Benefits of Transit Oriented Development

If done correctly and done well, TOD can have many benefits for the community. On the surface there are many benefits that are immediately visible once the development is successful. Mixed-use structures encourage people to shop near where they live, and by utilizing the transit system and relying on pedestrian or bicycle traffic for other commuting needs, the people get the added health benefits of the inherent walkability.

The idea for businesses is that when you compete standalone for only vehicle traffic, you need to have a strong enough reputation to convince people to get in their cars and drive to your specific location or be located near an anchor which will provide enough spillover customer activity in order to stay in business. However with TOD, the customers are brought right to you. It is much more of a hassle for a transit rider to hop back on the train or bus and head to another destination than it is with vehicle traffic. In turn, this encourages people to do more of their commuting needs in as few transit stops as possible. By consolidating needed resources and leisure items by putting them in TODs, you can create places where people will not only need to visit out of obligation, but also as a place to spend their leisure. Jane Jacobs said “Districts have to help bring the resources of a city down to where they are needed by street neighborhoods…not only for its own residents but for other users, workers, customers visitors – from the city as a whole” (1961). By striving to make this the goal of TODs, residents of American industrial cities will see immediate benefits.

A big issue with American highways is that they often lower the value of adjacent property. People have voted with their mortgages and said that they want to be close to a freeway, just not directly next to it. Transit systems, however, have been seen to consistently (although not always) raise the property values of adjacent properties (Cervero & Landis, 1993). There is no universally agreed on formula to determine how much property values can expect to rise, those will have to be determined locally in the projections made by the municipality or transit authority. We do, however, have some examples to consider. The city of Charlotte, North Carolina tracked the sale price per foot for single-family housing, condominiums, and commercial. When compared to control and other neighborhoods, the properties in approximation to the new south line had all outpaced the other neighborhoods in terms of increase of value. The prices per square foot were recorded before the line was announced, and after the line was announced. The results were simply astounding: single-family housing increased by 60.2%, condominiums by 152.8%, and commercial properties increased by 365.4% (Billings, 2011). It is worth noting that the data does not go past 2008, so the collapse of the real estate market is not represented in these figures and they may across the board be artificially inflated; we may not expect to see increases that high in the future. However, the amount that the property value has increased is not nearly as important as the percentage in which it has outpaced the other properties that are not located near a transit line, assuming that the property value increase is enough to justify the TOD in the first place.

After the real estate market took a turn for the worse, many municipalities witnessed their local property tax bases decrease substantially. While markets all over the country took a hit, Rust Belt areas were particularly hard hit. Cities with a perceived higher intrinsic value were in a great position to weather the storm; however places that seemed like the cities of yesterday and not tomorrow were the first to feel the effects, and will be the last as the rest of the country rebounds and they slowly pull themselves up from their bootstraps.

Cities are looking to think outside of the box in order to increase property values. This is essential, as falling values and more vacant housing means simply that there isn’t enough money coming into the municipality to keep the government services working without drastic cutbacks like Milwaukee had to do to their bus service in 2011 (Alden, 2011). Economic downturn in the Rust Belt has been more severe than the rest of the nation, so the cost of providing services has increased while the amount of revenue coming in has decreased. The question is simple: how do you raise the taxable value of property in the city without simply raising millage rates?

Part of the answer can be in TOD, with an area that is designed properly as a magnet to attract people. Any increase in property values will be noticed, and having a handful of well designed TOD notes on a transit system can serve as centers of commerce, trade, street life, and others. Property values are in many ways a representation of how we mobilize ourselves as society: the more people want to be someplace, the more that place is worth. Of course this is not a complete picture of how property is assessed and taxed, but in a simple form we can easily make the correlation. Data shows us that the property value increase can be up to 30% for those which are very close to TODs, with the number tapering off the farther you get away from the TOD until you can no longer consider the TOD a factor in property values (Renne, Curtis, & Bertolini, 2009).

Another benefit of giving people multiple options for commerce and leisure is that the TOD will not only support the neighborhood in which it is located, but potentially all the transit riders who use that line or bus route. It gives people a reason to want to get on the train and go find somewhere they want or need to go. In a report done in 2004 indicates that in California, we saw an increase in people who took transit to work if they lived near a TOD, in fact 25% of those living near the TOD were taking transit for their daily commute (Lund, Cervero, & Willson, 2004). Rust Belt transit systems will not expect a number nearly that high, at least not right away and should not expect such promising statistics.

Data shows that older and redeveloping regions such as the Rust Belt do not see the transit ridership increase for jobs in data collected from 1970 – 2000. In fact when compared to maturing heavy rail areas such as Washington DC or “new start” light rail areas such as Salt Lake City, the redeveloping regions did downright poorly. There are many reasons for this, including the amount of attention given or not given to the TODs and the overall transit system in general, but the facts remain: ridership across developing regions has decreased for work trips (Renne, 2005). The silver lining here is that the areas with a TOD didn’t suffer the amount of ridership decline that the areas without the TOD suffered, and the study did not take into account the amount of people who are using the transit system for rides other than their work commute. The decline in the older and redeveloping regions was -17% for TOD areas, and -37% for the rest of the MSA. Redeveloping regions were the only ones who saw a decline in both areas, while the rest of the country saw a decline only in areas without a TOD. This is a harsh reminder for all areas, especially those in automobile dominated cultures or those who are slow to grow economically, that TOD and transit in general is far from a magical solution to mobility, and if you simply build it they will not come.

The other numbers in the report however, are positive. On one hand, we can say that transit ridership is down and will continue to do so. There is a better approach, and that approach comes from recognizing the strengths of your community and building complimentary TODs and transit systems that will truly meet the needs of the community. Regardless of the ridership, TODs still prove a stronger point than the rest of the transit system. Very encouraging are the numbers from the newer light rail regions, which may be a viable option for Rust Belt areas moving forward. It is also worth noting that there are numerous studies which suggest TODs do increase ridership numbers over time, with some suggesting that they can increase anywhere between 20% and 40% (Cura, 2003).

Decreasing the amount of traffic congestion is also a big draw for people who want not just transit, but TOD to encourage people to ride the transit. In many cases, transit systems are offered along with increasing freeway size in order to address the single issue of traffic congestion. As previously mentioned, Pittsburgh has a large issue with their unstable highways and a transit system to compliment it. The same study also shows Chicago having some of the most congested traffic corridors in the country (Texas Transportation Institute, 2011). The two big factors that help to increase transit ridership are the traffic being in such bad shape, and the cost of parking being at a market rate which is high enough for the parking entrepreneurs to make money, but not low enough for most people to want to afford it. While there is no formula that can be applied universally saying that a certain amount of traffic congestion will lead to an increase in TOD ridership, there are three things we can point to as being strong draws for TOD corridors in relation to traffic congestion.

People will make the direct comparison between the travel times on the transit system against the travel time along the same route via an automobile. Even with a 10- minute walk each way to the station, the transit commute may be a great savings in time over sitting in stop-and-go-traffic. This means that even a newer transit system that is not rapid transit may see an initial uptick in ridership if the roads are still by comparison a less pleasurable commute. There is a general consensus that 10-minute service headways are what is needed to support a full transit lifestyle (Arrington & Cevero, 2008), a goal which is partially achieved through mixed use development allowing people to live close to the TOD.