PUBLIC 

TRANSPORTATION

Multiple Factors 

Influence Extent of 

Transit-Oriented 

Development

Report to the Chairman, Subcommittee 

on Housing, Transportation, and 

Community Development, Committee 

on Banking, Housing, and Urban 

Affairs, U.S. Senate

November 2014

GAO-15-70

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-15-70, a report to 

Chairman, Subcommittee on Housing, 

Transportation, and Community Development, 

Committee on Banking, Housing, and Urban 

Affairs, U.S. Senate.

November 2014

PUBLIC TRANSPORTATION

Multiple Factors Influence Extent of Transit-Oriented 

Development

Why GAO Did This Study

From 2004 to 2014, FTA allocated 

$18.9 billion to build new or expanded

transit systems through the Capital 

Investment Grant program. One of the 

key goals for many local governments 

when planning major capital-transit 

projects is to encourage transitoriented development as a way to 

focus future regional population growth 

along transit corridors. Transitoriented development is generally 

described as a compact and “walkable” 

neighborhood near transit with a mix of 

residential and commercial uses.

GAO was asked to examine transitoriented development. This report 

addresses (1) the extent to which 

transit-oriented development has 

occurred near select transit lines that 

received federal funds and the factors 

and local policies that affect transitoriented development, and (2) the

extent to which FTA considers factors 

related to the potential for transitoriented development when assessing 

proposed projects and the extent to 

which FTA’s assessment of these 

factors is consistent with the factors 

that local stakeholders told GAO affect 

a project’s results. To address these 

issues, GAO reviewed relevant 

literature and visited six federally 

funded case study transit projects in 

Baltimore, MD; Washington, DC; 

Charlotte, NC; Santa Clara County, 

CA; San Francisco, CA; and Houston, 

TX, selected for diversity in local 

programs, markets, and geography. 

During these visits, GAO met with 

stakeholders, such as local officials 

and developers. GAO also interviewed 

FTA officials. In commenting on a draft 

of this report, DOT noted FTA’s longstanding commitment to encourage 

transit-oriented development.

What GAO Found

GAO found a wide range in the extent of new transit-oriented development that 

has occurred since transit operations began for GAO’s six federally funded casestudy transit projects. There are many examples of new transit-oriented 

development in San Francisco, CA; Washington, DC; and Charlotte, NC, that 

local officials attribute—at least in part—to transit in the area. However, in other

cities GAO visited, local officials said that there has been very little development

around transit stations—or that development took as long as 10 years.

Stakeholders in these cities attributed transit-oriented development, or lack 

thereof, near the projects selected to the influence of several factors, including:

• conditions that support transit-oriented development, such as demand for 

nearby real estate, land available to develop, residents’ support, and a transit 

system that provides a direct and efficient connection to jobs;

• challenges that hinder transit-oriented development, such as high associated 

costs, difficulty in obtaining financing, a difficult local-government review and 

approval process, an unsupportive local population, and a physical 

configuration around transit stations unattractive for development; and

• local government policies that support transit-oriented development, such as 

supportive zoning, planning, infrastructure investments, and tax incentives.

The Federal Transit Administration (FTA) assesses projects for potential New 

Starts funding by evaluating several of the factors and local government policies

GAO identified as supporting transit-oriented development on a five-point scale 

ranging from low to high. FTA evaluates access to jobs, available land, and 

transit-supportive plans and polices—among other things—in assessing each 

project for economic development and land use, which are two evaluation criteria 

FTA uses to determine whether a project will be funded. Among four case study 

projects GAO visited that were assessed by FTA for New Starts, two scored 

medium-high or better, while two scored medium-low or lower. GAO found that 

many of the factors or local government policies that supported or hindered 

transit-oriented development are generally consistent with FTA’s summary 

assessment for economic development and land use. Further, GAO found two 

projects where transit-oriented development resulted in increased ridership, while 

projects with less transit-oriented development have fewer riders than expected. 

Transit-Oriented Development, Columbia Heights Station, Washington, DC

View GAO-15-70. For more information, 

contact David J. Wise at (202) 512-2834 or 

wised@gao.gov
Page i GAO-15-70 Transit-Oriented Development

Letter 1 

Background 4

A Variety of Factors and Local Government Policies Can Influence 

Transit-Oriented Development 10

FTA’s New Starts Assessment of Certain Factors Is Generally 

Consistent with Future Transit-Oriented Development 23

Agency Comments 32

Appendix I Objectives, Scope, and Methodology 33

Appendix II GAO Contact and Acknowledgments 36

Figures

Figure 1: Common Features of Transit-Oriented Development 5

Figure 2: New Starts Project Evaluation and Rating Criteria 9

Figure 3: Shuttered Buildings near a Light Rail Station in 

Downtown Baltimore, MD 11

Figure 4: New and Planned Development within a Half Mile of 

Light Rail Stations in South End, Charlotte, NC 11

Figure 5: A Low Density and Auto-Oriented Business near Light 

Rail in Houston, TX 12

Figure 6: New and Planned Development within a Half Mile of 

Light Rail Stations in San Francisco, CA 12

Figure 7: New Office Development at Moffett Park, CA 13

Figure 8: Transit-Oriented Development near the Columbia 

Heights Station in Washington, DC 13

Figure 9: Bicycle Lanes and Bicycle-Sharing Program, San 

Francisco, CA 22

Figure 10: Transit-Oriented Retail Development in Charlotte, NC 27

Figure 11: Percentage Change in Average Weekday Riders for 

Select Washington, DC, Metrorail Stations: 2005-2014 29

Figure 12: Actual and Forecast Average-Weekday Ridership of 

Selected New Starts-Funded Light Rail Projects 31

Contents
Page ii GAO-15-70 Transit-Oriented Development

Abbreviations

DOT Department of Transportation 

EIR Environmental Impact Review 

FTA Federal Transit Administration 

MAP-21 Moving Ahead for Progress in the 21st Century Act 

MPO metropolitan-planning organization

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

without further permission from GAO. However, because this work may contain 

copyrighted images or other material, permission from the copyright holder may be 

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Page 1 GAO-15-70 Transit-Oriented Development

441 G St. N.W.

Washington, DC 20548

November 18, 2014

The Honorable Robert Menendez

Chairman

Subcommittee on Housing, Transportation, and Community Development

Committee on Banking, Housing, and Urban Affairs

United States Senate

Dear Chairman Menendez:

From 2004 to 2014, the Federal Transit Administration (FTA) allocated 

$18.9 billion to build new or expanded “fixed-guideway”1 transit systems 

through the Capital Investment Grant program, which categorizes the 

largest projects as “New Starts”.

2 One of the key goals for many local 

governments when planning major capital transit projects is to encourage 

transit-oriented development—generally described by research as a 

compact, mixed-use,3 walkable neighborhood located near transit—as a 

way to focus future growth along transit corridors. According to FTA, 

transit-oriented development has a number of potential benefits, including 

increased transit ridership, associated gains in revenue, and 

encouragement of economic development.4

 

1

“Fixed-guideway” transit operates on a separate right-of-way exclusively for public 

transportation such as a rail track. Fixed-guideway systems include rail modes (heavy rail, 

light rail, commuter rail), ferryboats, aerial tramways, trolleybuses, and Bus Rapid Transit.

In addition, transit-oriented 

2

FTA’s Capital Investment Grant program is a discretionary grant program under the 

Moving Ahead for Progress in the 21st Century Act. It provides funding for what are 

referred to as New Starts, Small Starts, and Core Capacity projects. New Starts projects 

are new fixed-guideway projects or extensions to fixed-guideway projects. Small Starts 

projects are fixed-guideway projects that have a total net capital cost of less than $250 

million and a federal share of less than $75 million. Core capacity projects expand 

capacity in existing fixed-guideway corridors that are already at or above capacity today or 

are expected to be within 5 years. Pub. L. No. 112-141 § 20008(b), 126 Stat. 405, 658 

(2012), codified at 49 U.S.C. § 5309. 

