Transit-Oriented Development in the United States: Experiences, Challenges, and Prospects (2004)

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PART 5 LESSONS AND CONCLUSIONS Combining insights and findings from the previous chapters, Chapter 20 summarizes the key policy lessons from the research. A matrix is also provided that identifies case studies that underscore each of the lessons. The concluding chapter reflects on the broader policy implications of the research and offers suggestions for future research on TODs.

445 Chapter 20 Research Findings and Policy Lessons Current TOD Practices TOD has gained and continues to gain a steady foothold in much of urban America. Surveys conducted for this research revealed that well over 100 TODs of various shapes and sizes currently exist across the United States. Most are in large rail-served cities. For bus-only places with a population under a half million, TOD is more of a concept than a reality. While TODs are generally nodal in nature, some settings, like Los Angeles, Arlington County, and Minneapolis, are pursuing TOD on a corridor or district scale or even as part of a regional strategy as in Portland. In the United States, transit joint development, viewed in this study as project-scale TOD on a transit agency’s (or other public entity’s) property, is almost totally limited to rail transit systems. More than 110 joint development projects, ranging from air- rights developments to station connection fees, currently exist. The most common form of transit joint development is ground leases of agency land for commercial office development, followed by air-rights leases, operations and construction cost sharing, and station connection fees. The Washington (D.C.) Metropolitan Area is, by far, the nation’s leader in transit joint development. The region presently has some 30 joint development projects, including such notable air-rights developments (and revenue generators) as Bethesda and Ballston. Several large-scale joint development projects slated for construction, notably at the White Flint and New Carrollton Metrorail stations, are expected to become the nation’s largest and, from the transit agency’s perspective, most financially remunerative joint development undertakings. Among large rail-served cities, one noteworthy trend is the conversion of park-and-ride lots to mixed-use, infill development. Almost 20% of the surveyed transit properties indicated that parking lots are in the process of being transformed into TODs, in many cases consisting of moderately dense housing. Parking-lot conversions have been encouraged by the Federal Transit Administration’s new and more permissive joint development rulings, as well as the rising value of agency-owned land. One-to-one replacement parking policies, however, continue to limit parking-lot infill initiatives to urban settings where rents and land prices are sufficiently high to cover the cost of multi-level garages, which can run as high as $30,000 per space. From a public-sector perspective, finding funds to pay for TOD planning and implementation is often an uphill battle. Rarely, if ever, are general funds from cash-strapped local governments or transit agencies available for such purposes. Federal transportation pass- through monies, administered by MPOs, are finding their way to TOD planning

and support in some areas, such as with the Livable Communities Initiatives and Housing Incentive Program in the San Francisco Bay Area. Communities such as Sacramento, Seattle, and Portland are using federal funding from their New Starts grants to pay for strategic TOD planning. Besides intergovernmental transfers, individual investor funds and grants from private foundations have been used most frequently for TOD planning and implementation. America’s best TOD examples start with a vision and proceed to plan execution through aggressive and inclusive station- area planning, backed by supportive zoning, infrastructure enhancements, and fiscal policies that reward smart-growth investments. Often, zoning overlays are introduced to allow mixed-use projects to be built, and those projects complying with specific station-area plans are promptly issued necessary permits and allowed to build as-of-right. The principles at play are fairly simple: reward “good development” through measures like streamlining review and providing density bonuses and give developers who comply with the TOD visions and plans as much certainty, clarity, and built-in assurance as possible. Among the transit agencies surveyed for this study, nearly half indicated some kind of regional vision, policy, or plan was in place that embraced TOD principles, and 42% indicated that specific TOD plans and/or zoning existed within their regions. Among all of the built-environment factors that influence transit ridership, density in and around transit stations is the most important. More and more U.S. cities understand this and have proceeded to ramp up permissible densities in the vicinity of stations. In some areas of the country, such as Montgomery County, Maryland, density bonuses are provided in return for developers providing below-market-rate housing. Such inclusionary zoning enables localities to promote the twin and often reinforcing objectives of increased ridership and affordable-housing production. Through its Blueprint Denver plan, the city of Denver has created a new transit mixed-use zoning category (TMU-30) that allows FARs of 5 to 1. Since density-induced ridership gains reduce the need for parking, the city also slashed parking mandates for properties near light-rail stops by 25%. Studies, as well as market performance, show that urban design treatments like mixing up building façades and providing generous landscaping and streetscape enhancements can soften people’s perceptions of density, making the mid- to high-rise building profiles that are often necessary to support intensive transit services more tolerable. TOD’s Multitude of Stakeholders A wide range of views, attitudes, and opinions were expressed by the stakeholder groups surveyed and interviewed for this study, underscoring the diverse and at times complex landscape that shapes the practice of TOD and joint development in the United States. Each stakeholder group has its own motivations, “agendas,” and outlooks, not all of which are consistent or compatible. Still, the many commonalities expressed by multiple interests outnumber the differences that exist. The researchers were struck by the large areas of agreement among many stakeholders involved with TOD. These areas included a belief that transit and 446

land use can and should be better integrated; a general dissatisfaction with automobile-dependent patterns of growth and the problems they create; a view that public-private partnerships in the transit arena is inherently a win-win proposition; and a wide acceptance of the idea that, if done well, TOD and joint development yield numerous benefits, with ridership gains and profits (to both the private and public sectors) topping the list. The differences among stakeholder groups and institutions that are most evident have to do with contrasting goals and motivations. Among public entities, transit operators’ goals and the goals of all others are different. Transit properties are primarily drawn to TOD and joint development for financial reasons— mainly to obtain much-needed income from farebox revenue gains and direct lease payments. Other public entities see the benefits of TOD in broader terms (e.g., curbing sprawl, spurring redevelopment, expanding housing choices, and creating jobs). Private entities are most interested in TOD profit-taking. It is important to keep in mind that not all interests were represented in this report. Citizen groups and politicians often have their own agendas, as highlighted by some of the case studies in Part 4. The plurality of interests surrounding TOD is not necessarily a liability and can be turned into an asset. On the one hand, conflicting interests and an unwillingness to resolve differences, if not promptly dealt with, can bring TOD projects to a grinding halt. On the other hand, diversity means stakeholders bring unique talents, insights, and capabilities to the table, which can make the difference in whether or not a complex project moves forward. Without question, different political agendas form barriers, big and small, to successful TOD and joint development implementation. There is a general consensus that, among the antidotes, institutional building and strengthening within and (more importantly) between organizations is essential in overcoming barriers. Many stakeholder groups contacted for this research emphasized the importance of memorandums of understanding, intergovernmental agreements, task-oriented working groups, and informal as well as formal partnerships in building institutional bridges. Most stakeholders believe that before working with others, governments must first get their houses in order, dealing with issues like conflicting goals, “turf” and boundary problems, competition for shrinking budgets, and even petty institutional jealousies. The inability of transit agencies and local governments to reach an agreement on appropriate land uses around rail stops or proper parking standards is one example of how conflicts can derail projects. The insistence of local governments on following lengthy entitlement and permitting procedures and ignoring developers’ and their lenders’ need to get a product into the marketplace as quickly as possible, is another. Once more “harmonious” interagency relationships are built, public partners can shift their focus to reaching out to the larger public: neighborhood groups, developer associations, or environmental groups. A large number of survey respondents stressed the importance of outreach, education, and inclusive dialogue in getting views and opinions on the table, heading off confrontations, mediating disputes, building some degree of consensus, and moving forward. 447

