Transportation and land use planning, as a field, is shifting away from segregated uses connected by highways and streets to more compact, mixed-use developments connected by high-quality transit. This new paradigm has brought special attention to transit-oriented developments (TOD), which are sometimes touted as being among the most affordable, efficient places to live. But how affordable are they, and who has the power to effect change?
Is Transit-Oriented Development Affordable for Low and Moderate Income Households? , a study funded by the National Institute of Transportation and Communities (NITC), examines housing costs for households living in TODs. Led by Reid Ewing of the University of Utah, the team examined the housing affordability of TODs in U.S. cities across 23 regions. Register for a February 15 webinar to learn more about the project.
The analysis of housing costs revealed a lot of variability across different regions. Of all the examined housing developments, only 16 projects/developments out of 117 across 85 TOD sites were deemed 100% "affordable" – meaning that all the units in those 16 developments were affordable to households earning up to 80% of the average median income for that county.
For the purposes of this study, researchers defined eligible TODs as:
Researchers used the National TOD Database and contacted metropolitan planning organizations, transit operators, and major cities to get a list of potential TODs. Conversations with these agencies led to an inventory of 183 TODs within 26 rail-served regions, and among them only 85 of those sites across 23 regions met all of the researchers' criteria. This analysis of housing affordability is based on that select group (see a complete list on page 23 of the final report ).
The team compared the 85 TOD study sites in terms of numbers and shares of designated and naturally occurring affordable units. Naturally occurring affordable housing refers to residential rental properties that maintain low rents without federal subsidy, and have not been built in response to city/county/state regulations or policies or as a result of some development agreement that included such a requirement.
Many of these TODs consist of only one apartment building (such as the Riverfront, at Cranford Station in New Jersey), while others have several, often developed and managed by the same entity (as is the case at Orenco Station in Hillsboro, Oregon). The researchers identified all apartment projects by name, checked their websites for rent prices, interviewed property managers, and established rent levels for market-rate and below-market-rate affordable housing (if there was any available) for all apartments within these TODs. In Appendix C, the authors provide a complete list of rent levels per development as of July 2021 – a significant inventory of data.
According to the U.S. Department of Housing and Urban Development (HUD), housing that costs no more than 30% of a household’s income is considered to be “affordable” for that household. One limitation of this study was its inability to account for the cost of utilities. Since it was not possible for the research team to acquire such data, the analysis of housing costs relies solely on rent levels.
Some of the findings that stood out from this research were:
Generally, transit operators can play a huge role in enforcing the production of affordable housing because, in many cases, they own the land. So it makes sense for all the lands owned by transit operators to be developed as joint projects between commercial or nonprofit developers and local government agencies. It would also help make TODs more affordable if more transit operators adopted policies to regulate the creation of affordable housing by such joint projects. Researchers note that there are only a few measures in a few regions specifically designed to promote, incentivize or regulate the production of affordable housing in TODs. The two most clear-cut are:
In addition, decision-makers could take steps to ensure that all developments and projects located on public property, or using public funding, are required to provide a certain share of affordable housing – like the Low-Income Housing Tax Credit (LIHTC) program, which the authors say may be "the single most important measure for the creation of affordable housing in the United States." In this study, LIHTC was the single most-used mechanism to provide affordable units by all the TODs and projects examined.
More than half of the TODs in these 23 regions provide at least a small portion of affordable housing units. This is a very promising finding. The growing wealth gap in the U.S. makes it essential that decision-makers focus on policies that will limit the effects of cost-of-living increases on the already constrained budgets of lower-income households.
Is Transit-Oriented Development Affordable for Low and Moderate Income Households?
Reid Ewing , University of Utah; Nicole Iroz-Elardo and Arlie Adkins , University of Arizona
This research was funded by the National Institute for Transportation and Communities, with additional support from the City of Orem, Utah; ECONorthwest; and the University of Utah.
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The National Institute for Transportation and Communities (NITC) is one of seven U.S. Department of Transportation national university transportation centers. NITC is a program of the Transportation Research and Education Center (TREC) at Portland State University. This PSU-led research partnership also includes the Oregon Institute of Technology, University of Arizona, University of Oregon, University of Texas at Arlington and University of Utah. We pursue our theme — improving mobility of people and goods to build strong communities — through research, education and technology transfer.