How Transit-Oriented Development Enhances Infrastructure, Public Transportation Financing, and Promotes Sustainable Urban Growth

Transit-Oriented Development (TOD) is an innovative urban planning strategy that aims to create vibrant, sustainable, and livable communities centered around public transportation hubs. This approach integrates residential, commercial, and recreational spaces within walkable distances of transit stations, reducing reliance on private vehicles and promoting environmentally friendly and efficient land use. The concept of TOD is rooted in the idea that well-planned urban spaces, designed with public transit at their core, can significantly enhance the quality of life for residents while contributing to economic growth and environmental sustainability.

The significance of TOD has grown in recent years as cities around the world face challenges related to urban sprawl, traffic congestion, air pollution, and climate change. By focusing on the development of mixed-use, high-density neighborhoods around transit hubs, TOD addresses these issues by encouraging the use of public transportation, reducing greenhouse gas emissions, and fostering more compact and efficient urban forms. This holistic approach not only improves the accessibility and convenience of public transit but also supports the creation of vibrant, inclusive communities where people can live, work, and play without the need for long commutes.

Furthermore, TOD presents a viable solution for cities looking to enhance their infrastructure and public transportation financing. The strategic placement of development projects around transit stations attracts private investment, increases property values, and generates higher tax revenues, which can be reinvested into local infrastructure. Additionally, TOD projects often benefit from public-private partnerships and value capture financing mechanisms, providing stable and sustainable funding sources for large-scale infrastructure projects. The alignment of TOD with the United Nations Sustainable Development Goals (SDGs), particularly Goal 11 (Sustainable Cities and Communities), emphasizes its role in creating inclusive, safe, and sustainable urban environments.

Real examples from cities like New York, Portland, and Hong Kong illustrate the transformative potential of TOD. These cities have successfully leveraged TOD principles to revitalize underutilized areas, boost public transit ridership, and promote sustainable urban development. This article explores how TOD can enhance infrastructure and public transportation financing, drawing on case studies and numerical evidence to highlight its benefits. By examining the multifaceted impacts of TOD, we can better understand its role in shaping the future of urban development and creating more sustainable and resilient cities.

Enhancing Infrastructure Financing

1. Attracting Private Investment

TOD projects often attract significant private investment due to their prime locations and the promise of high foot traffic. Developers are more likely to invest in areas with reliable public transit, as these locations are desirable for both residential and commercial purposes. This influx of private capital can help fund the development of essential infrastructure such as roads, utilities, and public amenities, reducing the financial burden on local governments.

For example, Hudson Yards is a massive TOD project in New York City that has successfully attracted billions of dollars in private investment. Located on Manhattan’s West Side, this development features a mix of office, residential, retail, and recreational spaces, all centered around the newly extended 7 subway line. The project has transformed a previously underutilized area into a thriving urban center, demonstrating how TOD can attract private capital and drive infrastructure development.

2. Increasing Property Values and Tax Revenues

Properties located near transit hubs typically experience higher values due to their accessibility and convenience. This increase in property values leads to higher property tax revenues for municipalities. These additional funds can be reinvested into further infrastructure improvements, creating a positive feedback loop that enhances the overall quality of the urban environment. The increase in property values seems to align with SDG 8 (Decent Work and Economic Growth) by fostering economic growth through urban development.

Arlington County's Rosslyn-Ballston Corridor is a textbook example of TOD. Since the development of the Metrorail’s Orange Line, property values along the corridor have surged, significantly boosting local tax revenues. Property values in the corridor increased by over 81% between 2000 and 2015, contributing to a 50% increase in tax revenues (Arlington County Government, 2019). These revenues have been reinvested into further enhancing public infrastructure and services, creating a highly desirable and sustainable urban area.