3

Mixed-use development mixes residential, commercial, cultural, or institutional uses on 

the same site—or within close proximity—which can allow for greater housing density; 

encourage more compact development; and promote pedestrian-friendly environments. 

4

Research has also found that local governments and transit agencies view transitoriented development as a means to achieve goals such as increasing transit ridership 

and revitalizing neighborhoods. See Robert Cervero et al, Transit-Oriented Development 

in the United States: Experiences, Challenges, and Prospects (Washington, DC: 

Transportation Research Board, 2004).
 

Page 2 GAO-15-70 Transit-Oriented Development

development can provide advantages to the entire region through 

environmental benefits, such as reduced carbon emissions through fewer 

car trips.

You asked us to examine transit-oriented development around federally 

funded transit facilities. In this report, we address (1) the extent to which 

transit-oriented development has occurred near select transit lines that 

received federal funds and which factors or local government policies

support transit-oriented development and which factors hinder transitoriented development, and (2) the extent to which FTA considers factors 

related to the potential for transit-oriented development when assessing 

proposed projects, and the extent to which FTA’s assessment of these 

factors is consistent with the factors that local stakeholders told us affect 

a project’s results.

For both of these objectives, we selected six transit lines that received 

federal funds to serve as case studies. We selected these lines based on 

the existence of previously implemented and planned or in-construction 

federally funded transit lines in the same region, diversity in the existence 

of state and local programs that are supportive of transit-oriented 

development; diversity in the current strength of the local real estate 

market and; geographical breadth. The results of these six case studies 

are not generalizable to all federally funded transit lines. While we 

focused on a specific transit line in each city, in order to provide context 

for our cases, we also discussed with local officials the city or county’s 

broader experience with transit and transit-oriented development. The 

case studies we selected were:

• Central Corridor Light Rail in Baltimore, MD;5

• South Corridor Light Rail in Charlotte, NC;

 

5

According to the 2001 FTA Annual Report on New Starts Baltimore Central Corridor Light 

Rail Double Tracking Project Summary, the original Central Corridor Light Rail was built 

entirely with local funds. The line began operations in 1992 predominately as single track. 

The Maryland Transit Administration subsequently examined the feasibility and 

environmental impacts and benefits of double tracking eight sections. Three federally 

funded extensions of the Central Corridor Light Rail, to Hunt Valley, Penn Station, and 

Baltimore-Washington International Airport were completed in 1998. We used FTA’s 

summary project justification from the double-tracking project because FTA included the 

entire line in this assessment. According to this summary, while only certain sections of 

the line were improved, the summary project’s justification is applicable for the entire line, 

unless otherwise noted, since double-tracking sections were scattered throughout the 

system and affected service for the entire system.
 

Page 3 GAO-15-70 Transit-Oriented Development

• North Corridor Light Rail in Houston, TX;

• Third Street Light Rail, Phase 1 in San Francisco, CA;

• Tasman West Light Rail Extension in Santa Clara County, CA; and

• Green Line Metrorail Extensions in Washington, DC and Prince 

George’s County, MD.6

To determine the extent to which transit-oriented development has 

occurred near these transit projects, we analyzed local land use data; 

physically observed development, if any, along these transit lines; and 

interviewed local planning officials, developers, and other local 

stakeholders. To identify factors that support or hinder transit-oriented 

development and the policies that local governments can use to support 

such development, we visited all of the transit projects identified above 

and some nearby transit-oriented developments. We identified policies 

that local governments can use to support transit-oriented development; 

reviewed state and local planning regulations; and analyzed land-use and 

transit-ridership data from 2005 to 2014. We deemed the data on land 

use and transit ridership we collected reliable for the purposes of this 

report. We reviewed relevant literature on transit-oriented development as 

well as our past reports related to FTA’s Capital Investment Grant 

Program and transit-oriented development. During our site visits, we met 

with officials from transit agencies and local planning departments, 

developers, and other stakeholders, such as representatives from various 

transportation and planning organizations.

To determine the extent to which FTA considers factors related to 

potential transit-oriented development when assessing proposed projects, 

we analyzed relevant laws and documents, such as the Moving Ahead for 

Progress in the 21st Century Act (MAP-21)7

 

6

This extension includes the Columbia Heights, Georgia Ave/Petworth, and Congress 

Heights Stations in Washington, DC, and the Southern Avenue, Naylor Road, Suitland, 

and Branch Avenue Stations in Prince George’s County, MD. Funding for this extension 

came from FTA as part of the Fast Track program as authorized in the National Capital 

Transportation Amendments of 1990, Pub. L. No.101-551, 104 Stat. 2733 (1990). 

, FTA’s Annual Report on 

Funding Recommendations, and New Starts policy guidance. For projects 

that were assessed for New Starts funding, to determine the extent to 

which FTA’s assessment is consistent with future land use changes, if 

any, we reviewed FTA’s project assessments and materials used to 

7

Pub. L. No. 112-141.
 

Page 4 GAO-15-70 Transit-Oriented Development

support project recommendations.8

We conducted this performance audit from February 2014 through 

November 2014 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.

We then compared these 

assessments with information gathered from our site visits. We also 

interviewed FTA officials. For further details on our scope and 

methodology, see app. I. 

As we have previously found,9 there is no single definition of transitoriented development; however, research generally describes such a 

development as a compact, mixed-use,10

 

8

The light rail projects in Baltimore, Charlotte, Houston, San Francisco, and Santa Clara 

County were assessed by FTA for New Starts Funding. The San Francisco T-Third project 

did not receive a New Starts full funding grant agreement, but did receive more than $70 

million in funds from the Fixed Guideway and Surface Transportation Programs. The 

Washington Metrorail extensions were not assessed for New Starts Funding. 

and “walkable” neighborhood 

located near transit. Transit-oriented developments are typically located 

up to a half-mile from a transit station (usually a fixed guideway rail 

station), can encompass multiple city blocks, and have pedestrian-friendly 

environments. Transit-oriented developments can range in both size and 

scope, with some located in major urban centers while others are located 

in suburban neighborhoods. Transportation experts believe that transitoriented development can increase access to employment, educational, 

cultural, and other opportunities by promoting transportation options to 

households, resulting in increased transit ridership and reduced road 

congestion. Figure 1 provides a graphic representation of common 

features of a notional transit-oriented development.

9

GAO, Affordable Housing in Transit-Oriented Development, GAO-09-871 (Washington, 

DC: September 2009)

10Mixed-use development mixes residential, commercial, cultural, or institutional uses on 

the same site—or within close proximity—which can allow for greater housing density, 

encourage more compact development, and promote pedestrian-friendly environments. 

Background
 

Page 5 GAO-15-70 Transit-Oriented Development

Figure 1: Common Features of Transit-Oriented Development

A number of stakeholders play important roles in the planning and 

implementation of a transit-oriented development. These roles are 

summarized below.
 

Page 6 GAO-15-70 Transit-Oriented Development

• Local transit agencies: These agencies, such as transit authorities 

or transit operators, are generally responsible for building, 

maintaining, and operating transit systems. These transit systems can 

include fixed guideway transit systems—such as rail or bus rapid 

transit—ferry systems, paratransit services, and local bus service.

• State and local departments of transportation and metropolitanplanning organizations (MPO):11 These departments and 

organizations develop transportation plans and improvement 

programs; they also build, maintain, and operate transportation 

infrastructure and services.

• Local governments and regional councils: City and county 

governments have planning departments with control over land use 

planning, which includes zoning policies and growth management 

policies. These entities are also generally responsible for reviewing, 

engaging local residents on, and granting entitlements for new 

development projects.12 Regional councils develop land use plans 

used by metropolitan-planning organizations for transportation 

planning.

• Private developers: Private developers decide on and create 

developments and build and manage housing units and commercial 

developments.

• Lenders: Banks and other financial institutions finance developers to 

design and construct transit-oriented development projects.

• Business improvement districts: These districts—and other entities 

that coordinate local economic interests—have input on community 

infrastructure upgrades.

