Grigio Metro
TOD in Tempe, photo by Steven Vance

In the last couple of weeks I’ve been trying to dig into the data around transit-oriented-development. I first looked at the demand for housing near transit how that affected homes prices. After that I took a look at whether supply for housing near transit was keeping up with demand – the answer is ‘no’, by the way – and whether the excess demand could be used to create new transit lines.

This time I’m looking at what might happen if not enough housing is built to keep up with demand.

The obvious effect of demand growth exceeding supply growth is that prices for homes near transit will rise and people will continue to sprawl out to far-away exurbs. Ryan Avent explains it perfectly:

Imagine two areas: Gotham and Pleasantville. Say the demand to live in Pleasantville increases a little while the demand to live in Gotham soars. And say that due to differences in land use restrictions, housing supply responds dramatically in Pleasantville and very little in Gotham. Then what we’ll observe in Pleasantville is a rapid increase in population and slower growth in prices, and what we’ll observe in Gotham is rapid growth in prices and slower growth in population. And this is exactly what we observed in the real world. Suburbs have seen massive housing growth and rapid population growth, but prices in central cities have soared, even in many places where population numbers are level or falling


Rising prices are a first-order effect of demand outpacing supply, but there a couple of second-order effects that emanate from price increase.

One major effect is a demographic change. This American Radio Works project, “Back of the Bus“, focuses on minority issues when unequal transportation access occurs, but I think we can consider race a proxy for class in this particular program. The story is essentially that the Interstates allowed wealthier and middle class people to move out to the suburbs, leaving many urban cores more to poorer people. Now that the demand curve is changing and prices in the urban cores are going up, poorer people are being priced out of the center city even when transportation costs are rising.

[Former Denver Mayor Federico Pena] “The day you sit back and say I don’t care, just let the economic market forces dictate who’s going to live where and what’s going to happen to your city, then I do think we run the risk of having almost a push out of low-income, minority communities away from our inner cities, and pushed out 20, 30 miles or 40 miles.”

This could become a vicious cycle. If the poor and middle class are pushed out of cities and transit-friendly places to make way for wealthier people, urban agglomerations could become even more deeply divided places. And as people who’d like to live near transit are forced to live farther and farther from it and from walkable neighborhoods, it would become more and more difficult to build transit to where they are.  This is partly because they are farther out so it would cost more to get to them, but it’s also partly because they might not have the money or density in their communities to afford to build the line anyway.  Even then, if transit gets built and that drives up housing costs because new buildings aren’t constructed, the situation isn’t improved any.

This report summarizes (with lovely pictures) a number of strategies that cities around the country have been using to maintain or increase the amount of affordable housing near transit. Sadly, there’s a limit to what can be done with affordable housing programs. Denver has one of the most aggressive light rail expansion programs in the country, with 120 miles of tracking scheduled to open this decade. There, the Denver Enterprise and the Urban Land Conservancy have a plan to invest $15 million for affordable housing near stations, but in the grand scheme of things $15 million isn’t much. Portland has had a similar land acquisition fund, but its budget was only $10 million.

Really the only way to ensure affordable housing near transit is to increase the supply of housing. For obvious reasons, developers in general only build when prices are high, but new development eventually becomes old and an increased supply of new units can keep prices down on older ones.

Location matters more when it comes to energy use than does green building.

One policy suggestion is to reduce the emphasis on building “green buildings” and instead focus efforts on getting the cost of building new transit down. According to this study (via here) focusing on residential buildings, even buildings with the most energy efficient-designs and construction are outperformed in energy conservation by transit-oriented construction. Focusing on getting transit-oriented-housing built at all is a better goal for reducing energy consumption (and green house gases if you care about that sort of thing) than rewarding new buildings that are built “green”. Some ways to carry out this policy suggestion could be increasing heights, floor-area-ratios and decreasing parking requirements near transit.

Another suggestion is to investigate the sort of housing that people want near transit. The multi-family zoning codes in Seattle have instituted a one-parking-spot per unit requirement for units with two or fewer bedrooms, but the requirement increases by half a spot per bedroom from there. Because building parking is expensive, this means at the margin a lot more one-or-two bedroom units compared to three or more bedroom units.

In a similar vein, demand for multi-generational housing has been increasing in recent years, which generally means more bedrooms per unit. Building good multi-generational housing could mean a net increase in affordability for the residents  and an increase in ridership as senior citizens also make up a large portion of transit users. Not building enough could mean more seniors without access to transportation and also more demand on para-transit systems.

