They like it – a lot.
In the current issue of UrbanLand, members of Urban Land Institute’s Transit-Oriented Development (TOD) Council discuss the prospects for development around transit nodes—and the obstacles that remain – here.
Chris Leinberger: The future of real estate is intimately intertwined with TOD and walkable urban development in general. What used to be a niche market is now the market
Steve Wilson: A disproportionate amount of future development will be transit oriented—fueled by investor interest in TOD, which is at an all-time high.
John Hempelmann: TOD is happening with increasing speed all over the United States, and it’s even happening in places that are famous for being auto-centric, such as Los Angeles and Phoenix.
Neal Sleeper: It’s something of a mixed bag. There are many developers who like the idea of transit-oriented development and feel that transit adds to the marketability and financeability of their projects. The flip side is that the most effective TOD tends to be mixed use—some combination of retail, multifamily housing, office, or hotel. Unfortunately, in this market, many lenders seem to have a preference for single-use deals. The mixed-use aspect often makes financing more difficult.
John Cigna: In cities that have existing transit, the desire to build around rail stops is great. There are studies out now that show that rents around a TOD are significantly higher than elsewhere. And generation X and generation Y want to live in urban settings, where TOD exists. So development will follow demand.
But here’s the kicker:
Cigna: The problem is that local, state, and federal governments don’t have the money to build new light-rail lines and stations. That’s the huge disconnect. They can provide tax breaks, which are valuable, but most rail lines cross multiple municipalities. Getting municipalities to work together is difficult, and they still come up short when it comes to funding.
Yup, sounds familiar. So here’s the irony: no problem getting government to throw mega-dollars at new roads and bridges – typically in the name of economic development. But the sophisticated developers aren’t talking that way anymore. If urban regions really want to spur growth, they’d be laying rail.
Yes, rail. Not necessarily buses. Says Leinberger:
I predict the following will happen by 2030: to get to work and other activities outside the home, people will probably still rely on cars as their primary transportation option, but instead of 90 percent like today, cars will account for 30 percent of the trips from home. Their second option will be walking: probably 25 percent of us will be able to get to virtually anywhere we need to go by walking. Number three will be bicycles: 15 to 20 percent of people will be able to get around their metropolitan area by bicycle. Light rail, heavy rail, and streetcars together will probably make up 30 to 40 percent of transportation use in the course of a day.
Standard buses will make up 10 or 15 percent. Bus rapid transit [BRT] is a real unknown. It is yet to be proven, so my guess is at best 5 percent. And commuter rail will be about the same.
