Encouraging Transit Oriented Development Case Studies that Work

United States Environmental Protection Agency LIVABLE COMMUNITIES Keeping aff ordable housing in the transit-oriented mix ood transit-oriented development majority of US households used to be can provide all the benefits families with both a mom and dad and Gassociated with livable more than one child, this demographic communities: a mix of uses that makes it possible to get around without a car, a greater mix of housing types and transportation choices, an increased sense of community among residents, a heightened sense of place. Local This kind of development jurisdictions produces lower control greenhouse gas multiple emissions (a recent study by pools of the Center for funding that Transit-Oriented can be used Development to support shows that TOD produces 43 percent less group now comprises just 25 percent of affordable emissions than conventional households and it is shrinking. More and and mixed- suburban development, more households are childless or headed income www.reconnectingamerica. by single parents, and single adults housing in org), it promotes walking comprise 41 percent of households. The and biking and more demographic groups that are increasing transit zones active lifestyles, and it in size – households that are smaller, creates value for property older and more ethnically diverse – are owners, businesses, local governments, the same demographic groups that have transit agencies and residents. This historically shown a preference for higher is development that responds to the density housing near transit. concerns of the 21st century because it’s Today many people want a “room with more environmentally and economically a view” within walking distance of coffee, sustainable. And it provides a restaurants, yoga, a dog park, art, film convenient, affordable and active lifestyle and culture. Lifestyles are changing, for people of all ages, including those and convenience and affordability are who don’t drive. paramount considerations. Research Increasingly Americans are showing a by the Center for Transit-Oriented preference for more compact, walkable, Development shows that by 2030 nearly mixed-use communities over typical a quarter of all US households looking suburban development, in part because to rent or to buy are likely to want traffi c is so bad that no one wants higher-density housing near transit. The to spend time commuting. But the Urban Land Institute has also noted changing housing market has as much the changing real estate market: ULI’s to do with demographics: While the vast annual “Emerging Trends in Real Estate”

1 The Rosslyn Ballston Corridor in Arlington, VA, illustrates how TOD can accommodate tre- mendous development in a livable community that provides benefi ts to both new and existing residents. This was a declining low-density commercial corridor 30 years ago when the local government decided to focus development around fi ve closely spaced rail stations. Despite the enormous amount of development that has occurred, single-family neighborhoods have been preserved just a short walk away.

report has ranked locations near transit the enormous amount of development as a best bet for investors fi ve years in a that has occurred, single-family row. neighborhoods have been preserved just Moreover, transit is proven to a short walk away, and there has been generate value that can be captured only a modest increase in traffi c. The and reinvested in communities because overall results have been extraordinary: it concentrates development and .The assessed value of land around business activity and the tax base in stations increased 81 percent in 10 a way that allows for focused value years; capture strategies. Tried and true value .8 percent of county land generates capture strategies include: property .33 percent of county revenues – and sales taxes, real estate lease and allowing Arlington to have the lowest sales revenues, farebox revenues, fees property tax in Northern Virginia; on everything from parking to business .50 percent of residents take transit licenses, joint development, special to work; 73 percent walk to stations. assessment districts and public-private Shifting demographics and the partnerships. changing real estate market have The Rosslyn Ballston Corridor in opened up an unprecedented window Arlington, VA, illustrates how TOD can of opportunity to channel growth into accommodate tremendous development livable communities near transit. This in a livable community that provides opportunity should be exploited since benefi ts to both new and existing it is increasingly clear that one of residents. This was a declining low- the most sustainable, low-cost, long- density commercial corridor 30 years ago term solutions to a host of pending when the local government decided to problems – including climate change and focus development around fi ve closely dependence on foreign oil -- is public- spaced rail stations, working with private investment in neighborhoods residents and the private sector. Despite where people don’t have to drive.

2 STATION AREA PLANNING Getting the most out of transit-oriented development tation area plans are conceptual should be involved in determining or specifi c plans for the areas what public infrastructure is needed, Saround transit stations or along the desired mix of uses, whether there transit corridors. There is some variation in what these plans contain, but they all lay out the basics, including zoning, design standards, parking requirements and information about transit access and bike and pedestrian circulation. The Detailed most effective station area plans have a plans help clear time frame and strategy for leverage the implementation, potential such as an The neighborhood surrounding Highlands Garden Village, a mixed-in- of transit- investment or come, mixed-use urban infi ll project near downtown Denver, provided oriented infrastructure signifi cant input on the project design, greatly enhancing its success. improvement development plan that has clearly should be public space and what kind, identifi ed funding as well as other design considerations. sources. Station area plans work best In some cases plans may be advanced for encouraging TOD when there are enough to allow for “by-right” zoning signifi cant development opportunities that can greatly expedite the time it such as a large surface parking lot or takes to move from project conception to other underutilized land; they are far construction. less useful for development of a limited The developer of Mission Meridian scope. Detailed station area planning Village in South Pasadena, just north efforts are especially important for high- of downtown Los Angeles, solicited the priority sites. input of residents before building what was a relatively high-density mixed- VISIONING NEW STATIONS use TOD project in a historic single- family neighborhood that had long Station area plans that are based on a resisted development. By cultivating visioning process with community input their interest, input and enthusiasm he can help set standards and expectations succeeded in getting their support for before projects are proposed, smoothing what became a catalytic and immensely the way for the approval of appropriate popular development that activated development. This certainty and and improved the entire neighborhood. predictability can help ensure that Similarly, the neighborhood surrounding projects will be approved without delay Highlands Garden Village, a mixed- or community opposition ̶ both of which income, mixed-use urban infi ll project increase risk and result in increased near downtown Denver, provided development costs. The community signifi cant input on the project design,