In all, the situation is not as bleak as I had first thought it was. A lot of rail transit is getting built in this country right now, and a lot of housing is going up around it. Cities and regions have been innovating new ways of ensuring some affordable housing is included when these lines are built. Though it might not be enough – in areas like this nothing ever seems enough – it’s a lot of small steps and some big ones in the right direction.

45 Replies to “Future of Housing Near Transit”

    1. In energy use, Energy Star is supposedly more comprehensive than LEED. LEED just considers many other factors (like materials and runoff). Energy Star is appropriate for this comparison.

    2. They’re also mixed in advertising. City o Seattle’s BuiltGreen is another one locally.

  1. Very good post. The part about heaps of poorer people moving to the places with elastic housing supply is true for the country as a whole. The sun belt, while it has attracted a reasonable number of middle class working people, has attracted far more retirees and low-skill workers. I wonder whether that will come back to haunt them. Seattle, for all people complain about yuppies and hipsters, has attracted lots of educated youngish people who are unlikely to have heaps of kids or become long-term dependent on state aid.

    1. Of course those people may then move out once they decide to have kids and realize the choice is either a very dysfunctional public school system or expensive private schools… The effect is to have a very mobile and transient population who really have no regard for long range planning since Seattle is simply a stop and not a destination.

      1. Even if that’s true, I’ll take a well-educated and relatively affluent population with no regard for long-range planning over a poorly-educated population with no regard for long-range planning.

      2. So I realize this is just an anecdote, but I live in South Lake with 2 young kids and am not at all worried about schools. We’re homeschooling (there’s a huge community in Seattle) supplemented with classes at places such as the Seattle Children’s Theater. If we decide on public school later, we’re in the Queen Anne area for SPS which are top-performing though obviously the district as a whole has some big problems which will hopefully get fixed in the next decade or so. There are also decent more affordable private schools in addition to the very expensive ones (many private school offer financial assistance to low income families by the way).

        Finding good housing has been much more of a concern; we’d like a unit with easier access to the outdoors for example, but most of the ground floor units in buildings here are 1bd loft or studio layouts. And there isn’t a single 3+ bd unit in South Lake Union at all.

      3. You bring up an important and often overlooked aspect of the overall school system. I’ve looked into it before and while there was a big drop off in the Seattle Public School population the over school population (public + private) has steadily increased. Of course that has the effect of dragging down SPS scores and cutting their funding (alotted on a per student basis). Even so, SPS is close to the State wide average with some very good programs. Trouble is it’s nearest competition, Bainbridge, Northshore, Bellevue, etc. are some of the top districts in the State.

      4. Portioning funding on a per-student basis is bad policy. The state has loads of polices in place to take money from the cities and move it out to the sticks.

      5. @Bruce–
        assuming that “poorly educated” people have no regard for long-range planning comes accross as quite classist and racist. It also seems counter to clear evidence that communities of color often have strong community identities–if not the institutional power to impact the “long range planning” done to their communities.

  2. Actually I think the better policy would be to focus on affordable buildings that are also green in some sense; there’s no reason you can’t have both. The current problem is the emphasis on “luxury” housing that adds on LEED certification or whatever as a selling point. I live in a LEED building and I can tell you sustainability is definitely not the focus of the management–it’s fanciness. I’d much rather see a workforce focus.

    Also I can’t seem to find it now but Postgreen had a good summary a while back about how using stuff like prefab wall assemblies made construction of a very “green” building significantly cheaper than traditional construction, even before factoring in the savings in heating/cooling costs not to mention less waste. Here’s a decent proxy:

    1. My point was basically that the best “green” features you can add to a building is locating it near transit and putting in a walkable place. If you add other green features that raise the cost, you might actually be worsening energy use by allowing fewer green buildings to get built.

      I think prefab houses are a great idea if they can lower price, and they are often pretty attractive.

      1. For what it’s worth, the complete Postgreen houses (and they’ve done a small apartment building too) are not prefab, just the wall panels.

      2. High quality insulation is the most important “green” credential, and it pretty much reduces the cost, long term anyway — upfront it doesn’t even increase the cost that much.

  3. Yesterday, I went to a great little sushi place in Georgetown (which, if you like real industrial settings, like me, you should check out, ).

