Zegras, Costa, Zheng - Roads, Transit, and the Denseness of São Paulo's Urban Development

Examining the case of São Paulo, we present the first causal evidence of the different influences of road and rail infrastructures on urban outgrowth and densification in the half-century which spanned from 1947 to 1997. To draw the causal inference, we employ an instrumental variable approach. For rail transit effects we use abandoned streetcar routes as an instrument; for roads, we take advantage of the fact that several avenues and arterial roads in São Paulo were built upon dried urban riverbeds, and use those as an exogenous source of variation. We find that the construction of avenues and arterial roads crossing the urbanized area and connecting suburban and peripheral neighborhoods fomented urban expansion and accounted for more than half of the outgrowth observed. Specifically, each kilometer of new avenues and arterial roads generated a 5% increase in the local urbanization rate in our study period. In contrast, investments in rail transit promoted the evolution of vertical neighborhoods and were responsible for three-quarters of the increase in Floor Area Ratio (FAR) within São Paulo's central area. Each additional kilometer of transit lines was responsible for increasing the local FAR by 20% in the 50-year period, spurring the construction of 83 square kilometers of additional urban space in the city. Our results confirm that transit investments have further stimulated the specialization of land uses in urban São Paulo by attracting more commercial buildings towards central areas and stimulating residential real estate development in more distant areas. A simplified counterfactual analysis indicates that São Paulo would have been 2.7 times more compact than today had it pursued a transit-oriented scenario of transport infrastructure investments. Besides contributing to the empirical literature on the interactions between transportation and land use, our findings have far-reaching implications for contemporary planning strategies that promote transit as a strategy to advance sustainable urbanization.