Activating unused or underutilized public parcels with effective, equitable transit-oriented development strategies can create a myriad of benefits for communities (and public agencies).

The Low Income Investment Fund (LIIF), Enterprise Community Partners (Enterprise), and Living Cities are working together through the Connect Initiative to promote equitable Transit Oriented Development (eTOD) as one of the most effective place-based solutions to increase social equity. This is the first in a series of three posts about best practices for joint-development strategies in creating equitable communities.

Last month, Bay Area Rapid Transit (BART) approved a new policy requiring that all housing developments at BART stations must have a 20% minimum share of affordable units within the BART station property area. This approval was the first in a series of steps toward enhancing equitability within BART’s Transit Oriented Development policy, which will be revised this year, including new goals for affordable housing. The need and opportunity for affordable housing on BART land is substantial; 17,000 people expressed interest in the 115 affordable units set to open at the San Leandro BART station later this year. Building affordable housing at BART stations will help to mitigate the affordable housing crisis in the Bay Area, increase BART ridership, and allow greater access to opportunity for low-income families by making public transportation more accessible; all while reducing greenhouse gas emissions. BART’s policy is an example of how public agencies can support Equitable Transit Oriented Development (eTOD), and one we’re hoping other agencies will follow.

Equitable Transit Oriented Development has emerged as one of the most effective place-based solutions to increase social equity in communities that have historically lacked access to opportunity. A growing body of work is demonstrating how providing affordable housing in neighborhoods that are rich with amenities, including good public transit, can improve access between neighborhoods and employment centers, lower the cost of living, improve public health and well-being, create and support more efficient transportation networks, and contribute to local and regional economic growth.

Through the Connect Initiative, LIIF, Enterprise and Living Cities are advancing financing strategies and exploring the potential of other emerging models for supporting eTOD. We’ve found that local governments in smaller cities are often the public agencies that have the most potential to support eTOD on a local level, and can be essential partners in the development process. One of the greatest challenges for eTOD on the community development side, for example, is acquiring land near transit. Developers can face barriers at many points throughout the acquisition process, from environmental concerns to zoning issues, to prohibitively expensive prices due to competition from market rate developers, to a shortage of developable parcels or willing sellers.

As a result there is a critical need to better utilize publicly owned land near transit for affordable-housing development through joint development and/or public-private partnerships (PPP). These partnerships—wherein a public agency sells or leases land to a developer for, or uses it as a means to participate in, a predetermined project—offer a very effective way to develop strong eTOD projects for the public good. PPP strategies are opportunities for public agencies and private developers to come together to create healthy, more resilient communities.

Activating unused or underutilized public parcels with effective eTOD strategies can create a myriad of benefits for communities (and public agencies), including:

  • Tax benefits. Mixed-income and mixed-use properties typically contribute a share of the tax levy. The active use of previously unused or underutilized taxable land can generate greater benefits and revenues to the public.
  • Transit ridership benefits. Because low- and moderate-income families predominantly use transit, eTOD often increases ridership, leveraging greater financial return from and more effective use of the public’s investment in the transit system.
  • Create lasting infrastructure for long term affordable housing. Expanding a community’s affordable housing infrastructure creates long-term and noteworthy benefits to families, neighborhoods, and communities, such as stimulating economic development and promoting social integration. Equitable TOD offers the opportunity for affordable housing to be at the vanguard of neighborhood transition by connecting affordable housing to neighborhood growth, and in turn mitigating displacement that might otherwise occur.
  • Spur economic and community development. Encouraging eTOD can expand low cost mobility options for community members, lower commuting expenses (especially for low- and moderate-income households), and enhance access to employment, childcare, schools, and other critical services. This helps to create healthier and more connected communities with increased access and opportunity.
  • Public land can fill a project’s financing gap in jurisdictions with limited sources. Affordable housing requires developers to seek financial resources to cover the gap between development costs and reduced revenue from limited rent. For budget constrained jurisdictions, reducing the cost of land can be a substitute means of filling a project’s financing gap.
  • Potential for creative win-win solutions. Joint development may allow for maintaining or expanding a public use of the property while creating affordable housing and providing other benefits. For example, Montgomery County, MD selected a developer to construct a public library and affordable housing on a former parking lot in Silver Spring that will sit adjacent to a new light-rail station when transit service begins in coming years.

Follow along in the coming days to learn how public agencies can adopt financial and policy best practices to build more effective public-private partnerships that will result in strong, equitable communities.

Published: March 10, 2016
Category: Blog