Although FTA provides funds for transit projects that may spur transitoriented development, it does not have a discrete program for transit-

 

11MPOs are federally mandated regional organizations responsible for comprehensive 

transportation planning and programming in urbanized areas with a population of 50,000 

or more and are required to develop regional transportation plans. 49 U.S.C. § 5303.

12According to the Urban Land Institute, entitlements are legal rights conveyed by 

approvals from governmental entities to develop a property for a certain use, intensity, 

building type, or building placement. 
 

Page 7 GAO-15-70 Transit-Oriented Development

oriented development. However, the agency has been expanding its role 

in transit-oriented development in recent years by:

• Funding transit-oriented development research.13

• Coordinating with the Department of Housing and Urban Development 

and the Environmental Protection Agency on the Sustainable 

Communities Partnership. This partnership was formed in 2009 with 

the goal of coordinating federal housing, transportation, water, and 

other infrastructure investments to support communities’ development 

in more environmentally and economically sustainable ways, including 

transit-oriented development.

• Implementing a transit-oriented development planning pilot program 

that is to provide grants to state or local governments for advance 

planning efforts that support transit-oriented development.14 FTA 

plans to distribute $19.98 million in grant funding to state and local 

agencies in 2015.15

Since the early 1970s, the federal government has provided a large share 

of the nation’s transit capital investment through the Capital Investment 

Grant program. Projects eligible for the program include new fixedguideway transit lines, extensions to fixed-guideways, and projects that 

improve core capacity on an existing fixed-guideway system. As we 

recently reported,16

 

13See Center for Transit-Oriented Development, Intercity Rail and Transit-Oriented 

Development: Making Connections, Building Communities (Washington, D.C.: May 6, 

2013); New Jersey Institute of Technology, Planning for Transit-Supportive Development: 

A Practitioner’s Guide (Washington, DC: June 2014), and; Center for Transit Oriented 

Development, Trends in Transit-Oriented Development 2000–2010 (Washington, DC: May 

2014).

although FTA provides funding for Capital Investment 

Grant projects, local transit agencies typically serve as project sponsors, 

14MAP-21, Pub. L. No. 112-141 §. 20005(b). 

15The $19.98 million available consists of $9.98 million from the Consolidated and Further 

Continuing Appropriations Act, 2013 Pub. L. No. 113-6 Div. F, Title VIII, 127 Stat. 198 

(2013), and $10 million from the Consolidated Appropriations Act, 2014.Pub. L. No. 113-

76. Div. L, Title I, 128 Stat. 5 (2014) FTA issued a Notification of Funding Availability on 

September 4, 2014.Transit-Oriented Development Planning Pilot Program, Notification of 

Funding Availability, 79 Fed. Reg. 52799 (Sept. 4, 2014).

16GAO, Length of Development Process, Cost Estimates, and Ridership Forecasts for 

Capital-Investment Grant Projects, GAO-14-472 (Washington, DC: May 2014).
 

Page 8 GAO-15-70 Transit-Oriented Development

and design and implement these projects. The project sponsors often 

coordinate with local MPOs in designing and implementing these projects, 

and FTA awards funding to project sponsors upon completion of the preconstruction development process. This process includes a range of local 

policy-development and decision-making activities, including identifying 

the specific transit corridor and project, refining the project design, and 

obtaining the necessary funding commitments from state and local 

partners.

Once a project sponsor decides to seek Capital Investment Grant 

funding, FTA is required by law to rate a project considering a number of 

evaluation criteria, before it can recommend the project to Congress for 

funding.17 While these criteria have changed over time, there are currently 

six individual criteria: mobility improvements, environmental benefits, 

congestion relief, cost-effectiveness, economic development, and land 

use. In addition, FTA considers the availability of federal funds; 

consideration of project readiness, including sufficient engineering and 

design to produce a reliable scope, cost figure, and schedule; and 

sufficient technical capacity of the project sponsor to undertake a major 

construction project. FTA is also required to evaluate and rate the local 

financial commitment and the transit agency’s ability to operate the 

project and continue to operate the existing transit system.18

 

1749 U.S.C. § 5309(d).

See fig. 2.

1849 U.S.C. § 5309(c)(1)(B), 5309(f).
 

Page 9 GAO-15-70 Transit-Oriented Development

Figure 2: New Starts Project Evaluation and Rating Criteria

FTA is required by MAP-21 to rate each individual criterion on a five point 

scale, from low, medium-low, medium, medium-high, and high. FTA 

prepares and combines a summary project justification and a summary 

local financial commitment rating to arrive at an overall project rating. 

MAP-21 requires FTA to give “comparable, but not necessarily equal” 

weight to the six project justification criteria.19 FTA’s final policy guidance 

for the New Starts evaluation and rating process specifies that FTA gives 

equal weight (16.66%) to each of the project justification criteria to arrive 

at a summary project justification rating. According to FTA final policy 

guidance, each of these criteria provides important information about 

project merit and therefore should receive equal weight.20

According to MAP-21, a proposed transit project needs to achieve at least 

a medium overall rating (which requires at least a medium rating on both 

the summary project justification and the summary local financial 

commitment categories) to advance through the steps in the process and 

 

1949 U.S.C. § 5309(g)(2).

20Department of Transportation, Federal Transit Administration, New and Small Starts 

Evaluation and Rating Process Final Policy Guidance, (Washington, DC: 2013).
 

Page 10 GAO-15-70 Transit-Oriented Development

be eligible for funding. Projects may score below medium for an individual 

criterion, as long as the overall project rating is at least a medium.21

We found a wide range in the amount of new transit-oriented 

development since transit operations began for our six case study transit 

lines. Stakeholders in these cities attributed the amount of transit-oriented 

development to the influence of a variety of factors including conditions 

that support of transit-oriented development such as a demand for real 

estate, challenges that hinder transit-oriented development such as high 

associated construction costs, and local government policies that 

encourage transit-oriented development, such as transit supportive 

zoning.

During our case study visits, we found a wide range in the amount of 

transit-oriented development that occurred since the implementation of a 

federally funded transit project. For each project, we found at least a 

minimal amount of transit-oriented development near at least one station; 

however, for each project we also found examples of stations that have 

had little or no transit-oriented development. For example, in Baltimore, 

MD, local officials told us that there has been very little development 

around light rail stations—except near downtown Baltimore’s Penn 

Station, which also services commuter rail and Amtrak—despite more 

than 20 years of operations and a significant upgrade in service in 2006. 

In contrast, local stakeholders in Charlotte, NC, told us that the South End 

portion of the light rail line has been largely successful in attracting 

transit-oriented development—although one of these stakeholders 

acknowledge that stations further down the transit line in Charlotte are 

more auto-oriented22 and have generated little transit-oriented 

development. A more detailed description of examples of our findings 

from each case study can be found in figures 3 to 8.23

 

2149 U.S.C. § 5309(g)(2).

22Auto-oriented generally refers to development that requires an automobile for access, 

this type of development can make other travel options—such as public transportation, 

cycling, and walking—less feasible or safe. 

23The descriptions and illustrations in this table are illustrative of our case study findings 

and not a comprehensive analysis of all development that has taken place near each 

transit project. 

A Variety of Factors 

and Local 

Government Policies 

Can Influence TransitOriented 

Development

Overview of Case Study 

Findings
 

Page 11 GAO-15-70 Transit-Oriented Development

Figure 3: Shuttered Buildings near a Light Rail Station in Downtown Baltimore, MD

Figure 4: New and Planned Development within a Half Mile of Light Rail Stations in South End, Charlotte, NC
 

Page 12 GAO-15-70 Transit-Oriented Development

Figure 5: A Low Density and Auto-Oriented Business near Light Rail in Houston, TX

Figure 6: New and Planned Development within a Half Mile of Light Rail Stations in San Francisco, CA
 

Page 13 GAO-15-70 Transit-Oriented Development

Figure 7: New Office Development at Moffett Park, CA

Figure 8: Transit-Oriented Development near the Columbia Heights Station in Washington, DC

Stakeholders from across our case studies identified key conditions that 

can support transit-oriented development, including: demand for real 

estate, available land for development, supportive local residents, and a 

transit line that efficiently connects to established job and activity centers. 

