Do rail transit stations encourage neighbourhood retail activity?

Over the past 20 years, California has made substantial investments in intra-metropolitan passenger rail infrastructure, expanding existing systems and building new ones. According to advocates of New Urbanism, such investment should encourage the growth of mixed-use transit-oriented development, defined as a high-density mix of residential and commercial uses within walking distance of rail stations. Little research to date has examined whether rail investment stimulates retail activity, which is a key component of mixed-use development. In this paper, I test whether the opening of new rail stations across California’s four largest metropolitan areas is associated with changes in retail employment near the stations. Results indicate that new rail stations were located in areas with previously high employment density, somewhat outside the city centres. New station openings are not significantly associated with differences in retail employment in three of the four MSAs, and negatively associated with retail in the Sacramento MSA. There is weak evidence that areas around new suburban stations serving commuter rail lines are more likely to gain retail employment, while centrally located, intra-city rail stations see decreases in retail activity.