Gross Housing Density: 14.84 units per acre. Walkscore: 100. Index Category: TOD. Image source: https://www.planning.org
TOD Index™ December 2014
www.TODindex.com
Acknowledgements: Dr. Renne would like to thank Tara Tolford for her work on the GIS data analysis and for assistance in the production of this report.
Creator & Author: Dr. John L. Renne, Ph.D., AICP Founder and Managing Director, The TOD Group Associate Provost, Director and Associate Professor, University of New Orleans Senior Visiting Research Associate, University of Oxford
[email protected] [email protected] 504.717.1744
For more details on the methodology, please visit: www.TODindex.com
Overview Transit-Oriented Developments (TODs) are defined as walkable, mixedContents: Overview
1
Criteria for Categorizing Station Areas
1
TOD Index—Home Values
4
TOD Index—Rental Values
6
The Affordability Paradox: Location Affordability
8
Need for Converting Hybrids and TADs into
9
use and dense communities within a half-mile of a train station while Transit-Adjacent Developments (TADs) refer to station areas that are characterized by low-density, auto-oriented land uses. Research indicates that gross housing densities should be at least 8 units per acre (which equals 4,000 households within an area radiating a half-mile from a train station) in order to support transit ridership. ¹ Walkscore.com rates communities with a 70 or greater (out of a possible 100 score) as Very Walkable or a Walker’s Paradise (above 90).
The TOD Index™ provides a new benchmark to track both home and rental values in train station areas across the United States. The TOD Index includes stations categorized as TODs, Hybrids and TADs. Each category is also benchmarked against the national Zillow Home Value Index (ZHVI) or the national Zillow Rent Index (ZRI). Evaluating the market performance of TODs relative to national trends is of significant value because of the following factors influencing 21st century real estate trends:
The national housing market has undergone significant shifts following the 2008 recession
A growing percentage of Americans, including a large percentage of the millennial generation prefer to live in urban areas with high-quality transit access
Investors, developers, planners and policy-makers are looking to identify metrics to measure the success of TOD across the United States
The TOD Index allows for comparing performance in the for-sale and rental housing markets from the neighborhood to the national scales.
2013 : Year of the nation’s highest transit ridership
in 57
years at
over 10.7
billion trips
Criteria for Categorizing Station Areas The United States has approximately 4,000 passenger train stations that are an integral part of serving over 10.7 billion transit trips in the United States in 2013, the highest ridership in 57 years.2 The following criteria are used to classify stations across in the United States along a TOD–Hybrid–TAD spectrum. 1,441 stations across the US are categorized as TOD
Stations, which meet
the fol-
lowing criteria:
1.
Gross housing density must be greater than 8 units per acre across the half-mile station precinct AND
2. 1 2
The average Walk Score for the station area must be 70 or greater
See Renne and Ewing, 2013 for more information: http://scholarworks.uno.edu/cgi/viewcontent.cgi?article=1016&context=unoti_pubs See: http://www.apta.com/mediacenter/pressreleases/2014/Pages/140310_Ridership.aspx
TOD Index™
1
Examples of TODs include Portland’s Pioneer Square and Bethesda, Maryland
Pioneer Square Transit Mall: Portland, OR Gross Housing Density: 14.84 units per acre
Walkscore: 100 Index Category: TOD
Bethesda, MD
Image source: https://www.planning.org/greatplaces/gallery01/image20.jpg
Metro Station Gross Housing Density: 9.69 units per acre Walk Score: 94
Index Category: TOD
Image source: Google Street View, September 2014
1,180 stations across the US are categorized as
Hybrid stations which are defined as:
1.
Gross housing density must be greater than 8 units per acre across the half-mile station precinct OR
2.
