Professor Robert Cervero, Director UCTC, on transit oriented development , TOD

In UC Berkeley’s Spring 2009 newsBITS issue University of California Transportation Center (UCTC) Director Robert Cervero answers questions related to issues that we will be facing such as AB 32 and SB 375. These two Bills deal with reduction of greenhouse gas emissions and future regional transportation and transit oriented land development planning.
I will provide most of this report here, so as to avoid personal “spin” and include the web site link below as well as my own commentary on this recent interview.

Professor of City & Regional Planning; Interim Director, Institute of Urban & Regional Development “Robert Cervero received master’s degrees in civil engineering and city planning from the Georgia Institute of Technology, and a PhD in urban planning from UCLA. He began teaching at UC Berkeley in 1980 where he is also the Director of the Institute of Urban and Regional Development. His area of expertise is sustainable transportation policy and planning. For the past five years he has been an instructor of transportation planning courses for the National Transit Institute and the World Bank Institute.

NewsBITS sat down with Cervero to ask him about joint land use and transportation, sustainable transportation, transit-oriented development, public- private partnerships, and the effect of new state legislation.

Q: How would you describe your research?
A: I focus on the relationship between cities and regions, transportation, travel behavior, more or less taking the perspective that the design of cities, where people live, work, shop really sets the stage for where people travel and how people travel. In many ways, if you want to get to the systemic nature of a lot of problems, such as congestion, air pollution, it’s centrally tied to how we organize and define our cities. So if there’s a lack of affordable housing near job centers, and if people are displaced way out in Livermore, you’re going to get very long commutes.

So you can simply treat transportation as a way to respond to the symptoms—such as congestion—and design and build more roads. But increasingly the evidence appears to me that in many ways this further spawns sprawl and many other problems.

Q: Where do the solutions lie?
A: Even though I have a master’s degree in engineering and planning, over time I have evolved away from focusing on technology and operations and supply side solutions to more broadly the notion that how do we more resourcefully and sustainably design cities and regions. I would almost pitch it as a form of demand management. You can manage demand by pricing and parking policies and things like that, but you can also put people closer to jobs and shopping and walking and biking. It’s just another form of demand management.

Q: Not just sprawl, but energy use, congestion, greenhouse gas emissions, right?
A: Increasingly we’ve realized there are a lot of broader environmental benefits. It’s not just reducing congestion and emissions, we have problems of time pollution. We spend so much time traveling to and fro that people no longer have quality time to invest in their neighborhoods or their civic activities. They arrive home exhausted from their long commutes. Sociologists have tied this to social disaffect, where people sort of disassociate themselves from neighborhood affairs. So, I would suggest there are even more deeply-rooted problems associated with transportation problems.

Q: How does this relate to joint development—or integrating transportation and land-use planning?
A: I have long been a believer in mass transit simply because it is the most resourceful means of mobility. Transit, in my view, has always been a means of mobility we should be promoting and advancing. Of course, anyone who has spent time in Europe or in many other parts of the world, realizes what can happen if you carefully coordinate transit investment with urban planning. You get much more walkable, transit-friendly neighborhoods. A good share of trips can be handled more quickly, more efficiently, more economically, more resourcefully by transit.

Q: So you’re saying our system doesn’t work?
A:  It’s not to say that our system is broken; a lot of people like the freedom and individualism of the private car. But I think the difference you find in Europe is that people do own cars, they’re just not enslaved to them for any and every trip. They’re much more judicious and selective when they use the car or don’t. So if you live in a place like Stockholm or Copenhagen, if you go into the central city, everybody takes transit. Stockbrokers, day workers, school kids, everyone. But for regional destination trips, shopping, sports events, or if you’re making a late-night trip or doing big volume shopping they drive. For a weekend excursion they drive. So they are not anti-car, but the cities are designed so that transit is a respectable option for many.

Q: You have done a lot of work in the area of transit oriented development, or TOD. Can you explain what that is and how it works?
A: The way I envisage TOD is as a compact, mixed use, walking-friendly development oriented around transit stations, mainly train stations. Ideally, these transit hubs become a focal point around which community planning and design is organized. It’s a centerpiece for the community that often includes a civic square, where people gather for celebrations, public events and holidays, and these public squares are ringed by day-to-day services and retail outlets so people can combine their transit trip with after-work shopping or a daycare center. They play a mobility function, but they’re also a way to organize community planning and development.

In better-planned TOD settings, these transit hubs are regional. The metaphor might be a string of pearls along a transportation corridor. You’d have a sort of low-density green space interspersed with these walkable, compact communities near transit.

I’ve devoted a lot of my research life studying all the benefits of TODs when they’re done well. Benefits from both the public side include a reduction in congestion, energy use, greenhouse gas emissions, as well as from the private side, the benefits that accrue to investors and households. You get premiums and healthier real estate markets, lower vacancy rates, higher occupancy rates and rent premiums. There’s a finite, limited supply of real estate like that and people will bid up the price for the privilege of living or running a business or having and office there. So it’s a good way to quantify the benefits of that.