3 The developer of Mis- sion Meridian Village in South Pasadena solicited the input of residents before building what was a relatively high-density mixed-use TOD project in a historic single-family neighborhood. By cultivat- ing their interest, input and enthusiasm he suc- ceeded in getting their support for what became a catalytic and immensely popular development that activated and improved the entire neighborhood. greatly enhancing its success. In both of affordability. A “fl oating” TOD overlay instances community input resulted in zone offers more fl exibility; it can be a design that located new single-family applied when the opportunity arises homes on the sides of the development instead of pre-zoning the site before the that faced existing single-family homes, market is ready – which can cause land with more density and commercial speculation and higher costs, as well as space facing the commercial streets. diffi culties for existing property owners. The result was a truly sensitive design Transit agencies and cities should that integrated signifi cant density a into consider the corridor as well as single-family neighborhood. the station area, and balance Some elements of station area plans may be proscriptive, such as overall considerations about system prohibitions on auto-oriented retail, or performance with each station area prescriptive, such as a provision that plan. Considering the corridor as well as 50 percent of groundfl oor space should the station allows local governments to be devoted to retail. Other elements identify those stations that should serve can be “permissive.” For example, as parking lots for commuters, and those the developer may have the option that should be developed as high-activity of providing a certain feature, but it nodes. Parking ratios can be reduced as is not required. The challenge lies in neighborhoods near stations develop. At fi nding the right balance between what BART’s Fruitvale station in Oakland, for is optional and what is required with example, parking was reduced to allow the goal of ensuring that the plan will for a higher density, mixed-use, mixed- result in a successful project, but not income transit village that was developed scare developers away. Planners and by a local community organization. The policymakers should be careful not to let lower parking requirements reduced perfection get in the way of the good. While some plans are custom- development costs, which reduced designed for specifi c stations, a “transit the cost of housing and commercial district” or “transit village” overlay zone space, resulting in a vibrant mixed-use can be applied more generally to ensure pedestrian corridor with high-quality that plans or projects near stations meet public space and plazas leading from certain criteria including a mix of uses, the BART station to Fruitvale’s nearby a pedestrian orientation, or a standard commercial center.

4 COMMUNITY EFFORT Following the lead of community-based organizations

ommunity development land around the station, building or corporations (CDC) can use rehabilitating 1,000 housing units and a Ctransit-oriented development to new “green” station building that houses bring about comprehensive and lasting revitalization in neighborhoods and increase affordability because families that use transit spend less money on transportation. Community development corporations can play an especially Community important role in Development neighborhoods Corporations that have been play an bypassed by the market and that important aren’t a high role in priority for local neighborhoods governments or transit agencies bypassed by by initiating the market projects that The Dudley Village project developed by the Dorchester Bay Economic Development Corporation in Boston will bring 50 will benefi t the afforable housing units to Roxbury. community. Community support for a CDC’s efforts can go a long way toward a child care center and retail, creating a convincing lenders to invest in and comprehensive mixed-use development. retailers to move into a community. It The cities of Chicago and San Diego were may be possible, for example, to attract both supportive of these developments an otherwise reluctant vendor, such as but had prioritized development in a grocery store, if community members neighborhoods where it was easier to say they will support the store. attract developers. Bethel New Life had to buy land, develop the housing and TOD success stories negotiate with the city, developers and the transit agency in order to realize their There are many TOD success stories vision. Financing came together through involving CDCs: San Diego’s transit- a combination of loans, grants, tax oriented Barrio Logan neighborhood credits to make the deal work. was developed by a community services Similarly, four CDCs have come organization, as was the Lake-Pulaski together in Boston to build mixed- neighborhood in Chicago, where a CDC income transit-oriented projects along named Bethel New Life made an El the Fairmount commuter rail line to help station the anchor for its revitalization ensure that gentrifi cation doesn’t displace efforts. Beginning with $10,000 raised current residents. The combination of a from a church congregation, Bethel New strong housing market and improvements Life has since assembled and brokered to the commuter rail line -- including