Specifically, we found that the following conditions support transitoriented development:

Conditions that Can 

Support Transit-Oriented 

Development near 

Selected Projects
 

Page 14 GAO-15-70 Transit-Oriented Development

• Market demand for real estate: Market demand for real estate is 

needed to support transit-oriented development. According to the 

literature we reviewed and stakeholders we spoke to, demand for real 

estate is driven in part by the strength of the local economy so cities 

with strong local economies are more likely to support transit-oriented 

development. One study has also shown that market demand is the 

primary factor developers consider when determining whether to build 

a transit-oriented development.24 For example, a developer that has 

built mixed-use development projects in both Washington, DC, and 

Baltimore told us that developers consider anticipated price growth 

and existing housing supply when determining locations for new 

development. This developer told us that consideration of these 

factors has led to a pipeline of about 30,000 units in Washington, 

while Baltimore only has a few thousand. Further, we observed many 

new developments along the light rail in San Francisco, which had the 

fastest real economic growth of the 10 largest metropolitan areas in 

2012, according to the Bureau of Economic Analysis.25 While a strong 

economy and demand for real estate are necessary to support transitoriented development, they may not always be sufficient to lead to 

transit-oriented development. For example, Houston had a 23 percent 

job growth rate from 2003 through 2013, according to the Bureau of 

Labor Statistics. While the United States had a 5 percent job growth 

rate during the same period, we observed very little transit-oriented 

development in Houston due to factors such as land speculation and 

deed restrictions placed on land around transit.

• Large parcels of land available for development: The availability of 

large amounts of land such as surface parking lots near transit 

stations or underutilized industrial land can also support transitoriented development. We have previously found that many transit 

agencies view converting surface parking lots at transit stations into a 

transit-oriented development as an opportunity to accomplish multiple 

goals, including promoting transit-supportive land use near stations 

and increasing ridership.26

 

24Cervero et al, Transit-Oriented Development in the United States: Experiences, 

Challenges, and Prospects, 86. 2004.

In addition, as we have previously found, 

25U.S. Department of Commerce, Bureau of Economic Analysis, GDP by Metropolitan 

Area, Advance 2012, and Revised 2001–2011, accessed, August 5, 2014 

26GAO, Federal Role in Value Capture Strategies for Transit Is Limited, but Additional 

Guidance Could Help Clarify Policies, GAO-10-781(Washington DC, July 2010). 
 

Page 15 GAO-15-70 Transit-Oriented Development

research has shown27 that land and housing values generally tend to 

increase with proximity to a transit station. Underutilized industrial 

land also presents an opportunity for transit-oriented development due 

to the large size of industrial land parcels and the lack of neighbors to 

oppose new development. For example, we visited sites in both 

Charlotte and San Francisco where developers took advantage of 

large parcels of previously industrial land to build transit-oriented 

development.

• Resident support for transit and transit-oriented development:

Among our case study cities, San Francisco and Washington, DC, 

have the highest transit ridership—among the top five in the nation 

according to the 2009 American Community Survey—and both cities 

also have historically dense development patterns. As noted above, 

we observed many new developments near transit in both cities. In 

addition, according to stakeholders, cities with a high concentration of 

people 18 to 34 years old tend to be more supportive of transitoriented development than other age cohorts. For example, 

stakeholders from Houston; Washington, DC; San Francisco; and 

Charlotte told us younger residents’ desire for neighborhoods close to 

amenities and their support for transit are signs that this age cohort is 

supportive of transit-oriented development. These comments conform 

to a national survey by the Urban Land Institute that found that the 

majority of this age cohort prefers a shorter commute over a larger 

home; is attracted to living in neighborhoods close to public transit, 

with a mix of shops, restaurants, and offices; and shows a preference 

for living in a neighborhood with a mix of housing types and a mix of 

incomes.28

• Efficient access to jobs and centers of activity: Transit that 

efficiently connects people to established job and activity centers 

provides potential for transit-oriented development. According to 

planning and transit officials in Santa Clara County, to attract people 

to transit, transit routes need to move from residential areas to job 

centers as directly as possible. Specifically, the extent to which transit 

 

27GAO-09-871

28Urban Land Institute, America in 2013: Key Findings on Housing, Community, 

Transportation, and the Generations (Washington, DC: Urban Land Institute, 2014)
 

Page 16 GAO-15-70 Transit-Oriented Development

connects people to anchor institutions,29 central business districts, 

and existing mixed-use neighborhoods supports transit-oriented 

development. Stakeholders cited Washington, DC’s Metrorail system 

as an efficient system that has been successful in supporting transitoriented development because riders can reach a number of job and 

activity centers (such as downtown Washington, DC; Rosslyn, VA; 

and the Courthouse district in Arlington, VA). In San Francisco, the 

first segment of the T-Third Light Rail is close to Caltrain Commuter 

rail, which provides access to nearby areas with a high concentration 

of technology-industry jobs.

Stakeholders from our case studies identified several factors that can 

hinder transit-oriented development including: (1) the higher construction 

cost of transit-oriented developments; (2) lenders’ reluctance to finance 

transit-oriented developments in some cities; (3) lengthy or discretionary 

local-development approval processes; (4) an unsupportive local 

population; and (5) land around transit stations that is unattractive for 

development. Specifically, we found that the following challenges can 

hinder transit-oriented development:

• Construction costs can be higher: Construction of transit-oriented 

developments can be more costly than for traditional, single-use 

developments because of the cost of mixed-use buildings and parking 

garages. According to literature we reviewed and stakeholders we 

spoke with, aspects of transit-oriented developments such as multiple 

stories or a mix of uses can make transit-oriented developments more 

costly to build than traditional developments. For example, one study 

found that “different functions, appearance, access, and security 

levels of entrances and exits for different uses can become costly 

features in mixed-use projects.”30

 

29Anchor institutions are large organizations that tend to have fixed locations, may also 

have social, historical or cultural ties to the community, and are a major employer such as 

a university or a hospital.

A national stakeholder group also 

told us that the higher construction costs associated with mixed-use 

buildings can inhibit small construction firms from pursuing mixed-use 

projects. Some developers, transit, and planning officials noted that 

transit-oriented joint development on surface parking lots at transit 

30Marie Venner and Liisa Ecola, “Financing Transit-Oriented Development: Understanding 

and Overcoming Obstacles.” Transportation Research Record: Journal of the 

Transportation Research Board, no. 1996, (2007): 17–24

Challenges That Can 

Hinder Transit-Oriented 

Development near 

Selected Projects
 

Page 17 GAO-15-70 Transit-Oriented Development

stations could be hindered by the high cost of constructing 

replacement parking garages.31 Typically, when transit agencies enter 

into agreements with developers to use existing surface parking lots

for transit-oriented joint development projects, they ask developers to 

pay for all or for part of a parking garage to replace the surface 

parking spaces used for the development. In some cases, the cost of 

constructing a replacement parking garage may hinder the 

implementation of projects. For example, according to a 2012 study of 

parking-garage costs in the San Francisco Bay Area, a replacement 

parking garage may cost about $28,000 per space, or more than $14 

million for a 500-space garage.32 In addition, a developer told us that 

transit agencies could have design specifications for parking garages 

that double the cost per parking spot compared to what he would 

normally construct, cost that exacerbates the challenge of providing 

replacement parking.