The average Walk Score for the Image source: http://www.denver-cityscape.com/images/denver4305-53.jpg station area must be 70 or greater
Examples of Hybrids include Dallas’ Mockingbird Station and Denver’s Englewood Station TOD Index™
Englewood Station Denver, Co Gross Housing Density: 2.43 units per acre Walk Score: 83 Index Category: Hybrid
2
Mockingbird Station Dallas, TX Gross Housing Density: 3.5 units per acre Walk Score: 85 Index Category: Hybrid
Image source: http://madisonmarquette.com/portfolio/case-studies/mockingbird-station/
1,775 stations across the US are categorized as
TAD stations
which do not meet either
criteria for a TOD or Hybrid. Examples of TADs include the station at Baltimore’s BWI airport and Cisco Station in San Jose
BWI Airport Station Baltimore, MD Gross Housing Density: 0.0 units per acre Walk Score: 29 Index Category: TAD
Image source: http://www.bizjournals.com/baltimore/printedition/2011/02/18/office-retail-space-could-be-part-of.html?s=image_gallery
Cisco Station: San Jose, Ca Gross Housing Density: .47 units per acre Walk Score: 20 Index Category: TAD
Image source: Google Street View, September 2014
TOD Index™
3
TOD Index — Home Values
Since, 1996, growth of home values in TODs has outpaced the growth of home values nationally by a margin
In August 2014, the average home value in TODs was $518 per sf. The average home value in Hybrids was $251 per sf and the average home value in TADs was $196 per sf. This compares to the average national ZHVI for that same month at $149 per sf. Therefore, the average home in a TOD was worth 3.48 times more than the average home in the United States. Since 1996, homes in TODs have appreciated about 300% as compared to 168% for Hybrids, 126% for TADs and 103% for the national average. When looking at the data
during the most recent economic recovery, which began January 2012, the growth of home values in TODs has significantly outpaced all other categories. During the 32 month period, average home values in TODs has grown by 37%, as compared to 27%, 24% and 20% in Hybrids, TADs, and the national average, respectively. This means that the growth of home values in TODs have outpaced the growth of home values nationally by a margin of 1.85-to-1.
of nearly 2-to-1.
Home Values $ per s.f. $600 $500 $400 $300 $200
$-
Apr-96 Aug-96 Dec-96 Apr-97 Aug-97 Dec-97 Apr-98 Aug-98 Dec-98 Apr-99 Aug-99 Dec-99 Apr-00 Aug-00 Dec-00 Apr-01 Aug-01 Dec-01 Apr-02 Aug-02 Dec-02 Apr-03 Aug-03 Dec-03 Apr-04 Aug-04 Dec-04 Apr-05 Aug-05 Dec-05 Apr-06 Aug-06 Dec-06 Apr-07 Aug-07 Dec-07 Apr-08 Aug-08 Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10 Apr-11 Aug-11 Dec-11 Apr-12 Aug-12 Dec-12 Apr-13 Aug-13 Dec-13 Apr-14 Aug-14
$100
TOD
TOD Index™
Hybrid
TAD
National Zillow Median Home Value Index (ZHVI)
4
100
TOD Index™
TOD
Jul-12
Hybrid
TAD
Aug-14
Jul-14
Jun-14
May-14
Apr-14
Mar-14
Feb-14
Jan-14
Dec-13
Nov-13
Oct-13
Sep-13
Aug-13
Jul-13
Jun-13
May-13
Apr-13
TAD
Mar-13
Feb-13
Jan-13
Hybrid
Dec-12
400
Nov-12
Oct-12
Sep-12
Aug-12
TOD
Jun-12
May-12
Apr-12
Mar-12
Feb-12
Jan-12
100 Apr-96 Aug-96 Dec-96 Apr-97 Aug-97 Dec-97 Apr-98 Aug-98 Dec-98 Apr-99 Aug-99 Dec-99 Apr-00 Aug-00 Dec-00 Apr-01 Aug-01 Dec-01 Apr-02 Aug-02 Dec-02 Apr-03 Aug-03 Dec-03 Apr-04 Aug-04 Dec-04 Apr-05 Aug-05 Dec-05 Apr-06 Aug-06 Dec-06 Apr-07 Aug-07 Dec-07 Apr-08 Aug-08 Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10 Apr-11 Aug-11 Dec-11 Apr-12 Aug-12 Dec-12 Apr-13 Aug-13 Dec-13 Apr-14 Aug-14
TOD Index - Home Values April 1996 - August 2014
350
300
250
200
150
National Zillow Median Home Value Index (ZHVI)
TOD Index - Home Values
January 2012 - August 2014
140
135
130
125
120
115
110
105
National Zillow Median Home Value Index (ZHVI)
5
TOD
Aug-14
Jul-14
Jun-14
May-14
Apr-14
Mar-14
Jan-14
Feb-14
Dec-13
Oct-13
Nov-13
Sep-13
Aug-13
Jul-13
Jun-13
May-13
Apr-13
Mar-13
Jan-13
Feb-13
Dec-12
Oct-12
Nov-12
Sep-12
Aug-12
