A light rail train in Hong Kong. (Image: public domain)
One of Hong Kong’s transit operators, MTR (Mass Transit Railway), has long used a classic value capture model to fund greater service and system expansions using profits from land development above its rail stations. To maximize profits, these housing projects have typically been of the luxury variety. But MTR and government officials are considering a partnership on a few specific sites that would continue to provide profits to support MTR’s operations and system expansions, while also adding in a mix of affordable housing in the world’s most expensive housing market.
The crux of the partnership is that these specific developments—which would otherwise include tens of thousands of private, market rate housing units—would need to be profitable enough to support an expansion of the line estimated to cost 5.5 billion Hong Kong dollars in 2013 prices (approximately $70 million US). The MTR is a listed company on the Hong Kong stock exchange so investors will expect a profit. The plans for public housing along the extension are likely to be cast as “social responsibility.”
Transit agencies and public railways like Amtrak in the United States are typically not granted this kind of control over station development. While joint development occurs on agency-owned land, they are not publicly traded companies and are more beholden to regional transportation and planning goals where profit is not the motivation.
However, there are still lessons to be learned from MTR’s experience of successfully developing land to support the growth of the railway and their recent discussions about public housing. When government invests public dollars in transit, it’s right to expect that those investments should bring the maximum amount of benefits, yet the potential rewards can be stifled by zoning restrictions or a lack of cooperation between government agencies.
At TODResources.org, TCRP Report 182 discusses how to link transit agencies and land use decision makers in a way that connects them. If agencies can understand what levers they need to pull to support transit investments with good land use decisions, those investments will pay the community dividends for years to come.
Recent TOD news
Here are a few things that have been happening this week with TOD projects across the country.
- Fort Worth TOD back on track (Star-Telegram)
- As Toronto evolves, it looks for more TOD and a sense of place (Curbed Toronto)
- St. Paul’s 20 year plan calls for more development at 56 major intersections (Pioneer Press)
- Scottish Government urged to back workplace parking tax (Eltis)
- Google has spent almost $233 million on sites for its Diridon transit village (San Jose Mercury News)
- Tupperware sells Orlando land for future TOD (Orlando Business Journal)