Flexing and Leveraging Funds for Transit

Transit-oriented development (TOD) creates spaces — neighborhoods where shops, work, schools and entertainment are within easy reach by foot or public transportation. Without these qualities, a place is not really a neighborhood, but just a location that we happen to be passing through. The articles that follow in this series will demonstrate the roles of various stakeholders, and consider how the Federal Transit Administration (FTA) can play a role in creating true neighborhoods through transit-oriented development.

FTA directly influences land use through its funding. It provides funding for major new “fixed guideway” (rail, ferry or bus) projects. As part of the review process for these projects, it requires the project sponsor to consider current and future land uses around the stations that will be served by the new project. Projects with transit-supportive land uses planned or in place may receive a higher rating for eventual Federal funding than projects that do not plan to change land-use policies. This review process directly influences transit-oriented development. As stewards of the federal purse, we have to ensure that projects we support will serve the greatest possible number of passengers. By linking the new investment to land use, we take a significant step in the right direction.

FTA funding also indirectly influences land use and transit-oriented development. The funding provided acts as a cue to local development and real estate professionals, who facilitate new development around transit service for their own reasons. For example, by the time the Westside MAX had been built in Portland, Ore. — at a cost of more than $1.2 billion — local developers had invested an additional $980 million along the new light rail. That is an indirect influence of undetermined strength, but one that cannot be ignored. Whether intended or not, the government investment in infrastructure affects land use.

In these direct and indirect ways, FTA can influence land use, but it cannot dictate it. Ultimately, land-use decisions are made at the local level. In some instances, the decision may even come down to a single landowner. While most states, cities and counties control land use through local plans and zoning codes, some states have no zoning at all. They assume that landowners know best what should be built on their land, and that government should think carefully before interfering in that decision. Thus, FTA depends upon the local planning and public outreach process to determine what actual land uses will be around a major new transit investment. The FTA can develop a process at the federal level to rate new projects based on transit-supportive land use criteria, but local communities decide whether, and how, they will change land uses to create more transit-supportive corridors or station areas.

To encourage transit-oriented land use, we invited several experts from metropolitan planning organizations (MPOs) around the country to provide their perspectives on land use and transportation planning at the state, regional and local level. Do they encourage integrated planning? Do they provide incentives or restrictions on particular land uses or infrastructure projects? Does their transportation planning benefit from current or long-range land use and infrastructure plans? What kinds of programs exist to influence land use at the state, regional, or municipal level?

Statewide Initiatives Promote TOD
Whether they involve local governments, a county, a public transit agency or a developer, partnerships create the formal and informal linkages that enable (and facilitate) TOD to occur. In the absence of such partnerships, successful TOD becomes difficult if not impossible. A key facilitator of TOD partnerships, as well as a potential funding resource for local activities, is state government. Through policy initiatives, formal programs and financing, state agencies can provide leadership, technical assistance and implementation support for TOD. Summaries of two such examples, in Pennsylvania and New Jersey, are presented here.

Developing Transit Villages in New Jersey
Promotion of TOD in New Jersey has been a concerted effort of the Department of Transportation and New Jersey Transit (NJ Transit) through the Transit Village Program (TVP) and the Transit-Friendly Planning Program, respectively. The Planning Program offers technical assistance from NJ Transit’s planning consultants to develop TOD plans, which can assist communities in qualifying for TVP designation.

The two transportation agencies lead a smart growth partnership (with nine other state agencies) known as the Transit Village Initiative. The TVP has been in effect since 1999, and 17 communities have been designated as Transit Villages. The program is intended to revitalize communities around transit facilities, and exemplifies smart growth principles by encouraging growth where infrastructure and public transit already exist. Two other primary program goals are reducing traffic congestion and improving air quality through greater use of transit.

The defined Transit Village criteria determine whether a municipality is ready for designation, including:

  • An adopted land-use strategy (through a plan or zoning ordinance) to achieve compact, transit-supportive, mixed-use development within walking distance of transit service.
  • A bicycle and pedestrian focus.
  • Communities must have vacant land and/or underutilized or deteriorated buildings within walking distance of the transit facility.
  • Projects should support local arts and culture and the historic and architectural integrity of the community.
  • Projects must have an affordable housing component.
  • Projects must be ready-to-go and be able to be completed in three years.
Community and Transit Revitalization in Pennsylvania

TRID is applicable statewide, and may be designated by a local government in any geographic area or neighborhood, including vacant, underutilized or potentially redevelopable land located around a commuter rail, light rail, busway or similar transit service stop or station. Planned new stations or stops, in conjunction with a planned transit service, are also eligible (as defined on adopted local, county, regional or public transit agency plans).

The TRID planning study provides the rationale for TRID designation, including amendment of the municipal (and county) comprehensive plan. A TRID does not become effective until completion of the planning study, the required public involvement activities and acceptance of study recommendations by the local governing body and cooperating transit agency. The scope and scale of proposed transit and community facility improvements and any support facilities are also determined in the planning study.

