Episode 91: Neighborhood Change and Transit Ridership with Mike Manville (Road Scholars pt. 1)

Madeline Brozen 0:04
Hello, this is the Housing Voice Podcast, and I'm today's host, Madeline Broson. You may have noticed that Shane and I announced that we're taking a four-part detour into the world of transportation, and that starts today. We're calling it Road Scholars, and it features conversation on transportation research, sometimes at the intersection of mobility and housing, and sometimes just digging into the transportation world. There's a growing recognition, or even legislative mandates, to integrate land use, housing, with transportation planning and policy. But it's fair to say that even in California, where we have a mandate, we have a long way to go to truly coordinate these efforts. The goal is to be intentional about where people can live, to make the lowest impact on our greenhouse gas emissions, and create neighborhoods where people can get around and live high-quality lives without solely relying on automobile travel. But we see that even getting one of those pieces on the right track is tough work, and that all too often, bringing together land use and transportation efforts can be a hill just too high to climb. But at the Lewis Center, we like challenges, puzzles, and giving people the opportunity to learn, so we're hopeful that the series will give housers the chance to dabble in transportation and bring some transportation folks along for the ride.
Our first episode in the Road Scholars series is with UCLA Urban Planning Professor Mike Manville. We chose to start here for a few reasons, and not just because Mike knows the ropes around Housing Voice Podcast. But Mike, along with his co-authors, tackle the relationship between housing and transportation in a direct and useful way. In our conversation, we'll discuss this new paper that looks at what happens to transit ridership in areas where housing costs are increasing. People largely look at this question in the other direction with regards to displacement. How do new transit projects affect housing costs? But this is one of the first and only papers to do this the other way around with evidence from the Los Angeles region.
Road Scholars and the Housing Voice Podcast is a production of the UCLA Lewis Center for Regional Policy Studies with production support from Shane Phillips, Claudia Bustamante, Irene Marie Cruise, and Tiffany Lieu. For this series, send your questions and feedback to mbrozen@ucla.edu.
And with that, let's get to our conversation with UCLA's Mike Manville on the first installment of Road Scholars. Mike Manville is Professor and Chair of the UCLA Urban Planning Department and researches transportation and land use. In addition, he's an occasional co-host on the Housing Voice Podcast. Today he's joining us on Road Scholars, Housing Voice Transportation Interlude. And he's going to talk about his recent work on transit ridership and how that relates to housing cost changes. Mike, thank you for joining us on Road Scholars.

Michael Manville 3:00
Thanks for having me. It's great to be a part of this crossover episode.

Madeline Brozen 3:04
Yeah. So I'm also joined by my co-host Juan Matute, who's my counterpart as the Deputy Director of the UCLA Institute of Transportation Studies. And he actually also happens to be a co-author on this paper. So super prepared for today's episode. So on Housing Voice, Shane asked the guests to give us a tour of some place that they know well, but in the spirit of switching things up, we're asking our Road Scholar guests to start us off with a memorable transportation journey with the definition of memorable up to your interpretation. So Mike, where are we walking through today?

Michael Manville 3:37
Yeah. I mean, I saw this prompt and I had so many ideas pop into my head, but I think what I'm going to discuss is the time. A long time ago now, I was back when I was in grad school where I walked across Los Angeles. I joined a fellow PhD student, I was a PhD student at the time of mine and his wife who was also a graduate student because his wife had found somehow some organization was going to walk across LA, going to start in East Los Angeles on the other side of the river and end in Santa Monica. And I honestly forget what the point of this was. I think it was some sort of fundraiser, but we were all just like, yeah, we're going to walk across LA. It's going to be great. And it wasn't great. It really drove home to me how bad of a walking city Los Angeles is. Most of the journey was on Sunset Boulevard and it was just hot and like this traffic and it was polluted. So it's a pretty far walk and I'm not ashamed to say that when we crossed into Hollywood where I lived at that time, we ended up walking right past my street and I just bailed. And my friend, my fellow graduate student, although he did not live on that street, bailed with me and I gave him a ride home. And his wife, to her great credit, continued walking, walked all the way to Santa Monica. My recollection is he went and picked her up later and she had finished and she said, oh my God, like my feet, my shoes, I just want to take my shoes off and go in the water. And he said, don't do it. And she did it anyways. And of course, her feet just swelled up terribly and she couldn't walk for three days. I think about it occasionally because recently the LA Times has sometimes run little columns like, oh, you think LA is not a good walking city? Here's 10 great walks you can do. I mean, I like those little articles, I don't begrudge them being published, but whenever I see them, I think about that trip and what I think about is the difference between a city that has some great walks and a city that's a walking city. Of course LA has some great walks, but usually you have to drive somewhere and then just walk through this particular area. And when we think about great walking cities, they're cities that you go out the door and you can just walk. And it might be for recreation, it might be to complete some task and there's too little of that in Los Angeles for many of the reasons that we discovered while we were trying to walk from East LA to Santa Monica.