Besides having differing objectives, stakeholder groups sometimes differed in their views on what could best be done to promote TOD. For the public entity, the obvious answer is more money for planning and construction. Where this money will come from, however, was rarely mentioned either in open-ended responses or via other correspondence. For the most part, there was a general sentiment that providing funding is the responsibility of higher levels of government, starting in Washington, D.C. Yet most local entities acknowledge that the benefits of TOD accrue mainly to cities and regions. This contradiction—the common view that funding should come from higher government levels despite the fact that TOD is quintessentially a local affair, with local beneficiaries—has undoubtedly impeded the ability of some stakeholders to forge a political consensus on TOD funding and support. Nevertheless, flexible funds administered by states and MPOs have become an important source of TOD funding in some parts of the country, most notably Maryland, Illinois, New Jersey, Oregon, and California. Perhaps the most striking difference in views on what governments can do to best promote TOD is found between developers and public-sector interests. Survey respondents from transit agencies, local governments, MPOs, and state DOTs were generally of the mind that fiscal strategies mattered most and that procedural initiatives are fairly inconsequential to the development community. As an example, most of these stakeholders judged the streamlining of entitlements and the permitting process to be of marginal importance. Yet, for many of the developers that were interviewed, initiatives that expedite the review process, clarify the “rules of the game,” and minimize uncertainties are of paramount importance in building TODs. Reaching a consensus on how to share the risks and rewards of TOD remains the supreme challenge of building effective and enduring public-private partnerships. Getting the “math” right is especially challenging in marginal and transitional inner-city neighborhoods. As long as developers can make good money, with lower risk, building on greenfields in the automobile-friendly suburbs, and as importantly, as long as commercial banks believe this is the case, a considerable share of the risks for TOD will invariably rest with the public sector. Of course, this is less the case in buoyant and healthy real-estate markets and more the case in languishing urban districts. As long as the public sector can equally and fairly participate in the downstream rewards of TOD partnerships, government underwriting of near-term risks can make a lot of sense. In the world of TOD, this mainly takes place through redevelopment law, although not all states allow localities to set up “privileged” districts and employ TIF. Points of Agreement and Disagreement This section summarizes similarities and differences in views and opinions among stakeholders across topics reviewed in this report, elaborating on some of the points raised above. Emphasis is given to identifying differences that potentially stand in the way of implementing TOD in the United States and might therefore become the focus in conflict resolution and mediation. 448

TOD as Mixed-Use Development Stakeholder groups have adopted fairly similar definitions as to what constitutes a TOD. Most definitions are wrapped around smart-growth principles, which call for mixed-use developments with high-quality walking environments that support transit riding. Mixed use, however, is a bone of contention. Private interests plead with TOD planners to frame mixed-use development in terms of market realities. Developers and lenders alike view vertical mixing as a risky endeavor and prefer that land-use mixing occur horizontally (i.e., mixing uses across properties within a transit- served neighborhood). However, local planners often deal with projects on a case-by-case basis through the issuance of building permits, zoning amendments, or environmental impact assessments. There is a tendency to push the mixed- use template on each and every project, regardless of market realities or whether a developer has mixed-use experience. What might be more effective is a monitoring program that tracks cumulative trends in land-use changes, thereby allowing projects to be staged and prioritized on the basis of how they contribute to mixed-use targets. A master developer approach to station- area development might also allow more horizontal mixing while also ensuring that components are phased in line with market trends. Perceived Roles There was general agreement among those interviewed and surveyed that TOD is chiefly a “bottom-up” undertaking. Local governments and, given their often stronger purse-string and regulatory powers, redevelopment agencies, are best positioned among public actors to bring TOD to fruition. Transit agencies, many agree, can most effectively encourage TOD by mounting and delivering first-rate rail and bus services. Moreover, transit agencies can be effective advocates of TOD. Of course, also vital to the bottom- up planning/implementation process is the private sector, specifically developers and lenders. Views on the desirability of public-private partnerships for creating TODs were not always the same. Local governments generally prefer a joint sharing of risks and rewards through equity partnership arrangements. Most developers would prefer that the public sector attend to matters of preparing a specific plan for station areas backed by supportive zoning and infrastructure. Some developers stated that public-sector staff members, however well intentioned, lack the business acumen and entrepreneurial drive to create successful TODs. Lenders generally concurred with this view. Several lenders stated that TOD partnerships add complexity and blur lines of responsibilities. All sides agree that higher levels of government, like MPOs, state DOTs, and federal agencies, should focus on providing a supportive financial, legislative, and institutional environment that promotes TOD. Local governments, redevelopment agencies, and transit operators, predictably, call for more planning grants and capital from higher levels of government to fund TODs. Perhaps as predictably, higher levels of government view their roles in much more modest terms, mainly seeing themselves as helping with coordination and providing outreach and technical support. Many MPOs view themselves as clearinghouses and information brokers; although there are a few exceptions 449

(e.g., Portland Metro, SANDAG, and the Met Council in Minneapolis-St. Paul have proactively supported TOD, including through the use of purse strings). Some MPOs have little choice but to take a fairly passive stance on TOD because of statutory limits. While MPOs often have embraced smart-growth principles, few have sought to prepare regional land-use plans that orchestrate the evolution of TOD across municipal boundaries. For most state DOTs, TOD is even further down the priority list. Four states— California, New Jersey, Oregon, and Maryland—had passed legislation or provided funding through state agencies explicitly to promote TOD as of 2004. The lack of a significant funding commitment to these programs has reduced their effectiveness in California and New Jersey. Maryland’s DOT stands out for its commitment to promoting and funding TOD planning and construction. The federal government is in the best position of all to prod local interests to carefully coordinate TOD activities using incentives and penalties. This might be done, for example, by elevating the importance of corridor-level, cross- jurisdictional planning in assessing proposals under FTA’s New Starts Program. Surveys of transit agencies suggested, however, that New Starts criteria have not changed land-use planning practice very much, at most raising the profile of TOD among politicians and community groups. Some observers feel the federal government should explicitly embrace TOD in national legislation. While past legislation like the Intermodal Surface Transportation Efficiency Act and the Transportation Equity Act for the 21st Century spoke to the need for consistent transportation and land-use planning, so far TOD and joint development have received little national legislative attention. Goals Given the differences in how they perceive their roles, it is not surprising that the goals of stakeholder groups regarding TOD tend to vary. Transit agencies view TOD and joint development mainly from a fiscal perspective (i.e., how much income it can produce, both in terms of lease revenues and higher farebox returns). Among local entities, views differed somewhat between municipalities and redevelopment agencies. Municipal planners hold fairly high hopes that TODs can redress many citywide and regional problems like sprawl, traffic congestion, and affordable-housing shortages. Staff members from redevelopment agencies generally believe that TOD is most effective at dealing with neighborhood-scale issues like enhancing pedestrian environments, revitalizing decaying districts, and increasing transit ridership. These contrasting views stem, no doubt, from differences in institutional responsibilities and geographic points of reference between the two groups. Private-sector interests tend to align with those of transit agencies regarding the goals of TOD. Many see TOD as a potential boon to ridership and contributor to congestion relief. Some, however, see TOD as an opportunity to expand the palette of housing and lifestyle choices available to consumers. Outreach and Education Public-sector representatives universally agree that outreach and education—such 450