5 better service and new infi ll stations -- had prompted developers to build market-rate housing in what had been high-poverty transit-dependent neighborhoods. The four CDCs mobilized support for the transit improvements, raised funds for planning and development capacity, and are developing projects near the new stations that provide affordable units and economic development opportunities for lower-income residents. Perhaps the most famous example of a CDC-led TOD effort is the Fruitvale BART (Bay Area Rapid Transit) station near Oakland, California. This large mixed-use mixed-income TOD project grew out of community resistance to BART’s plan to build a parking garage between the BART station and the Latino neighborhood’s commercial center, which the community worried would hasten the decline of the already distressed neighborhood. BART withdrew the plan and agreed to work with the neighborhood on an alternative. The Spanish-speaking Unity Council, which had led the opposition, became the developer, working The Fruitvale BART station in Oakland, a large mixed- with a variety of federal and local income TOD project, grew out of community resistance partners to build the project. Fifteen to BART’s plan to build a parking garage between the years later, the Fruitvale “transit BART station and the Latino neighborhood’s com- village” links the commercial center mercial center, which the community worried would and BART station with a pedestrian hasten the decline of the already distressed neighbor- corridor and plazas lined with shops, hood. The Spanish-speaking Unity Council became offi ces, apartments and community the developer, working with a variety of federal and services – the village includes a local partners to build the project. clinic, child development center, senior center and library. All of these examples illustrate how TOD neighborhood. There are also some can be used to catalyze neighborhood lessons learned: In each of the examples revitalization, ensure affordability, discussed above there were effective leverage public and private investment, public-private-nonprofi t partnerships, provide more choices for residents, effective leadership, public involvement, increase transit ridership, reduce traffic creative fi nancing, quality design and and pollution, and enhance the economic construction and -- perhaps most and environmental sustainability of a importantly -- perseverance.

6 RIGHT-SIZING PARKING Taking advantage of transit-oriented development arking mandates crafted for single land uses overestimate the Pparking needs of development near transit and undermine opportunities for higher-value uses. Providing parking is expensive – estimated to cost from $20,000 to $40,000 per space in a parking structure and as much as $60,000 or more per space in high-value real estate markets like San Francisco. Because parking requirements can drive the budget for TOD Housing projects, parking becomes a key factor in determining in transit- real estate prices. oriented Local parking standards developments are usually set in accordance with the produces as Institute of Transportation much as 50 Engineers trip generation across pneumatic tubes stretched percent less and parking forecasts. across the driveways of 17 transit- traffi c than The ITE model, however, oriented housing projects in Philadelphia, is based on suburban Washington D.C., the San Francisco Bay conventional examples where parking Area, and in Portland, OR. The research developments is typically inexpensive was intended to provide guidance for an and plentiful, and update of the ITE trip generation and because surrounding parking generation rates. low-density uses make travel by car necessary. The Center for Transit ECONOMICS OF PARKING Oriented Development’s database of transit systems and TOD shows that, Reducing parking requirements can in contrast, homeowners in walkable increase the feasibility of mixed-income communities with a mix of uses and and mixed-use development, and from good transit access own 43 percent a design perspective largely determines fewer cars than those who live in if there is space for retail, childcare or suburban communities. other nonresidential uses. Consider, for There’s increasing proof that TOD example, a one-acre parcel zoned for up projects generate less traffi c. The to 100 units of residential development. Transit Cooperative Research Program A parking requirement of two spaces (TCRP) released new research in 2008 for each residential unit would consume by PB PlaceMaking, Robert Cervero of 320-350 square feet per space at a UC-Berkeley, the Urban Land Institute cost of $20,000 to $40,000 per space. and the Center for TOD that shows that Reducing the requirement to 1:1 would transit-oriented housing produces just allow the project to save as much as half as many car trips as conventional $2 million. By reducing the parking suburban development. The study requirement to 0.75:1, enough ground counted the number of cars driving fl oor space would be available to allow

7 Higher-densities in transit-oriented developments are often not enough to make them pencil out. The lower line shows that a developer would require subsidies in order reach densities of more than 35 units per acre and 25 units per acre would be the optimal density. But if the higher rents a project near transit can demand and the lower development costs from reduced parking are added to the equation, the site’s profi table maximum moves to the 90 units per acre range.

