The Bay Area Won’t Meet Its Goals Without a New Transit-Oriented Development Policy

rendering of proposed transit-oriented development at Oakland's Lake Merritt BART station

The proposed transit-oriented development at Oakland's Lake Merritt BART station would bring 519 homes (233 of them affordable) and 517,000 square feet of commercial space. Rendering by PYATOK architecture + urban design, courtesy BART.

While COVID-19 remains a pressing challenge for everyone, the crises that confronted our region before the pandemic have not gone away. Inadequate and unaffordable housing, growing racial inequality and growing impacts from climate change — from wildfires to drought to flooding — all require our attention. Building diverse communities with much more housing, services, and jobs around our existing and future transit hubs is the best opportunity we have to tackle these immense challenges. Such communities decrease driving, reduce the impacts of climate change, and help our region get the most out of transit investments. By their design, these places make it more convenient to take transit, walk or bike than to drive. When planned carefully, they can support an inclusive and diverse community and provide people with better access to opportunity. The collection of policies to promote such communities are called transit-oriented development (TOD) policies.

Over the past three years, the Metropolitan Transportation Commission (MTC) has been leading a regional process that emphasizes the need for transit-oriented development. The product of this effort, Plan Bay Area 2050, charts a course to reduce greenhouse gas emissions, plan for the region’s housing needs for people of all incomes, reduce transportation cost burdens and roadway congestion, and advance racial equity. There’s one thing this 30-year vision makes clear: to meet these goals, the region must accommodate many more residents, jobs and services in transit-oriented areas.

But embracing change can be a tall order. For example, neighborhood resistance to new housing and concerns about parking may prompt a city to opt for low-density development with more parking spaces — choices that are not likely to make a dent in climate change. This means local jurisdictions alone are not going to drive sustainable housing and jobs growth around existing stations. They’ll need incentives to encourage them to plan areas around transit as equitable, sustainable population and job centers. It is MTC’s job to create policies that encourage all communities to advance these regional goals. And it’s MTC’s obligation to prioritize its limited transit and roadway funds to growing transit-oriented communities. Failure to be ambitious will risk undermining the sustainable communities strategy just as it is being published.

What’s needed now: A transit-oriented development policy for today’s goals

A regional policy is necessary to clarify the Bay Area’s ambitious goals for transit-oriented communities, which are laid out in Plan Bay Area 2050. A regional policy is also necessary to specify how regional funding resources will be prioritized to help communities deliver on these transit-oriented development goals . For this reason, it is both appropriate and necessary that MTC update its now-outdated 2005 regional transit-oriented development policy with an eye toward the funding and policy incentives that will be needed to deliver the regional goals established in Plan Bay Area 2050.

While a policy update may not sound like significant change, this one presents an extraordinary opportunity to advance the Bay Area’s sustainability, equity, livability and economic development goals. Getting it right could mean the difference between creating a sustainable and equitable future for the Bay Area — or not.

Regional transit-oriented development (TOD) policies encourage or require cities to create development that both supports and takes advantage of nearby transit service with increased building densities and designs that promote transit use. However, focusing just on new development is not sufficient, as other considerations are essential to creating safe, equitable, transit-oriented places. There has been a growing emphasis on the broader concept of transit-oriented communities (TOCs), which pair new transit-oriented development with broader design changes throughout the community to create and support more equitable, inclusive and transit-oriented places. Support for TOCs can include anti-displacement and other community stabilization policies, bicycle and pedestrian facilities, parking policies, a broad array of services and an attractive public realm.

A transit-oriented communities policy must define not only the characteristics needed around major transit hubs but also how local jurisdictions will be encouraged to deliver such change, what regional resources can be directed to support implementation and what outcomes the government agency that has created the policy expects. Not every community with a transit station is the same, so the policy should not make the same requirements of each one. SPUR’s report Model Places, developed with AECOM as part of SPUR’s 2070 Regional Strategy, illustrates how a wide variety of neighborhood types can grow to accommodate the housing, jobs, and services that transit-oriented communities need.

This article uses the term “TOD policy” because that’s what MTC calls its policy. However, SPUR feels strongly that MTC’s regional TOD policy must evolve to become a transit-oriented communities policy. We believe the update we’re calling for can achieve this shift.
 

Why is the current regional TOD policy inadequate?

