Encouraging transportation-oriented development in the United States: a case for utilizing "earned as of location" credits to promote strategic economic development.

Author:Jewitt, Matthew G.

TABLE OF CONTENTS INTRODUCTION I. INTRODUCTION TO TRANSPORTATION-ORIENTED DEVELOPMENT (TOD) AND ITS BENEFITS A. What Is TOD, and How Do "Earned-as-of-Location" (EAOL) Credits Advance It? B. Benefits of TOD 1. Health Benefits 2. Economic Benefits 3. Social Benefits II. IMPEDIMENTS OF CURRENT ZONING REGULATIONS TO TOD IN THE UNITED STATES A. Analyzing the Built Environment B. The Obstacles Current Zoning Policies Pose to TOD III. INTRODUCTION TO EAOL ZONING CREDITS AS A METHOD OF ADVANCING TOD A. TOD Hurdles Under Traditional Means of Recourse B. EAOL Credits as a Solution C. Legislatively Created Zoning Regulatory Agencies as the Medium Through Which EAOL Credits Are Granted D. Introduction to the Three-Part Test to Evaluate EAOL Credit Eligibility 1. Part One: Proximity to Transit Centers 2. Part Two: Required Area Improvements 3. Part Three: Reasonable Rate of Return E. Judicial Review IV. POTENTIAL OBSTACLES TO OVERCOME CONCLUSION INTRODUCTION

Midtown East, a roughly seventy-three block neighborhood surrounding Grand Central Terminal in Manhattan, traditionally served as one of the most important business districts in the New York City region. (1) With the average office building in the neighborhood reaching nearly seventy years old, however, and with little Class A office space constructed in the past two decades, the Midtown East office building stock increasingly fails to meet the needs of modern corporate tenants. (2) To ensure that the area would continue to serve as a premier business district, the Bloomberg Administration proposed an ambitious rezoning of Midtown East in 2012 that would allow for the construction of larger office buildings in order to take advantage of the area's transportation infrastructure. (3)

The plan was met with severe resistance from residents and community leaders concerned about overcrowding, and Mayor Bloomberg decided to withdraw the proposal after the New York City Council indicated that it would vote to reject the rezoning initiative. (4) In 2014, a Midtown East steering committee began to meet in another effort to rezone the neighborhood. (5) The new proposal seeks, among other things, to compel developers to make improvements to the area's transportation infrastructure as a requirement for constructing larger buildings. (6) This element contained in the new zoning proposal is an illustration of what is known as "Transportation-Oriented Development." (7)

Transportation-Oriented Development (TOD) is a city- and municipal-planning strategy that focuses on increasing residential and commercial development around transportation centers in an effort to encourage and facilitate public transportation use and decrease automobile dependence. (8) TOD is lauded for its numerous economic, social, and health benefits, which include decreasing pollution and traffic congestion, increasing property values, and fostering safer neighborhoods. (9)

Growth patterns in the United States, however, have typically focused on low-density, auto-centric sprawl. (10) Municipal zoning today largely favors reducing residential and commercial densities, meaning institutional interests are incentivized to exclude compact development, the public's perception regarding the scope and benefits of TOD is often misinformed, and the lack of cooperation between municipalities hinders efficient regional transportation development strategies. (11)

In an effort to promote TOD when faced with such obstacles, including the hurdles presented by the Midtown East rezoning, this Note will argue for the creation of legislatively appointed zoning regulatory agencies that have the authority to grant a property with "earned-as-of-location" (EAOL) credits, which would permit a developer to construct a building in excess of height or floor-area ratio limitations under current zoning regulations if that building is near a transit center.12 EAOL credits would serve as a less formal method of zoning variance that would allow developers to exceed current zoning limitations without having to resort to traditional means of recourse, such as rezoning or seeking a formal zoning variance.