Now, good planning around transit stations does not mean simply a good physical design. You have to deal with the social aspects of the community–recreational outlets, cultural attractions. In a sense, it’s community building, not just architecture. But if you use a transit station and do good quality community planning and design, you get significant land value returns.

Q:How does this relate to joint development?
A: I’ve long felt it is a mistake to let the private sector reap all the benefits of these land value gains that are created by public investment. These are, after all, taxpayer-financed, publicly-invested transit systems. The private sector should share, and by doing so could help fund all the community enhancements—libraries, city squares, and streetscape enhancements. So transit joint development is a way of capturing the value of the land around transit stations. It’s a way to return some of the benefits that are inferred by the public investments back to the public sector to help partly retire the bonds and costs of building the transit networks.

It’s very expensive to build transit. Heavy rail systems in the U.S. are easily $50 to $100 million a mile. But you can also generate funds to improve the public realm, the streetscape, all the civic attractions that make a fun and viable community.

Q: Some people say this is social engineering. How do you answer them?
A: It’s really not social engineering. I would almost submit that most people who live in the suburbs are socially engineered: they have no choice but to drive. Their lifestyles are shaped by that one technology instead of choices. In a sense, we’ve engineered walking and biking out of day-to-day life. You go to many parts of Europe and you’ll find 30 to 35 percent of trips are by bicycle. And we’re nowhere near that. For people who want more choices—and often these are young professionals without kids or empty nesters—they don’t exist in many of our suburbs. What TODs can do is create more variety, diversity and choices, particularly in suburban environments where people can select and sort themselves into this type of neighborhood. They’re going to pay more for housing, more per square foot, and they’re going to give up some size, but they get a lot in return: better quality civic areas, nice walkable communities, and they don’t have to fight traffic.

So anyway, it’s not social engineering—it’s market-based. I would say we have failed to deliver housing choices and neighborhood choices in many suburban environments. Most research suggests that 30 to 35 percent of newly emerging households in metropolitan areas would be receptive to TOD types of environments if given the choice. The problem is, they don’t have the choice. In the suburbs you find transit stations surrounded by parking lots. These areas are unplanned, ugly, essentially dead. You can find housing near transit stations in Oakland, but they’re not great environments either; there’s crime, and people don’t want to live there.

Q: So are there any good examples of TODs?
A: Yes, Washington, D.C., which gets us to the subject of public-private partnerships. The Washington Metropolitan Area Transit Authority began with a system of air right development and land leases. They acquired so much land at the time they began building their system—extra land, more than they needed—that they banked the land, and once the prices of land increased, they started leasing it. So they have a very active portfolio. They get roughly $250 million annually in lease revenues from private development around their transit stations. It’s not a huge share of their total budget, only about 2.5 percent, but then again it’s not inconsequential.

They have things like station connection fees, where at some stations there is a passageway going to a retail store. Here the retail will help pay for the passageway, but the retailers also share some of their gross revenues with the agency. The logic being you’ve got tens of thousands of transit riders walking through these retail outlets who otherwise wouldn’t be buying purses and other things. So they managed to carve out revenue-sharing deals with the retailers.

Q: Have other transit systems tried this approach?
A: The Washington Metropolitan Area Transit Authority has been far more proactive than BART or any other transit system in this country, in good part because early on they set up a real estate development division within their agency and hired seasoned real estate professionals, paid them high salaries to go out and work deals. So they have been far more entrepreneurial.

If you look at a lot of transit agencies, I’d say BART is somewhat the same, their view of the world, their mission, so to speak, is, we’re not here to mess around with real estate, we’re here to run trains and buses on time. So they see real estate development as a distraction. To me that’s wrong-headed. If you want to be a successful transit agency, running trains and buses on time is partly shaped by where the market demand is, and you can shape that market. You can work with the private development community to really steer lots of riders through your own transit stations and reap some large rewards.

Q: What about transit systems in other countries?
A: By far, the most progressive system has been Hong Kong’s. Virtually two-thirds of the revenue which is generated by the transit system for Hong Kong comes from real estate development. The administrative region of Hong Kong provides the development rights at a cost prior to rail investment. Once the agency has these development rights, they tell the real estate development community, “We’re going to extend the line and build a station here, and we want to lease or sell off this land around the station. You tell us what you’ll pay.” So they sell the development right to a real estate developer at the “with rail” price. That is, they purchase it pre-rail, then they say we’ll build a station here and you tell us what you want to pay, and they take the incremental difference to pay for the rail.

So roughly two-thirds of the cost of these railway extensions is being covered. They’re making profits—they’re one of the few places in the world where the transit agency is actually making big profits.

In fact, they are not a public transit agency in the pure sense, they’re sort of a quasi transit agency. The Hong Kong government owns two-thirds of the agency, and the other one-third is owned by private investors. They sell shares on the Hong Kong stock exchange, so they’re accountable to investors for a return on investment and have to be much more entrepreneurial.

