Can Transit Transform the Waterloo Region?

Nine years ago, regional politicians abandoned their caution and embraced rail transit as a tool to shape land use.

They were encouraged in part by two supportive factors. In 2000, regional council assumed control of transit. Soon after, senior governments put cash on the table for transformative projects.

Today, council is poised to install street-level electric trains in Kitchener and Waterloo and fast buses in Cambridge, funded in part by up to $565 million from senior governments. A final decision looms in June when council considers 10 revised options, including rapid buses.

To grasp how trains could transform neighbourhoods, look to the intersection of King and Ottawa streets in Kitchener, the subject of a 2008 study. Today it features a bank, a gas station and a vacant lot, near an empty car lot and underused industries that have seen better days.

Imagine it transformed, after a train station opens at Ottawa and Charles streets. Vacant lots fill with buildings six- to eight-storeys high, fronting on sidewalks filled with pedestrians. Tired industrial properties are replaced with workplaces, residences and street-level shops. Parks and green spaces abound.

Formerly bleak, the intersection has become a lively urban village. This is the intended purpose of rail transit.

“It’s not primarily a people-mover,” Kitchener Coun. Jim Wideman has explained. “It’s a way for us to attract redevelopment into the downtown areas.”

If council confirms its previous choice, rail transit could launch by 2017 for $818 million. Regional taxes would rise an estimated 8.2 per cent over six years to pay for it.

But will it work? Three planners say yes, no and maybe.

“We don’t look at it as a risky project,” says Kevin Eby, director of community planning for Waterloo regional government. “We see this as another component of the package that we need in order to ensure that the community continues to grow with the lifestyle that it’s used to.”

“I’m really not too sure how this is going to be an urban renewal project,” warns Bill Thomson, former planning director for regional government, now retired. He favours better buses, saying the community isn’t big enough for trains. “I can’t see light rail transit doing really anything.”

“It may work. It may not work,” says Pierre Filion, professor of urban planning at the University of Waterloo. “I think there’s a gamble there.” He adds: “If it happens, it will change profoundly the region.”

Rail transit would be the most ambitious redevelopment effort ever undertaken here, distinguished from previous efforts by its high cost, twin-city scope and use of transit as a redevelopment catalyst.

Here’s how it would reportedly work. Investors will see tracks on the spine of Kitchener and Waterloo. They will understand that trains can move residents and employees in and out, unaffected by traffic congestion. They will know the tracks are permanent.

This permanency will make investors more confident about erecting residences and workplaces near stations. Property values will rise. New buildings will replace crumbling houses, derelict factories and parking lots.

Politicians will encourage this process by assembling properties at public expense, preparing sites for redevelopment and dangling them for resale.

“I don’t think anybody is naïve enough to think that light rail transit in and of itself is the kind of thing that will create instant reurbanization. It is one part of a larger package,” Eby says.

Other parts of the package include redevelopment that’s already underway, a continuing housing shift away from detached homes, and an aging population that’s expected to favour urban residences such as condominiums.

Regional government forecasts that by 2031, when the population reaches 729,000, rail transit as proposed would put an extra 13,068 residents and 18,784 jobs into central neighbourhoods, while increasing land values near stations by $215 million.

Calgary-based real estate analyst Melanie Reuter predicts property values will rise 10 to 20 per cent near local train stations. “The impact is felt most dramatically in older, well established neighbourhoods,” she said.

Her 2010 study recommends investors focus on older neighbourhoods with below-median incomes within 800 metres of stations. Returns will be greatest there because older properties are cheaper, better transit is more important to poorer residents, and stations have little impact on properties farther away.

Her conclusion is based on rapid transit impacts in Dallas, San Jose, Los Angeles, Portland, Sacramento, Vancouver and Toronto.

Proponents of rail transit commonly point to other cities that have seen property values increase near stations. This was an unplanned consequence in some cities. Elsewhere it has required an extra effort, such as transit-supportive zoning, parking restrictions and redevelopment incentives.

“It’s not positive everywhere,” Filion warns. For example, while there’s some evidence of increased property values in Buffalo, N.Y., light rail transit there is regarded as a passenger failure, on a downtown route that never met ridership expectations.

“But in a lot of other cities that were originally very car-oriented, (light rail transit) is working very well and people are using it,” Filion says.

Filion figures the local challenge will be persuading up to 12 per cent of the population to ride transit, up from four per cent today. That’s a significant lifestyle change and if it happens, developers will see they can charge a premium for land near stations. Retailers will see they can locate stores near stations.

“Then the strategy works,” he said. “You have that chain of events that is set in motion.”

But if just six per cent of residents ride rail transit “it is not enough people using transit to get developers interested,” Filion said. “You just don’t have the critical mass of users to get that kind of interest for those locations and the redevelopment doesn’t happen.”
 

Eby disagrees, suggesting the promise of ridership is more important than actual ridership. If passengers stay away, this might increase rail operating costs but would not lessen its redevelopment potential, he contends. “Having the capacity available is what will drive reurbanization,” he says.

Rail transit is the biggest local reurbanization scheme since Kitchener sought to revitalize its faltering downtown in 1974. That failed plan saw politicians demolish the old City Hall, built in 1924, to make way for the Market Square mall, today awkwardly converting to offices.

The plan was to create a pedestrian shopping corridor, anchored by two King Street malls. Shoppers would drive in from the suburbs and park in garages. Ring roads would divert other traffic around the central core. High-rises would spring up nearby.

The plan, as controversial then as rapid transit is today, was ultimately endorsed by business leaders, politicians and the public. “The economic elite and the political elite were strongly supportive,” Filion says.

Thomson helped create the downtown plan. “It just didn’t manage to jell,” he says.

Today, Thomson figures the downtowns of Kitchener and Waterloo are redeveloping well by pursuing other investments and strategies. “There seems to me to be no reason why that sort of thing cannot continue,” he said. “It will keep on going I think, regardless of transit.”

“Waterloo and Kitchener are slowly creating downtowns that are beginning to attract people.”

Eby agrees that downtowns are improving. He says the cities are already meeting mandated urban redevelopment targets, without rapid transit. But he says this momentum will soon falter, choked by traffic congestion, if rapid transit is not built. “We’re going to start to hit the wall at some point, relatively soon,” he warns.

Filion and Thomson figure that cheaper rapid buses, properly planned, may achieve similar redevelopment benefits. “If you have a secure lane for a bus, and it keeps stopping at the same places, isn’t that the same as a train?” Thomson said.

Eby agrees rapid buses could promote redevelopment but “to a lesser extent” because buses are not as permanent as trains.

Investors in urban redevelopment face large costs to clean up contamination, demolish buildings and consolidate properties, he explains. It’s easier to justify this expense if it’s based on tracks that will never move, rather than buses that could be relocated.

Why pursue urban redevelopment?

Councils have traditionally promoted urban redevelopment to:

- Promote civic pride by preserving historic downtowns.
- Protect downtown merchants against suburban enterprises.

- Protect tax revenue threatened by declining downtown property values.

- Prevent social ills that arise when a neighbourhood falls into poverty.

- Ease spending by putting residents and jobs where infrastructure exists.

- Save the environment by restraining suburban growth.

Rapid transit heading for June decision

Regional council is considering 10 options ranging from $608 million to $1.6 billion to build. Senior governments are paying up to $565 million. Costs include inflation through the end of construction in 2016.

Estimated regional tax increases range from 5.3 per cent to 22.3 per cent, for construction and operating costs. This tax impact ranges between $88 and $376 for an average home valued at $225,000, phased in equally between 2012 and 2017.