Rail

Feds finally see housing connection

Posted on April 21, 2009 by Cliff Henke

For years, experts in the U.S. transit industry have touted the connection between public transport and economic development. A number of studies have documented it, and some developers have made a lot of money in properties around rail (and in a few cases, bus) stations. Little wonder, as several studies have shown that the average working U.S. household spends nearly 60 percent of its monthly expenses on housing and transportation costs, and the highest rates of foreclosures and upside-down mortgages are in the edges of metropolitan areas where higher gas prices have hiked commute costs the most. Now policymakers seem to have gotten the connection.

U.S. Department of Housing and Urban Development (HUD) Secretary Shaun Donovan and U.S. Department of Transportation (DOT) Secretary Ray LaHood announced a new interagency task force to help stimulate transit-oriented development (TOD).

Importantly, the two department heads said that the task force will set a goal to have every major metropolitan area in the country conduct integrated housing, transportation, and land use planning and investment in the next four years. To help meet this laudable goal, HUD will make planning grants through its proposed Sustainable Communities Initiative in consultation with DOT to metropolitan areas, and create mechanisms to ensure those plans are carried through to localities. For its part, DOT will encourage MPOs to conduct the same integrated planning as a part of their next long-range transportation plan update and will provide technical assistance on “scenario planning,” a tool for assessing future growth alternatives that better coordinates land use and transportation.

Beyond the coordination and grant money, you may ask: Don’t these departments really already require similar planning processes? Yes, but what will be supposedly different is coordination. The announcement mentioned the synchronization of planning cycles, processes and geographic coverage with which these mandates operate.

Another new focus is on transparency. The task force will develop federal housing affordability measures that include housing, transportation costs and other costs that affect location choices. Currently, federal housing affordability definitions fail to recognize transportation costs on homeowners and renters, especially those who live farther away from their jobs. The task force will redefine affordability to reflect these interdependent costs and create online tools to help people calculate these combined costs when choosing a new home. By doing so, the task force intends to encourage “location efficiency” in housing and transportation choices, something that HUD has been funding in pilot mortgage programs for years.

This is long overdue, and rail transit stands to be a big winner. Households now pay on average at least 25 percent of their income on car ownership and operation versus less than 5 percent a century ago, according to Center for Transit Oriented Development data. Nor is it great for the environment. According to a new Brookings Institution study, car-dependent households emit three times the climate change gases, as a walkable urban household with good access to transit.

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