3. Public-Private Partnerships (PPPs)

TOD encourages the formation of public-private partnerships, where private entities collaborate with government agencies to develop and maintain infrastructure projects. My previous article explained how PPP can assist in overcoming challenges in TOD implementation. These partnerships can leverage the strengths of both sectors, combining private sector efficiency and innovation with public sector oversight and social responsibility. PPPs can provide a stable and sustainable funding mechanism for large-scale infrastructure projects, supporting the objectives of SDG 17 (Partnerships for the Goals).

I am using the same example to illustrate the success of PPP in TOD implementation, ie. The redevelopment of Denver’s Union Station. The project, which cost approximately $500 million, transformed the historic train station and its surrounding area into a vibrant, mixed-use district. The collaboration between the city, private developers, and transit authorities has revitalized the area, making it a key hub for transportation and economic activity.

Enhancing Public Transportation Financing

a. Increased Ridership and Fare Revenues

By designing communities that prioritize access to public transit, TOD can significantly boost ridership levels. Increased ridership translates to higher fare revenues, which can be reinvested into maintaining and expanding transit services. This aspect aligns with SDG 11 (Sustainable Cities and Communities) by promoting accessible and sustainable transportation systems. A well-utilized public transportation system is more financially sustainable and can reduce the need for government subsidies.

The city of Portland has implemented several TOD projects along its light rail lines, leading to a substantial increase in public transit ridership. Between 2001 and 2016, ridership on Portland's MAX Light Rail system increased by 64%, and the boosted fare revenues have helped the city expand and enhance its transit services (City of Portland, 2019).

b. Value Capture Financing

The Transbay Transit Center in San Francisco used value capture financing to fund its development. Value capture financing is a mechanism where the increased property values resulting from TOD are harnessed to fund public transportation projects. Tools such as tax increment financing (TIF) and special assessment districts allow municipalities to capture a portion of the economic benefits generated by TOD and reinvest them into transit infrastructure. The project’s financing plan included the sale of publicly owned land and the capture of increased property tax revenues from surrounding developments. It is a concept that those who benefit most from improved transit services contribute to their funding. This approach ensured that the economic benefits of the project directly supported its funding. The center's development, costing approximately $2.26 billion, was significantly funded through value capture mechanisms.

c. Federal and State Grants

Governments at various levels often provide grants and funding programs to support TOD initiatives. By aligning development plans with TOD principles, municipalities can increase their eligibility for these grants, securing additional financial resources for public transportation projects. This external funding can complement local efforts and accelerate the implementation of transit improvements. It can also bridge gaps and support successful TOD project implementation. The combination of private funding with some government support shall expedite the implementation.

Increasing Public Transport Ridership

1.Enhancing Convenience and Accessibility

TOD ensures that residential, commercial, and recreational areas are within easy walking or biking distance of public transit stations. This increased accessibility encourages more people to use public transport for their daily commutes and other travel needs, reducing dependency on private vehicles which contributes to SDG 11 by promoting sustainable transportation systems. As an example, Hong Kong’s MTR system is globally recognized for its efficiency and integration with TOD principles. Many residential and commercial developments are directly connected to MTR stations, making public transport the most convenient and preferred mode of travel for residents. As a result, the MTR system handles around 5.8 million passenger trips per day, underscoring the success of TOD in increasing ridership.

2.Creating Attractive Urban Spaces

These projects often focus on creating aesthetically pleasing and functional urban spaces. By incorporating green spaces, pedestrian-friendly streets, and amenities, these developments make public transport hubs attractive places to live, work, and visit, further boosting ridership. Stockholm’s Hammarby Sj?stad is a sustainable urban development project that integrates TOD principles. The development’s attractive design, combined with efficient public transport links, has led to high public transport ridership among residents. The area boasts a public transport mode share of 52%, significantly higher than the city average (City of Stockholm, 2020).

Promoting Sustainable Development

a. Reducing Carbon Emissions

TOD encourages the use of public transportation, walking, and cycling, reducing the reliance on private vehicles. This shift in transportation habits leads to lower carbon emissions, contributing to the fight against climate change. By creating compact, mixed-use communities, TOD minimizes urban sprawl and preserves green spaces, further promoting environmental sustainability, which aligns with SDG 13 (Climate Action).