Over the past 15 years, housing and jobs have continued to grow in areas that are not well-served by transit, leading to more driving and congestion, while increasing transportation costs and mobility challenges. At the same time, lower income residents who benefit most from convenient access to transit have struggled to find affordable housing and have moved in large numbers to new neighborhoods that are not well-served by transit. There are few affordable home ownership opportunities near transit, leaving very few opportunities for families to build wealth while leading a transit-oriented lifestyle.

MTC’s original 2005 TOD policy is now outdated and does not apply to most places needing support for transit-oriented communities. Adopted as part of Resolution 3434, which established the Regional Transit Expansion Program Strategic Plan, the policy set specific targets for the average number of housing units that must be accommodated in each station area located along major new proposed transit corridors. In order to receive funding from certain state and federal funding sources controlled by MTC, these new proposed transit corridors were required to meet the target number of housing units per station area. For example, Sonoma and Marin counties were required to make zoning changes in station areas along the SMART train corridor so they could accommodate an average of 2,200 housing units within one half-mile of each station. This policy applied to nine major transit corridors under consideration for funding when it was adopted in 2005, but has not since been updated to include additional transit corridors. It was a groundbreaking approach to encouraging TOD in 2005, but for several reasons it is no longer sufficient. Here’s why:

  • Nearly all the corridors where the policy applies have been completed or are under construction.
  • The station area densities required by the current policy — ranging from 4 to 8 units per acre — are not sufficient to justify costly new transit investments, nor are they sufficient to support the kinds of transit service frequencies that will reduce auto dependence.
  • The policy only leverages funding for new transit extensions, yet significant funding for transit today is dedicated to enhancing existing transit corridors, not building new ones.
  • The policy does not provide incentives or direct support for other components of transit-oriented communities such as reduced parking, transit-oriented jobs and services, investments in sustainable station access.
  • The policy does not address the need to stabilize transit-oriented communities where there is risk that existing residents and businesses could be displaced.
  • The policy’s affordable housing incentive counts one affordable unit as equivalent to one-and-half market-rate units for the purpose of meeting housing production thresholds. This incentive proved to be insufficient to drive strong affordable housing production. In addition, this approach put affordable housing goals in competition with basic transit-supportive density goals, since the building affordable units meant not needing to meet the same density targets.

The current policy is not only failing to deliver the transit-oriented communities we need, it is doing harm. The density targets from 2005 still serve as the baseline for new TOD policies being established by transit agencies today, even though these densities are insufficient to deliver on Plan Bay Area 2050’s transit-oriented housing and jobs commitments. For example, in December 2019, the Tri-Valley San Joaquin Valley Regional Rail Authority approved a new TOD policy for the proposed Valley Link Rail Project. This 2019 policy (see page 157) specifically cited the average station-area target of 2,200 units from MTC’s 2005 Policy, which was understandable in the absence of an updated standard. The 2,200 units per half-mile radius station area is equivalent to a gross density of four units per acre — the low end of the spectrum for typical single-family zoning. And this very low standard still does not represent the minimum density for each station area. Rather, it is the average for the whole corridor, implying that some stations could have dramatically less density than this. Investing in transit corridors with such low densities will guarantee failure of our climate, equity, and mobility goals. Some argue accurately that very high-density buildings do not make economic sense for certain stations. Consideration of what level of density is justified by the market is part of MTC’s policy analysis. Where these densities are very low, the policy should consider interim uses that allow for mid-term redevelopment.

Since the original regional TOD policy was approved in 2005, MTC has developed two other major programs that function to support transit-oriented communities, the Priority Development Area (PDA) Program and the One Bay Area Grant (OBAG) Program. These programs are briefly summarized below, noting where they fall short of delivering the incentives needed to create transit-oriented communities.
 

Priority Development Area Program

This program allows jurisdictions to nominate areas with high-quality transit service within an existing urbanized area as a Priority Development Area (PDA) – thereby formally designating the area for growth. (“High-quality transit service” means that at least half of the area must be within half a mile of an existing or planned rail station, ferry terminal or frequent bus.) The benefit for a community designating a PDA is that MTC funds planning for these areas, provides guidance for what PDA plans should contain, and prioritizes discretionary funds to support growth in PDAs. The guidance for developing these PDA plans addresses key factors for transit-oriented communities including:

  • Affordable housing and displacement strategies
  • Market demand analysis for higher density development
  • Multimodal access needs
  • Pedestrian-friendly and accessible design
  • Parking policy and management

