What's
TOD Got To Do With It?
From a transportation perspective, "transit
oriented development" (TOD) is the land use and economic
development version of transportation demand management
(TDM). The purposes of TOD and TDM are similar, to
reduce the use of single occupant vehicles (SOV) by increasing
the number of trips by walking, bicycle, car/van pool, bus,
street car, ferry or rail. To minimize external trips, TOD
projects should be located in higher density, mixed use,
urban pedestrian districts with high quality transit service.
External SOV trips can be reduced as much or more by people
walking within a mixed use urban district as they can by
using transit within and between urban centers.
To be most effective, TOD should be "urban"
even in a suburban setting. Pedestrian scale design
draws people to return again and again. Urban development
supports transit; suburban development does not. This
is a powerful idea once established. The concept includes
mixed use, higher density, buildings at the sidewalk, less
private and more public open space, smaller blocks, narrow
streets with wider sidewalks, street trees and lights, lower
parking ratios, shared parking, parking behind buildings,
and on-street parallel parking.
What happened
in Portland, Oregon?
The 1992-1998 intergovernmental Westside
MAX light rail station area design, planning and development
program focused on removing public and private obstacles
to and providing support for transit-oriented development
(TOD) prior to opening the new light rail line between Portland
and Hillsboro in 1998. The effort was successful both
in producing new development and in altering the land use
regulatory structure in the western portion of the metropolitan
area. About 7,000 dwellings have been built and more
than $505 million has been invested in projects within walking
distance of the new light rail stations. For more information,
please see:
The author of this paper, Henry S. Markus,
AICP, led several dozen light rail station area planning
and development tours in Portland, Oregon for elected, professional
and citizen groups over a period of several years.
These groups were local, northwest, national and international.
It was surprising that many of the same questions came up
repeatedly. Much of the following material is based
on answers to their questions.
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Lessons Learned Index
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Why should you
care about TOD?
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Do you believe
in magic?
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Plan or build?
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Baking a cake
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Market for TOD
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The light rail
development advantage
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Travel to/from
stations
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Business cycle
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Public/private
partnerships
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Practice what
you preach
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Politics
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Civic personalities
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Leadership
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Set targets
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Timing/coordination
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Budget/funding/resources
-
Types of development
sites
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Flexibility &
certainty
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Density & parking
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Buy land
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Program administration
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Joint products
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Property owners
-
Station design/plan/develop
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Public/private
partnerships
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Missed opportunities
-
TOD sites
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Marketing/education
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Mixed use
-
Infrastructure
-
Public subsidies
are effective
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TOD incentives
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Development regulations
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Why Should You Care About TOD?
Transit oriented development (TOD) is
good politics because the public likes it. For a transit
agency, TOD design will save time by reducing controversy
and money by reducing the need for transit facility redesign.
It will help meet transit ridership targets. TOD makes
stations notable public places. They will be a highly
visible effort to "manage" growth. Private sector
TOD investments validate the public investment in transit.
Do You Believe In Magic?
Popular pedestrian districts are mixed
use and active eighteen hours a day including weekends.
People drive to them so that they can walk in them.
Their popularity with the public was not "planned" by government
or "built" by developers although government now protects
them and developers enhance them. Creating a "magical"
place on vacant land is difficult but can be done.
Plan or Build?
A planning program is completed when plans/codes
are adopted. A development program is successful when
projects are built. If you want TODs built before
light rail begins operation, adopt plans and development
regulations at least two years before opening day or be
prepared to accept the consequences of dealing with TOD
applications under existing plan/code. Timing is crucial
to address developers' anxiety about the public approval
process.
Baking A Cake
If transit oriented development (TOD)
is new to you, the following analogy may be helpful.
Many people love cake. If you want to sell a new type
of cake, you should offer people a free sample. Baking
a cake requires tools. Don't ask someone who has never
baked a cake to write a recipe. Planning is only one
ingredient. A master chef bakes a better cake.
Making every cake unique is expensive. A cake mix
is cheaper and easier but can be bland. Using the
right ingredients makes a better cake. Market analysts
determine what type of cake people liked last year.
