Why is it so hard to build housing near transit stops?

American communities added nearly nine times as many housing units far away from transit stations from 2000 to 2019 as they did near those stations, a new study found.

The analysis by Yonah Freemark, the principal research associate in the Metropolitan Housing and Communities Policy Center at the Urban Institute, illustrates how difficult it can be to build “transit-oriented development” even at a time when such projects have gained popularity among a growing number of interest groups.

Building dense housing developments near subway, rail and bus rapid transit routes appeals to environmentalists working to reduce greenhouse gas pollution, urbanists who want to promote walkable neighborhoods and housing activists who want more affordable places to live.

But that’s easier said than done, when transit systems have such a limited reach, and local governments often prevent development near existing stations.

“We have a problem with lack of investment in public transportation that’s been going on for decades. And that lack of investment means it’s very difficult to build new housing near those lines,” Freemark said in an interview. “It’s also true that even in most of the regions where there is substantial transit, new housing was more likely to be located far from transit, rather than near transit, and that suggests to me that that’s an issue with local planning and zoning policies.”

The New York region is one of the few metropolitan areas where Freemark found that more housing units were added closer to transit than far away. Even there, though, local policies often prevent developers from building high-density housing near stations.

In fact, 67 of the 355 commuter rail stations in New York and New Jersey that would otherwise be ripe for transit-oriented development are constrained by local zoning that restricts or prohibits multifamily buildings, according to the Regional Plan Association, a New York-based advocacy group.

The RPA analysis found that commuter stations in New York and New Jersey are surrounded by approximately 74,000 acres of “underutilized” land, which is equivalent to the surface area of Manhattan and Brooklyn combined.

Nearly 39% of the area’s stations are in largely white, affluent neighborhoods with restrictive zoning. And most of those stations are located in the inner suburbs, which would make them otherwise attractive locations for transit-oriented development.

Marcel Negret, a senior planner at RPA and the author of the report, said the analysis also showed how different jurisdictional rules affected development.

“New Jersey has been doing a better job at aligning its land use with its transit capacity in a way that Long Island hasn’t been doing,” he told Route Fifty. “That shows a more urgent need for the state [of New York] to have a more significant role in construction, to set parameters or at least guidelines, to ensure that some of these places are aligning land use based on transit capacity.”

New York, he explained, has generally been more deferential to local governments in terms of land use. New Jersey, on the other hand, still operates under the “Mount Laurel Doctrine,” which the state supreme court first implemented in 1975, that holds that municipalities are responsible for providing their “fair share” of affordable housing. That fair share, Negret pointed out, is based on many of the same factors that make transit-oriented development attractive, such as the community’s proximity to jobs and the amount of vacant land available.

Last year, New York Gov. Kathy Hochul promoted transit-oriented development as part of a controversial package of changes she sought to create 800,000 new residential units to make housing more affordable. “We have invested in the [Metropolitan Transportation Authority]’s world class commuter lines, we’ve connected more people to jobs, we’ve created thriving downtowns and that’s why it makes all the sense in the world to build more housing in those areas,” she said at the time. But lawmakers ultimately shelved the idea, in large part because her plan also called for mandatory housing quotas for cities.

New Jersey lawmakers, meanwhile, considered a proposal that would reduce statewide parking requirements around rail, bus and ferry stops. The Senate passed the measure, but it languished in the Assembly.

Negret said he was encouraged by the recent attention lawmakers have given to the issue of housing affordability, particularly near transit stops. “New York State is really lagging behind in addressing this issue, but I think the conversation has been moving in the right direction,” he said. Negret added that the findings from the report could help lawmakers understand why more transit-oriented development is needed.

Freemark, from the Urban Institute, said state and local governments should go beyond just making zoning changes to allow transit-oriented development; they should also include land acquisition as part of their planning for new transit projects.

“There’s not much coordination between transit agencies and local governments when it comes to actually planning these projects,” he said. “This is a key opportunity for them. It does not require federal involvement. If these entities want to cooperate with their transit agencies, they can do so and then they can leverage the benefit of being near transit to create new publicly owned land that can be used for affordable—or any—housing development.”

Transit agencies, Freemark said, are often ill-equipped to include housing in their expansion projects. Some agencies have sold or redeveloped land near their stations that had been used for parking lots or storage for housing, as well. But those efforts have been relatively rare.

“One fundamental problem is that, frankly, most transit agencies just don’t have the bandwidth to be thinking beyond transit,” he said. In the years following the COVID-19 outbreak, transit officials have been worrying about pressing issues such as how to get riders to return to pre-pandemic levels, shoring up agency finances after federal subsidies run out and recruiting enough bus and train operators to maintain service.

Beyond that, transit agencies don’t have the legal ability or the financial capacity to buy excess land for transit-oriented development as they’re building new stations.

The federal government has taken some steps to encourage transit agencies to incorporate housing into their construction plans, though, Freemark said.

For example, the Federal Transit Administration—a major source of funding for transit expansion projects—doesn’t penalize agencies for planning to buy extra land while building new capacity; in other words, the extra expense doesn’t affect federal ratings for a project’s cost effectiveness.

In 2022, Congress made it easier for transit agencies to give away land it bought for construction staging or other temporary uses to affordable housing projects. That had previously been cost-prohibitive for transit agencies because they would have had to pay back the federal government for the cost of the land before giving it away.

The federal government has also made it easier to use public loans for transit-oriented development, although the rules governing those types of loans can still be cumbersome, Freemark said.