The Development Effects of High-Speed Rail Stations and Implications for California

High-speed rail is the most visible form of new technology accompanying and enhancing the transformation to an information-based economy, and is likely to have the greatest spatial development effects of any of these technologies. This report studies the development effects of high-speed rail stations on behalf of the California Department of Transportation (Caltrans), which is currently considering the use of high-speed rail in California. Since high-speed rail is a relatively new technology and is in use in only a few countries, the development effects of high-speed rail stations are somewhat difficult to discern and categorize. Nonetheless, a review of the literature on its development effects in Japan, France, and Germany, and observation of stations in the latter two countries, reveals significant development effects at the regional, urban, and station levels. These include changes to the following: population and employment growth rates; ridership; business behavior; real estate values and activity; business and employment location; and residential location. A review of related rail systems, heavy and commuter rail, reveals similar effects and opportunities for value capture. The development effects of high-speed rail stations are most clearly associated with a strong regional economy and good links with other transportation modes, especially rail links to the local city center and public sector support of development. The presence of these factors can help provide the formation of significant development activity around stations catering to the information-exchange sector, such as offices and hotels, the stimulation of retail activities in the area, and increases in overall land value of approximately 20 percent. At the regional and urban levels, concentrations of information-exchange sector employment and centers of higher education are associated with above-average employment and population growth rates, as well as access to high-speed rail. In California, high-speed rail would reinforce existing population and employment patterns and future growth trends. In order to fully exploit station development opportunities and ensure ridership, the agency responsible for developing a high-speed rail system in California must take an active role in station area development and coordinate its activities with local transportation agencies.