PLANNING AND IMPLEMENTING TOD: KEY FACTORS FOR SUCCESS

Sujata Srivastava Knowledge Corridor TOD Workshop June 5, 2013

• 6-year old partnership dedicated to improving practice through technical assistance, research, and policy reform

• Creating a national marketplace for TOD, working with cities, transit agencies, developers, investors, and communities

• Developing new tools and collaborative and equitable planning models

• Online Clearinghouse of TOD + Transit Best Practices

Presentation overview Benefits of TOD Corridor examples and factors for success Local strategies Concluding thoughts

Benefits of TOD

Transit Ridership at 40 Year High! Up 32% Since 1995

Transit expansion projects in nearly every state

Source: Center for Transit-Oriented Development

Changing demographics are driving demand

• Singles will soon be the new majority – 55% of households by 2030 • Echo Boomers are now one-third of the population • Almost half the U.S. population will be non-white by 2050

Demographic groups growing most quickly use transit more

Growing recognition of benefits of TOD

Reduced auto dependence and greenhouse gases

Reduced transportation costs

Creating a sense of place Housing diversity Connections to jobs Health and equity Economic development

Benefits to households

Benefits to businesses

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

2002 2009

Jobs near transit 2002-2009

0%

5%

10%

15%

20%

25%

30%

Employment by sector in station areas compared to regions overall

Transit Regions

Transit Sheds

Source: Center for Transit-Oriented Development

This can translate into higher property values….

Land Use

Single Family Residential +2% w/in 200 ft of station to +32% w/in 100 ft of station(San Diego Trolley, 1992) (St. Louis MetroLink Light Rail, 2004)

Condominium(San Diego Trolley, 2001)

Apartment +0% to 4% w/in 2,640 ft of station to +45% w/in 1,320 ft of station(San Diego Trolley, 2001) (VTA Light Rail, 2004)

Office +9% w/in 300 ft of station to +120% w/in 1,320 ft of station(Washington Metrorail, 1981) (VTA Light Rail, 2004)

Retail +1% w/in 500 ft of station to +167% w/in 200 ft of station(BART, 1978) (San Diego Trolley, 2004)

Range of Property Value Premium

+2% to 18% w/in 2,640 ft of station

Source: Center for Transit-Oriented Development

…And stronger fiscal health for local governments “Building Better Budgets” Infrastructure Savings - 42% in Champaign, IL

Lower service costs - Reduction of 13% in Nashville, TN

Higher tax revenues - Increase of 350% in California

Source: Smart Growth America and Strategic Economics

TOD Success Factors

TOD at the Corridor Scale

Destination Connectors Commuter Corridors District Circulators

The Minneapolis- St Paul Central Corridor

Condominiums

Live/Work Lofts

Townhouses

Pittsburgh Typology

Lessons learned from peer regions

Medium size regions Similar industry mix Strong knowledge-based and

eds/meds economies Some are slower growth

places All have successfully

implemented TOD in existing and new stations

Charlotte Cleveland Pittsburgh Twin Cities Denver

Peer regions: industry mix

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Cleveland Pittsburgh Charlotte CRCOG/PVPC

Pe

rce

nta

ge o

f Jo

bs

by

Ind

ust

ry G

rou

p

Region of Transit Shed

Other

Retail

Health Care and Social Assistance

Industrial

Entertainment

Public Admin.

Education

Knowledge-Based

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

Half-

Mile

Tra

nsit

Shed

Sha

re o

f Reg

ion

Jobs

Industry Group

Cleveland Pittsburgh Charlotte CRCOG/PVPC

Development trends on 3 new rail corridors

Hiawatha Line (Minneapolis)

Southeast Corridor (Denver Region)

Blue Line (Charlotte)

Significant amount of development in station areas along these lines

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

Minneapolis Hiawatha Line(2003 - 2009)

DenverSE Corridor

(2004 - 2009)

CharlotteBlue Line

(2005 - 2009)

Est

imat

ed S

quar

e Fe

et o

f N

ew D

evel

opm

ent

Commercial

Residential

But the pattern of development is uneven

0% 50% 100%

Downtown/Urban Center

Suburban Center

Legacy Industrial Area

Mixed-Use Neighborhood

Commercial Corridor

Industrial/Distribution Area

Low Density Residential

Major Greenfield/Infill

Other

Percent Vacant/ Underutilized

Share of Development

Hiawatha Line – Context of Opportunity Sites and Development

What types of places attracted development?

• In or near downtowns or employment centers

• Legacy industrial districts

• Districts where plans were in place and strategic investments were made

• Small infill sites on strip corridors

• Very large greenfield sites on the edge

• Large formerly industrial sites

YES NO

BRT - Cleveland Health Line

BRT line opened in 2008 Connects major employment centers

along Euclid Avenue (Eds/Meds) RTA moved existing Red line stops Cleveland Clinic hospital and

Cleveland State University redesigned campus

Cleveland Clinic partnered with University Hospital to rebrand “HealthLine”

+ 5,000 jobs ~$5 billion in new development

Sou

rce:

New

Yor

k Ti

mes

• Market conditions (of course)

• Frequency & quality of transit service – NOT TECHNOLOGY!