Madeline Brozen 6:06
Of all the great things that LA is, a kind of get up and go city in all corners just unfortunately ain't it. So not to say that there can't be that in certain parts, but if you're going to take a street, walk it east, west, north, south, you're going to see some up and downs and not just the hills.

Michael Manville 6:26
That's right. And it is, and to your point, it's something to work toward and it's something that is eminently fixable because it is a city with great weather, a lot of flat ground. I mean, it should be and could be one of the great walking cities in the United States, but it is not right now.

Madeline Brozen 6:41
Well, we're recording this on a rare rainy day in Los Angeles so that sunshine will hopefully come back and we'll do some great walks. So the article we're talking about today was published last December in the Journal of Transportation Geography with co-authors Hannah King, Juan Matute, and Theodore Lau, and it's titled Neighborhood Change in Transit Ridership, Evidence from Los Angeles and Orange Counties. Most work connecting housing and transportation looks at whether transit, typically in the form of rail stations, affects the housing market and how that's related to gentrification or displacement. This is the first paper that asks, do housing prices and neighborhood changes affect transit use and ridership? In the paper, they argue that if people who typically ride transit can no longer afford their housing costs, those people may be replaced by others who are less likely to use transit. To do this, they put together a dataset from 2008 to 2017 that included transit ridership from LA Metro and the Orange County Transportation Authority, the two largest transit providers in the region, and then they look at housing costs at the neighborhood level. They broke apart this decade of data to look at change from 2008 to 2012 and then compare that to 2013 to 2017. I'll set up some of the headline findings at the outset here. Mike, you and your co-authors find evidence that housing cost increases are related to transit ridership changes. Places that experienced median rent increases were associated with a 22% decrease in transit boardings and that neighborhoods with increased burden or how rents change relative to median renter household income are associated with a 14% reduction in neighborhood transit ridership. That's my introduction to this work. Before we get into the details here, Mike, you've previously published rather definitive studies looking at the causes of transit ridership decline in Southern California. We'll come back to those in our later discussion, but why look at this question again? Then the other question is that since there's all this work that looks at the relationship between transit and gentrification, why was this the first paper that looked at going from housing to transit and not the other way around?

Michael Manville 9:01
Yeah. I mean, those are great questions. I think with respect to the first question, this project actually flowed out of one of those other projects you mentioned. Way back, probably 2017 or so, myself and our colleagues, Brian Taylor and Ebi Blumenberg were asked by SCAG, the Southern California Association of Governments, the regional government in our area to examine just in general why transit ridership seemed to be falling so much over the 10 years preceding that in Los Angeles County and the surrounding counties. In the course of doing that study, which really was just focused on kind of what's going on region-wide, it often came up that housing costs might play a role. At the time, it wasn't really something we could dive into because of reasons of data, because of the scope of the project we had, and so we kind of alluded to it and talked in sort of conjecture about it in that report, but didn't really dive into it. A little bit after that, one of our sort of contacts at SCAG who we work with a lot came back to us and said, well, we're still interested in this, would you be willing to do a second sort of more narrow study looking at this relationship between housing costs and transit ridership? We agreed and one can probably attest to this that that was quite a while ago and we had all sorts of hiccups. Part of it was just the original research design was thrown off by COVID and then there was just – whenever you have one large public agency trying to sign a contract with another large public agency, and that's what happened between SCAG and UCLA, you literally have like a year of people fighting over paperwork. I'm very fortunate that I was only like a bystander to that, but it was ridiculous, so it took a while to get everything up and running, but then we did and so that's why – and then of course you go through peer review and so the study is just emerging now, but that's how that came about. With respect to why we ended up looking at sort of the ridership effects of housing costs, I think it's because we started from this concern about why transit ridership was falling. I think that this larger literature that kind of flips that on its head and tends to say, hey, if you build transit, is this going to drive up housing costs, often starts with a concern about gentrification and displacement. We just happened by sort of by dint of being responsive to our sponsor to start with the concern about transit itself, and if you start with the concern about transit itself, in my opinion, that mechanism that we study in this paper just becomes a lot more plausible, which is to say that yes, one could imagine that if you built an amenity like a rail station, that would drive up rent so much that it would cause gentrification and you would see big changes, but one could equally imagine in the United States that that's not a super likely outcome, just because in most parts of the country, and Los Angeles is very much included here, even rail transit is basically a part of the social safety net. It's a social service that we provide to people who can't afford an automobile. The likelihood that a rail network of the sort that we see being built in Denver, in Los Angeles, et cetera, would substantially draw in higher income people to the point where it drives out lower income people just doesn't seem very large. On the other hand, though, the likelihood that prices would be rising in many parts of some cities, and not just near rail networks, but near bus stops, in almost every city in the country, the bus ridership population is much bigger than the rail ridership population. That likelihood is much higher and is likely to be much more consequential, because if you have a situation where rents are rising for almost any reason, then you might have a situation where, as you said in the introduction, over time, the type of people who are most likely to ride a bus become less able to live in the neighborhoods where the bus service is best. Then you get kind of a mismatch going, where the housing market has basically shuffled people with the highest propensity to ride transit sort of away from transit, and that could lead to ridership falling. That's kind of the thread we were pulling at when we started down this path.

