San Jose Demonstrates the Limits of Urban Growth Boundaries and Urban Rail

Publication Date: March 2003

Publisher: Reason Foundation

Author(s): Randall O'Toole

Research Area: Transportation

Type: Report

Coverage: California

Abstract:

San Jose, California, provides an excellent case study of how the realities of urban-growth boundaries and
light rail systems come home to roost. In the 25 years preceding the middle of 2001, San Jose housing prices
grew by 936 percent, more than any other major urban area. And one consequence is that the city has spent
hundreds of millions of dollars to provide housing subsidies to offset rising costs.

Meanwhile, San Jose's light rail system has flopped. Passenger miles of travel have remained below 1992
levels in every year through 2000 except 1998, and light rail ridership on the first line never exceeded half
the riders projected in the original study. The system's operating costs are more than twice the national
average for similar light rail systems and are more than the city's bus system measured either per passenger
or per vehicle mile. The story of what happened
in San Jose can help policymakers evaluate urban-growth boundaries and light rail systems and understand
why they have not lived up to their promises.