Senators Want More Transit Hubs to Help Reduce Housing Costs
WASHINGTON — A Senate panel strategized Tuesday during a hearing on ways to stimulate transit-oriented development with government funding.
Transit-oriented development refers to urban planning that integrates high-density residential, commercial and recreational spaces within walking distance of public transit hubs.
It is supposed to give a boost to local economies, make housing more affordable and to promote lifestyles less dependent on cars.
It also comes with high initial infrastructure costs.
The U.S. Department of Transportation uses money appropriated under the Transportation Infrastructure Finance and Innovation Act to pay for such projects.
The program provides federal credit assistance for direct loans, loan guarantees and lines of credit to finance surface transportation projects of national and regional significance, usually valued at more than $50 million. It started in 1998 as a means of leveraging federal dollars to attract private and non-federal capital into transportation infrastructure.
The Transportation Department has been discussing 24 potential projects with local officials recently but only one has been approved.
The question before a Senate Appropriations subcommittee was why it has fallen short of its goals.
“We need to make it easier to build in any way we can,” said Sen. Brian Schatz, D-Hawaii, chairman of the Subcommittee on Transportation, Housing and Urban Development, and Related Agencies.
The subcommittee’s concern was prompted largely by recent economic reports on high housing costs, which could be brought down with transit-oriented development.
Harvard University’s Joint Center for Housing Studies reports that the ratio of household income to housing costs is at an all-time high.
At the same time, many of the 42 million Americans who report being cost-burdened by housing could benefit from dense housing near transit hubs, according to transportation experts at the subcommittee hearing. Cost-burdened means the households spend more than 30% of their income on housing.
“This is the exact right time to start deploying these TIFIA loans for housing,” Schatz said. “It’s sort of go time.”
Sen. Cindy Hyde-Smith, R-Miss., described one of the obstacles to funding for TOD as “layers upon layers” of regulations and other bureaucratic red tape.
Her comment about the barriers won agreement from transportation experts who testified at the hearing.
“This program has had trouble achieving escape velocity and producing any housing,” said Tracy Hadden Loh, a fellow at the Brookings Institute who specializes in real estate and transportation. “Just be careful about making it more complicated.”
One of the changes she suggested was lowering the requirements on local communities for matching financing.
They must pay 51% of the cost of TOD projects to receive the federal government’s 49% share under the TIFIA program. Loh suggested the federal government pay 75% of the cost.
“This would reduce the burden on project sponsors to find gap financing from other sources, which for some projects will make the difference between feasibility and impossibility,” Loh said.
Other impediments to TIFIA financing include stringent environmental regulations and Buy America rules that require using American manufacturers and builders for projects, she said.
Loh suggested that the Transportation Department grant “an administrative waiver to speed up the more pressing policy priority of building housing near transit.”
Adhi Nagraj, chief development officer for the real estate development firm McCormack Baron Salazar, said housing near transit stations could reduce the costs for residents who cannot afford automobiles.
“Low-income folks don’t have a ton of options,” he said.
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