TRID implementation is governed by a management entity (such as an authority) established by the partnering government(s) and agencies, through a development agreement specifying the responsibilities of each participant. Participating transit agencies are authorized to acquire and improve property for defined real estate development activities, provided such land is the minimum necessary to accomplish a TRID planning study’s objectives for a designated TRID area, coordinated with the pertinent county or municipal redevelopment authority (as applicable).

Through designation of the TRID boundaries, a coterminous Value Capture Area is created that enables the local jurisdiction(s) and transit agency to share the incremental new real estate or other designated tax revenues generated by subsequent real estate investment. The participating transit agency may use such revenues to accomplish specific activities or projects described in the development agreement and the TRID plan, but only within the TRID area.

Although grant funding was not included in the Act, for Fiscal Year 2006, the General Assembly directed DCED to provide up to $500,000 from their existing planning program for TRID planning grants. Subsequently, six projects (with a maximum grant of $75,000 and a 25 percent match requirement) were approved; PennDOT funded a seventh project directly. These plans will be underway this year. However, a funding source for Fiscal Year 2007 has not yet been defined, and it is unclear whether either department will provide discretionary funding for additional planning studies at this time.

Partnering with the State
Both Pennsylvania and New Jersey are advancing statewide programs to plan and implement TOD in local communities. The respective program guidelines and planning requirements offer guidance for other states and localities interested in using the “power of partnerships” to make TOD happen.

Regional Incentives Push for TOD
In the next two decades, the San Francisco Bay Area is expected to add more than one million people and one million new jobs to the nine-county region. Where these people live and where the jobs are located are essential in determining what the region’s future will look like, including how effectively the transportation system can handle this new growth. As the Metropolitan Planning Organization for the nine county Bay Area, the Metropolitan Transportation Commission (MTC) understands that getting more people to live and work within walking distance of the region's public transit network is essential to providing cost-effective public transportation by attracting more riders.

In the recently adopted Transportation 2030 Plan, MTC is investing two-thirds of the region's transportation dollars in public transportation. The more people whom live, work and study in close proximity to public transit stations and corridors, the more the region can reap the rewards of these investments. The areas immediately surrounding major bus, train and ferry terminals are regionally significant opportunities to develop new housing, jobs, schools, retail and social services.

MTC has pursued an incentives-based approach to promote TOD since the late 1990s. The Transportation for Livable Communities (TLC) program — first developed in 1998 — has provided $87 million in funding for more than 130 community-led transportation projects that have provided better local access and pedestrian and bicycle connections to transit hubs throughout the region.

MTC's Housing Incentive Program (HIP) has provided capital grants for transportation projects to Bay Area cities and counties that build new housing adjacent to high quality transit, providing another $40 million to support more than 16,000 new bedrooms. The amount of funds granted is based on the size and density of the residential development, and the amount of affordable units. A local government can use HIP funds for transportation projects near the housing development. HIP provides one of the few positive financial incentives for local governments to build infill housing near existing transit stations.

A Broader Platform for TOD
Building on the experience with the TLC and HIP programs, MTC developed a broader platform around transportation and land use in 2005. The platform was intended to take the next step beyond the existing incentive programs and articulate a regional interest and set of actions that MTC could pursue to strengthen the transportation-land use connection.

The MTC’s Transportation/Land Use Platform, adopted February 2005, includes:

  • Prioritize transportation investments that maintain the existing core transportation network.
  • Provide funding for land-use planning efforts around existing or future transit stations and corridors.
  • Condition discretionary funds for future transit extensions on supportive land-use patterns and policies around.
  • Support transportation/land-use coordination in suburban areas beyond major transit corridors.
  • Coordinate transportation/land-use issues with regional neighbors.
  • Develop joint planning projects with partner agencies to implement this platform and the smart growth Vision.

In addition to adopting the groundbreaking TOD policy, MTC established a Station Area Planning grant program. These funds are awarded to local agencies to plan housing-supportive zoning, amenities for walking and biking, and parking policies appropriate for a transit-rich location. In the first round of grants, MTC provided $2.8 million to eight communities. In a related effort, MTC has launched a study to help local jurisdictions define how to relax zoning requirements for parking and reform parking policies to support their plans for TOD and infill development.

MTC has a number of key interests in smart growth — to insure cost-effective transit, ease the region’s housing shortage, help local jurisdictions create vibrant communities and preserve regional open space. Mounting traffic congestion, air quality problems and a continuing housing crisis all point to the need to craft a new regional approach to coordinating transportation and land-use decisions. MTC and its partners are exploring efforts at a regional scale to envision and support smart growth land-use patterns such as higher housing densities around transit stations and in downtowns, while preserving valuable open space. The MTC is working with cities and transit agencies to help define development levels in corridors that will support transit investments. At the same time, it continues with smaller scale projects through the TLC and HIP programs that encourage local communities to build more housing near transit and build vital pedestrian and bike connections. The success of these policies and programs requires continued coordination and support by the numerous and valuable partners and public that make the Bay Area one of the world’s most competitive and attractive regions.

