What is a Transit-Oriented Development?

The Center for Transit-Oriented Development Estimates that Overall Demand for Housing Near Transit Hubs will Grow from 6 Million to 15 Million Households by 2030

What is a Transit-Oriented Development?

What is a Transit-Oriented Development?

The Center for Transit-Oriented Development Estimates that Overall Demand for Housing Near Transit Hubs will Grow from 6 Million to 15 Million Households by 2030

Author: Donald M. Pepe|December 6, 2019

Many Americans live in the suburbs and commute daily to nearby cities.  However, with transportation costs and traffic congestion both on the rise, there is a growing demand for housing near transit. In fact, the Center for Transit-Oriented Development estimates that overall demand for housing near transit hubs will grow from 6 million to 15 million households by 2030, which accounts for approximately one-quarter of all renters and buyers.

The Benefits of Transit-Oriented Development

Because supply has failed to keep pace with demand, cities and towns are increasingly looking to redevelop the areas surrounding transit stations into walkable “villages” that include both housing and amenities, such as shops and restaurants. The commonly-used term for this type of development is transit-oriented development or TOD.  

Transit-oriented development is traditionally defined as high-density, mixed-use development within walking distance (typically 0.5 miles) of a transit station. Common features include a mix of market-rate and affordable housing together with retail service, shopping and restaurants, all within walkable distance from local transit.

As highlighted by the Center for Transit-Oriented Development, TOD can have a wide range of benefits, including increased transit ridership, reduced transportation costs for residents, less traffic congestion, more walkable neighborhoods, and economic revitalization. Communities including a combination of both affordable and market-rate housing can benefit from reduced income segregation and greater economic opportunities for lower-income residents.

Public-Private Partnerships Are Key to TOD Projects

Most TOD projects rely on partnerships between transit agencies, local governments, and private developers. Because of the sheer number of moving parts, TOD projects can face significant obstacles, which can make them time-consuming and expensive. Some of the hurdles that must be overcome include complex land acquisition and financing deals, lengthy permitting processes, affordable housing obligations, potential environmental remediation, and community opposition.

To encourage TOD projects, many states are establishing regulatory, planning and funding frameworks. Examples include land assembly, zoning changes and tax incentives. Many transit agencies have also begun to sell off vacant and underutilized property surrounding their stations so that it can be redeveloped.

New Jersey’s TOD Initiatives

Transit-oriented development is gaining momentum in New Jersey. As discussed more fully in a separate article, Gov. Phil Murphy recently announced that the state’s Economic Development Authority will partner with NJ Transit to redevelop land surrounding New Jersey’s train stations. Under the plan, parking lots and other property located in close proximity to rail stations would be converted into mixed-used developments containing housing and retail businesses

Efforts are already moving forward. On October 3, 2019, NJ Transit issued a Request for Expressions of Interest (REOI) to identify a private developer or joint venture of developers to implement TOD projects on NJ Transit owned property adjacent to the River LINE Light Rail system.

The land spans the 37-mile River LINE right-of-way and includes 21 station areas across 15 municipalities. According to NJ Transit, its goal is to convert the land into vibrant TOD projects that support local and regional land use planning and economic development goals, along with its own transportation mission.

“This is a great opportunity for developers to get in on the ground floor and help create thriving local communities,” said NJ TRANSIT President & CEO Kevin Corbett. “So many cities and townships in New Jersey have grown and benefited from their proximity to NJ TRANSIT service, and we want to accelerate that growth in partnership with our host communities by promoting and encouraging mixed-use TOD on our River LINE Light Rail system.”

NJ Transit is seeking to obtain information and feedback to assess the viability of making all or a portion of its River LINE station area parcels available for redevelopment, and will review submitted EOI Responses to assess private and/or public interest in the 
River LINE properties, including market suitability, recommended land uses, potential opportunities and constraints, conceptual development scenarios and other factors that would inform overall project delivery. According to NJ Transit, if and when the agency elects to proceed with a project, it may issue a formal Request for Qualifications or Proposals for one or more station areas.

For businesses that are interested in transit-oriented development, the ability to anticipate potential obstacles and come up with creative solutions can reduce costs and delays. Accordingly, we encourage you to work with a knowledgeable New Jersey land use attorney who can help you successfully navigate the process.

If you have questions, please contact us

If you have any questions or if you would like to discuss the matter further, please contact me, Don Pepe, or the Scarinci Hollenbeck attorney with whom you work, at 201-806-3364.

This article is a part of a series covering New Jersey's new initiative to redevelop areas near public transit centers. Additional installments from the series are listed below:

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About Author Donald M. Pepe

Donald M. Pepe

Donald M. Pepe devotes his practice to all aspects of complex real estate development and real estate transactional work with an emphasis on retail and residential development.

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