Transit-oriented developments, or TODs, are developments that include mixtures of offices, residential, retail and additional amenities that are designed to create a very walkable, livable neighborhood. TODs are typically situated within a half mile of public transportation.
The increasing popularity and demand for these lifestyle communities can be attributed to many things — individuals who are looking for a live/work/play community (like urban downtown areas, but without the high cost of living) is just one reason.
Let’s look at some other reasons why transit-oriented developments are growing in popularity and show no signs of going anywhere.
- Reduced Transportation Costs
As growth in urban areas increases and rents continue to rise, individuals are being pushed out of urban areas and into secondary or suburban markets. However, this does not mean that these individuals also move to a job that is closer to these suburban markets, even if there is a lack of public transportation in the secondary market.
Instead, for every $1 saved on housing another $.77 is being spent on transportation according to an article from bizjournals.com. By increasing walkability, and therefore allowing for more accessibility within the community as well as closer access to public transportation, TODs help to reduce these transportation costs for all.
- Local Government Attempts to Reduce Traffic
Due to large population growth in urban areas, traffic has becoming overwhelming for cities like Austin and Boston. Some governments have put official plans into place to reduce the congestion that has been created by this population increase.
These plans encourage the use of public transportation. Boston’s mayor is even going as far as working with developers to reduce the number of buildings built with parking structures as a means of discouraging the use of vehicles within the city.
As public transportation accessibility is increased through these efforts, transit-oriented developments will only benefit as the ability to get to an urban destination will become that much easier.
- Increased Market Demand
The real estate market is primarily built on the idea of location, location, location; transit-oriented developments have become a desirable location due to all the amenities being within close proximity. As the number of TODs continues to increase, so will the desire to be in these places.
A study done by Redfin shows that the value of residences in major metros known for their high traffic congestion can be increased significantly by just one point on their Transit Score, which measures the convenience of public transportation. At the top of the list is Atlanta with a 1.13% increase in value with every one point change of the Transit Score.
Not only does this show that residences in transit oriented developments would have a higher value to residents, but it also in turn shows that the market would have higher demand for these types of residences.
Overall, transit-oriented developments create one thing that individuals are demanding from all aspects of life: convenience. These developments will allow residents convenient access to shopping, work and even to other towns through public transportation.