• Proximity to employment centers

• Accessibility by many modes (car, bike, ped)

• Planning and place-making

Factors that determine where development happens

Local strategies for TOD

TOD is not one size fits all! Plan and build to your market / context

Building Type Example Parking Approx. Density/ac. Const. Type

Townhome Surface Park 20 Wood frame

Townhome Tuck-under/ Garage 30 Wood frame

Multifamily 2-3 stories Surface/ carport 35 Wood frame

Multifamily 2-3 stories Garage 45 Wood frame

Multifamily 4-5 stories Podium/ Garage 75 Wood frame Over concrete

Urban Block/Texas Wrap Wrapped Garage 90 Wood frame

Common perception of density

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

5 10 15 20 25 30 35 40 45 50 55

Deve

lope

r Pro

fit in

Jilli

ons

Density

17 1716 1615 1514 1413 1312 1211 1110 109 98 87 76 65 54 43 32 2

1 1

b1 b1b2 b2b3 b3b4 b4

UnitsFAR

68 80 1044.0 4.9 4.9 5.6 6.5 7.5 9.540 50 50 56

120 ' 140 ' 180 '

Five story Seven story Seven story N ine story Eleven story Thirteen storySeventeen

story

55 ' 75 ' 85" 100 '

Stor

ies

Und

ergr

ound

P

arki

ng

5-Story

7-Story

7-Story

9-Story

11-Story

13-Story

17-Story

But in reality higher density projects can be less profitable to developers

Sometimes removing regulatory barriers can make a big difference

Construction Costs

City Fees Other Costs1

Land Costs

$0

$10

$20

$30

$40

$50

$60

$70

Construction Costs

Developer Revenues

3-Story Residential Building (in millions of dollars)

Construction Costs

City Fees

Other Costs1

Land Costs

$0

$10

$20

$30

$40

$50

$60

$70

Construction Costs

Developer Revenues

5-Story Residential Building (in millions of dollars)

1 "Other costs" include design , legal, financing, and marketing, and other "soft" costs.

Source: Strategic Economics 2010

29

($200)

($150)

($100)

($50)

$0

$50

15 25 35 45 55 65 75 85 95 105 115 125

Res

idua

l Lan

d Va

lue

per S

F

Units per Acre

Townhome 4 Stories over Podium 6 Stories +

Providing incentives can also make a big difference

Urban block with wrapped

parking garage

Source: Strategic Economics 2010

Standard parking ratios

Reduced parking ratios:

($200)

($150)

($100)

($50)

$0

$50

15 25 35 45 55 65 75 85 95 105 115 125

Res

idua

l Lan

d Va

lue

per S

F

Units per Acre

Townhome 4 Stories over Podium 6 Stories +

February 6, 2010 New Partners for Smart Growth Conference 31

Urban block with wrapped

parking garage

Source: Strategic Economics 2010

Providing incentives can also make a big difference

Public realm improvements are critical for spurring private investments in slower markets

Category Type Description Impact

Surface Streetscape General streetscape improvements

28% increase in home values

Surface Open space Presence of neighborhood parks and playgrounds

3 – 15% increase in home values

Surface Walkability Walkscore improved from 20 to 80 points

54% price premium for office and retail property

Site Site remediation

Remediation of brownfield sites

3 – 11% increase in housing prices

Transit Transit Proximity to transit 2 – 32% price premium for single family homes

Transit Transit Proximity to transit 1 - 120% price premium for commercial real estate

Concluding thoughts

Lesson 1: There is no single recipe for success

There is no one set of tools or strategies for implementing TOD

Lesson 2: Have a plan that reflects market realities

Having an implementable plan in place makes it easier for projects to be “shovel ready.”

Lesson 3: Partnerships are essential

Look for partners who benefit from TOD like major employers, universities, hospitals, community groups.

Lesson 4: Look for long-term value

Simple neighborhood improvements can pay “dividends” over the long-term, especially with respect to property values and retail sales.

Lesson 5: Leadership is Essential

All successful projects have champions, but they also have implementers. Both are essential.

Resources Center for Transit-Oriented Development Rails to Real Estate, 2010 Transit and Regional Economic Development, 2010 www.ctod.org

Strategic Economics, Infrastructure Financing Options for Transit-Oriented Development (funded by U.S. EPA)

http://www.epa.gov/smartgrowth/pdf/2013-0122-TOD-infrastructure-financing-report.pdf

Smart Growth America, Building Better Budgets, 2013 http://www.smartgrowthamerica.org/documents/building-

better-budgets.pdf

Early Research on the Economic Benefits of BRT Pittsburgh, PA: A single-family home 1,000 feet away from a

station is valued approximately $9,745 less than a property 100 feet away, all else equal (Perk and Catala)

Boston Silver Line: A condo 1,000 feet away from a station sells for $45 per square foot less than a condo 100 feet away, all else equal (Perk)

Eugene, OR: Between 2004 and 2010, the number of jobs within 0.25 miles of the EmX BRT line grew by 10%, while jobs in the metro area declined by 5% (Nelson et al.) The EmX BRT line.

Source: Lane Transit District, http://www.ltd.org/