Transit-Oriented Development: Benefits, Challenges, and Everything In-Between

Transit-oriented development (TOD) has gained importance since the COVID-19 pandemic, as people are commuting less than they were before. 

TOD creates walkable mixed-use neighborhoods centered around transit, and a recent Brookings study shows the benefits of living near these so-called “activity centers,” examining how people can save more money and reduce their carbon footprint.

According to the study, “the average driver living closer to multiple activity centers can save around $920 to $1,200 in annual transportation expenses.” They can also reduce their carbon footprint by 2,455 to 3,020 pounds of carbon dioxide.

WSP, an engineering and environment firm, aims to bring TOD to more cities and is heavily involved in projects across the U.S. The company supports the re-envisioning of a former Union Pacific rail yard in central Denver. The project plans to create better connections to the rest of the metro region and will showcase all of the benefits TOD has to offer.

The Denver project and the Brookings study are a small sample size of TOD’s growing presence within the industry.

How Transit Agencies Benefit from TOD

Transit agencies also stand to benefit from TOD.

“If it's an existing high-frequency transit facility, like bus rapid transit (BRT), light rail, subway, or commuter rail, the transit agency often owns some of the land that's residual from when the facility was built,” says Manjeet Ranu, sr. VP, national planning lead, at WSP in the U.S. “It's an opportunity to monetize those underutilized properties in a way that advances opportunities for housing for businesses, economic development, and advancing equity by providing for income qualified affordable housing.”

The idea behind asset monetization is that it creates more riders to use the transit system. 

Ranu adds that by creating a walkable, vibrant environment that wasn't there before, transit agencies can create housing opportunities, as well. 

“It's well suited to a mix of different housing opportunities,” he says. “You have a variety of land uses that are mixed together so you could walk from your house to the restaurant, to your office, or if you just want to get on the train and go to a special event like a baseball game. You never had to touch your car once.” 

TOD provides choices for consumers, residents, and businesses to have different opportunities to live and take advantage of transit facilities that agencies have already invested in.

TOD’s Biggest Challenge

There is one challenge that stands in the way of TOD more than any other — density.

Ranu describes this challenge as the “D word.” 

“When you're introducing transit-oriented development in an area that is already surrounded by existing neighbors and businesses, you're introducing change and change can be anxiety-inducing, especially when it comes with higher-density development. It’s key to address those fundamental challenges of density and change through process and engagement with communities.”

Now the question is, “How do you address the ‘D word?’”

Engagement and patience are key to addressing the density challenge.

“To do that, effectively, you have to understand who your partners are. It's not the transit agency that has the land use authority, it's the city or the county that has the land use authority,” Ranu says. “Making sure you understand who your partners are helps you navigate the decision-making that comes with the many stakeholders involved in addressing the changes through policy and regulations.” 

Stop if you have heard this before, but another key challenge is infrastructure. 

An agency has to account for the deficits in the area and consider if it's a new project or a new line. After taking those factors into consideration, an agency has to figure out how it is going to fund the infrastructure necessary to support it so the development can come.” Is this supposed to be a quote?

“There are a variety of funding and financing strategies that need to be explored to put together a variety of compact land uses and property assemblage,” Ranu says.

Changes in TOD Over the Years

TOD is popping up in more places. Once communities take the first step and realize the first project, then they can see something is real. Agencies realizing more and more TOD is possible is one of the biggest changes over the years.

“If it's designed well, in terms of how it looks and how it feels when you're on the site, then there's a success to point to, and we're seeing more of that in the United States,” Ranu says.“There are changes in demographics that want choices in housing types, to provide access to opportunity via transit, and the development around it that's oriented to transit.” 

An example of a successful TOD project is Millenia in suburban San Diego, a mixed-use hub designed into 80 walkable city blocks. Millenia is built around the BRT system that was constructed by the San Diego Association of Governments and is operated by the San Diego Metropolitan Transit System, according to Ranu. 

There are other projects WSP is supporting across the U.S. WSP is serving as the owner's representative for the City to support the redevelopment of a 64-acre site in Santa Fe, New Mexico.

For New Jersey Transit, WSP is supporting a prioritization analysis that will determine where the best TOD sites potentially may be in the state.

Recently completed projects by WSP include an equitable TOD policy framework and design guidelines for Raleigh, N.C. 

Most of the innovations in TOD, though, involve environmental sustainability and how agencies can further reduce greenhouse gas emissions through the initial development of the TOD project and the ongoing activities surrounding it. 

Ranu says more companies and agencies are looking at what they can do to reduce energy consumption and greenhouse gas emissions.

The Transit-Oriented Development Institute projects living near activity centers can reduce energy consumption and driving by up to 85%.

On the economic side, agencies aim to provide opportunities for small businesses to have a place to establish, thrive, and network with other businesses in the same TOD community. 

“The market is key to providing a variety of housing types to meet the housing needs for our country, but we will always need some amount of income qualified for affordable housing,” Ranu says. “Sites that are already owned by the public sector that are next to high-quality, high-frequency transit are a great way to provide affordable housing for those that need it.” 

TOD Advice for Agencies

Ranu has more than 26 years of experience around TOD plans in senior leadership roles with the Metropolitan Atlanta Rapid Transit Authority, the Utah Transit Authority, Los Angeles County Metropolitan Transportation Authority, and others. 

Ranu has learned many lessons during his time and expresses how important it is to understand partnerships.

“We understand the characteristics of transit-oriented development and why it’s beneficial, but focusing on the benefits for the sake of it being the right thing to do is not enough to move the needle and move forward,” Ranu says. “You really do need to understand the partnerships that are necessary to advance this since these complex projects that transfer developments from policy all the way through implementation and activation require many different partners with a variety of different decision-making authority. Understanding who your partners are and how to work effectively with them is important.”

Ranu adds that agencies can move through the process quickly, but he stresses that they define the process carefully. 

“Opportunity is all around. You have to be realistic about what the market potential is. If you're in a very low-density area that has a high-frequency transit project going through their building type one construction at 14 stories tall, it's not the best transit-oriented development solution,” Ranu says. “You don't have to be that dense to have a compact, walkable, effective transit-oriented development. It just needs to be compact, walkable, activated, and well-designed, which you can do with even just wood construction types that are cost-effective as well. Think creatively about what can be done to achieve those goals for transforming development.”