As we have previously found, there is no single definition of transit- oriented development; however, research generally describes such a development as a compact, mixed-use, 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 transit- oriented 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. A number of stakeholders play important roles in the planning and implementation of a transit-oriented development. These roles are summarized below. 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 metropolitan- planning organizations (MPO):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. 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 transit- oriented development, it does not have a discrete program for transit- oriented development. However, the agency has been expanding its role in transit-oriented development in recent years by: Funding transit-oriented development research. 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. FTA plans to distribute $19.98 million in grant funding to state and local agencies in 2015. 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 fixed- guideway transit lines, extensions to fixed-guideways, and projects that improve core capacity on an existing fixed-guideway system. As we recently reported,Grant projects, local transit agencies typically serve as project sponsors, although FTA provides funding for Capital Investment 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 pre- construction 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. 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. See fig. 2. 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-oriented 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. 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 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. 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. While a strong economy and demand for real estate are necessary to support transit- oriented 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 transit- oriented 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. In addition, as we have previously found, research has shownincrease 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. that land and housing values generally tend to 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 transit- oriented 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. 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 connects people to anchor institutions,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 transit- oriented 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.” 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 stations could be hindered by the high cost of constructing replacement parking garages. 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. 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 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 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 transit- oriented 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 transit- oriented 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 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 transit- oriented 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) 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, 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 transit- oriented 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 transit- ridership, 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 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). 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 environmental clean-up on their parcels has made development on vacant industrial land more feasible. 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. 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. 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 sub- factors 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: Mobility Improvements—The total number of “linked trips” using the proposed project, with a weight of two given to trips that transit- dependent persons would make with the project. 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. While transit-oriented development may be part of the reason for this growth, growth could also come from broader development in the region. Benefits 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 transit- oriented development—are generally consistent with FTA’s pre- construction evaluation and rating of factors related to transit-oriented development. 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 transit- supportive land use.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). 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 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). 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 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,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. The ridership forecast for this segment was estimated to be 7,500 by 2005. (see fig. 12). 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. 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. 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 transit- oriented 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 transit- oriented development with local officials to provide context for our cases. The case studies we selected were: Central Corridor Light Rail in Baltimore, MD; South Corridor Light Rail in Charlotte, NC; 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. 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 transit- oriented 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. 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. 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.

Summary: 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 transit-oriented development as a way to focus future regional population growth along transit corridors. Transit-oriented 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 transit-oriented 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 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 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 long-standing commitment to encourage transit-oriented development. 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 case-study 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.