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entitled 'Affordable Housing in Transit-Oriented Development: Key
Practices Could Enhance Recent Collaboration Efforts between DOT-FTA
and HUD' which was released on September 24, 2009.

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Report to the Chairman, Subcommittee on Transportation, Housing and
Urban Development, and Related Agencies, Committee on Appropriations,
U.S. House of Representatives:

United States Government Accountability Office:
GAO:

September 2009:

Affordable Housing in Transit-Oriented Development:

Key Practices Could Enhance Recent Collaboration Efforts between DOT-
FTA and HUD:

GAO-09-871:

GAO Highlights:

Highlights of GAO-09-871, a report to the Chairman, Subcommittee on
Transportation, Housing and Urban Development, and Related Agencies,
Committee on Appropriations, U.S. House of Representatives.

Why GAO Did This Study:

The federal government has increasingly focused on linking affordable
housing to transit-oriented developments—compact, walkable, mixed-use
neighborhoods located near transit—through the Department of Housing
and Urban Development’s (HUD) housing programs and the Department of
Transportation’s (DOT) Federal Transit Administration’s (FTA) transit
programs. GAO was asked to review (1) what is known about how transit-
oriented developments affect the availability of affordable housing;
(2) how local, state, and federal agencies have worked to ensure that
affordable housing is available in transit-oriented developments; and
(3) the extent to which HUD and FTA have worked together to ensure that
transportation and affordable housing objectives are integrated in
transit-oriented developments. To address these issues, GAO reviewed
relevant literature, conducted site visits, and interviewed agency
officials.

What GAO Found:

Characteristics of transit-oriented developments can increase nearby
land and housing values, however determining transit-oriented
development’s effects on the availability of affordable housing in
these developments are complicated by a lack of direct research and
data. Specifically, the presence of transit stations, retail, and other
desirable amenities such as schools and parks generally increases land
and housing values nearby. However, the extent to which land and
housing values increase—or in the rare case, decrease—near a transit
station depends on a number of characteristics, some of which are
commonly found in transit-oriented developments. According to transit
and housing stakeholders GAO spoke with, higher land and housing values
have the potential to limit the availability of affordable housing near
transit, but other factors—such as transit routing decisions and local
commitment to affordable housing—can also affect availability.

Few local, state, and federal programs are targeted to assisting local
housing and transit providers develop affordable housing in transit-
oriented developments. The few targeted programs that exist primarily
focus on financial incentives that state and local agencies provide to
developers if affordable housing is included in residential
developments in transit-oriented developments. However, GAO found that
housing developers who develop affordable housing in transit-oriented
developments generally rely on local and state programs and policies
that have incentives for developing affordable housing in any location.
HUD and FTA programs allow local and state agencies to promote
affordable housing near transit, but rarely provide direct incentives
to target affordable housing in transit-oriented developments.

Since 2005, HUD and FTA, and more recently DOT, have collaborated on
three interagency efforts to promote affordable housing in transit-
oriented developments including (1) an interagency agreement, (2) a HUD-
FTA action plan, and (3) a new DOT-HUD partnership. While these
interagency efforts have produced numerous strategies, local housing
and transit officials told GAO that these strategies had little impact,
in part, because they have yet to be implemented. However, the agencies
have not yet developed a comprehensive, integrated plan to implement
all efforts, and without such a plan, the agencies risk losing
momentum. GAO has previously identified key practices that could
enhance and sustain collaboration among federal agencies; when compared
to these practices, GAO found that HUD, FTA, and DOT have taken some
actions consistent with some of these practices—such as defining a
common outcome. However, weaknesses in agency housing data and
analytical transportation planning methods will limit these agencies’
ability to effectively monitor, evaluate, and report results—another
key collaboration practice. GAO found that other collaboration
practices, such as establishing compatible policies and procedures,
could be taken to strengthen collaboration. Finally, without a more
formalized approach to collaboration, including establishment of
memorandum of agreements, these agencies may not effectively leverage
their unique strengths.

What GAO Recommends:

GAO is recommending that DOT and HUD develop a plan for implementing
interagency efforts to promote affordable housing in transit-oriented
developments, ensure they collect sufficient data to assess the results
of these efforts, and formalize key collaboration practices. DOT and
HUD agreed to consider the report’s recommendations.

View GAO-09-871 or key components. For more information, contact Dave
Wise, (202) 512-2834 or wised@gao.gov, or Mathew J. Scirè at (202) 512-
8678 or sciremj@gao.gov.