Juan Matute 13:32
Hey, Mike. There's a lot of academic work on neighborhood change, though very little of it has led to any firm conclusions. Can you give us an overview of what we know about the relationship between transit investment development patterns and neighborhood change?

Michael Manville 13:48
Yes. I would say that there's a fair amount of evidence that transit investment will often coincide with rising prices, which is to say it's very easy to look at where, for instance, a city would build a new rail station and see that that's a place where prices are rising. What's much harder to discern is whether the one causes the other. Initially, I think there was some real interest in the idea that the rail station was in fact causing neighborhood change and gentrification. I think we are now over 10 years, maybe a dozen years into that research, and it's fair to say that that literature, the results of it are at best mixed. This is literature that our colleague, Anastasia Lukaitis-Sideris has done in collaboration with Karen Chappell, who was then at Berkeley and is now at Toronto. I think their book found mixed results but sort of leaned toward the idea that maybe some of this sort of what they call transit-oriented gentrification was happening. But you have people like Elizabeth Delmel at Penn who's really looked into this as well and others too, and basically pretty consistently finding null results. Lisa Rail has also examined this. I would say, without having really looked at this literature in a little while now, that the preponderance of studies that go looking for this do not find conclusive evidence that rail is causing gentrification, even though it often coincides with it. Now, a caveat here, and it's an important distinction that we'll probably come back to, is that if you look for evidence that when someone puts in a rail station, property values go up, you'll find that. That's sensible because the rail is an amenity and it does give sort of option value to people and it suggests that in the future, this neighborhood might change in interesting ways and it makes sense that if you were to buy a building there, you'd be willing to pay a little bit more. But when we worry about gentrification, I think our biggest worry is usually that rents are going to go up. Where expectations do get capitalized into values, it's much harder for them to be capitalized into rents. Rents really represent the stream that someone is willing to pay today to consume that housing location. If you have a situation, again, where the rail network at this point doesn't go that many places, most people drive, you could have a situation, and I think we see this in Los Angeles, where values are a little bit higher near rail and that's probably caused by the rail, but the rents probably are not caused by it. I think that's something that the literature has resolved.

Madeline Brozen 16:35
Before getting into the housing side of things, I want to talk more generally about the geography of where transit ridership is and where it's changed, just to kind of give the sense of the magnitude of the problem that we're talking about. The paper explains that transit ridership increased in 25% of the neighborhoods. Transit ridership fell in half of the neighborhoods and then nothing changed everywhere else because those places had no transit ridership in the first place. The paper then kind of dives into these high loss tracks, which is you're using census tracks as neighborhoods, and says 10% of the tracks that lost the most ridership accounted for 73% of all the lost boardings over this period. That's a pretty shocking comparison demonstrating just how concentrated transit ridership is and how changes in a small area can have a pretty big effect on system-wide ridership. So compared to everything else, the paper also highlights how these high loss tracks had better predictors of transit ridership. There were more density, higher percent of residents in poverty, more multifamily housing, more renters, households without cars. Just help us understand this a little bit. Why are high loss neighborhoods places that on paper have the mix of people and density that you would really think goes along with strong transit ridership? What can we take away about the concentration of loss in such a small amount of neighborhoods as well?