Investors may prefer to finance a cake mix factory rather
than a bakery. A wedding cake costs more.
Market For TOD
There is a market for TOD. If there
are few/no TODs in your area, local real estate market analysts,
who are paid to be conservative, will conclude that someone
besides their client should build the first one. The
real estate industry has a supply problem. Demand
for more varied products exists. Hire a forward looking
market strategist to evaluate the market for TOD in your
area. Keep an up-to-date list of local TOD projects.
Developers, bankers and others are more
comfortable building product that they are familiar with.
If the issue is comfort rather than risk, go find developers
comfortable building a TOD. A TOD success will effectively
convince other developers to build TODs. If an experienced
TOD developer says that something will not work, listen.
Until recently, national retailers loved
big box and were skeptical of TOD. "Lifestyle retail"
is now the next big thing. "Authentic" mixed use main
streets and urban villages are not just acceptable but good
investments for real estate investment trusts (REITS), insurance
companies and pension funds.
The Light Rail Development Advantage
Like freeway interchanges, light rail
station areas offer greater certainty and therefore less
risk to the development community. Once built and
operational, a station is unlikely to move or operation
to cease. Bus routes are perceived to be more flexible
and less certain over long periods of time like 30+ years.
Trains are more likely to be on schedule and travel faster
during AM/PM commute periods than buses (or cars) because
light rail operates on a separate right of way and cannot
get stuck in traffic.
Local governments that revise their comprehensive
plans and development codes to allow pedestrian and transit
supportive development and restrict other land uses are
providing "protection" to the first developer to build a
TOD project by increasing the likelihood that future projects
will increase rather than decrease the value of their project.
This is especially important to developers that "hold" rather
than "resell" their projects.
Travel To/From Stations
Going to a light rail station, people
can walk, ride a bus or bike, ride in a van pool, or drive
a car. After getting off a train, people can walk,
ride a bike or bus, or take a shuttle (if available); they
do not have the option of driving a car. This has
several important ramifications. TOD with office,
retail or entertainment uses give more people the option
of walking to their final destinations. Higher density
residential TOD gives more people the option of walking
to or from a station. Mixed use TOD increases the
number of people with both of these options. As the
number of station areas with higher density mixed use TOD
increase, light rail ridership (peak and off-peak passengers)
and mode split (percent of non-auto trips) will increase.
This in turn results in less traffic congestion, fewer vehicle
miles traveled (VMT), and less air pollution.
Business Cycle
Buy low, sell high. Land prices
are lowest at the bottom of the real estate business cycle
but this is the hardest time to get funding/financing and
the longest wait before development is likely to occur.
Do not buy land or expect TOD to be built at the end of
the cycle unless you are ready to tolerate red ink.
The initial upswing after the bottom of the market is the
best time to do TOD planning but complete it fast to take
advantage of market momentum. By luck, the Westside
station area planning program (WSAP) in Oregon hit the cycle
perfectly -- $14 billion of regional high tech investment,
large vacant land parcels at relatively low prices near
five stations, and low apartment, office and flex space
vacancy rates.
Public/Public Partnerships
State of Oregon funding conditions, Metro
2040 regional growth plan requirements, and the Federal
Transit Administration (FTA) Hillsboro Extension funding
conditions, created a framework for local government transit
oriented planning and development in Portland. As a result
of much discussion and effort that led to an understanding
of the need for coordination of station area planning efforts,
ODOT, Metro, Tri-Met, Washington County and the cities of
Beaverton, Hillsboro and Portland cooperated in the planning
process, including setting common goals and objectives,
establishing a common work plan, agreeing on lead and shared
planning responsibilities, and allocating limited funding.
The regular meetings of staff representatives throughout
the process helped to identify and address shared planning
issues, as well as providing moral support. Based
on discussions with staff in other metropolitan areas, this
degree of cooperation is unusual.
Practice What You Preach
Locate and design stations, park & ride
lots and other transit facilities to support TOD.