for a childcare center and 10,000 square can be passed on to consumers in the feet of retail. form of more affordable housing. Lower Similarly, the TCRP study showed parking ratios will help promote transit that under the right conditions lowering ridership. And less parking will mean residential parking ratios by 50 percent that TOD projects are more compact and for TOD projects near high-quality transit sustainable. service could provide for increases in In Evanston, IL, for example, recent residential density of between 20 to 33 multifamily residential developments percent and a savings to the developer included a minimum of 1.25 spaces for ranging from 5 to 36 percent. The housing units that are one bedroom or TCRP research suggests that reducing smaller and 2 spaces per unit for three residential parking ratios for TOD makes or more bedrooms. But an onsite survey sense and would help these projects to determine whether all these parking realize the expected community benefits spaces were actually used found an by limiting traffi c, encouraging walking actual parking demand of 0.8 spaces and biking and transit use, making to 1.18 spaces per unit. As a result, TOD housing prices more affordable Evanston planners proposed reducing by limiting project costs, and providing parking requirements and shifting from room for higher-value uses. a per-bedroom rule to a per-square-foot rule that will range from one parking COUNTING TOD TRIPS space for an 800 square-foot-unit to 1.5 spaces for 1,500 square feet or more. In addition, neighborhoods may be more likely to support density near For more information see: Parking transit if they understand that TOD Spaces/Community Places: Finding the produces fewer trips than conventional Balance through Smart Growth Solutions. development. The savings to developers http://epa.gov/smartgrowth/parking.htm

8 SHARED PARKING Making parking work 24/7 in mixed-use districts

arking policy is every bit as provide private off-street parking, important to creating vibrant, thereby allowing each public space to Ppedestrian-friendly mixed-use serve many users and destinations. It is districts as streetscapes, parks and high- estimated that 100 public parking spaces quality public space, because it largely determines whether a neighborhood is compact and walkable. Shared parking is a valuable tool because it provides for a more cost-effi cient use of parking resources, and frees up Shared land for parking is higher- value uses, WEEKDAY EVENING WEEKEND most effective creative site Shared parking works best with multiple destinations with different peak when land planning parking demand periods. uses have and landscaping significantly – all of which will enhance can be the equivalent of 150 to 250 different the vibrancy, appeal and private parking spaces, and developers peak parking value of the development. or building owners can be asked to characteristics Shared parking is a pay in-lieu fees to fund construction of parking management policy these public parking facilities. On-street that allows for parking parking is also easy to share since it’s spaces to be shared by more than one so visible and convenient, but in order user, since most parking spaces are to make this work the on-street parking only used some of the time and many must be managed for maximum use, parking facilities include many unused particularly in busy commercial centers, spaces with patterns of usage that by limiting the time to two hours or less, follow predictable daily, weekly and or applying short-term pricing. Parking annual cycles. For example, an office can also be shared among a group of complex can effi ciently share parking employees or residents: For example, facilities with restaurants or theaters, 100 employees or residents can usually since offi ces require maximum parking share 60-80 spaces since not all during weekdays, while restaurants and employees will drive to work at one time. theaters require maximum parking in the evenings and weekends. As a result, AGREEING TO SHARE PARKING it is estimated that the total amount of parking can be reduced 40-60 percent. Shared parking is typically One of the best ways to provide implemented by municipal governments, shared parking is to build shared parking with sharing arrangements made facilities rather than having each building between individual facility developers

9 The seven-story Gaia complex in downtown Berkeley, less than a block from the Berkeley BART station and the University of California- Berkeley campus, was allowed a height bonus in exchange for providing a performance and arts space. In addition to the cultural space, there is a cafe on the ground floor, a rooftop garden and a solarium as common ar- eas. The 91-unit project has 42 spaces in parking lifts along with space for car sharing and bike stor- age facilities.

and managers. Some local would have required a proposed 162- jurisdictions incorporate language in room downtown hotel to provide local ordinances to permit and even 302 spaces, costing an estimated encourage shared parking. These $4.83 million, making the project jurisdictions allow shared parking to fi nancially infeasible. In the interest meet minimum parking requirements of encouraging urban revitalization for uses located in the same building the city agreed to lower the parking and also permit off-site shared requirements to 218 and allow parking arrangements to meet on-site the developer to pay in-lieu fees requirements for complementary uses of $3,000 per space for a quarter within a defi ned area. These location of these spaces plus an additional requirements are typically based on $50 per space per month to cover acceptable walking distances. San parking operating and maintenance Diego’s municipal code, for example, expenditures. The revised parking states that shared parking facilities requirements provided a savings of must be located within 600 feet of the more than $2 million to the developer uses served, while Eugene, Oregon, and has facilitated the revitalization and Los Angeles both allow for 1,320 of the surrounding area, increased and 1,500 feet, respectively. pedestrian traffi c, generated approximately $300,000 in property IN-LIEU PARKING FEES tax revenues and helps to support Long Beach’s downtown. The city of Long Beach recognizes that parking is expensive and consumes valuable land, and allows for shared parking and in-lieu parking fees. For example, the city’s minimum parking requirements