as marketing, neighborhood meetings, design charrettes, and interactive web sites—are vitally important in advancing the cause of TOD. Most large transit properties and cities that were surveyed engage in some level of TOD outreach. Private-sector interests sometimes had a more cynical view on outreach. Some equated it with red tape. A number of developers felt scarce public resources would best go to improving transit services, providing supportive public infrastructure, and financing station-area land-use and zoning plans. Enough TOD developers have been blindsided by NIMBY resistance, however, that many now support a more open and proactive approach to public engagement. Implementation Tools To date, the chief tools employed by local governments to promote TOD have been station-area planning, the initiation of zoning incentives (e.g., density bonuses), and the relaxation of parking standards. Surprisingly, however, these tools were rated as weak to moderate by respondents from transit agencies, local governments, and redevelopment authorities in terms of their effectiveness in promoting TOD. Rated most effective by local government respondents, but used sparingly, are streamlining of the development process and assistance with land assembly. Transit agencies generally felt that tools that provide direct financial benefits, like capital funding and tax-exempt bonds, were best suited for leveraging TOD. Among respondents from redevelopment agencies, tools that are commonly used by their organizations such as TIF, assistance with land assembly, and tax- exempt bond financing received the highest effectiveness ratings. Even local government respondents felt that the kitbag of tools available to redevelopment agencies was more potent than their own policy levers at enticing private capital to station areas. Developers generally like non- interventionist, market-based approaches to promoting TOD such as LEMs, flexible parking standards, and enhanced public transit services. Many look favorably upon efforts to expedite the entitlement and building-review process. On this, local planners and developers agree; however, as noted, relatively few of the surveyed localities fast-track building permits for projects near transit stations. Several other incongruities exist. Density bonuses and overlays are popular tools in and around transit stations, but they generally receive low marks for their effectiveness. Outside of a few robust real-estate markets like Manhattan, Northern Virginia, and the San Francisco Bay Area, densities under existing zoning codes are widely viewed as sufficient to support market demand. Also, a tool used by the redevelopment agencies that were surveyed for this study—relaxed parking standards— received the lowest effectiveness rating by most stakeholder groups. Some observers feel more energy should be devoted to upgrading the quality of the pedestrian environment and transit services than to inhibiting automobile access and restricting parking. Impediments All of those surveyed were asked to identify factors that stood as impediments to TOD. Transit agencies rated automobile-dependent sprawl at the top of the list, followed by three “lacks”: lack of local expertise, lack of 451

market demand, and (related to both) lack of developer interest. Local government respondents felt similarly, but they disagreed about the lack of local expertise. In addition to questionable market demand, local planners felt that community opposition stood in the way of TOD. Despite the controversy surrounding park-and-ride facilities, relatively few transit agencies or local planners felt that they had much impact on the ability to form successful TODs. Local governments wrestle with the traffic problems associated with any new development that substantially increases densities, including TODs. If traffic conditions deteriorate quickly, the TOD concept can quickly become tainted. Local elected officials, accountable to their constituents, do not always have the patience to wait until the longer-term benefits of TOD reveal themselves. Some local planners distinguish between “good” and “bad” traffic congestion (as with “good” and “bad” cholesterol). Added traffic, they reason, is a by- product of an active, rejuvenated community. This logic does not always resonate with those who must devote more time each day to driving in and out of their neighborhood because of mid- rise development around rail stops. In many parts of the country, authorizing legislation restricts how far transit agencies can go in pursuing TOD. In some instances, statutory law outright prohibits transit agencies from engaging in any form of real-estate transaction that is not directly related to the acquisition of properties for facility construction. Similarly, regional planning organizations typically have little or no control over local land-use and zoning decisions. Such regulatory constraints coupled with fiscal pressures and the political philosophies of transit board members have sometimes created a culture within transit agencies and regional planning entities that approaches land development in general and TOD, more specifically, with caution and even skepticism. Private-Sector Views and Opinions It deserves to be mentioned once more that the views and opinions of the private sector did not always align with those of the public sector. Given that TODs are principally the outcomes of many parcel-level private investment decisions, finding ways to bridge differences is vital to future TOD implementation in the United States. Many developers view transit positively, but rarely, if ever, consider it a decisive factor in the decision to move ahead with projects. The ability to attract equity finance (e.g., pension funds and REIT investments) is governed by fundamentals, not a project’s status as a TOD. Also, lenders do not fund concepts like TOD. They might fund developers with proven track records, but they never fund a planning principle. One lender suggested dropping the TOD label altogether and casting this genre as mixed-use projects that have the added bonus of being near a transit stop. What matters is the combination of mixed use and accessible transit, not the notion of government-planned TOD. Among the actions that local governments could take to spur private investment around transit stops, the presence of supportive land-use designations was rated the highest among developers. Once zoning is set, 452

developers want the ability to build as- of-right, providing a buffer against changing political whims. Many developers also feel that public infrastructure, such as under-grounding of utilities and expansion of sewerage capacity, is also crucial in leveraging TOD. Some developers go a step further and suggest public financing of structured parking as an essential piece of TOD infrastructure. Another common plea was to reduce regulations and bureaucratic hurdles. Most developers said they can make money in the TOD marketplace as long as they can avoid excessive red tape and minimize uncertainties. What often bothers them most is when governments “change the rules of the game” at the last moment. Some developers would also like public authorities, notably transit agencies and redevelopment agencies, to help with land assemblage. A lack of developable parcels was cited as one of the major obstacles to TOD, particularly parcels of sufficient size to attract large development firms with “deep pockets.” Private lenders were generally favorably disposed to the idea of joint development, at least as much as they were to TOD. Transit joint development, however, can be problematic where there are unsubordinated ground leases, and multiple parties carry financial risks and responsibilities. To the degree that joint development produces social benefits like increased ridership and improved air quality, lenders generally believe that subordinated loans that protect the financial interests of private groups over the interests of the public sector are appropriate. Joint ventures, some lenders believe, complicate projects, blur credit risks, and require too much time to coordinate activities. Lenders also hold the views and opinions of real-estate appraisers in high regard when making lending decisions. For the most part, appraisers weigh the standard features of comparables like building square footage and on-site amenities in arriving at an estimated property value. Few think about or seriously consider benefits that might be associated with proximity to transit. Getting appraisers to consider transit’s added value could elevate the standing of TOD in the minds of some lenders. Benefits of TOD Relatively little empirical research has been conducted documenting the economic benefits of TOD beyond studies showing that development near rail stations boosts ridership and increases land values. These outcomes reflect the accessibility benefits conferred by tying land development to transit investments. A host of other benefits that derive from increased ridership and land values, such as congestion relief and more sales- and property-tax income, have been assigned to TOD. However, there is little data available other than anecdotes by which to gauge these impacts, and some impacts (such as higher tax income and, in general, economic development) are actually redistributive in nature—economic resources that go from the pocketbooks of one party to those of another. One unavoidable outcome of limited empirical research on TOD’s benefits has been to shift the debate to the realm of ideology. Different groups have turned to different studies to reach totally opposite conclusions about the benefits, or lack thereof, of TOD. This has happened even in the case of one 453

transit station, perhaps most notably the Portland area’s Orenco Station. As discussed in Chapter 7, pro-transit observers note that 22% of Orenco’s commuters regularly take transit while critics contend that 75% of Orenco’s residents always drive and just one in six commuters take transit more than twice a week. Different spins cast TOD in totally different lights. Past research shows that people living near transit in large rail-served metropolitan areas tend to ride transit five to six times as often as their counterparts who live further away from transit. Mixed land uses and pedestrian improvements can bump up these market shares even more. Recent research suggests that self-selection (i.e., people choosing to live near transit for lifestyle reasons like avoiding having to drive to work and acting upon these preferences by taking transit) accounts for as much as 40% of the ridership bonus associated with transit-oriented housing. Original research conducted for this study points to the potential ridership payoff of TOD under favorable conditions such as those in the San Francisco Bay Area and Arlington County, Virginia, two areas that have been among the nation’s highest economic performers and that have experienced significant traffic congestion problems. Census data for the Bay Area revealed that transit-commute modal shares increase with density, land-use diversity, and walking-friendly designs around rail stations. For example, every 10 additional dwelling units per gross acre was associated with a 3.7% increase in transit’s commute modal share. In Arlington County, increases in the square footage of office-retail development along seven stations of the Rosslyn-Ballston and Jefferson Davis corridors led to significant gains in Metrorail boardings and alightings. Models revealed that every 100,000 square feet of additional office and retail floor space over the 1985-to-2002 period added around 50 station daily boardings and alightings. Moreover, housing construction interacted with transit service levels to give ridership a further boost. Some skeptics contend that U.S. cities are already so built-out and existing land-use patterns are so entrenched that TOD can only exert a modest impact on urban landscapes and travel behavior in the larger scheme of things. Evidence on residential self-selection in TOD neighborhoods being matched by exceptionally higher transit-usage rates suggests that impacts could be more substantial if and when TOD reaches a critical mass along any given corridor. Impacts of TOD no doubt vary by time and circumstances. The biggest ridership and land-value benefits accrue in areas enjoying a boom economy matched by jam-packed highways. The market for infill housing near major transit stops drives up rents and land prices when traffic woes worsen. In small cities and towns with minimal traffic congestion, it is probably the case that TOD can bring about the most dramatic changes when created on greenfields or the exurban fringes. Therefore, some observers contend that exurban communities should not attempt to create TODs but rather to be “transit ready,” that is, able to support good- quality transit if and when the market allows it. The idea is not to preclude TOD from happening, similar to interim zoning. Transit-supportive design guidelines are one way to ensure that 454

