Origen: From BIDs to Bikes: 4 Takeaways from the TOD and Urban Real Estate Conference | TheCityFix October 28, 2015
City design is at the root of many of our global problems. With traffic crashes the leading cause of death among young people and congestion burdening the economies of countless cities worldwide, it’s imperative that we develop our streets, neighborhoods, and cities around people, rather than the car. However, by linking mobility with compact development, transit-oriented development (TOD) can be part of a broader solution.
From October 20 – 22, 2015 urban planners, real estate experts, and local leaders gathered in Washington, DC for the first national Transit Oriented Development and Urban Real Estate Conference, organized by the TOD Institute. The conversation ranged from regional examples of successful TOD to marketing “the TOD lifestyle” to federal transport policy—with four major messages echoing throughout the conference:
Put “the T” in TOD
Without high-quality transport, the entire concept of TOD falls apart. As Metropolitan Land Use Expert Chris Leinberger said, “the transportation we build dictates the form of the built environment.” For example, in the U.S., decades of highway-oriented development have left communities sprawled and scattered. Bringing people into compact, sustainable communities requires a commitment to transit on the part of local and national leaders. This first step is indispensable.
However, TOD isn’t just about rail-oriented development, as metro systems can’t extend endlessly for both financial and practical reasons. Rather, TOD is also about developing around a variety of transit modes—including bikes. Bike share is made for short trips last-mile connectivity, and as Paul De Maio of MetroBike noted, bike share complements other modes, like rail. “Bike-oriented development” is simply a variation of TOD, and it’s important to remember that access to mobility is what matters—whatever forms it takes.
Walkability Makes All the Difference
Walkability is essential to both the success of the transit system and the surrounding development. As Shyam Kannan of the Washington Metropolitan Transit Authority explained, there is a direct relationship between land use and transit ridership. If people can walk from their homes to transit stations, more people will take transit. Ensuring that areas surrounding stations are mixed-use, dense, and safe is key to robust ridership—and revenue from user fares. It’s therefore in the interest of transit agencies to have walkable, dense development oriented around metro lines.
Walkability is also critical to the economic performance of TOD, as walkability has been shown to correlate with property values. In Washington, DC, for every 6 point increase in a street’s walk score, annual office rents increased by $7.28/sq. ft., retail rent by $6.71, and for-sale housing prices by $113. Furthermore, since 2009, 49 percent of real estate investment has gone to walkable developments in Washington, DC. In sum, investing in walkability is investing in the local economy.
Work with What You Have
Many of the disruptive changes that have emerged from the sharing economy—think of Uber and AirBnb—center on the idea of working with what you have. Indeed, making use of unused, excess capacity can help boost the local economy and spur innovation. This happens best, asserted Harriet Tregoning of the U.S. Department of Housing and Urban Development, in areas with strong TOD, as urban density is a primary driver of innovation.
But tapping into these assets requires leadership from cities and local actors. Cities can encourage TOD through infill development, which densifies areas around transit that were previously underutilized. On the flip side, some business improvement districts (BIDs)—which are voluntary associations made up of local businesses that provide services—in the U.S. have been highly successful in working with local communities to make use of untapped assets to boost the local economy and create a unique sense of identity. For example, Angela Fox of the Crystal City BID talked about her experience working with building owners to use vacant spaces for community events. By encouraging a culture of sharing within the transit-oriented community, the Crystal City BID has helped create a thriving local economy.
Get Creative with Financing
It’s not news that mass transit projects can be extremely expensive—but this doesn’t mean that the short-term costs will exceed the long-term benefits. In light of this, we need to become more creative with financing. In the U.S., 20 percent of funding for major metropolitan transit projects comes from the federal government, 20 percent from the state, 30 percent from local government, and 30 percent from fares and other sources. As federal transportation budgets continue to struggle in many countries, funding will need to come from a variety of sources. In Sao Paulo, for example, private investment from seven different financial institutions has helped the city’s Linha 4 mitigate risk and remain financially sustainable.
Similarly, there are numerous challenges to financing development around transit. With the return on investment for drivable, suburban development peaking around three to seven years, it’s no surprise that investors are often wary of TOD projects, which typically return the most value between five and 20 years. We need to innovate new ways of financing these projects so that patient investors who think long term will be rewarded, attracting more to do the same.
To learn more the TOD Institute, visit their website here.