New rail transit stations and the out-migration of low-income residents

Abstract

This article tests the hypothesis that low-income residents disproportionately move out of neighbourhoods in close proximity to new rail transit stations. This transit-induced gentrification scenario posits that the development of rail transit will place an upward pressure on land and housing values and that higher-income residents will outbid low-income residents for this new amenity. The most transit-dependent population may therefore be displaced from the most accessible locations, forming a paradox in the investment in new transit systems. We test this hypothesis using the Panel Study on Income Dynamics (PSID) dataset to trace the out-migration of residents across the United States from census tracts within five years of the opening of a new station, between 1970 and 2014. We find that low-income individuals are more likely to move, regardless of their neighbourhood. However, we do not find significant evidence that low-income individuals are more likely to move out of transit neighbourhoods, after controlling for both individual and other neighbourhood characteristics. The odds of moving out of a transit neighbourhood for low-income residents is statistically insignificant. In other words, they do not have a heightened probability of leaving new transit neighbourhoods compared with other residents. Our results are robust across decades, when examining renters alone, for different time spans and for varying definitions of transit neighbourhoods. We further find that those living in transit neighbourhoods are not more likely to live in a crowded dwelling. Our results therefore suggest that, on average, across the nation, low-income residents do not disproportionately exit new transit neighbourhoods.