Regulations and Financing tools for Quality communities around transit

1. Regulations and Financing tools for Quality communities around transit

2. Introduction This is one of seven Transit Oriented Development training modules developed by the Regional Plan Association, the Project for Public Spaces and Reconnecting America under contract to the New York State Department of Transportation in collaboration with the New York State Thruway Authority and MTA/Metro-North Railroad. The modules were presented and tested in one-day training sessions in two counties and two-day training sessions in eight municipalities, all in the lower Hudson Valley. Each module is, largely, the culmination of the versions used in the training sessions. The seven modules are as follow. Module 1: Building Quality communities Around Transit Module 2: Changing Street Design to Support Liveable Development Module 3: Smart Parking Module 4: Creating Great Places Around Transit Module 5: Regulations and Financing Tools for TOD Module 6: Building Mixed Income Communities Around Transit Module 7: Station Area Planning

3. Key Concepts and Definitions • Transit-oriented development doesn’t happen on its own. • Retool zoning and financial incentives to meet goals. • Infrastructure and development investments are key to TOD implementation. • Policies can be tailored to take advantage of transit proximity and “Location Efficiency.”

4. What is Location Efficiency? • Location Efficiency determines how people choose to travel most cost effectively. • Location is a major factor in transportation costs for households and businesses. • The Key Drivers of Location Efficiency are: Compact neighborhoods Walkable streets Access to transit Mix of land uses and services

5. TOD Implementation Challenges • Traditionally, zoning has required: • Separated uses • High parking requirements • Minimum lot sizes • Maximum density • Zoning should allow for compact and mixed-use development.

6. TOD Implementation Challenges • Upfront costs to TOD can be high: • Land costs • Infrastructure (streets, utilities) • Structured Parking • Time spent in approval process • But there is long-term value to the community as a whole.

7. TOD Implementation Challenges • TOD is just starting to be understood by the market: Standard real estate “products” do not necessarily fit in. Investment capital requires quick returns and high yields. There is a perceived risk for developers . • Zoning and policy refinements may need to be supported by investment.

8. 6 Implementation Strategies • Partner cooperatively among municipalities • Proactively plan for station areas • Revise zoning and development controls • Utilize value capture tools for new investment • Leverage investment for mixed-income communities and preservation of existing communities • Invest public resources in transit station areas

9. Strategy 1: Cooperative Partnerships • Can establish a vision or plan for economic development and sustainable growth. • Address competition for scarce resources. • Show growing need for collaboration for new Federal programs.

10. Intermunicipal Agreements • Save money and improve efficiency in service and citizen board members. • Control natural resources or market areas that extend beyond municipal borders. • Limit impact of projects in neighboring municipalities and avoid “border wars.” • Allow municipalities to qualify for funding not otherwise available.

11. Examples of IMAs • Rockland Riverfront Communities Council: 13 municipalities • Historic Hudson River Towns: 12+ towns along the Hudson • Long Island Sound Watershed Intermunicipal Council: 10 municipalities • Town of Greenburgh: Joint Municipal Review Board among 4 municipalities • Hudson River Valley Greenway Compact

12. Strategy 2: Proactively Plan for Station Areas • Bring all stakeholders together. • Set the long-term vision and implementation steps. • Identify needs and opportunities.

13. What Goes Into a GoodStation Area Plan? • Community Engagement and Vision • Comprehensive Land-Use Plan • Public Infrastructure Investments • Implementation and Financing Plan

14. TOD Station Area Plans Multifamily residential Public/open space Residential Core commercial Dallas, TX

15. Implementation Tools: Generic EIS for SEQR Compliance • Allows municipalities to consider full range of projects to implement Station Area Plan. • Takes out some of the “upfront” cost for development. • Reduces project-by-project implementation struggles.

16. Implementation Tools: NY State Industrial Development Agency (IDA) Financing • The IDA is a public benefit corporation that issues revenue bonds for economic development. • It is commonly used for industrial, manufacturing, warehousing, commercial, research and civic facilities. • It could be targeted to transit zones to support implementation of station plans.

