Transit Cooperative Research Program Sponsored by the Federal Transit Administration RESEARCH RESULTS DIGEST October 2002—Number 52 Subject Area: VI Public Transit Responsible Senior Program Officer: Gwen Chisholm Transit-Oriented Development and Joint Development in the United States: A Literature Review This digest summarizes the literature review of TCRP Project H-27, “Transit-Oriented Development: State of the Practice and Future Benefits.” This digest provides definitions of transit-oriented development (TOD) and transit joint development (TJD), describes the institutional issues related to TOD and TJD, and provides examples of the impacts and benefits of TOD and TJD. References and an annotated bibliography are included. This digest was written by Robert Cervero, Christopher Ferrell, and Steven Murphy, from the Institute of Urban and Regional Development, University of California, Berkeley. CONTENTS IV.2 Supportive Public Policies: Finance and Tax Policies, 46 I INTRODUCTION, 2 IV.3 Supportive Public Policies: Land-Based I.1 Defining Transit-Oriented Development, 5 Initiatives, 54 I.2 Defining Transit Joint Development, 7 IV.4 Supportive Public Policies: Zoning and I.3 Literature Review, 9 Regulations, 57 IV.5 Supportive Public Policies: Complementary II INSTITUTIONAL ISSUES, 10 Infrastructure, 61 II.1 The Need for Collaboration, 10 IV.6 Supportive Public Policies: Procedural and II.2 Collaboration and Partnerships, 12 Programmatic Approaches, 61 II.3 Community Outreach, 12 IV.7 Use of Value Capture, 66 II.4 Government Roles, 14 IV.8 Long-Range Planning, 68 II.5 Transit Agency Roles, 18 IV.9 Barriers and Constraints, 68 II.6 Development Commitments and Policies within Transit Agencies, 22 V URBAN DESIGN, 75 V.1 Community Service Integration, 75 III EVALUATION OF IMPACTS AND BENEFITS, 27 V.2 Successful Design Principles and III.1 Effects of Federal Policies and Programs, 30 Characteristics, 76 III.2 Effects of State Policies and Programs, 33 V.3 Station-Area Design and Scale, 77 III.3 Effects of Local and Metropolitan Policies V.4 Built Environments and TOD, 79 and Programs, 34 V.5 The Evolutionary Approach to TOD, 86 III.4 Private-Sector Benefits: Land Market Impacts, 35 VI CONCLUSION, 88 III.5 Public-Sector Benefits: Ridership Impacts, 40 III.6 Other Public-Sector Benefits, 43 REFERENCES, 90 IV IMPLEMENTATION, 45 APPENDIX A: ANNOTATED BIBLIOGRAPHY, 99 IV.1 TOD Markets, 45 Literature Review Transit-Oriented Development/Transit Joint Development I. INTRODUCTION headquarters under construction above the Lindberg station), in part to open up more commuting and housing options for their Transit-oriented development (TOD) has work forces. To some, TOD equates with gained popularity as a means of redressing a good business. number of urban problems, including traffic congestion, affordable housing shortages, air Closely related to TOD is transit joint pollution, and incessant sprawl. Several development (TJD). While the distinction factors have heightened the public interest in between the two is not always clear, in general TOD. One is a receptive policy environment, their differences lie with scale. TOD generally marked by recent legislation and grant encompasses multiple city blocks, funding—at all levels of government— representing more or less a neighborhood in committed to promoting “livable size and character. TJD, on the other hand, communities” and “smart growth.” Over the tends to be project-specific, often occurring past few years, several federal initiatives have within a city block and tied to a specific real explicitly sought to leverage TOD: new transit estate development. Whereas TOD is often joint development policies, including a more spearheaded and choreographed by a public permissive interpretation of the federal agency, TJD usually occurs through a common-grant rules; “new starts” criteria that partnership of public and private interests explicitly weigh attention given to coordinated working in tandem to achieve “win-win” transit and land use in evaluating proposals outcomes, whether in the form of air rights for major capital investments in transit; and leasing of publicly owned space, station- the location efficient mortgage (LEM) connection fees, or the joint sharing of program, underwritten by Fannie Mae, that capital-construction costs. makes it easier to qualify for a loan to purchase a home situated near transit. Over the years, various physical-design principles have surfaced for building TODs A host of demographic factors have also and (to a lesser extent) TJDs (Calthorpe 1993; worked in favor of TODs—e.g., increasing Bernick and Cervero 1997). Most involve shares of childless couples, influxes of foreign some combination of intensifying commercial immigrants (many of whom come