Michael Manville 18:06
Yeah, I'm really glad you asked that because that's probably something that I should have mentioned earlier because it's important to the basic hypothesis that something like this would happen. Just to even zoom out a little bit more, just in the country as a whole, transit ridership is extremely unevenly distributed. We would say it's kind of a Pareto distribution. A small share of places account for most of the ridership. I think most people are familiar with public transit, sort of understand this at the regional level that like the New York region is about 40% of all the transit boardings in the country. If you add in what we call sort of legacy cities, Washington, Boston, San Francisco, Chicago, Philadelphia, you're up to like two-thirds of all the country's transit ridership happening on some 7% of its land area or something like that. The point we were making in this paper and that we demonstrated using the data from LA Metro and the Orange County Transit Authority is that that same uneven distribution happens at the sub-regional level, that a small share of neighborhoods account for a very disproportionate share of total transit ridership. It's something that makes Los Angeles quite different, I think, from Manhattan. Manhattan has so much subway coverage and so much bus coverage and so much density that it's not obvious to me that any one set of small share of neighborhoods is going to sort of so disproportionately account for ridership there, although maybe there's a New York transit expert out there listening to me and it turns out I'm wrong. The fact that that's the case in so many places and certainly the case in Southern California is an important precondition for the relationships that we end up documenting, is that the fact that there's relatively few places that are highly amenable to transit ridership because in places that were developed to a great extent after World War II, there's going to be relatively few places that have the built environment necessary to make transit a vital way of moving around and that's sort of a dense built environment. It's a street network that's a little bit more integrated and grid-like. It's buildings that were built at a time when parking wasn't required and so forth. These areas simultaneously tend to be places that are more affordable to lower income people because of the density, because of the older housing and have environments that make them conducive to better transit service. Once you have that situation where a small share of neighborhoods are going to hold most of the transit ridership, it then just kind of follows mathematically that if you're going to have a big loss in transit ridership, it has to occur in those neighborhoods because there aren't enough riders in other neighborhoods to actually have a big loss. Once you realize that there's a lot of concentration in ridership, it becomes unsurprising that there's also going to be a lot of concentration in ridership losses once losses reach a certain size. I think that's basically what we showed with those tables and graphs that you mentioned.

Juan Matute 21:14
So I'd like to dig into how you measured housing costs. Housing costs are the largest household expense for most families. To understand these costs, you tested three different measures of housing costs, the change in house values, the change in rents, and a third constructed variable called added burden. Why did you decide to use three measures and were there any neighborhoods where the measures behaved in surprising ways?

Michael Manville 21:39
It's a good question. I think I'll talk about two decisions we had to make. One is the decision to measure rents and values, and then this third metric that we called the added burden. The reason we measured rents and values is kind of similar to what I alluded to above, that these are the two big housing costs that are tracked in the census. The values, of course, represent for owner-occupied housing and rents are for rental housing. There's just good reason a priori to think that rents are going to matter more. They're going to matter more because they don't capture expectations, but primarily because transit riders tend to be low income, low income people tend to rent, and renters are the people who are most likely to see their sort of location change if housing costs rise. Just to put this in concrete terms, if you have a neighborhood full of middle-class owner-occupants, like a nice place out in the San Fernando Valley or something, and the value of all that housing goes up, that doesn't actually necessarily lead to higher costs being paid on a regular basis by any of those owner-occupants because they probably have a fixed payment on their mortgage. They just get wealthier. Even if their costs did go up, it probably doesn't lead to a change in transit ridership because probably none of them rode transit. What you're looking for, if you have this hypothesis that rising housing costs can change transit use, is a situation where the monthly costs that people actually pay rise and those people were at least somewhat likely to be riding transit to begin with. That's why we did rents and values. Then this third metric that we came up with was mostly just a check on the rent one. As Maddie alluded to above, what we did was we just folded income into the rent measure. What we did was we constructed this ratio, which is a ratio of the change in housing costs in the neighborhood to the level of median income for the renters in the first period. That sounds like a mouthful, but what it basically measures is if you looked at the typical renter in a neighborhood in that first period we examined, the larger that number is, the harder financially it would be for someone with that same income to keep living in that neighborhood in the second period. That gets to the second consideration we had to make, which is we really made a point of measuring the change in all these rather than the level. The reason that's important is because it's a very well-established finding that if you just look at the level of housing costs, they have a huge and negative relationship with transit ridership. It is extremely well-established to say in places where rents are higher and housing values are higher, transit ridership is lower. That's not necessarily causal. It's just that this is where high and low-income people live. What we were really concerned about was this within-place change that in a given neighborhood, if the rent goes up, do we see correspondingly that transit ridership goes down?

Juan Matute 24:47
Is it the change in rent that is a stronger predictor or the added burden?

Michael Manville 24:52
If you look at the paper, this is not as clear as it could be, they end up being quite similar. We measure them in standard deviation. Let's say a standard deviation change in median rent associated with a 22% reduction in ridership and a standard deviation in this added burden increase gives you a 14% reduction in ridership. If you work those out into predicted numbers, I think the burden might be a little bit bigger, but probably within the margin of error. We did that as a check on the rent, but they probably generally point in the same direction.

Madeline Brozen 25:27
That one curiosity that I don't think you all talked about in the paper, but maybe you just kind of know based on looking at the data, were there any places that actually the rents went down? Are we just kind of looking at housing costs and especially rent costs just rising everywhere in the region?

