T h e W e e k l y N e w s p a p e r o f t h e P u b l i c T r a n s p o r t a t i o n I n d u s t r y

Washington, D.C., Monday, August 18, 2003 Volume 61, No. 33

By Federico CuraReporter

Transit-oriented developmentand transit-adjacent develop-ment—terms referring to aform of urban planning thatconnects development withlocations near public trans-

portation properties—is growing in popularityas transit systems take an increasingly activerole in the process along with developers andlocal governments.

Over the past two years, public transitagencies have been stepping up efforts to cap-italize on underused agency properties thatcan be used for TOD in an effort to boost rid-ership, revenues, or for other benefits. In anera of tightening budgets, the agencies arelooking for greater non-farebox revenues,which may include TOD.

TOD often incorporates some sort ofmixed-use development, which may includehigh-density residential space and shops; com-mercial buildings; entertainment facilities; offices; and public open spaces. The proximityto a transit station connects the developmentto other places, and reduces the dependencyon automobiles.

Transit villages typically create pedestrian-friendly environments that appear open andwelcoming to the surrounding community:neighbors may walk to a nearby station, pickup a cup of coffee and a newspaper on the wayto work, and shop on their way home.

These developments are designed to bringpotential transit riders closer to transit facili-ties, leading to increased ridership through alocation at, or within one-quarter mile to one-half mile from, a transit stop, said G.B.Arrington, senior professional associate fortransit-oriented development with ParsonsBrinckerhoff Quade & Douglas in Portland,Ore., and chair of APTA’s Land Use and De-velopment Subcommittee.

Arrington noted that different transporta-tion consultants define TOD in slightly differ-ent ways, such as mandating that the transitstop be part of a fixed guideway system such asrail transit or busway-dependent Bus RapidTransit. He said the TOD process has broad

potential in both large and small communitiesthat are served by either bus or rail transit,adding that a successful TOD will reinforceboth the community and the transit system.

Another term, joint development, refersto TOD projects located on transit agencyproperty, sometimes replacing surface park-and-ride lots. It implies a partnership betweena transit agency and a private-sector entitysuch as a developer.

Increased Ridership and Other BenefitsU.S. Rep. Earl Blumenauer (D-Ore.), a long-time supporter of “smart growth” planning,pointed to the numerous U.S. transit agenciestaking a more active role in supporting TOD.“The resulting increased ridership and rev-enue has benefited these transit agencies, engaged developers and others in the privatesector, and—perhaps most importantly—sig-nificantly improved the quality of life of thesurrounding communities,” noted Blume-nauer, who also is the founder and board pres-ident of the annual Rail~Volution conferencethat promotes building livable communitiesnear transit.

While some transit agencies have turnedjoint development into a significant source ofnon-farebox revenue, others have found ithelps them gain riders, as well as other benefitssuch as the possibility to expand their systemsand reach more potential riders or markets.

Arrington cited a 2002 Parsons Brincker-hoff report for the state of California showingthat TOD can yield 20 to 40 percent higherridership at an individual transit stationthrough both commuter and non-work trips,not to mention increasing overall regional rid-ership by up to 5 percent.

Some local governments have seen theeconomic development triggered by TOD,and also want to attract these typically urban-styled, high-density, mixed-use developments.Over the past two decades, according to Ar-rington, a growing number of communitieshave married light rail with TOD as part of anintegrated strategy to revitalize urban areas.

For example, a University of North Texasstudy released in January shows a direct link

Transit Agencies Seeing Increased Interest in Transit-Oriented and Joint Development

The Promenade at Rio Vista development in San Diego is a mixed-use project at San Diego Trolley’s

Rio Vista Station.

between enhanced property values and loca-tion near Dallas Area Rapid Transit light railstations. The study calculated that officeproperties located near suburban DART railstations increased in value 53 percent abovecomparable properties not served by light rail,and values of residential properties near thestations rose 39 percent compared with agroup of control properties not served by rail.

