T J T L U http://jtlu.org V. 10 N. 1 [2017] pp. 725–742 Open for business? Effects of Los Angeles Metro Rail construction on adjacent businesses Rosalie Ray Columbia University
[email protected] Abstract: Recent court cases and news reports have focused on the Article history: effects of transit construction on business revenue and survival, yet the Received: August 17, 2016 topic is underexplored in the scholarly literature. This paper examines Received in revised form: April whether transit construction negatively affected the revenue and sur- 24, 2017 vival of businesses along the second segment of the Los Angeles Metro Accepted: May 1, 2017 Rail Red Line under Vermont and Hollywood Boulevards. Using Na- Available online: July 27, 2017 tional Establishment Time-Series business data, the research shows that business survival was significantly lower among businesses within 400 meters of stations, where cut and cover construction was used. A difference-in-differences technique was employed to determine wheth- er revenue loss was the main mechanism by which businesses were dis- placed, but revenue loss was not found to be significant. The increased failure rate provides evidence that construction effects of mitigation programs for businesses should be standard practice when building new transit lines. Further research and data collection on business ten- ure are needed to understand the dynamics of business displacement around transit and to make such programs more effective. 1 Introduction Planners and politicians sell major transit investments with the dual promise of 1) providing residents and businesses with better access and 2) transforming corridors through economic development.