If the transit agency does not advocate for TOD, who else
will? Build structured parking, support shared parking,
set up transportation demand management programs, sell air
rights, locate retail mixed use between parking and station
platform, assign fee credits to adjacent property owners
for TOD, pursue joint development of remnant property, share
cost of public/private master planning, provide technical
and financial assistance to local jurisdictions, be an advocate
for TOD in local permit public hearings. For example,
transit agencies, like retailers, want their parking at
the front door; placing mixed use development between a
station and a park & ride provides customers for the private
project. To make this work best, land should be set
aside during the preliminary engineering and draft environmental
impact statement processes. The longer you wait, the
harder it is to accomplish.
Politics
Identify potential fatal flaws and deal
with them. People think that they dislike density.
Based on visual preference surveys, what they actually don't
like is insensitive design, traffic impacts, lack of public
open space, and so on. The solution is public outreach,
citizen participation, adoption of good design standards,
and site specific project impact mitigation. Station
area development regulations should include detailed design
standards, and design review should be considered if not
already required.
If you need to cut down a forest to build
TOD, seek support from environmental groups. If a
neighborhood fears congestion from new development, add
traffic calming projects to your capital improvement program.
Always provide opportunities to participate in decision
making. Some issues are best dealt with by meeting
separately with developers, property owners, citizens, experts,
and public officials, then bringing a package back for joint/public
review. Participants need to have direct access to
decision makers.
Civic Personalities
One local government is ready to do the
work. Others need time to get started. One style
is to get it done fast. Others prefer to take several
years. Some are stable. Others change mayors,
directors and senior staff several times during the process.
One wants to wait until regional, state and federal policies
are finalized. Others prefer to lead rather than follow.
Some innovate through applications for development.
Others want development to stop until they revise their
plans and codes. Some want visibility, others prefer
the stealth approach. None of this is right or wrong,
just different. Take this into account when preparing
work programs, schedules and budgets. Provide expert
technical assistance and hold work sessions early on to
aid program set up.
Leadership
Promote enlightened self-interest.
Question traditional assumptions. Set a new agenda.
Build coalitions of strange bedfellows. Identify public,
private, and non-profit leaders who support TOD. Make
it easy for neighborhood, city, county, regional, state
and federal leaders to cooperate, coordinate, and collaborate.
Provide powerful facts. Make sure that leaders get
credit for success.
Set Targets
Clear intergovernmental objectives are
needed to establish and evaluate the success of a station
area planning and development program. Take care to
determine what is most important and to set real targets.
The target areas should include land within one-half mile
of light rail stations or one-quarter mile of feeder bus
routes. Set targets for TOD based ridership; share
of trips (mode split) from pedestrians, bicycles, and internal
trips; ridership from feeder bus routes; people per acre
for residents, employees, visitors and customers; transit
ridership for AM/PM weekday peaks, mid-day, evening and
weekend.
For TOD ridership assume, for example,
10,000 new dwellings within walking distance of light rail
stations, two adults per unit, two commute trips per day,
and a 10% transit share, this equals 4,000 trips per day
by transit. Assuming mixed-use transit-oriented development,
the total contribution of transit, walk/bike and internalized
trips can reduce external automobile trips by up to one-third.
Translate targets into land uses and densities;
include interim targets to support longer-term objectives.
For example, define build out for a station area and interim
steps (project phasing) to reach the target. Create
catalyst projects to reach critical mass. Identify
areas where little is likely to happen.
Timing/Coordination
Be aware that there can be irreconcilable
timing dilemmas. Light rail PE/DEIS processes end
about five years before service begins. Developers
usually have about a two-year time frame. Long-range
land use planners can take several years to prepare a twenty-
year plan. Identify and take advantage of "windows
of opportunity". To the extent possible, coordinate
work programs and schedules for the light rail project and
station area planning. Managers of major projects
want to be on time and on budget.
