TOD

The passage of the “FasTracks” ballot measure by metro Denver voters in 2004 signaled the start of a new era of transportation, growth and development in the area. FasTracks has terrific potential to deliver on its promises of reduced congestion, livable neighborhoods and greater economic competitiveness, but its success is dependent on the kind of development that grows up around new and existing transit stations.

Well-planned “transit-oriented development” (TOD) can foster greater use of FasTracks light rail by encouraging housing, retail and office developments in the districts around transit stops. Incorporating affordable housing into TODs presents opportunities to meaningfully address the region’s growing affordability crisis by tackling housing and transportation costs simultaneously—while expanding access to jobs, educational opportunities and prosperity for the many households living in the Denver region.

Transit-oriented development or TOD is typically defined as more compact development within easy walking distance of transit stations (typically a half mile) that contains a mix of uses such as housing, jobs, shops, restaurants and entertainment. At Reconnecting America we believe projects should also achieve the goals listed here. TOD is really about creating walkable, sustainable communities for people of all ages and incomes and providing more transportation and housing choices (including townhomes, apartments, live-work spaces, and lofts). These neighborhoods provide for a lifestyle that’s convenient, affordable and active, and create places where our children can play and our parents can grow old comfortably.

The maxim is that when looking for a new home or business the three most important considerations are: location, location, location. As traffic makes it increasingly difficult to drive in downtowns, as downtowns become increasingly popular with both residents and businesses, and as new transit systems open up in downtowns across the U.S., an address near transit is proving to be a good one. Empirical evidence that transit and TOD create significant value is mounting. It has to do with economies of agglomeration and the efficiencies created: Some things work better when clustered together. And with “killer commutes” tying up 10 million drivers two hours a day in traffic, it works best when they’re clustered around transit.

The fact that condo sales have outpaced the sale of single family homes is proof the market is changing. Smaller, non-traditional households without children want to live in convenient neighborhoods. In cities, the road network has reached a level of connectivity best described as “saturated,” and returns on that investment are diminishing. But transit still offers net benefits, in part because it concentrates development -- and the tax base – allowing for more focused value capture strategies. And in this era of shrinking public funding and expansive demand, value capture strategies are needed to help pay for construction and operation of transit and expensive TOD components like structured parking.

Value Capture: How to Get a Return on Investment in Transit and TOD

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.