Past research and zoning initiatives aimed at increasing TOD have been wide and varied. (13) Many cities have enacted TOD reforms by decreasing zoning restrictions within a certain proximity to transit centers through a process known as "blanket zoning." (14) This practice is common along transportation corridors like the Rosslyn-Ballston corridor in Arlington County, Virginia. (15) EAOL credits differ from these traditional TOD methods because, unlike blanket zoning around transportation centers, EAOL credits are not designed to provide for large swaths of land with decreased zoning restrictions. Rather, EAOL credits would be applied on a case-by-case basis when the property in question is so inextricably linked to transit infrastructure that its location warrants the construction of larger commercial or residential structures.

The goal of EAOL credits is to advance TOD by promoting economic development in strategic transportation corridors to maintain the integrity, and maximize the investment, of urban transit infrastructure. EAOL credits reflect the philosophy that the benefits provided by transportation infrastructure, and the public policy desire to encourage mass transportation use, are often so substantial that they warrant divergence from zoning that would restrict the full realization of social, economic, and health rewards. (16) EAOL credits are designed to provide developers the opportunity to cultivate lots in proximity to transit centers, based on market demand, in the absence of an otherwise compelling reason that would necessitate rezoning or the issuance of a variance.

Upon application by developers who wish to construct buildings that exceed current zoning limitations, the zoning regulatory agencies would determine, on a case-by-case basis, whether to grant the developer EAOL credits using a three-part test. First, the development site would have to be within close proximity to a transit center. (17) Second, the development would have to include proposals for public improvements. (18) Third, the developer would need to show a likely reasonable rate of return from the proposed development. (19)

An aggrieved party could seek judicial review of the zoning agency's decision. The courts should, however, give deference to the decision of the zoning agencies unless there was a showing of egregious error, bad faith, or some other exigent circumstances. If the zoning agency did not confer EAOL credits on the development site, the developer would be left to resort to traditional variance request processes.

This Note will analyze EAOL credits as a form of TOD. Part I of this Note will introduce TOD, explore the benefits of TOD, and explain how EAOL credits would help maximize the realization of these benefits. Part II will examine how current zoning practices in the United States present obstacles to TOD goals and implementation. Part III will introduce EAOL credits, explain how EAOL credits should be applied, and elaborate on the elements used to determine whether a property would be eligible for EAOL credits. Finally, Part IV will explore factors that threaten the future expansion of TOD and how EAOL credits would help to alleviate those difficulties.


    1. What Is TOD, and How Do "Earned-as-of-Location" (EAOL) Credits Advance It?

      TOD is often understood as a regional planning strategy that orients mixed-use commercial and residential development around or near public transportation facilities. (20) Though no definition captures a universally accepted notion of what TOD is, (21) most interpretations of the term share common traits regarding prioritizing land use to encourage and facilitate mass transit ridership. (22) Often, TOD requires cities to relax zoning regulations to permit construction of high-density buildings in proximity to transit stations. (23) The goal of TOD is to provide communities with alternative means of transportation in an effort to reduce automobile dependency and thus lessen air pollution and traffic congestion. (24)

      EAOL credits are tools that could be used to advance TOD and encourage greater investment in and utilization of transportation infrastructure. By authorizing the construction of larger buildings than otherwise allowed, even within existing transportation zoning overlays, EAOL credits would enhance TOD by increasing development that is oriented toward mass transit. EAOL credits would increase the number of businesses, homes, customers, and residents that have access to, and could utilize, transportation alternatives to automobiles. Driven in large part by the economic resurgence of cities and strong growth among younger cohorts, growth in United States cities has outpaced suburban and rural growth for the first time since the 1920s. (25) EAOL credits would help cities and other communities maximize the potential of harnessing the population and economic growth that favors transportation-based commercial and residential developments. Using EAOL credits as a method to advance TOD would help increase the numerous health, social, and economic benefits derived from effective TOD implementation.

    2. Benefits of TOD

      1. Health Benefits

        TOD provides a multitude of health-related benefits. (26) The direct benefits stem from the opportunity for individuals to increase mobility and live active lifestyles. (27) The rise of auto-centric development correlates with "dramatic increase[s] in the number of overweight adults and children." (28) There are worrisome risks associated with living in sedentary communities. (29) A California study found that "excessive inactivity and the obesity that results from it[] may be a primary contributing factor in the 200,000 annual deaths that are caused by heart disease, cancer, and diabetes." (30)


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