What Does the Push for Transit Oriented Development Mean For Rural Areas?

The affordable housing world is paying attention to the connection between housing costs and transportation costs, and that’s a good thing. The federal government and many state and local governments are encouraging transit oriented development (TOD), and that’s a good thing too. But in rural places, public transit is scarce and TOD may be both difficult and unpopular – especially in remote, sparsely populated areas. 

HUD defines TOD as “compact, mixed-use development near transit facilities that promotes sustainable communities by providing people of all ages and incomes with improved access to transportation and housing choices, [and] reduced transportation costs that reduce the negative impacts of automobile travel on the environment and the economy.”

A small city might be able to provide transit in the form of an on-demand service, or perhaps even a system with regular routes and a standard timetable. But a town of 500? Not likely. The American Public Transportation Association reports that in small urban and rural places, 41 percent of residents have no access to transit and another 25 percent live in areas with below-average transit services. To provide transit oriented affordable housing development in those places, new transit systems could be created – if funding could be found. Alternatively, residents would have a choice: move to affordable housing created near transit, or live where they prefer to live but without housing assistance.

Fortunately the creators of TOD initiatives are finding ways to avoid disadvantaging rural residents. An applicant for Low Income Housing Tax Credits from the Minnesota Housing Finance Agency can score three points for a development that is near public transit, is in a designated transit improvement area, is within a specified distance from employment opportunities and has dial-a-ride services available, or is within a specified distance from employment opportunities and is close to public services like a post office, a medical or dental office, a supermarket, or others.

The Illinois Housing Development Authority takes a more restrictive approach in providing a different standard for rural areas. A tax credit applicant can score two points if its development is within six blocks of fixed-route public transportation in the city of Chicago, one mile in the Chicago metropolitan area, 1.5 miles in another metro area, and two miles in a nonmetro area. In some other states, setasides for rural areas allow tax credit allocators to avoid the TOD discrimination issue.

Outside the tax credit arena, advocates in California have developed a proposal to direct a specific pool of state funding toward investments in housing and transportation. California rural housing interests are developing language that could be added to take account of the transit differences in rural places. 

The National Housing Trust – which graciously provided the Minnesota and Illinois examples above – is conducting research on the connections between tax credits and transit and will release a report later this year. Has anyone conducted research on the application of TOD requirements in rural places under other programs? Are there other examples of best practices – or worst practices?

What do you think? Has the TOD focus had a positive, negative, or no effect on rural affordable housing development?

(Image by JAUNT, Inc. in Virginia.)

Leslie Strauss is senior policy analyst at the Housing Assistance Council.


  1. The answer is, “it depends.” TOD can be one useful tool, but it has been overblown and promoted as the latest panacea. To that extent, it is having a negative effect across rural, suburban and urban areas.

    TOD projects, especially if they are mixed income, don’t actually create many affordable units. And they don’t inevitably link low income people or affordable housing to jobs. It would be a more strategic use of limited resources to give equal, if not greater focus in transportation planning to “developing oriented transit” (DOT) i.e. extending transit to more job and residential activity centers, and expanding affordable housing near entry and mid-level jobs.

    The Minnesota HFA materials linked above at least take a balanced approach, rather than elevating TOD: “To reduce transportation costs, it is important to locate affordable housing near the places that lower-income workers are employed or near public transportation.”

    Many of the strongest TOD advocates live in regions with unusually strong transit systems and thus have a skewed view of the value of TOD. In many other urban areas, affordable housing is already served by transit —- but the transit does not effectively link to region’s job growth centers without an impractical 60 to 90 minute commute. This is especially true in regions around the nation that lack a robust, integrated regional rail system.

    TOD is a “feel good” approach. But in regions with weak transit systems, increasing the often already high level of affordable housing on transit in the name of TOD is a poor investment of limited affordable housing resources.

  2. I can speak for rural Appalachia. I’ve lived my life in the heart of it. It is not feasible to think a bus system could sustain when most folks have over an hour to travel just to get to a major hospital or go to dinner somewhere other than fast food chains.
    However, there are numerous rusting down train cars scattered alongside the rivers and ridges and many miles of abandoned train tracks that would easily carry people for hundreds of miles, to and fro and shorten many commutes. This is something to think about when looking for solutions and cleaning up our valuable landscape.
    Every small town in Southwest Virginia and Northeast Tennessee has an old train station in front of tracks that are simply not used anymore. What would it take to put wheels under this concept?


Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.