What is Transit Oriented Development and How Does It Help Make Housing Affordable?
Peter Calthorpe joins us to discuss Transit Oriented Development and its importance in creating affordable housing. It was a fascinating discussion on how we can create more housing and reduce transportation costs at the same time.
Intro: Hey look, it’s the Doublewide Dudes.
Alberto Piña: Alright, alright. Welcome back to another episode of the Doublewide Dudes, our first episode of 2022. And today we’re joined by our guest, Peter Calthorpe. Peter, thanks for joining us.
Peter Calthorpe: Hey, you’re welcome. Anybody who’s after affordable housing is on my side.
Alberto Piña: Yes, Sir. Yes, Sir. Well for our audience, Peter is an architect, an urban designer, and an urban planner, and he’s taught all over the place, UC Berkeley, University of Washington, University of Oregon, and the University of North Carolina. Peter’s a founding member of the Congress for the New Urbanism, an advocacy group form that promotes sustainable building practices, some of which, we’ll get in here in a bit. Peter received the Urban Land Institute’s prestigious J.C. Nichols Prize for visionaries in urban development, and was named one of the top 25 innovators on The Cutting Edge by Newsweek magazine. So, really excited to dive into this and to get to talk about a topic. Peter, we just haven’t really addressed too much on the podcast, which is transit-oriented development. I guess, to start us off Peter, what is transit-oriented development?
Peter Calthorpe: Well, it’s a realization that transportation and housing and communities are all linked in profound ways, and you can’t solve for one without solving for all of them. So, the kind of housing you choose and where it’s placed impacts the transportation system, either positively or negative, or in the economics of the household in a pretty profound way. Everybody’s used to the affordability issue of around housing, and 30% of household income can go to it. That’s kind of the target of qualifying. A lot of low-income households can’t fit that budget, and they end up at 40 and 50% of household income going into housing. But on top of that, is 20 to 30% of household budget going to transportation. And when you link the two, for almost everybody it’s over 50%. It’s kind of an astounding aggregation.
And so the old model which was, “We’re going to build subdivisions out on cheap land, and we’re going to use basic construction and thereby deliver, not affordable housing, but workforce housing, you might want to call it.” And then, of course there’s Big lots with it’s expensive houses, and there’s a whole variety. But the most of… The middle class housing of America was subdivisions. Well, as our Metropolitan regions grew, and grew, and grew, those subdivisions got farther and farther away, and the transportation cost mounted. And in a way, that’s what drove the 2008 collapse, was people really not being able to afford the old paradigm of, ‘Drive till you qualify’, as you said. So, a lot of us has been talking about infill housing for a long time. Putting higher-density housing closer to jobs, closer to services.
Now you might say, “Well, everybody… It’s the American dream, a single family dwelling.” “Yeah, but.” There’s a lot of people who are willing to make a trade-off and say, “Gee, if I don’t have to spend two hours, three hours a day driving, maybe it’s worth living in a townhouse,” or, “Maybe it’s worth living in a condo.” But, we just don’t allow for much infill. And that, therein lies the crisis. Now I’m going to show you a whole bunch of analyses we did in California on the housing crisis there, which of course is much bigger than it is in Texas. And it’s because we don’t allow infill housing. And of course, we make it difficult to build any kind of housing in California. But if we’re going to solve our housing crisis, and there may be parallels in Texas sooner or later, we’re going to have to figure out how to get infill housing built.
The idea is to take our underutilized commercial strips and infill housing over shops, mixed-use development. The beauty of it is of course, that it distributes the housing kind of in a linear fashion through every community, more often than not in the more mature communities where the jobs are. And it also gives us the opportunity to take those arterials and upgrade them into Boulevards with transit. So, there’s space for transit and space for housing in a distributed system that is kind of a infill at large. So, this idea is one I’ve been working on for decades. And we have a bunch of pilot cities that have picked it up, and they’ve pretty much zoned all of their arterial strip commercial areas for mixed-use. And lo and behold, private developers move in on small lots and big lots. And they go to town and they build really great mixed-use. And all of a sudden, instead of just an arterial quarter, you get a place that’s really lived-in, safe, and interesting, filled with cafes and things like that. So-
Alberto Piña: And that’s how it used to be. I remember my Nana telling stories. Her father owned a small grocery shop in the community, and they lived above it, and the shop was below it. And that’s how her whole town was. I was reading… This is something you’ve been working on since the early 90s. What was going on at that time that led to this? And has that changed now? Gotten better, worse? Or, what have you seen over the years?
