Across the country, inequity is a defining issue of our time, and in Los Angeles and the San Francisco Bay area, the examples are stark. According to the Brookings Institution, the San Francisco metro area ranks third and Los Angeles metro area seventh as areas with the highest income inequality in the country. Stagnant and low wages and increased poverty and homelessness are but a few of the alarming trends that wealth disparity has brought to these regions.
Los Angeles and the San Francisco Bay Area also top the charts for the highest rent and home sale prices, and no one feels this pinch more than low-income families and low-wage workers. According to the National Low Income Housing Coalition, a California worker needs to earn $28.59/hour to afford a two-bedroom apartment, ranking third in the nation for the highest housing wage. A median-income family in the Bay Area spends 62 percent of their income on housing and transportation alone, and in Los Angeles metro area that percentage is higher: 73 percent. Longtime residents in these regions can no longer afford to stay in their homes. As the trend of urban displacement and gentrification continues, the suburbanization of poverty forces low-income workers to endure long commutes on the freeway, leading to increased pollution and greenhouse gas (GHG) emissions.
In 2006, California enacted landmark legislation to reduce GHG emissions with the Global Warming Solutions Act of 2006 (AB 32), which set GHG emission reduction goals into law. Accompanying AB 32, the Sustainable Communities and Climate Protection Act of 2008 (SB375), supports the State's climate goals of GHG emissions reduction by coordinating, for the first time ever, transportation and land use planning to foster sustainable communities. These laws laid the foundation for the creation of California’s multi-billion dollar cap-and-trade program now referred to as the California Climate Investments Program (CCIP, formerly the Greenhouse Gas Reduction Fund) for which cap-and-trade proceeds support three main program areas: Transportation and Sustainable Communities, Clean Energy and Energy Efficiency, and Natural Resources and Waste Diversion.
With the state mandating land use and transportation planning coordination through the Sustainable Communities Strategy (SCS) and providing resources for programming and projects through CCIP, regional and local public agencies throughout the state, such as transit operators, are adopting the new framework of equity and sustainability by creating their own policies, programs, and projects.
The Role of Transit Operators in Affordable Housing Development
Among the largest transit operators in California, Metro, BART, and VTA began steps toward building a framework of equity and sustainability through their affordable housing policies. Metro has an operations budget of $1.6 billion, serving Los Angeles County with 4,000 buses that carry 1.6 million passengers daily, and 300 miles of rail transporting 340,000 riders daily. BART spans 5 of the 9 counties in the Bay Area with 430,000 daily weekday riders with 45 stations and 104 track miles and a budget of approximately $2 billion. As the primary transit operator of Silicon Valley, VTA buses and rail serve 44 million riders annually with a budget of $510 million.
All three transit operators own significant land holdings for joint development, which has emerged as one of the most precious public resources in high-cost regions. The dissolution of redevelopment agencies under the Brown administration not only slashed $1 billion for affordable housing, it also significantly shifted the landscape of public sector capacity to plan, finance, and acquire sites for affordable housing and other community amenities like parks and plazas. For affordable housing developers, land owned by transit operators is particularly valuable because affordable housing developers are not competing on the speculative market to acquire these sites, and transit operators are patient land owners as the financing comes together for an affordable housing development.
Making the Case for Transit-Oriented Development (TOD): Increased Ridership
For transit operators, ensuring ridership is critical to a functioning transit system, and recent studies demonstrate that affordable TOD has a larger ridership bonus than market-rate TOD, and the development and preservation of affordable housing near transit is a critical strategy for expanding transit ridership.
A 2014 study by TransForm and the California Housing Partnership Corporation found that lower income households drive 25 to 30 percent fewer miles when living within a half-mile of transit than those living in non-TOD. When living within a quarter-mile of frequent transit, they drove 50 percent less. In contrast, higher income households drive more than twice as many miles and own more than twice as many vehicles as extremely low-income households living within a quarter-mile of frequent transit. Building and preserving affordable housing will allow for both vehicle mile travelled (VTM) reduction and preserve and expand core ridership. Research by the Dukakis Center for Urban and Regional policy underscores TransForm and CHPC’s findings showing that the preservation of housing affordability and economic diversity near transit allows transit systems to keep core riders and attract new riders. “There is a symbiotic relationship between diverse neighborhoods and successful transit: transit systems benefit from and depend on the racial and economic diversity of the neighborhoods that they serve, just as low-income households, people of color and renters depend on benefit from living in neighborhoods served by transit.”
