#BizTrends2019: The exciting fast-growing trend of TOD

Karen Petersen, development director at Tongaat Hulett Developments

In South Africa, there is a significant base of public transit ridership, however those riders generally are economically disadvantaged, while others with higher incomes have access to private cars. The mix of jobs and housing helps reduce transport and opportunity costs for the poor, thereby raising living standards. Economically, transit access spurs demand for new development, enhancing the marketability of transit-oriented locations. This enhanced market value is particularly powerful in lower-income communities and areas that otherwise lack market access. Transportation and accessibility are the key to today’s economies and have become a focus of real estate development. Furthermore, TODs offer a potentially useful concept to drive the restructuring and transformation of South African socio-spatial patterns.

Key components

The key components of transit-oriented development include walkable design with the pedestrian as the highest priority, higher densities (some developers are requesting FARs ranging from 3.0 to 5.0), mixed use developments/zones (both vertical and horizontal), highly walkable distances (approximately 15 minutes), adjacent to or in close proximity to intermodal transport nodes (taxi, rail, bus etc.), and specialised commercial (retail) offerings serving commuters and residents in the form of shops, cafes, etc.

Key benefits

The benefits of such forms of development include:
1. Higher quality of life with better places to live, work, and play,
2. Greater mobility with ease of moving around,
3. More compact living and reduced traffic congestion,
4. Healthier lifestyles with more walking and less stress,
5. Higher and more stable property values, and
6. Increased foot traffic and customers for area businesses.

Integrated transport and urban planning can undoubtedly create value for cities. Occupiers can further derive significant value from being located within close proximity to transport nodes subsequently providing investors with the ability to unlock the value, and harness the accessibility advantages of TOD development.

Factors influencing TODs – critical success factors

But if transit-oriented development is such a good idea, why isn’t it happening in more places? Research has shown that there are several factors influencing this, and the following conclusions have been made:

• There is currently no clear definition of TOD or agreement on desired outcomes, and hence no way of ensuring that a project delivers these outcomes. Key roleplayers and stakeholders in this space need to come to an agreement on the most appropriate definition of this term and the value it can unlock for all parties.
  
• There are currently no standards or systems to help the actors involved in the development process bring successful transit-oriented projects into existence. Without appropriate standards and systems, successful TOD is the result of clever exceptionalism, and beyond the reach of most communities or developers.
  
• Transit-oriented development requires the participation of many actors and occurs in a fragmented regulatory environment, adding complexity, time, uncertainty, risk and cost to projects. A better understanding of the concept itself would assist greatly in reducing (often perceived) constraints around this type of development. Often, perception is the reality.
  
• While transit adds accessibility and value to a place, transit alone is insufficient to drive real estate markets. When other market forces are not present, special actions are needed to ensure that projects go forward that achieve regional land use or housing goals.
  
• TOD can be a path toward advancing socio-spatial transformation, but will require an intentional focus on inclusive TOD. For TODs to be sustainable and successful, incorporating income diversity into TOD projects, will be critical.Moving forward, what is required from key stakeholders, developers, local authorities and other organs of state is effective and efficient collaboration to bring transit-oriented development to scale by ensuring that tools, systems and processes are in place to create stable, mixed-income, mixed-use communities that capture the advantages of location efficiency for families, communities and regions.

  It can and should utilise transit investments to spur a new wave of development that improves housing affordability and choice, revitalises neighbourhoods, and generates sustainable private and public returns.