• Lenders may be reluctant to finance transit-oriented 

development: According to the transit-oriented development 

literature we reviewed and developers and others we spoke with, 

some lenders are reluctant to finance transit-oriented developments 

because of a perception that transit-oriented developments are riskier 

than more traditional developments due to higher market risk 

associated with mixed-use buildings. This reluctance may be 

heightened in areas with few or no successful transit-oriented 

development projects. Mixed-use developments can face market 

challenges because each use must have sufficient market demand to 

make the project as a whole profitable. For example, a national 

interest group told us that mixing retail use with residential use adds 

risk to a project because the market for retail real estate tends to be 

 

31Replacing surface parking lots at transit stations is typically done through joint 

development. Joint development is generally defined as a real estate development project 

that involves a cooperative arrangement between public and private sector partners, often 

as part of a transit-oriented development. In most cases, joint development takes place on 

or above property owned by a transit agency or other public entity. Joint development 

arrangements can take a number of forms, including a lease of land, air rights, or space to 

a developer; sale of land for specific types of development; joint construction of a transit 

facility and private development; and others. Public and private partners can share costs, 

revenues, or financial risk depending on the particular arrangement. Any joint 

development using federal funds to make capital improvements must follow FTA’s joint 

development guidance and meet the statutory definition of an eligible capital project.

32See Metropolitan Transportation Commission, Parking Structure Technical Report: 

Challenges, Opportunities, and Best Practices (Oakland, CA: 2012).
 

Page 18 GAO-15-70 Transit-Oriented Development

more volatile than the market for residential use. In areas with no 

successful examples of transit-oriented development, lenders may 

view these projects as additionally risky, because lenders do not know 

if there is local consumer demand for transit-oriented development.

• Local approval processes may add requirements or delays:

Another challenge that can hinder transit-oriented development is a 

lengthy or discretionary local approval process. For example, two 

national stakeholders said that developers face higher risk and more 

uncertainty in developing projects when transit-oriented developments 

are not in line with the zoning code for the area. In these cases, a 

zoning variance is typically required from local officials, a requirement 

that can make the entitlement process lengthier and more 

discretionary. These stakeholders also said that when entitlement 

processes are dependent on the discretion of the local officials, 

developers might be unable to predict when projects will get approved 

or what requirements local officials will attach to projects as conditions 

of approval. Three developers in San Francisco and Charlotte told us 

that if they are uncertain of the length or outcome of the entitlement

process, they might choose not to pursue projects.

• Local residents may not support transit or dense development:

Stakeholders in every city we visited told us that transit-oriented 

development could face challenges when the local population is not in 

favor of transit or dense residential development. Transit officials in 

Baltimore and Houston reported that negative perceptions of transit 

affect transit ridership and consumer demand for transit-oriented 

development. Stakeholders in Baltimore told us that a social stigma 

associated with public transit results in low ridership on the light rail 

system. The Houston transit agency and a local developer told us that 

Houston’s “car culture”—wherein residents generally prefer to 

independently travel in their own car rather than on transit—is a factor 

that can inhibit the appeal of transit and demand for dense living near 

transit stations. Stakeholders in the San Francisco Bay Area reported 

that local residents may oppose new development out of concern 

about issues such as the height of buildings for dense development or 

perceived decreases in quality of life due to increases in population, 

traffic, and demand for parking.

• Physical features surrounding a transit station may be 

undesirable for development: Stakeholders in all of our case study 

areas reported that physical features such as highways, vast areas of 

vacant land, blank walls, driveway entrances, or a lack of pedestrian 

crossings at streets could hinder transit-oriented development. For 
 

Page 19 GAO-15-70 Transit-Oriented Development

example, local officials in Houston told us that many stations along the 

light rail system have challenges with the last 100 feet. Specifically, 

there are many areas where sidewalk and ramp improvements are 

needed to help better access the station. These improvements could 

increase walkability and make transit-oriented development more 

attractive.

• Unsupportive land uses: Land uses around transit stations that are 

not supportive of high-density, mixed-use development can also 

hinder transit-oriented development. For example, as discussed 

previously, vacant industrial parcels of land can support transitoriented development. However, developers, planning officials, and 

other stakeholders told us that aspects of this type of land can hinder 

transit-oriented development if:

• there is still operating “legacy” industry nearby that would be 

noxious to residential use;

• the land requires environmental clean-up;

• the land requires significant physical-infrastructure investment 

such as adding sidewalks or upgrading sewer capacity; or

• the area lacks community infrastructure such as schools and 

parks.

Local governments can use a variety of policies to encourage transitoriented development including zoning regulations, station area planning, 

targeted infrastructure investments, and tax incentives. Stakeholders told 

us that these tools most successfully support transit-oriented 

development when they align with the local residents’ preferences and 

market demand for development. The following are examples of local 

government actions to support transit-oriented development near the 

projects we selected:

• Creating zoning and regulations supportive of elements of 

transit-oriented development: Local governments can support 

transit-oriented development by designing zoning or other regulations 

to facilitate more certainty for developers proposing projects near 

transit stations. According to two stakeholder organizations we spoke 

with, local governments can help improve developer certainty by 

developing zoning codes that specifically allow aspects of new 

developments that are consistent with transit-oriented development. 

According to a report we reviewed, transit-oriented development 

zoning districts that allow buildings of greater unit density or fewer 

parking spaces can facilitate developer certainty because the 

entitlement process will likely be shorter and projects will not be 

Local Government Policies 

Support for TransitOriented Development
 

Page 20 GAO-15-70 Transit-Oriented Development

subject to a discretionary entitlement process. A developer in 

Charlotte told us that the transit-oriented development district zone 

made him confident that he would get his project entitled and that 

absent the zone, he would not have proceeded with the project. In 

some cases, policies supportive of transit-oriented development can 

make projects more economically feasible. For example, cities can 

allow greater height or density and require fewer parking spaces to 

allow developers to increase revenue or to help offset the property 

value premium that transit can generate. The City of Houston does 

not have zoning, which results in a unique regulatory environment in 

which the City cannot regulate land use or other building features like 

most cities can. The City allows a reduction in required parking and 

has implemented an optional transit-corridor ordinance that reduces 

the legal setback from the street, but few developers have used either 

option to date.

• Developing area plans that provide guidance and resolve 

contentious issues: Local governments can also support transitoriented development through neighborhood-scale land-use planning 

activities. Among our case studies, most local governments use some 

form of these plans to provide detailed direction on land use, 

transportation, housing, parks and economic growth for the 

development of city blocks, corridors, or neighborhoods around transit 

stations. These plans typically identify gaps in city services and 

resources deployed at the neighborhood level and shape capital 

investment priorities, among other things. In San Francisco, planning 

officials told us they not only use neighborhood plans to guide 

neighborhood growth but also to create a blanket Environmental 

Impact Review (EIR)33

 

33According to the San Francisco Planning Department, EIRs are public information 

documents for use by governmental agencies and the public to identify and evaluate 

potential environmental impacts of a project, to identify mitigation measures to lessen or 

eliminate significant adverse impacts, and to examine feasible alternatives to the project. 

Local environmental review requirements may vary, but, for example, under the California 

Environmental Quality Act, most large proposed developments are obligated to go through 

an environmental review prior to entitlement approval.

that is applicable for the entire neighborhood. 

According to these officials, this can reduce the cost of EIRs for each 

development and also manages public participation in the EIR 

process, which traditionally accounted for much of the entitlement 

process delay. They noted that the Area Plan also resolves a number 

of topics that can be contentious (such as density, height, parking, 
 

Page 21 GAO-15-70 Transit-Oriented Development

and traffic congestion issues), before developers come in with specific 

project plans. Developers told us that, as a result, development has 

concentrated in neighborhoods with Area Plans and entitlement 

processes for projects in these areas are shorter.

According to planning and transit officials in Baltimore, Washington, DC

and Charlotte, policies designed to encourage transit-oriented 

development are most successful when they are tailored to local 

circumstances such as local residents’ preferences and market demand.

