On April 5th, 2024, the Federal Transit Administration (FTA) released proposed policy guidance for the Capital Investment Grants (CIG) Program. This program outlines the criteria and procedures that proposed public transit projects must meet to be eligible for funding from the FTA. In the following public comment, the Niskanen Center makes recommendations to the FTA which would encourage housing growth by improving public transportation systems.

June 4, 2024

Veronica Vanterpool
Acting Administrator
Federal Transit Administration

1200 New Jersey Avenue, SE
West Building, Room W12-140
Washington, DC 20590

Re: Docket No. FTA-2021-0010, Notice of availability of proposed policy guidance for the Capital Investment Grants program.

Dear Acting Administrator Vanterpool,

The Niskanen Center appreciates the opportunity to provide comments on the Federal Transit Administration’s (“FTA”) proposed policy guidance for the Capital Improvement Grant (CIG) program for eligible public transit projects, FTA-2021-0010, as published in the Federal Register on April 5, 2024, pursuant to 49 U.S.C. 5309(g)(5).

The Niskanen Center is a nonprofit public policy organization that advocates for a government that provides social insurance and essential public goods, fosters market competition and innovation, invests in state capacity, and does not impede productive enterprise. A critical aspect of our mission is expanding housing supply in the United States to enhance access to economic opportunities.1 This goal requires expanded public transportation options to accommodate population growth, making federal infrastructure investments vital for jurisdictions that are committed to more homebuilding but need support in scaling up public services, including mass transit. This rulemaking is an opportunity to better direct federal public transit investment to where it will succeed, and to create an incentive for state and local governments to adopt transit-supportive land use by relaxing stringent zoning and permitting barriers to homebuilding. 

As outlined in the notice of proposed policy guidance published on April 5th, the FTA seeks public comment on proposed reforms to the CIG program generally, as well as the Small Starts (SS) and New Starts (NS) project scoring criteria specifically.2 This comment will focus mostly on the proposed changes to the SS and NS project rating criteria, and offer suggestions we hope will shape the FTA’s strategy for the program as a whole. 

  1. Housing growth and successful public transportation investments are closely linked 

Transit systems inherently serve transit-dependent populations, providing essential access to opportunities and amenities, as highlighted in previous comments to this agency.3 Though successful transit will provide enough frequency and coverage to attract riders from all walks of life, people who depend exclusively on transit have comparatively low incomes,4 and thus high-quality transit service uniquely advances economic opportunity for marginalized populations.5

Transit systems are engines of social mobility – connecting people with opportunities and amenities for the low cost of a single bus or train fare.6 In exchange for connecting a wide range of riders with the places they want to go, transit systems receive robust fare revenues that allow additional service or reduced operating subsidies. Thanks to this virtuous cycle of a growing ridership base with improving services, transit systems accrue greater local and regional commitments from decision-makers and their constituents. This in turn makes it easier to sustain or expand services, especially after the pandemic shock to mass transit finances, to historically underserved users in high-opportunity communities and in high-need communities alike.7 

The above dynamic can only be achieved, however, when jurisdictions allow for more housing density near transit investments, ensuring a critical mass of potential riders will take advantage of these new options. Transit systems, their operating budgets, and the public benefit from an ample supply of trip origins and destinations within walking distance of transit stops. Typically, a fixed guideway transit system requires a housing density of at least 15 dwelling units per acre for adequate financial sustainability.8 Yet government policies often hinder the construction of more dense housing options close to public transportation routes. 

The FTA can help communities achieve an optimal pairing of successful housing and transportation policies by encouraging land use reforms that drive robust ridership. Directing federal resources to transit projects in corridors where abundant housing and commercial opportunities are (or can be built by-right) sets transit systems up for operational success and fiscal health. 

We thus applaud FTA for broadly recognizing the importance of housing density near mass transit corridors in evaluating the SS and NS proposals.9 The current CIG land use scoring assesses population density and total existing employment when evaluating proposed investments. Additionally, the proposed CIG guidance would further reward pro-growth housing policies by adding land use factors, including supportive zoning, into its separate economic development scoring. These current metrics and proposed changes make clear to jurisdictions that active support of a larger housing stock improves their pursuit of competitive federal transit dollars–creating a vital incentive for local decision makers to remove barriers to increased housing density. 