Peter Calthorpe: Well, a long time ago, I wrote a book called ‘Sustainable Communities’. And in that book, we began to realize that just spreading outward at low-density was never going to work environmentally or socially that well. A lot of people argued whether or not it’s socially successful. But sure enough, in terms of affordability, it doesn’t work.
Alberto Piña: Right.
Peter Calthorpe: And so, I’ve been working on that idea since. I worked for the state of California and did a kind of statewide scenario process called ‘Vision California’ way back in the 90s, where we said, “Look. If the state continues to grow as we’ve been growing with subdivision after subdivision farther and farther away, let’s compare that to an infill future for California.” And sure enough, all the significant metrics came way down. The water consumption, the congestion, the air quality, the health impacts. The household costs came down by $10,000 per household.
And so it was like a 20% reduction in household costs. That’s a big number. And then, there’s carbon emissions and all sorts of other dimensions to the problem. And we were able to identify all of them. And so ever since that time, there’s been a fairly large group trying to see, “Well, what is systemically the problem with infill? Why can’t we get it done?” And there’s a lot of answers to that reason. We have a deficit of 2 million units in California. It’s beyond a crisis. And in the next 15 years, we’re going to need another 15 million. And our housing affordability is only 50% of the current population. Can you afford to buy or rent? It’s just… We’re losing it. Everybody’s pointing a finger at California saying we’re overregulated and over taxed. But we’re still a place that generates an amazing quantity of jobs.
And if we could just solve the housing problem, we’d be in a more equitable, strong, and sustainable position. Take the Bay Area. In the last decade, or from 10 to 18, we created 880,000 jobs and only built 114,000 units of housing. So this is the epicenter of the problem right here. The solution, as I was outlining, is taking underutilized strip commercial. And you know because of Amazon and our new lifestyles that came out of COVID, people are not cruising down the strip to go shopping. They’re doing it online. So we’ve got just a tremendous amount of land that’s dormant, not generating decent taxes, and becoming a blight, literally on our communities. We can infill with a range of housing types. I’m not going to get into the TIF, the tax increment financing. But when you generate more property value, you generate more property tax.
It’s smaller than Texas. I think Texas, it’s like 3% residential tax, and we’re just at 1%. But it still generates a lot more taxes which then can be recycled to pay for transit, and affordable housing, and all the other good things. So, it’s a self-correcting and reinforcing. What we need is, as-of-right zoning. We need to basically say, “I don’t care what city you’re in, the richest Palo Alto in the heart of Silicon Valley or Oakland. You have to have the same rights so that all the entitlements don’t get trapped in an endless cycle of approvals, and reviews, and redesigns. There has to be an inclusionary element. If the state’s going to say, “As-of-right…” And by the way, the whole idea of as-of-right zoning, it’s been done all over the United States. New York, all of New York is as-of-right. If you’re a developer there and you build according to the existing plan, you can just take your instruction documents in and get them approved, as long as they’re structurally sound and all the rest of that.
And you don’t have all this waiting, and environmental impacts, and community groups protesting and trying to change the nature of the thing. So as-of-right, is a real… It’s a solid, simple idea that makes… Puts a lot of the appropriate land in play to solve the housing problem. Inclusionary just means, “Hey, when you build it, you got to include affordable housing.” So we don’t want to just have a set of affordable housing enclaves here and there. We want to distribute it. So within each one, it’s 15%. And then the tax increment financing I was just telling you about, it’s all about how we can get the public value of redeveloping these slices, and use that for all the good things we want. So the first thing I looked at was a famous street, El Camino. It runs through the heart of Silicon Valley from San Francisco down to San Jose.