10 AESTHETIC ZONING Emphasizing form over use to create human-scale places

ost U.S. cities regulate conventional codes, focus on the development through architectural and urban “form” of the Mconventional or Euclidean built environment, and regulate key zoning, the primary purpose of aspects such as building heights and which is to segregate incompatible land uses and accommodate the movement and storage of vehicles. But these codes date back to concerns about the industrialization of American cities at the turn of the Physical form last century and aren’t as and beauty relevant to of a city are the economic defi ned by realities of cities today. the sum of its Demographics One of the earliest codes was created for the new town of Seaside, public spaces in America Florida, in the 1990s. It was subsequently recognized as one of the most are changing. important planning efforts of the post-World War II era. Whereas the family was the major demographic group in the 1950s, making setbacks, windows and doors, the street the suburban single family home popular, and sidewalks. The intent is to get all singles and “non-family” households of these elements to work together to (single-parents, empty nesters, friends create a desirable public realm and allow living together) have become the new for the complexity, diversity and fl exibility majority. These households are much that can create dynamic and vibrant more interested in multi-family housing neighborhoods. types -- including the loft and live-work space and condo – in lively mixed-use FLEXIBILITY IN CODES neighborhoods that are walkable. Mixed-use zoning has become popular Form-based codes are much more as a result, and mixed-use districts user-friendly than the typically complex are often overlaid on the conventional and oft-amended conventional codes, zoning grid through creation of which are composed of lengthy text special zones or districts. But this is a and numerical descriptions. Form- makeshift strategy and doesn’t change based codes, in contrast, use charts the underlying requirements of auto- and illustrations with the intent of dependent planning, and many cities are simplifying the code; they depict desired instead turning to form-based codes to outcomes through the use of two- achieve more vibrant and human-scaled and three-dimensional drawings and neighborhoods. diagrams. Most importantly, form-based Form-based codes, in contrast to codes allow for much greater fl exibility

11 The former Safeway site on Columbia Pike will include an 188-unit rental apartment build- ing. Approximately 34,340 square feet of retail and 14,650 square feet of offi ce space will be included on the ground fl oor and mezzanine. There will be 408 parking spaces on three below- ground levels; at least 107 of which are non-reserved and shared for visitors and shoppers. The project also includes 79 bicycle parking racks. The project is in compliance with the Form Based Code and consistant with the goals of the Columbia Pike Initiative.

with regard to the uses located in the recognized as one of the most appealing buildings so that property owners can and important planning efforts of the adapt to changing market conditions, post-World War II era. Arlington, VA, and to allow the mix of uses to change adopted an optional form-based code for over time. They also simplify and Columbia Pike in 1998 that incentivized streamline the planning process, thereby its use by expediting projects that met appealing to both cities and developers. code requirements – thereby prompted Form-based codes focus on the a wave of development. It has been relationships between building facades lauded as providing for up-front citizen and the public realm, the form and mass consultation, less regulation, quicker of buildings in relation to one another, approvals, and for making development and the scale and types of streets and less expensive (less parking, expedited blocks. The primary concern is the approvals), which has allowed for the impact on the public realm or right of construction of more workforce housing. way, in acknowledgement of the fact Denver is also adopting a form-based that architectural design, how buildings code to help implement the city’s recent relate to the street, and walkability are comprehensive plan, which directs important elements in creating places higher-density development along that people want to visit -- which is why public transit corridors in the hopes of form-based codes focus on enforcing promoting ridership. these elements instead of on restricting uses.

BUILT-IN INCENTIVES

One of the earliest codes was created for the new town of Seaside, Florida, in the 1990s and was subsequently

12 COLLABORATION Leveraging public-private partnerships for better results

public-private partnership is a marketing of the fi nished development, contractual agreement between advertising its proximity to transit, for A a public agency (federal, state or example. Lenders typically want to be local) and a private sector entity that “taken out,” or paid off, as quickly as leverages the skills and assets of both possible by with the goal of delivering a service or a mortgage. development for public benefi t. Public- If marketing private partnerships are especially useful helps sell the for leveraging private investment in units more transit-oriented development, they are quickly, transit more fl exible than joint access can development arrangements, help develop- Melding and they don’t require pub- ers secure of public licly owned land – though, fi nancing more and private as with joint development, quickly, lower- each partner brings some- ing the costs goods is a thing to the deal. Local gov- at the end progressive, ernments, for example, can of the proj- pragmatic help assemble land, rezone ect. This cost solution to it, and fund environmental savings can remediation with a grant help subsi- the practical from the federal govern- dize below- diffi culty of ment. Private investment market-rate Portland’s Pearl District streetcar getting things can also be leveraged if a units, or pay local government provides for pedestrian amenities like parks and done. an in-kind match, in-lieu-of plazas and streetscapes. DART in Dallas fees, or gap financing. has done a particularly good job of us- Local governments can be particu- ing transit to market TOD. The agency’s larly effective in incentivizing the kind of real estate department reaches out to development they want by working with developers, providing them with a basic developers to mitigate the four risks as- market analysis for sites near stations, sociated with in the development pro- including information about demograph- cess: They can help with entitlement risk ics, land ownership, characteristics of the by bringing communities to consensus on surrounding communities. Some cities, a station area plan that creates predict- like Portland, have made infrastructure ability for both the community and the investments -- including parks, sidewalk developer, and by expediting the review improvements, and transit stop enhance- process. They can help with construction ments – to increase the curb appeal and risk by prioritizing inspection services for marketability of larger developments. TOD, and by vetting contractors. They Local governments can also help with can help with fi nancing risk by working predevelopment costs, which are typi- with local banks to provide lower-cost cally hard to fi nance, especially if the mezzanine loans, a type of debt used for land to be developed has to be held commercial and multifamily construction for several years until it is developable that is typically very expensive. because of zoning or design issues. Government can also help with the Local governments can help by provid-

