Issue Background: Sustainable Communities & Transit-Oriented Development

Sustainable community development refers to planning and building activities that address social equity, environmental stewardship and economic development. This long-term and holistic approach is crucial to the efficient allocation of resources for housing, infrastructure, public transportation and supportive services. Sustainability does not refer to a set of prescriptive development and policy choices. Rather, it is a framework for making decisions that reflect the unique characteristics, challenges and opportunities of a given geographical area. Well-planned development can yield numerous benefits for households, including lower utility and transportation costs, better health outcomes and increased access to employment and other resources. Communities can also benefit from lower infrastructure costs, additional economic development and increased tax revenue.

Transit-oriented development (TOD) is an important component of sustainable development. The interrelated costs of housing and transportation are the two largest expenses for many households. Communities closely connected to a broad range of services, retail options and employment opportunities are often associated with higher housing costs. Households can be faced with a choice of paying an unaffordable amount for housing in such communities or living further away and commuting into opportunity-rich areas. In the later scenario, the savings in housing costs can be negated by the increased costs of transportation.

Communities can promote social equity by expanding public transportation access to underserved low- and moderate-income communities and investing in the preservation and/or construction of affordable housing near transit. The preservation of affordable housing is particularly crucial to prevent the displacement and increased cost burden that sometimes result from increases in property values in new transit corridors.

Enterprise supports sustainability through its Enterprise Green Communities initiative and its TOD-related activities. Green Communities provides resources for developers and communities to build well-located green affordable homes. Enterprise’s TOD work includes financing, research and policy advocacy. Enterprise is a lead partner in Mile High Connects, which will create or preserve at least 1,000 affordable homes along current and future transit corridors in the city, and is involved in TOD-financing activities in other cities throughout the country.

Current Policy State

In 2015, Enterprise published a report laying out specific recommendations for state and local policymakers to overcome these barriers. These recommendations include:

  • Adopt a clear strategy for eTOD. Implementing eTOD requires engaging multiple entities, which often have different immediate priorities, including both the housing and transportation sectors, various levels of government, and the development community. Puget Sound Regional Council, a regional planning agency located in Seattle that handles transportation planning, collaborated with the Washington State Housing Finance Commission to develop transit-supportive criteria for the allocation of Low-Income Housing Tax Credits. In Atlanta, the Metropolitan Atlanta Rapid Transit Authority has set a goal for 20 percent of the housing units developed around transit stations to be affordable.
  • Reform local plans, codes and policies that influence station-area development.? Successful eTOD requires a supportive regulatory framework, yet many jurisdictions impose a number of restrictions that complicate station-area development, including limits on density, excessive parking requirements, overly restrictive or prescriptive building codes, excessive development fees and poorly managed public-engagement processes. To address these barriers, Prince George’s County, Md., which borders Washington, D.C., routinely uses station area zoning-overlay tools to reduce parking minimums near transit.
  • Expand access to capital with appropriate terms and condition. The financial feasibility of eTOD depends on the availability of capital to meet unique development needs. Government support can significantly enhance capital availability. For example, in 2010 the city of Denver contributed $2.5 million in top-loss capital to create a $15 million eTOD acquisition fund for the city. The fund now totals $24 million and can be used across the seven-county metropolitan region. In the San Francisco Bay Area, the Metropolitan Transportation Commission contributed $10 million in transportation funding to seed the Bay Area Transit-Oriented Affordable Housing Fund, a $50 million structured fund to finance pre-development, acquisition and construction for affordable housing. And in Southern California, the Los Angeles County Metropolitan Transit Authority (Metro) has committed 35 percent of units developed in Metro-owned land to affordable housing, as well as $10 million for a transit-oriented affordable housing fund.
  • Enhance access to high-demand sites for affordable housing developers. In strong markets, affordable housing developers often struggle to compete with market-rate developers to redevelop sites or preserve existing affordable housing. In 1996, King County, Wash., which is in the Seattle metropolitan region, instituted a public land disposition program in which all county-owned property deemed surplus is reviewed in order to determine suitability for residential development. Acceptable sites are then marketed for development, with a portion of units developed reserved for affordable housing.

While most policy decisions related to eTOD are made at the state, regional or local level, the federal government also plays an important role. For example, the Federal Transit Administration (FTA) supports local transit capital projects through the Capital Investment Grant program. In 2013, the FTA adopted a new evaluation framework that creates incentives for a range of transit-supportive elements, including affordable housing. We urge the FTA and other federal agencies to pursue further ways to better integrate local housing needs into any federally-supported transit project.

Publications and Resources

Enterprise Resources

Enterprise Statements, Testimony and Public Comment

Public Comments to FTA on Coordinating Affordable Housing, Community Development and Public Transportation Investments

Additional Sustainable Communities/Transit-Oriented Development-Related Statements, Testimony and Public Comment