Transit-Oriented Development

Moving From Rhetoric to Reality (June 2002)

Three major trends characterize metropolitan America at the beginning of the 21st Century. The first trend is the resurgence of investment in America’s downtown areas. We are seeing a re-inhabitation of our urban centers at a level that has not been experienced since the World War II. Data from the 2000 Census and analysis by the Brookings Institution Urban Center and the Fannie Mae Foundation show that this urban rebirth is a function both of people moving back to cities, and of immigrants choosing cities as destinations. Urban centers are once again seen as attractive, lively places to live and work, and as centers of intellectual and creative capacity.

The second equally powerful trend is the continuing growth and emerging maturity of America’s suburbs, many of which are struggling to become cities in their own right. Suburban areas are increasingly diverse in race, ethnicity and income, and increasingly experiencing the travails of rapid growth. These growth issues include the need to diversify land uses to build more solid revenue bases, the need to create urban centers, and the growing problem of traffic congestion along overtaxed suburban arterials, compounded by the many cul de sac neighborhoods. Suburbs are increasingly vital and also increasingly challenged to become more than bedroom communities.

The third trend is a renewed interest in transit use and transit investment. Virtually every major city in America is planning some form of urban rail or rapid bus system, and states across the country are joining together to plan and build high-speed rail systems linking metropolitan regions in the West, the Midwest, the Northeast and the South. In fact, the wait for federal mass transit funding for a new project is estimated at almost fifty years. New rail or rapid bus systems have opened in the past ten years in such nontraditional places as Dallas, Denver, St. Louis, San Diego, Sacramento, Los Angeles and Salt Lake City, with substantial system expansions underway in virtually every traditional rail city.

At the convergence of these three trends is the realization that a substantial market exists for a new form of walkable, mixed-use urban development around these new rail or rapid bus stations and transit stops. Changing demographics are creating a need for a diversification of real estate projects, and for the type of development known variously as transit villages or transit-oriented development is beginning to receive serious attention in real estate markets as diverse as the San Francisco Bay area, suburban New Jersey, Atlanta, Dallas and Chicago. These transit-oriented developments have the potential to provide residents with improved quality of life and reduced household transportation expenses while providing the region with stable mixed income neighborhoods that reduce environmental impacts and provide real alternatives to traffic congestion. New research clearly shows that this kind of development can reduce household transportation costs, thereby making housing more affordable.

Transit-Oriented Development: Moving From Rhetoric to Reality