Moreover, a core focus in FTA’s land use scoring on current or potential housing density significantly advances the pursuit of Equity Action Plan goals articulated by the Department and administration–even where this housing is primarily market-rate.10 This is supported by the following: 

  1. New transportation investments allow high opportunity, high demand regions to expand their housing stock, reducing displacement of existing low-income residents and allowing for more movement to economic opportunity.11
  2. The creation of high-volume station corridors near housing density improves the overall sustainability of mass transit systems, which enhances their ability to improve service to underserved populations.12 
  3. Similarly, the construction of dense market-rate housing and commercial real estate near transit investments bolsters regional economic growth, creating a larger tax base to invest in education, affordable housing, and other equity-enhancing strategies.13
  4. Reliable transit connections to economically dynamic population centers support robust and expanded labor markets, allowing low-income workers across a given region to easily commute to meaningful employment opportunities in these areas.14 

In sum: The total existing and planned density of jobs and homes near mass transit is the most important factor in driving successful transit ridership, advancing economic opportunity, and in leveraging federal transit investments to incentivize state and local governments to relax their growth controls and alleviate the housing shortage. To the fullest extent possible, FTA should not dilute the importance of density in the definition and scoring of transit-supportive land use.

  1. FTA should shift away from its current use of LBAR share in land use scoring 

There are critical opportunities for FTA to further promote the linked development of housing growth and transportation investments. An unfortunate but self-imposed land use scoring policy comes from the FTA’s most recent policy guidance document in January 2023.15 Currently, the agency rewards projects that serve a greater share of legally binding affordable housing (LBAR) compared to county-wide averages. As we outline further in our comment in Section III, better metrics are available for FTA to identify how to direct CIG dollars to underserved, low-income communities.

We are concerned that prioritizing the share of LBAR served by a project will tilt the scoring incentives away from projects that serve more people and toward projects that potentially serve fewer people. For instance, low-density suburbs with 50 percent of housing units subject to inclusionary zoning (IZ) mandates would rank higher than high-density neighborhoods with lower IZ shares but more total low-income units. Another weakness of this approach is it would leave behind at-risk people who do not live near high concentrations of LBAR housing. For example, even within the universe of subsidized housing, LBAR also cannot account for Section 8 voucher recipients in market-rate housing, and therefore neglects one of the most essential levers used by public policy makers to provide affordable housing. This is not a trivial distinction: federally-assisted LBAR units in the Low Income Housing Tax Credit Program only recently surpassed the number of Section 8 recipients.16

We are further concerned that this policy will entrench an unfortunate stigma that transit is primarily for the least fortunate rather than a helpful tool for many people’s transportation needs.17 As we highlighted earlier, transit is an engine for social mobility and accessing opportunity, and it performs this role best in the long term when it provides this benefit to the most people. 

III. FTA should proceed carefully in new additions to land use scoring 

The new FTA proposed guidance presents several updates to land use scoring to enhance the reach of CIG grants to underserved communities. First, the proposed guidance incorporates the Census Community Resilient Estimate (CRE) tool into land use scoring. Second, the notice of availability of proposed guidance asks whether the USDOT Equitable Transportation Community (ETC) Tool should also be incorporated into this scoring or substitute for CRE. 

We advise the replacement of the current LBAR share factor with either the Census CRE or a modified version of the ETC that does not incorporate certain disaster-related variables. Relative to the current LBAR share metric, both tools provide a far clearer understanding of the scope of underserved populations located near potential CIG investments. We are concerned that if ETC’s environmental, climate, and disaster risk burden variables were incorporated into the assessment of CIG applications, it would unintentionally encourage transit projects in places where disproportionately high disaster or pollution risks likely undermine the cost, feasibility, safety, and long-term fiscal sustainability of mass transit. Pushing transit investments in areas marked, for instance, by significant wildfire and flooding zones would not necessarily serve vulnerable communities well or be a prudent use of limited competitive federal transit grant dollars. 

Furthermore, FTA should add only one of the above assessments into CIG’s land use scoring. Adding both factors would dilute the weight of actual land use–population density and employment density–within the Land Use score. This risks undermining the goal of connecting transit investments to housing density, which we previously noted is the most essential factor for pursuing equity goals and for ensuring the long-term health of mass transit systems. 

