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TRANSCRIPT
TOD Index™ December 2014
www.TODindex.com
Acknowledgements:
Dr. Renne would like to thank Tara Tolford for her work on the GIS data analysis and for
assistance in the production of this report.
Creator & Author:
Dr. John L. Renne, Ph.D., AICP Founder and Managing Director, The TOD Group
Associate Provost, Director and Associate Professor, University of New Orleans Senior Visiting Research Associate, University of Oxford
[email protected] 504.717.1744
For more details on the methodology, please visit: www.TODindex.com
2013 :
Year of the
nation’s highest
transit ridership
in 57 years at
over 10.7
billion trips
Contents:
Overview 1
Criteria for Categorizing
Station Areas
1
TOD Index—Home Values 4
TOD Index—Rental Values 6
The Affordability Paradox:
Location Affordability
8
Need for Converting
Hybrids and TADs into
9
Transit-Oriented Developments (TODs) are defined as walkable, mixed-
use and dense communities within a half-mile of a train station while Transit-Adjacent Devel-
opments (TADs) refer to station areas that are characterized by low-density, auto-oriented
land uses. Research indicates that gross housing densities should be at least 8 units per acre
(which equals 4,000 households within an area radiating a half-mile from a train station) in
order to support transit ridership. ¹ Walkscore.com rates communities with a 70 or greater
(out of a possible 100 score) as Very Walkable or a Walker’s Paradise (above 90).
The TOD Index™ provides a new benchmark to track both home and rental values
in train station areas across the United States. The TOD Index includes stations categorized
as TODs, Hybrids and TADs. Each category is also benchmarked against the national Zillow
Home Value Index (ZHVI) or the national Zillow Rent Index (ZRI).
Evaluating the market performance of TODs relative to national trends is of significant value
because of the following factors influencing 21st century real estate trends:
The national housing market has undergone significant shifts following the 2008
recession
A growing percentage of Americans, including a large percentage of the millen-
nial generation prefer to live in urban areas with high-quality transit access
Investors, developers, planners and policy-makers are looking to identify metrics
to measure the success of TOD across the United States
The TOD Index allows for comparing performance in the for-sale and rental housing markets
from the neighborhood to the national scales.
1 See Renne and Ewing, 2013 for more information: http://scholarworks.uno.edu/cgi/viewcontent.cgi?article=1016&context=unoti_pubs 2 See: http://www.apta.com/mediacenter/pressreleases/2014/Pages/140310_Ridership.aspx
Overview
Criteria for Categorizing Station Areas
The United States has approximately 4,000 passenger train stations that are an integral part
of serving over 10.7 billion transit trips in the United States in 2013, the highest ridership in
57 years.2 The following criteria are used to classify stations across in the United States along
a TOD–Hybrid–TAD spectrum.
1,441 stations across the US are categorized as TOD Stations, which meet the fol-
lowing criteria:
1. Gross housing density must be greater than 8 units per acre across the half-mile
station precinct
AND
2. The average Walk Score for the station area must be 70 or greater
1 TOD Index™
Examples of TODs include Portland’s Pioneer
Square and Bethesda,
Maryland
1,180 stations across the US are categorized as
Hybrid stations which are defined as:
1. Gross housing density must be
greater than 8 units per acre
across the half-mile station
precinct
OR
2. The average Walk Score for the
station area must be 70 or greater
Examples of Hybrids include Dallas’ Mockingbird Station and Denver’s Englewood Station
Pioneer Square Transit Mall:
Portland, OR
Gross Housing Density: 14.84 units per acre
Walkscore: 100
Index Category: TOD
Image source: https://www.planning.org/greatplaces/gallery01/image20.jpg Bethesda, MD
Metro Station
Gross Housing Density: 9.69
units per acre
Walk Score: 94
Index Category: TOD
Image source: Google Street View, September 2014
Image source: http://www.denver-cityscape.com/images/denver4305-53.jpg
Englewood
Station
Denver, Co
Gross Housing Density:
2.43 units per acre
Walk Score: 83
Index Category: Hybrid
2 TOD Index™
1,775 stations across the US are categorized as
TAD stations which do not meet either
criteria for a TOD or Hybrid.