new suburbs and far-flung exurbs are poised to accommodate TOD if and when the market brings it their way. Recurring Themes and Lessons This section draws lessons on contemporary TOD practice in the United States on the basis of the body of materials presented in this report, including insights gained from the case studies. While lessons cannot always be easily transferred from one location to another and certainly are not intended to be carbon-copied, different “bits and pieces” will likely have relevance in most places. The lessons are organized by the following five categories: political and institutional factors, planning and land-use strategies, benefits and impacts, fiscal considerations and partnerships, and design challenges. Political and Institutional Factors • Political leadership is vital to TOD implementation. Having someone step up as the political champion of a TOD proposal is critical to marshalling resources, building a coalition, and resolving disputes that invariably crop up along the way. While it is not necessary that there be a single point person for shepherding a project along, someone in a position of power must be prepared to embrace TOD as part of his or her political platform, investing time and energy and sometimes “cashing in political chips” to usher projects forward. Of course, happenstance and serendipity have a lot to do with whether political leadership arises or not. Regardless, mixed-use TODs like the Fruitvale Transit Village in Oakland and the project in Arvada (suburban Denver) owe a lot to the dedication and savvy of one or more leaders willing to put their careers and political futures on the line for TOD. Sometimes leadership comes from the state level, as was the case with Boston’s Liberty Tree Building and New Jersey’s Transit Village Initiative. Leadership, however, need not always lie within the public domain. In the case of Dallas’s Mockingbird Station, the developer, Kenneth Hughes, provided much of the inspiration and motivation that made the project a success, and he has since ignited efforts to emulate the Mockingbird experience in other parts of the region, such as Plano and Richardson. • Inclusiveness and ongoing public input in TOD planning, design, and implementation is essential to success. Outreach not only helps to fend off a possible NIMBY backlash, but it also gives those who live and work in a TOD neighborhood a vested stake in ensuring that what is built is consonant with neighborhood goals, has a human-scale “feel,” and is of the highest caliber possible. Of course, market pressures might prompt developers to increase the density envelope beyond what local residents prefer. Neighborhood meetings, workshops, charrettes, and other venues offer the best hope of working out differences and finding an acceptable compromise. • Institutional coordination and streamlining are especially crucial to TOD implementation where multiple agencies govern different elements of land development and transit-service delivery. Red tape, 455

institutional bickering, and multiple levels of review are sometimes enough to frighten away the hardiest of developers from station locations. Places like metropolitan Baltimore, Philadelphia, San Francisco- Oakland, and Denver have formed interagency working groups and committees to streamline TOD review and coordinate decision making. In metropolitan Miami, the consolidation of decision making within the county facilitated TOD implementation by allowing developers to bypass multiple layers of bureaucracy and public process. • More permissive regulatory environments and enabling legislation are often needed if transit agencies, local governments, and regional planning organizations are to proactively implement TOD. The absence of authorizing legislation or simple avoidance of the issue of how far transit agencies can go in pursuing land development has often muddied the issue of whether TOD is a legitimate public-sector undertaking. Without clearly articulated legislation that enables transit agencies and other local actors to assemble and bank land and enter into joint development arrangements, TOD either gets ignored or ends up on the back-burner, lost in the pressing day-to-day needs of running a transit organization. Where state governments have taken a leadership role, passing permissive authorizing legislation (such as in California in the case of the Los Angeles County MTA and through trilateral agreements that formed the Washington Metropolitan Area Transit Authority), transit agencies have proactively pursued TOD and joint development. Political leadership in advancing TOD must often begin at the state capitol. Planning and Land-Use Strategies • Successful TODs start with shared visions that guide planning and implementation for years to come. To say that visions are important might be stating the obvious and no doubt sounds cliché. However, the enterprise of creating a TOD over an extended period of time is subject to so many distractions and interruptions that the ability to “keep the eyes on the ball” is pivotal to success. Of course, defining “the ball” is the first step in the process. Some areas, like Arlington County, Virginia, have adopted the Scandinavian practice of employing a metaphor to articulate the TOD vision. In Arlington County’s case, the metaphor was a “bull’s eye.” Many local observers attribute Arlington County’s success at adding over 15 million square feet of office space, 18,000 housing units, and several thousand hotel rooms to the bull’s eyes of the Rosslyn- Ballston corridor since 1970 to this early vision and the subsequent General Plan and specific station-area plans that embellished how the vision could be effected. • Start TOD planning early. TODs are often the cumulative products of many individual development decisions, some of which unfold slowly and in fits and starts. Areas with successful TOD track records like Portland, Arlington County, and Montgomery County (Maryland) have been at it a long time. There 456

must be enough lead time to allow plans to be prepared, partnerships to be built, funding to be secured, and improvements to be programmed. Experiences show that developers are often willing to build projects before transit stations even open, as long as they are confident that a strong planning commitment exists to not only deliver first-rate transit services but also improve a neighborhood, strengthen institutional relationships, and supply supportive infrastructure. • TOD success can hinge on rewarding developers with measures that grant more latitude in designing projects; allow mixing of uses; increase density envelopes; and offer certainty, clarity, and built-in assurances that the public sector will follow through on planning commitments. Because of the risks sometimes encountered in building near transit stations, especially infill and redevelopment projects, and because of the public good conferred by TOD, “business as usual” should not apply to TOD developers. Zoning must often be revised to allow higher-than-average densities and a land-use program and mix that satisfy market demands. In cities like Seattle, Portland, San Diego, and Atlanta, zoning overlays have been successfully used to increase permissible densities, prevent automobile-oriented uses from preempting TOD possibilities, and diversify uses. Developers make it abundantly clear that they want and expect specific station-area plans that define the parameters under which they must operate. In addition to advanced strategic planning, developers also want public resources channeled into delivering good- quality transit services; ensuring the presence of safe and attractive pedestrian connections to stations; and expanding local infrastructure (including road, sewage, and water trunk-line capacities) to accommodate new development. • Successful TODs emphasize “place- making”: creating attractive, memorable, human-scale environs with an accent on quality-of-life and civic spaces. Increasingly, projects built around up-and-coming transit nodes, like Dallas’s Mockingbird Station, Portland’s Pearl District, and metropolitan Chicago’s Arlington Heights, are targeted at individuals, households, and businesses seeking locations that are vibrant and interesting, usually with an assortment of restaurants, entertainment venues, art shops, cultural offerings, public plazas, and civic spaces. What all of these places have in common is high-quality walking environments with a minimal on-site automobile presence. It is often the case that settings that can accommodate a dense concentration of shops, eateries, and pedestrians without automobile dominance are near transit stations. Yet, creating walking-friendly environs at transit stations can pose special challenges because of the difficulties of accommodating not only walk-on traffic but also feeder buses, drop-off passengers, park-and- ride, and other interface functions— what has been called the “conflict of place and node.” TODs that have designed good, safe circulation systems and minimized conflict points, such as the Bethesda Station 457

