Institutional, property and governance factors of TOD

TOD is a conceptually simple idea: build higher density urban development around well-connected high frequency public transport services that allow residents to reduce or eliminate their reliance on automobiles for urban travel. But the task of providing high quality public transport development is very complex even before land-use development is considered.

Strategic network planning

High quality public transport requires strategic network planning at the metropolitan scale to identify which locations will be connected via the transit system and what modes and infrastructure will be provided.

TOD tends to focus on fixed infrastructure public transport, like light or heavy rail, or metro systems. Such infrastructure is often very capital intensive requiring large sums to be expended in the construction phase with expenses often recovered through fare revenue over multiple decades.

Orientating land-use activity to high quality transit nodes is a further requirement for transit oriented development. This involves focusing land uses that are attractive to travellers around transit stations.

Prior to the automobile, public transport was used to expand residential areas beyond the walking distances of the 19th Century city, creating a relationship between the residential origins and the administrative and commercial destinations of the historic city centre. In the era of the automobile this relationship was weakened. The contemporary literature on the built environment and travel demand indicates that destination factors are among the most important in supporting transit use. So TOD necessarily requires a combination of land uses that are attractive destinations, not just residential activity.

Planning coordination and capital investment

Putting together the planning coordination and capital investment that is required to support TOD is a complex task. Within the transport sector there are many institutions with a role in planning, design, financing and construction.

Metropolitan transit agencies typically lead the planning and development of transport networks, and sometimes require coordination with franchised service providers, such as the metropolitan train operator. Government finance departments need to agree to budgets for public transport investment, and regulatory authorities need to oversee the impacts from construction.

Land use plans at the metropolitan and local scale need to be coordinated with metropolitan transport infrastructure and service plans to support transit oriented development. This may require metropolitan governments to set frameworks for development of TODs, with local government often having responsibility for more detailed development planning. In most TODs it is private developers that invest in land use activities, whether these are commercial or residential. Thus development is dependent on private sector appetite for investment in terms of both return and risk.

Governance and coordination

Governing and coordinating the various institutions within a given TOD or corridor of TODs is often a complex task. Often governments will establish dedicated agencies that are empowered to plan and coordinate TODs and which are separate from the main agencies involved. This may include a development authority which takes planning and design responsibility for the TOD precinct.

Because public transport typically increases land values through improved accessibility, governments may sometimes seek to recover some of the cost of the transport infrastructure, through financing mechanism that ‘capture’ the value added to land adjacent to stations. This requires negotiations with land owners about the terms for value capture and legal instruments that facilitate the arrangements. Late 19th and early 20th Century suburban tramway and railway infrastructure, was often funded through the sale of land around new stations, on greenfield sites located beyond walking distance from the city.

London underground northern line extension

A high profile example of value capture financing is the Northern Line Extension to the London Underground railway. This £1bn project was financed through a public works loan, funded through a combination of local land taxation and developer contributions, based on new land development, that would be attracted to the two stations being constructed.

The Northern Line Extension example also exemplifies the institutional complexity of governing TOD. An array of agencies, including two local governments, the metropolitan authority, the metropolitan transit agency, developers, banks and other actors, all had a role in bringing this project to completion.