Michael Manville 25:42
This might have been in a footnote. There are places where the rent went down, yeah. Los Angeles is a place where in general, rents go up for sure, but there's a lot of census tracts in LA and Orange County. Either idiosyncratically or because jobs moved or what have you, there are places where rents did decline. They were less common than places where rents went up. If I'm remembering correctly, rents usually fell by less than rents rose in places where rents rose, but it was not non-existent.

Madeline Brozen 26:11
Yeah. I mean, it seems like there's maybe some places where it's kind of going down, but overall, we're kind of looking at increases as kind of the baseline regionally. That's right, yeah. We know the headline here. We've come back to it a few times. Neighborhoods where rents and cost burden to renters increased are statistically significantly related to transit ridership loss in those areas. Now, as academics, we always want to give a big caution and reminder about correlation versus causation. You all are very careful to kind of highlight that this relationship doesn't mean that rising housing costs are causing this change. Rather, the housing costs are just in the mix of things related to the transit ridership loss. Here's where I kind of want to bring in and talk about this previous work that you mentioned at the outset from you and other UCLA colleagues about kind of regional transit ridership declines that also actually looked at the same period. In that work, there was a really strong message that transit ridership change was driven by increases in car ownership. Does this paper contradict that? Or I don't mean to kind of be pointed at that, but can you just kind of talk about how these two things are related since it was pretty consistent before that it was like cars that were super related and more cars. So kind of how does rent change and vehicle ownership both kind of go together in this mix?

Michael Manville 27:41
Yeah, it's a great question. And I think there's a couple different ways of parsing it. One, sort of with respect to causality, you know, we don't have an instrumental variable specification, we don't have a difference in difference specification or something that would make us a little more confident that we had uncovered a real causal relationship. I think that in the absence of approaches like that, what you're left with and what we have here is a regression analysis that does cover two time periods. We have to ask yourself as well, how well or to what extent have we controlled for other plausible factors that would undermine the idea that what we've seen here is causal? And I would say that most of those are controlled for. They're controlled for in part because we sort of use these lagged variables that we really are measuring the change so we are able to control for a lot of factors that are specific to those neighborhoods at different time periods. And in our sort of checks on our results, we also control for a whole bunch of different levels and changes of socioeconomic status markers in these neighborhoods, you know, income and race and ethnicity and education levels and so forth. And some of those end up being statistically significant and some don't, but none of them really change the finding about housing costs. So again, I would hesitate to say that this is a causal finding, but I would also not agree and perhaps I'm biased, it's my research, I would not say this is just sort of a raw correlation that is probably spurious or anything like that. With respect to our earlier work, you're absolutely right. The big takeaway from there was that across the region over the time period that we examined in this paper and maybe a little bit earlier as well, what happened is that households really stepped up the rate at which they added automobiles. When you sort of account for that addition of automobiles in models of transit ridership at that region level analyzing households, what you see is a huge reduction in the propensity to ride transit that could explain a lot of the overall decline that we saw in Southern California during that time. And so I don't think these findings necessarily conflict. And in part, they don't necessarily conflict because we're looking in this latter paper that we're discussing today at things that are happening at a neighborhood level and we're analyzing neighborhoods. And in that earlier paper, we're looking at the sort of regional level and we were analyzing households. And so why don't those two things conflict? I think there's two potential reasons. One is just that the things that change ridership at the neighborhood level may not change them at the regional level. And what I mean by that is it's possible, and we could have a discussion about how plausible it is, but it's certainly possible that people no longer live in these better quality transit neighborhoods because the price is higher in 2018 than it was in 2008. So neighborhood ridership as a result of that would go down. And that's something that we document, or at least provide evidence for. The next question, which might be something that's more interesting for a transit agency as well, wherever these people who would have lived in a high quality transit area, but for the high housing costs, wherever they live now, what are they doing transportation wise? If they used to take 12 transit trips a day and they have to move somewhere else that's lower density and the transit ridership isn't as good, but they still take 12 transit trips a day, well then regional ridership isn't falling, even though neighborhood ridership is. What's basically happening is that these folks have lower levels of welfare. But conversely, it's also possible and perhaps more plausible that if you are forced by housing costs to live a little further out, to live in a place where transit isn't as good, you might buy a car. If you end up in a lower density area and you buy an automobile, suddenly it now becomes more plausible that the falling neighborhood ridership does translate into falling regional ridership. And that if you were to run a household level regression that examined travel in the region, you would find what we found in that earlier study, which is, hey, a bunch of cars got added and as a result, transit ridership fell. Now, I don't think that every single instance of a lower income household adding a car over this time period occurred because people could no longer live as close to transit as they wanted to. That's not what I'm saying. I think people added cars for a whole lot of reasons. The price of used cars in particular was falling pretty dramatically at that time. But I do think it could play some role in that. This is something that when we initially proposed this research, we really wanted to examine. The initial goal for this research would end up being too ambitious, was not only were we going to try and document the relationship between housing costs and neighborhood change and transit ridership, but we were also going to try and determine if falling neighborhood ridership translated into falling regional ridership. Juan and Theodore did this incredibly yeoman-like work, working with consumer panel data to try and actually follow people as they moved out of these neighborhoods and see where they went and then try and make inferences based on where they went about how they probably traveled. Through no fault of Juan and Theodore, the data just couldn't tell us that. We had an analysis about that in the first round of the paper and the reviewers very rightly said, you should probably take this out. It's just not quite there. That remains a open question.