Overall, the PDA program has delivered great benefits. Station area plans have led to more thoughtful and integrated transportation and land use planning, and have delivered communities that are more walkable, more affordable and more sustainable than they would otherwise have been. But the program is voluntary and has not produced nearly the level of TOD growth that the region needs in its PDAs. For example, across the more than 200 PDAs in the Bay Area, the program has only delivered plans for 110,000 new homes and 200,000 jobs near frequent transit over the past 12 years. Considering that Plan Bay Area 2050 calls for 1.4 million new households over the next 30 years, this current pace of PDA development suggests that we could accommodate only about 20% of the region’s growth in priority development areas. In contrast, Plan Bay Area calls for accommodating 82% of new households in these transit-rich zones. And this inadequate pace is even further from regional targets than it seems because it counts planned growth, not just actual, constructed housing units.

There are several reasons we don’t see more homes or jobs resulting from the PDA program. First, local jurisdictions decide if they wish to establish a PDA in a qualifying area. When a local jurisdiction chooses to establish a PDA, compliance with MTC planning guidelines for PDAs is also voluntary. As a result, it’s easy for cities to prevent any new development or to allow auto-oriented, low-density, inaccessible development to continue in these transit-rich areas. Second, the PDA program does not typically yield enough planning or implementation funding for jurisdictions to deliver transit-oriented, accessible, high-density development at the scale called for in Plan Bay Area.
 

One Bay Area Grant Program

The MTC One Bay Area Grant Program (OBAG) first began in 2012, pooling flexible federal transportation funds under MTC’s control and prioritizing funds to advance Plan Bay Area goals. Some funding qualification requirements and formula factors directly support transit-oriented communities. For example:

  • Designating a portion of funding to pay for the process of developing the PDA plans discussed above
  • Targeting 50% to 70% of funds toward transportation projects that are inside PDAs or that improve access to and from PDAs
  • Distributing funds to county congestion management agencies based upon jurisdictions accepting their fair share of regional housing allocations, then actually delivering new housing units and delivering an appropriate share of affordable housing units
  • Mandating compliance with key state and regional requirements that support walkable communities and affordable housing growth, including committing to complete streets, adopting a housing element that is consistent with state law and affirming compliance with California’s Surplus Lands Act

Overall, the program has been successful at concentrating flexible federal transportation funds to improve access for transit-oriented locations. However, the policy has not leveraged enough funds to support the scale of growth the region is seeking at transit stations, nor have the funding evaluation criteria created sufficient incentives for communities to deliver the pace of transit-oriented housing and jobs that Plan Bay Area needs.

The OBAG program is now completing its second 5-year cycle, with the criteria for the third cycle (OBAG 3) currently under development. This creates an immediate opportunity to further leverage federal transportation funds to advance the region’s transit-oriented community goals. This is particularly important in light of a current federal infrastructure funding proposal that may dramatically increase funding sources for the OBAG program. MTC’s research on the updated TOD policy must immediately inform ongoing discussions on the OBAG 3 funding criteria.
 

Other MTC Programs

There are a number of smaller MTC programs that relate directly to transit-oriented communities. These include:

  • The Transit-Oriented Affordable Housing Fund, a $50 million revolving loan fund that supports affordable housing together with services such as childcare centers, health clinics, fresh food outlets and other retail space
  • The Bay Area Preservation Pilot, a $49 million property acquisition loan fund that supports nonprofits to acquire properties near transit that are currently affordable to low- and moderate-income households but are at risk of becoming unaffordable
     

What are the priorities for an updated regional TOD policy?

MTC’s TOD policy update is an opportunity to knit together a number of different policies and programs to deliver great places in areas well-served by transit. The following are examples of what a new regional TOD policy must tackle.
 

1. Include existing transit stops.

The current TOD policy is focused on transit expansion. It sets growth targets only for stations on proposed new transit corridors, with new transit investments contingent upon these corridors meeting the growth targets. Although this approach should continue, this can no longer be the sole focus of the policy. Transit expansions make up a small fraction of transit investment, with greater focus now on increasing frequency, reliability and access for existing transit corridors. Examples include electrification and grade separation along the Caltrain corridor, new BART stations within an existing BART corridor (e.g., Irvington Station in Fremont), and upgrades to bus rapid transit, such as the new Tempo Line in the East Bay or Geary BRT in San Francisco. A strong TOD policy will be designed to deliver transit-oriented communities around all areas served by high-quality, frequent transit.
 