17. Strategy 3: Revise Zoning and Development Controls Variety of Tools Available: Overlay Zoning Form-based Zoning Incentive-based Zoning Inclusionary Zoning These tools provide an opportunity to shape new development and reinvestment. Bel-Red TOD Incentive Zoning, Bellevue, WA

18. Overlay Zoning • Overlay Zones can respond to different conditions without redoing the entire zoning code. • Base zoning requirements will continue to apply. • Overlay requirements can address particular areas and tailor requirements to these areas. • Overlay Zoning allows zoning requirements to be tailored to support transit riders and community.

19. Key Elements of Overlay Zoning as a Tool for TOD Using Overlay Zoning for TOD to: Reduce parking requirements Require active ground floors Allow for increased density to support local-serving retail. Encourage a mix of uses to integrate housing and other uses. Make sure existing community assets are conforming.

20. How Do You Create an Overlay Zone for TOD? STEP 1 Define a Purpose and Applicable Area STEP 2 Define Allowable and Prohibited Uses STEP 3 Define SpecificParking Requirements STEP 4 Define Development Types and Incentives

21. How Do You Create an Overlay Zone for TOD? Define Allowable and Prohibited Uses Define SpecificParking Requirements Define Development Types and Incentives • E.g. “To promote transit ridership and high-quality development around transit” • Often ¼ to ½ mile radius around station • Can vary based on transit mode or station type STEP 1 Define a Purpose and Applicable Area

22. How Do You Create an Overlay Zone for TOD? Define Purpose and Applicable Area STEP 2 Define Allowable and Prohibited Uses Define SpecificParking Requirements Define Development Types and Incentives • Often prohibit auto-oriented uses (fast food, car wash, etc.) • Often require or allow retail, housing and pedestrian scale uses • Encourage community uses such as entertainment, retail

23. How Do You Create an Overlay Zone for TOD? Define Purpose and Applicable Area Define Allowable and Prohibited Uses STEP 3 Define SpecificParking Requirements Define Development Types and Incentives • 1 space per unit residential (sometimes as maximum) • 1 space per 500 sf retail (or less) • Encourage shared parking • Reduced requirements for carshare or bike parking

24. How Do You Create an Overlay Zone for TOD? Define Purpose and Applicable Area Define Allowable and Prohibited Uses Define Specific Parking Requirements STE P 4 Define Development Types and Incentives • Allow increased density for community goals (parks, work force housing) • Allow mix of uses • Define design standards and street treatments

25. Beacon, NY Proposed TOD Zoning District

26. Form-based Zoning Uses Designrather than USE for regulating development Focuses on: buildings and the public realm form and mass of buildings in relation to one another scale and types of streets and blocks

27. Form-based Zoning as a Tool for TOD Form-based Zoning: • Provides certainty to developers and residents about the built form or what it will look like. • Allows flexibility of use and change over time to respond to market. • Speeds approval process and reduces red tape.

28. Incentive-based or Inclusionary Zoning • Rewards desired outcomes (e.g. mix of incomes or park lands) with incentives, such as density bonuses, streamlined board permit approvals or reduced fees. • The desired outcomes and community benefits need to be indentified at the onset (e.g. parks, moderate-income housing, etc.). • Can address increased the upfront costs of TOD.

29. Incentive-based Zoning: Case Study Massachusetts: Offsets perceived fiscal impact with direct funding to cities. Requires affordable units in most private projects. Addresses gap in low- and moderate-income housing. Proposed development along the Silver Line in Boston

30. Incorporate Value-Capture Exaction into Zoning • Development Fees – used to finance public facilities, including parks, bike and pedestrian systems and road improvements. • Mitigation Fees – used to finance public improvements away from the development site.

31. Strategy 4: Utilize Value-Capture Tools for New Investment • “Capture” increases in private land values generated by a new public investment to share benefits. • Pay upfront costs of infrastructure or development. • Share risk and financial return to finance benefits and amenities. • Address potential fiscal impact of new development.

32. Capturing Incremental Tax Revenues for Project Implementation • “TIF” uses future gains in tax revenues to finance local investments and infrastructure improvements. • Bonds are generally rated against General Fund health and security of private investment. • However: • TIF is not always tied to transit access and needs to be aligned with transit-supportive outcomes. • TIF is available in New York State but is very restricted in its current form.