13 One of the best examples of a successful public-private partnership that used transit to lever- age large-scale redevelopment is Portland’s Pearl District, a neighborhood built along a street- car line. The streetcar was built to connect two large parcels of vacant industrial land north and south of downtown.

ing patient capital from funding sources $3.5 billion in 2008 – helped the city such as redevelopment funds. They can meet several public goals and objectives, also provide funding for public parking including accommodating a significant and therefore become an equity part- number of new housing units within the ner in the development. Value capture city’s urban growth boundary. The result: strategies and zoning incentives includ- • 10,000 units of housing, one quarter ing density bonuses can be used to fund of which is affordable; affordable housing and infrastructure. • 4.6 million square feet of commer- One of the best examples of a highly cial space within two blocks of the successful public-private partnership streetcar; that used transit to leverage large-scale • Portland’s 20-year housing goal was redevelopment is Portland’s Pearl Dis- met in just 7 years on one-tenth the trict, a new neighborhood built along a projected land; streetcar line. The streetcar was built • A record number of building permits to connect two large parcels of vacant were issued 7 years in a row; industrial land north and south of down- Properties closest to the streetcar town. The city struck a deal with the were developed at 90 percent of permit- owner of 40 acres: The city would build ted density, compared to 43 percent of the streetcar past his property and make allowable density at 3 blocks and further other improvements if he would up-zone away. his property from 15 dwelling units per The Portland streetcar proved to be a acre to 125. This was in the early ‘90s, public investment that attracted private when there was no market for this kind investment that helped the city meet of development, but today it is the city’s many public goals including affordable densest and most popular neighbor- housing, very high-quality streetscapes hood, and at build-out it will be home to and parks and plazas, and which 10,000 residents and 21,000 jobs. The generated a high volume of business streetcar was subsequently extended to activity for downtown. The streetcar the second vacant parcel, the South Wa- has been so successful in stimulating terfront, where an even more ambitious development that there are now at least redevelopment effort is underway. 60 US cities trying to follow Portland’s This private investment – an estimated example by building streetcars.

14 JOINT DEVELOPMENT Leveraging agency land to improve TOD prospects

enerally speaking, transit agencies located, or to support additional transit or cities cannot create transit- investments. Moreover, transit agencies Goriented neighborhoods that have found that joint development is a generate high ridership and achieve other public goals on their own. They aren’t likely to own enough land at stations to create truly catalytic projects, and their real estate departments may lack the The most necessary staff, common joint resources development and/or arrangements sophistication. However, are ground many transit leases and agencies and operation- cities do enter into joint cost sharing A tripartite agreement among the MBTA, Massport, and a developer in South development Boston led to construction of a new underground Silver Line BRT station. with private development partners on publicly owned land to ensure that it is cost-effective way to help ensure higher built with uses that will support transit ridership – much more so than building ridership, or development that supports costly parking structures or providing other public goals including affordability feeder bus service. and the revitalization of neighborhoods. There are challenges, however. One Private developers bring their own key issue is the disposition of land. Many resources, including additional property, transit agencies prefer to lease their and expertise to joint development land rather than sell it outright, which projects, which can result in more can have a critical impact on the cost of successful development. fi nancing. Lenders and equity providers Research shows that transit can add perceive more risk with deals in which signifi cant value to land near stations. the land is not permanently secured to Developing the land maximizes that the real estate improvements they make. value and can yield signifi cant revenues The cost of joint development is high to from long-term ground leases, rents or begin with – because of the added time sales, as well as increased property and and complexity of these projects – and sales taxes and farebox revenues, and the added cost of fi nancing makes it provide increased revenues from fees hard to make these projects pencil out. on everything from parking to business There may also be the thorny question licenses. All these revenues can be used of providing replacement parking to fund additional improvements for the for transit users – which has killed neighborhood in which the station is the fi nancial feasibility of many joint

