Module 5 REGULATIONS AND FINANCING TOOLS FOR QUALITY COMMUNITIES AROUND TRANSIT

Module 5 Regulations and Financing Tools for Quality Communities Around Transit 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

Module 5 Regulations and Financing Tools for Quality Communities Around Transit 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.”

Module 5 Regulations and Financing Tools for Quality Communities Around Transit 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

Module 5 Regulations and Financing Tools for Quality Communities Around Transit 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.

Module 5 Regulations and Financing Tools for Quality Communities Around Transit 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.

Module 5 Regulations and Financing Tools for Quality Communities Around Transit 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.

Module 5 Regulations and Financing Tools for Quality Communities Around Transit 6 Implementation Strategies 1. Partner cooperatively among municipalities 2. Proactively plan for station areas 3. Revise zoning and development controls 4. Utilize value capture tools for new investment 5. Leverage investment for mixed-income communities and preservation of existing communities 6. Invest public resources in transit station areas

Module 5 Regulations and Financing Tools for Quality Communities Around Transit 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.

Module 5 Regulations and Financing Tools for Quality Communities Around Transit 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.

Module 5 Regulations and Financing Tools for Quality Communities Around Transit 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

Module 5 Regulations and Financing Tools for Quality Communities Around Transit Strategy 2: Proactively Plan for Station Areas Bring all stakeholders together. Set the long-term vision and implementation steps. Identify needs and opportunities.

Module 5 Regulations and Financing Tools for Quality Communities Around Transit What Goes Into a Good Station Area Plan? Community Engagement and Vision Comprehensive Land-Use Plan Public Infrastructure Investments Implementation and Financing Plan

Module 5 Regulations and Financing Tools for Quality Communities Around Transit Public/open space Core commercial Residential Multifamily residential Dallas, TX TOD Station Area Plans

Module 5 Regulations and Financing Tools for Quality Communities Around Transit 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.

Module 5 Regulations and Financing Tools for Quality Communities Around Transit 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.

Module 5 Regulations and Financing Tools for Quality Communities Around Transit 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

Module 5 Regulations and Financing Tools for Quality Communities Around Transit 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.

Module 5 Regulations and Financing Tools for Quality Communities Around Transit 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.

Module 5 Regulations and Financing Tools for Quality Communities Around Transit 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 Specific Parking Requirements STEP 4 Define Development Types and Incentives

Module 5 Regulations and Financing Tools for Quality Communities Around Transit How Do You Create an Overlay Zone for TOD? Define Allowable and Prohibited Uses Define Specific Parking 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

Module 5 Regulations and Financing Tools for Quality Communities Around Transit How Do You Create an Overlay Zone for TOD? Define Purpose and Applicable Area STEP 2 Define Allowable and Prohibited Uses Define Specific Parking 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

Module 5 Regulations and Financing Tools for Quality Communities Around Transit How Do You Create an Overlay Zone for TOD? Define Purpose and Applicable Area Define Allowable and Prohibited Uses STEP 3 Define Specific Parking 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

Module 5 Regulations and Financing Tools for Quality Communities Around Transit 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

Proposed TOD Zoning District Beacon, NY

Module 5 Regulations and Financing Tools for Quality Communities Around Transit Form-based Zoning Uses Design rather 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

Module 5 Regulations and Financing Tools for Quality Communities Around Transit 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.

Module 5 Regulations and Financing Tools for Quality Communities Around Transit 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.

Module 5 Regulations and Financing Tools for Quality Communities Around Transit 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

Module 5 Regulations and Financing Tools for Quality Communities Around Transit 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.

Module 5 Regulations and Financing Tools for Quality Communities Around Transit 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.

Module 5 Regulations and Financing Tools for Quality Communities Around Transit 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.

Module 5 Regulations and Financing Tools for Quality Communities Around Transit 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.

Module 5 Regulations and Financing Tools for Quality Communities Around Transit 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.

Module 5 Regulations and Financing Tools for Quality Communities Around Transit 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.

Module 5 Regulations and Financing Tools for Quality Communities Around Transit 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.

Module 5 Regulations and Financing Tools for Quality Communities Around Transit 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.

Module 5 Regulations and Financing Tools for Quality Communities Around Transit 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.

Module 5 Regulations and Financing Tools for Quality Communities Around Transit 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

Module 5 Regulations and Financing Tools for Quality Communities Around Transit 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

Module 5 Regulations and Financing Tools for Quality Communities Around Transit 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

Module 5 Regulations and Financing Tools for Quality Communities Around Transit 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.

Module 5 Regulations and Financing Tools for Quality Communities Around Transit 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

Module 5 Regulations and Financing Tools for Quality Communities Around Transit 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

Module 5 Regulations and Financing Tools for Quality Communities Around Transit 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.

Module 5 Regulations and Financing Tools for Quality Communities Around Transit 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.

Module 5 Regulations and Financing Tools for Quality Communities Around Transit 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.

Module 5 Regulations and Financing Tools for Quality Communities Around Transit Funding Sources Categorical 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

Module 5 Regulations and Financing Tools for Quality Communities Around Transit Funding Sources: NYSDOT & MTA NYSDOT  Capital and ARRA Projects  Transportation Enhancement Program  Safe Routes to Schools  Scenic Byways MTA  Joint Development

Implementing TOD Community engagement and visioning Public investment in transit, streets, parks Private investment in existing places and new development

Implementing TOD Community engagement and visioning Public investment in transit, streets, parks Private investment in existing places and new development Station Area and Development Plans Community benefits agreements Capital improvement plans Programming and management TOD Zoning Joint Development Financing tools (IDA, TIF)

Module 5 Regulations and Financing Tools for Quality Communities Around Transit Five Key Points to Implementing TOD 1. Know the vision 2. Understand the gaps and hurdles 3. Evaluate existing tools and strategies 4. Proactively invest in making it happen 5. Enjoy the benefits of hard work

Module 5 QUESTIONS? COMMENTS?