An increasingly influential planning strategy for leveraging rail transit is high-density residential development near rail stations, or 'Transit-Based Housing'. Proponents argue such projects will get more people onto trains, reduce developers' expenses, and lower commuting costs, housing prices, and air pollution in the bargain. While most of the literature has addressed the merit of such projects, this paper considers a separate question: Whatever virtues transit-based housing may have, what are its prospects?
We find that transit-based housing faces a much steeper uphill battle than the conventional wisdom suggests. Cities' parochial fiscal and economic interests appear to conflict with transit-based housing in several fundamental respects, a view strongly supported by a behavioral analysis of zoning data for all 232 existing and proposed Southern California rail transit stations. Municipalities behave as if they prefer to use rail transit stations for economic rather than residential development, suggesting that transit oriented planning strategies would profit form more attention to their local fiscal and economic benefits.