As construction projects progress, they
are less flexible; change orders create headaches and cost
money. This is a key reason to undertake station area
design, planning and development as soon as possible. Be
prepared to do any or all of the following concurrently
-- Public/private master planning; finalizing transit facility
locations and design; updating local government plans, regulations
and capital improvement programs; development review; and
TOD marketing/incentives. Use a charrette process
(intensive multi-day meeting) to compress the time required
to reach agreement on light rail final design, TOD, plan/code,
and other issues without missing opportunities or creating
fatal flaws by dealing with one issue at a time.
Budget/Funding/Resources
Make walk-on ridership a budget priority.
To the extent possible, make TOD an eligible light rail
project expense. To capture potential TOD ridership,
adequate resources are needed for staff, geographic information
system (GIS) system/data/operator, consultants, marketing,
training, land purchase, and so on. Obtain funds for
TOD from as many sources as possible with as few strings
as possible to provide technical and financial assistance
as well as to buy land and make site improvements.
For TOD public/private master planning,
negotiate a 50/50 cost split. Under intergovernmental
agreements, pay for work that is completed, not for work
in-progress. Use multi-year contracts; delegate authority
so that every amendment does not have to go back to the
governing bodies; provide for public budget end-of-the-year
funding roll over. Make sure that each public sector
player has at least one senior level person assigned full
time to TOD plan/code work and implementation. Once
you succeed in obtaining TOD funds, use them or lose them.
Types of Development Sites
The type of development sites in light
rail station areas is important for setting targets and
because developers often specialize in one or two types;
development costs may vary by type of site; and neighborhood
support and/or opposition may vary by type of project site.
National developers with institutional funds want to build
large projects, for residential, this often means a minimum
of three hundred units.
- "Greenfield" sites are vacant parcels
that are ten acres or larger;
- "Infill" sites are smaller vacant
parcels in developed areas;
- "Brownfield" sites require environmental
clean-up;
- "Redevelopment" sites have improvements
whose value is lower than the land value;
- "Rehab" sites have buildings that
can be updated or converted to a new use; and
- "Joint development" sites are owned
by a public agency and offered for development on a
competitive basis.
TOD Sites
Identify, preserve, enhance or create
TOD opportunity sites around stations and feeder bus routes.
Consider interim development regulations to prohibit inappropriate
land uses while permanent plans and regulations are being
prepared. Purchase the land or prepare public/private
master plans for large vacant sites. Proactively solve
problems of difficult sites (hazmat, wetland). Consolidate
fragmented parcels or at least require coordination of development.
Support infill and redevelopment design sensitive to neighbors.
In existing residential areas with alleys or large lots,
allow a rental unit to be added on single family lots to
increase density over time without major upheaval.
Marketing/Education
This is much more than "citizen participation"
in planning. "Stakeholders" include transit project
staff, residents, property owners, developers, institutional
investors, business, special interest groups, government
agencies, and others. Prepare a marketing strategy,
document TOD opportunity sites (profiles/maps), market analysis,
case studies (nothing sells like success), focus groups,
charrettes, seminars, conferences, newsletter, presentations,
handbook, tours, TV shows, newspaper articles, lecture series,
sketch walks, computer simulations, field trips, surveys,
web sites, monitor development projects, and so on.
Mixed Use
Mixed use TODs are the most effective
type of development for reducing external automobile trips
but are difficult to do. Public incentives may be
necessary. Mixed-use projects can be vertical (in
a building) or horizontal (adjacent to one another).
For vertical, it is more difficult to find developers and
consultants who understand mixed use relationships and marketing,
to obtain financing, and to get permit approvals.
Most banks do not make loans for mixed use. A modest
mix of uses can be hidden inside a larger project like first
floor commercial in one building of a multi-building residential
complex. Nationally, there is growing experience with
mixed-use urban villages (neo-traditional development).
Combined with transit, this is a powerful and workable marketing
concept.
Infrastructure
Station area planning should include traffic
impact analysis for the types and density of development
desired. Make public improvements or offer tax/fee
credits to developers to support necessary TOD infrastructure.
Higher density pedestrian districts require more streets;
this costs more than sprawl development and is harder to
finance. Even assuming a 20% mode-split, higher density
TODs will create local congestion because 80% of trips will
still be by automobile. The benefits are creation
of active pedestrian districts and reductions in regional
traffic congestion, air pollution, and vehicle miles traveled.