    The place had some nice street parking right along where it was and some parking in the back. Very low impact.

    What I thought it — this is what’s great about living in a place which isn’t all built up. A new and innovative business or retail place can open up, with low cost rent, and provide jobs, find a customer base and then grow.

    This is the opposite of the Transit Model which establishes a high cost infrastructure at the get go, and locks in certain routes and businesses. That means that all future development has to occur at a very high cost, high rent….the high leveral model that has caused us so many problems in the past.

    Part of my requirements for a place to live is low costs. An incubator environment where businesses, artists, creative people can set up shop and do new things without having burdensome taxes, fees, “infrastructure” choke the life out them before they can get going.

    That is why I think the low density, personal transit model, is a far better one than the high cost, high density, public transit model.

      1. Please, offer a synopsis of how there is a lower cost of entry for residences and business on a “transit corridor” versus a 2011 suburb in any place in America (other than Puget Sound).

      2. For residences, certainly, you’re right John. Read the Ryan Avent/economist piece I linked to.

      3. What 2011 suburb? Kent is a 1970s suburb. If it were built in 2011 it likely would have been designed with transit in mind, with a nice straight bus route down the middle instead of the turn-turn-turn to get from East Hill to Kent Station and 99. In fact, Kent Station would really be the center of town, with offices and supermarkets around it.

        The reason Georgetown is cheap is it’s a forgotten area that’s hard to get to. Kent shares some of that in being hard to get to and spread out. So if your solution to keeping costs low is to keep places hard to get to and around in, that sounds like shooting yourself in the foot.

    1. I’m from the Detroit area, which had ample parking, relatively affordable housing, and a notable lack of transit in the suburbs (being as the bus system outside of Detroit proper is “opt in,” by city, and involves a property tax levy that must be approved. There are tons of freeways criss crossing the region and a strip mall to meet your every need. Sounds great, right!

      The lack of things like public transportation or real walkable places was one of the big reasons I moved to Seattle and never looked back. I don’t think I’m alone judging by population trends, and I’ve contributed my fair share to the economy of this region. When I have friends and family visit from back home they love everything the city has to offer, and I can assure you we’re not spending our time in Kent enjoying the ample parking at the local fast food joint.

      When you see a place like metro Detroit that has a hard time attracting talent and new indsturies despite solid road infastructure, affordable housing, and relatively affordable taxes in the ‘burbs it’s hard to square, if that’s all people really cared about. My personal hunch is a lot of companies have came to Seattle for the people, and one of the reasons people come to Seattle is the urban “package” you get, including density and transportation.

      1. Johnny Knoxville might disagree with you on Detroit:

        Johnny Knoxville, star of MTV’s Jackass and other shit like that just wrapped up the filming of a documentary in Detroit. He is on a mission to show the good things going on in the D as opposed to all the negative attention we receive. With a focus on young people bringing back the community, this film looks to be quite promising. Check out this channel 7 footage of the film as well as the film in three parts. Enjoy!

      2. Clearly a lot of people DO agree Tom however, given population trends. The fact that one random movie star has good things to say doesn’t mean a whole lot. Kudos for him trying to help the city, but you didn’t actually address the issue at hand, which is that people like what’s happening in Seattle. You don’t like it, so you don’t live here. Problem solved.

      3. So a guy who gets kicked in the b@|}s for a living likes Detroit. What a surprise. I grew up in Michigan and living there was a lot like getting kicked in the b@{|s.

      4. Detroit is no doubt a good place for urban pioneers who want to be part of its second renaissance, and don’t mind the “pioneer” aspects of having no neighbors on your block or having to drive to the suburbs for groceries. But a lot of people want a finished place to live in, not one that will take 10-20 years to redevelop.

    2. Although I think you’re ignoring the externalities associated with the type of density you prefer, there are plenty of places that fit that requirement. It just happens, unfortunately for you perhaps, that many people move to cities specifically for that “Transit Model.” You can argue all day about which is better (and you know how the vast majority of people here feel), but big cities like Seattle are exactly the place to promote high density, where you can get the most bang for your buck efficiency- and transit-wise.

    3. Businesses, artists, creative people today mostly need an electrical outlet and wi-fi, plus one very important other element – lot’s and lot’s of people.

      John, add to your library of books you’ve read Jane Jacob’s ”The Death and Life of Great American Cities”, the “Economy of Cities” and “Cities and the Wealth of Nations”.

