Transit as an Affordable Housing Tool? The Feds Think So!

Earlier this year, amidst the hullabaloo of the State of the Union, the release of the President's Budget, and the start of the 114th Congress the US Department of Transportation (through the Federal Transit Administration, FTA) released its annual recommendations and ratings of those transit projects seeking federal funding. Dubbed in the industry, "The Annual New Starts Report," this document is a rite of passage for any streetcar, bus rapid transit, light rail, commuter rail or subway extension seeking to be built in the near future.

It used to be that a good rating made a project, while a bad federal rating spelled its doom. While the latter is still true, we've seen in recent years some highly-rated transit projects make it through the arduous federal pipeline only to be struck down under the weight of unalleviated local concerns. The Colombia River Bridge Crossing in Oregon is one big ticket example of this from last year's report. Despite a favorable rating and FTA's recommendation for it to receive a coveted "Full Funding Grant Agreement," the $2.8 billion project failed to secure adequate local and state support. In this year's report, Maryland's proposed Purple Line, which connects suburban job centers outside Washington, DC, and Baltimore's Red Line both received a strong federal rating yet the light rail projects must first pass muster with newly-elected Governor Hogan.

Amidst this transit drama, the most recent New Starts report is notable for being the first evaluation of transit projects since the Obama Administration revised its methodology for considering the merits of a transit project under new criteria established in MAP-21, the federal legislation that authorizes the federal transit program. A new Rule and Final Guidance were issued by FTA in 2013. Throughout last year project sponsors worked to ensure that their projects could meet the higher bar established for considering land use, economic development, environmental benefits, mobility, and nancial capacity.

Included in these provisions was a hard fought victory for those fighting to ensure that transit projects benefit the low-income residents and wage-earners who rely on it to reach jobs, schools, health care and other critical destinations. Included in FTA's consideration of land use and economic development is a new focus on policies and programs to preserve and create affordable housing near transit. FTA now asks project sponsors -- typically transit agencies -- to coordinate with local and state agencies responsible for housing policy to identify the housing needs along a proposed corridor, examine the amount of permanent affordable housing in relation to affordability needs, and to describe efforts by local partners to ensure that households at a range of income levels will have housing options near transit.

Looking at the FY2016 New Starts report, the commitment by project sponsors to addressing affordability varies. Yet, there are some notable bright spots of where communities are coming together to recognize that these multi-million or billion dollar transportation investments are a rare and important opportunity to leverage other public and private investments to meet community needs. This new policy brief by MZ Strategies examines each of the rated New Start and Small Start projects to assess how well they performed against FTA's new affordable housing factors, and what the FY2016 New Starts report affordable housing recommendations may mean for those seeking to advance future transit projects.

Transit can be a powerful catalyst. Transit advocates like to argue about the positive economic development impacts that a new rail line can have on adjacent property. Community advocates sometimes argue against transit as a gentrification tool. In reality, both may be right but the intent of the 2013 Final Guidance is to ensure that information and dialogues are occurring in communities to consider these trade-offs. Just as elected officials, planners and the public must debate the alignment and value of a new transit project; there is also a need to commit that same level of attention to ensuring that the land use and housing policies are in alignment to leverage these infrastructure investments to achieve community benefits. Public funds are simply too scarce to not ensure that we are getting multiple benefits and maximum efficiency from every dollar invested. The MZ Strategies policy brief, Creating and Preserving Affordable Housing Through the Federal Transit Capital Investment Program, offers examples of how some communities are threading this needle.