The following are examples of such policies in our case studies:

• Responsiveness to local residents’ preferences: Planning and 

transit officials in Baltimore, Washington, DC, and Charlotte told us 

that aligning local policies such as transit-oriented development 

districts and Area Plans with the scale of the existing community may 

ensure a higher level of local residents’ support for transit-oriented 

development. In addition, incorporating input from local residents on 

issues like land use, parking, density and building height may also 

help ensure their support. For example, a Baltimore planning official 

told us that the City of Baltimore held numerous public meetings while 

drafting their new zoning code. Due to public input, the City changed 

its plans to have two transit-oriented development districts of different 

densities and similar uses and instead developed four different transitoriented development districts with varying density and use.

• Responsiveness to market demand: Planning and transit officials in 

Charlotte also told us that it was important for transit-oriented 

development districts and local government policies to conform to 

market demand. For example, some local governments would like to 

cap parking in transit-oriented zones in order to encourage transitridership, but city-mandated parking requirements do not always align 

with consumer demand for parking and therefore the requirements 

can hinder transit-oriented development. Some local governments 

would like to encourage mixed-use developments near transit by 

requiring retail, but two developers told us that setting aside a 

minimum amount of retail space in residential buildings may not align 

with demand for retail in that area because encouraging new retail 

areas is very difficult. For example, a developer in San Francisco built 

a mixed-use residential and retail development and the retail space 

remained empty for fifteen years, until it was converted into a 

live/work loft space.

Beyond planning and zoning, local governments can also play a role in 

improving connections to transit and helping mitigate environmental 
 

Page 22 GAO-15-70 Transit-Oriented Development

challenges to transit-oriented development. Actions in these areas may 

include the following, among others:

• Targeted investments in infrastructure: Local governments’ efforts 

to support transit-oriented development through zoning and planning 

are enhanced when local governments make targeted investments in 

infrastructure around transit stations. To increase the attractiveness of 

transit and transit-oriented development, local governments can 

support the integration of multi-modal transportation choices to take 

riders to and from the transit stations. Stakeholders in San Francisco 

reported that shuttle service, car-sharing, bicycle-sharing programs, 

bicycle lanes, and pedestrian amenities can help move people in and 

around the transit station area, thus supporting ridership and making 

transit more attractive (see fig. 9).

Figure 9: Bicycle Lanes and Bicycle-Sharing Program, San Francisco, CA

• Tax credits for developers: In order to mitigate some of the 

challenges associated with transit-oriented development on vacant 

industrial land, some state governments have created programs that 

provide tax credits to help developers ameliorate clean-up costs and 

reduce legal liability. Stakeholders in both Baltimore and Charlotte 

reported that programs in which developers receive tax credits and 

reduced legal liability in exchange for providing a certain amount of 
 

Page 23 GAO-15-70 Transit-Oriented Development

environmental clean-up on their parcels has made development on 

vacant industrial land more feasible.34

FTA assesses several factors that can support transit-oriented 

development when reviewing transit projects for potential New Starts 

funding; however, these factors make up only a small percentage of all 

the factors considered. As mentioned earlier, proposed New Starts 

projects are evaluated and rated according to criteria set forth in law. In 

addition to rating the local government’s financial commitment, FTA 

evaluates and rates a proposed project according to six statutory project 

justification criteria including mobility improvements, environmental 

benefits, congestion relief, economic development effects, land use, and 

cost-effectiveness.35

 

34The City of Baltimore participates in the State of Maryland’s Brownfields Incentive 

Program. The program allows the City to reduce the Brownfield site’s increased property 

tax liability if the developers commit to site cleanup. In addition, the developers are not to 

be held liable for existing contamination on the site. In Charlotte, owners of Brownfield 

sites that have received Brownfield Agreements with the North Carolina Department of 

Environment and Natural Resources are entitled to the partial City and County property 

tax exclusions for the first 5 taxable years beginning after completion of qualifying 

improvements.

Two of the six project-justification criteria—economic 

development effects and land use—require documentation from project 

sponsors related to whether current and future land use is supportive of 

transit. To assign ratings for these criteria, FTA evaluates many of the 

same factors that we found help support transit-oriented development.

35Department of Transportation, Federal Transit Administration, New and Small Starts 

Evaluation and Rating Process Final Policy Guidance, (Washington, DC: August, 2013).

FTA’s New Starts 

Assessment of 

Certain Factors Is 

Generally Consistent 

with Future TransitOriented 

Development

FTA Assesses Factors 

That Support TransitOriented Development
 

Page 24 GAO-15-70 Transit-Oriented Development

The land use criterion includes evaluation of factors such as the 

development, character (including amenities such as short building 

setbacks and active facades), pedestrian facilities, parking supply, and 

the percentage of affordable housing in the existing corridor and station 

areas compared to the percentage in the surrounding counties. Many of 

the elements that support high ratings for this criterion are similar to the 

elements that stakeholders we spoke with identified as supportive of 

transit-oriented development. Specifically, to receive a higher rating, 

project sponsors need to show, among other things, that the existing 

project corridor serves a significant number of employees and densely 

populated areas; has development with infrastructure such as sidewalks, 

trees, crosswalks, and other pedestrian amenities; a mix of residential, 

retail and professional uses; and minimal parking and thereby costly 

parking (more expensive parking tends to support ridership).

The economic development criterion includes evaluation of several 

factors relating to local government policies. FTA evaluates three subfactors within the criterion: transit-supportive plans and policies, 

performance and impacts of policies, and tools to maintain or increase the 

share of affordable housing in the project corridor. To assign ratings, FTA 

considers many of the same plans and policies that stakeholders told us 

can help support transit-oriented development. For example, FTA 

considers plans and policies to enhance the transit-friendly character of 

station areas, plans to improve pedestrian facilities, parking policies, 

zoning ordinances that increase development density and allow for 

reduced parking, and outreach and efforts to engage the development 

community in station area planning. FTA also considers whether 

proposed station areas have land available for development and 

demonstrated cases of development affected by transit-supportive 

policies and plans, policies, or incentives the local governments have in 

place to maintain or increase the share of affordable housing.

These two criteria account for one-third of the summary-project 

justification rating and one-sixth of the project’s overall rating. The 

remaining two-thirds of the summary project-justification rating are based 

on four other criteria. While these four criteria could be affected by future 

transit-oriented development, they do not directly relate to the potential for 

a project to support transit-oriented development:
 

Page 25 GAO-15-70 Transit-Oriented Development

• Mobility Improvements—The total number of “linked trips” using the 

proposed project, with a weight of two given to trips that transitdependent persons would make with the project.36

• Environmental Benefits—Based upon the dollar value of the 

anticipated direct and indirect benefits to human health, safety, 

energy, and the air-quality environment scaled by the annualized 

capital and operating cost of the project. FTA computes these benefits 

based on the change in vehicle miles travelled that would result from 

implementation of the proposed project.

• Cost-Effectiveness—For New Starts projects cost-effectiveness is 

measured by the annual capital and operating and maintenance cost 

per trip on the project. The number of trips on the project is not an 

incremental measure but simply total estimated trips on the project.

• Congestion Relief—A new criterion introduced in MAP-21. Until FTA 

undertakes a rulemaking process, FTA plans to assign a medium 

rating to this criterion for all projects seeking New Starts funds.

FTA uses either estimated ridership or the change in vehicle miles 

traveled resulting from a transit project as part of the calculation for 

mobility improvements, environmental benefits, and cost-effectiveness. 

As discussed above, the calculation for the congestion relief criterion is 

not yet defined. Transit ridership can be generated in a number of ways. 

Riders can approach a transit station by car and park at the station, a 

feeder bus system, or by walking from transit-oriented development or 

other location near transit. These ridership forecasts may take into 

account growth in population and employment in the region.37

 

36“Linked trips” using the proposed project include all trips made on the project whether or 

not the rider boards or alights on the project or elsewhere in the transit system.

While 

transit-oriented development may be part of the reason for this growth, 

growth could also come from broader development in the region. Benefits 

37Under the current Capital Investment Grant process, FTA requires all project sponsors 

to report “current year” forecasts of ridership using existing population and employment as 

inputs to the forecasts. FTA also allows “future year” forecasts of ridership that allow 

sponsors to input anticipated growth in population and employment, In the past, (and for 

the case studies we examined) FTA required project sponsors to submit “future horizon 

year forecasts”—generally 20 years in the future. These forecasts would assume 

population and employment growth.
 

