How Denver and Seattle are working to preserve affordable housing near transit

By Rayla Bellis

The Denver and Seattle regions are experiencing a challenge common to a number of cities around the country: despite an influx of transit-oriented development projects, much of that new housing is unaffordable to the people who rely on transit the most.

In a recent guest post for TransitCenter, Eleni Bardaka, an assistant professor at North Carolina State University, and John Hersey, a TOD planner at the Denver Regional Transit District, discuss some of the ways Denver is addressing this challenge using Equitable Transit Oriented Development strategies, or “eTOD” in shorthand.

Bardaka and Hersey report that approximately 29 percent of new housing in the region is within half a mile of rail stations, according to an estimate from Economic and Planning Systems. Yet Denver is not seeing any significant increase in ridership, despite the $4.7 billion FasTracks transit funding package approved by voters in 2004. Previous research from other cities has suggested a relationship between transit ridership and gentrification; higher-income residents move into transit-rich neighborhoods and displace lower-income residents, but tend not to use transit as frequently.

To better understand these factors, Bardaka and Hersey surveyed more than 300 people who live within a 10-minute walk of Denver’s new light rail stations, comparing residents of new market-rate housing to low-income households. Ninety-one percent of market-rate households reported owning at least one car, compared to 47 percent of low-income householders. Further, 69 percent of the market-rate residents most frequently use a personal vehicle to get around, while 66 percent of low-income residents most frequently use transit.

The problem, as the authors point out, is that, “without equitable planning and policies in place, major transit investment can generate new demand for development in areas that quickly transition from economic afterthoughts to high-end enclaves of housing, retail, and offices catering to higher-income earners while leaving behind low-income households who could most benefit from improved transit access.”

Preserving affordable housing near transit is challenging in part because securing funding to subsidize low-income housing can be difficult. The Denver region is working to address the challenge through strategies and financing tools to support eTOD.

One example is the region’s Denver Regional TOD Fund, a partnership between Enterprise Community Loan Fund and a number of public and private investors. The purpose of the $24 million fund is to preserve affordable housing along current and future transit corridors in the city. The fund provides loans to borrowers in seven eligible counties in the Denver metropolitan region to acquire property for affordable housing and supportive commercial space. Fifteen loans have been made since the fund’s inception.

Several investors in the fund have also enacted their own policies and programs to support eTOD. For example, Denver has reduced parking requirements in station areas and promotes transportation demand management principles to complement reduced parking. Easing parking requirements can reduce costs to developers, which they can then pass on to renters. Another investor, the Colorado Housing Finance Authority, has tailored its low-income housing tax credit program to benefit eTOD projects. Through a combination of these approaches, Denver was able to deliver 65 new homes at its 38th & Blake Station development that are affordable for households making 30 percent of area median income.

Other regions are also seeing a need to put policies in place to provide affordable housing near transit. Seattle recently celebrated the groundbreaking of a mixed-use development directly above the Capitol Hill light rail station where more than 40 percent of the units will rent below market rate. The project, a collaboration between a private developer and nonprofit affordable housing developer Capitol Hill Housing, has helped reshape Sound Transit’s overall approach to the land it owns surrounding stations. Sound Transit now has a directive called the “80-80-80 policy,” which mandates that 80 percent of the agency’s surplus property be offered first to developers who make at least 80 percent of units affordable to people earning no more than 80 percent of area median income.