Catalyzing Change: Multi-Sector Partnerships
In the San Francisco Bay Area, the Great Communities Collaborative (GCC), is a multi-sector collaboration that addresses the challenges of climate change and equity by influencing local and regional policies, practices, and investments. GCC played a pivotal role in advancing the affordable housing policies at both BART and VTA by conceptualizing an inside and outside strategy. GCC created the TOD Implementation Table: a neutral space to engage with transit agency staff, other public agencies, and advocates to further their regional equity and sustainability goals and align philanthropic and public resources. GCC also supported several organizations to advocate for strong policies by engaging board members and agency staff of transit operators. In Los Angeles, foundations commissioned a report that made the case for equitable development along Metro’s expanding transit system. The group LA Thrives emerged to more deeply engage Metro on their policies as a collaborative of organizations committed to equitable TOD that prioritizes investments in the production and preservation of affordable homes and protecting the social fabric of neighborhoods. As bridges between advocates and the public sector, both GCC and LA Thrives believed that policy wins would lay the groundwork for systems change within these agencies that would get them to change their community development practices.
Champions also emerged within Metro, BART, and VTA. Several progressive board members worked collaboratively with advocates to advance the affordable housing policies, and the agencies crafted thoughtful practices and research that bridged the priorities of these agencies to combine safe transit with affordable housing and community development needs.
With contributions from agency staff and advocates, we’ll share some of the stories and policies that were adopted by Metro, BART, and VTA—starting with Metro, below. Affordable housing provisions are either stand-alone policies or a part of larger policy updates pertaining to joint development, station area access improvements, or TOD. It is also important to note that the State Surplus Land Act was strengthening during the time which encouraged public agencies to develop policies and practices for land disposition.
METRO: Setting the Bar and Incentives for Affordability
In 2008, Los Angeles voters passed Measure R, a half-cent sales tax that funds the expansion of transit by doubling the rail line and number of stations. Measure R has financed the construction of two recently completed rail lines with three additional rail lines under construction. In November, voters will consider an additional sales tax that will raise up to $120 billion to continue its transformation.
In the mid-2000s, the California Community Foundation (CCF) and The California Endowment (TCE) recognized that this one-time multi-billion investment could significantly transform the region into a more sustainable, well-connected region with access to opportunity—and also have the negative consequence of displacing low-income communities of color, since the transit system would increase land and property values in the neighborhoods where new lines and stations were being sited. Along with advocates such as LA Thrives and ACT LA, CCF and TCE believed that if transit expansion and development is done with equity and sustainability as core principles, the benefits could be harnessed by low-income communities through investment without displacement, and by the transit system through increased ridership.
CCF and TCE funded a study, conducted by Enterprise Community Partners, the Low Income Investment Fund, and the Center for Transit-Oriented Development that analyzed the value of equitable growth around transit, specifically how other transit agencies nationally are supporting it.
With emerging leadership from the Mayor Office in Los Angeles and Metro Board support, particularly Board member Mark Riley Thomas (recently elected among progressive board members), Metro developed a more holistic approach to transit expansion to include “Transit Oriented Communities.” Metro would broaden its role as a transit agency in catalyzing and shaping community change and make substantial infrastructure investments to maximize public benefit in housing, environment, public health, and economic development.
In July of 2015, Metro amended their Joint Development Program to include robust affordability provisions. Metro created a suite of affordable housing policies to establish several mechanisms to create and preserve affordable housing in Los Angeles, including:
- Performance measure that Metro’s portfolio of joint development projects include a minimum of 35 percent affordable units;
- Ability to discount land for joint development projects that include affordable housing (up to 30 percent of land value, proportionate to number of units);
- New revolving loan fund to which Metro will contribute a total of $9 million dollars with the intent to leverage an additional $70 million from a range of housing funding sources; and
- New discounted transit pass program available for affordable housing developments.
Photo credit: Dan Reed via flickr, CC BY-NC 2.0)