15 The Washington (D.C.) Metropolitan Area is, by far, the nation’s leader in transit joint development. The region presently has some 30 joint development projects, including such notable air-rights developments (and revenue generators) as this Bethesda station project.

development projects. With the cost of by the pre-payment of lease revenues structured parking estimated at between on development planned for 18 acres $20,000 and $40,000 a space, the around the station. Other project requirement to replace a large surface partners included the state DOT, the parking lot with structured parking in council of governments, congestion order to make room for development can management agency, and the cities of price most projects out of the box. In Dublin and Pleasanton, which surround the recognition that joint development the station and owned some of the land. projects may be the highest and best The Massachusetts Bay Transportation use for transit agency properties, many Authority has also been selling and transit agencies that engage in joint leasing land near stations to private development are abandoning their one- developers, and taking an equity for-one replacement parking policies interest in the development. At the for more fl exible guidelines that allow Ashmont Square Station, for example, replacement parking to be moved to the MBTA entered into an agreement other stations along a corridor. with a developer to build 150 units of housing on agency land. Proceeds were JOINT-DEVELOPMENT EXAMPLES used to help fund construction of a new parking structure with 5,000 spaces The Washington Metropolitan near the station. MBTA also entered Area Transit Authority (WMATA), the into an agreement with Massport and Massachusetts Bay Transportation a private developer to construct a new Authority, and BART in the San Francisco underground Silver Line BRT station at Bay Area are among the transit agencies the World Trade Center complex in South that have aggressively pursued joint Boston, with each each development development opportunities. In one of partner contributing something to the the more interesting and complicated deal. joint development deals, BART’s $70 million West Dublin station is being built in part with $15 million generated

16 LAND ASSEMBLY Packaging a project to leverage development opportunity

and assembly can be a challenge and grants from corporate and family when developing pedestrian-friendly foundations can be a source of capital Ltransit-oriented neighborhoods. for land acquisition. Neighborhoods around stations are often built-out, sometimes with transit- unfriendly uses, there may be few vacant or underutilized lots, and sites that are developable Local may be small, disconnected governments and not under can help the control of package and any one owner. assemble Exceptional TOD projects land for require large development sites, and large purposes sites reduce construction Charlotte’s Scaleybark station is surrounded by large industrial and com- costs, provide mercial sites that are ready to be redeveloped, making it well suited for for a more even quality of catalytic TOD projects building design, and ensure a phased build-out that will maximize profi ts. For all of these There are barriers to land assembly, of reasons some local governments use course, including the fact that property their land assembly powers to acquire owners may be unwilling to sell or have sites and then sell or donate the land unrealistic expectations about what to the development team. The power their properties are worth, given the to assemble land provides leverage for speculative rush that can accompany public agencies, giving them greater the construction of a new transit say in decisions about the kind of line. Moreover, it takes a long time development that should be built. to assemble sites and then get them There are a number of innovative entitled, zoned, platted and approved land assembly and fi nancing techniques for development, and there are legal that are being employed, including issues surrounding the use of eminent making the planning of infrastructure domain. Many developers are not able investments and land assembly to handle the holding costs of long-term concurrent. Land acquisition or land- or even medium-term site assembly and banking funds are being considered in entitlement, which is why the help of many cities to enable the early purchase public agencies is often necessary. of land around stations or along Because of these difficulties, transit corridors while the land is still brownfi eld sites, underutilized affordable. Development fees, flexible commercial and industrial sites, and state transportation and housing funds, redevelopment project areas offer

17 Philadelphia has the third largest rail system in the United States but stations are dominated by auto-oriented uses. In addition, the Temple Regional Rail station and elevated rail line separate Temple University in North Philadelphia from the Asociacion de Puertorriqueos en Marcha (APM) community, which has long struggled to revitalize after population loss.

some of the best opportunities for able to market the land in accordance TOD because they make large-scale with neighborhood plans and dispose development possible. For example, the of the properties without the delays City of Baltimore was able to offer 30 associated with a more piecemeal acres for redevelopment as TOD around approach. the Metro station at Center Square. Land swaps are another option that These sites link the Metro station to a can help clear the way for development light rail station surrounded by city and of critical sites near stations. At the county offi ces and cultural attractions. Fruitvale BART (Bay Area Rapid Transit) Land assembly is also a major element station, for example, the developer of the Atlanta Beltline effort to turn needed to assemble all the parcels of more than 20 miles of mostly unused land at the site under single ownership. railroad tracks and adjacent land into an BART owned the land, but couldn’t part “emerald necklace” of parks, workforce with the property because of a long- housing and mixed-use development standing policy requiring the agency on either side of a transit line looping to retain ownership of the land for around the city. long-term planning. The problem was addressed through a land swap in which REDEVELOPMENT AND TRANSIT the developer was awarded a 96-year lease on the land in return for a parcel In Philadelphia, land assembly the developer owned behind the transit has been deemed so important to station as well as several nearby vacant the stabilization and rebuilding of parcels owned by the City of Oakland. neighborhoods that the city has This swap gave the developer proprietary implemented a new approach driven rights to the entire development site by redevelopment considerations. The without reducing the value of BART’s city has nearly 60,000 vacant parcels, land assets near the transit station. but few are large enough to support signifi cant and catalytic development For more information, see: Tools for that can spur other projects. So the city Mixed-Income TOD, Douglas Shoemaker has begun acquiring large quantities of with the Center for Transit Oriented vacant land, and by holding title will be Development