I would like to mention about the Vancouver's Cambie Corridor Plan that emphasizes TOD to create sustainable, transit-accessible neighborhoods. The plan has led to a significant reduction in carbon emissions by encouraging the use of public transit and reducing car dependency. The plan aims to accommodate 32,000 new residents and 9,200 new jobs by 2041 while reducing greenhouse gas emissions (City of Vancouver, 2018).

b. Efficient Land Use

TOD also promotes the efficient use of land by concentrating development around transit hubs. This reduces the need for extensive road networks and parking facilities, freeing up space for parks, recreational areas, and other community amenities. Efficient land use also helps prevent the overconsumption of natural resources and supports the creation of resilient urban environments, that is aligned with SDG 15 (Life on Land). Curitiba in Brazil is renowned for its innovative TOD approach, which has led to efficient land use and high-quality urban living. The city's Bus Rapid Transit (BRT) system is integrated with land use planning, creating dense, mixed-use corridors that maximize space and resources. The TOD approach has helped Curitiba maintain 52 square meters of green space per capita, one of the highest in the world.

c. Enhanced Quality of Life

Communities designed with TOD principles offer residents greater accessibility to jobs, services, and amenities. The convenience of having essential services within walking distance fosters a sense of community and improves overall quality of life. Additionally, reduced traffic congestion and improved air quality contribute to healthier living conditions for urban dwellers, which supports SDG 3 (Good Health and Well-Being). I would like to quote Singapore as an example. Singapore’s commitment to TOD has resulted in a highly efficient and livable city-state. Developments around MRT (Mass Rapid Transit) stations are designed to provide easy access to transportation, shops, and services, enhancing the quality of life for residents and reducing the environmental impact. As a result, the MRT system carries over 3 million passengers daily, underscoring the success of TOD in improving urban living conditions (Urban Redevelopment Authority, 2019).

Way forward

Transit-Oriented Development presents a multifaceted approach to enhancing infrastructure and public transportation financing while promoting sustainable development. By attracting private investment, increasing property values, and leveraging public-private partnerships, TOD provides a robust framework for funding essential infrastructure projects. TOD concepts ticks many objectives and allows prudent finance management. Simultaneously, it boosts public transportation financing through increased ridership, value capture mechanisms, and access to federal and state grants. Ultimately, TOD fosters environmentally sustainable, livable communities that offer residents improved quality of life and reduced environmental impact.

The positive outcomes observed in cities such as New York, Portland, Hong Kong, Singapore and others as mentioned above demonstrate that TOD is not merely a theoretical concept but a practical solution that can be adapted and replicated worldwide. As cities continue to grow and face the dual challenges of urbanization and climate change, embracing TOD principles can pave the way for a more sustainable and economically resilient urban future. Policymakers, urban planners, and developers should collaborate to implement TOD strategies, leveraging the synergies between transportation infrastructure and urban development to create thriving, sustainable, and inclusive communities for future generations.

References

Arlington County Government, 2019. Rosslyn-Ballston Corridor: A National Model for Transit-Oriented Development. https://www.arlingtonva.us/Government/Projects/Plans-Studies/Land-Use

City of Portland, 2019. Transit-Oriented Development. https://ppms.trec.pdx.edu/media/project_files/MultiyearSummaryReport_FINAL.pdf

City of Stockholm, 2020. Hammarby Sj?stad. https://start.stockholm/en

City of Vancouver, 2018. Cambie Corridor Plan. https://vancouver.ca/home-property-development/cambie-corridor-plan.aspx

Hudson Yards New York, 2020. About Hudson Yards. https://www.hudsonyardsnewyork.com/about

Transbay Joint Powers Authority, 2019. https://www.tjpa.org/about-tjpa

Urban Redevelopment Authority, 2019. Singapore Master Plan. https://www.ura.gov.sg/Corporate/Planning/Master-Plan

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