Transit-Oriented Development: A Tool for Promoting Regional Equity · 2011-04-29 · Transit-Oriented Development: A Tool for Promoting Regional Equity Enterprise and Urban Land Institute

Transit-Oriented Development: A Tool for Promoting Regional Equity

Enterprise and Urban Land Institute Regional Equity Live Online Event Sam Zimmerman-Bergman, Project Director

February 14, 2008

Reconnecting America’s Center for Transit-Oriented Development

• Create a national marketplace for TOD, working with cities, transit agencies, developers, investors and communities.

• A collaboration with The Center for Neighborhood Technology, Strategic Economics, and real estate and transit experts

http://www.reconnectingamerica.org [email protected]

What is TOD, and why should you care?

Transit-oriented development: • Increases “location

efficiency”; • Boost transit ridership and

reduces traffic; • Provides a rich mix of

housing, jobs, and shops; • Provides value for public

and private sectors, and; • Creates a sense of place

Pictured: Portland’s Pearl District, one of the best examples of TOD

TOD is More Than A Single Building

Corridor Site

Region

District

Question: How engaged is your organization in TOD?

Answer the Poll questions to the right. Then click the “Submit” button.

Transportation has always been connected to housing and development

With Streetcar Suburbs, Developers built Automobile travel reshaped streetcar lines to serve their projects development, making connectivity

of streets, neighborhoods and development less important

Results of postwar patterns: Dependency on oil, higher costs and environmental crisis

21st Century neighborhoods are changing

• Changing demographics, market forces and values are changing urban neighborhoods

• 100 million more people in next 25 years • Greater diversity, also greater disparity

Demand for mobility-oriented housing is growing

• Residential demand for living near transit couldgrow from 6 million to16 million households by2030

• 21% of all households will have a potentialdemand for living neartransit

• Regions with extensiveand growing transitsystems offer the greatestTOD potential.

Projected Demand for Housing

in Transit Zones

0

2

4

6

8

10

12

14

16

2000 2005 2010 2015 2020 2025

Ho

us

eh

old

s (

Mil

lio

ns

)

Source: 2006 Revised Projections, CTOD National TOD Database

The American Dream is being re-imagined

• In 2005, the median sales price for condos topped the price of single-family homes (Wall St. Journal)

• Dwell Magazine cover: “Small is the new big”

• AARP reports that 71% of older households want to live within walking distance of transit

• Anecdotal evidence (DC, Charlotte, CA) suggests that so far, housing near transit is holding its own in the current housing downturn

Most demand for higher-density housing will be in regions

with the most extensive systems

Question: TOD can be both rail and bus-oriented. What type of TOD may be most

suitable for your organization? We’ll assume folks are involved in urban and suburban locations.


Housing construction hasn’t met changing demand

• Housing Product Types

– Increasing need for rental units (immigrants, retirees, echo-boomers, and low incomes), but rental construction is barely keeping up with losses

– Nationally, married couples with children are 24% of Market, but single family homes are 78% new construction

• Housing and Lifestyle

– 30% want to live near transit, and only 2% being built there

– Households want shorter commutes, but largest growth areas are >20 miles from CBD

Source: State of the Nation’s Housing 2005, JCHS

Diversity + Demand for Housing near Transit Collide

• Neighborhoods near transit today are more racially and economically diverse than their host regions.

• In the future, Low and Very Low Income Households will make up at least 40% of TOD demand.

• 58% of TOD demand is likely tocome from single personhouseholds.

• Existing subsidized affordablehousing is at risk

Orchard Gardens, a HOPE VI development in Boston

Affordability: Where the Rubber Meets the Road

Growing number of state campaigns seeking to address affordable housing and the job – housing mismatch through better transportation choices.

IL, CA, MD, NJ, MA

The Housing & Transportation Costs Trade-off Where can a 3-person household earning 80% of area

median income live in the Twin Cities?