2. Include performance targets.

The regional TOD policy should be driven by concrete regional goals — specifically by regional targets for housing and job growth, equity and share of travelers that choose transit. Plan Bay Area 2050 encourages strong housing and job growth within targeted “growth geographies,” including the PDAs discussed above. The draft plan assumes that 85% of the projected 1.4 million new housing units built by 2050 will be located in these places. This amounts to nearly 40,000 units per year being built within PDAs and other areas well-served by transit. Similarly, the plan targets 55% of new jobs within target growth geographies, amounting to more than 25,000 jobs per year. Plan Bay Area 2050 further assumes a subdivision of affordable housing units at levels affordable to medium-, low-, very low- and extremely low-income families. These growth targets should form the basis for the TOD policy update so that future transit oriented communities will accommodate housing at all income levels. This is particularly important since low-income residents often benefit most from proximity to regional transit.
 

3. Expand and prioritize funding to meet realistic development costs.

Inadequate funding is one reason that TOD is not being delivered at the scale and pace that regional plans intended. The costs of infill development, particularly in high-density physical forms, are often extraordinary. Factors that make TOD particularly costly include the need for:

  • New and upgraded infrastructure (roads, utilities, sidewalks, landscaping, plazas, etc.)
  • Significant inclusionary below market-rate housing
  • Identifying parking alternatives for some portion of surface parking lots, often the best TOD development sites

Some of these costs can be reduced, for example by minimizing the amount of replacement parking that must be built, or reducing development costs through permit streamlining. The state will need to play a role on some of these matters, including by putting limits on development fees in transit-oriented areas and by allowing more resources to be leveraged through infrastructure financing districts. (Historically, redevelopment played a strong role in financing infill housing development in the Bay Area. The funding gap created when California’s redevelopment agencies were dissolved in 2011 has not been replaced.) Basic construction and infrastructure costs, however, still require more significant funding than MTC has provided to date. With unprecedented federal infrastructure funding likely to be approved soon, the TOD policy must place a strong regional priority on using new funding sources to support the planning and infrastructure investments necessary to deliver TOD.
 

4. Include priorities for commercial development.

While affordable and market-rate housing are urgently needed, the new TOD policy must also include goals for jobs and other commercial development around transit. Research by SPUR and others has demonstrated that putting jobs near transit stations increases transit use more than putting housing near stations. That means having jobs close to stations is also vital for supporting transit use, reducing private automobile use and congestion, and meeting air quality and climate goals.

The TOD policy should also establish targets and incentives to deliver a broad array of services around transit hubs, such as childcare, shopping, health care facilities and grocery stores. This will ensure that communities with fewer cars have access to services, and that anyone accessing these transit stations will be able to combine trips to meet many of their daily needs.
 

5. Require community stabilization policies.

Communities with great regional transit have experienced rapid change and displacement pressures for decades. A regional TOD policy must help existing residents and businesses continue to benefit from investment in transit-accessible places. This is necessary not only to maintain equity and community stability, but also because low-income residents often benefit the most from access to reliable transit. The regional TOD policy must encourage local anti-displacement policies that ensure existing residents can stay put or remain in the immediate community if properties are redeveloped. It should also encourage affordable homeownership options as an important tool to stabilize the community and help close the racial wealth gap. The TOD policy should also identify and encourage policies that will help retain small businesses and the cultural character and identity of the communities that host these transit hubs.

Examples of community stabilization policies can be found in SPUR’s report Rooted and Growing. Policies discussed in this report that apply in transit-oriented communities include:

  • Create a regional land bank or use community land trusts to acquire single-family properties, particularly when they go into foreclosure.
  • Require financial and technical assistance for tenants who are forced to relocate, replacement of all units demolished or removed from the housing stock and the right to return for former tenants.
  • Prioritize affordable housing units for people who have been displaced or who are vulnerable to displacement.
  • Include displacement-reduction measures as a performance target for planning processes.
  • Give tenants, public agencies and affordable housing nonprofits the first opportunity to purchase multifamily buildings or parcels when they are put on the market.
  • Invest in the basics: community centers, schools, parks and services.
  • Strengthen key arts and culture organizations in neighborhoods experiencing change.
  • Create an explicit process for an ongoing community dialogue between newcomers and longtime residents to process neighborhood change together.


