On Track to Revitalization? A Synthetic Control Approach to New Jersey's Transit Village Initiative Open Access
Shon, Isaac (Spring 2024)
Abstract
This thesis examines and evaluates the community-level impacts of transit-oriented developments as a potential place-based, community development and revitalization intervention. Using a synthetic control methodology, I study the impact on home prices, small business lending activity, and demographic changes in two municipalities selected as transit villages through New Jersey's Transit Village Initiative. Overall, I find that neither state designation nor adoption of local station-area plans had a significant effect on home prices, small business lending, or the proportion of residents with at least a bachelor's degree. The findings of this study calls for continued, critical examination of transit-oriented developments and place-based policies to better understand their broader, long-term implications on neighborhoods and communities.
Table of Contents
1 Introduction 1
2 Literature Review 5
2.1 The Provision of Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.2 A Conceptualization of Transit-Oriented Developments . . . . . . . . . . . . . . . . . 9
2.3 Transportation and Urban Development . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.4 Sorting & Institutionally-Driven Segregation . . . . . . . . . . . . . . . . . . . . . . . 16
2.5 Revitalization Strategies, TODs & Neighborhood Change . . . . . . . . . . . . . . . . 19
3 Theory, Research Questions & Hypotheses 25
4 Data & Methodology 28
4.1 Selection of New Jersey for Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.2 Data Collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.3 Empirical Framework: Synthetic Control Method . . . . . . . . . . . . . . . . . . . . 35
4.4 Comparison Group/Donor Pool Restrictions . . . . . . . . . . . . . . . . . . . . . . . 37
5 Results & Discussion 40
5.1 Effect on FHFA Home Price Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.2 Effect on 3-Yr. Avg. Per-Capita Volume of Small Business Loans . . . . . . . . . . . . 42
5.3 Effect on Percent of ResidentsWith at Least Bachelor’s Degree . . . . . . . . . . . . . 44
5.4 Robustness Check: Treatment Backdating . . . . . . . . . . . . . . . . . . . . . . . . . 46
6 Conclusion 51
List of Figures
1 Illustrative Description of a Typical Transit-Oriented Development . . . . . . . . . . 2
2 Timeline of Major Federal Mass Transit Legislation . . . . . . . . . . . . . . . . . . . . 8
3 Designated Transit Villages in New Jersey, 1999-2023. . . . . . . . . . . . . . . . . . . 29
4 Location of Selected Designated Transit Villages. . . . . . . . . . . . . . . . . . . . . . 31
5 All Eligible Donor Pool Tracts, NJ. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6 FHFA HPI Evolution in Somerville, NJ (𝑇0 = 2010). . . . . . . . . . . . . . . . . . . . . 41
7 FHFA HPI Evolution in Linden, NJ (𝑇0 = 2010). . . . . . . . . . . . . . . . . . . . . . . 41
8 Small Bus. Lending Evolution in Somerville, NJ (𝑇0 = 2010). . . . . . . . . . . . . . . 43
9 Small Bus. Lending Evolution in Linden, NJ (𝑇0 = 2010). . . . . . . . . . . . . . . . . 43
10 %With At Least Bachelors in Somerville, NJ (𝑇0 = 2010). . . . . . . . . . . . . . . . . 45
11 %With At Least Bachelors in Linden, NJ (𝑇0 = 2010). . . . . . . . . . . . . . . . . . . . 45
12 Synthetic Control Results - HPI Evolution (𝑇0 = 2007, 2008) . . . . . . . . . . . . . . . . . . 48
13 Synthetic Control Results - Small Business Lending Evolution (𝑇0 = 2007, 2008) . . . . . . . 49
14 Synthetic Control Results - % Bachelors Evolution (𝑇0 = 2007, 2008) . . . . . . . . . . . . . . 50
List of Tables
1 Predictor Balance - HPI (Treatment Date = 2010) . . . . . . . . . . . . . . . . . . . . . 60
2 Predictor Balance - 3-yr. Small Bus. Loans per capita (Treatment Date = 2010) . . . . 61
3 Predictor Balance - % With At Least Bachelors (Treatment Date = 2010) . . . . . . . . 62
4 Predictor Balance - HPI (Treatment Date = 2007, 2008) . . . . . . . . . . . . . . . . . . 63
5 Predictor Balance - 3-yr. Small Bus. Loans per capita (Treatment Date = 2007, 2008) . 64
6 Predictor Balance - % With At Least Bachelors (Treatment Date = 2007, 2008) . . . . . 65
7 Synthetic Control Weights - HPI (Treatment Date = 2010) . . . . . . . . . . . . . . . . 66
8 Synthetic Control Weights - Small Business Loan Volume per Capita (Treatment
Date = 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
9 Synthetic Control Weights - PercentWith At Least Bachelors (Treatment Date = 2010) 67
10 Synthetic Control Weights - HPI (Treatment Date = 2007, 2008) . . . . . . . . . . . . . 73
11 Synthetic Control Weights - 3-yr. Small Bus. Loans per capita (Treatment Date =
2007, 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
12 Synthetic ControlWeights - PercentWithAt Least Bachelors (Treatment Date = 2007,
2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
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