To improve transit service, we need better transit-oriented development
While we still need to build a lot more high-quality transit, communities across the country already feature a lot of useful transit options. Meeting the booming demand for more affordable homes and everyday destinations near transit can help maximize those transit investments by adding more riders. Here’s how the Build Housing Unlock Benefits and Services Act (Build HUBS) could help us do more of it.
The benefits of transit and having more people near transit
Before explaining how Build HUBS can encourage more development around transit, let’s talk about the benefits of transit. Transit services provide mobility choices, reduce CO2 emissions, encourage healthier lifestyles, and improve the safety of our roads. Transit-oriented development (TOD) is a planning strategy that creates walkable, mixed-use communities by building commercial and residential spaces in close proximity to high-quality transit and is essential to maximizing the benefits of transit projects.
One of the biggest challenges for sustainable transit service is low transit ridership. Transit services almost never cover their costs with fares, but fewer riders mean lower fare revenue, which in turn increases the need for funding from other sources, and can lead to budget cuts. These cuts translate into reduced service frequency and enter a horrid cycle of unreliable transit services. It also makes it easier for leaders to justify service cuts. If fewer people take transit because it is unreliable, leaders face little pressure for proposing budget cuts because few people are riding.
One of the best ways to get out of the transit “death spiral” is to put as many people and essential destinations as possible close to transit stations, while making sure residents know reliable transit is close by and available when they need it. Studies consistently show that developing mixed-use spaces near transit increases transit ridership. When communities invest in walkable neighborhoods around transit, it results in an increase in fare revenue to support transit operations, especially at a time when many transit agencies are searching for more operational funds to address operating shortfalls.
TOD also encourages economic growth, increases pedestrian traffic, and improves visibility for local businesses. Increased foot traffic can lead to more sales and higher revenue for local businesses. Transit investment can also create new value around stations and transit corridors. Value capture is a strategy that allows communities to capture some of the economic value of transit investments and use it to help finance the costs of providing that service, making it a powerful tool to augment local or regional transit funding. This is because transportation infrastructure projects often stimulate economic growth and development, leading to more desirable real estate. TOD also creates more opportunities to strengthen local financing for municipalities.
Finally, creating walkable, transit-accessible communities is a more effective approach to addressing traffic congestion. Prosperous and desirable places will always have some traffic congestion, but the question is whether we can build cities where people can opt out of it. Despite recent calls to increase roadway capacity to address traffic, what municipalities really need is the freedom to invest in ways that keep people moving and improve accessibility. TOD offers a path to reorient infrastructure goals away from simply addressing congestion and instead focus on how to better connect people to jobs, schools, and healthcare resources.
Communities that have enhanced transit projects through TOD
Although TOD as a concept was not named until the 1990s, the practice of building developments near transit existed long before that and shaped many large American cities. However, there are plenty of modern examples of TOD that highlight its positive ripple effects within communities across the country. A recent example is Chicago’s transit-oriented development in Wicker Park in 2013. The 11-story building prioritized transit access and features 99 mixed-income apartments, office space, and ground-floor retail. The opening of this building across from the Division Blue Line station was a catalyst for economic growth and even inspired other developers looking to transform other neighborhoods in Chicago.
TOD is not limited to large cities, it works in smaller communities as well. In 2015, Hennepin County, MN, began a TOD project near its light rail (LRT) station. The development included retail space, a Human Services Center, and 500 housing units right next to the Lake Street station. One of the biggest benefits of the development was providing new and current residents with better access to services and public spaces through the light rail connectivity. The former Metro Transit General Manager explains it best: “Transit-oriented development is about letting people choose where to live, work and recreate — and giving them the freedom to make those choices without worrying about the financial burdens they’ll face when it comes to transportation.”
A bill aiming to encourage more TOD and cut red tape
The Build Housing, Unlock Benefits and Services (Build HUBS) Act targets needed reforms to the Railroad Rehabilitation and Financing (RRIF) and Transportation Infrastructure Finance and Innovation Act (TIFIA) programs. These programs help finance large transportation and infrastructure projects. During the lead-up to the FAST Act in 2015, Smart Growth America’s LOCUS coalition championed language that included TOD eligibility. However, in the past decade, only one TOD project has been successfully financed through these programs.
As RRIF and TIFIA currently stand, these programs can be incredibly challenging and time-consuming for developers to access, hindering their efforts to advance more transit-oriented development. Although this bill is only one of an array of policy solutions needed to encourage transit-oriented development, it is a strong step toward smarter development and better-connected communities.
The process of applying for RRIF and TIFIA loans is often costly, complex, and time-consuming. To improve access to these financing tools and support more TOD, Build HUBS includes reforms designed to cut red tape, speed up the loan process, and provide regulatory relief. These reforms include NEPA relief, expanded measures for project creditworthiness, the creation of an attainable housing designation to encourage more affordable housing, and a range of other administrative improvements. Improving access to these loans is one step closer to unlocking the full benefits of transit-oriented development and enhancing transit projects.
The next surface bill text will (eventually) drop, and is the most viable vehicle to get Build HUBS into law. Build HUBS already has a wide range of supporters, including a letter signed by 93 organizations calling on Members of Congress to cosponsor the legislation. This bill is one of many steps needed to better connect communities and help address the housing crisis. Call on your representatives today to ask them to support the bill!