6. Require parking policies that support transit.

Parking policies around transit must support the goal of diverse, walkable and safe communities. Space is at a premium because transit hubs have so many demands: they must accommodate high-quality access for a wide variety of travel modes while simultaneously creating great public spaces and a vibrant and walkable community where people can live and work. Doing all of this requires prioritizing access for the most space efficient modes and prioritizing developed land for housing, jobs and services. This means minimizing single-occupant vehicle use and the vast space required to store cars. Toward this goal, a TOD policy must address parking management including the following areas:
 

Parking requirements for development

A regional TOD policy should prohibit parking minimums for development and impose low parking maximums. A bill (AB 1401) recently failed in the California Legislature that would have prohibited parking minimums near transit, making it clear that the Bay Area will need to act at a regional level. Parking minimums dictate a minimum number of off-street parking spaces that a development must deliver based on the type of development. Elimination of parking minimums is essential to prioritize land uses that take full advantage of nearby transit resources and to reduce the cost of development, but it’s not enough to meet the region’s sustainability goals. Parking maximums, or caps on the amount of off-street parking that a development is allowed to create, are also needed. Private developers often add parking even where it is not mandated as a means to appease community members who prioritize parking. Parking maximums ensure that developers won’t simply add parking as a way to smooth project approvals.
 

On-street parking and curb management

The push to build excessive off-street parking stems from community concerns that developments or transit stations will result in more cars, and thus more competition for existing on-street parking. This can make it difficult to park on the street in both commercial and residential areas. To address these concerns, it is necessary to manage on-street parking through residential permit parking programs, time limits and proper pricing is necessary to prevent the negative effects of spillover parking from new development. Implementing such curb management programs requires technical expertise and funding. Technical assistance and start-up costs for curb management should be specifically addressed in a regional TOD policy.
 

Shared parking systems

Due to decades of overbuilding and mismanaging parking, many transit station areas have a significant number of parking spaces that go unused. These parking spaces can often be shared between residents, transit patrons, business customers, and other drivers, who often require parking at different times from one another. Shared parking can minimize the cost and inefficiency of new parking construction. Effective shared parking at station areas often requires an organization to oversee a shared parking management system. It may also require regulatory changes to create flexibility where local restrictions currently tie specific parking spaces to specific properties or uses. A TOD policy should identify funding, technical assistance and regulatory changes that are necessary to deliver shared parking.

 

7. Support great station access design and programs.

Delivering reliable, affordable and sustainable travel to major transit hubs from surrounding areas will dramatically increase the number of homes and destinations that are accessible by high-quality transit. Easy access to major transit hubs not only makes it more sustainable and affordable to get around the region, it also helps the communities nearby these transit hubs to access the diversity of services and amenities that will — if the TOD policy is effective — become the norm for regional transit hubs. In order to drive attention and innovation on station access, MTC’s TOD policy should create station access performance targets, policies and incentives that improve station accessibility. BART’s 2016 station access policy provides a helpful example that includes broad goals and strategies, a collection of different station categories that allow different station access priorities for each different stations type. BART’s policy also established near-term performance targets for each type of station (e.g., the portion of trips to the station by sustainable travel modes).
 

How should pandemic travel changes influence the TOD policy development?

The pandemic has raised questions for many about the future role of transit. Increasing the number of residents, jobs and services that are accessible to transit remains important despite recent changes in travel behavior. The pandemic’s impact on long-term travel patterns remains unknown, but we can be confident that more people will work remotely more of the time, and that low-income, Black and Latinx workers will have less opportunity for remote work. At the broadest level, disrupted commute patterns, remote work, and public health concerns have hurt transit ridership and capacity, yet many workers will still depend on affordable and reliable transit. Strong growth in transit-oriented communities will increase the number of transit-reliant households and thereby support transit’s recovery.

A more specific benefit of TOD relative to pandemic transit impacts relates to time-of-day travel. Specifically, flexible remote work policies are likely to reduce the share of travel during traditional peak commute periods. For this reason, supporting a robust transit network during off-peak hours becomes even more important. Because people living close to transit are far more likely to take transit outside of commute periods, growth in transit-oriented communities will support a transit network that provides quality service outside of traditional peak periods.
 

What’s the process from here?

MTC is expecting to approve a new TOD policy in 2022. Staff and consultants are reviewing best practices from around the country, analyzing existing MTC policies that relate to transit-oriented communities and developing initial TOD policy proposals for public discussion. These proposals are likely to be presented and discussed at MTC’s Policy Advisory Committee, and the Commission in December 2021. SPUR — in partnership with housing and transportation advocacy organizations including Enterprise Community Partners, Transform and Non-Profit Housing Association of Northern California — will track these discussions and continue to present our perspective on priorities.