Farebox Freedom: An analysis of centralized fare policy interventions relative to the suburbanization of poverty

Abstract

The United States is witnessing a shift in its geography of poverty, with suburban communities experiencing greater increases in poverty rates relative to urban cores. However, transit service and fare policies have not kept pace with this demographic shift, inadequately meeting the needs of a growing population of lower income riders in the suburbs, particularly those served by higher-cost modes like commuter rail.

This thesis confronts this evolving dynamic, bridging a research gap between transit fare policy and the suburbanization of poverty, analyzing seven transit systems across the US through a Spatial Difference in Differences research approach, revealing mode specific shifts in transit cost burdens from 2019 to 2021 and impacts of these shifts on social vulnerability as defined by the CDC. The thesis also explores federal policy pathways to create greater fare equity in light of this dynamic, either through supporting operations costs for transit agencies or through a flat-fare national transit pass for riders, akin to Germany's Deutschlandticket (D-ticket) program.

Focusing on suburban commuter rail communities across the sampled networks, the analysis finds that in 2021, communities with only commuter rail access and higher-than-average social vulnerability scores were associated with approx. an 11% additional increase in transit cost burdens compared to all other groups while also experiencing an increase in transit cost burdens overall. Furthermore, a two-fold increase in transit costs as a share of median income in 2021 was correlated with an additional 7.4% rise in social vulnerability index scores for commuter rail communities, relative to those with access to other modes that are closer to the urban core. While these communities have a 38% lower social vulnerability score, the analysis estimated a 60% increase from 2019 to 2021, highlighting a disproportionate increase and challenging the assumption of the wealthy commuter rail suburb.

This increasing sensitivity to transit cost burdens points to a significant ongoing interaction between national trends of suburbanization of poverty and fare policy. Given that many transit agencies face funding constraints and are nationally inconsistent in their low-income fare programs, they may be structurally limited in their ability to address these disparities on their own. This analysis considers lessons from historical policies such as the National Mass Transportation Assistance Act of 1974 and recent international programs like Germany’s D-ticket, to suggest that federal support for transit operations—paired with inclusive, mode-agnostic fare programs—would help address these emerging inequities in transit affordability amid the suburbanization of poverty.