Affordable Housing on Transit Land

[M II A II R II K]

Affordable Housing on Transit Land


September 27, 2019

By Dan Reed

Read More: https://shelterforce.org/2019/09/27/...-transit-land/

.....

Nearly 1 in 3 households (and 47 percent of renter households) are cost-burdened, meaning they pay more than 30 percent of their income on rent. And among the lowest-income households, many are simply pushed out of the housing market entirely, leading to a substantial increase in homelessness. The number of unsheltered homeless people in California grew by 25 percent between 2014 and 2018. During that same time, it doubled in Colorado, and increased by 80 percent in Washington state.

- This trend is particularly acute in large coastal cities, where population growth, high land costs, and difficult bureaucratic climates make it especially hard to respond to the need for housing. Land values, particularly on the West Coast, have increased significantly since 2012. Many of the nation’s largest metropolitan areas are also adding households at a faster rate than they’re issuing new home permits. These areas also happen to be where the most jobs and economic opportunities are. — The result is a perfect storm: young households flock to these areas to find jobs and put down roots in starter homes, while older households are downsizing, which together create increasing pressure for an already overstretched supply of affordable homes.

- Meanwhile, public transit providers are struggling to make ends meet. Many agencies are in a vicious cycle: the increased use of ride-hailing and bike-sharing services means fewer riders, creating a decline in revenue, which, along with the chronic lack of funding, results in further service cuts. It doesn’t help that in many communities, an affordable housing shortage has displaced lower-income riders who typically rely on transit. — Phil Washington of Los Angeles Metro once said, “I don’t want to build new tracks, I want to make sure people can live near our transit.” It is this same spirit that is behind affordable housing advocates finding new allies in public transit agencies.

- Los Angeles’ Metro transit agency is one several around the nation that has focused on transit-oriented development and either partnered with affordable housing developers or promoted affordable housing near its stations. Since 2016, Metro has distributed $9 million in low-interest rate loans for affordable housing on land adjacent to its stations as part of its Joint Development Program. — Like other agencies, Metro also has an explicit affordable housing policy, requiring that at least 35 percent of all housing units developed on its properties be set aside for households making less than 60 percent of the area median income, or roughly $56,000 per year. The program has generated more than 700 subsidized affordable units near the agency’s rapidly expanding system, with another 162 affordable units in construction, and almost 600 more in negotiation.

- It turns out that transit agencies have a lot to gain from affordable housing. Transit providers are often major landowners in their communities, controlling underutilized properties like park-and-ride lots or leftover pieces of land from the construction of a new project, or storage and maintenance facilities. These sites are also opportunities to provide desperately needed affordable housing, which in turn creates increased ridership from residents and visitors, as well as additional revenue. For instance, it’s estimated that Metropolitan Transit System properties in San Diego, about 57 acres can support 8,000 new homes, 3,000 of which can be reserved as permanently affordable for low-income renters, according to a Circulate San Diego report.

- A recent study from Harvard University found that commuting time is the “single strongest factor” in a person’s ability to rise out of poverty. The more time people spend traveling to and from opportunities, or the more unreliable their trip is, the harder it is for them to improve their situation. In the Washington, D.C., area, renters need to make nearly $133,000 per year to afford rental housing without being cost-burdened. That means transportation costs, and simply having access to reliable, frequent transit service can have a transformative effect on residents’ lives. That’s the finding at The Bonifant, a mixed-use, high-rise senior housing development in Silver Spring, Maryland, built adjacent to a light-rail station.

- The Bonifant was a partnership between Montgomery County, which owns the land; MHP, a private affordable housing developer; and the Maryland Transit Administration, which is constructing the 16-mile light rail called the Purple Line. The county originally planned to only build a library on the site, but when the state selected it for a future station in 2009, county officials decided to build affordable housing there as well, citing the area’s high housing costs. The Bonifant opened seven years later, in 2016. All but 10 of the high-rise’s 149 apartments are set aside for senior households earning between $30,000 and $60,000 per year. “The building was engineered around the Purple Line’s needs,” says Stephanie Roodman, project manager for the Bonifant.