Considering housing costs Housing + transportation costs

Working families are burdened by costs

Housing and transportation costs for families earning $20K-$50K http://www.nhc.org/index/heavyload

Preserving Opportunities: Saving Affordable Homes Near Transit

• Over 100,000 federally assisted units are located in close proximity to rail stations in these 8 cities.

• 63% of the total units near transit are covered by rental assistance contracts expiring before the end of 2012.

Linking Housing and Transit Creates Multiple Benefits for Low-Income Residents

For Preservation and Construction, Working Pro-Actively is Key

SOME CHALLENGES: • Need to recognize complexity of funding sources and policy

goals • Need to better link transportation and housing plans • Need flexibility to engage private and non-profit sectors

Question: Are you working locally with public agencies to

coordinate housing and transportation investments?


TOD strategies need to address housing barriers

• Land assembly • High land costs • Inadequate

infrastructure • Concentrated poverty

but also displacement • New vs. existing transit

www.reconnectingamerica.org

Planning & Zoning Strategies

Tools for Creating Mixed-Income TOD

Strategy: Inclusionary Zoning

• Uses market momentum to create new affordable housing (rental & ownership)

• Developer sets aside small percentage of units as affordable

• Creates diverse, mixed-income neighborhoods

• Usually enacted via zoning ordinance, but can also be implemented through other types of regulation

• Not enabled in some jurisdictions • Best when implemented area-wide

rather than project by project


Case Study: Montgomery Co, MD

• Requires projects w >20 units make 12.5 – 15% affordable.

• More than 11,800 units developed since 1974

• All mixed-use developments must have affordable component.

• 22% density bonus

• Some recent problems with implementation and enforcement

Strategy: Inclusionary Zoning

Glenmont Metrocenter

• 1,550 units, mix of types (townhouse, apt)

• 12.5% affordable

• 90,000 SF Retail

• Transit-Oriented

• Public Space


Strategy: Expedited Permitting & Review

• Complex review process can add to difficulty of creating mixed-income projects

• Expedited reviews can be Austin’s Villas on Sixth Project accomplished at little cost through

a dedicated staff member

• Some jurisdictions also waive certain fees for mixed-income development.

Santa Fe’s Puebla Hermosa

Case Study: S.M.A.R.T. Program Austin, TX

• Expedited permits reviews, and fee waivers

• Typical developer savings: $600/MF unit; $2000/SF

• Must meet green building standards

• Must be transit-oriented

Strategy: Expedited Permitting & Review

Villas on Sixth

• 160 rental units

• 15% market rate

• 85% affordable (40-50% of AMI)

• Mixed-use infill project walking distance to schools, health care, and transit

• Housing Authority leases land on long-term basis to developer

Courtesy: http://www.housingpolicy.org

Strategy: Incentive-based Zoning • Provides developers with density

or other types of bonuses in exchange for affordable unit construction

• Often used in conjunction with voluntary inclusionary zoning

• Can also be used to encourage pedestrian-friendly design and transit accessibility

• Widely used, but can lead to uncertain outcomes


Strategy: Reduced Parking Requirements

• Parking key factor in determining long-term housing prices

• Maximum requirements rather than minimum

• Reduced parking often results in reduced demand, especially in TOD

• Allows developer to construct more units more affordably



Strategy: Reduced Parking Requirements

Strategy: Reduced Parking Requirements • 1 acre parcel zoned for up to 100

units of residential development

• At 2 spaces/unit, parking will need to be in multi-level garage at a cost of $20,000 to $40,000 per space.

• At 1 space/unit, parking can be in ground floor podium, saving the development as much as $2 million.

• At 0.75 spaces/unit, the development now has enough ground floor space for a child care center and 10,000 square feet of retail.