in Maryland, and the Orenco Station in Hillsboro, Oregon, have managed to largely resolve the conflicting goals of stations as both “places and nodes.” Traffic-calmed, walking- friendly environs near popular transit stops have a cachet in the development community. The ability to moderate the presence of automobiles while attending to the complex access, circulation, and parking needs of multiple nodes can make the difference between a successful and unsuccessful TOD. • TODs invite bold new policies that push conventional boundaries and acknowledge the unique market niches that are being served. Initiatives like LEMs, unbundled parking costs, flexed parking standards, and sliding-scale impact fees are good examples of “out of the box” thinking. Standard designs, cost pro forma, and building-code templates need to be challenged for each and every TOD project in large part because the TOD market is not “standard.” Experiences show that new housing built near rail stops often appeals to singles, professionals, childless couples, and empty-nesters who value amenities as much as the amount of living space and who often own fewer automobiles and log fewer miles on their odometers than the typical urban household. Standards for mortgage qualifications, building designs, and parking supplies need to reflect these market realities. Unbundling the provision of parking from a dwelling unit can save residents living near transit tens of thousands of dollars. Given that fewer automobiles come in and out of the driveways of transit-based housing projects than is the norm, trip generation estimates that inform impact assessments (that in turn inform impact-fee levies) need to be adjusted accordingly. Santa Clara County and Los Angeles (California), Gresham, Oregon, and Washington D.C. have introduced sliding-scale impact fees to promote TODs. These are places that understand that smart growth requires smart calculus. • Station-area plans and planning matter. Given the risks and uncertainties associated with TOD, developers, residents, and merchants expect, and indeed deserve, carefully crafted, forward-looking plans that orchestrate how, when, and where a TOD will evolve. Good TODs begin with good textbook planning practice. Arlington County’s success at creating two viable transit-oriented corridors owes much to a General Plan backed by station-area plans that mapped future land uses, specified overlay zones, attended to circulation needs, identified networks of open space and pedestrian ways, and defined needed changes to building and parking codes. Similarly, TOD successes in Portland are largely a product of the region having worked hard for the past several decades at tying station-area development to rail transit investments, applying the nuts and bolts of good planning practice. In the San Francisco Bay Area, sub- regional and regional planning organizations have seeded station- area planning through grants (Transportation for Livable Communities and Housing Incentive Programs) that channel federal and state transportation funds to local governments. Some cities, like 458

San Diego, have been particularly forward-looking in their planning and siting of rail extensions, opting to avoid railroad corridors where development opportunities are restricted in favor of settings with stronger market conditions, despite the higher costs incurred. TODs stand the best chance for success when land-use planning precedes, or at least parallels, transit development rather than being an afterthought. Experiences in Arlington County, Portland, and San Diego make this clear. Benefits and Impacts • TOD’s ridership bonuses are substantially a product of residential self-selection, suggesting policy reforms should focus on allowing residents to sort themselves into transit-served neighborhoods unimpeded. Research continues to demonstrate that self-selection is a major factor behind higher transit ridership among those living near rail stations. It follows that public policy should focus on breaking down barriers to residential mobility and on introducing market- responsive zoning in and around transit stations. Policies like flexible parking standards, decoupled housing and parking pricing, and location-adjusted mortgages could help in this regard. • TOD benefits are not automatic and generally accrue during upswings in local economies when traffic congestion worsens. Favorable conditions must exist for TOD to produce significant economic benefits. Experiences show that if compact, mixed-use development around transit nodes is to attract significant enough numbers of motorists to transit so as to reduce traffic congestion and impart environmental benefits, areas need to be experiencing rapid growth, and traffic conditions need to be bad and getting worse. Since TODs increase accessibility among those living, working, and shopping near transit, an extensive transit network is also often necessary for the benefits of TOD to materialize. The absence of measurable societal benefits, however, in no way suggests that TOD projects should not move forward. As long as market demands are being satisfied, there is private benefit (between producers and consumers) in building transit- oriented housing, offices, and retail shops. Diversifying America’s suburban landscapes and providing greater housing and lifestyle choices can be important benefits of TOD even if there is little evidence of congestion relief or local job creation. • Transit’s benefits, as reflected by land-value premiums, also generally increase with proactive planning, network development, and system maturation. External factors like regional economic and traffic conditions do not solely govern the potential benefits of TOD. Case experiences from Dallas, Santa Clara County, and San Diego show that land-value premiums tend to increase as a system’s network expands and are generally higher in areas with stronger real-estate markets, as well as in areas where far-sighted, proactive planning has taken place. 459

Fiscal Considerations and Partnerships • TODs benefit from recapturing some of the value conferred by transit investments to generate revenues needed for ancillary improvements. Recapturing some of the land-value premium conferred by transit investments provides much-needed revenues that can go to seed various station-area improvements like landscaping, pedestrian-way upgrades, and public spaces. While recapturing value is difficult in practice, Los Angeles managed to cover nearly a tenth of the cost of the first phase of the Red Line subway through special assessments levied on benefiting parcels. Entrepreneurial transit agencies, like Washington D.C.’s WMATA, have over the years recaptured value through aggressive joint development activities, including land leases and station interface programs. WMATA pegs lease revenues to the values of surrounding properties, thus ensuring that it benefits from land appreciation after a lease with a developer has been invoked. • Creative financing is essential to spreading the risks, expanding the base of knowledge and experience, and tapping into the fiscal advantages of certain partners, such as local governments’ superior bond ratings and guarantees, to make projects pencil out. Partnerships are pivotal to successful TODs. In redevelopment districts that suffer from a poor marketing and performance image, multiple partners are often necessary to raise sufficient capital to spread financial risks. Each partner can bring something unique and of value to the table. A private developer might offer years of experience and business savvy. Private interests also offer a wide array of potential funding sources such as equity capital, conventional debt, REIT funds, and venture-capital loans. Redevelopment agencies also offer something unique. Most are empowered to condemn, acquire, and assemble parcels and to fund such ancillary improvements as sidewalk upgrades and utility relocations. Local governments are often in a position to offer revenue bonds at favorable rates, use tax-exempt fiscal instruments, and secure loan guarantees backed by the federal government. A transit agency might be in a position to contribute critical parcels through land swaps or the provision of easements. In built-up settings with small lots under multiple owners, no one party can create TOD on its own. Only through a partnership that offers each party some return on investment can a TOD project hope to gain firm financial footing. Experiences with risky mixed-use investments in marginal urban districts like Barrio Logan in San Diego, Overtown in Miami, and El Cerrito del Norte in the San Francisco Bay Area underscore the importance of creative multilateral financing. • Market fundamentals, not a TOD label, govern whether private capital gets invested around transit stations. The availability of equity and loans to fund projects near transit is primarily driven by capital market conditions and perceived market demand, not a project’s status as a TOD. Lenders involved with TOD 460

projects (not all of whom even realize they are funding a “TOD”) rarely adjust lending standards to reflect proximity to transit. Sometimes this translates into an unwillingness to fund projects that propose parking supplies that are below the norm. While market fundamentals rule the roost, developers believe that certain attributes of TOD can help, at the margin, with securing loans and making projects pencil out, including good-quality transit services, streetscape and ancillary public improvements, and local political support. Design Challenges • In urban settings, rationalizing parking policies in relation to TOD is essential to influencing how a TOD station will be accessed and to avoiding conflicts over whether land goes to parking or development. If not properly dealt with, parking can form a huge obstacle to TOD: separating a station from the neighboring community, diminishing the quality of the walking environment, and precluding station- site air rights or joint development. The issue of parking can provoke visceral reactions, often pitting constituencies against each other. Conventionally, the interests of professional-class suburbanites who park-and-ride conflict with neighborhood residents who abhor the idea of outsiders descending upon their neighborhood to park their automobiles during daylight hours. Transit boards need to rationalize parking policies beyond a carte blanche one-to-one replacement mandate. This might take the form of siting parking more peripherally to a station or away from a community and toward an active highway corridor. Chicago’s Metra minimized the impact of parking by using a number of small lots sited away from the station as opposed to a single large lot. Where land prices are high enough, structured parking can replace surface lots, thereby freeing up land for infill development, pedestrian ways, and civic spaces. Where affordable housing is being built near stops, reduced parking quotas or at least flexible standards should be considered to reflect the tendency of many TOD households to own fewer automobiles. Unbundling the cost of parking from the cost of a dwelling can make transit-based residency all the more affordable. Furthermore, to the degree that there is interest in paring back parking supplies, transit agencies can respond by expanding feeder bus services, and localities can pitch in by upgrading pathways and bike routes that connect to a station. Parking need not always be viewed as a liability; for mixed-use TODs, shared-parking possibilities can economize on costs and land consumption. If not addressed early in the process, parking can be a TOD deal-breaker, but, if it is handled smartly, such as through shared- parking schemes, it can be a deal- maker. There is no easy formula for coping with the conflicts of parking and TOD. What is important is for local authorities to get out in front of the problem, find an appropriate and workable strategy, and build enough flexibility into the process to change course if and when circumstances warrant it. Parking policies cannot be 461

