MTI Research Shows Transit-Oriented Developments Help Californians Save Money

The Mineta Transportation Institute (MTI) released its findings from the latest research, "Can Californian Households Save Money on Transportation Costs by Living in Transit-Oriented Developments (TODs)?"

The study examined how TODs could be an effective tool to ease the housing affordability problem by increasing housing supply and reducing transportation costs in transit-rich neighborhoods. 

According to the Federal Transit Administration, TODs include “a mix of commercial, residential, office and entertainment centered around or located near a transit station.” According to MTI, these environments translate to dense, walkable neighborhoods, and vibrant communities.

By utilizing the confidential version of the 2010–2012 California Household Travel Survey, the study evaluated the impact of TOD on household transportation expenditures by comparing TOD households with two control groups. 

Key findings from this research include:

• When controlling for demographics, TOD households save $1,232 per year on transportation expenditures — 18% of their total annual transportation expenditures. 
• When controlling for both demographics and supportive neighborhood environment (e.g. one with higher land use density and mixed land use), TOD households save $429 per year — about 6% of their total annual transportation expenditures.

“The transportation cost savings have different implications for homeowners and renters living in TODs. Homeowners enjoy the double benefits of TOD: increased property values and savings in transportation costs," said the study’s author. "Renters, meanwhile, save money on transportation costs but may need to pay a rent premium to live in TODs."

This study confirms that Californian households save money on transportation costs by living in TODs because they own fewer vehicles. About 35% (or $429) of the annual savings can be attributed to access to rail transit and the other 65% attributed to transit-friendly neighborhood environment (e.g. higher land use density) and location, which highlights the importance of integrating a rail transit system with supportive land use planning and neighborhood design.