Jul-12
Jun-12
May-12
Apr-12
Mar-12
1.6% 1.4% 1.2% 1.0% 0.8% 0.6% 0.4% 0.2% 0.0%
Feb-12
Previous Month Percentage Change in Home Values
National Zillow Median Home Value Index (ZHVI)
TOD Index — Rental Values
Since January 2012, the
In August 2014, the average apartment in TODs rented for $2.28 per sf. Average rent in Hybrids was $1.36 per sf and the average rent in TADs was $1.19 per sf. This compares to the average national ZRI for that same month at $0.89 per sf. Therefore, the average apartment in a TOD rented for 2.56 times the average rental unit in the United States.
growth of rent values in TODs has significantly outpaced all
When looking at the data since January 2012, the growth of rent values in TODs has significantly outpaced all other categories. During the 32 month period, average rent values in TODs have grown by 18%, as compared to 13%, 11% and 8% in Hybrids, TADs, and the national average, respectively. This means that the growth of rent prices in TODs has outpaced the growth of rent prices nationally by a margin of 2.3-to-1.
other categories.
Previous Month Percentage Change in Rental Values 1.5% 1.0%
TOD TOD Index™
Aug-14
Jul-14
Jun-14
May-14
Apr-14
Mar-14
Feb-14
Jan-14
Dec-13
Nov-13
Oct-13
Sep-13
Aug-13
Jul-13
Jun-13
May-13
Apr-13
Mar-13
Feb-13
Jan-13
Dec-12
Nov-12
Oct-12
Sep-12
Aug-12
Jul-12
Jun-12
May-12
Apr-12
-0.5%
Mar-12
0.0%
Feb-12
0.5%
National Zillow Rent Index (ZRI) 6
100
TOD Index™
Apr-12
TOD
Hybrid
TAD
112
110
108
106
104
102 Mar-14
Feb-14
Jan-14
Dec-13
Nov-13
Oct-13
Sep-13
Aug-13
Jul-13
Jun-13
May-13
Apr-13
Mar-13
Feb-13
Jan-13
Dec-12
Nov-12
Oct-12
Sep-12
Aug-12
Jul-12
Jun-12
May-12
Apr-12
Mar-12
Jul-14
Aug-14
114
Aug-14
116 Jun-14 Jul-14
118 May-14
120
Jun-14
January 2012 - August 2014
May-14
TOD Index - Rental Values Apr-14
National Zillow Rent Index (ZRI)
Apr-14
Mar-14
Feb-14
Jan-14
Dec-13
Nov-13
Oct-13
Sep-13
Aug-13
Jul-13
TAD
Jun-13
May-13
Apr-13
Mar-13
Hybrid
Feb-13
Jan-13
Dec-12
Nov-12
Oct-12
TOD
Sep-12
Aug-12
Jul-12
Jun-12
May-12
Feb-12
Jan-12
$-
Mar-12
Feb-12
Jan-12
Rental Values $ per SF
$2.50
$2.00
$1.50
$1.00
$0.50
National Zillow Rent Index (ZRI)
7
The Affordability Paradox: Location Affordability Benefits of TODs TOD households had the largest
disposable income after housing and transportation costs
While housing costs more on a $ per sf basis in TODs, the data reveals a paradox that TODs are actually the most affordable places to live, at least for now. This is due to unit size being smaller in TODs, which means that while home values and rent prices on a per sf basis are higher, the overall prices make them more competitive on an affordability basis. Table 1 shows that the average household in a TOD and Hybrid spent a smaller percentage of their income on housing (24%) compared to TADs (27%) and nationally (33%). Households in TODs also benefitted from the lowest transportation expenditures at 13% of their income, compared to 19% for Hybrids, 22% for TADs and 18% nationally. In total, TOD households had the largest disposable income after housing and transportation costs considering they only spent 37% of their income
on these two categories, as compared to the average American, which spent 51% of their total income on housing and transportation. TOD households have a larger disposable income, after housing and transportation costs, as compared to any other category. Given that the average household in a TOD earns $55,032 (see Table 2), their disposable income after housing and transportation is $34,670. TOD households have nearly $10,000 more in disposable income as compared to the average American. Moreover, despite TOD households earning significantly less than TAD residents, they have more disposable income. Table 3 reveals that TOD households are more likely to be located closer to downtown as compared to Hybrid and TAD households and they are significantly more likely to be renters.