Examples of TADs include the station at Baltimore’s
BWI airport and Cisco Station in San Jose
Mockingbird Station
Dallas, TX
Gross Housing Density: 3.5 units per acre
Walk Score: 85
Index Category: Hybrid
Image source: http://madisonmarquette.com/portfolio/case-studies/mockingbird-station/
Image source: http://www.bizjournals.com/baltimore/print-
edition/2011/02/18/office-retail-space-could-be-part-of.html?s=image_gallery
BWI Airport Station
Baltimore, MD
Gross Housing Density: 0.0 units per acre
Walk Score: 29
Index Category: TAD
Image source: Google Street View, September 2014
Cisco Station:
San Jose, Ca
Gross Housing Density:
.47 units per acre
Walk Score: 20
Index Category: TAD
3 TOD Index™
during the most recent economic recovery,
which began January 2012, the growth of
home values in TODs has significantly out-
paced all other categories. During the 32
month period, average home values in TODs
has grown by 37%, as compared to 27%, 24%
and 20% in Hybrids, TADs, and the national
average, respectively. This means that the
growth of home values in TODs have out-
paced the growth of home values nationally
by a margin of 1.85-to-1.
TOD Index — Home Values
In August 2014, the average home value in
TODs was $518 per sf. The average home
value in Hybrids was $251 per sf and the
average home value in TADs was $196 per
sf. This compares to the average national
ZHVI for that same month at $149 per sf.
Therefore, the average home in a TOD was
worth 3.48 times more than the average
home in the United States.
Since 1996, homes in TODs have appreciated
about 300% as compared to 168% for Hy-
brids, 126% for TADs and 103% for the na-
tional average. When looking at the data
Since, 1996, growth of
home values in TODs
has outpaced the
growth of home values
nationally by a margin
of nearly 2-to-1.
4
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Home Values$ per s.f.
TOD Hybrid TAD National Zillow Median Home Value Index (ZHVI)
TOD Index™
100
150
200
250
300
350
400
Apr
-96
Aug
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Aug
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TOD Index - Home Values April 1996 - August 2014
TOD Hybrid TAD National Zillow Median Home Value Index (ZHVI)
100
105
110
115
120
125
130
135
140
Jan
-12
Feb
-12
Ma
r-1
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TOD Index - Home ValuesJanuary 2012 - August 2014
TOD Hybrid TAD National Zillow Median Home Value Index (ZHVI)
5 TOD Index™
-0.5%
0.0%
0.5%
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1.5%
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4Previous Month Percentage Change in Rental Values
TOD National Zillow Rent Index (ZRI)
In August 2014, the average apartment in TODs rented for $2.28 per sf. Average rent in Hy-
brids was $1.36 per sf and the average rent in TADs was $1.19 per sf. This compares to the
average national ZRI for that same month at $0.89 per sf. Therefore, the average apartment
in a TOD rented for 2.56 times the average rental unit in the United States.
When looking at the data since January 2012, the growth of rent values in TODs has signifi-
cantly outpaced all other categories. During the 32 month period, average rent values in
TODs have grown by 18%, as compared to 13%, 11% and 8% in Hybrids, TADs, and the
national average, respectively. This means that the growth of rent prices in TODs has out-
paced the growth of rent prices nationally by a margin of 2.3-to-1.
TOD Index — Rental Values Since January
2012, the
growth of rent
values in TODs
has significantly
outpaced all
other
categories.
0.0%
0.2%
0.4%
0.6%
0.8%
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1.2%
1.4%
1.6%Fe
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Previous Month Percentage Change in Home Values
TOD National Zillow Median Home Value Index (ZHVI)
6 TOD Index™
$-
$0.50
$1.00
$1.50
$2.00
$2.50
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Rental Values$ per SF
TOD Hybrid TAD National Zillow Rent Index (ZRI)
100
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TOD Index - Rental ValuesJanuary 2012 - August 2014
TOD Hybrid TAD National Zillow Rent Index (ZRI)
7 TOD Index™
While housing costs more on a $ per sf basis in
TODs, the data reveals a paradox that TODs are
actually the most affordable places to live, at least
for now. This is due to unit size being smaller in
TODs, which means that while home values and
rent prices on a per sf basis are higher, the overall
prices make them more competitive on an afforda-
bility basis.
