Why It Matters
Congress faces a fundamental disagreement over federal policy on transit-oriented development. A recent Congressional Research Service (CRS) report frames a sharp ideological divide between members who want to expand support for development near transit stations as a tool for housing and climate policy, and those who want to eliminate it as federal interference in local zoning and land-use decisions.
The Big Picture
Transit-Oriented Development (TOD) can encompass subway, light rail, commuter rail, Amtrak stations, bus rapid transit stops, and ferry terminals. Proponents argue such development improves transit access to homes, jobs, and services, increases transit ridership, creates better conditions for bicycling and walking, reduces regional traffic congestion, and generates more housing supply alongside an expanded property tax base. Critics raise concerns about local traffic congestion near TOD sites and the displacement of existing residents and businesses through gentrification.
Federal support for TOD has existed since at least the 1990s, when the Department of Transportation began advocating for the approach. Current tools include authority for joint development projects, credit assistance through DOT loan programs, and the ability for transit agencies to transfer publicly-owned land to local governments and nonprofit housing agencies for affordable housing construction.
Two competing bills now before Congress illustrate the divide. The Build Housing, Unlock Benefits and Services Act would add affordable housing as part of TOD to eligible projects for federal credit programs, while the Negating Obligations for Transit-Oriented Developments (NO TOD) Act would remove TOD eligibility from those same programs entirely. The Building Unrivaled Infrastructure and Long-term Development for America's 250th Act, marked up in committee in May, sits between these poles, proposing targeted expansions: raising the maximum federal share for affordable housing projects from 49% to 75%, allowing below-market interest rates for affordable TOD projects, and exempting TOD land acquisition from environmental review under the National Environmental Policy Act.
The Bottom Line
Transportation Infrastructure Finance and Innovation Act (TIFIA) has made one TOD loan and Railroad Rehabilitation and Improvement Financing (RRIF) has made no TOD loans. Barriers cited in the report include local zoning laws favoring single-use, low-density, car-oriented development, financing gaps especially for affordable housing, rigid loan underwriting standards, land availability challenges, and weak coordination among stakeholders.
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