I used to live in Palo Alto, so I know it very well. And I asked the question, “Well, on El Camino, how much strip commercial land is there and how many units of housing could we sit?” And here’s the astounding answer. One road, 250,000 units of housing. The housing that’s right at the heart of where all the jobs are always being created. So nobody’s commuting. And it’s a big enough street to put a BRT transit system down. So I’ve really changed my idea of what TOD is. It used to be a light rail system, a station, and in a walking radius around the station. And now, it’s becoming this linear kind of urbanism that’s attached to a network of BRT systems. That’s what El Camino looks like. Look at that. That is underutilized land in the most valuable place in the United States, you might say. And so, the idea that all of that could get redone, it’s a no-brainer. The private sector would gobble it up immediately, and we’ve seen it over and over again.
Alberto Piña: What’s been the reception on this thus far? Is that something people are open to, or are you getting pushback?
Peter Calthorpe: Wherever there’s a zoning that allows it, it gets built. So there are individual cities like Menlo Park, and Redwood city, and a few others. These are all names that aren’t related to you guys. But there are lots of places where they just do it because they think it’s a good idea for their town. And it gets built and it is a good idea. So this is El Camino today. It’s not… This is kind of… Seen you guys got plenty of in Texas, I’m sure.
Alberto Piña: Yeah.
Peter Calthorpe: This is what it could be. So, big sidewalks, bike lanes, you still have lanes for cars. And then there’s a BRT system, bus rapid transit.
Alberto Piña: Bus rapid transit?
Peter Calthorpe: Yeah. It’s the most affordable form of really good, high quality transit. We’re getting to the point where light rail is too expensive for anybody to build at a hundred a mile. Hundred million a mile, excuse me.
Alberto Piña: Oh, wow.
Peter Calthorpe: And bus rapid transit has dedicated lanes, so the buses aren’t stuck in traffic. And they have technology to manipulate the lights at the intersection so they can flow freely. In other words, they have priority in the intersection. And so, they really create an advantage. You can travel faster than in your car. Now nobody’s going to give up their car if they’re going slower on transit.
Alberto Piña: Right, right.
Peter Calthorpe: So, the key here is a dedicated right-of-way. So, this is an overview of what El Camino could look like when you build out housing and you have the ground floor shops and cafes. And there down the middle, you can see the BRT. The technology today… It’s already developed in China, is autonomous buses. So on these dedicated, protected right-of-ways, it’s very easy to run autonomous technology.
Peter Calthorpe: So, when we looked at the whole of the Bay Area, all the arterials, there’s about 700 miles of arterials in the Bay Area, and about 15,000 acres of strip commercial land. And if we upzoned all that to mixed-use, we’d get 1.4 million units of housing. And the beauty of it is that, that housing sits closer to jobs than any new subdivision is ever going to get a shot at in this. So it’s a different kind of TOD. It’s a network of linear places and linear transit ways.
Alberto Piña: That’s interesting.
Peter Calthorpe: What’s amazing is that, if you compare the average house that sits on a Grand Boulevard to the average house in a subdivision, water use is down 62%, energy use is down 40%. The amount of driving is down 55%. The greenhouse gases, 50%. And household costs, that’s transportation and utilities, down 53%. So, it’s better for the environment, and it’s better for people on every level.
Alberto Piña: Yeah. And the household cost, that’s the real tie-in to the affordable housing conversation, right?
Peter Calthorpe: Yeah. Yeah, I like that.
Alberto Piña: If the house cost was to build, but you’re having to pay for gas, and fuel, and a car to drive an hour or hour and a half each day to work, the overall cost of living in that… It is out of reach for a lot of people in terms of affordability.
Peter Calthorpe: Oh, no. The stress is… It’s like a domino effect. When one group can’t afford a house, they move down to the next level. They move down to the next level. And before you know, it’s fallen over to the point where you have homelessness, which we have. And it’s kind of tragic. So everybody… The burden gets passed down the chain.
Alberto Piña: Right.
Peter Calthorpe: And the people who need affordable housing get priced out. And all of a sudden they don’t… They’re homeless. It’s just… It’s a tragedy that should not be happening. So, this is a big solution. Of course, politics are really tough. The idea of infill housing is something that scares a lot of communities. They think, “Oh, other people are going to move in here. They’re going to change the politics. They’re going to change the culture.” There’s a lot of people that are up-front. “I don’t want low-income population in my community.” So, those are the barriers, and they’re real.