- Like many affordable housing developments, this $44 million project has a complicated financing scheme. Montgomery County owns the land, which is leased to MHP for 77 years. To develop the building, MHP received funding from a variety of public agencies, including the county and state housing agencies, HUD, and private banks. Even still, lenders were reluctant to fund the building, saying it would be difficult to find tenants due to the lack of parking. — “We had to convince lenders that the project would be successful without parking, and brought examples of other similar buildings around the country,” says Roodman. Instead, the building generated tremendous interest when it opened in 2016, there were already 800 inquiries for its 149 units, and each of its four ground-floor retail spaces had been rented.

- While financing is an issue, zoning may be the biggest factor that prevents transit agencies from getting affordable housing built on its land. “A huge part of the problem is the land use rules, which transit agencies have no responsibility and very little control over,” says Osborne. — In many cities, rail transit stations may be surrounded by areas with single-family home zoning, which prohibits apartments and effectively makes affordable housing illegal, as it typically comes in the form of multi-family buildings. Where zoning does allow for higher-density development near transit, the demand for housing is so high that land prices skyrocket, which makes homes more expensive. This can make subsidized affordable housing financially impossible, and even when housing providers can make the funding work, they may simply be outbid by market-rate developers.

- In Seattle, Sound Transit has had a policy promoting transit-oriented development since 2010. In 2018, the public transit agency’s board created an official policy that it would offer at least 80 percent of its surplus property to affordable housing developers at below market rate, or at no cost. The agency requires that at least 80 percent of the new homes be affordable in perpetuity to households making below the area median income. — This isn’t Sound Transit’s first foray with affordable housing. It’s taken almost 20 years for one of the agency’s first affordable-housing partnerships to get built due to a lengthy community engagement process. Planning for the Capitol Hill Station, located underground in a historic neighborhood, began in the 1990s. Residents were initially resistant to proposals for apartments above the light-rail station before agreeing to accept them with some height restrictions.

- The San Francisco Bay Area is one of the nation’s most expensive regions, as rising housing costs have dramatically outpaced income over the past 40 years. It’s no surprise then that the Bay Area Rapid Transit (BART) system in the San Francisco Bay Area may be one of the first agencies in the country to have an affordable housing policy for its land. Since 1993 it has worked with developers to build over 750 affordable homes near 11 stations, while another 1,000 are in planning or under construction. — The agency’s long-term goal is to add up to 18,000 homes at its stations by 2040, 35 percent of which would be available at below-market rates. A recently passed law requires cities with BART stations to change their zoning to allow higher-density housing up to 12 stories.

- BRIDGE Housing, a San Francisco-based affordable housing developer, has worked with BART on eight projects, including Marea Alta, a 200-unit building for families and seniors that is built on a former agency-owned parking lot at the San Leandro BART station. The two-building project, which opened in 2017 and includes a childcare center and plaza, was built using modular construction, which lowered costs. BART required BRIDGE Housing to replace onsite parking with a parking garage, which increased the number of spaces, and BRIDGE also provided a new waiting area for rail passengers. This long-term relationship, spanning almost two decades, has allowed both organizations to better understand each other’s needs.

- Most of the transit agencies that have affordable housing policies are on the West Coast, though Osborne of Transportation For America highlights Massachusetts, which is working to promote more walkable neighborhoods to make it easier for people to live near and use transit. She notes that cities and states with more progressive zoning will be in a better position to provide more affordable housing near transit, like Minneapolis, which eliminated single-family zoning and legalized triplexes throughout the city, including near transit. Triplexes can now be built “by-right,” meaning they’re automatically allowed by the local zoning code and don’t require special approvals to be built.

.....

Marea Alta, a 200-unit building for families and seniors, is built on a former transit agency-owned parking lot. The San Leandro BART station is pictured in front of the building. Photo courtesy of BRIDGE Housing