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Clean Transport

Published on January 2nd, 2015 | by Zachary Shahan


Transit-Oriented Development Adds Value And Affordability For Residents

January 2nd, 2015 by  

Originally published on Sustainnovate.

Light-rail-in-Martin-Place1Transit-oriented development has been promoted by urban planners for ages. It was a hot and fun topic when I was in graduate school for city planning. It’s completely logical and beneficial to humans… those who live in transit-oriented communities and those who don’t. A new report finds that transit-oriented development (TOD) does indeed add value to homes but also adds affordability for the people living there. If you’re confused, here’s some information from Planetizen:

“A new report from the TOD Index reveals three important findings for the national real estate industry and housing market:

1. The financial performance of for-sale and rental housing in thousands of neighborhoods near rail stations across the United States significantly out-performs the national housing market. Among all station typologies, Transit Oriented Developments (TODs) are the leading performer.

2. Despite the impressive financial performance of TODs, households that live in TODs spend the lowest percentage of their income on housing and transportation costs, providing $10,000 in additional annual disposable income, on average, compared to the average American household.

3. Households in TODs demonstrate the lowest vehicle ownership rates and highest rates of transit, walk, bike commuting, which has important implications for environmental sustainability.”

The fact of the matter is, individuals transportation themselves around in large, mostly empty vehicles of their own is extremely inefficient. This comes with large financial costs for the individuals, and also large environmental costs that we jointly pay as a society, through things such as much higher medical bills, more suffering, and premature death.

Cars are certainly useful in some instances, but they should be used for all cases and needs. However, many communities have been developed in such a way that other options are poor and even practically illogical. Given more options in better-developed communities, people use more logical and enjoyable modes of transport.

“TODs are performing so well in the market because they provide households with options. These options include travel choices, choices of where to eat and shop, and the option to live a lifestyle with lower impacts to the natural environment,” Dr. John L. Renne, the creator of the TOD Index, stated.

Planetizen adds: “The report finds that TODs residents spend only 24% of their income on housing, compared with the 33% national average, and only spend 13% of their income on transportation compared with the 18% national average. Other key findings from the TOD Index include:

  • The average home value in a TOD was $518 per sq. ft. compared to the Zillow Home Value Index of $149 per sq. ft. for the average home in the United States.

  • Rental rates in TODs was $2.28 per sq. ft. compared to the Zillow Rent Index value of $0.89 per sq. ft. for the average rental in the U.S.

  • Since the start of the economic recovery, in January 2012, TOD home values grew by 37% as compared to a 20% growth for the average American home.

  • Since January 2012, rental rates grew by 18% in TODs compared to 8% growth nationally.”

For more, see the full TOD Index.

Image vua Cincinnati Transforum

Reprinted with permission.

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About the Author

Zach is tryin’ to help society help itself (and other species) with the power of the word. He spends most of his time here on CleanTechnica as its director and chief editor, but he’s also the president of Important Media and the director/founder of EV Obsession and Solar Love. Zach is recognized globally as a solar energy, electric car, and energy storage expert. He has presented about cleantech at conferences in India, the UAE, Ukraine, Poland, Germany, the Netherlands, the USA, and Canada.

Zach has long-term investments in TSLA, FSLR, SPWR, SEDG, & ABB — after years of covering solar and EVs, he simply has a lot of faith in these particular companies and feels like they are good cleantech companies to invest in. But he offers no professional investment advice and would rather not be responsible for you losing money, so don’t jump to conclusions.

  • Michael G

    I read the report.

    1. I can’t tell if the data includes NYC. NYC public transit (including separate entities like Staten Island) has something like 90% of the boardings in the US. Any study that averages in NYC with places like Washington, DC is invalid. NYC data completely overwhelms all that from other cities. http://en.wikipedia.org/wiki/List_of_North_American_rapid_transit_systems_by_ridership

    2. If we’re all going to get electric cars, why is mass transit a good thing? That may be a few years off, but do we really want to design our cities around mass transit knowing the need for it will go away in 10-20 years?

    3. The traditional city may have seen its heyday. There is a cost to living in the concentrated urban areas, as the referenced document points out, that is not a plus for many people. With the web and distributed generation of not just power but information, who needs huge cities. There is some optimal sized city which is big enough, but not too big, and where public transit is for those that can’t use cars. Turn around the enthusiasm from the TOD doc and put it in the mouths of residents:

    “I have to leave the city – it is certainly convenient to get around but just too expensive. Taxes to support all the convenient transit etc., are just taking too much. I have a tiny apt., that gives me claustrophobia; housing prices are way out of reach, so I have more spare money than I need which is nice, but I’m not building up any home equity like my brother in the suburbs. He can’t afford to go with me to the shows that come to town but when I visit him, he has a nice yard in the back we can sit and talk in and watch the kids play. If you have a place like that who needs to see the latest shows? I can’t raise kids here – I don’t feel it is safe for them with the constant flow of strangers.”

    This is and has been the common refrain from all kinds of people for centuries. The NYC subway was built before cars, and among other things was a way to get working class people out of the crowded, filthy, disease-ridden inner cities to the bucolic fields of upper Manhattan and Brooklyn.

    There was a recent Brookings institution report which misread the flow to the cites in the last census. Break it out by zip code and you still see 70% seeking the suburban lifestyle. C.f.:


    • There are HUGE advantages to cities and compact, transit-oriented city design. It’s really as obvious as the grass is green, so I’m really not going to spend a lot of time on it right now. But there are plenty of reasons why the human population moves more and more to cities.

      • Bob_Wallace

        There are quality of life issues as well.

        I suspect we’d be better served by small town/village/burb life with rapid, carbon-free, inexpensive transport to “work cities”.

        We may need some “young adult” towns so that their necessary learning experiences don’t inconvenience the rest of us.

  • David in Bushwick

    Cheap parking is the biggest obstacle to transit use.

    • jeffhre

      Need good policies from the start. Higher densities ultimately make cheap-parking an oxymoron.

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