Page 26 GAO-15-70 Transit-Oriented Development

and high ratings for these criteria could be driven by transit-oriented 

development, but could also be driven by more auto-oriented uses.

While FTA evaluates many of the factors or local policies that we 

identified that support or hinder transit-oriented development, there are 

inherent limitations in the extent to which some factors can be fully 

evaluated. For example, local officials and a developer told us that the 

strength of the real estate market is critical for transit-oriented 

development. FTA evaluates real estate market conditions as part of the 

economic development criterion; however, real estate markets for 

residential, retail, and office space are cyclical and the life cycle of a 

transit project planning spans many years into the future. Market 

conditions could change significantly between FTA’s assessment and the 

beginning of transit operations. According to a transit official, FTA 

evaluations are based on a snapshot of a specific moment in time that 

may not necessarily be predictive of future economic or political cycles. 

Similarly, development patterns and acceptance for dense, urban living 

may be influenced by cultural factors that influence local resident support 

for transit-oriented development. Factors such as Houston’s “car culture” 

and housing preferences of millennials can be challenging to quantify and 

evaluate.

Among our case studies that were assessed for New Starts funding, we 

found that the amount of transit-oriented development realized—and the 

factors that local stakeholders told us supported or hindered transitoriented development—are generally consistent with FTA’s preconstruction evaluation and rating of factors related to transit-oriented 

development.38

 

38Throughout this section, we refer to the FTA assessment of each project using the 

terminology that FTA used for each criterion at the time of the assessment. For the 

projects in Baltimore and San Francisco, we are using the assessment for TransitSupportive Existing Land Use and Future Patterns. For the projects in Houston and 

Charlotte, we are using the assessment for Transit-Supportive Land Use. We were not 

able to obtain records from FTA on the final rating for the Tasman West extension in 

Santa Clara County. The Washington DC and Prince George’s County Green Line 

extensions were not assessed for New Starts Funding.

For example, we included two light-rail projects as case 

studies that FTA assessed as high or medium-high for land use and 

economic development. Both the Charlotte South Corridor light rail and 

the Third Street light rail in San Francisco were rated highly for transitFTA’s Assessment of 

Factors Related to Land 

Use and Economic 

Development Is 

Consistent with Future 

Transit-Oriented 

Development
 

Page 27 GAO-15-70 Transit-Oriented Development

supportive land use.39

Figure 10: Transit-Oriented Retail Development in Charlotte, NC

As mentioned earlier, segments of both of these 

projects are now surrounded by several new transit-oriented 

developments (see figs. 4 and 6). For the Charlotte South Corridor light 

rail project, in support of the medium-high rating, FTA cited local policies 

such as the regional centers and corridors’ growth strategy, the transit 

overlay district, and the 2025 Integrated Land Use/Transit plan. In 

addition, FTA noted that changes to policies and zoning in the South End 

neighborhood had led to new buildings’ being built. We observed other 

transit-oriented development activity, such as new residential and retail 

establishments oriented towards the light rail (see fig. 10).

For the Third Street light rail project, in support of the high rating, FTA 

noted the urban character of the corridor as well as the efforts by the 

transit agency and the City of San Francisco to encourage high-density 

development that was transit-oriented, pedestrian-friendly, and parkinglimited and, as previously reported, many new transit-oriented 

developments have opened in neighborhoods near the light rail.

 

39The Third Street Light Rail Project Phase 1 was rated high in the Transit-Supportive 

Existing Land Use and Future Patterns Criterion. The South Corridor Light Rail was rated 

medium-high in the overall transit-supportive land use criterion. 
 

Page 28 GAO-15-70 Transit-Oriented Development

Among projects we visited that FTA rated as medium-low or low for land 

use and economic development, we found very little transit-oriented 

development has taken place, for example:

• In the assessment of the Baltimore light rail double-tracking project, 

FTA rated the transit-supportive existing land-use and future patterns 

criterion as low-medium. This assessment noted that significant 

sections of the light rail development were suburban, at low to 

moderate densities and had limited pedestrian access. In addition, 

FTA found that economic forces indicated a general outward 

migration from the center city and noted that existing policies to 

encourage transit-oriented development were generally weak.

• In 2008, FTA rated the Houston’s North Corridor light rail project as 

medium-low for land use. In its assessment, FTA cited factors such as 

low-density, auto-oriented existing land uses, poor pedestrian access, 

limited regional planning and growth management efforts, and a lack 

of zoning or other transit-oriented development implementation 

mechanisms.

As reported in Figures 3 and 5, we found little transit-oriented 

development had occurred along the light rail in either Baltimore or 

Houston.

While FTA rated these projects as medium-low or low for land use and 

economic development, FTA approved the projects based on their merit 

in other criteria. For instance, while the project in Houston scored 

medium-low for transit-supportive land use, it scored medium-high for 

cost effectiveness and mobility improvements, and high for environmental 

benefits. All of these benefits taken together lead to an overall project 

justification rating of medium. Similarly, the FTA overall project 

justification rating in 1999 of Baltimore’s double-tracking project was 

medium based on ratings of high for environmental benefits, medium for 

operating efficiencies, medium-high for cost effectiveness, and medium 

for mobility benefits.

Among projects we visited, the actual ridership performance of the transit 

lines when compared to ridership expectations or historical ridership 

varies. Our case studies provide several examples where ridership has 

grown over time. For example, when the Columbia Heights Metrorail 

station in Washington, DC, opened in 1999, several vacant or 

underutilized lots surrounded it. Ridership at the station in 2000—the first 

Performance of TransitOriented Development 

and Ridership along 

Selected Transit Lines
 

Page 29 GAO-15-70 Transit-Oriented Development

full year it was open—averaged about 4,000 riders per day. Since 2000, 

many new developments were constructed on the vacant or underutilized 

lots near the Columbia Heights station. Over the past 10 years, ridership 

has grown about 93% to more than 12,000 riders per day. The 

percentage gain in ridership for Columbia Heights has exceeded 

percentage gains for the other five Green Line stations that also opened 

in 1999 or 2001. Of the four stations in this group located in Prince 

George’s county—where local officials told us there has been little or no 

development—three have lost ridership in the past 10 years (see fig. 11).

Figure 11: Percentage Change in Average Weekday Riders for Select Washington, 

DC, Metrorail Stations: 2005-2014

Similarly, in Charlotte, the projected opening-year average ridership for 

the Charlotte Light Rail system was about 9,100 riders per day. In 2008, 

the first full year of operations for the system, ridership averaged 11,678 

per weekday, exceeding the opening-year ridership target by about 2,500 
 

Page 30 GAO-15-70 Transit-Oriented Development

riders (28%). As development has occurred along the line, ridership has 

grown 30% to more than 15,000 riders per average weekday.

Other projects, particularly those projects that have not been surrounded 

by new development, are generally not on track to meet the ridership 

forecasts specified in the New Stats project’s documentation, specifically:

• Ridership on the Houston North Corridor light rail averaged about 

4,500 passengers per weekday from February to July 2014,40 less 

than one-third of the expected opening year ridership of 17,400. (see 

fig. 12).

• The Baltimore Central Corridor light-rail system attracted an average 

of 26,647 riders per weekday in 2013. The ridership forecast for 2020 

is 44,000 riders per average weekday (see fig. 12).

• Average weekday ridership at stations built as part of the West 

Tasman Light Rail Extension in Santa Clara County was 3,125 from 

July 2012 through January 2013.41

 

40Houston Metro, July 2014 (FY 2014), Monthly Ridership Report, METROBus and 

METRORail. 

The ridership forecast for this 

segment was estimated to be 7,500 by 2005. (see fig. 12).

41Santa Clara Valley Transportation Authority, VTA Transit Service Plan, FY 2014 – FY 

2015 (May 2013). 
 