In a study of Santa Clara County propertyvalues in 1998 and 1999, a University of Cal-ifornia at Berkeley researcher found rents forcommercial properties within walking dis-tance of Santa Clara Valley TransportationAuthority light rail stations were 23 percenthigher than at non-transit-oriented commer-cial buildings.

Arrington quoted the Urban Land Insti-tute/PricewaterhouseCoopers publicationEmerging Trends in Real Estate, which empha-sized TOD market fundamentals in its 2002market review, in his recent paper titled LightRail and the American City: The State-of-the-Practice for TOD: “Markets served with mass-transportation alternatives and attractiveclose-in neighborhoods should be positionedto sustain better long-term prospects as peo-ple strive to make their lives more conve-nient.” In a telephone interview, Arrington

outlined several market conditions intensify-ing over the past few years—such as demo-graphics—that he sees as making TOD, tran-s i t , and urban lifestyles more attractive to homerenters, home buyers, and developers.

Removing the Obstacles However, smart growth advocates and transitofficials maintain that TOD faces a numberof obstacles and developer disincentives inaddition to occasional community opposi-tion. While demographers estimate that asmuch as 30 percent of the demand for hous-ing is for denser, walkable, mixed-use com-munities, less than 2 percent of new housingstarts are in this category, said Hank Dittmar,president of a livable communities advocacyorganization called Reconnecting America.

Reconnecting America recently createdthe Center for Transit Oriented Develop-ment to tackle the many policy, zoning, andplanning obstacles facing developers andtransit agencies who want to create a TOD orjoint development project. Moreover,Dittmar noted, building high-density devel-opment requires a developer with unique ex-pertise, which tends to be rare.

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lenge of meeting demand for more com-p a c t a n d c o n v e n i e n t h o u s i n g a n dlifestyle, according to Dittmar. “Virtuallyevery major metropolitan area is plan-ning, designing, or constructing a newtransit project at this time,” he said,adding that new transit stations offer the“opportunity to create new anchors forgrowth and development that is orientedto transit service.”

Other benefits of TOD listed by tran-sit officials include enhanced livabilityof surrounding communities; improvedair quality that contributes to residents’health and overall quality of life; and away to begin curbing suburban sprawland vehicle miles traveled, and ulti-mately meeting stricter ozone standards.

Federal policies also are contributingto TOD’s popularity, according to Ar-rington and other transit experts. TheFederal Transit Administration increas-ingly encourages New Starts project ap-plicants to pursue joint developmentand TOD projects; with the competitionfor federal funding for high-capacitytransit projects, particularly for lightrail, at an all-time high, Arrington said,“land use can make a difference in whichprojects are recommended for federalfunding.”

Changing the RulesTina Votaw, vice president of economicdevelopment at Metro in St. Louis, saidthe real estate-financing system was tai-lored toward the construction of tradi-tional housing in low-density or isolatedcommunities that tend to be discon-nected f rom publ ic t ransportat ion.Moreover, she said, local zoning codesrequire a developer pursuing a TOD toprovide as many parking spaces as a de-veloper pursuing a greenfield-type devel-opment: “It makes it exceedingly diffi-cu l t for a TOD project to competeagainst projects in other areas whereland values are lower.”

Votaw and other transit professionalsalso pointed to a 1997 change in FTApolicy that allows the use of federally as-

sisted assets for joint development if cer-tain conditions are met as advantageousfor TOD. The St. Louis transit systemwants to take advantage of this favorablefederal policy change, she said, and willprobably discuss the possibility of allow-ing Metro to purchase land around sta-tions to generate either an eventual one-time financial benefits or a constantrevenue s t r eam to supp lement theagency’s budget. She explained thatMetro was limited in its joint develop-ment opportunities because the systempurchased only enough land to build thelight rail stations themselves.

Even with these limitations, the St.Louis region has seen substantial TOD,redevelopment, and real estate invest-ments near its MetroLink light rail sta-tions since the system opened in 1993,generating approximately $1 billionwithin Metro’s service area.

