The term “affordable housing finance” isn’t quite as catchy as “carshare,” “bikeshare,” or any of the other technology improvements helping promote transportation demand management. Yet for low-income members of our communities, who stand to benefit the most from those solutions, affordable housing finance should be considered, and put to use as, a TDM strategy.
In the United States, housing and transportation costs are often the two largest expenditures for households. Unfortunately, for those who need affordable housing, it is often located outside of the urban core, driving up their transportation costs and negating the savings on housing.
For barriers both real (smartphones often required) and perceived (“the sharing economy is for yuppies”), many of the newer transportation solutions do not work for those in low-income housing. While some creative initiatives have arisen from this need, the real way to decrease transportation financial and time costs for low-income residents is to provide housing near transit. By providing housing near transit for low-income people, and allowing them to use public transit and use it more efficiently, both those residents and the community benefits.
According to the Department of Housing and Urban Development’s Guidebook for Creating Connected Communities, typical households in auto-dependent neighborhoods spend about 25 percent of their income on transportation costs, but this number drops to 9 percent in neighborhoods with a variety of mobility options. The savings of both dedicated affordable housing and decreased transportation costs allows these families to save for homeownership or market-rate housing, spend more money in the local economy, and spend on essential services such as healthcare. These benefits are not just individual, but societal as well, as they place less strain on social services and resources.
The improved location of affordable housing also provides access to a wider job market, while taking more cars off the streets, from which even an SUV-driving CEO benefits. Appropriately scaled and distributed affordable housing, such as that near transit, prevents pockets of poverty, and has been shown to have no negative impacts on surrounding property values.
Higher land values near transit often make it difficult for affordable housing developers to purchase land in these locations. These two maps of Arlington County, Va., showcase this: one shows locations of committed affordable units, and the other maps the density of such units. It may appear that affordable housing is well spread throughout the county, but the density map shows that the largest concentrations are not in the county’s Metro corridors.
While Arlington does have a robust affordable housing plan, these patterns still exist due to the difficulties of acquiring land. However, several strategies to ensure the creation and preservation of affordable housing in close proximity to transit are in use in Arlington and in other jurisdictions across the country.
Making transit-oriented affordable housing happen
Tax credit points for transportation
Strategies for incorporating affordable housing near transit are varied, and can be accomplished from the federal level down to community development corporations. One way to promote this development on a national level is through the allocation of Low-Income Housing Tax Credits. These credits are provided to each state on a per-capita basis from HUD, and then distributed to projects via states’ Qualified Allocation Plans. Each QAP outlines various points that a proposed project earns based on a number of criteria, which, for this case, could include transportation solutions. Massachusetts is one of several states that have incorporated mobility into their QAPs by awarding points based on a project’s proximity to rail or bus.
Housing protection district
Despite a large concentration of affordable housing on the western end of Columbia Pike, Arlington County, is seen as an affordable housing success [PDF], and does have a method for preserving affordable units in its Metro corridors. In addition to the county’s Affordable Housing Trust Fund, Arlington’s main financing mechanism for affordable housing, the county also has a Special Affordable Housing Protection District included in its General Land Use Plan.
The SPAHD protects affordable housing sites along Metro corridors by stipulating they be replaced on a one-for-one basis in most new developments (specifically, anything with a floor area ratio of 3.24 or higher). So if a new building knocks down a smaller one that had affordable units, the new one must include just as many. This initiative protects vulnerable committed affordable units as areas in the county’s Metro corridors become even pricier.
Transit-oriented development fund
One of the most forward-thinking examples of not just preserving affordable housing, but getting ahead of the curve, is Denver. The city is in the midst of massive additions of light rail (above), commuter rail, and BRT within the next several years. In advance of these projects, the city, Enterprise Community Partners, and affordable housing developers worked together to create the Denver Regional Transit-Oriented Development Fund.
The fund provides developers a loan to purchase and hold land for five years for affordable housing developments within a half-mile of rail and a quarter-mile of high frequency bus stations. Provisioning land while the transit lines are still being constructed allows affordable housing developers to purchase parcels at more reasonable prices. Originally established just within the City and County of Denver, the TOD Fund has expanded to the entire seven-county metro area and has provided $24 million in funding. To date, there are 600 affordable units in the pipeline, with a goal to create more than 1,000 new units near transit.
The increasing number of transportation options are great, and do a good job of serving those already living in dense urban cores, but the best strategy for those who need it most may be affordable housing policy finance. Affordable housing creates more diverse and economically sustainable communities: working to focus affordable housing near transit will only serve to increase its benefits.
Photos, from top: Riders exit the Ballston Metro stop in Arlington, Va. (Sam Kittner for Mobility Lab, www.kittner.com). Arlington County affordable housing maps (Michael Ryan). Light rail in downtown Denver (BeyondDC, Flickr, Creative Commons).