Affordable housing is quickly becoming a hot-button issue for cities across the country. The provision of affordable housing is of particular interest to public transit agencies with a focus on equity. With the relatively quick reversal of the COVID-19-induced urban flight from cities, rental prices are quickly rising. Manhattan in June of 2022 saw a historic high in average rent prices. Nationally, June’s median asking rent price was more than $2,000 monthly for the first time. Many communities are facing increasing financial pressures from the rent hikes, and affordable housing policies remain the most important for many municipalities. Transit agencies are uniquely positioned to assist in alleviating the growing crisis by supporting and even directly constructing affordable housing units. Doing so can also help transit agencies with increased ridership.

A study by a small team of professors and graduate students at the University of Utah and presented by HUD analyzed 85 transit-oriented developments (TODs) across the country. Of these, one-third were found to have no affordable housing at all. Of all the affordable housing units apart from TODs, 16 were responsible for 40 percent of all the units, indicating greater disproportionality with which agencies are constructing affordable units on their properties. The study concludes that currently, “TODs are generally unaffordable for low- and moderate-income households. A lack of city- and state-level policy has left affordability in TODs fragmented because the production relies on nonprofit developers.” 

More creative solutions are being proposed instead of relying on nonprofit funding or tax credits. Sound Transit, which operates in Seattle, is building 318 affordable housing units near light rail stations in collaboration with Amazon. The project received $42.5 million from Amazon through low-interest loans and grants. Future renters will earn 30% to 80% of the area’s median income. Amazon plans to follow up with 1,200 affordable housing homes on Sound Transit property. The public-private partnership between Sound Transit and Amazon may provide a guideline for how other transit agencies can support the communities they serve apart from traditional transportation. They also will increase ridership demand for transit.

NJ Transit has ambitiously begun several TOD initiatives across the state encompassing several transit modes. Funding was partially secured with FTA grants to develop affordable housing alongside Bus Rapid Transit stations. Plans are in progress to construct TODs next to Metropark Station, Newark, and Jersey City and surrounding other major commuter rail stations. NJ Transit is leading the nation in the number of new TOD communities. There is no data yet indicating how many of these new units will be classified as affordable housing, but some will be. 

BART is launching several TOD developments specifically for affordable housing units and is seeking partners to develop several locations alongside existing stations. Partners are primarily local nonprofit charities with significant funding. The Port Authority of Allegheny County released new guidelines in 2021 for best practices when implementing TODs, hoping for induced demand leading to new construction. This has led to several communities reexamining their zoning codes in support of affordable housing in TODs. One of the most ambitious projects features a multi-modal transit station and mixed-use development. Financing of almost $160 million for the total project comes from local, state, and federal investments alongside other unfinalized means.  

The objective of this study is to identify strategies and tools public transit agencies can use to increase the provision of affordable housing in their regions. The study should:

• Examine the varying definitions of affordable housing,
• Identify the strengths and weaknesses of various funding methods,
• Identify the strengths and weaknesses of various development methods,
• Identify critical development decisions that impact transit access,
• Examine impacts on public transit ridership and demand from affordable housing development,
• Examine best practices for successful affordable housing in TODs with recommendations, and
• Identify agencies and regions with successful synergy between affordable housing and transit.