Land locked stations surrounded by vacant land can be wonderful
development opportunity sites; however, be sure to acquire
public access to the station before finalizing the station
location and design.
Public Subsidies Are Effective
Urban sprawl is supported by past and
present public policy on freeways, the GI Bill, the Lakewood
Plan (southern California), and tax subsidies for single-family
homes and parking lots. For anyone who says they hate
subsidies, ask them if they own a home and deduct mortgage
interest and property taxes on their income taxes.
To provide a "level playing field" for TOD, either subsidy
for auto-oriented development should be reduced and/or subsidies
for TOD should be provided.
TOD Incentives
Public support can take many forms.
Consider all possible ways to encourage and support TOD.
Sponsor demonstration, pilot and catalyst projects.
Sell land owned by public agencies not needed for a public
purpose. Take action to minimize development soft
costs, time delays and uncertainties by dealing with issues
like wetlands, strange or missing code provisions for TOD.
Amend zoning codes to allow high-density development.
Other opportunities include offering a
TOD property tax exemption, systems development charge or
transportation impact fee credits, permit expediting, and
modifying any/all existing/related programs to support TOD.
HUD has a multiple-family housing mortgage guarantee program
that allows first floor commercial. Public benefits,
both tangible and intangible, should equal public costs.
The marketing value of incentives should not be underestimated.
Beware, if higher developer transaction costs to take advantage
of public incentives approach the value of the incentives,
program effectiveness is dead on arrival.
Development Regulations
Make what you want easy and prohibit what
you don't want. Many codes do the opposite.
Do a regulatory audit. Adopt interim development regulations.
If you don't want "suburban" low-density auto-oriented development
in station areas, don't allow it. If you set your
standards too high, no transit-oriented development will
occur without subsidy. If too low, what's the point.
Finding the balance that is currently viable, which is a
moving target, is the hard part.
To the extent possible, make standards
clear and objective. Use "shall" not "may"; adopt
"standards" not "guidelines". Have an intergovernmental
team prepare model regulations with intent and commentary
to help local government staff expedite code update.
Get sign off from police/fire officials for skinny street
design. Prepare proactive solutions to fire code concerns
for vertical mixed-use projects and wood frame platform
parking. Some government agencies want single story
buildings and lots of parking for their facilities.
Require public agencies to practice what they preach.
New people-intensive civic facilities should be located
in station areas; locate new land-intensive public or private
facilities like maintenance or storage elsewhere.
Negotiate an overall strategy with all
agencies responsible for issuing light rail project development
permits and fees. Obtain intergovernmental agreement
on consistent design standards and a consolidated process.
If you want high quality TOD design requirements, apply
the same criteria to the light rail project. Obtain
approval to assign any unused fee credits to TODs on adjacent
properties.
Flexibility & Certainty
This is the boon and bane of developers
and city officials. If you want retail but market
risk does not justify requiring it, require retail "design"
instead and zone for commercial land use which allows but
does not require retail. This way a developer has
a fall back position if retail does not work for a time.
Consider adopting two approaches in the development code
for TOD: A traditional one with prescriptive standards and
a second with flexible performance standards for master
planning with public review.
Density & Parking
High parking ratios combined with surface
parking make high-density development impossible.
In suburban areas, set the minimum density near the top
end of what the market can provide without public subsidy
for structured parking (25-30 du/ac subject to topography);
this should increase over time. Set maximum allowed
parking near the low end of what the market will accept
(1.7 space/unit); this should decrease over time.
Promote shared/joint parking and structured parking; provide
public incentives to encourage this such as shared use of
park & ride lots. Set up transportation demand management
programs to reduce parking demand. Pedestrian oriented
blocks are 200-300 feet long with a perimeter of 800-1200
feet. Small blocks may prohibit some types of development.
Having more streets provides more on street parking which
creates a better pedestrian environment.