Alberto Piña: Yeah. Yeah.
Peter Calthorpe: Here’s another thing…
Alberto Piña: Is something we’ve chatted to a few folks about, and trying to understand it from both sides. I think what we’re seeing now, starting to see in Texas with a lot of California coming over here. And what I almost guarantee you all are seeing now is, this is no longer a low-income only problem. This is affecting… Even in the Bay Area. Everybody in Texas knows the Bay Area’s where all the stuff we use on our phone comes out of. But behind that, there’s teachers and first responders and-
Peter Calthorpe: You got it.
Alberto Piña: Folks that aren’t making Bay Area developer money that need to be a part of that community for the community to function. Is this solution…
Peter Calthorpe: It’s all just sounding to me that people can’t get used to the idea that they ought to at least build housing from the people who take care of the community. The idea that, everybody who takes care of the community has to commute in, drives me nuts. But once again, we are in a very bizarre political world. We did the same analysis of L.A. County. Just one county alone has close to 20,000 acres of strip commercial, which could produce 1.6 million units of housing. So between those 2, we got 3 million units. This actually solves… Without going anywhere else in the state, it solves the state’s housing crisis.
Alberto Piña: Wow.
Peter Calthorpe: So these are… I just don’t think we can piecemeal our way to solving a problem that’s as big as the housing crisis in America. We’ve got to come to systemic solutions. It’s not that we’re saying no to more subdivisions. It’s just that we have to add to the mix, a choice that lets people live in a more urban lifestyle, walkable, and local destinations. Just that choice needs to be available. And then the market can proportion things as it is appropriate. But right now, all our land use policies are leaning towards remote subdivisions. And that’s just not functioning anymore. How do you live on an arterial? This is one of my projects. These are ground floor live/work. So these are little offices on the ground floor of your house, and your living room’s on the second floor. So, you’re up and away from the street, and you actually have nice long views. And these are townhouse style units with parking in the back. The idea of live/work used to be radical. But now after COVID, the idea you’re going to work at home is not such a weird idea.
Alberto Piña: Right.
Peter Calthorpe: So, if you have a little office space on the ground floor of a street, you’d say, “Oh, that’s too busy to live on, but it’s not too busy to spend two or three days a week working there.” And I think in the end, people are going to go back to work in their central office, but not full-time.
Alberto Piña: Mm-hmm (affirmative).
Peter Calthorpe: So, these are really healthy options for people. So right now in China, they have these autonomous buses. And they’d literally just paint a line on a street and then it goes.
Alberto Piña: That’s cool.
Peter Calthorpe: 50% of the transit costs are in the drivers. So, if we’re going to make transit real, it’s got to do two things. It’s got to be faster than getting in your car, and it’s got to be cheaper than it is today, much cheaper. So I think, with the new technology, is going to get us there and it’s kind of exciting.
In Singapore, they have these little vans running on dedicated auto-free streets. And because they’re auto-free, the autonomous technology works today. It doesn’t have all the complexity and liability of driving around mixed-flow streets. But it allows you to get on a van that goes direct to destination. So it’s like an express service. You don’t have to stop at all the in-between places. Now, it may stop once or twice more to pick up other people going to the same destination. But all of a sudden, the average speed of the trip goes way up. The operations and maintenance costs is cut in half. And the construction costs are way down. Because of course, this is at grade. It’s really just repaving and landscaping.
Alberto Piña: Okay, okay.
Peter Calthorpe: So that’s a vision for what I call ‘next generation transit’. And I think it’s coming soon.
Alberto Piña: Yeah, I think that’s kind of important to talk about in this context. From my experience with public transportation, typically it takes quite a bit longer to go from point A to point B than if you were in your car. And that’s… It sounds like that’s one of the biggest barriers this proposal would eliminate.
Peter Calthorpe: Yup. Yup. And it would solve the housing crisis at the same time. And building the housing would pay for the transit. That… The beauty of the system is that the increased property taxes can pay for everything you want.
Alberto Piña: Got it.
Peter Calthorpe: Everything you could ever need.