18 HOUSING TRUST FUNDS Preserving aff ordable housing near transit ousing trust funds establish a additional resources), loans for stable and steady source of developers, and/or matching funds used Hfunding for affordable housing to leverage private investment. One of outside of the unreliable political budgetary process, enabling jurisdictions to provide developers with a dependable funding source. These funds are typically established by the city, county or state via legislation or ordinance. While there Socio- are different constitutional economic or procedural diversity issues that enhances determine how this can be community The City of Charlotte purchased property at Scaleybark station, done in each stability and which is surrounded by large industrial and commercial sites, to jurisdiction, ensure that development remains affordable. sustainability nearly 600 funds have been the appeals of a city-controlled fund is established in 43 states in the country, that it can be tailored to the particular generating more than $1.6 billion a needs and opportunities of a community. year to support housing needs. State Targeting these resources to sites near housing trust funds are the most transit is especially important because signifi cant source of money, and are transit-oriented development provides usually funded with proceeds from the increased affordability. The American real estate transfer tax or documentary Public Transportation Association stamp tax. Cities typically use developer estimates that households that live fees. Counties have a more diffi cult time near transit and use it can save $9,499 fi nding a funding source, but they are a year on transportation compared to well-positioned to provide broad support households that drive (www.apta.com). for affordable housing outside municipal Research by the Center for Transit- boundaries. Oriented Development shows that households living in walkable, mixed-use PURCHASING AFFORDABILITY neighborhoods near transit spend about 16 percent less on transportation than Housing trust funds are used households that live in conventional for a variety of purposes, including suburban development (www. the construction and maintenance reconnectingamerica.org). For these of affordable housing, homebuyer reasons, trust funds and well as other assistance, homeless shelters, gap affordable housing resources should be fi nancing (for projects where other used around stations and along transit funding sources leave a gap requiring corridors to preserve existing affordable

19 housing, to purchase rental properties for permanent use as affordable housing, and/or to build new affordable housing. Charlotte, North Carolina, established an Affordable Housing Trust Fund to provide public funding to private developers in exchange for affordable units using a competitive bid process. The City Council set aside $10 million for the fund in 2001, and voters then approved another $35 million. The city has the fl exibility to make the funds available as either a loan or grant for land acquisition or construction. By 2007 the fund had enabled the construction or rehabilitation of more than 2,800 units, more than half of which were for households earning below 30 percent of area median income. This number included 223 units of new affordable ownership housing, more than 900 new multifamily rental units, nearly 600 rehabilitated multifamily rental units, and more than 1,100 units for households with special needs. The average subsidy per unit was less than $14,000 and sometimes included other affordable Land acquisition funds or land banking funds housing funds. can also be used to secure sites near transit for affordable housing or transit-oriented projects while the land is still affordable. This is espe- AFFORDABLE HOUSING cially important now because changing demo- graphics in the U.S. are boosting the demand for Land acquisition funds or land housing in these locations, driving up the price banking funds can also be used to of real estate near stations. secure sites near transit for affordable housing or transit-oriented projects while the land is still affordable. This funds. is especially important now because The city of Charlotte has also established changing demographics in the U.S. – a land acquisition fund to purchase land households are older, smaller and more near the stations planned along its South diverse – are boosting the demand for Corridor light rail line to ensure the housing in these locations, driving up development of mixed-income, mixed- the price of real estate near stations. use TOD. The City Council capitalized the Land acquisition or land banking funds fund with an initial grant of $5 million. can also be used to acquire existing It is jointly managed by Coldwell Banker housing in order to preserve affordability Commercial, the Charlotte Area Transit in neighborhoods where gentrifi cation is System, and several city departments. a threat. The fi rst site, the Scaleybark station Development fees, fl exible state area, was purchased with the help transportation and housing funds, and of the city’s Housing Trust Fund, and grants from philanthropic organizations development is required to meet a are often used to create land acquisition minimum affordable housing threshold.

20 Produced by Reconnecting America on behalf of the Local Initiatives Support Corporation