IV. Additional comments on walkability and economic development scoring 

We conclude with several additional comments on the proposed CIG guidance. We commend FTA’s intention to reward CIG applicants whose station corridors are marked by high levels of walkability. To assess this metric, the proposed guidance incorporates the EPA National Walkability Index.18 While this tool is in the public domain and can help identify the least walkable areas, its lack of precision has difficulty differentiating between auto-centric areas and places with the highest degrees of walkability. Recent research notes the “limited applicability in planning and design practice” of conventional walkability indices.19 Newly developing commercially available tools built on machine vision of actual streetscapes suggest more accuracy but may not be appropriate given their proprietary nature. We advise FTA to hold off on incorporating walkability into CIG policy guidance until the emergence of an effective, publicly available data resource that can be used by project applicants and FTA evaluators.

In future policymaking, some of these measures should be incorporated into the FTA’s ridership forecasting tool known as “STOPS”. Variables like walkability are important for attracting ridership–and should be captured by an accurate ridership forecasting tool. Insofar as STOPS is unable to account for them–if STOPS, for example, cannot tell that the walking path to and from a station is in fact cut short by an impassable highway–then STOPS itself should be upgraded to account for this. The Transportation Research Board’s transit service manual recommends a “network connectivity index” adjusted for terrain, population characteristics, and street crossing difficulty in standard GIS software to calculate actual walking access to transit stops.20 

Finally, FTA’s addition of land use factors in its economic development scoring presents a further opportunity to proactively direct CIG dollars to jurisdictions most committed to homebuilding. Regarding FTA’s request for input on these scoring changes, we strongly advise supportive zoning be given sole or higher weight relative to other factors. 

Following these recommendations, FTA can better exercise its broad statutory authority to support the consistent pairing of mass transit investments and housing density–improving access to opportunity, incentivizing land use reform, and placing transit systems on sound fiscal footing. Thank you for the opportunity to comment on this CIG proposed policy guidance.

Sincerely,

Alex Armlovich
Senior Housing Policy Analyst
Niskanen Center
aarmlovich@niskanencenter.org
1201 New York Ave. NW, Suite 200B
Washington, D.C. 20005
(347)-918-4547

Andrew Justus
Housing Policy Analyst
Niskanen Center
ajustus@niskanencenter.org
1201 New York Ave. NW, Suite 200B
Washington, D.C. 20005
(737)-787-8074

David Jimenez
Social Policy Government Affairs Manager
Niskanen Center
djimenez@niskanencenter.org
1201 New York Ave. NW, Suite 200B
Washington, D.C. 20005
(412)-320-0766

Footnotes:

  1. See, e.g: Alex Armlovich, Andrew Justus, An agenda for abundant housing, Niskanen Center, February 28, 2023. https://www.niskanencenter.org/wp-content/uploads/2023/02/An-agenda-for-abundant-housing.pdf and Alex Armlovich, Andrew Justus, Statement for the Record before the U.S. Senate, Committee on Banking, Housing, and Urban Affairs, Subcommittee on Housing, Transportation, and Community Development, September 12, 2023. https://www.niskanencenter.org/statement-for-the-record-before-the-u-s-senate-committee-on-banking-housing-and-urban-affairs-subcommittee-on-housing-transportation-and-community-development/ ↩︎
  2. Guidance: Capital Investment Grant Program, Federal Transit Administration, April 5, 2024. https://www.regulations.gov/document/FTA-2021-0010-0106 ↩︎
  3. See, e.g., Metra, Comment FTA-2021-0010-0028, October 12, 2021. https://www.regulations.gov/comment/FTA-2021-0010-0028; and Jarrett Walker and Associates, Comment FTA-2021-0010-0023, October 12, 2021. https://www.regulations.gov/comment/FTA-2021-0010-0023 ↩︎
  4. Hugh M. Clark, et al., Who Rides Public Transportation, p.4, American Public Transportation Association, January, 2017. https://www.apta.com/wp-content/uploads/Resources/resources/reportsandpublications/Documents/APTA-Who-Rides-Public-Transportation-2017.pdf ↩︎
  5. Raj Chetty, et al., Where is the Land of Opportunity? The Geography of Intergenerational Mobility in the United States, NBER, June, 2014. https://opportunityinsights.org/wp-content/uploads/2018/03/mobility_geo.pdf ↩︎
  6. Mikayla Bouchard, Transportation Emerges as Crucial to Escaping Poverty, New York Times, May 7, 2015. https://www.nytimes.com/2015/05/07/upshot/transportation-emerges-as-crucial-to-escaping-poverty.html; and Laura Ducceschi and Erin Mierzwa, The role of transportation in fostering economic mobility in northeastern Pennsylvania, Federal Reserve Bank of Philidelphia, Fall 2017. https://www.philadelphiafed.org/community-development/the-role-of-transportation-in-fostering-economic-mobility-in-northeastern-pennsylvania ↩︎
  7. In the Transportation Research Board’s Transit Capacity and Quality of Service Manual, calculated from pre-pandemic data, the minimum density for even just hourly transit is 5 homes per net buildable acre. High quality bus service (every 10 minutes) is only viable at or above 15 homes per net acre. Transit Capacity and Quality of Service Manual, Third Edition, Transportation Research Board, 2013. https://nap.nationalacademies.org/read/24766/chapter/1#3 ↩︎
  8. Federal Transit Administration, Capital Investment Grants Policy Guidance, p.13 and p. 18, January, 2023. https://www.transit.dot.gov/sites/fta.dot.gov/files/2023-01/CIG-Policy-Guidance-January-2023.pdf ↩︎
  9. Ibid, 17. Current CIG land use scoring considers both “station area population densities” and “total employment served by the project”. ↩︎
  10. Federal Transit Administration, USDOT Equity Action Plan, February 2024. https://www.transportation.gov/priorities/equity/equity-action-plan ↩︎
  11. Xiaodi Li, Do new housing units in your back yard raise your rents?, Journal of Economic Geography, September 2, 2021. https://academic.oup.com/joeg/article-abstract/22/6/1309/6362685?redirectedFrom=fulltext; and Andrew Justus, Sprawl can be good, actually: expand the metropolitan commute zone to grow housing supply, Niskanen Center, July 12, 2023. https://www.niskanencenter.org/sprawl-can-be-good-actually-expand-the-metropolitan-commute-zone-to-grow-housing-supply/#:~:text=We%20often%20imagine%20sprawl%20as,grow%20a%20region’s%20housing%20supply. ↩︎
  12. M. Nolan Gray, US needs more housing to support public transit recovery, Bloomberg City Lab, January 3, 2024. https://www.bloomberg.com/news/articles/2024-01-03/us-needs-more-housing-to-support-public-transit-recovery ↩︎
  13. Edward Glaeser, Agglomeration Economics, National Bureau of Economic Research, February, 2010. https://www.nber.org/system/files/chapters/c7977/c7977.pdf ↩︎
  14. Maysen Yen, Does rapid transit and light rail infrastructure improve labor market outcomes?, Census Bureau – Center for Economic Studies, April, 2024. https://www2.census.gov/library/working-papers/2024/adrm/ces/CES-WP-24-22.pdf ↩︎
  15. Federal Transit Administration, Capital Investment Grants Policy Guidance, p.13 and p. 18, January, 2023. https://www.transit.dot.gov/sites/fta.dot.gov/files/2023-01/CIG-Policy-Guidance-January-2023.pdf ↩︎
  16. See: Section 8’s big, clumsy brother: How the Low Income Housing Tax Credit works, Niskanen Center, December 2022: https://www.niskanencenter.org/section-8s-big-clumsy-brother-how-the-low-income-housing-tax-credit-works  ↩︎
  17. Overcoming the stigma of riding the bus, University of North Carolina – Charlotte, August 23, 2021. https://ui.charlotte.edu/story/overcoming-stigma-riding-bus/ ↩︎
  18.  National Walkability Index, EPA, May 16, 2024. https://www.epa.gov/smartgrowth/smart-location-mapping#walkability ↩︎
  19.  “Despite its wide use across disciplines, the conventional walkability index has limited applicability in planning and design practice because it shows poor agreement with pedestrians’ subjective assessment, which is an important measure of pedestrian-friendliness. One of the key reasons is that the index largely ignores micro-level features that are important in describing walking behavior.”
    See: https://www.sciencedirect.com/science/article/abs/pii/S2210670723005073  ↩︎
  20.  See: “Transit Capacity and Quality of Service Manual, Third Edition”, pages 5-11 through 5-17. https://www.trb.org/Main/Blurbs/169437.aspx  ↩︎