Wednesday, December 23, 2009

Putting the T in TOD

By Ariel

You don’t have to take Reconnecting America’s word for it, just ask your Realtor, housing that is closer to transit is worth more than housing that is farther away. This is the premise behind Transit Oriented Development (TOD) and it is a popular one among transportation policy wonks and developers. Cities and suburbs across the United States have changed their zoning codes to creating dense, walkable environments within a half mile from transit and counties, states and federal agencies are pouring money into affordable housing near transit stations. Recently the US DOT and HUD have banded together to create “Livable Communities” and target their funding to maximize the land-use / transportation connection. What excites me about this is not the seismic change in federal policy that this shift indicates, but the opportunities it means for Philadelphia, SEPTA and our metropolitan region.

To date, there are a few problems with TOD in the Philadelphia region. For one, TOD is often project based and project biased. Any new development within a quarter mile of transit is slapped with a TOD sticker of approval by developers hoping to cash in on available dollars and win good will. This means that when we look at TOD, we focus on the “D” and not the “T” which is a huge mistake. It’s a huge mistake because it assumes that all transit is good for development. As Econsult noted in their report on TOD for NeighborhoodsNow, the value of any development is contingent upon the value of the transit service provided. T’s value in “TOD” is only as strong as the frequency of service that it provides: i.e. fast frequent transit is good for development. However in Philadelphia our fastest, most frequent and reliable transit systems are in the core of the city, along the Market Frankford Line and Broad Street subway, both of which travel through our dense urban and underinvested core. Our oldest neighborhoods have been hardest hit by the late 20th century exodus into the suburbs. These potential TOD districts are marked by complicated land ownership patterns and markets developers don’t want to serve. Moreover, typically TOD’s are financed by bonds backed by rising real-estate values created by the transit service. However not only do those TIF (Tax Increment Financing) backed bonds work best when a new transit line is placed where none was before, but Philadelphia with its ten-year tax abatement and slow reassessment processes means that TIF around transit does not work in Philadelphia.

But this does not mean that there are no TOD opportunities for Philadelphia. If we ignore for a moment the D side of “TOD” in Philadelphia (three such projects are being built around Temple and Washington Lane regional rail train stations and one around the 46th and Market, elevated train line) and focus on the T potential, we find that there are regional opportunities for collaboration.

Focusing on the T in TOD means we need to think of two key measures of transit: the strength/ draw of the destination (another D in a popular transit policy acronym, O&D or origin and destination) and the frequency of service. While we have regional rail lines flowing into center city from the Main Line to Malvern, their TOD value remains relatively low: with only half hour peak headways (i.e. trains that come only once every half hour during rush hour) and hour long off-peak headways, they simply are not that attractive to Center City commuters or area residents. Increasing transit service frequency on regional rails that bring workers from the region’s wealthiest neighborhoods through its poorest and into the heart of the central business district and allows for easier access for casual day-trippers is critical and has been called for by area policy-wonks at both the Economy League and Econsult (and featured as part of a UPenn city planning studio vision plan).

There are major challenges to doing so. SEPTA can only accommodate so many cars in its tunnels during rush hour. However the bigger obstacle is how much such a project would cost, but the suburbs don’t have the tax abatements Philly does and TIF financing could potentially pay for this.

It would take a shift in mind-set; we are used to having TIF financing pay for buildings. However the very development of new buildings is actually one of the hugest impediments to TOD developers, neighbors are worried about having new buildings come in and with it new families (and more children which means more teachers) and more cars. Investing in transit itself can help build regional land values without raising taxes, building new buildings or bringing new children into the neighborhoods. This would be a win for both the counties and the city. The counties (and municipalities along the rail lines) become more competitive and more frequent service along transit lines that also pass through Philadelphia’s inner neighborhoods builds the value of the surrounding neighborhoods within the city. Most importantly it provides an opportunity for cooperation between counties and the City, who all too often clash over SEPTA and the allocation of resources within the system.