[End of section]

Contents:

Letter:

Background:

Transit-Oriented Developments Can Affect the Availability of Affordable
Housing but Conclusions Are Complicated by Limited Research and Data:

Local, State, and Federal Affordable Housing Programs and Policies
Support, but Generally Do Not Require, Affordable Housing in Transit-
Oriented Developments:

DOT, HUD, and FTA Have Collaborated on Interagency Efforts to Promote
Affordable Housing in Transit-Oriented Developments, However,
Implementation Has Been Limited, and Additional Steps to Enhance
Collaboration Could Be Taken:

Conclusions:

Recommendations for Executive Action:

Agency Comments and Our Evaluation:

Appendix I: Scope and Methodology:

Appendix II: Types of Locations that Could Have Transit-Oriented
Developments:

Appendix III: Examples of LIHTC Programs that Award Points for
Proximity to Transit or Transit-Oriented Developments:

Appendix IV: Comments from the Department of Housing and Urban
Development:

Appendix V: GAO Contacts and Staff Acknowledgments:

Tables:

Table 1: Examples of Federal Programs that Fund Transit Projects:

Table 2: Examples of State and Local Affordable Housing Incentives and
Requirements that Have Been Used in Transit-Oriented Developments but
Are Not Specifically Designed for Use in Transit-Oriented Developments:

Table 3: Summary of Strategies and Recommendations Made by the Three
Interagency Efforts:

Table 4: Eight Key Practices Federal Agencies Can Undertake to Enhance
and Sustain Collaborative Efforts and the Extent to which DOT's, HUD's,
and FTA's Collaboration Efforts Are Consistent with These Key
Practices:

Figures:

Figure 1: Representation of a Transit-Oriented Development and Key
Components:

Figure 2: Infill Development, Including Some Affordable Housing Units,
Has Replaced Vacant or Underutilized Land near the Columbia Heights
Station in Washington, D.C.

Figure 3: Examples of Inconsistencies in Number of HUD-Subsidized
Housing Unit Records, 2000-2008:

Abbreviations:

AMI: area median income:

CDBG: Community Development Block Grant:

CTOD: Center for Transit-Oriented Development:

DOT: Department of Transportation:

EPA: Environmental Protection Agency:

FTA: Federal Transit Administration:

GPRA: Government Performance and Results Act:

HUD: Department of Housing and Urban Development:

LIHTC: Low Income Housing Tax Credit:

PHA: public housing authority:

QAP: Qualified Allocation Plan:

SAFETEA-LU: Safe, Accountable, Flexible, Efficient, Transportation
Equity Act: A Legacy for Users:

[End of section]

United States Government Accountability Office:
Washington, DC 20548:

September 9, 2009:

The Honorable John Olver:
Chairman:
Subcommittee on Transportation, Housing and Urban Development, and
Related Agencies:
Committee on Appropriations:
House of Representatives:

Dear Mr. Chairman:

Households seeking relief from high housing costs may move to areas
with less costly housing but then find themselves further away from
their place of employment and public transportation. Consequently, they
can face significant increases in transportation costs and commute
times. Such costs can particularly affect lower-income households,
since these households are more transit dependent and have fewer
transportation choices available. In addition, state and local
governments, which build, operate, and maintain each region's
transportation system, may need to accommodate more people driving
longer distances to work, and with an increase in traffic congestion,
will likely need to spend more money on roads.

To combat increasing costs for both individual households and local
governments, numerous local communities believe there is a need to
expand housing opportunities and other amenities located near transit
by promoting transit-oriented developments. Transit-oriented
developments are commonly seen as compact, mixed-use (commercial and
residential),[Footnote 1] walkable neighborhoods located near transit
facilities--such as fixed-guideway stations.[Footnote 2] The perceived
benefits of transit-oriented developments include reducing individual
households' transportation costs by providing residents with walkable
access to transit service and shopping, and reducing the investment
needed for local governments to build and maintain roads. Officials in
cities such as Denver and Seattle believe that promoting transit-
oriented development will realize these benefits and can spur economic
development.

Some policy makers and housing experts, however, have raised concerns
that lower-income households might not benefit from these developments.
Specifically, they are concerned that the high demand for housing at
transit-oriented developments will encourage developers, who typically
seek to maximize the return on their housing investments, to primarily
build market rate housing that may limit affordable housing
opportunities for lower-income households.[Footnote 3] Also, housing
stakeholders have expressed concern that existing affordable housing--
whether subsidized or not--presently located near transit may no longer
be financially feasible once a transit-oriented development is built,
thereby increasing the demand for affordable housing.[Footnote 4]

The federal government has acknowledged the link between housing and
transportation.[Footnote 5] For example, the Department of Housing and
Urban Development (HUD) and the Federal Transit Administration (FTA)
started collaborating in 2005 by funding research on expanding housing
near transit. More recently, in separate testimonies presented in March
2009, the Secretaries of HUD and the Department of Transportation (DOT)
discussed the relationship between housing and transportation.[Footnote\
6] In addition, there has been an increased focus on combining the cost
of housing and transportation as the "true" cost of housing
affordability. However, under the current structure, the federal
government provides significant funding to state and local governments
to support both local affordable housing and surface transportation
programs through separate housing and transportation departments. For
example, HUD provides rental housing assistance through three major
programs--housing choice vouchers, public housing, and project-based
rental assistance; in fiscal year 2008, these programs provided rental
assistance to about 4.75 million households and, according to HUD
officials, paid about $31.25 billion in rental subsidies. DOT, through
a variety of FTA programs to include the New Starts program,[Footnote\
7] has provided more than $33 billion over the last decade to help
design, construct, rehabilitate, and modernize fixed-guideway transit
projects throughout the country.[Footnote 8] Congress, among others,
has raised questions about how these departments could better work
together. In 2008, the Appropriations Committees directed HUD and FTA
to jointly address new and better ways for promoting affordable housing
near transit service.[Footnote 9]

You asked us to provide information on several key questions related to
the impact of transit-oriented development on affordable housing and
how HUD and FTA might better work together. More specifically, this
report addresses the following questions:

1. What is known about how transit-oriented developments affect the
availability of affordable housing?

2. How have local, state, and federal agencies worked to ensure that
affordable housing, including housing subsidized through HUD programs,
is available in transit-oriented developments?

