February 26, 2018

TOD and Affordable Housing


A new revitalized TOD-area near the Cleveland BRT

by R. Balachandran, Alchemy Urban Systems

Click to enlarge

The cost of housing is well beyond the money paid for rent or mortgage.  There is also the cost of access. This refers to bundle of services including water supply, sanitation, health, education and most importantly, transportation. Therefore, housing can be made truly affordable only if the whole package (housing plus services) is made affordable. In large cities where walking and cycling are not sufficient to ensure access to needed opportunities and services, Transit-Oriented Development (TOD) offers a great opportunity to do this.  In this blog, I attempt to outline the opportunity and the challenges to making it happen. I write specifically in the context of transit catchments in developing/ low-income countries where the urban poor end up living in substandard housing in risk-prone areas of the city. This discussion is relevant mainly to Metrics 5.B.1- Affordable Housing, and 5.B.2-Housing Preservation of the TOD Standards, but may also be connected to others, for example Metric 4.A.1-Walking Distance to Transit.


The Opportunity

An affordable transit system increases accessibility and mobility all along its route, providing substantial benefits to communities in its catchment.  When cities with substantial populations of urban poor take up station area planning, or TOD area planning, they should ensure easy access to transit for low income families.  

To begin with, when transit alignments are planned, stations could be located within walking distance to existing high density low-income settlements (with measures to ensure that redevelopment pressures don’t displace the residents). Secondly, connections could be made to settlements further away using feeder buses, para-transit and infrastructure for walking and cycling.  These two interventions however only provide access to existing settlements with/ without improving their housing conditions.

The most important and forward-looking intervention possible is to enable the development of new affordable housing of acceptable standards within the station areas for low-income families to move into. In cities that have public housing and public transit programs, affordable housing projects should be located in TOD/ station areas. One example, is the Sikandar Bakht Nagar Housing Project for Economically Weaker Sections at Behrampura, Ahmedabad, India (see images), built to rehouse informal dwellers from a flood-prone area on the banks of the Sabarmati River, within short walking distance from both the river and a Bus Rapid Transit station. And while Sikandar Bakht Nagar has been criticized for a number of design, construction and maintenance problems that should be addressed, its residents do benefit from rapid and convenient connections to countless opportunities and resources throughout the city.


Ensuring Access to Services

A significant element of subsidy is inevitable in the process of producing affordable housing and keeping them affordable.  Fortunately, in a TOD context, there is an opportunity to capture a portion of the unearned value gained by private properties in the catchment of transit (the concept is usually referred to as “value capture”) and use it to achieve comprehensive redevelopment including affordable housing and infrastructure upgrading.  The revenues from value capture should be escrowed towards affordable housing, infrastructure upgrading and other public investments within the TOD areas.

But, while the “value capture” opportunity is seductive, it is often exploited in a simplistic manner where additional development rights are offered at a price in the catchment areas of the transit system without any planning, ostensibly to densify the area according to the principles of TOD.  However, densification without carefully planning the provision of utilities and services can result in infrastructure inadequacies.  Already deprived low-income communities suffer exacerbated shortages for water and sanitation as well as access to health, education and other community services.  They end up paying more for these services, undermining the affordability of housing as a complete package.

Therefore, TOD policy should ensure that promotion of affordable housing in TOD areas happens through planned development or redevelopment with adequate infrastructure provision. Users of the TOD Standard are advised to use their discretion to only allocate density points where infrastructure is sufficient.


Maintaining Affordability

Access to transit is a powerful driver for real estate values and could cause gentrification of affordable housing in a TOD/ station area.  Therefore, it is important to take specific measures to keep the housing affordable to the target group over time.  How to do this requires context specific policies.

Many developing countries with poor data infrastructure and enforcement systems have tried in vain to use covenants restricting the resale/ renting of affordable housing units allocated to “beneficiaries” identified through a due process.  Market forces have historically found ways of subverting such restrictions.  Another method is to prevent amalgamation of more than one small house into a bigger one.  Regular checking of the units is required for this and is best achieved by involving the community members.  Creating a “Community Land Trust” (CLT) is yet another method that is gaining favor. The CLTs could regulate or manage all transactions on these houses including sale, rental, lease etc. to ensure that the house is always occupied by the targeted income-group at a price truly affordable to them. CLTs, or variations of this model, could potentially involve the community members in the active management of the affordable housing developments.

To conclude, TOD offers a great opportunity to promote a truly affordable housing and services package for the urban poor in the cities of developing countries. However, beyond the scope of TOD Standard indicators, achieving this in the long term involves addressing the challenges of ensuring adequate services and maintaining affordability of the housing developments.

Download The TOD Standard here and visit todstandard.org for more information.  You can also read more insights from other authors of The TOD Standard here and here.


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