Buy Land
Public purchase of land and resale for
TOD is a key implementation tool. Obtaining funds
to purchase land is difficult. To the extent possible,
use light rail project funds. Buy as many of the "best"
TOD sites as possible, prepare master plans, make site improvements,
package incentives, then resell on a competitive basis for
private development with conditions. Reinvest land
sale proceeds to reduce development soft costs, provide
infrastructure in the project area or on-site public amenities,
or put into a revolving fund to use at other TOD sites.
Obtain interagency agreement on the permit approval process
and requirements before offering joint development sites
and incentive packages to developers. The location
and size of light rail construction staging areas should
take into account the potential for TOD; minimum size should
be one acre; bigger is better. National multiple family
residential developers like projects of 300 units or larger.
This strategy works for infill sites as well as greenfield
sites.
Program Administration
For intergovernmental projects, have management
experts (not planners) set up and monitor contracts and
legal agreements (IGA, MOU), objectives, milestones, budget,
accounting, scheduling, products, and evaluation.
Key decisions include who does what and joint products.
Prescreen consulting firms in a variety of disciplines using
an RFQ process to allow hiring on the fast track from a
pre-approved short list on an as needed basis.
Joint Products
For example, model development regulations
with intent and commentary should be prepared by a consultant
team with an intergovernmental advisory committee.
Local government staff can then prepare custom versions
for adoption in their jurisdictions based on the model.
This will expedite adoption of new local TOD plans and codes.
Themes should be consistent but include variations for different
situations. Seek review and critique of the model
from special interest groups. Using common names and
requirements for station areas where two or more local governments
have jurisdiction reduces potential confusion of residents,
business, property owners and developers. Use MOUs
or letters of intent to establish a working basis for an
inter-agency project. If conditions change, amend
the agreements.
Property Owners
Individuals, families and public or private
organizations that own vacant or underutilized land in light
rail station areas may have little or no expertise with
development. They may know even less about transit
oriented development. Their perception of risk for
TOD may be even higher than that of conservative developers.
The public sector should provide technical assistance to
property owners as well as practice patience.
Station Design/Plan/Develop
The right interagency/interdisciplinary
team with the right assignment at the right time can save
significant funds and time while reducing conflict. The
team should include land use, transportation, market analysis,
environmental, urban design, engineering, legal, marketing,
public relations, and other specialties. To identify,
preserve, enhance and create TOD sites, include urban designers
and market analysts on teams before finalizing transit facility
location and design, updating city/county plan/code and
preparing public/private master development plans.
For interagency teams, seek people with expertise and signature
authority; document team conclusions and decisions at the
end of each work session; members should obtain sign off
from their agencies before the next meeting so work can
proceed to the next stage. When explaining the purpose
of TOD to engineers or economists, tell them that TOD will
"increase the utilization capacity" of light rail.
Translated into English, this means that you get more riders
at little or no additional cost. That is a very good
thing.
Public/Private Partnerships
In Portland, the best TOD projects were
developed using the Oregon version of California's "specific
plans". Seek partnerships with local government, major
property owners and developers. Offer to split the
cost of master planning but require a 50% private match.
Be willing to modify transit facility location and design
to take maximum advantage of major development projects.
Define roles and responsibilities, and set clear joint objectives
at the beginning for land uses, density, parking, block
size, incentives, street connectivity, public involvement
and so on. Either jointly hire a consulting team or
create two teams, one for the private participants and another
for the public. Use a charrette process with the decision
makers and consultants in face to face discussion.
Missed Opportunities
In Oregon, the two most significant missed
opportunities were not preparing model plan/code provisions
and not purchasing land for TOD. Model interim city/county
station area development regulations prepared by an intergovernmental
team with consulting assistance saved time, effort and money;
the effort should have continued to prepare permanent model
plan and code.
Public purchase of some of the large tracts
of vacant land around stations from willing sellers in the
early 1990s for mixed use development would have created
better catalyst projects demonstrating the full potential
of TOD. Even if funds had been available, it would
have been hard to convince a public agency (city, county
or transit) to buy land for TOD that had never done this
type of economic development project before. In 1997, Metro
established a new program to buy land for TOD.
