London School of Economics: HSR Delivers Economic Growth
Note: Apologies for the extended downtime on the blog Thursday night. Our hosting company had a power outage that forced them to take their servers offline, affecting not just this blog, but numerous other transit blogs. We’re back up and everything should be running smoothly now.
This blog has consistently argued that high speed rail will provide badly-needed economic growth to California at a time when we desperately need it. Mired in the worst recession in 60 years, California is not in a position to turn down projects or infrastructure that will provide significant long-term economic growth and job creation prospects.
Now the London School of Economics is out with a new report showing that existing HSR lines produce demonstrable and meaningful increases in economic growth to the cities they serve:
Economists discovered that towns connected to a new high-speed line saw their GDP rise by at least 2.7 per cent compared to neighbours not on the route. Their study also found that increased market access through high-speed rail has a direct correlation with a rise in GDP – for each one per cent increase in market access, there is a 0.25 per cent rise in GDP.
The findings, from the London School of Economics and Political Science and the University of Hamburg, may be used to support arguments for high-speed networks which are already being planned in the UK, US and across the world. Until now, no one has demonstrated that high-speed rail brings clear economic gains along its routes….
Their research focused on the line between Cologne and Frankfurt, which opened in 2002 and runs trains at almost 185mph (300 kmh). The authors looked at the prosperity and growth of two towns with stations on the new line – Limburg and Montabaur – and compared them with more than 3,000 other municipalities in the surrounding regions.
The new line brought Limburg and Montabaur within a 40-minute journey of both Cologne and Frankfurt. Over a four-year period, the researchers found that both towns and the area immediately around them saw their economies grow by at least 2.7 per cent more than their unconnected neighbours.
This should be required reading for city council members in cities such as Redwood City, Palo Alto, Gilroy, and Bakersfield, where debates over how the tracks should be built threaten to overshadow the recognition of the significant economic benefits that HSR stations would bring to their cities and their economies. Gilroy, which faces an unemployment rate of 17%, and Bakersfield, facing a 16% unemployment rate, are two cities in particular that would massively benefit from the HSR stations being proposed for them.
In Gilroy’s case, this blog has repeatedly made the case about how Gilroy will benefit from HSR. By providing a fast and affordable method of travel, HSR will encourage companies to locate in Gilroy and will encourage workers with jobs in SF and San José to move to Gilroy, providing a massive boost to property values and creating significant numbers of jobs. Without an HSR station, however, Gilroy risks becoming a backwater, left behind by the 21st century economy and mired in high unemployment.
These arguments hold true for the other cities where a station is proposed, including the Peninsula cities. That’s one reason why such large majorities support the project there, in spite of the efforts of a small but vocal group of prosperous HSR critics to prevent that economic growth from coming to the Peninsula.
Once again, we see the stark economic terms in which the battle over building HSR is being fought. Those who oppose it are fighting to prevent anyone else from sharing in the economic security the critics enjoy. It is an inherently elitist position (even if not every critic is in the elite), one that ruthlessly ignores and denies the dire economic realities that are being experienced across the state, a position that aesthetic values are more important than jobs, that the role of local government is to protect property values instead of providing for broadly shared prosperity.
The LSE study deserves a wider audience – especially in the cities that will gain the most direct economic benefits from this transformative infrastructure project.