Madeline Brozen 33:24
Yeah, I mean, I think you've peeled back the curtain on a couple of things in research, which is like, if we could only just follow people around and really understand their behavior, we could learn so much more. And, you know, I think I've probably been accused of wanting to do that if someone wants to give me like a lot of money. And the other part is the idea that you have at the beginning of the research project and the idea that is in the paper at the end, it's just a kind of reality check, right, of like what you can really do.

Michael Manville 33:52
That's right. And this has been, I think, the biggest limitations of gentrification research for a very long time, right, is that it's much easier to document that a certain group of people is no longer in a place in a second period as opposed to a first period than it is to determine where that group of people ends up as a result. And it's a huge question because the welfare implications of the change you document really hinge on where people end up. And I think that it used to be, you know, back when I was in grad school and you guys were in grad school, like, there wasn't much to be done other than kind of wave your hands about it. And with the rise of this consumer reference data, it has gotten easier to try and at least take a shot at it. And there are versions of this consumer reference data out there, they were beyond our budget at the time, that actually will at least take a shot at estimating not only did this person go here when they left, but they may have added an automobile. And I think if someone wanted to write a grant to sort of do a version of our study that then followed up with data like that, it could be fascinating. But that was not in our scope at this time.

Juan Matute 35:02
So transit agencies have no ability to influence housing costs or car acquisition, but these trends impact them. What does this paper and previous work suggest for LA and OC transit agencies? What can or should they do? And what can other government agencies do to support transit?

Michael Manville 35:21
It's a great question. And I think there's a natural tendency to read transportation research and research about public transit, and then ask exactly the question you asked, which is like, well, what do we tell the transit agency? And, you know, part of it's sort of like, the landscape's not very good for you, but they know that. They've been paying attention. And I think that it's more constructive to think of research like this and research like our earlier study as well about the people buying automobiles as less about what can we tell transit agencies and more about what can we tell the public and elected officials in general about transportation and about what transit agencies can and can't do. I think there's a tendency, and there's certainly been this tendency in Los Angeles, to look at transportation problems and say, we're just going to fund more transit. We're going to pour money into public transportation and then be somewhat disappointed when the problems they identify don't seem to be getting solved. And LA is a great example of this, where billions of dollars have been spent, many miles of rail have been laid down, and our ridership has fallen and our congestion is as bad as ever and so forth. And I think research like ours and of many others too, and certainly our colleague Brian Taylor's research, one of the benefits of it or one of the uses of it is to go not to the transit agency and say, hey, you should know this, but to say to voters and advocates and elected officials, there's real limits to what the transit agency by itself can do. If you lay down some railroad tracks in a low density area where everyone owns a car, not much is going to happen. If you lay down some railroad tracks in a higher density area where prices are rising sufficiently that the typical person who lives there is not going to be a transit rider, you're also not going to see the outcome you want. And this is not to say that there's no point to funding transit. No, of course there is. It's to emphasize to people that actually, as hard as it is to raise money for transit, the transportation problem isn't that easy. It also involves hard decisions about making space, giving priority, and most of all, enabling more housing units and more density in these places where transit is nearby. So I think that the policy audience is less the transit agency itself and more the various people who have an influence over transportation policy more broadly.

Madeline Brozen 37:49
Yeah. I do want to point out that while LA Metro is investing a lot in the system, they're investing in the capital side of things, right? And like what you mentioned earlier, majority of our ridership in LA and everywhere is on the bus system. And that actually hasn't seen a lot of investment. We haven't seen a lot of service added. This doesn't kind of set aside that we got to work on the housing and that's kind of the big message. But I always want to kind of come back when people are like, LA is doing so much about transit. It's like, LA is doing transit in a certain way that may or may not actually really benefit the core riders in making service better for them.

Michael Manville 38:26
Yeah. I mean, I think there's a general sense as it's gone on for a long time that people are drawn more to rail systems than bus systems. And I think it goes back to what we mentioned earlier, which is just that when you think about this transit gentrification link, why do so many people think about transit causing gentrification? And I think one reason for it is it's very easy to, when you say transit, think of a new rail station and then say, well, what must this be doing? It's a little less obvious to the casual observer that the typical transit rider is on a bus and the buses are all over the city. Again, if you want to see a big system lose a lot of riders, those losses have to happen on the bus, because it's just where most of the riders are.

