Developers have two new ways to finance transit-oriented development, like the buildings in this rendering for Triangle Transit in North Carolina. Image via Our Transit Future.
On December 4, President Obama signed into law the Fixing America’s Surface Transportation (FAST) Act, a five-year $305 billion transportation authorization.
Included among the bill’s many provisions (good and bad) are two new ways for developers to finance transit-oriented development (TOD) projects. LOCUS was the leading coalition advocating for these provisions — U.S. Transportation Secretary Anthony Foxx also spoke out in favor of these provisions.
We were excited to see these new financing options included in the bill, but we’re even more excited to put them into action. For LOCUS members and real estate developers everywhere interested in building walkable development near transit, here’s an overview of the two new financing programs.
TOD in TIFIA
The U.S. Department of Transportation’s Transportation Infrastructure Finance and Innovation Act (TIFIA) program provides credit assistance for large-scale, surface transportation projects like highways, transit, railroads, and ports. TIFIA loans (or loan guarantees or credits) can help state and local governments, transit agencies, railroad companies, special authorities, special districts, and private entities finance projects that might not otherwise be financially possible.
The FAST Act expands TIFIA to include TOD and local infrastructure projects. These projects can include parking garages, property acquisition and infrastructure for people walking or bicycling. In addition, the FAST Act lowers the TIFIA project cost requirements for TOD and local infrastructure from $50 million to $10 million—making relatively small projects eligible for the program, as well. The FAST Act also reduces application costs for low-cost, low-risk projects, including $2 million in annual grants to help defray application costs for smaller projects.
TOD in RRIF
The FAST Act also changes the Railroad Rehabilitation Improvement and Financing (RRIF) program. This program, administered through the Federal Railroad Administration, provides direct loans and loan guarantees to finance development of railroad infrastructure. Under the FAST Act, RRIF loans can now also be used to finance commercial and residential development near passenger rail stations.
In addition to these two new options, the FAST Act also maintains the Federal Transit Administration’s TOD planning grant program, which can be used to conduct planning activities around public transportation to enhance economic development and ridership on the project, improve access and connectivity, and enable mixed-use development and private-sector participation.
These new ways to finance transit-oriented development projects would not have happened without the advocacy work of LOCUS members and allies across the country. If you emailed, called, or met with your member of Congress about these issues, thank you. You helped make these new programs possible.
Thank you also to the members of Congress who championed these programs, including Senators Brian Schatz, Ed Markey, Jeff Merkley and Mark Kirk, as well as Representatives Steve Cohen, Donna Edwards, Garret Graves and Barbara Comstock.
Over the next several weeks, LOCUS will be hosting webinars and creating new resources about how developers can use these new programs. We are also available to help your company apply for these financing options. If you are considering submitting an application and want to know more about our consulting services, email Christopher Coes.