Q: You’ve been active in developing recent legislation, AB32 and SB 375, which would seem to open the doors wider to TOD and joint development, wouldn’t it?
A: AB32 says that California is going to reduce by 2020 carbon dioxide levels to the 1990 levels, and Senate Bill 375 says that as part of the metropolitan planning process, cities, regions and counties have to develop regional transportation plans, which include sustainable community strategies, which will help achieve these targets.

Among the strategies that you find in this initial legislation—and will see all the regions embracing—is more strategic development around transit stations and investment in transit. And the current estimates suggest you might be able to achieve roughly 10 percent of your target, just from land use and transit integration. I think if it’s done well, and particularly if it is coupled with things like parking management, car sharing, and other demand management strategies you will get synergistic benefits. Instead of roughly a 10 percent contribution to cutting greenhouse gases, you might be able to see upwards of a 15 or maybe 18 percent rate. And that’s an area of research I have been working on and am still working on.

Q: Are you applying the Hong Kong or Washington, D.C. model elsewhere?
A: We’ve done a lot of research, including a big report available on the Volvo Center website, and we’re applying the Hong Kong model to China. As you know, China’s cities are just growing incredibly fast, and they’re building more rail miles than any place in the world—high-speed rail all over the country. So there are tremendous opportunities to use this model to help not only finance this rail, but to enhance the quality of urban development.

It’s important because, unfortunately, the Chinese are committing all the mistakes and sins that we have—which lead to congestion and pollution. So I, and many others, have been trying to advance this idea of joint development and TOD in China because in truth, regardless of what Europe and the U.S. do to reduce greenhouse gases, those efforts will be swamped by what’s happening in China.”

Gilbert comments.
I respectfully disagree with professor Cervero. What he is presenting is “social engineering.” We each enjoy “free will” and choose where we live and how we commute to work or any other local travel.
For starters many of us left the urban inner cities to enjoy the open spaces in the suburbs where we enjoy open space, parks and cul-de-sac neighborhoods. For 100,000 of my neighbors we moved to Mission Viejo that in 1992 was recognized as being one of the finest planned communities in America because of all the fine amenities spread out in this 17 square mile city just south of Irvine and Lake Forest in Orange County.
Before leaving New Jersey I once commuted daily to Manhattan taking the Hudson Tubes and transferring to the “D” train to get to my job and back. When I return to visit family in that area I will sometimes take the George Washington bridge where I-95, the “Trans Manhattan Expressway (I-95), runs underneath the street. Over the expressway, the city built the George Washington Bridge Bus Terminal, and the Bridge Apartments — a low-income housing project. In the photo’s foreground on the left is part of the Bus Terminal; the apartment towers are in the middle of the photo. Unfortunately for the project’s residents, the expressway was not covered over. Therefore, the people living in the apartments breathe the exhaust escaping from the open-cut all day and all night. “New York 1960″ (Monacelli, New York, 1995) says,
One of the city’s most unusual housing projects, Brown & Guenther’s Bridge Apartments (1963), was built straddling the new road-way. The project’s four thirty-two-story aluminum-clad north-south slabs, housing 960 families, were not only banal but were subject to appalling environmental conditions: noxious fumes from the traffic below rose from the highway that separated the pairs of slabs, rendering the balconies useless and the apartments almost uninhabitable.”

Is that the future for California under SB 375?

Yes, there are many examples of effective mass transit. Having rode mass transit around the world I would agree that there is a time and place where it represents an effective mode of transportation.

In Mission Viejo we are currently having a discussion of the merits and possible utilization of “roundabouts” to improve vehicular traffic throughput. One member of the committee is a former Vice President of the Mission Viejo Company who was very active in the creation of our “California Promise” as we were promoted. While he is a strong advocate of roundabouts and welcomes our research, he admits that the concept of roundabouts was not considered when our city was created. The same argument applies to California’s newer cities that are based on urban sprawl, not high rise housing.

Another concern for me is that SB 375 will have an adverse impact on our private property rights in land use decisions where property may be sacrificed for the needs of it’s anti sprawl provisions under the cute heading of “smart growth– transit oriented projects.”

At the current time and population or employment centers we cannot justify the ridership nor cost of mass or light rail transit in Orange County. OCTA tried it and was soundly trounced. It was called the “Center Line.”

Folks. One hundred years ago major cities like New York invested in subway (or elevated L) systems when land was a bit cheaper and more readily available. In the 21st century adding mass transit systems is not cheap Instead of citing systems like the European examples serving high density inner cities perhaps professor Cervero can site a recent transit system, other than the Red car in San Diego, that is not draining the coffers of the public agencies which fund and operate same.
And, if I am not mistaken, I believe the CA League of Cities may have some concerns regarding SB 375 trumping local land use decisions.

These are just a few personal thoughts to open the dialogue. The Orange Juice microphone is now open for your comments.

About Larry Gilbert