“This is not driven by altruism.” -Paul Morris, Vice President of Sustainable Planning and Development, Cherokee

In a workshop at last week’s Ceres conference, Mr. Morris explained the benefits of Transit-Oriented Development (TOD). His private equity firm redevelops brownfields – dormant industrial properties usually marked by significant environmental damage – into new, mixed-use developments.

I was intrigued by the political and economic calculus behind such projects. Mr. Morris described how homebuyers, commercial tenants, and local governments are driving TOD growth – and not because of any sense of social mission. Buyers and renters want proximity to work and transit, and cities want the revenues from more intensive land use.

Mr. Morris cited a 2007 study that found homebuyers willing to pay a 12% premium to live near a transit stop. This was the largest premium that buyers were willing to pay for an added feature, meaning that mass transit was worth more than living in a gated community or close to open space.

This was not always the case.

West Hyattsville, MD, he explained, is home to a new, dense subdivision near a D.C. Metro station. This is a selling point now, but apparently the station was placed near the brownfield in the 1970s precisely because residents of the surrounding area didn’t want a Metro stop too close to their homes.

So what’s changed? Streetcar suburbia works for me, too, but where’s it been for the past sixty years? Federal and state support for new highways, combined with anti-density sentiment and regulation in many communities, has encouraged sprawl. Long commutes, high energy prices, and the appeal of well-executed TOD, though, may be reversing this centrifugal pressure. Mr. Morris predicted that, for the first time, 50% of all growth over the next 20 years will occur in existing urban areas.

Cherokee has found that by sharing some of development’s returns with local governments, new transit capacity can be financed without federal involvement. Cities are learning that they have a stake in the more intensive use of already-developed land.

“Municipalities really have no assets other than land…. As voters and taxpayers, we’re stockholders.”
-Paul Morris

To learn more about sustainable development practices, see KLD’s Green Building topic.

Also see KLD’s resource page for a description of community investing.