Essays on People, Place & Purpose

Investing in What Works for America's Communities

The Changing Face of Transit in the Bay Area, LA and Beyond

by Admin

By Craig Adelman and Thomas Tsun-Hung Yee of the Low Income Investment Fund

The convergence of transit and community development has gained increasing acceptance across the United States for nearly two decades in the form of transit oriented development (TOD).

But the emergence of equitable TOD (eTOD) as a strategy for increasing opportunity for lower income families and stemming displacement has been a more recent development as communities seek better outcomes in public health, culture, climate resilience and racial equity. While the federal government has been instrumental in furthering eTOD as a practice, recent innovative leadership has come from the state, regional and local levels.

In California, the Bay Area and Los Angeles are setting new standards of policy and practice around eTOD. And with a huge boost from their parental state, California is making huge strides in aligning its investments in housing, health, climate and transportation through eTOD.

The Bay Area continues to build on its signature eTOD financing tool, the Bay Area Transit Oriented Affordable Housing Fund (TOAH), which provides favorable financing for the development of affordable housing and other community services near transit lines throughout the Bay Area; a critical tool in a region where competition for land is particularly fierce. TOAH is a public-private partnership administered by the Low Income Investment Fund (LIIF) and built upon an initial $10 million investment from the Metropolitan Transportation Commission (MTC), further leveraged with philanthropic, CDFI and Bank funding. MTC recently committed an additional $10 million to TOAH, which will expand its lending capacity to $87.5 million and adds a new grant program that will advance projects with an even deeper impact.

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Los Angeles is now developing its own eTOD capital tool. The LA THRIVES collaborative, whose members include LIIF , Enterprise Community Partners, and California Community Foundation, have been advocating for such a fund since 2012 with their publication of a report commissioned by the LA Metropolitan Transportation Authority (Metro). This year, following careful consideration of the report which called for the creation of new financing tools to support affordable housing investments, Metro voted to invest $10 million to seed such a fund. LA THRIVES is partnering with Metro to lead efforts to design this new fund. Similar to the Bay Area TOAH, this fund would leverage other investments from foundations and CDFIs to expand capital to the region. In a compelling new twist, Metro also voted to develop a loan program for small businesses, to address the loss of mom and pop storefronts in many neighborhoods home to brand new Metro rail stations.

The new Metro CEO, Phil Washington, freshly transplanted from helming the expansion of Denver’s transit system, has begun orienting the agency around what he calls a “transit oriented communities” approach. This integrated view of Metro’s role in sustainable growth for Los Angeles County comes at a perfect time – Metro is considering a new 2016 sales tax measure to expand on the $40 billion voter-approved transportation funds from 2008’s Measure R. Metro’s expanded set of eTOD tools include a 35% portfolio target for affordable housing in their joint-development projects on agency-owned land and discounting agency-owned land up to 30% for the purpose of building affordable housing.

At the same time, the State of California has demonstrated unprecedented vision and leadership through its groundbreaking Cap-and-Trade funding program. First by recognizing the costs of pollution and monetizing a fee for polluters as both a disincentive and a resource for offsetting activities. Second, by distinguishing eTOD as a critical place-based strategy to combat pollution by reducing car usage. California has dedicated 20% of its Cap-and-Trade revenues to expanding eTOD and transit opportunities throughout the state – and amount that could ultimately be as much as $1 billion annually. While the inaugural awards were just made earlier this year, the program has laid the tracks for monumental equitable and sustainable growth for years to come.

There’s a growing recognition of the pressing need for a public policy approach that is inclusive of residents of all incomes that can successfully and equitably achieve sustainable growth. But this isn’t easy work – it requires out-of-the-box thinking across sectors, alignment of government, non-profit, and private resources, and an ability to act at a neighborhood, city, and regional scale. Collaboratives such as LA THRIVES in Los Angeles, the Great Communities Collaborative in San Francisco, and Mile High Connects in Denver offer up examples of how to knit together partners, capital, and policy. With the support of the Kresge Foundation’s Capital Absorption approach, these three regions are working to expand and strengthen their respective regional systems of community investment for eTOD projects.

As the concept and practice of eTOD matures, practitioners continue to broaden their thinking beyond affordable housing and transit to investing in communities that leverage even greater outcomes in public health, culture, climate resilience and racial equity. From a global scale all the way down to the neighborhood level, eTOD continues to demonstrate a broad benefits and exciting new solutions that lead our growth and development by demonstrating how the full spectrum of Americans will thrive in the right environment.

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Investing in What Works for America’s Communities is a joint project of the Federal Reserve Bank of San Francisco and the Low Income Investment Fund.

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