Skip to content

Fact Sheets

Transit Oriented Development (TOD)

Download as PDF

Transit Oriented Development is compact, mixed-use development near transit facilities providing high-quality walking environments. It usually includes new residential development, office space, and other service amenities that are within a half-mile of public transportation and easily commutable by other means such as walking and biking. TOD typically creates sustainable neighborhoods that provide a convenient, affordable, and active lifestyle.

There are two broad types of TODs, both of which are developed around transit systems. Urban TODs located in or near city centers in close proximity to main light rail, heavy rail, and/or express bus routes. They feature high density residential and commercial developments and employment clusters. Neighborhood TODs are located along the feeder lines or bus routes further away from the urban core. While neighborhood TODs also feature mixed residential commercial uses, densities are not normally as high as urban TODs.

The potential benefits of TODs may include:

  • Increased land values
  • New prime retail spaces for businesses to attract customers
  • Increased higher-density development and up-zoning
  • Increased foot traffic and visibility to customers for businesses
  • New development subsidies to improve and maintain community infrastructure

By increasing access to public transit, TOD facilitates growth in transit ridership and a corresponding reduction in vehicular traffic and parking demand in TOD developments. TOD is also often used with other value capture strategies including joint development and special assessment districts.

Planning for TOD has focused on forecasting the benefits that such developments bring to transit investments. The impetus for this dates back to the focus on the Metropolitan Planning Organization (MPO) process in the Intermodal Surface Transportation Efficiency Act (ISTEA) of 1991 and the Transportation Equity Act for the 21st Century (TEA-21) of 1998. TEA-21 mandated that the MPO process, "Protect and enhance the environment, promote energy conservation, and improve the quality of life," and also stipulated that it should include land use analysis and growth management strategies to achieve specific development goals. In addition, the legislation tied funding for New Starts transit projects to their performance in these areas. Together these dynamics have led MPOs around the county to include TOD in their regional plans and have made public funding available to support community infrastructure costs.

Project Examples

Hennepin County, Minnesota

In 2003, the Hennepin County Board of Commissioners created a transit oriented development program to support the redevelopment and construction of new transit lines and encourage transit ridership. To date, the county has awarded more than $29 million in funding to urban and suburban TOD developments along major transit corridors including the MetroTransit Blue, Green, and Red lines. The Lake Street Transit Village is a transformational TOD project in the Corcoran neighborhood near the Lake Street/Midtown Station on the Blue Line in south Minneapolis. It opened in 2017 and combines a new county Human Services Center, retail space and more that 500 units of housing immediately west of the Lake Street/Midtown Station. Additional housing will be phased in over time. The development complements a new $45 million senior housing project located near the station and the Midtown Farmer's Market, which attracts over 66,000 annual visitors. The Lake Street Transit Village is one of many transit oriented communities to be developed in the Minneapolis / St. Paul region in the past 15 years.

Artist rendering of future Lake Street Transit Village in Hennepin County, Minnesota

Lake Street Transit Village
photo credit: MetroTransit

Davis Square, Somerville, Massachusetts

Davis Square is located in Summerville, Massachusetts, north of Cambridge at the terminus of the Massachusetts Bay Transportation Authority (MBTA) Red Line. Prior to the extension of the Red Line the area had been in decline. Officials and local residents established the Davis Square Task Force to develop plans to revitalize the neighborhood using the creation of the new MBTA station as a catalyst. The plan called for repurposing existing buildings, new construction, improving streets and parking, and creating pedestrian amenities. The city worked with state and federal agencies to raise funding for the following TOD improvements:

  • Redeveloping streets and sidewalks, street lighting, and fencing and landscaping with assistance from FHWA's Urban Systems Program
  • Using Community Development Block Grants to fund a storefront and facade improvement program
  • Redeveloping 100,000 square feet of the Buena Vista office and retail complex through the Urban Development Action Grant
  • Reusing an abandoned freight railroad right-of-way for bike and pedestrian pathways providing access to the Alewife MBTA station
  • Building a parking structure with over 2,600 parking spaces at the Alewife MBTA station, together with traffic calming measures to help mitigate traffic and car usage

Together these improvements transformed Davis Square into one of the first transit oriented communities in the U.S.

People at a train station in Davis Square, Somerville, Massachusetts

Program Areas of the FHWA Center for Innovative Finance Support

The FHWA Center for Innovative Finance Support is a one-stop clearinghouse for expertise, guidance, research, decision tools, and publications on highway program delivery innovations. Our website, workshops, and myriad resources support transportation professionals in the use of innovative approaches for delivery of highway projects.

Public Private Partnerships (P3s)

The FHWA Center for Innovative Finance Support's P3 program focuses on resources and capacity building for consideration and use of design-build-finance-operate-maintain (DBFOM) concessions funded through tolls or availability payments.

Alternative Project Delivery

The FHWA Center for Innovative Finance Support's Alternative Project Delivery program provides information on contractual arrangements that allow for greater private participation in infrastructure development by transferring risk and responsibility from public project sponsors to private sector engineers, contractors and investors.

Project Finance

The FHWA Center for Innovative Finance Support's Project Finance program focuses on alternative financing, including State Infrastructure Banks (SIBs), Grant Anticipation Revenue Vehicles (GARVEEs), and Private Activity Bonds (PABs).

Tolling and Pricing

The FHWA Center for Innovative Finance Support's Federal Tolling and Pricing program focuses on the use of tolling and other road user charges as a revenue source to fund highway improvements, and the use of variably-priced tolls as a tool to manage congestion.

Value Capture

The FHWA Center for Innovative Finance Support's Value Capture program explores strategies for tapping into the added value that transportation improvements bring to nearby properties as a means to provide new funding for surface transportation improvements.

Contact:

Patrick DeCorla-Souza
(202) 366-4076
Patrick.DeCorla-Souza@dot.gov

www.fhwa.dot.gov/ipd/p3/toolkit/

Fact Sheets home

Quick Facts

Transit Oriented Development provides compact mixed-use development with housing, commercial and retail space and other amenities - all in close proximity to transit stations.

TOD provides a high-quality walking environment and encourages transit ridership.

TOD focuses on developing cohesive communities with business clusters and entertainment centers to counter the effects of urban sprawl.

Contact:

Thay N. Bishop
(404) 562-3695
Thay.Bishop@dot.gov

www.fhwa.dot.gov/ipd/value_capture/

back to top