January 6, 2017

New FTA Joint Development Circular Update Supports Affordable Housing

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On December 29, the Federal Transit Administration (FTA) published a Federal Register Notice updating its Joint Development Circular to provide greater flexibility in support of affordable housing near transit. The circular addresses the rules and regulations for development on FTA-funded property, typically under the control of transit authorities. Joint Developments can be used to facilitate various types of development near or adjacent to FTA-supported transit service, including mixed-use, transit-oriented development. The notice provides clarification that gives transit agencies greater flexibility in structuring public-private partnerships that provide affordable housing in these developments.

The circular update is the latest in a series of FTA actions that support equitable transit-oriented development (eTOD). In 2013, the agency overhauled its rating criteria for its Major Capital Investment Grant program, including provisions that support the preservation and creation of affordable housing near new transit service. It has also provided planning grants and technical assistance resources to support eTOD.

Continuing this trend, the most recent change addresses FTA’s Fair Share of Revenue standard for Joint Development. To protect the federal financial investment in the property, FTA requires that the transit agency receive a minimum amount of revenue from the developer for the use of the land. However, the circular provided an exception for “community service” and “publicly operated” buildings, which generally produce less revenue than market-rate development. The December 29 notice clarifies that this exception is also available for Joint Development that includes affordable housing. This clarification is important because more flexible land sale or lease terms could increase the likelihood that such developments would be financially feasible, and/or increase the number of affordable units that could be included in mixed-income developments near transit.

Enterprise strongly supports these and other efforts to provide affordable housing opportunities in neighborhoods with access to employment, services, community facilities and life’s other necessities. The latest action by FTA is yet another positive step in this direction. For more information on eTOD, read Enterprise’s Promoting Opportunity through Equitable Transit-Oriented Development research series.