Transit Agency Tries Its Hand as Developer

Land Use

Transit Agency Tries Its Hand at Another Role: Developer

By developing the land around its transit stations, the North County Transit District can earn some money off the land it owns, and help the region build housing in the mixed-use, transit-oriented projects it has said are needed to accommodate population growth.

The transit agency for North County is trying its hand as a developer.

The North County Transit District, operator of the Coaster, Sprinter and Breeze rail and bus systems, is looking to develop its land around transit stations.

It’ll start by developing around rail stations in Solana Beach, Oceanside and Escondido.

The agency is reviewing proposals from developers for the Solana Beach land and plans to put out calls for proposals for the Oceanside Transit Center by Dec. 31 and for the Escondido Transit Center within the next two or three years.

It’ll help NCTD earn some money off the land it owns, and help the region build housing in the mixed-use, transit-oriented projects it has said are needed to accommodate population growth.

“These are really in their early stages,” said Dahvia Lynch, NCTD’s chief planning officer. “We think they are a great public-private partnership opportunity, but we expect it will be a long process.”

The developers NCTD selects will work with each city to plan around each station, focusing on the details of each specific project. NCTD wouldn’t sell the properties; it would instead enter into long-term leases with the developers.

But transportation and affordable housing advocates are pressuring the agency to focus on providing homes reserved for low-income residents.

NCTD’s official policy calls for developers to build market-rate projects. But cities are free to work with developers to push for projects, including homes reserved for low-income residents, Lynch said.

Lynch also left open the possibility of NCTD changing its policy sometime in the future.

“We’re largely saying, ‘Go work with the jurisdiction,’” Lynch said. “Most of the jurisdictions have affordable housing requirements. We just don’t want to put our hands in land use and determining the use of those sites. That’s not our expertise.”

The city of Oceanside requires residential developers to dedicate at least 10 percent of new units for low- or moderate-income residents, or pay a fee to the city that’s used to fund such construction.

Jeff Hunt, an Oceanside city planner, said NCTD has listened to the city’s vision for the station area, and the request for developer proposals will already include much of what they want: a mixed-use project with additional parking that’ll fit with existing plans to revitalize the downtown area.

Hunt said he’d like the project to include some low-income housing, but he plans to wait until a developer is selected so they can work together to see what is possible.

Transportation and affordable housing advocates say the agency should look to Los Angeles for policy direction.

In 2013, Los Angeles commissioned a study exploring options for transit-oriented development and low-income housing. It found low-income individuals comprise a significant portion of the city’s public transportation ridership.

That means building low-income housing not only filled a need, it helped boost the agency’s ridership numbers, and therefore its own financial picture.

The L.A. County transit agency implemented a policy requiring 35 percent of housing units in a development on its property go to low-income housing. It also offered developers discounts on the land in exchange for even more low-income housing. For example, if all of the units were qualified as affordable – reserved for families making no more than 80 percent of the area’s median income – a developer could receive up to a 30 percent discount.

“This is exactly why we need a policy to ensure that land use for (transit-oriented development) includes some affordable housing,” said Colin Parent, policy counsel for CirculateSD. “Because without it, this is what they do. They sell the land to the highest bidder. That’s really short-sighted and problematic.”

Parent said that once public transportation is built, the property values of the land around it skyrocket. And often transit agencies depend on low-income ridership for their fares. If they don’t live nearby, the transit agency could lose that source of revenue.

“It’s really short-sighted to use these one-time uses of land to generate funds, when they could be creating a constant and sustainable community of new riders,” Parent said. “Not to mention the social equity and broader value of allowing low-income people to access an affordable transit system.”

A 2009 ridership survey by SANDAG, the regional planning agency found pronounced differences in income levels between NCTD’s different transportation services.

The Coaster carries more high-income riders, who are more likely to own cars and drive to the station to take the train. The Sprinter and Breeze are more likely used by low-income riders, with more than a third of their riders earning less than $15,000 annually.

Boosting ridership could give a lift to NCTD finances. Last year, passenger fares accounted for a little more than 23 percent of the NCTD’s operating funds. They’re expected to account for a similar amount of operational funding in 2016.

That puts NCTD below other transit agencies, in terms of how much of its funding comes directly from passenger fates. According to the American Public Transportation Association, passenger fares made up 32.5 percent of operating funds for transit agencies, on average, in 2012. The San Diego Metropolitan Transit System, meanwhile, recovered 41.5 percent of its costs through passenger fares in 2014.

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