Last year, transit-oriented developments were all the talk. What many developers and investors found was that making these types of developments work with local government entities is not always easy – despite TOD being a win-win-win for cities, residents, and businesses.
With competing and sometimes conflicting interests on all sides, it’s easy for these types of projects to fall apart or stall for years. However, what has progressed over the last year is a move by city governments to work with developers to attract more transit-oriented development projects to help combat displacement by gentrification, improve community access to social services, and to revitalize run-down neighborhoods.
Reversing the damage caused by urban blight over decades of urban sprawl is just one of the reasons why cities are backing transit-oriented developments. As money continues to pour into major projects backing TODs across the country, 3 stats particularly point to the reasons why transit-oriented continues to be the talk of CRE:
#1: TOD Developments Attract More Investors
The NAR® reports one study that revealed that today’s investors seek out projects being built near “smartly designed and well-maintained infrastructure” in addition to other factors. Location to infrastructure and public transit is becoming a leading factor in determining the feasibility of a new development.
#2: TODs Help Reduce Congestion
When revitalizing urban centers with new TODs, traffic flow and design often gets an overhaul too. By reducing congestion and increasing access to public transportation, local governments and businesses are capitalizing on an increasingly pedestrian population that relies less on automobiles and more on smart city planning to get around.
#3: Older Adults in TOD Communities Are More Active
One stat attracting the attention of older adults is one cited by AARP; in a study of Virginians aged 75 and older, 22% of those living in walkable cities walked or took transit compared to only 8% of 75+ aged adults living in the suburbs. This is one of many studies showing that living in TODs is good for the overall health of older adults, keeping them active for much longer than their more sedentary counterparts.
U.S. TOD Projects that Are Thriving
Developers are seizing on the TOD trend as projects across the U.S. are thriving. Generally speaking, the most successful transit-oriented developments are located within two miles of public transportation. That means light rail, subway, bus, rideshare, shuttle, etc.
In the U.S. more than half of the states have taken some action toward laying the groundwork for more TOD projects. The same is true for more than 65 cities in nearly 50 regions across the country. Specifically, there are cities that are setting the standard for what is possible with TODs.
“We’re seeing a great increase in interest when it comes to transit-oriented communities —both from investors and tenants,” says Tony DiCamilo with Coldwell Banker Commercial Scalzo Group in Purchase, NY. “These communities provide the amenity-rich housing that today’s tenants are looking for, while also making a live/work/play lifestyle possible.”
Denver Leads the Way
By partnering with state and local agencies to meet local needs while creating financial incentives for businesses, Denver is proving that TODs can help boost city coffers while also improving the overall well-being of communities. Denver is leading the way for how to forge a cooperative partnership between many different government and private agencies to create spectacular TODs that revitalize old infrastructure and attract new investors.
Portland’s Light Rail System Attracts Many New Investors
In Oregon, the City of Portland backed a city-wide TOD that helped to fund the new light rail system. With it have come new housing developments, retail shops, businesses, and residents of all ages and backgrounds.
Minneapolis Masters the Public-Private Partnership in TOD
For combining funding programs into massive new TOD projects, Minneapolis, MN is taking advantage of dozens of federal, state, and local funding sources as well as public-private partnership programs, and private investors to back a brand new transit system to support its massive new TOD projects. St. Paul and Minneapolis will use the funding to build a new light rail system.