3. To what extent do FTA and HUD work together to ensure that
transportation and affordable housing objectives are integrated in
transit-oriented developments, and what opportunities exist to enhance
collaboration?

To address these questions, we conducted a review of relevant
literature, reports, studies, and our prior research. We also conducted
11 site visits in Mesa, Phoenix, and Tempe, Arizona; Sacramento,
California; Chicago, Illinois; Cleveland, Ohio; Jersey City and
Hoboken, New Jersey; Portland, Oregon; Washington, D.C.; and Arlington,
Virginia. During these site visits, we interviewed federal, state, and
local housing and transportation officials; nonprofit housing
organizations; and housing developers, and toured transit-oriented
developments. We selected this nongeneralizable sample of metropolitan
areas based on whether the metropolitan areas reported having transit-
oriented developments, if the area had received New Starts federal
funding for construction of a local fixed-guideway transit system, and
geographical diversity. We also interviewed transportation, housing,
and community development officials; housing developers; and
representatives from various transportation and housing associations
with experience in developing, implementing, or analyzing these issues.
In addition, we reviewed studies and documentation on how government
agencies and other housing and transportation stakeholder groups in
these and other metropolitan areas and states have promoted transit-
oriented developments. We conducted this performance audit from August
2008 to September 2009 in accordance with generally accepted government
auditing standards. Those standards require that we plan and perform
the audit to obtain sufficient, appropriate evidence to provide a
reasonable basis for our findings and conclusions based on our audit
objectives. We believe that the evidence obtained provides a reasonable
basis for our findings and conclusions based on our audit objectives.
See appendix I for more information about our scope and methodology.

Background:

There is no single definition of transit-oriented development; however,
research generally describes such a development as a compact, mixed-
use, walkable neighborhood located near transit facilities. Research
has highlighted that most transit-oriented developments are typically
near a fixed-guideway rail station, generally encompass multiple city
blocks up to a half-mile from a transit station, have pedestrian-
friendly environments and streetscapes, and include high-density and
mixed-use developments. In addition, these developments may have fewer
parking spaces compared to more traditional developments because
residents have easy access to transit, and thus less need for an
automobile. Transit-oriented developments can range in both size and
scope, with some being in suburban neighborhoods with streetcars or bus
rapid transit systems and community-related services while others are
located in major urban locations with light, heavy, or commuter
rail.[Footnote 10] Transportation experts believe that transit-
oriented developments can increase accessibility to employment,
educational, cultural, and other opportunities by promoting
transportation options to households, thereby increasing transit
ridership and reducing road congestion. Figure 1 provides a graphic
representation of a transit-oriented development, and appendix II
provides a description of various types of such developments.

Figure 1: Representation of a Transit-Oriented Development and Key
Components:

[Refer to PDF for image: illustration]

Features (generally encompasses multiple city blocks up to a half-mile
from a transit station):

Transit station, such as a light rail station, that is part of a
transportation network allows residents to access the region’s
neighborhoods, destinations, and centers, thereby promoting transit
use;

Open spaces to include transit-plazas, small parks or regional open
spaces;

High-quality walking environments and streetscape that allow people to
take care of some of their daily needs by walking or biking;

Includes moderate-to-high-density mix of residential, commercial,
employment, and civic/cultural developments;

Includes residential buildings that can vary from small-lot single
family/duplex/townhome units to high-rise multifamily units;

Offers mixed use and employment developments that can vary from mid- to
high-rise residential over commercial to low-to-high-rise
office/commercial.

Source: GAO.

[End of figure]

Planning and development of a transit-oriented development and
affordable housing are driven largely by state and local governments,
transit agencies, and private developers. For example, state and local
government agencies provide many of the necessary infrastructures of
transit-oriented developments, including transit stations, connections
to other transportation modes, sidewalks, utilities, and other public
amenities. Local governments also create the zoning environment, which
may, for example, allow developers to build a mix of uses at higher
densities. Some of the key agencies involved and their principal roles
are summarized below.

* State and local departments of transportation and metropolitan
planning organizations[Footnote 11] develop transportation plans and
improvement programs; and build, maintain, and operate transportation
infrastructure and services.[Footnote 12]

* Local transit agencies, such as transit authorities or transit
operators, are responsible for building, maintaining, and operating
transit systems. These transit systems can include fixed-guideway
transit systems--such as light or heavy rail, and bus rapid transit-