Why Use It?

When implemented as an equitable development strategy, TOD can bring multiple benefits to the local community and to the metropolitan area as a whole.

Local Benefits

Revitalization around and beyond the station area. By bringing together public investments, planning resources, development incentives, and community support, TOD can become a force for dramatic revitalization and improved quality of life in a neighborhood. Focused public investments to improve transportation infrastructure and integrate the transit stop into the surrounding community can spark renewed private investment in the area—from new developers and existing residents. TOD can lead to infill development and the reclamation of vacant, abandoned, and underutilized properties that have often long-burdened communities. In addition, TODs incorporate principles of pedestrian-oriented design (such as plazas, parks, and pathways), which improve safety and comfort for pedestrians, create an appealing environment for new employers and retailers, and increase foot traffic for existing businesses.

Accessible jobs, housing, services, and recreational opportunities for residents. Creating a mixed-use, mixed-income development around a transit stop or corridor can offer local residents direct access to a range of jobs, shopping, and other services and resources.

Reduced transportation costs for residents. Linking affordable housing and jobs to transit can significantly reduce commuting costs for all residents, and the savings will be greater in relative terms (e.g., as a proportion of total income) for those with lower incomes. Transportation is the second largest household expense in the United States, after housing, and low-income working families (those who earn between $20,000 and $50,000) spend 30 percent of their household budget on transportation. Being able to walk or use transit can free up significant amounts of income for other purposes. At the neighborhood level, the decrease in transportation expenses can significantly increase purchasing power for other essentials—potentially attracting small businesses and retailers such as grocers.

Affordable housing and mixed-income communities. TOD encourages denser residential development and allows for a diversity of housing choices, including multi-family units. Other equitable development strategies such as inclusionary zoning (policies that encourage or require developers to incorporate affordable housing units into their developments) and housing trust funds (dedicated funds for affordable housing) can work in tandem with TOD to ensure long-term affordability.

Increased transportation mobility and access to jobs and other opportunities. TOD not only brings housing, jobs, and services to underserved neighborhoods, but also offers public transit options for residents to travel to neighborhoods elsewhere in the region to access jobs, child care, training centers, parks, and multiple other opportunities.

Local economic development. Retail and office space in TODs can bring much-needed tax revenue to underinvested cities and suburbs and encourage residents to spend money locally instead of at distant suburban shopping centers. This community reinvestment in turn creates revenue for neighborhood infrastructure investments like parks or schools.

Asset-building and ownership opportunities. If transportation costs are reduced through TOD, residents can apply the savings toward personal asset development. Innovative mortgage lenders have already found a way to capitalize on the transportation savings inherent in “location efficient” places. Fannie Mae’s Smart Commute™ mortgages (available in approved locations in 27 states), for example, qualify people living near transit for larger mortgages.

Regional Benefits

Reduced air pollution and traffic congestion, and attainment of climate change goals. By making transit more convenient for a wider range of people and trips, TOD can drastically reduce the number of car trips made by residents. Mixed-use TOD can lead to trip reduction by making it easier to combine shopping, banking, and other errands with the work commute, which is more commonly made by transit. A recent study of 17 TODs found that people who live in TODs use their cars half as much as the regional average. Lower rates of car use regionwide will reduce both congestion and air pollution. TOD can be an important strategy for meeting CO2 reduction goals.

Connections to housing, jobs, amenities, and services across the region. Development patterns in many regions have created a “spatial mismatch”: affordable housing concentrated in the central city or older suburbs, and the majority of new job growth in distant suburbs or neighborhoods inaccessible by transit. Concentrating mixed-use, mixed-income development near transit stops and corridors and enhancing the transportation network through new and improved stations and lines can reduce this mismatch and increase regional connectivity.

Increased neighborhood options and sustainable development patterns. TOD is not just about creating successful transit nodes—it is about creating great places: healthy neighborhoods that provide diverse housing choices, walkable streets, cultural opportunities, and more. Livability and neighborhood choice are critical aspects of regional quality of life and economic competitiveness. Strong neighborhoods, diverse housing choices, and smart growth are important components of sustainable regional development.

Regional and community visioning processes. TOD projects involve many decisions, which can make the planning and implementation process long and challenging, but it also provides myriad opportunities for stakeholders to discuss and plan for the future of their communities and their regions.

Open space preservation. TOD promotes compact development and infill development. A regional commitment to TOD can relieve pressure on developers to build in suburban areas and greenfields.