Juan Matute 39:15
So LA Metro has a lot of money, but you don't have many agencies in the position of LA Metro where they have a big capital program and space for things like housing development on their land. What's the more generalizable takeaway for transit agencies across the country, especially as they're once again in a ridership recovery mode post-COVID-19?

Michael Manville 39:36
Yeah. I mean, as we discussed, there's not a lot that the typical transit agency can do about housing costs. And I want to emphasize we're studying in this paper two very different transit agencies. Metro, which is a fairly well-endowed self-reliant transit agency that serves Los Angeles County, and the OCTA, which does have some self-help money. They also have had some ballot measures, but is, I think, not in anywhere near the sound fiscal position or relatively sound fiscal position that Metro is in, but also it just has different ambitions. OCTA is not embarking on a big capital rail program or things like that. It really operates buses. But to your point, in part because of its construction and because of its historical holdings, Metro could and is planning to build a bunch of housing, and that helps. But I do think it's also important to keep in mind how big the city and county of Los Angeles are and how even if Metro builds big towers over its new rail stations, and I hope it does, and I live near one of them. I live on those new stations, and I'd love to see a big tower go up. It's going to be a drop in the bucket. We have a region that's really short of housing, and what Metro really needs for this particular problem of rising rents and things like that is a lot of new housing coming online in a lot of places precisely to alleviate the burden of rising rent on the existing housing where a lot of their riders live.

Madeline Brozen 41:06
Yeah, so I feel like in that answer you kind of just turned us to the dial of the main housing voice channel. What you're saying is that we found a housing problem, right? But I do want to take a little bit just to go more into that. So what do we do on the housing side? I mean, you can just say build more housing. But I think there's a great sentiment that one of our LA transportation leaders, Lido Reynolds, like to say, which is that a lot of the structural issues show up in the transportation system but don't actually have much to do with the transportation itself. Whether that's school choice or homelessness policy, this work is kind of another example of that sentiment. So for local decision makers, for people that are listening that don't work on the transit side of things, we're just kind of saying more housing. But just in case someone hasn't done their homework on the podcast or listened to the many previous podcast episodes where kind of researchers make the point about the relationship between more housing and rent costs, which we will put in the show notes, just like why would we expect that more housing would actually help to address rent costs? And then if you want to do something about this, especially kind of with this transit ridership, those core people in mind, where's the focus? Where's the priority? Is it supply for transit reliant people who are low and very low income households? Or kind of for the broader market?

Michael Manville 42:31
I mean, I think with respect to – well, the two questions go together very nicely. Because I think when you say like, oh, why would we expect more housing to help control rent costs? When someone is skeptical of that, oftentimes they say something like, well, you know, you can't just build a bunch of new housing. It has to be affordable housing aimed specifically at these types of people. In this case, it might be lower income people who are very transit reliant. And that's what we really need. And I think that's an understandable reaction. And again, I refer you to two dozen different episodes of Housing Voice podcast where this is delved into in more detail. But I think the reason it's understandable is that in some ways, the idea of building new housing to address a housing crisis can seem like an odd remedy. Because the new housing that's going to get built, because it's new, is going to be expensive. And the people who move into it, because the housing is expensive, are going to be of a higher than average income. And so I think it's understandable for a casual observer to look at that and say, geez, like we got all these problems. There's a huge housing affordability crisis and you're building a fancy new apartment building full of yuppies. How does that help? And that can lead to why don't we just emphasize affordable housing and deed restricted housing and so forth. And the short version of this answer is as follows. No one who argues for a lot of new market rate housing to help affordability is doing so because they are under the illusion that if you put up a brand new eight story apartment building, very low income people are going to be able to move into it. The logic instead is that that new housing absorbs people who would otherwise, through their demand and through their higher resources, drive up the rents of people in existing housing. I'm borrowing this phrase from somewhere else, but you can think of this new housing as sort of a series of yuppie diversion machines. That if you have a growing economy and higher income people are going to come, then you as a housing official or a planner as an elected official have a decision to make. Do you want those folks to go into new buildings that we put up or do you want them to crash into existing neighborhoods and drive up the rents of lower income people and put those people in an untenable position where they may have to leave those neighborhoods and leave the amenities that are most valuable to them like public transit or an established neighbor network or what have you? Yes, could affordable housing play a role in that? Of course it could, but affordable housing is very expensive to build and you'd have to build an awful lot of it. This is something that we have not politically, and I don't like this fact, politically been willing to do is just build lots and lots of affordable housing. Market rate housing, people will build it for you if you'll just let them. I think it's worth emphasizing that the places in the country that are most expensive build more deed restricted affordable housing than any other places in the country. The point of that is not that deed restricted affordable housing causes prices to go up. It's just to say that it plainly is not sufficient to hold them in check, that it's a lot cheaper to live in parts of North Carolina and parts of Texas than it is in San Francisco. That's not because the Dallas Public Housing Authority has covered Dallas in social housing. It's because it's just really easy to build housing in Dallas. I totally understand the skepticism, but there is a method to the madness. The common denominator in the places in our country that are just extraordinarily expensive is that for years, they just haven't kept up with their housing stocks.