Table 1 shows that the average household in a
TOD and Hybrid spent a smaller percentage of
their income on housing (24%) compared to TADs
(27%) and nationally (33%). Households in TODs
also benefitted from the lowest transportation
expenditures at 13% of their income, compared to
19% for Hybrids, 22% for TADs and 18% nationally.
In total, TOD households had the largest disposa-
ble income after housing and transportation costs
considering they only spent 37% of their income
The Affordability Paradox: Location
Affordability Benefits of TODs
TOD
households
had the largest
disposable
income after
housing and
transportation
costs
Table 1: Location Affordability in TODs Hybrids and TADs
Station Typol-
ogy
Average HH Budget
% on Housing
Average HH Budget %
on Transportation
Average HHBudget % on
Housing + Transportation
TOD 24% 13% 37%
Hybrid 24% 19% 43%
TAD 27% 22% 49%
Nation 33% 18% 51%
Table 2: Income
Station
Typology
Average HH
income
Disposable
Income
TOD $55,032 $34,670
Hybrid $52,724 $30,052
TAD $63,848 $32,562
Nation $51,100 $25,039
Table 3: Distance to Downtown and Percent
Station
Typology
Average
distance to
CBD (miles)
Percent
renters
TOD 3.9 72%
Hybrid 10.6 63%
TAD 15.1 45%
Nation NA 33%
on these two categories, as compared to the aver-
age American, which spent 51% of their total in-
come on housing and transportation.
TOD households have a larger disposable income,
after housing and transportation costs, as com-
pared to any other category. Given that the aver-
age household in a TOD earns $55,032 (see Table
2), their disposable income after housing and
transportation is $34,670. TOD households have
nearly $10,000 more in disposable income as
compared to the average American. Moreover,
despite TOD households earning significantly less
than TAD residents, they have more disposable
income. Table 3 reveals that TOD households are
more likely to be located closer to downtown as
compared to Hybrid and TAD households and they
are significantly more likely to be renters.
8 TOD Index™
Across the nation, approximately 18 million people live within a
half-mile of a rail station. However, if all stations were built to a
minimum density of 8 units per acre, the country could see new
housing to accommodate an additional 26.4 million Americans,
which would correspond to 11% of the population by 2050.
However, an estimate by the National Association of Realtors
revealed that over 80% of the millennial generation wants to
live in TOD-like neighborhood. If demand continues to outpace
supply, the nation could expect housing prices in TODs to con-
tinue grow quickly, and housing affordability, now present
in TODs, to quickly become unaffordable as more and
more people compete for the limited housing. This pre-
sents the nation with a significant opportunity to develop
policies that encourage both new housing in Hybrids and
TADs, and the opportunity to build new rail infrastructure
to encourage growth and connectivity in our cities and
regions to create more TODs across the United States.
Across the United States, there is the need and opportunity to
increase the walkability and density of Hybrids and TADs to turn
them into TODs. Federal, state and local communities have al-
ready invested significantly in years past to build the rail infra-
structure – now communities, developers and investors need to
take advantage of building TODs around the stations, which
could have social, environmental and economic benefits.
Need for Converting Hybrids and TADs into
Table 4: Vehicle Ownership, Commuting and Transit
Station
Typology
Average HH
vehicle
ownership
Percent
Walk Com-
muters
Percent
Bike Com-
muters
Percent
Transit
Commuters
Combined Walking,
Bicycling and Transit
Commuting
TOD 0.6 17.4% 1.8% 38.6% 57.8%
Hybrid 1.0 10.0% 1.7% 17.0% 28.7%
TAD 1.3 4.2% 1.2% 12.2% 17.6%
Table 4 shows that the average household in a TOD owns
0.6 vehicles as compared to 1.0 and 1.3 vehicles per house-
hold in Hybrids and TADs, respectively. Nearly 58% of
households in TODs commute via walking, bicycling or
transit as compared to 28.7% of households in Hybrids and
17.6% in TADs.
Proposed Clear Creek Valley TOD, Denver, CO. Image source: www.theTODgroup.com/projects
9 TOD Index™
www.TODindex.com