10 Questions to Ask About Planning, Financing and Implementing Transit Oriented Development Strategies

Abstract

Transit-Oriented Development (TOD) strategies can improve connectivity between housing and employment centers, green spaces, and community facilities by supporting both local environmental sustainability objectives, through more efficient use of land, and “complete” streets, by creating safer infrastructure for pedestrians and bicyclists, leading to potential modal shifts. Enabling conditions for TOD may include changes in land-use regulation and other statutory provisions to create an integrated regulatory framework. TOD requires robust stakeholder engagement and institutional coordination during planning and implementation. Financing mechanisms cities have used to fund TOD include Land Value Capture, a strategy based on expected increases in land values due to infrastructure investments. These mechanisms have been used to generate revenues such as Tax Increment Financing (TIF) and a wide range of taxes and fees. Cities should be aware of the potential negative impacts of TOD, such as displacement and gentrification. Effective and inclusive TOD strategies should be accompanied by land management strategies that mitigate these impacts, including having policies in place to ensure the preservation and expansion of affordable housing. There is typically a lag of at least 5 to 10 years before the economic and financial impacts of TOD investments are fully realized, thus requiring the need for patient capital, well-structured deals and financial instruments, and proper governance.