Role of Transit Service Providers in Land Development

While various transit development initiatives, such as integrated transit and land development and transit-oriented development, have been proposed in the past, many transit agencies in the United States are experiencing declining ridership and increasing dependence on government subsidies for operating costs. Compared to the U.S., several foreign countries have been very successful in transit development. One particular strategy is to encourage (and subsidize) transit service providers to compete and invest in land development. This study is helpful in identifying barriers that need to be overcome in order for transit agencies to reap the benefits from investing and participating in land development. This study also conducted a cost-benefit analysis on data from the financial reports of two agencies praised in the literature for their involvement and investment in land development. These agencies are the Washington Metropolitan Transit Authority and the Mass Transit Railway Corporation (MTRC). The analysis showed that participation yields significant profits, but participation coupled with investment is extremely profitable, with a calculated internal rate of return for the MTRC‘s property development activities being 571%.