates in Wisconsin, and the drain on the economy, businesses and families is substantial. With a focus on affordable living and economic development, Bernstein laid out the case for commuter-rail and enhanced transit in southeastern Wisconsin.
Bernstein illustrated that in Wisconsin, transportation now costs working families about as much as housing. To further explain his point, he considered the price of gas on June 30, 2008 and the median income of the region at that time ($52,000). Assuming that a household in the region had two cars and traveled approximately 25,000 vehicle miles per year, had no alternative transit options and spent approximately $18,684 a year on housing and $15,584 a year on transportation, a total of 65.9 percent of its total annual income would be spent on housing and transit.
Bernstein stated that when transit options are available, people have greater expendable income and are able to pay more for housing and other wealth building investments because they are paying less for transportation. Therefore, Bernstein argued, property values around areas with fully integrated transit systems increase because of the convenience of not having to rely on an automobile. Additionally, Bernstein illustrated that increased travel efficiency, by modes such as commuter rail, can boost disposable income by ten to 20 percent.
In regard to market perception of southeastern Wisconsin, Bernstein shared Moody’s rankings, which suggest our region is viewed poorly as compared to others nationwide, and continues to fall (www.Economy.com ). In February of 2008, southeastern Wisconsin’s 2006-2008 performance ranked number 214 out of 386, and was projected to be ranked 306 for its 2006-2011 performance. However, by October of 2008, the updated 2007-2009 performance listed southeastern Wisconsin with a projected ranking of 362 out of 386 for its overall 2006-2011 performance. Lack of mass transit and good inner-city links, and failure to approve rail transit projects were contributing factors in this poor rating.”
People will have more money to spend when they aren’t forced to spend as much on automobiles. It just makes sense.