an afterthought; they must be carefully considered and weighed in keeping with the overall goals set for TOD and tempered by the financial realities that transit agencies face. • Even though mixed land uses are a trademark of TOD, arriving at a workable program poses planning and design challenges that need to be overcome for a successful TOD. Quite often, finding the right formula for mixed land uses is every bit as difficult as rationalizing parking policies. Planners sometimes impose a design template of ground-floor retail and upper-level housing or offices (i.e., vertical mixing) on any and all development proposals within a TOD. Mixed-use projects are trickier to design, finance, and sometimes lease than single-use ones. Ground-floor retail is doomed to fail unless it opens onto a street with busy foot traffic and convenient automobile access. Ground-floor restaurants might be unappealing to upper-level residences seeking quiet and privacy in the evening. There are few developers who specialize in mixed-use projects and even fewer financiers who understand them. Local governments need to be sensitive to such challenges and focus on achieving a desired land- use mix within a transit station area as opposed to doing so in individual parcels (i.e., horizontal mixing). Sensitivity to retail design can also enable big-box retail to coexist with more pedestrian-oriented uses in a TOD, as shown with the CityCenter project in Englewood, Colorado, and the Rio Vista West “semi-TOD” along San Diego’s Mission Valley Trolley line. • Walking access and quality of circulation and the overall pedestrian environment are critical to successful TODs; however, the conflict between stations as “nodes” and “places” often makes this difficult. Research shows the majority of residents living within 1⁄4 mile of a transit station arrive by foot or bicycle; however, this share plummets markedly if there are significant physical barriers as well as symbolic and psychological barriers like wide, busy roads and incomplete sidewalk networks. Where the majority of a station’s catchment is beyond an easy walk or bus trip, “functional” priorities are apt to give greater design preference to the needs of park-and-riders than walk-and- riders or bus-and-riders. San Diego’s Mission Valley; San Mateo County, California; and suburban Denver are good examples of places where (with the help of smart-growth planning monies and pedestrian-sensitive zoning ordinances) design attention was given and resources directed to improving the quality of circulation, aesthetics, and basic provisions (e.g., crosswalks and benches) of areas surrounding rail stations. • Transit service improvements and system upgrades can trigger TOD activities, especially in settings with expensive housing markets and a pent-up demand for transit-oriented living. “Choice” transit users are highly sensitive to service quality; thus, running frequent and reliable trains and minimizing the need to transfer can be critical to the future of TOD. In northeast New Jersey, the extension of NJ TRANSIT’s Northeast Corridor to New York 462

Penn Station unleashed a flurry of building activities around century- old commuter-rail stations. The elimination of a transfer offered those living near stations considerable travel-time savings, prompting many with jobs in Manhattan to seek out rail-served residences. Station enhancements also matter. In the suburbs of Chicago, new or refurbished Metra stations jump-started private real- estate investments. And it is not always rail services that catapult TOD forward. In Boulder, Colorado, the integrated CTN—known for its colorful “Hop, Skip, Jump, Leap, and Bound” buses—triggered bus- based TOD (typically second- and third-floor offices and lofts above street-level retail) along several routes. Lessons Through Case Studies The 10 case studies presented in this report amplify many of the lessons discussed in this chapter. As a whole, their lessons are instructive. Metropolitan Washington D.C. is a true success story in part because shaping land use was a goal of the original transit investment. Signature TODs abound in the District of Columbia, surrounding cities, and increasingly in outlying suburbs, a result of rebounding markets for in-town housing and commercial space, unfettered market forces, and interventionist public actions. Metrorail’s ambitious joint development program adds riders to trains and revenues to public coffers, serving as a model for the nation. Boston is a recent urban TOD success in large part because its central-city real estate is red hot. Outside the city proper, however, TOD has failed to materialize, partly a consequence of inadequate attention to NIMBY opposition. Three areas where TODs have sprouted in suburban settings are northeast New Jersey, metropolitan Chicago, and the Dallas metroplex. Northeast New Jersey’s TOD market is sizzling thanks to major rail improvements that have dramatically shaved the amount of time it takes to rail commute into Manhattan. Its experiences remind us that the quality of transit services is often of paramount importance. Swift and direct rail connections to major urban centers that provide travel-time savings over the automobile are a sure-fire way of triggering TODs. Metropolitan Chicago’s suburban TOD successes owe much to local political leadership and careful station-area planning. In greater Dallas, TOD leadership has come mainly from the private sector, spawning compact, mixed-use development near light-rail stops in places like Plano and Richardson, development that only a decade or so ago would have been unimaginable. Metropolitan Denver has similarly witnessed suburban TOD because of community activism and an urban renaissance in and around major transit corridors. Portland is the most extreme case of pushing the TOD envelope in the United States, courtesy of regional visioning and planning, extensive interagency agreements, regulatory controls, and incentives that encourage densities that exceed those that would be achieved through normal market forces. Portland is the best example of TOD planning and implementation at a regional scale in the United States, and like Boston and Denver, it has entered a new phase that 463

focuses on constructing central-city infill projects close to rail corridors. The San Francisco Bay Area has over the years sought to adopt Portland’s regional approach. The Bay Area is widely recognized as a leader in promoting good planning and transportation concepts; however, implementing TOD among a diverse group of local governments and special interests has been an uphill struggle. New partnerships that have given rise to projects like the Fruitvale Transit Village could signal a breakthrough. Despite a consolidated government structure that has centralized planning and transit functions, Miami-Dade County has struggled in its pursuit of TOD. As a rail-served Sunbelt region collared by water and the Everglades, and given its standing as the gateway to Latin America, Miami-Dade County would seem to be ideal for TOD. In the absence of proactive public policies, however, the market has failed to spawn TOD, not only in prime real-estate locations but also in communities that are most in need of development. With several mixed-use projects finally underway near the Overtown Station and Miami-Dade Transit seeking joint development partners for strategic parcels near several prominent stations, prospects for future TOD are today looking better than ever. Despite its international reputation as an automobile-friendly megalopolis, Southern California has made impressive headway on the TOD front in recent times. The city of San Diego has been a pioneer in crafting innovative zoning codes, targeting supportive infrastructure investments, and creating attractive walking environments in and around light-rail stations. TOD has failed to take hold to the same degree in Los Angeles County, although mixed-use joint development projects, such as the project at the Hollywood-Highland subway station, and a continuing commitment to build and expand BRT services are encouraging trends. In an effort to summarize and consolidate the lessons reviewed in this chapter, Table 20.1 was prepared. The matrix identifies case-study settings that illustrate each of the key lessons. Some lessons, like “TOD as place-making,” are found in all 10 case studies. Most lessons, however, are best highlighted by a few case studies. To learn more about a particular lesson, the interested reader might want to review the relevant case-study chapters in more detail. Of course, not all case experiences with TOD in the United States were covered in this report; thus, lessons no doubt can be found, to varying degrees, elsewhere as well. Still, the case experiences reviewed in this volume are thought to provide some of the best, the most current, and the most poignant insights into both the successful and unsuccessful practice of TOD in the contemporary urban United States. As the United States’s experiences with TOD accumulate and new insights are gained, new lessons and extensions to existing ones will no doubt appear. Seeing to it that policymakers and those in positions of influence are aware of these lessons and that outcomes are carefully and critically weighed is essential to constructively advancing the practice of TOD in the United States. The concluding chapter discusses such challenges further. 464