Harrison Square, DC

Mandela Gateway, Oakland


Strategy: Reuse of Vacant Properties

• Can help alleviate blight and stop neighborhood decline

• Location efficiency and existing infrastructure

• May require foreclosure reforms, or creation of a land bank

• Allows housing nonprofits to build development capacity via smaller scale projects


Case Study: Foundry Square – Newburyport, MA

• 20 unit condo building

• 7 market-rate, which provided subsidies for 13 affordable units

• $650,000 from MA Housing Trust Fund• Built on former site of the

Department of Public Works, a blighted and vacant property

• Site designed to be walkable and accessible from other neighborhoods


Question: Which of the mentioned tools have you

utilized?



Financing Strategies

Tools for Creating Mixed-Income TOD

Strategy: Public-Private Partnerships

• Jurisdictions can provide assistance in land acquisition

• TIF Districts and BIDs can implemented in conjunction with development

• Public infrastructure improvements can improve transit access and make development feasible


Strategy: Public-Private Partnerships

Case Study: Chatham Court – Alexandria, VA

• Affordable component fully integrated into site

• HOPE VI project replaced distressed 1940’s public housing

• Housing• 152 units Authority profit

enabled the• 100 market rate, selling developmentfor up to $1m of additional affordable• Public housing units are unitsrental


Strategy: Housing Trust Funds

Developed w funding from regional AHTF in Washington State

• Established by states, regions, or jurisdictions to provide a stable and dedicated revenue source for affordable home financing

• Revenue source should be able to finance fund without annual appropriations decisions

• Sample funding streams include: portion of real estate tax, document recording fees, or hotel/motel taxes


Case Study: 2495 Massachusetts Avenue Massachusetts Affordable Cambridge, MA Housing Trust Fund

• Deed-restricted to first-• Funded via Ma time homebuyers with

General Fund incomes below 80% of

• Has distributed AMI $111 million since FY 2001, • $460K from MAHTF -assisting 180

additional funding from developments with 6,791 units the City of Cambridge of housing and local foundations

• Can be used to • Transit accessible for both

ownership and rental units, • Community nonprofit including sponsor assistance for first-time homebuyers

• 14 condos

• Infill development


Graph courtesy of the San Antonio Housing and Neighborhood Services Department

Strategy: Value Capture Tools (e.g. TIF)

• Can be used to fund mixed-income housing, or public investments intended to stimulate economic revitalization

• Creates resources for land assembly and infrastructure improvements, including transit

• Operates within a specific district

• PA’s TRID program allows for creation of districts around transit


Strategy: Community Land Trusts

• Land is acquired and held in trust

• Best used to lock in low land costs in underserved neighborhoods Case Study:

Dudley Neighbors, Inc., Boston, MA • Land value increases can • Housing and Open Space projects be leveraged for community

benefits • Granted authority to condemn vacant and abandoned property within neighborhood boundaries

• Requires long-term strategy • Land held in trust and conveyed to affordable housing

developers for long-term, low-cost leases


Strategy: Targeted Use of LIHTC • 4% credit can be used to raise

additional capital and is not subject to the same caps that apply to the 9% credit

• Some states include location

Milwaukee, WI efficiency criteria or requirements, increasing affordability through transit access

• Some local governments encourage a mix of uses in LIHTC-assisted projects through provided funding for community centers or daycare


Brooklyn, NY

Question: Which of the mentioned tools have you

utilized?


Reconnecting Housing and Transportation • The federal government should

restore confidence in the Section 8 program by fully funding the program.Also restore the Hope VI program topromote mixed-income TOD.

• State housing finance agencies shouldallocate resources towards creatingand preserving affordable housing intransit rich neighborhoods. (LIHTC)

• Address regulatory barriers and createincentives and special funding tools.Cities and states should do more to develop acquisition funds.

• Cities and transit agencies shouldwork to create frequent servicenetworks to core residential and jobcenters allowing workers to make moreconnections to the greater region, with apriority on maintaining and expandingservice to areas with affordable housing.

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Transit-Oriented Development: A Tool for Promoting Regional Equity · 2011-04-29 · Transit-Oriented Development: A Tool for Promoting Regional Equity Enterprise and Urban Land Institute

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