from development around stations, inter-mixing countries with a heritage of transit-oriented land uses, layering in public amenities (e.g., living), and growing numbers of empty- civic spaces, landscaping), and improving the nesters seeking to downsize their living quality of walking and bicycling. The quarters. These groups form ready-made challenges of creating successful TODs and consumer markets for housing situated near TJDs, however, are more than physical in transit nodes. nature. Attention must also be given to such matters as personal security, economic and Steadily worsening traffic congestion has also community development, cultural history, spurred TOD initiatives. In many parts of the building social and human capital, and United States, traffic woes have created a strengthening the bond between transit and cohort of individuals who are drawn to the the neighborhoods it serves. idea of living near transit and enjoying a less stressful commute to work. More and more While the concepts of TOD and TJD enjoy businesses are also locating near rail stops broad appeal, in truth the gulf between theory (e.g., the Discovery Channel’s new and practice remains huge. To date, America’s headquarters adjacent to the Silver Spring track record at implementing successful Metrorail station; BellSouth’s new TODs has not been impressive. Some have 2 Literature Review Transit-Oriented Development/Transit Joint Development failed financially. Laguna West, for instance, of a downturn in the local real estate market.1 was originally touted as a TOD prototype for In the minds of many, the risks of TJD the suburbs of Sacramento, but a downturn in remain unacceptably high. According to the the real estate market at the time the project Urban Land Institute (1979, p. 2), "rather than was coming on line led to eventual being a theoretical misunderstanding of bankruptcy. Hoped-for TODs in some parts market phenomena, the main problem in the of the United States have failed to break execution of joint development appears to be ground because of unrealistic market that both the public and private sectors lack expectations. To date, relatively little develop- sufficient knowledge of the complexities of ment has occurred around light rail transit joint development." (LRT) stops in St. Louis, Pittsburgh, and Buffalo because of tepid real estate conditions Despite such obstacles, numerous U.S. cities and stagnant growth in rail-served corridors. have helped bring some semblance of TODs to fruition. On the west side of Portland, Experience shows that, if they are to have Oregon, the master-planned community of much chance of success, TODs must be Orenco has taken form around a newly proactively championed by the public sector. opened MAX light rail station in Hillsboro Upon the opening of the Bay Area’s BART (Arrington 2000), featuring a multitude of system in the early 1970s and other urban rail housing product-lines, a neighborhood retail systems that soon followed, many thought district, and an attractive promenade that links that transit-oriented land uses would spring residents to the rail stop. Along San Diego’s up around stations naturally, without the need Mission Valley Trolley corridor, the Hazard for public-sector encouragement or Center has evolved into a successful mixed- intervention. This view was buttressed by use, pedestrian-scale community huddled experiences in Toronto and Montreal, where around a light rail station. In downtown San even a casual observer could see a close Diego, mid-rise housing has been constructed correspondence between transit facilities and near several Trolley stations, leveraged real estate development patterns (Urban Land through initiatives undertaken by the Centre Institute 1979). Absent a proactive and rock- City Redevelopment Corporation. The most steady commitment to station-area financially remunerative TJD project to date development, relatively little Canadian-style has been the Bethesda Metro Center (Photo clustering of activities occurred around newly 1), an office-retail-hotel project that sits atop opened U.S. rail stations during the second the Bethesda Metrorail station (Maryland) and half of the twentieth century (Huang 1996; generates $1.6 million annually in air rights Cervero and Landis 1997). Canada’s tradition rent for the Washington Metropolitan Area of regional governance has also been credited Transit Authority (WMATA). This sum will with orchestrating the co-development of land likely be eclipsed by the leased payments use and transit investments (Knight and Trygg generated by the planned 32-acre office-retail- 1977; Pill 1979). residential project at the White Flint station in Montgomery County. Transit joint development has also faced uphill struggles. During its first