      You might find out that Kent would still be just dirt and trees if it were not for Seattle. I won’t comment though if Seattle deserves credit or blame…

      1. Seattle’s not to blame. Fault lies with WA State and King County. I don’t want to live along MLK, anywhere on Capital Hill or Queen Anne. I know most people on this blog would choose Gitmo over Bellevue because of it’s density but I think the worst crime related to land use lack-of-planning is the development of our natural flood plains. Snohomish has flooded numerous times. Kent has been living on borrowed time. Eventual Mother Nature will prevail. The question then is do we pull a New Orleans and double down on a losing bet. My guess is yes since we continue to float debt to build sinking bridges.

      2. “My guess is yes since we continue to float debt to build sinking bridges.”

        Funny, coming from somebody who lives in Kirkland. I suspect Kirkland would be nothing more than a small farming town or maybe a tourist / bedroom community at the end of a ferry without the 520 bridge. Or am I misinterpreting your comment?

      3. While personally I’d be just fine with getting rid of the 520 bridge entirely (peace and quiet, well.. except for 405). But what I’d hoped is that a proper bridge would be built instead of one that’s going to need replacement again in 50 +/- years.

      4. The Kent Valley was farmland and a small town until the 1970s. Southcenter Mall was originally going to be in Burien but the developers decided to build it in the valley instead, to open with the soon-to-be-built I-5 and 405. The mall opened in 1968, and I think the first developer-built neighborhoods in Kent were built around that time. Then the wave of office parks followed. So without Seattle and the freeways, there would have been no Kent, at least no more than the original farm town.

      5. “But what I’d hoped is that a proper bridge would be built instead of one that’s going to need replacement again in 50 +/- years.”

        You mean one with Light rail on it build for 100+ years? Or 8 lanes of cars/buses?

      6. Double decked bridge with trains on one level instead of the cheap round about over I-90 that’s going to be a short term “solution”.

    4. You do understand that new little sushi places open up all the time in “built up” New York City?

      Most businesses don’t need custom buildings and do just fine with minor renovations.

      If an area is high rent, it is because there is excess demand for that area. I’ve practically never seen a successful restaurant in a low rent / low property value zone — restaurants get more business if they’re “where the action is”.

  4. When you mention Denver’s TOD Fund – the first in the country – keep in mind we are starting with a $15mil fund that we will leverage into $100mil in affordable housing investments. Our goal is to expand the fund to $25mil in the near future, but the $15mil we have now is a great start yes?

    1. Yes $15 million is awesome, and being able to create $100 million in affordable housing is amazing. It’s small compared to the billions that will go into other housing near the Denver LRT, but like I said, we’ll never (ever) reach too much, and thus everything will never be enough.

    2. “You mean one with Light rail on it build for 100+ years? Or 8 lanes of cars/buses?”

      what does built for 100 years mean? dont rails need maintencance?? how many unused tunnels of sub rail is there in NY city??

      maybe people turned to cars for a reason??? they prefer them in except the most un-car-like situations. gridlock on commutes.

  5. Great article on housing/transit Back of the Bus: Mass transit, race and inequality:

    [Will] American cities look back, fifty years from now, and compare light rail expansions like Denver’s to the highway boom of the 1950s – except in reverse. Will American city centers in 2050 be mostly upper-income, with everyone else living on the outskirts?

    “It’s a good question,” Pena muses. “The day you sit back and say I don’t care, just let the economic market forces dictate who’s going to live where and what’s going to happen to your city, then I do think we run the risk of having almost a push out of low-income, minority communities away from our inner cities, and pushed out 20, 30 miles or 40 miles.”

    That’s a form of 21st century segregation this city [Denver] is trying to avoid.

    1. More affluent people living in cities has been a centuries-long worldwide trend. The fact that it reversed in the US post WWII is the anormality, and now it’s coming back to mean. We do run the risk of the poor and working class being pushed out of Seattle and other cities; many already live in south King County where the rent is lower. The unfair part of this is that when the poor lived in the inner city, they didn’t need cars, but if they live in the suburbs and exurbs they do, which is a significant dent in their paycheck.

  6. Is that picture really sprawl? It looks like they have a grid and a main street with taller buildings even with lower single family density. If more regions sprawl looked like that we’d be a lot better off over the long run.

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