Three-quarters of U.S. housing shortage could be alleviated by building near mass transit

As much as three-quarters of an estimated 5 million shortfall of residences across the country could be alleviated by building affordable residential property near train and bus stations, according to mass transit executives.

Transit agencies can make a considerable amount of land available for housing by selling land that they already own and by buying land as part of expansion projects. More states are having transportation agencies enable transit-oriented housing development, though some are finding resistance because of limited transportation budgets.

Complicating this strategy is the tendency for the cost of land to soar after a new transit line opens. Thus, agencies should buy property for housing as early as possible when expanding service.

Multiple layers of financing will most likely be needed for developers to buy property. Some developers may need tax credits and grants as well as direct funding from government to make affordable projects viable.

Multiple states have passed laws to encourage more transit-oriented housing development. Maryland, for example, passed a bill this year allowing affordable housing developers a 30% increase in the size of projects when building within three-quarters of a mile of a passenger rail station. The state also limited the ways local governments can slow or block such projects.