Madeline Brozen 46:11
Yeah. What we're seeing here is the numbers game. Bottom line, you got to do as much as you can, and it's going to mean doing everything. If you just focus on deed restricted or very low income housing that tends to be the most expensive to build, you're probably going to get the least amount of it. There's just really a cause to say, go big, do as much as possible. Don't focus on solely one market because we just spent so long in this region and the country doing nothing. We have a lot of catching up to do.

Michael Manville 46:46
Yeah. We're in a pretty big hole for sure.

Madeline Brozen 46:49
As we're wrapping up here, what else? What else can't be this work that's unanswered? Put another way, you already put one of these ideas out there. If you don't mind giving research ideas that maybe other people can pick up and run with, what's unanswered? What's the next phase? What do we still need to know?

Michael Manville 47:07
Oh, I mean, plenty of things. Off the top of my head, I would say it would be interesting to do a study like the one we did, somehow be able to get more time periods. One of the limitations we confronted in this limitation existed just because we needed to have a period of time where we could get stop-level transit data from these agencies and assign it to census tracks. That only went back to about 2008. Then, of course, if you want to match that to housing costs or socioeconomic characteristics, you have to split that into five-year chunks to match it with census data. Suddenly, we're just down to two time periods. If you can get a situation where you have more time periods, you get closer to something that looks like a panel regression. You get closer to a research design that lets you be a little more confident about causality. Maybe you won't get quite there. Maybe someone more clever than me could come up with a nice instrumental variable that would also do this. There's plenty of room to push what we did and maybe try and isolate that correlation a little bit more to see how much of it really is cause. That's one suggestion that I'd love to see people do. The other one is the one I alluded to above, which is this eternal question whenever we study a changing neighborhood of just, okay, we see that a certain group of people is no longer as present as they once were. Where'd they go? Again, I do think there's a lot of potential in these new consumer reference data sets, particularly the ones where they try to match not just some basic socioeconomic or basic household characteristics to the people that are moving, but try and make inferences about whether they added vehicles, did they move into a larger house, things like that. It's a big data undertaking, which is not necessarily my strength, but there's plenty of people out there who are very good at it. I think you could really find some interesting stuff if you dove into that and tested hypotheses like this one.

Madeline Brozen 49:01
Well, great. I think today's episode has made a really good case for why you should look at both transportation and housing at the same time, right? A bit of the peanut butter and chocolate go together type situation. So thanks so much. And Juan, I'll hand it over to you to close this out.

Juan Matute 49:20
Yes, we wanted to end this episode with a dedication to Hannah King, a PhD student and co-author of this paper who sadly passed away at the end of last year. By my count, this was Hannah's seventh peer-reviewed publication, which is a number that would be part of a tenure file at many other universities. She was also awarded a best paper in the Journal of American Planning Association for her 2021 work on the jobs housing balance with Evelyn Blumenberg. Hannah had an acerbic sense of humor, something I really valued in the workplace. And for many years, she worked at the desk next to the office water cooler, and we'd get to exchange jokes about the latest transportation news. I'll miss her and what she brought to the UCLA Institute of Transportation Studies culture. Through these podcasts, I think listeners can get a sense of the conversations we have at UCLA in our housing and transportation research centers. And Hannah King made these conversations brighter.

Michael Manville 50:19
I completely agree. You know, Hannah was a student of mine. And of course, she was a co-author on this paper. And she was very much a rising talent. I mean, I just mentioned that organizing large amounts of data isn't really my strength. That was not the case for Hannah. She was very talented at it. And of course, she was just in her own sort of dry sarcastic way, a very good person and a good member of our planning community and our department community. So it was a tremendous shock to have her pass. And so our comfort and condolences still go to her family and all her friends.

Madeline Brozen 50:54
Well, on that note, let's all be so inspired to brighten our colleague's day with witty jokes and great work. Thanks, Mike. Thanks, Juan. And we'll catch you on the next episode of Road Scholars. You can read more about Mike Manville's work on our website, lewis.ucla.edu. And you'll find the show notes and a transcript there as well. The UCLA Lewis Center is on the socials and I'm on Blue Sky at MBrozen. Thanks so much for listening.