Alberto Piña: I can definitely tell you’re a professor. I felt like I just got a full on lecture of… Sitting here at home on Zoom. But I definitely learned a lot. And I think, if I can take a stab at summarizing it for our audience… Really what transit-oriented development is, is an idea that if we put work, and put housing, and put effective transport all together, we can take use of properties that between Amazon and COVID, just aren’t going to be used to support our communities as much as they might have been in the past, and really solve this affordable housing problem in a big, big way.
One thing when I was looking at your slides there, and some of the projects you all have built… Here in San Antonio in Texas, we see a lot of particularly new home buyers that want that lifestyle. They don’t want the lifestyle where they have to drive to everything. They want to walk to their restaurant, and walk to their job, and walk to the dog park. And it sounds like this addresses the affordability, but also the market demand for an urban, walkable lifestyle.
Peter Calthorpe: Yeah. Now listen to this. How many households, as a percentage in the United States, do you think are families with kids? Because that’s kind of the… The image of the cul-de-sac is always about mom-and-pop, and a couple kids, right?
Alberto Piña: Right.
Peter Calthorpe: What percentage of households do you think that is?
Alberto Piña: I’d say a third, if I’m guessing.
Peter Calthorpe: It’s 24%.
Alberto Piña: Wow. That’s a lot less than I was thinking.
Peter Calthorpe: No. Back in the 60s, when we had this whole American dreams, suburban style, it was 56%. And so, our demographics have changed. What you’re pointing out is that, “Hey, there’s 75% of the population that are singles, single parents, young people, elderly.” There’s a whole bunch of stages of life and income groups that don’t need or want a remote house on a lot on a cul-de-sac.
Alberto Piña: Yeah. Right.
Peter Calthorpe: That’s a phase of life for a certain income group. So, there’s such a big demand for other. But it’s got to be good. It’s got to be complete. And then, transit comes along and makes that walkable area that much bigger. Because you can walk through your neighborhood and do a few things, hop on a van on a dedicated right-of-away, be at work maybe 10 miles away. And you just don’t have the expense of a car. Car costs like $5,000 a year per house, per unit. It’s a big expense now. It doesn’t mean everybody’s going to give up all their cars, but they may go from three cars to two, or they may go from two to one.
Alberto Piña: Right, yeah.
Peter Calthorpe: Depending on the environment. People tend to paint these things in absolutes, and they’re not. This is about creating more choice.
Alberto Piña: Yeah.
Peter Calthorpe: And I think that, if the choice is there, we’re going to see a much healthier set of communities evolve.
Alberto Piña: Why, I definitely agree now that I know what transit-oriented development is. I always like learning new things myself, and I know our audience does. And we’ll put those slides up and share them for reference on the video version of this podcast, if those listening want to see the slides that Peter and I were just talking through. For folks that want to learn more about what you are doing and just this concept of transit-oriented development, what are some resources we can point them to, to learn more about what we discussed today, Peter?
Peter Calthorpe: Well, they can go to the Congress for the New Urbanism’s website. My stuff… I don’t have a single point where you can go and find it. The Grand Boulevard’s proposal is… I did a TED Talk that covers this material, but also covers issues outside of the United States. It was more of a global perspective on housing and cities. But that, you can look that up.
Alberto Piña: Okay. Okay.
Peter Calthorpe: And that’s for people to look at.
Alberto Piña: Yeah, we’ll be sure to put links to the Ted Talk. We’ll find that for our audience, and then put some links to what the overall Congress for the New Urbanism’s been working on. But I’ve learned a lot for sure, Peter. And I think this is something that would work just the same here in Texas. We’re getting more and more of these problems coming at us. And this makes a lot of sense in a lot of ways down here as well. So, thanks for joining us, and…
Peter Calthorpe: Sure.
Alberto Piña: Appreciate you being our first guest of the new year.
Peter Calthorpe: Hey, and thank you for having your focus on something this important.
Alberto Piña: Yes, Sir.
Peter Calthorpe: Alright, bye.
Alberto Piña: Great to meet you. Have a good one. Alright, well that does it for another episode of the Doublewide Dudes. Appreciate Peter joining us. And as always, appreciate you all tuning in. And we’ll catch you on the next one.
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