Notes From Transit-Oriented Development Financing Forum
The Center for Transit-Oriented Development (CTOD), Transportation for America (T4America), the National Housing Conference (NHC), the American Institute of Architects (AIA), and LOCUS: Responsible Real Estate Developers and Investors hosted a Transit-Oriented Development (TOD) Financing Forum on May 17, 2010 in the U.S. Capitol Visitor Center. The event brought together more than70 participants from the housing, development, public and private finance, transportation and policy sectors to discuss the complexities of financing TOD. The Forum was designed as an opportunity to exchange policy ideas between TOD practitioners, advocates and federal policy makers. CTOD released a set of 10 federal policy recommendations to accelerate equitable TOD through upcoming transportation, tax, and livable community legislation. AIA also released its new report, Promoting Livable Communities: Examining the Internal Revenue Code and changing the way it affects the built environment, which provides a review of existing provisions in the Federal tax code that explicitly or implicitly affect the design and development of communities.
For the past several years, CTOD has been cataloguing and researching the impact of high-quality transit service on adjacent property values, strategies being developed by local jurisdictions to capture increased value to property and local economies, and challenges to financing TOD projects particularly to assure housing affordable to households at a range of income levels. Several regional and national CTOD reports on the subject of "Value Capture" are available at www.reconnectingamerica.org including the 2008 report, "Capturing the Value of Transit."
John Robert Smith, President and CEO of Reconnecting America, provided the opening remarks, commenting on the need to solidify ideas and promote a set of shared polices to advance transportation authorization and other potential legislation. Federal Transit Administration Deputy Administrator Therese McMillan, who was joined by other FTA staff at the event, also gave opening remarks.
The notes below provide a summary of the four-hour event and also include a copy of the PowerPoint presentations.
Overview of Recent Trends influencing Financing of TOD, Dena Belzer (Strategic Economics)
What’s Equitable TOD?
Transit-oriented development incorporates the half-mile around a station. It creates an environment where a car is not mandatory. By 2030 demand for TOD housing will have doubled with a projected 30 million households seeking to live in walkable communities served by transit with access to jobs, housing, services, entertainment and retail. A majority of the projected demand is from single person households or those without children. About 30% of this demand comes from low-income households, many of who currently live near transit. Ensuring that TOD provides for housing affordable to households at a mix of income levels is critical, and includes a need to create new housing opportunities while also placing a heavy emphasis on the preservation of affordable units. NHC has developed a policy paper that further discusses the importance of linking location efficient communities and affordable housing through transportation policy.
How is TOD different than smart growth? You need the T: transit, along with other amenities and services create transit-oriented development. The demand for transit investment is a huge. A 2009 study by Reconnecting America identified almost $250 billion in proposed new transit investments: rail, streetcar, light rail, bus rapid transit. Not sufficient public resources to meet this growing demand for transit. Investment in the necessary placemaking in TOD infrastructure is limited. Of all of FTA’s grant-making for transit enhancements, less than 1 percent goes for TOD.
Proximity to transit stations has been found to increase property values. The standard tools to capture that value (i.e. Tax Increment Financing, business improvement districts, development fees, etc.) only affect new developments so not sufficient to meet TOD potential around existing and planned corridors, in old and newer communities. Not all types of transit corridors have equal value-capture potential. Around the South corridor light rail line in Charlotte, NC there are 1,300 under-developed acres open to development. Around the Fairmount line in Boston, MA there are only 300 under-developed acres, most of which are in small, fragmented parcels.
In our analysis of transit regions around the nation we have identified four types of corridors: Congestion Relief, Future Growth and Redevelopment, Equity, and Economic Development.
Click on the links below to review PowerPoint slides and discussion notes from each of the panels.
Wrap-Up: Mariia Zimmerman
- Throughout the discussion today we heard a number of recurring themes.
- There’s an increase in demand for walkable areas.
- We need patient capital, and land acquisition/pre-development funding.
- We should compliment federal grants with leverage.
- The government shouldn’t lock in TOD/Livability definitions but set parameters.
We’ve developed a set of 10 recommendations based on the feedback and on-the-ground experience that has been shared with us over the past year that we would like to see enacted to help advance equitable TOD. The federal government is already an important funding partner in financing infrastructure. Nationally, demand for TOD far outstrips the number of places that currently have reliable, convenient and high quality public transportation. Ensuring that federal transportation funds are leveraged to achieve national economic development, energy security, social equity and environmental goals is an efficient use of scare federal resources. These recommendations include both modifications to existing programs, and the creation of new financing tools particularly to create credit enhancement programs for TOD and transit.
We welcome the chance to hear from you about these recommendations, including how they can be improved and if you’d like to work with us on advancing these policy ideas. Achieving equitable TOD requires many partners, perspectives, innovation and as we’ve discussed today it requires the financing to make the transit, the development, and the placemaking possible. Later this summer, the Center for Transit-Oriented Development will be releasing a Policy Paper on Financing Equitable TOD building off of the discussion we’ve had today, and our on-going research. Please continue to check our website for more information as it becomes available.