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Transit and the Housing Shortage

Bellingham is one of many cities across America considering with renewed vigor the idea of Transit-Oriented Development (TOD) to address issues of sprawl, increasing populations, and a worsening housing shortage. According to the Municipal Research and Services Center of Washington (MRSC), a mix of TOD and TSD (Transit-Supportive Development) addresses many of the goals laid out in Washington’s Growth Management Act. These goals, “compact growth, transportation options, housing affordable to all income levels, and a vibrant economy,” are achieved through the “higher density, compact, mixed-use development” of Transit-Oriented Development and Transit-Supportive Development.

However, proposals to focus increasing densification around major transit stations and corridors are not as simple as they seem. In practice, issues around housing affordability, gentrification, and displacement often remain inadequately addressed or entirely unresolved even after adjusting housing policies in favor of and putting significant city resources into renewed Transit-Oriented Development.

What Is Transit-Oriented Development (TOD)?

The Federal Transit Administration (FTA) describes TODs as “dense, walkable, mixed-use development near transit.” This kind of development involves changes to land use policies around transit centers to make it easier to expand or create nearby housing and further develop the space for both residential and commercial use. Bellingham, like many cities across America, is experiencing tremendous growth and is in serious need of more housing to accommodate its growing population. In addition to housing opportunities, Transit-Oriented Development can provide many local benefits. The list from the FTA includes:

- Neighborhood revitalization

- More affordable housing

- Increased ridership for transit systems

- Congestion relief, improved air quality and other environmental benefits

- Improved safety for pedestrians and cyclists

Limits of TOD

The Federal Transit Administration acknowledges one major challenge of Transit-Oriented Developments to be gentrification. This is precisely because the increased access to public transit often leads to an increase in the valuation of the surrounding land and real estate and, consequently, the displacement of the people who are most likely to need the available transit.

Further research supports the gentrification challenge expressed by the FTA and also affords a more nuanced look at what TODs bring to the table.

Researchers from the University of Utah found that displacement was likely linked to the fact that there was often not enough focus on creating affordable housing in developing TODs. Low-income housing tax credits, grants, and tax abatements are shown to be the primary source of funding for affordable housing, according to the study. In the areas studied, they found only 20% of housing units were considered affordable (13% were designated affordable housing, 7% naturally occurring affordable housing).

Nearly a third of TODs offered no affordable housing, and the naturally occurring affordable housing mostly served “moderate-income households – those earning 80 percent of the area median income (AMI) – that typically consist of individuals who can afford only small units. This means that families needing larger units cannot rely on market forces to provide affordable housing in TOD areas.” Both individuals and families that would most benefit from transit-oriented developments are ultimately at a greater risk of being priced out and end up looking farther away from the city center for affordable housing.

Another group of researchers, conducting studies focused largely on the Los Angeles area, confirmed these findings. They suggested, based on their findings, that increased subsidies should be available “for affordable rental units near transit, both in and outside TODs,” and that less developers should be able to opt out of these subsidies for affordable units. Overall, the researchers believe their findings to be widely relevant beyond LA, concluding that “the benefits flowing from community investments in density and housing affordability are not limited to TODs,” though TODs can be one method to begin to address housing shortages.

Both sets of findings suggest it is a challenge to create affordable housing in Transit-Oriented Developments. Affordable housing, which should play a large role in how cities address their housing shortages, does not occur naturally in these areas. In fact, the opposite tends to happen, with TODs leading to an increase in the cost of the newly developed housing, forcing many existing residents out, creating urban sprawl, and potentially further exacerbating rising rates of homelessness.

Diminishing Ridership

In addition to the fact that residents who most need public transit often are not the ones who benefit from TODs, the public transit ridership in general has been diminishing, both before and even more so during the pandemic. This leads to further questions about the usefulness of transit in its current state in addressing a city’s housing needs.

A survey on transit ridership across the country examines the lag in transit use even as “economic activity and day-to-day travel have gradually rebounded.” The study defines two groups of transit riders: the “choice” riders for whom using transit is one among several convenient, viable travel options, and the “essential transit” riders who rely on transit to reach essential destinations like jobs, schools, food, social services, recreation, and social connections. It examines the effects on these groups of higher pandemic-related costs to transit agencies and the resulting reduction in overall transit service. There seems to be a vicious cycle of falling ridership levels leading to reduced revenue, leading to reduced service availability, leading to reduced ridership levels.

Those who rely on transit are particularly vulnerable to the transit service cuts, but as TOD research has shown, essential transit riders are unlikely to benefit from the new housing developments intended to serve this very section of the community.

Still, current and would-be transit users across the country are advocating for more transit funding, and their voices have been strong enough to effect policy changes. A recent decision by the Colorado Department of Transportation for example redirected funds initially intended for highway expansion, in favor of investing in public transit and walkability around Denver.

There are certainly pandemic-related lifestyle changes that have affected transit use, like telecommuting and changes to employment, but more broadly the issue seems to be that people still need public transit, or rather, people still require mobility, but those who have a choice find that they cannot rely on the existing transit structures. These structures suffer from a lack of funding which stops them from ultimately offering more frequent, affordable, and reliable commuting options.

It seems clear that there is a larger transit issue at play, which means that simply developing housing near transportation hubs is not nearly enough to address the depth of the housing shortage in Bellingham and beyond. As the LA-based research group concludes, it’s likely that Transit-Oriented Developments “are not a magical solution to an affordable housing shortage so severe that some describe it as a crisis.” Rather, in conjunction with different types of affordable and family-oriented housing and changes to transit systems, TODs may offer one possible step in addressing the housing needs across the country, as long as these systems can provide dependable and affordable service to help their residents commute.

About— Housing for Bellingham is a community resource that works to explain the fundamental processes and terminology associated with housing related decisions in effort to inform the public. When the people understand land use planning processes and terminology, everyone can make more informed decisions about housing and land use policies in their communities.



Contact your Bellingham City Council representative and tell them you support a proactive plan for sustainable growth.

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