Portland’s Tri-County MetropolitanTransportation District of Oregon re-ported more than $3 billion in real es-tate and overall economic developmenttaking place within walking distance ofits MAX light rail stations since theagency began planning its 38-mile sys-t e m i n l a t e 1 9 7 0 s , a c c o r d i n g t ospokesperson Mary Fetsch.

Help from Local GovernmentThe Charlotte Area Transit System inCharlotte, N.C., will be able to foster in-creased TOD near its future light rail andcommuter rail stations and other facilitiesthanks to a a crucial local governmentendorsement.

In May, the Charlotte City Council,Mecklenburg Board of County Commis-sioners, and the Metropolitan TransitCommission adopted the CATS TransitStation Area Joint Development PolicyGuidelines. These guidelines and a set ofsimilarly named CATS principles providea framework for local governments to en-courage TOD at transit stations, and willensure consistency with the region’s long-term urban and transportation plans.

The primary goal of Charlotte’s land

2 PASSENGER TRANSPORT

A major joint development project is taking shape in Washington’s Chinatown area at WMATA’s

Gallery Place/Chinatown Metrorail Station. The Metrorail pylon indicating the entrance to the

subway station is located to the right of the Chinatown Arch. The joint development project is also

adjacent to the MCI Center sports/entertainment arena, shown in background at right.

The Urban Land Inst i tute recently published a booklet titled Ten Principles for Successful

Development Around Transit, using re-search done in cooperation with mem-bers of APTA’s Land Use and Develop-ment Subcommittee.

The report by Robert Dunphy, Debo-rah Myerson, and Michael Pawlukiewiczcompares the pairing of housing and re-tail with stations for light rail, other formsof rail transit, and Bus Rapid Transit thathas been seen since the late 1990s withthe streetcar-stop communities that weretypical of urban areas in the 1920s. “Bythe close of the twentieth century, how-ever, the automobile had become thedominant means of travel in urban cen-ters, cities with extensive transit net-works were in decline, and proximity to

transit was most often an afterthought indevelopment,” the report states.

The report lists the 10 principles asfollows:

• Make It Better with a Vision;• Apply the Power of Partnerships; • Think Development When Think-

ing About Transit; • Get the Parking Right;• Build a Place, Not a Project;• Make Retail Development Market

Driven, Not Transit Driven;• Mix Uses, But Not Necessarily in

the Same Place;• Make Buses a Great Idea;• Encourage Every Price Point to

Live Around Transit; and• Engage Corporate Attention.Copies of the report are available at

the ULI web site, <www.uli.org>.

ULI Releases ‘Ten Principles’ for Transit-Oriented Development

use plan is to transform unfocused devel-opment patterns in corridors and wedgesinto compact, mixed-use, pedestrian-friendly development along corridorsand in station areas.

CATS Chief Executive Officer RonTober noted that developers and busi-nesses along the South Corridor LightRail line already have invested nearly$400 million in anticipation of the line’sopening in 2006.

The long-term success of public tran-sit in the Charlotte region is closelylinked to creating dynamic, mixed-usedevelopment at stations, Tober said,adding. “This will require a new level ofcooperation and coordination in bothgovernment and private sectors.” Incen-t ives , partnerships , and promotingdemonstration projects are just some ofthe ideas CATS is proposing to makethis happen.

Building Local EffortsIn Houston, the Metropolitan TransitAuthority of Harris County hopes togenerate up to $1 billion in economicdeve lopment a long the path o f i t sMETRORail light rail system, which en-ters service Jan. 1, 2004.

Using DART’s light rail system as amodel, Houston Metro began seekingTOD opportunities and hired SteveBonczek as a joint development special-ist. In a city where strip centers, big-boxstores, and vast parking lots still pre-dominate, Bonczek said he has noticedincreasing interest in TOD and joint de-

velopment from Houston’s developers,banks, retailers, and others. He said healso is looking to attach development tobus facilities such as major stops andpark-and-ride lots.

