Mass Transit Speeds Delivery of TODs

By Allan Zreet

Zreet writes that transit-oriented developments, or TODs, are bringing transportation closer to consumers, while drawing a new generation of riders to mass transit.

Allan Zreet, AIA, is vice president of Building Programs with the Dallas office of Carter & Burgess.

The Golden Age of transit may have arrived. Driven by the skyrocketing price of gasoline, choked freeways and the desire for simpler, less harried lifestyles, consumers nationwide are taking a fresh and more positive look at public mass transit, and equally important, living, working and shopping at transit-oriented developments or mixed-use developments at transit stations.

Ridership is up on transit systems nationwide, and every uptick in gas prices seems to convert a few more frustrated motorists into satisfied transit passengers. Local, state and federal governments, in close partnership with the private sector, are investing billions of dollars in new and expanded public transportation infrastructure.

At the same time, a new generation of innovative development is blossoming at and around public transit stations. A Transit Oriented Development, or TOD, serves the dual purpose of bringing transit closer to consumers and, at the same time, creating compact communities.

TOD projects typically include retail, commercial and other activities that serve residents and attract other consumers to the development. It's a solution that works for communities, developers and citizens.

All Aboard Demographics and lifestyle preferences are bringing many riders through the transit turnstiles. A study by Fannie Mae and the Brookings Institution highlights a resurgence in many U.S. cities, with 75 percent of downtown districts gaining population and attracting new investment in housing and retail. Research shows that empty nesters, the creative class and other demographic groups are moving to city centers, drawn by urban amenities, proximity to work and the availability of efficient and convenient transit systems.

Congestion is another factor. According to the advocacy group, Reconnecting America, ridership on public transit systems throughout the United States has grown 21 percent since 1995. More recent surveys by the American Public Transit Association, including a 2006 sampling of public transit agencies in major U.S. cities, show that higher gasoline prices have indeed spurred transit ridership in recent months.

Governments and private investors are responding to the growing demand for public transportation. Some 25 projects, representing a $16 billion investment, are in the transit new-starts pipeline nationwide, with successful systems being expanded and new systems planned or being built in a number of metropolitan regions.

Live, Work, Play A new kind of planned development is sprouting near many of the country's mass transit stations, bus rapid transit stations and park-and-ride facilities.

A TOD is based on a collaborative community planning approach in which transit systems are closely integrated with other land-use decisions.

Many of those projects embrace a more holistic live-work-play philosophy that incorporates transit, moderate- to high-density housing, retail and entertainment, commercial and office space and even health-care facilities into a community-based, pedestrian-oriented design.

DART Hits the Mark The Dallas Area Rapid Transit station in Carrollton is an example of how a TOD can both spur ridership and foster urban and suburban renewal.

At the hub of three intersecting rail lines, the four-platform downtown Carrollton light rail station will be one of the largest suburban TODs in the nation. When finished, the station will serve a number of Dallas-Fort Worth area communities and airports, and will incorporate high-density housing, retail, office and transportation facilities.

Due to the uniqueness and complexity of such TOD projects, cities and developers increasingly seek out specialists who can spot and minimize potential problems while maximizing the opportunities of each property.

Profitable Partnerships In previous years, when two major highways intersected, commercial development would inevitably spring up around the crossroads. Much the same is happening with TODs as cities, landowners, developers and consumers recognize the value of being near a transit hub.

Developers can often command a 20 percent to 30 percent premium on residential and retail properties near TODs because transit-focused developments are increasingly seen as the urban centers of the future.

Successful TODs typically require close collaboration between the public and private sectors: Builders and developers need the funding available only from public agencies. At the same time, government agencies increasingly recognize that they need expertise found only in the private sector for things such as design, development and traditional construction loans to make transit and related developments work.

Federal funding is available to finance many aspects of a TOD, from housing and garages to landscaping, lighting and open spaces. Thanks to a growing recognition of the value of transit-oriented developments, a capital market focusing specifically on investments in developments at and adjacent to metropolitan transit hubs is emerging. TODs are a magnet for consumers and savvy investors.

It takes about $10 million to build a transit station these days, and when a public agency makes that kind of investment, developers and owners of adjacent land naturally want to get the highest and best use for that property. Hence, the emergence of high-density, mixed-use transit-oriented developments around these stations is almost immediate.

In recent years, TODs have shifted from a largely theoretical planning stage, to a growing, nationally recognized real estate market segment. When TOD projects are well conceived and championed, more experienced and capable developers will respond. Municipalities now perceive the value of transit-based projects, and are increasingly willing to support the mixed-use developments that make TODs feasible.