Table 1: Location Affordability in TODs Hybrids and TADs
Station Typol-
Average HH Budget
Average HH Budget %
Average HHBudget % on
ogy
% on Housing
on Transportation
Housing + Transportation
TOD Hybrid
24% 24%
13% 19%
37% 43%
TAD
27%
22%
49%
Nation
33%
18%
51%
Table 3: Distance to Downtown and Percent
Table 2: Income Station
Average HH
Disposable
Typology
income
Income
TOD
$55,032
$34,670
Hybrid
$52,724
$30,052
TAD
$63,848
$32,562
Nation
$51,100
$25,039
TOD Index™
Station Typology TOD Hybrid TAD Nation
Average distance to CBD (miles) 3.9 10.6 15.1 NA
Percent renters 72% 63% 45% 33%
8
Proposed Clear Creek Valley TOD, Denver, CO. Image source: www.theTODgroup.com/projects
Need for Converting Hybrids and TADs into Across the United States, there is the need and opportunity to increase the walkability and density of Hybrids and TADs to turn them into TODs. Federal, state and local communities have already invested significantly in years past to build the rail infrastructure – now communities, developers and investors need to take advantage of building TODs around the stations, which could have social, environmental and economic benefits.
Table 4 shows that the average household in a TOD owns 0.6 vehicles as compared to 1.0 and 1.3 vehicles per household in Hybrids and TADs, respectively. Nearly 58% of households in TODs commute via walking, bicycling or transit as compared to 28.7% of households in Hybrids and 17.6% in TADs.
Table 4: Vehicle Ownership, Commuting and Transit Average HH
Percent
Percent
Percent
Combined Walking,
vehicle
Walk Com-
Bike Com-
Transit
Bicycling and Transit
ownership
muters
muters
Commuters
Commuting
TOD
0.6
17.4%
1.8%
38.6%
57.8%
Hybrid
1.0
10.0%
1.7%
17.0%
28.7%
TAD
1.3
4.2%
1.2%
12.2%
17.6%
Station Typology
Across the nation, approximately 18 million people live within a half-mile of a rail station. However, if all stations were built to a minimum density of 8 units per acre, the country could see new housing to accommodate an additional 26.4 million Americans, which would correspond to 11% of the population by 2050. However, an estimate by the National Association of Realtors revealed that over 80% of the millennial generation wants to live in TOD-like neighborhood. If demand continues to outpace supply, the nation could expect housing prices in TODs to conTOD Index™
tinue grow quickly, and housing affordability, now present in TODs, to quickly become unaffordable as more and more people compete for the limited housing. This presents the nation with a significant opportunity to develop policies that encourage both new housing in Hybrids and TADs, and the opportunity to build new rail infrastructure to encourage growth and connectivity in our cities and regions to create more TODs across the United States.
9
www.TODindex.com