In Denver, the Regional Transporta-tion District is approaching developers,local governments, and owners of landnear the future sites of 13 stations of alight rail line currently under construc-tion, said TOD Specialist Chris Coble.RTD representatives already have re-ceived TOD proposals for five of the sta-tions, and are working with developersto better accommodate the projects byadapting the line’s alignment, and sta-tion and parking design and location,among other things.

The new 19-mile RTD light rail lineand an associated highway expansionproject are part of the TransportationExpansion Project, also known as T-REX.

The city of Greenwood Village, siteof a station on the T-REX line, has ex-pressed an interest in high-density de-velopment around the station, Coblesaid. The city—located in an area southof Denver characterized by shoppingplazas, industrial uses, and highways—paid $7 million to the T-REX construc-tion authority, jointly run by futureowners RTD and Colorado DOT, to lo-cate a planned park-and-ride lot abovean adjacent highway maintenance facil-ity to preserve more land so the city cancreate a village center around the sta-tion that will include cultural and retail

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August 18, 2003 3

attractions.I n k e e p i n g w i t h a

growth plan or “vision” re-l e a s e d b y t h e c i t y o fToronto last year, develop-e r s w o r k e d w i t h t h eToronto Transit Commis-sion to build a large condo-minium complex near thesite of a future TTC station,a c c o r d i n g t o T T Cs p o k e s p e r s o n M a r i l y nBolton. Construction ofboth the station and thecondos was completed atthe same time.

In Boston, the Massa-chusetts Bay Transporta-tion Authority recentlyagreed to a land exchange,part of the largest TODproject on MBTA propertyin its history. The projectknown as the North Pointwill help the agency relo-cate its Green Line, locate anew intermodal station alongthe new alignment, and eventually seek a vi-able extension of the line, said MBTA Gen-eral Manager Michael H. Mulhern.

The relocation of the line, Mulhern ex-plained, not only will include a new stationserving Cambridge and new tracks, but also isexpected to increase the line’s ridership by at-tracting residents to live, shop, and work in a

high-density, mixed-use project that the de-veloper plans to build and fully integrate withthe new station. Moreover, MBTA has sev-eral projects underway to sell “air rights” overMBTA right-of-way for rail and BRT, whichalso will help the agency increase its non-fare-box revenues.

Joint development and TOD projects

account for 10 percent of current subwayridership in the nation’s capital, said Denton Kent, director of the Office ofProperty Development and Managementat the Washington Metropolitan AreaTransit Authority. WMATA expects toearn $12 million from joint developmentprojects in Fiscal Year 2004, an amount

estimated to grow to $15 million by FY2006. Because of projections for majorpopulation growth projections in the re-gion, WMATA decided some years agoto make TOD one of its top four policypriorities for capital projects.

Kent noted a connection between thetype of living provided through manyTOD projects and the recent introduc-tion of Fannie Mae’s Smart CommuteProgram in Washington, which allows amortgage applicant to qualify for a largermortgage amount to purchase a propertynear a transit station or major stop.WMATA has pledged to give free transitpasses for those acquiring these mort-gages.

Alberto Parjus, chief of management ser-vices for the Dade County Office of PublicTransportat ion Management in Miami-Dade County, said he expects the in-troduction of the Smart Commute program inSeptember may trigger more interest in TODfrom developers.

Parjus also oversees the county’s Joint De-velopment Program, which he said has a longhistory of success in fostering TOD aroundMiami-Dade Transit’s rail stations, and is cur-rently gathering public input to have TOD di-rected around BRT stations in its South DadeBusway’s extension to Florida City. The city ofHomestead, Fla., also is planning its own ur-ban transit village around a future buswaystation serving its community.

Orenco Station, along TriMet’s Westside MAX Blue Line, is a 200-acre transit-oriented development featuring retail,

commercial, and housing. The buildings shown here in Hillsboro feature mixed-use retail and housing. The Orenco Sta-

tion Community was voted the Best Planned Community by the National Association of Home Builders in 1999.

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