By Michael A. Spotts, August 19, 2013
On August 14, 2013, the Federal Transit Administration released the final Policy Guidance for its Major Capital Investment Projects program, also known as New Starts/Small Starts. This program is the primary federal funding source for new transit investments, and this guidance sets the framework for the program’s competitive evaluation and ratings process. Enterprise and many of its partners have provided feedback to the FTA throughout the rulemaking process, which began in 2010. Our comments focused on promoting the coordination of affordable housing and community development activities with any new transit investments. We are pleased to see that the Final Rule (released in January 2013) and guidance reflect many of our recommendations, including incentives to expand transit access to low-income communities, preserve existing affordable housing and develop additional affordable units near new stations. We commend FTA for the steps it has taken to ensure that families of all incomes can benefit from transit expansion and the community investment that often follows.
Continue reading for more information on the guidance's importance and implications.
The Importance of Affordable TOD and Implications for Local PractitionersBefore getting into the details of the new guidance, it’s important to consider the reasons why we encouraged FTA to take affordable housing and community development into account in its funding decisions. Transit service is crucial to accessing jobs, health services and other everyday necessities for many low-income workers and families. New transit expansions can enhance personal mobility and contribute to increased economic development in the surrounding neighborhood. Investment in these communities can have significant revitalization effects in previously disinvested areas, and property values near station areas can rise. However, this raises the prospect that the area may become unaffordable to low- and moderate-income households, who stand to benefit the most from the new transit access. Therefore, it is important for policymakers to consider housing affordability when making decisions about transit to ensure that people of all incomes can experience the benefits.
How does the New Starts Final Rule and Policy Guidance address this issue?
- First, FTA will assess the degree to which the proposed transit project will reach existing affordable housing. In addition, FTA’s measure of mobility benefits provides extra weighting for trips made by transit-dependent persons. These incentives encourage project sponsors to ensure that the transit project reaches lower-income households from the outset.
- To address the neighborhood change that often accompanies transit investments, the guidance also provides incentives for adopting plans and policies that preserve and expand affordable housing opportunities in the station areas. Enterprise and its partners are pleased that the final guidance placed a greater emphasis on preservation and the needs of very- and extremely-low income families.
- Finally, the incremental costs of certain sustainability-related project features, such as energy-efficiency measures and transit-oriented joint development, are excluded from the calculations of cost-effectiveness. The previous calculation method penalized any additional project cost that did not result in direct and proportional increases in ridership, regardless of whether the project feature enhanced the transit system's overall quality.
FTA has taken a strong step in the right direction toward promoting and investing in communities of opportunity. However, these changes will require adjustment on the part of practitioners. We anticipate that a number of questions will arise as the transit and housing fields take a closer look at the new guidance and consider how it will apply to their specific context. In anticipation of these questions, Enterprise will soon release a more detailed analysis of the New Starts Policy Guidance as part of its Policy Focus series of issue briefs. This brief will provide more specific implementation details and recommendations for action at the local/regional level. In the meantime, please contact me if you have questions or would like additional information.