NACo endorses bill to support, finance transit-oriented development projects

Key Takeaways

On April 20, NACo endorsed the Build Housing, Unlock Benefits and Services (Build HUBS) Act (H.R. 7062/S. 3636). This bipartisan legislation is led in the U.S. House by Reps. Laura Freedman (D-Calif.) and Mike Lawler (R-NY) and in the U.S. Senate by Sens. Lisa Blunt Rochester (D-Del.) and John Curtis (R-Utah). This bill would facilitate transit-oriented development (TOD), in particular transit-oriented housing, which would help alleviate housing shortages and boost transit ridership.
 

The Build HUBS Act would make reforms to two financing programs under the U.S. Department of Transportation (USDOT)—the Railroad Rehabilitation and Improvement Financing (RRIF) program and the Transportation Infrastructure Finance and Innovation Act (TIFIA) program—to make them easier to use for TOD projects. 

While TOD projects are already eligible uses of both RRIF and TIFIA funding, programmatic requirements create significant administrative barriers that have prevented them from being used for these purposes. Currently, most housing construction is done by private entities using private capital, which do not impose requirements like compliance with the National Environmental Policy Act (NEPA). These developers have reported that RRIF and TIFIA’s favorable financing rates are not enticing enough to outweigh the cost of these programs’ other requirements.

The Build HUBS Act would remove many of these barriers to make developers more likely to pursue TOD projects financed with RRIF and TIFIA. This includes:
 

• Codifying categorical exclusions under NEPA for office-to-residential conversion and infill projects.
• Clarifying programmatic definitions of TOD to provide certainty for financing eligibility.
• Making it easier to determine project creditworthiness under the TIFIA program, while still retaining strong fiscal safeguards.
   

Importantly, the Build HUBS Act does not “alter, supersede, or preempt any State or local zoning or land use law.”
 

County impact

Counties play a major role in the nation’s public transit infrastructure, owning, operating or otherwise financially supporting over a third of public transit systems. Public transit systems across the country have struggled to recover ridership after the Covid-19 pandemic. This has created a negative feedback loop as decreased ridership leads to lower operating revenue, which leads to funding cuts that further shrink ridership. TOD projects can help boost system ridership, which eases financial pressure on transit systems and can reduce regional traffic and congestion. 

At the same time, aligning public transit investments with affordable housing development may benefit both systems. As communities look to address housing affordability, greater density and streamlined regulatory procedures surrounding development should exert downward pressure on housing costs. 
Looking ahead, NACo supports the Build HUBS Act and will push for its inclusion in the next surface transportation reauthorization bill.