33. Examples of TIF as a Tool for TOD • TRID program in Pennsylvania allows for TIF from multiple sources in proximity to transit. • Pooled TIF in Dallas broadens the areas where increment is generated. • 20% affordable housing set aside in California supports mixed-income communities.

34. Local Improvement District/Benefit Assessment District • A direct tax or fee is assessed to property owners or businesses. • Can be used for residential areas, commercial areas or a mix. • Requires special vote and majority support to be enacted.

35. Joint Development • Development of publically owned land enhances economic development. • Public/private partnership shares in risks and benefits. • Often there are restrictions on how public land can be used.

36. Joint Development as a Tool for TOD • Links land use and transportation. • Criteria for the project must have a public transit benefit. • Can be used to fund development of land near transit stations.

37. Joint Development as a Tool for TOD: Case Study Pleasanton, CA Joint Development of a new Transit Village including apartments, condos, a hotel and retail space and new BART station.

38. Strategy 5: Leverage Investment for Mixed-Income Communities • New investment can provide housing opportunities for all members of the community. • Proactive steps and new tools are needed to maximize the potential. • Preservation can be as important as new development.

39. Land Bank/Land Acquisition Fund as a Tool for TOD • Preserves opportunities for mixed-income housing as land values rise. • Can leverage market interest for mixed-income housing. • New models led by nonprofit with city investment. Scaleybark Station, Charlotte

40. Local Housing Trust Funds as a Tool for TOD • Can be used for new construction or preservation. • More flexible than Federal housing programs. • Can be easily targeted to efficient locations. Affordable TOD in Washington, DC

41. Mixed-Income Communities Are More Than Housing • Housing needs to be linked to jobs, shopping and community uses. • Other public investments support mixed-income communities. Bookmark Apartments, Portland, OR

42. Emerging Federal Opportunities and State Tools • Federal and State programs often determine funding priorities and opportunities. • New Federal Initiatives (Choice Neighborhoods, Sustainability Partnership) may provide resources. • States are taking a lead role in supporting mixed-income TOD.

43. Strategy 6: Invest Public Resources in Transit Station Areas • Use existing institutional funding to target transit access. • Invest in streetscape improvements and utility upgrades. • Access State, Federal and regional planning and capital programs. Mt Vernon, NY

44. Street Capital Improvement Programs as a Tool for TOD This tool can be used to: • Improve access to transit stops and stations. • Target capital improvement budgets toward other TOD improvements. South Orange, NJ

45. TOD Involves a Range of Public and Private Investments • Both public and private financing will be required. • Effective overall financing plan will involve unusual partnerships and collaborations. • Public financing will come from the municipality, New York State and, potentially, Federal agencies. • Investments will be phased and implemented over time.

46. Federal Funding for TOD • No current programs expressly for TOD • Many federal programs that could be used for TOD, including: • Community Development Block Grants (HUD) • Metropolitan and Statewide Planning Funds (FTA) • Transportation Enhancements (FHWA) • Brownfields (EPA) • Most federal programs require that their funds be matched by state or local funds.

47. Federal Funding for TOD • New Federal priority links housing, transportation and environment in TOD. • New and proposed programs: • Sustainable Communities grants (HUD)  • TIGER I and II funds • Sustainable Communities grants (DOT) • National Infrastructure Innovation and Finance Fund • New sources require coordination and collaboration. • Planning funds may help communities receive future capital funds.

48. Funding SourcesCategorical Grants and Assistance • Many potential sources of State funding: • Infrastructure -- Environmental Facilities Corp. • Housing – Dept. of Housing and Community Renewal • Business -- Empire State Development • Waterfront – Dept. of State, Canal Corp. • Parks -- Office of Parks, Recreation and Historic Preservation • Greenways -- Greenway Compact

49. Funding Sources: NYSDOT & MTA NYSDOT • Capital and ARRA Projects • Transportation Enhancement Program • Safe Routes to Schools • Scenic Byways MTA • Joint Development

50. Implementing TOD