Page 31 GAO-15-70 Transit-Oriented Development

Figure 12: Actual and Forecast Average-Weekday Ridership of Selected New StartsFunded Light Rail Projects

Note: The projects presented all received a New Starts Full Funding Grant Agreement from FTA. The 

actual ridership is the most recent available from each transit agency. The forecast ridership is the 

figure presented in the relevant FTA Annual Report on Funding Recommendations.

In San Francisco, ridership on the T-Third Light Rail is also below 

expectations despite the new development project that has been built in 

Mission Bay. For operating purposes, the T-Third is actually part of the K 

Ingleside/T-Third Route that runs through downtown San Francisco and 

into another part of the city. San Francisco Municipal Transportation 

Agency does not break out ridership on the T-Third, but estimated that in 

fiscal year 2013 the entire route had about 34,000 riders per average 

weekday. This is short of the more than 80,000 daily boardings estimated 

for 2015 during the preliminary engineering phase of the project. 
 

Page 32 GAO-15-70 Transit-Oriented Development

However, the average weekday ridership at the nearby San Francisco 

Caltrain rail station has increased by 58 percent from February 2007 to 

February 2014.

We provided DOT with a draft of this report for review and comment. In its 

comments DOT stated that the report highlights the multiple challenges 

faced by local governments in guiding development around transit. DOT 

reiterated FTA’s long-standing commitment to encourage local land use 

actions near major transit capital investment. DOT also stated that 

authorizing statutes have increased the prominence of land use and 

economic development for the FTA’s Capital Investment Grant evaluation 

process and that FTA has long believed transit supportive land use plans 

and policies indicate good regional planning. 

We are sending copies of this report to interested congressional 

committees and the Secretary of the Department of Transportation. In 

addition, this report will be available at no charge on GAO’s website at 

http://www.gao.gov. 

If you or your staff have any questions or would like to discuss this work, 

please contact me at (202) 512-2834 or wised@gao.gov. Contact points 

for our Offices of Congressional Relations and Public Affairs may be 

found on the last page of this report. Individuals making key contributions 

to this report are listed in appendix II.

Sincerely yours,

David J. Wise

Director, Physical Infrastructure Issues

Agency Comments
Appendix I: Objectives, Scope, and 

Methodology

Page 33 GAO-15-70 Transit-Oriented Development

In this we report we identify: (1) the extent to which transit-oriented 

development has occurred near select transit lines that received federal 

funds and which factors or local government policies support transitoriented development and which factors hinder transit-oriented 

development, and (2) the extent to which FTA considers factors related to 

the potential for transit-oriented development when assessing proposed 

projects, and the extent to which FTA’s assessment of these factors is 

consistent with the factors that local stakeholders told us affect project’s 

results.

To respond to both of our objectives, we selected six transit lines that 

received federal funds to serve as illustrative case studies. We selected 

these cases based on the existence of previously implemented and 

planned or in-construction federally funded transit lines in the same city or 

county; diversity in the existence of state and local programs and grants 

supportive of transit-oriented development; diversity in the current 

strength of the local real estate market; and geographical breadth. The 

results of these six case studies are not generalizable to all federally 

funded transit lines. While we focused on a specific transit line in each 

city, we discussed the greater city’s experience with transit and transitoriented development with local officials to provide context for our cases.

The case studies we selected were:

• Central Corridor Light Rail in Baltimore, MD;1

• South Corridor Light Rail in Charlotte, NC;

• North Corridor Light Rail in Houston; TX;

• Third Street Light Rail, Phase 1 in San Francisco, CA;

 

1

According to the 2001 FTA Annual Report on New Starts Baltimore Central Corridor Light 

Rail Double Tracking Project Summary, the original Central Corridor Light Rail was built 

entirely with local funds. The line began operations in 1992 predominately as single track. 

The Maryland Transit Administration subsequently examined the feasibility and 

environmental impacts and benefits of double-tracking eight sections. Three federally 

funded extensions of the Central Corridor Light Rail, to Hunt Valley, Penn Station, and 

Baltimore-Washington International Airport, were completed in 1998. We used FTA’s 

summary project justification from the Double Tracking project because FTA included the 

entire line in this assessment. According to this summary, while only certain sections of 

the line were improved, the summary project justification is applicable for the entire line 

since double-tracking sections were scattered throughout the system and affected service 

for the entire system.

Appendix I: Objectives, Scope, and 

Methodology
Appendix I: Objectives, Scope, and 

Methodology

Page 34 GAO-15-70 Transit-Oriented Development

• Tasman West Light Rail Extension in Santa Clara County, CA; and

• Green Line Metrorail Extensions in Washington, DC, and Prince 

George’s County, MD.2

To determine the extent to which transit-oriented development has 

occurred near these transit projects, we analyzed local land-use data, 

physically observed development, if any, along these transit lines, and 

interviewed local planning officials, developers, and other local 

stakeholders. To identify factors that support or hinder transit-oriented 

development, we conducted site visits to all of the transit lines and some 

nearby transit-oriented developments and interviewed a variety of 

stakeholders. In total, we interviewed with 66 different stakeholders 

including:

• twenty-six planning officials from eight local and regional planning 

entities,

• sixteen transit officials from eight local and regional transit agencies,

• fifteen representatives from both national and local-interest non-profit 

and research organizations with knowledge of transit-oriented 

development, and

• nine developers from seven different firms.

To identify policies that local governments can use to support transitoriented development, we reviewed state and local planning regulations, 

and analyzed relevant land use and transit ridership data from 2005 to 

2014. Finally, we reviewed literature on transit-oriented development 

published within the past 5 years as well as our past reports related to 

FTA’s Capital Investment Grant Program and transit-oriented 

development. We assessed the reliability of the land use and by 

reviewing relevant documentation and either discussing reliability with 

agency officials or comparing data to corroborating information. We 

assessed the reliability of transit ridership data by reviewing 

documentation on the methods used to collect and maintain the data. We 

deemed the data on land use and transit ridership we collected reliable 

for the purposes of this report.

 

2

This extension includes the Columbia Heights, Georgia Ave/Petworth, and Congress 

Heights Stations in Washington, DC, and the Southern Avenue, Naylor Road, Suitland, 

and Branch Avenue Stations in Prince George’s County, MD. Funding for these 

extensions came from FTA as part of the Fast Track program as authorized in the 

National Capital Transportation Amendments of 1990, Pub. L. No.101-551, 104 Stat. 2733 

(1990). 
Appendix I: Objectives, Scope, and 

Methodology

Page 35 GAO-15-70 Transit-Oriented Development

To determine the extent to which FTA considers factors related to 

potential transit-oriented development when assessing proposed projects, 

we reviewed and analyzed relevant laws including Moving Ahead for 

Progress in the 21st Century Act (MAP-21) and the preceding funding 

authorization laws. We also reviewed FTA’s Annual Report on Funding 

Recommendations and New Starts policy guidance. For projects that 

were assessed for New Starts funding, to determine the extent to which 

FTA’s assessment is consistent with future land use changes, if any, we 

reviewed FTA’s project assessments and materials used to support 

project recommendations. We then compared these assessments with 

information gathered from our site visits. To determine the extent to which 

these projects have met ridership projections included in the information 

provided for New Starts funding assessment, we gathered ridership data 

from transit agencies and compared this data to the original ridership 

forecasts. We also interviewed FTA officials.

We conducted this performance audit from February 2014 through 

November 2014 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.
Appendix II: GAO Contact and 

Acknowledgments

Page 36 GAO-15-70 Transit-Oriented Development

David J. Wise, (202) 512-2834 or wised@gao.gov

In addition to the contact named above, John W. Shumann (Assistant 

Director); Melissa J. Bodeau; Mark Braza; Leia Dickerson; Kathleen 

Donovan; Terence Lam; Matthew LaTour; Hannah Laufe; Cheryl 

Peterson; and Kelly Rubin contributed to this report.

Appendix II: GAO Contact and 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(542231)
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