What is Transit Oriented Development?

Transit Oriented Development, commonly referred to as TOD, is a development strategy that ties commercial, residential or industrial development to a transit project. Transit projects may involve new construction or major renovations to existing facilities and can vary from a basic Park n’ Ride to a complete light rail system with numerous stations.

If the commercial, residential or industrial development is physically tied to the transit project, such as stores and shops in or adjoining a transit station or an apartment/office building above a transit station, it is referred to as TOD; and, if the development occurs within one-quarter mile of a transit station, such as nearby condominiums with a central green area and basic shops such as a pharmacy, grocery store, bank, daycare center, etc., it is referred to as Transit Related Development, or TRD.

Both TOD and TRD projects can benefit from Federal, state and local government funding depending on the nature of the development. Additionally, when a municipality or transit agency partners with a developer in all or some portion of the total project, this is considered Joint Development and may offer additional benefits and funding sources, again depending on the nature of the Joint Development. A typical example would be where the transit agency contributes the land on which some or all of the TOD/TRD occurs. The relationship between the parties is documented in a Joint Development Agreement that outlines ownership, income sharing, land use, management responsibilities, etc. and must meet specific funding guidelines.

Additionally, a Joint Development project must satisfy three tests…….1) the statutory definition of a capital project; 2) financial return; and 3) highest and best transit use. These are technical requirements set forth in the transit section of Code of Federal Regulations. Urban Innovations is uniquely qualified to navigate these regulations and maximize funding and profitability for your project.

Whether employing TOD, TRD or Joint Development, a mixed-use environment is created that provides opportunities for people to live, shop, and work in the same neighborhood, and, on a larger scale, an opportunity for a more efficient transportation system that connects communities within the region.  It also creates neighborhoods with a sense of place that have a safe and friendly atmosphere, a strong pedestrian orientation and higher market values.

This approach includes locating higher density development adjacent to transit facilities and moderate density development nearby. It is an approach that focuses land use and transportation strategies in a manner that makes transit use more viable as a mobility choice.  Through relatively higher density, this approach uses land and infrastructure in a community or region much more efficiently. 

Studies have shown that Americans are willing to walk or ride a bike up to a half-mile to meet basic services and daily needs. And, the trend of aging baby-boomers and young adults is to live in an urban “24-Hour Neighborhood”. Development within a half-mile radius from transit centers provides for the consolidation of several trips if people can stop at a bank, convenience store or daycare between the transit station and home.  The resulting environment is a vibrant mix of uses and provides the opportunity to live, work and play in the same general area.

Urban Innovations has developed expertise in bringing TOD, TRD and Joint Development projects to reality in a timely manner. By maximizing the government funding of your project, the Urban Innovations process will reduce costs and improve profits for the transit agency, municipality and developer, and deliver more and better social benefits to the community.

In addition to providing the “hard construction” dollars for the transit project, the government funding for a TOD/TRD/Joint Development project covers the costs for planning, design, engineering, environmental, site preparation and infrastructure for both the transit project and all or part of the associated non-transit development. Additionally, when the parties partner under a Joint Development Agreement, the local transit agency/municipality and the developer share in the long term benefits of the Joint Development aspects of the project, with the transit agency operating the transit assets and the developer operating the non-transit assets. Together, they are partners in the Joint Development, earning improved long-term income streams.

Transit projects provide an ideal platform for a wide variety of associated development that can benefit a community far beyond the obvious benefits of the transit project itself. The transit agency/municipality and the developer need each other to maximize the benefits of their respective projects and to minimize their costs…..this concept was specifically designed into the funding programs. Urban Innovations is the catalyst to making all of this happen.

Contact us today to get started on your project.