MBA Joins Trade Groups in Push for Affordable Housing Near Transit

With affordability playing an increasing role in the future of housing, the Mortgage Bankers Association joined more than a dozen industry and consumer trade groups this week in a letter to members of Congress in support of legislation that would promote federal investment in public transportation projects.

The letter expressed support for the Build More Housing Near Transit Act, introduced by Reps. Scott Peters, D-Calif., and Cathy McMorris Rodgers, R-Wash., with several co-sponsors. The bill would change the rating criteria for the Federal Transit Administration’s New Starts program, which funds transit projects such as commuter rail, light rail and bus rapid transit through the Capital Investment Grants Program. The bill would require housing feasibility assessments to determine how and where housing units could be built near new transit stops. The bill would also prioritize local commitment to change land use policies to accommodate market-rate and affordable housing.

“Our bill will maximize federal investment in transit and increase housing options for families across the country,” Peters said. “On top of that, we can protect our environment by increasing transit ridership and getting more cars off the road.”

The trade group letter said the bill seeks to maximize federal investment in fixed-guideway transit by ensuring FTA take a holistic and quantitative approach to evaluating the potential for affordable and market-rate housing development near transit alignments and station areas.

“The small change in language in evaluation criteria that this bill proposes can create a positive impact on the availability of housing for all people in transit-served locations across the country,” the letter said.

The letter noted the U.S. is in the middle of a “severe housing shortage and affordability crisis.” According to Up for Growth National Coalition’s research, from 2000-2015, the country failed to produce the 7.3-million homes needed to keep pace with growth.

“This shortage of homes means families are paying more for rent, often living further away from jobs and critical services, fewer families are becoming new homeowners and the country is not living up to its full economic potential,” the letter said. “Nearly half of the country’s renter households are cost-burdened, spending more than thirty percent of their income on housing. The Build More Housing Near Transit Act would spur the development of much-needed housing near transit locations, fulfilling critical transit, housing, economic development and environmental goals.”

The bill would small but important enhancements to the evaluation criteria for the FTA’s Fixed Guideway Capital Investment Grants program, or Section 5309 grants. The letter noted while real estate and economic development potential is currently part of the evaluation, each factor is considered individually rather than holistically. As a result, projects can receive funding when the potential for affordable and market-rate housing development is nearly impossible, while projects ripe for housing development are denied.

“For example, a city applying for transit dollars could have exorbitant impact fees or restrictive land use policies that effectively prevent housing being built near transit,” the letter said. “Yet these policies alone would not disqualify a project applicant from receiving funding. As a result, the Section 5309 Grant Program’s adjacent goals of enabling ‘transit-supportive land use’ and ‘economic development are often not realized.

The legislation would require project applicants to submit a housing feasibility assessment, which some transit authorities already conduct and would not otherwise be a significant added expense or requirement. Along with other factors, the assessment would be considered holistically and quantitatively in project evaluations. In addition, the Build More Housing Near Transit Act would add “a commitment of local land use policies to accommodate affordable and market-rate housing development associated with the project” to go along with a demonstrated financial commitment from the applicant.

“From smarter planning, to rational housing regulation, to effectively and efficiently spending federal dollars, this legislation represents sound policy that is the product of a thoughtful and collaborative process,” the letter said. “Its passage would mean communities can realize needed housing that uses less land, takes cars off the road and provides housing opportunities for all people closer to jobs, schools, and amenities.”

With MBA, the letter was signed by the American Planning Association, Circulate San Diego, Enterprise Community Partners, Habitat for Humanity, the Housing Advisory Group, Local Initiatives Support Corporation, the National Apartment Association, the National Association of Home Builders, the National Housing Trust, the National Leased Housing Association, the National Multifamily Housing Council, Prosperity Now, the Regional Plan Association and Up for Growth Action.