	Background

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. 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. A Variety of Factors and Local Government Policies Can Influence Transit- Oriented Development

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. 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. Challenges That Can Hinder Transit-Oriented Development near Selected Projects

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. 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. 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. FTA’s Assessment of Factors Related to Land Use and Economic Development Is Consistent with Future Transit-Oriented Development

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. Agency Comments

We provided DOT with a draft of this report for review and comment. In  addition, this report will be available at no charge on GAO’s website at  http://www.gao.gov. Appendix I: Objectives, Scope, and Methodology

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 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. We also interviewed FTA officials.
Why GAO Did This Study

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.

What GAO Found

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.