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Metro TOD Program Transit-Oriented Development Strategic Plan

I. Introduction

The Portland region has a successful history at achieving transit-oriented development and compact growth. It continues to outperform many of its peer regions when it comes to connecting jobs to transit, promoting alternative modes of transportation beyond the car, and promoting successful new compact development.

But, there is room for improvement throughout the region as a whole. Many areas outside of central Portland have not been able to generate momentum for infill and higher-density development and the creation of more walkable, livable neighborhoods. New development near transit and amenity-rich walkable communities remain priced out of reach for many households. Thus, the combined cost of housing and transportation burdens many families, and particularly low- and moderate-income families. Vehicle miles of travel (VMT) and greenhouse gas (GHG) emissions from transportation continue to be key environmental challenges in the region. The Metro TOD Program fills a critical gap in addressing these challenges, but it will never be the only responsible entity promoting this type of regional transformation.

This Strategic Plan is designed to guide future investments by the Metro TOD Program, in order to ensure the program maximizes the opportunities for catalyz•ing transit-oriented development throughout the region and effectively leverages additional resources to comprehensively advance TOD in all station areas and frequent bus corridors.

This plan contains the following components:

  • An evaluation of regional existing conditions influencing the ability of TOD as a strategy to achieve Metro’s 2040 Growth Concept goals
  • A typology framework that classifies station areas and corridors based on their “TOD readiness”
  • Guidelines for phasing of TOD Program activities based on this typology
  • Discussion of potential future activities for the program, and funding strategies to support them

About the TOD Program

Metro’s Transit-Oriented Development Program serves a unique and critical implementation-based role that is unmatched in other regions around the country. The TOD Program is designed to provide incentives, primarily in the form of modest funding grants, to private developers to build higher-density, mixed-use projects located near transit. The program is structured to encourage projects that “push the envelope” in terms of density or building type, acknowledging that these projects are often more expensive to build or carry additional risk. The Program’s strategies for maximizing TOD potential include:

  • Contributing to local identity through multi-year investments in catalyst projects and place-making elements;
  • Creating market comparables for higher-density mixed-use development near transit and in centers;
  • Cultivating developers with expertise in higher-density and mixed-use development in suburban settings; and
  • Building community acceptance of urban style building types in suburban communities.

Current Program Activities

The TOD Program implements these strategies through a series of existing activities that include direct investment in development projects, limited acquisition and banking of property near transit, supporting the addition of neighborhood amenities or “Urban Living Infrastructure” and providing education and outreach to local jurisdictions, developers, and citizens throughout the region. The activities of the TOD Program are complemented by the activities of Metro’s Development Center which typically focuses on the region’s downtowns and main streets. Figure 1 outlines the various activities and grant programs in detail, the scale of the program and its funding source(s). Activities are listed in the descending order of level of investment, with those activities which have received the most TOD Program resources listed first.

Project Evaluation

Selection of projects and decision-making around distribution of funding to in•dividual projects is a key component of program effectiveness. The program uses a spreadsheet model as a primary tool to assess applicant project cost effectiveness and financial need. The model is not the sole consideration used by staff to develop recommendations for project funding, but program history shows that model outputs have been the most important guide in determining actual funding allocations to private developers and also provides a key data source for measuring program success. Results from the model are considered along with other criteria and presented as part of staff’s recommendation to the program’s Steering Committee and Metro Council when approving projects and funding amounts.

Metro’s model is currently set up to make two primary calculations, the lower of which serves as a maximum project subsidy:

  1. A calculation of the total cost premium associated with achieving higher density and/or mixed-use development. These include, but are not limited to, the cost of structured or tuck-under parking; costs related to elements of mixed-use development, such as firewall separation; and higher con•struction costs associated with taller buildings (e.g., elevators, structural systems, fire sprinkler systems, or more expensive building materials).
  2. 2.A calculation of the benefit associated with additional transit use, and specifically the incremental transit revenue associated with a project’s higher density and/or mix of uses. The model calculates a maximum project subsidy based on the net present value of additional transit revenue associated with increased ridership over a 30-year period. Specifically, the model computes:
    • The estimated number of new transit trips made per day (“induced ridership”)
    • The cost per trip (Metro’s investment divided by induced trips)
    • The net present value dollar amount of transit fares over 30 years as a result of the project (“capitalized fare box revenue”)

Both of the above calculations require comparison of a proposed project to a “baseline” project, defined as a project that would be delivered in the private mar•ket with no assistance. The baseline project is typically based on recent market-rate development that has occurred nearby.