Local Vision Supports TOD
In November 2004, voters approved a $4.7 billion bond initiative to build FasTracks, 119 miles of light and commuter rail line, and expanded bus service and Park-n-Rides throughout the Denver region.

Metro Denver has an unprecedented opportunity to capitalize on the convergence of demographic trends, changing consumer preferences, and citizen willingness to invest in the region’s future. Transit-oriented development in metro Denver is about to become reality.

With this opportunity comes great challenge. No other region in the United States is building more miles of rail service or planning and developing more TOD within such a focused period. No models can simply be applied to the 97 station areas metro Denver will have when FasTracks is completed in 2016.

The Denver Regional Council of Governments (DRCOG) is working at several levels to support successful transit-oriented development. First, DRCOG encourages collaboration. Second, DRCOG guides transportation and land-use patterns through the implementation of Metro Vision, the region’s long-range transportation and land-use plan. DRCOG also funds station area planning studies, and transit and TOD infrastructure.

As both the region’s MPO and council of governments, DRCOG’s TOD role is technical and policy-oriented.

Encourage Informed Dialogue
TOD literature is filled with case studies and research reports documenting how to develop successful TOD and achieve environmental, fiscal and social benefits. The unique nature of each jurisdiction and station area requires different, yet complementary solutions. No single model for planning and developing TOD can or should be replicated.

A common theme throughout TOD literature is the need for informed dialogue and collaboration. To build TOD successfully, experts agree it is vital to carefully craft partnerships between the many individuals, organizations and institutions interested in the outcome, including developers, lenders, transit agencies, local and regional planning organizations, and public interest groups.

DRCOG, along with the Metro Denver Economic Development Corporation, the Regional Transportation District (RTD) the Colorado District Council of the Urban Land Institute (ULI Colorado), the Transit Alliance and other partners have adopted a plan to coordinate efforts of TOD stakeholders. DRCOG serves as the vehicle for regional collaboration.

Several activities are underway, including:

  • Providing relevant and timely information via DRCOG’s Web site.
  • Working with stakeholders to develop a shared vision and collective definition of TOD success across the region and marshalling resources to achieve this success.
  • Sponsoring and hosting workshops encouraging public/public and public/private collaboration.
  • Sponsoring public education and outreach programs to involve citizens.
Metro Vision

One key element of Metro Vision is the identification of urban centers. Urban centers are strategic locations where denser development is encouraged and good highway and transit access is provided. If these “nodes” are developed with a mix of land uses, especially residential and employment, people can choose to leave their cars behind and use public transit.

Concentrating future development in these urban centers supports Metro Vision’s goal of compact development. Even though population is growing by 50 percent, urban center development will keep future land consumption below 50 percent.

Metro Vision identifies the Denver Central Business District (CBD) as the region’s most significant urban center. A healthy regional core is vital to the vision of a sustainable region. FasTracks focuses the region’s transit system on the CBD, and Denver is identifying several downtown stations as major TOD opportunities. Of particular significance is the redevelopment at Union Station. Union Station is not only a central transfer point for several transit lines, but a unique TOD location. DRCOG is participating with RTD, the Colorado Department of Transportation (CDOT) and Denver in planning and funding both the transit and development elements of Union Station.

As the region’s MPO, DRCOG prepares the Transportation Improvement Program (TIP) in cooperation with local governments, CDOT and RTD. Through the TIP, DRCOG selects projects to receive federal congestion mitigation/air quality (CMAQ) funds.

Elements of the CMAQ program adopted in the current TIP include:

  • $7.5 million annually to support FasTracks implementation, particularly on rail/bus stations in each corridor.
  • $2 million in the next two years to support local government station area planning. Thirteen projects (covering 17 stations, plus one corridor-wide effort) have been selected to date, and remaining funds will be programmed soon. Average local match for the selected projects is 45 percent.
  • $6.4 million in the next three years to build bicycle and pedestrian infrastructure improving access to existing and new stations. The average local match for these bike/pedestrian projects is 37 percent.
Further Strategies

It is an exciting time to be in the Denver metro area as the region undergoes a huge transformation. The collaboration of the region’s local government, business and environmental communities will be key to its success.

Public Transportation and Sustainable Neighborhoods
The preceding authors discussed programs that they employ to influence land uses around major public transportation infrastructure, and the policy origins of those programs. I hope that this discussion of projects and programs will help cities and towns aspire to make public transportation the mode of choice for their citizens. I also hope that the diversity and breadth of these programs will encourage you to consider how public transportation can create, or recreate, vibrant, walkable and sustainable neighborhoods for our children and ourselves.

James S. Simpson is the administrator of the Federal Transit Administration (FTA).
Richard G. Bickel, AICP is director, Division of Planning, for the Delaware Valley Regional Planning Commission (DVRPC).
Steve Heminger is executive director of the Metropolitan Transportation Commission (MTC).
Jennifer Schaufele is executive director of the Denver Regional Council of Governments (DRCOG).