Mixed Income TOD Acquisition Fund Business Plan Framework

I. INTRODUCTION

BACKGROUND

The Great Communities Collaborative (GCC) brings together residents and local organizations to participate in community planning processes across the Bay Area to create a region of vibrant neighborhoods with affordable housing, shops, jobs and services near transit. The GCC is a unique cooperative relationship between four Bay Area nonprofit organizations - Greenbelt Alliance, TransForm, Urban Habitat, the Non-Profit Housing Association of Northern California, and the national nonprofit Reconnecting America. The East Bay Community Foundation, the San Francisco Foundation and the Silicon Valley Community Foundation are also part of the collaborative. In 2006, members of the GCC met with the Bay Area Local Initiatives Support Corporation (Bay Area LISC) and the San Francisco Foundation to craft a strategy for property acquisition in support of equitable TOD. These conversations were rooted in the recognition that the ability to control land and land use is often critical to ensuring that affordable housing, open space, and community facilities are not left out, but rather go hand-in-hand with private market development. Following those initial meetings, the GCC released a report in 2007 authored by the Center for Transit Oriented Development (CTOD) and the Center for Community Innovation called Transit-Oriented for All, which made the case that TOD is most effective when linked to equitable development. This report helped galvanize the attention of regional non-profit organizations, public agencies, and foundations toward exploring tools to ensure that transit oriented communities are developed in an inclusive manner. In October of 2007, an expanded focus group that included many of these organizations convened to further discuss the need for, and to determine the interest in, an acquistion fund for the Bay Area. To further discussion, Bay Area LISC prepared a report Property Acquisition Strategy for Transit Oriented Development to identify additional examples of land acquisition strategies.

Following these meetings, presentations, and publications, the CTOD in conjuction with Bay Area LISC were tasked with forming a steering committee to provide guidance in determining the type of land acquistion fund that could be an important component of a comprehensive strategy to achieve the goal of fostering mixed-income transit oriented communities. This document is an important next step in crafting and implementing such a fund, and will form the basis for a later Business Plan.

THE NEED FOR A TOD ACQUISITION FUND

A recent analysis by the Center for Transit Oriented Development (CTOD) found that in 2000, 613,000 households in the Bay Area lived near fixed-guideway transit stations. That same study projects that by 2030, the demand for housing near transit will increase by 40%; in order to meet this demand, 248,000 units housing units will need to be constructed in transit oriented developments (TOD) in the Bay Area. While this demand will come from households across all income groups, it will be especially acute among low-, very low-, and extremely low-income households; of the total demand for housing in TOD, roughly 50 percent will come from households in these groups. By providing affordable housing in transit zones, lower-income workers can be better connected to regional employment market without significantly increasing their transportation costs.

However, even as housing providers and managers struggle to access sufficient funding for the construction and operation of affordable housing, they face an additional barrier when seeking to provide housing opportunities in transit zones: a very limited land supply. Out of the 1,140,520 acres of land located in incorporated cities or census designated places in the Bay Area, only 31,280 acres (less than 3%) are considered vacant or underutilized. 1 Of this, only 4,458 acres are within one half mile of a fixedguideway transit station; this number increases to 5,488 acres when stations proposed under the Metropolitan Transportation Commission’s (MTC) Resolution 3434 are included.2 Those vacant or underutilized parcels that do exist near transit are often more expensive than those in the surrounding area, particularly relative to parcels located at the periphery of the region. Given this scarcity and expense of opportunity sites near transit, and the need for additional housing in the region (both subsidized and market-rate), it will be critical to ensure that development on each of these parcels capitalizes on the advantages offered by transit connectivity. A land acquisition fund could play an important role in overcoming these obstacles and fostering high quality, economically inclusive TOD.

ABOUT THIS REPORT

A variety of strategies have been utilized around the Bay Area to support the development and preservation of high-density, mixed-income communities. Transit supportive zoning, inclusionary housing ordinances, traditional redevelopment strategies, and community benefits agreements are just a few of the tools that can be employed to ensure that the scarce opportunities offered by land near transit are not squandered. However, there is one potentially critical tool that does not currently exist in the region: a mixed-income TOD acquisition fund.

This report is the next step in the progression of meetings, presentations, and documents described above, and provides an intial framework for a mixed-income TOD acquisition fund for the Bay Area. The next section provides a regional analysis of the region’s station areas in terms of land supply, income, housing stock, and relevant policie s. The set of regional needs and assets that arise from this analysis serves as an important lens for refining the fund’s goals. The third section describes the unique set of benefits that an acquisition fund can offer, and provides an initial set of specific goals for the fund. In addition, this section offers a preliminary plan of operations for the fund, along with a series of “Next Steps” to be taken in order to finalize and institutionalize the fund. The appendices at the end of the document include four case studies that further illuminate the variety of opportunities and challenges to mixed-income TOD in the Bay Area, and a series of charts and matrices that form a more detailed regional analysis than the one presented in Section II.


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