Public transportation—buses, trains, ferries, and more—plays an essential role in connecting us to one another, to the things and places we want to experience, and to the services we need. Presently, many transit agencies nationwide are in a vulnerable state, as the COVID-19 pandemic has threatened their financial stability. Though agencies were aided by substantial federal support that covered operating losses for several years, those grants have ended, and the slow return of ridership has significantly reduced fare revenues compared with prepandemic levels, leaving many agencies facing an impending fiscal cliff (PDF).

In our new study, we explore ways transit agencies and public officials can surmount this cliff and maintain long-term financial stability. We identify that land-use change in neighborhoods surrounding major bus stops and rail stations—especially in office-dominated neighborhoods in cities where many employees now work from home—could catalyze this sustainability through both new funding and increased ridership, elevating the ability of transit systems to fund quality service.

Transit agencies could benefit from office space conversions, particularly green ones

Today’s transit networks, rail services specifically, largely  serve employment hubs. But because of the pandemic, average office utilization across major cities sits at less than 50 percent. With office districts unlikely to return to prepandemic employment levels, transit agencies could benefit from any effort to activate office-heavy station areas by renovating vacant office space into other uses. This office conversion process offers much potential for city vitality but faces barriers related to financing, design, and land-use regulation.

We explore the potential value to transit agencies of office conversions, aided by changes in land-use policy, by examining conditions in Chicago. We selected the Windy City because it has detailed, open-source land-use data covering all of the Chicago Transit Authority’s (CTA) rail network, is already investing in conversions in its unfilled downtown, and the CTA has struggled (PDF) more than most of its peer agencies to regain riders.

To put Chicago’s current transit struggles in perspective, CTA rail ridership in August 2023 was just 57 percent what it was in August 2019. That ridership retention rate for the Washington Metropolitan Area Transit Authority was 62 percent, 58 percent for the Massachusetts Bay Transportation Authority, 64 percent for Los Angeles Metro Rail, and 73 percent for New York City’s Metropolitan Transit Authority.

We classified each of CTA’s rail stations by the primary land use in their surrounding areas and compared their average ridership recovery. We find that stations in areas dominated by office space have recovered ridership more slowly than areas dominated by other uses—particularly those surrounded by industrial and open space (such as parks) uses.

Our findings suggest not only that office districts are ineffective at attracting riders, but also that the growing transit-to-nature (also called transit-to-parks or transit-to-trails) movement could contribute to increased ridership. In some cities, like Seattle and Los Angeles, new and improved services are focusing on connecting riders to parks and other open spaces. In the context of office conversions, this relationship between ridership and a rekindled appreciation of open space should encourage policymakers to include new, publicly accessible open spaces in conversion designs that fall within station areas. In a sense, a nature-to-transit movement.

Ridership resilience aligns with variety of activities

Next, we explored how the diversity of land-uses around a station relates to ridership. We created a simple scoring system that accounts for the number of different land-uses present in an area—its mix—as well as how much of that area each use occupies—its balance. A station receives one point for each of the six major land-use types (housing, office, institutional, industrial, open, and nonoffice commercial space) if at least 10 percent of the area within a half mile of the station is dedicated to that use. For example, a station with an equal share of nearby land allocated to each use type (16.6 percent of land area each) would score a 6, while a station similarly with all six use types with four types each accounting for less than 10 percent of land area would score a 2.

We find—as have others (PDF)—that variety and balance of different land uses matter for transit trip generation. On average, stations with higher land-use diversity indexes have substantially higher ridership retention, suggesting that having more riders drawn to the area by the range of things to do outweighs any deterrence the close concentration of uses may have on transit by encouraging walking or cycling instead.

Relating land-use diversity and revenue, if the stations with the lowest land-use diversity (such as the Harlem station on the Blue Line) had the average ridership recovery rate of the stations with the highest diversity levels (such as the Harold Washington Library station downtown), CTA would carry an additional 15,000 riders per day—conservatively equivalent to almost $5 million per year into the agency’s limited coffers.

Zooming in on Chicago’s downtown core and its adjacent neighborhoods, which offer the greatest potential for ridership gains through office conversions, we find the same patterns of low ridership retention for station areas dominated by office space, as well as higher ridership for stations with a variety of uses. Additionally, the value of open space is cemented as downtown stations with the most direct access to open space (such as Grant and Millennium Parks) have had their ridership more quickly approach 2019 volumes than their intra-neighborhood peers.

Transit agencies can work with local governments to promote land-use changes

Transit agencies can work with policymakers to ensure their fiscal stability strengthens as a result of station-area office conversions in the following ways:

• Target the use of their own land holdings for new high-density, mixed-use construction. For example, San Francisco Bay Area Rapid Transit has already been enabled by California state legislation to enforce zoning policies (PDF) that allow the redevelopment of parking lots and other land the agency owns at high densities—even if such densities are not allowed by local zoning laws. CTA is planning to incorporate new housing into the land it acquired to help reconstruct the north side of the city’s Red Line. These approaches can generate much needed funding for agencies through potential ridership increases and long-term ground leases.
• Work with local governments to remove barriers to increasing affordable housing in station areas. Residents of affordable housing account for a disproportionately large share of transit riders, so station area affordable housing development (newly constructed or converted) would best connect not only would-be riders to transit services but also high-likelihood Chicago’s Connected Communities Ordinance, which lowers parking requirements and incentivizes density and affordability near transit, has taken a step toward removing some of the barriers typically cited (PDF) as thwarting density and affordability efforts. Ensuring affordability is similarly incentivized for office conversions could give transit agencies a shot at seeing lasting ridership gains.

With more cities transitioning from talking about office conversions to operationalizing such projects, policymakers must make transit use, transit’s value, and transit’s healthy, financially sustainable future a central part of the plan forward.