Most of the U.S. housing shortage could be addressed by building affordable residential property near train and bus stations, some transportation professionals say. But to pull it off, they add, developers need to overcome local opposition and get control of more land.
As much as three-quarters of an estimated 5 million shortfall of residences across the country could be met by building around transit stops, if developers are permitted to pack enough houses, condos or apartments nearby, said Harriet Tregoning, an adviser to the federal Department of Transportation and Maryland’s former secretary of planning.
She made the comment in a panel discussion this week at the U.S. Department of Housing and Urban Development that included several government, nonprofit and private-sector leaders focused on the promise of development built close to bus and train hubs.
Transit agencies that operate bus, subway and commuter rail systems are in a good position to make land available for housing, the panelists said, either through buying it as part of expansion projects or by making property available that they already own. States are increasingly leaning on their transportation agencies to make these lands available for housing, though they are getting some pushback because of limited transportation budgets.
“The demand for capital to build transit is so high that the transportation agencies say, ‘We can’t fund housing because we need to pay for the transit,’” according to Tregoning.
One major challenge to the approach is that the cost of land tends to skyrocket once a transit line is operating. So agencies need to look for opportunities to buy property for housing as early as possible when planning new service, especially if some of the residences are going to be priced affordably, said Eryn Deeming Kehe, a development manager for Portland, Oregon’s Metro planning agency who was on the panel.
There are other challenges to the approach. The panelists pointed out that even if the land is acquired, multiple layers of financing will most likely be needed. Some developers may need to look for tax credits and grants as well as governmental direct funding.
Potential benefits
Even so, the strategy can be successful. One state that has centered development near bus and train lines is Massachusetts, which approved the MBTA Communities Act in 2021. The law requires 175 towns and cities served by the T, as the Boston area’s transit network is informally known, to designate a portion of their territory to allow duplexes, townhouses or apartments. Detached or single-family homes are also allowed, as long as it’s possible to build at least 15 homes per acre. As of this week, more than 100 of the affected towns and cities had met the law’s requirements.
There could be a number of positive outcomes of building more housing near transit, Tregoning noted, including the reduction of stormwater runoff, since homes are typically built on paved land rather than on undeveloped land, fewer cars on the road and less air pollution.
Maryland could potentially build 2,600 new homes on land the state’s department of transportation owns along the commuter rail line that connects Washington, D.C., and Baltimore, Stan Will, managing partner of real estate consulting firm HR&A Advisors, told Tregoning and fellow panelists. The Washington Metropolitan Area Transit Authority, which operates the subway system in Washington, could provide another 17,400 units.
“What better way to foster new riders than by building housing next to stations?” Will said, noting how ridership has declined significantly since more people shifted to remote work during the pandemic.
Jake Day, Maryland’s secretary of housing and community development, said his state passed a bill this year to offer affordable housing developers a 30% increase in the size of their projects if they build within three-quarters of a mile of a passenger rail station. The state also limited the ways local governments can slow or stop such projects, like requiring multiple public hearings where people can speak in opposition to the projects.
“The fraught nature of this is that the fight is at the local level,” Day said. “It’s about people grandstanding at public meetings.”