Institutional Permissive Inclusiveness Coordination & and Enabling Leadership & Public Input Streamlining Legislation Case Study Boston New Jersey Washington D.C. Miami Chicago Dallas Denver Portland San Francisco Southern California Political and Institutional Factors = lesson revealed through case experience Table 20.1. Matrix Summary of Case Studies that Highlight TOD Lesson (Table continues next page)

Case Study Boston New Jersey Washington D.C. Miami Chicago Dallas Denver Portland San Francisco Southern California Shared Progressive, Start TOD as Visions Flexible Zoning Early Place-Making Planning and Land-Use Strategies = lesson revealed through case experience Bold Policies Station-Area Sensitive to Markets Planning Table 20.1. (Continued) (Table continues next page)

Case Study Boston New Jersey Washington D.C. Miami Chicago Dallas Denver Portland San Francisco Southern California Self Selection & Favorable Market-Responsive Economic Zoning Conditions Benefits and Impacts = lesson revealed through case experience Proactive Planning and Network Expansion Table 20.1. (Continued) (Table continues next page)

Case Study Boston New Jersey Washington D.C. Miami Chicago Dallas Denver Portland San Francisco Southern California Value Creative Market-Driven Parking Lot Workable Recapture Financing Lending Conversions Mixed Uses Fiscal Considerations and Partnerships Design Challenges & Considerations = lesson revealed through case experience Transit Pedestrian System Needs Design Table 20.1. (Continued)

469 Chapter 21 Policy Reflections and Future Research Directions Policy Reflections The U.S. state of practice with TOD is generally a healthy one. There are many exciting examples of TOD currently on the ground and at least as many on drawing boards across the United States. Mixed-use TODs like the one in downtown Plano, Texas, and the CityCenter in Englewood, Colorado, would have been unimaginable in the 1980s when these and other suburban communities were hosting a boom in campus-style office development and automobile-oriented shopping plazas. The United States is in the midst of a sea change when it comes to linking transit and urbanism. In more and more settings once dominated by automobiles, yesterday’s design templates are being discarded in favor of TOD. Atlanta’s BellSouth TOD is the result of taking scattered automobile-oriented development and transforming it into a concentrated TOD. Attention has been given to every detail, like siting additional BellSouth employee parking around other MARTA stations to enable workers to rail commute for part of their trip. The company’s aim is for at least 30% of its workforce to arrive by transit, a huge change from the current market share of less than 5%. In the past, planners and policymakers felt little need to encourage development around transit facilities—the presence of high-capacity, high-quality transit services, they felt, would act like a magnet, attracting development by its mere presence. The failure of transit by itself to spur growth around many station areas has prompted a 180-degree turn, with more and more local and regional organizations today subscribing to the view that governments must actively pursue, if not spearhead, TODs. Rather than wait and react, today’s TOD mindset is one of getting out in front and shepherding land-use changes to achieve a desired built-form outcome. What also distinguishes contemporary TOD practice from past practice is its inclusiveness, signaled by public outreach, close citizen involvement in planning and design decisions throughout the process, and engagement through media like neighborhood charrettes and workshops. While in the past transit agencies were merely sideline participants, today they are often leaders in planning and implementing TODs around rail stops, fully aware of the potential ridership and lease-revenue payoff of these efforts. Transit agencies like BART, WMATA, and Metra received their fair share of criticism for slighting local citizens in the past, learned their lessons, and today are often leading the charge in changing the landscape around their train stations. A fair amount is also occurring on the national front. The Center for Transit Oriented Development, part of Reconnecting America, a nongovernmental organization,

recently opened. The Center proclaimed as its mission the use of transit investments to spur a new wave of development that improves housing affordability and choice, revitalizes downtowns and urban and suburban neighborhoods, and provides value capture and recapture for individuals, communities and transportation agencies.1 Rail∼volution, an increasingly popular annual conference devoted to “building livable communities with transit,” often runs conference sessions on TOD, offering a forum for transit professionals, developers, and other interested parties to “trade notes,” learn what others are doing, and build networks.2 Also different from the past is that it is not just public policies and interventions that are paving the way for TOD. Unfettered market forces are also having a profound impact. The less desirable features of sprawl—automobile dependence, congestion, excessive amounts of time behind the wheel, and a feeling of isolation from cultural offerings—are prompting more and more Americans to leave the suburban edge and head to transit-served subcity nodes and even the traditional inner city. The recent 2004 edition of Emerging Trends in Real Estate by the Urban Land Institute put it like this: “Convenience counts: walkable communities near mass-transit hubs ‘have caught on,’ and smart-growth projects—which emulate traditional town centers—enjoy increasing success.”3 Markets alone, however, cannot be relied upon to create the ideal TOD future. There always will be the need for a proactive public-sector role as long as barriers to free-market choices exist, negative externalities and mis-pricing in the urban transportation sector exist, and society’s ideals of social equity and justice are not yet fully achieved. Many of the lessons outlined in the previous chapter point to the kinds of initiatives that the public sector might take to foster TOD. Some observers call for an even bolder public-sector stance. One idea is to create a “TOD fund” to financially support TOD projects that cannot obtain conventional financing. A TOD fund administered by an intermediary could provide much-needed money for grants, loans, guarantees, and equity investments to seed TODs when conventional lenders are unwilling.4 Others have suggested extending some of the powers of redevelopment districts to TODs, such as TIF and the ability to acquire and assemble land, even if the TODs do not lie in “blighted areas.”5 Forming statewide infrastructure banks that give priority to transit projects linked to land development might help channel the dollar amounts necessary to leverage TOD on a grand scale. State and local governments are also in a position to provide regulatory relief for TOD projects by exempting those that comply with General Plans and station-area plans from environmental reviews and permitting requirements. Funding authorities should also consider extending the definition of transit capital projects to include not only a transit facility, but also its armature— the many elements that connect a station to its surroundings like bus staging areas; public squares; pathways and skywalks; lighting improvements; and important complementary facilities, like child-care centers and police substations (perhaps better marketed as “protection services”). 470

Of course, this does not guarantee that capital funds will be used for such purposes since local funding authorities and transit agencies might have little flexibility in the expenditure of capital grants. Doing whatever is necessary to get the economics of TOD “right” is also largely a public-sector responsibility. Unbundling parking from housing costs, supporting Location Efficient Mortgage concepts, and adjusting impact fee programs to acknowledge the “trip de-generating” impacts of TOD are things that are easily within the purview of public-sector influence. Financial assistance to TOD projects might also be in the form of tax credits, abatements, and fee waivers, although these can be controversial to the degree subsidies are involved. As long as TOD confers both public and private benefits, there is no replacement for public-private partnerships in advancing TOD implementation. Each party brings unique talents, insights, and resources to the table. Creating an in- house capability within transit agencies to pursue partnerships, hammering out fair and mutually rewarding risk- and revenue-sharing agreements, and building in contingencies that allow projects to change course as needed, experiences show, can produce win-win outcomes. Successful TOD partnerships win recognition in the marketplace and deserve recognition in other forums, such as national awards, “best practice” web sites, and high-profile special sessions at annual conferences like those sponsored by Rail∼volution and the Urban Land Institute. As the joint development talent pool and knowledge base expands, lessons will be learned and put to good use on new and up-and- coming projects. Disseminating and cross-pollinating knowledge offers the best hope of achieving future generations of TOD and joint development projects that are robust, smartly designed, and financially viable. Future Research Directions Considerable progress has been made in understanding TOD: what works and what does not, what preconditions are necessary to effectively leverage land development around stations, and how private developers react to different regulations and incentives. Still, knowledge gaps remain. More research is needed and perhaps will always be needed, not only to close knowledge gaps, but also to keep pace with the changing times, account for shifts in political priorities, and evaluate new programs and experiments that are introduced. Weighing what we know and do not know about TOD, the following are promising avenues for future research: • The Benefits of TOD. Our understanding of the net benefits of TOD, at least in a monetary sense or from a benefit-cost calculus, remains fairly fuzzy. Fertile grounds for new research lie in monetizing the benefits on the basis of outcomes like net reductions in VMT that can be attributed to TOD. This has been done as part of scenario forecasting (e.g., land-use scenarios forecast with TOD versus without TOD) for greater Sacramento. More telling might be an enumeration for a region like Portland, Oregon, which has a strong tradition of TOD, where relationships between transit and 471

