In greater New York, the biggest U.S. city where an affordable housing shortage is a frequent talking point, an estimated 74,000 acres of underutilized land near commuter rail stations has been identified as available for development as part of an increasing focus around the country on more residential construction.

Transit hubs in New York and New Jersey are surrounded by surface parking lots as well as vacant and underutilized land that are equal to the surface area of Manhattan and Brooklyn combined, according to the Regional Plan Association, a nonprofit that advocates for economic opportunity and other causes in metropolitan New York. It’s an opportunity that some commercial developers, such as RXR, are targeting.

The region has the country’s most extensive commuter rail network, with over 390 stations and a combined annual ridership of 170 million, the RPA said, adding that yearly passenger miles are more than four times those of second-ranked greater Los Angeles. Ninety-six stations already have attributes for “near-term” potential transit-oriented developments, with only minor investment and updated zoning needed, the RPA said.

“The severe shortage of affordable homes is widely recognized as one of our region’s greatest economic, social and humanitarian challenges,” Tom Wright, president and chief executive of the RPA, said in a statement. The study “underscores the immense potential to deliver abundant homes, improved affordability, thriving economies, and a sustainable environment.”

The RPA’s study comes as a push for housing has accelerated nationwide as cities and states adopt legislation or incentives for what’s known as transit-oriented developments, or TODs. California passed two separate bills in 2022, including one banning cities from imposing minimum parking requirements on residential and commercial projects near transit, New York University’s Furman Center said in a study published last year. Other states, including Massachusetts, have similar measures.

Despite some signs of slowing, New York City’s average asking rent per unit has reached a record high of $3,124, according to CoStar data. In contrast, the U.S. average asking rent per unit, while still near a peak, has fallen to $1,680 from the $1,688 set in the second quarter of 2023.

“The New York region’s extensive mass transit systems provide significant opportunities for TOD that would alleviate housing shortages while encouraging mass transit use,” the Furman Center report stated.

Despite the growing interest, there are still limits to the approach. While limiting parking near transit is designed to lower development costs while reducing dependence on cars — creating more walkable neighborhoods — some residents might not want to live in an area without parking, and some apartment developers have said they need it to attract tenants.

Even so, some developers already have taken note of the potential. New York City-based RXR is betting on transit-oriented luxury multifamily properties in the New York suburbs of New Rochelle and White Plains as part of a focus on what CEO Scott Rechler has described as “superstar cities.”

He said in an interview that “the rents are 50% to 30% cheaper than Manhattan,” and the apartments are 30 minutes away from midtown.

Transit-oriented developments in suburban downtowns are important because no matter how much housing is built in major cities such as New York, the cost of living will still remain much higher compared with the outlying communities, he said.

Developers are also focused on opportunities that span the United States. In South Florida, more than 15,000 apartment units are underway within a mile of a metro or rail station, representing about 34% of units under construction, thanks to a federal and local government focus on this type of development over the past few years, according to a recent CoStar analysis.

In New York, Gov. Kathy Hochul has called on localities with rail stations run by the Metropolitan Transportation Authority to undertake local rezoning for high-density multifamily development. In August, the state announced the completion of Avalon Harrison, a transit-oriented development at the Harrison Metro-North station built with support from the MTA.

“New York has a tremendous opportunity to help municipalities advance transit-oriented districts around stations while New Jersey can build on its existing TOD programs,” the RPA report said.

In New Jersey, Hackensack Meridian Health, one of the largest hospital chains in the state, is bringing a health and wellness center to the Metropark transit hub in the Iselin section of Woodbridge. The mixed-use project led by Russo Development has been awarded $113.7 million in state tax credits.

The RPA pointed out “restrictive zoning is predominant” in both New York and New Jersey, calling for streamlined land-use regulations to allow for more transit-oriented developments. For instance, only 39% of all stations in the two states have zoning that facilitates multifamily development while the remaining 61% has zoning that severely limits or does not allow multifamily buildings around station areas, the RPA said.

The organization cites examples of Long Island and the Mid-Hudson Valley in New York state that are experiencing a decline in the rate of housing permits due to zoning restrictions. Nassau County on Long Island has the largest number of stations where the surrounding land use is regulated by zoning that limits or entirely prohibits multifamily buildings, the RPA said, adding: “TOD is especially needed in this region, as it disproportionately relies on Manhattan’s [central business district] as a primary job center.”

Meanwhile, New Jersey counties including Bergen, Hudson, Essex, Union, Middlesex, Somerset, Morris and Passaic have increasingly led housing growth in the region due largely to pro-housing policies and programs, the RPA said.

While the number of housing units per capita across the region has fallen following the Great Recession, New Jersey posted a 24% increase, the study found.

Existing transit-oriented developments in New York and New Jersey “do not collectively match the extent of the rail network,” the RPA said, adding that single-family homes account for only about 50% of the study area’s housing stock yet cover over 89% of residential land. Multifamily buildings, meanwhile, make up 49% of the housing stock but only about 11% of residential acreage.