land use are apt to be more elastic. Still, forecasts based on anticipated changes are inherently speculative. In venturing out to year 2030 and beyond, no one has a better crystal ball than anyone else. Forecasts hinge on numerous assumptions about conditions that powerfully shape travel behavior, like the future cost of gasoline and presumed technological futures, which are exogenous in nature, outside the sphere of local policy influence. Gaining insight into the impacts of TOD on regional VMT reduction on the basis of grounded realities rather than future simulations would be helpful. One way to do this would be to look at a region that has been at the forefront of TOD and for which good longitudinal data are available, such as Portland, Oregon, or Montgomery County, Maryland. An ex post evaluation could be conducted by comparing current recorded VMT levels in the region with what would have been expected had TOD projects like Orenco Station and the Pearl District not been implemented (i.e., the “actual” versus “counter- factual”). Assuming a full social cost per vehicle mile of travel (ideally partitioned by time of day) would allow the VMT-related benefits of TOD to be imputed. External social costs of automobile use in the United States have been pegged at between 18 and 37 cents per mile (in 1998 currency); thus, VMT reductions attributable to TODs could be applied to such figures to impute an economic benefit.6 Over time, research that sheds light on minimum thresholds of transit services needed to support TOD would be very useful. Ideally, research could answer such questions as whether a bus route with 15-minute frequencies on a major arterial connecting the CBD with a suburban employment center can justify a medium-scale TOD with net residential densities of 15 units per acre. To fill such knowledge gaps will require a very rich database that ties together information on transit service levels and costs, ridership elasticities, and TOD designs. While it will probably be many years before there are enough wide-ranging examples of TOD to allow such a database to be constructed, now is the time to start the process. • TOD Typologies. Another promising line of study would involve developing typologies of TODs as they unfold and take shape. For example, TODs might be classified according to size of metropolitan area, location within a region (e.g., CBD, urban, mature suburb, new suburb, and exurban), and type of transit service (e.g., heavy rail, light rail, commuter rail, and BRT). With such a typology in place, the ability to examine differences in institutional arrangements, ridership impacts, economic benefits, and approaches to community participation across the groupings would be strengthened. There have not been enough TODs on the ground for a sufficient length of time to begin to build such a typology today (i.e., most “cells of the matrix” would probably be empty). However, given the rapid growth in TOD in some parts of the country, in 10 years’ time, or there about, there will probably be enough examples in a 472

variety of settings to allow such a typology to be constructed. Developing typologies should not be confused with restricting and narrowing the definition of TOD. As of late, a number of commentators have issued calls for greater clarity and a more tightly bound definition of what constitutes a bona fide TOD (e.g., the TOD versus TAD debate). While such an undertaking might have value, it is doubtful that it could be successfully pulled off, and if it could, it is not apparent that a watertight TOD definition would matter that much. TOD clearly covers a very broad spectrum. Everything from the revamped multimodal transit center in the heart of Corpus Christi to the high-rise, mixed-use corridor along the Rosslyn-Ballston Metrorail axis has been labeled TOD. TOD, of course, is relative. In a small Midwest town, having a developer build a two- story apartment building with a few ground-floor retail shops near a major bus stop might be considered TOD, regardless of what TOD looks like elsewhere. In a large rail-served city, however, such a project might be categorized as TAD if parking codes remain unchanged, site designs place parking in the front, and few pedestrian amenities are provided. A danger of circumscribing the TOD concept is that projects that represent progressive change and a genuine departure from “business as usual” in some circumstances might not pass the “TOD acid test.” This might mean that a community pursuing what it believes to be TOD ends up not qualifying for a smart-growth grant or special bonding rates. We clearly need continuing research on TOD, especially as it increases in numbers and scope; however, research must be sensitive to the fact that land-use changes and urban- design features are relative in nature, both within and between metropolitan areas of the country. • TOD Evaluations. Evaluation also has a role in the future TOD research agenda. As innovative initiatives like LEMs, below-code parking policies, and BRT investments are introduced, there is a need to carefully evaluate impacts. Evaluation cannot be a rushed or at-the-last-minute undertaking. Rather it must be preplanned so that “before” and “after” data can be compiled, clinical- like controls can be introduced, and a wealth of indicators and metrics can be measured to draw a full assessment of impacts. Given the growing interest in TOD and smart-growth strategies in general, consideration should be given to resurrecting evaluation-based programs of the past, such as the Service and Methods Demonstration (SMD) program run by FTA’s predecessor organization, the Urban Mass Transportation Administration, in the 1970s. This program encouraged transit agencies to introduce service and pricing strategies, some far bolder than they would be expected to introduce on their own (like fare-free off-peak transit services), to “test the waters” and identify the most promising and productive policy reforms. Importantly, evaluation was a key component of the SMD program, with sufficient resources provided to allow carefully designed longitudinal studies to be conducted. The time seems ripe for an SMD-like program that 473

focuses specifically on TOD, joint development, and other multi-lateral initiatives aimed at strengthening the transit/land-use nexus. • Other Research Possibilities. A number of other research areas could yield useful policy insights in coming years. Research on consumer attitudes about living and working in TODs might be useful supplements to studies on land-market impacts. Surveys might also track changes in the attitudes of local officials and citizens to TOD over time. Economic and institutional studies might be conducted that examine the costs of TOD versus the costs of sprawl (integrating and extending findings from both this study and TCRP Report 74: Costs of Sprawl—2000). Parking remains a controversial issue in many TOD settings; thus, studies that evaluate the impacts of parking reforms (like flexible parking standards and below-norm parking codes) could also be of great value. Similarly, empirical evidence on the trip generation rates of TOD could help advance policies that promote compact, mixed-use projects near transit stops, such as sliding-scale impact fees and streamlining project reviews. Areas like Montgomery County in Maryland and Los Angeles County and Santa Clara County in California recommend the lowering of trip generation estimates of TOD; however, empirical evidence that might be drawn upon in estimating trip rates remains scant. Developers who face the prospect of paying hefty impact fees would particularly welcome numbers that reflect the ability of TODs to “de-generate” vehicular traffic. • Research Dissemination. Lastly, attention needs to be given to “getting the word out” about TOD research results. Technical reports, professional journal publications, and conference presentations are obvious channels. As important is conveying research findings over the Internet. A national TOD web site that showcases “best practices” and highlights the latest research findings would be welcomed by many professionals and practitioners. Notes 1 See http://www.reconnectingamerica.org/ html/TOD. 2 See http://www.railvolution.com/. 3 J. Miller, Emerging Trends in Real Estate 2004 (Washington, D.C.: The Urban Land Institute, October 2003). 4 D. Belzer and G. Autler, Transit Oriented Development: Moving from Rhetoric to Reality (Washington, D.C.: The Brookings Institution Center for Urban and Metropolitan Policy, 2002). 5 R. Cervero, Transit Villages in California: Progress, Prospects, and Policy Reforms, Working Paper 98-08 (Berkeley: Institute of Urban and Regional Development, University of California, 1998). 6 See J. Murphy and M. Delucchi, “A Review of the Literature on the Social Costs of Motor- Vehicle Use,” Journal of Transportation and Statistics, Vol. 1, No. 1 (1998): 15–42; J. MacKenzie, R. Dower, and D. Chen, The Going Rate: What It Really Costs to Drive (Washington, D.C.: World Resource Institute, 1992); D. Lee, Full Cost of Pricing Highways (Cambridge, Massachusetts: John A. Volpe National Transportation Systems Center, 1995); and T. Litman, Transportation Cost Analysis: Techniques, Estimates and Implications (Victoria, British Columbia: Transportation Policy Institute, 1995). 474