“How could cities better connect all their residents to economic opportunity?”

This blog post is written in response to the May 12, 2014 Meeting of the Minds & Living Cities #urbanopportunity group blogging event, which asks, “How could cities better connect all their residents to economic opportunity?”

The geography of opportunity today has changed. People often traverse neighborhoods, cities, counties and even regions to access job opportunities and the essential services (e.g., healthcare, childcare, grocery stores, etc.) needed to support themselves and their families. Low-income communities are often disproportionately affected by this dynamic and cut-off from access to opportunity by sheer distance, limited access to public transit or other means of transportation, and by numerous barriers beyond physical mobility, such as lack of broadband access.

Through our Connect work, Living Cities is deepening our understanding of how to address these barriers and increase the number of low-income individuals with affordable access to job opportunities and essential services. We are currently exploring the following strategies:

1. ALIGNING RESOURCES & POLICIES TO ENSURE THAT NEIGHBORHOODS OFFER BETTER ACCESS

So far, much of Living Cities’ work in this space has focused on advancing equitable transit-oriented development (“equitable TOD”). Equitable TOD aims to ensure that all people along transit corridors, including low-income individuals, have the opportunity to affordably access jobs, housing, health clinics, child care, and other essential services.

As part of this work, Living Cities has partnered with the [Low Income Investment Fund (LIIF) and Enterprise Community Partners (Enterprise) to explore the state of equitable TOD efforts in several western regions – the Bay Area, Denver, Los Angeles and Seattle. As part of this exploration, we worked with our national and regional partners to host Capital Absorption workshops in each region with local leaders from community organizations, philanthropy, developers, lenders, investors and public sector agencies, including transit and housing authorities. These workshops facilitated an open dialogue about participants’ regional vision for equitable TOD and the related resources and policies that together form the “landing pad” for capital investment in support of that vision.

Through these workshops, LIIF and Enterprise identified policies and practices with the potential to help regions go from the planning of mixed-income, transit-oriented communities to their actual build-out. One key practice identified was the important role of regional cross-sector collaboratives, such as Mile High Connects in Denver or the Great Communities Collaborative in the Bay Area, as the keepers of shared visions for equitable TOD and the potential for those collaboratives to aid in implementation. Another is the alignment of resources and investment pipelines so that we no longer make investments in transit expansion, affordable housing development, or community facilities development in isolation from each other.

Similarly, we’re gaining a deeper understanding of how equitable TOD projects are affected by policy decisions often made decades earlier. Through a recent report we commissioned with Will Fleissig of Communitas Development and Ian Carlton of ICRCSteps to Avoid Stalled Equitable TOD Projects – we learned that developers and investors should be involved early on in land use, zoning, and transit expansion decisions to add a practical perspective on how these decisions affect the market feasibility of surrounding land. For example, transit routes are sometimes built along unused former freight rail facilities, which can be purchased at low prices, yet result in surrounding sites being poor prospects for real estate development without significant time and subsidy.

Resource Document: Steps to Avoid Stalled Equitable TOD Projects
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2.INNOVATING CURRENT FINANCIAL PRODUCTS TO SUPPORT EQUITABLE TOD

We’ve also developed a deeper understanding of the potential to enhance current financial products to support equitable TOD. Through research conducted by LIIF and Enterprise – Filling the Financing Gap for Equitable Transit-Oriented Development – and through our joint exploration of the state of TOD in four regions, we have learned about opportunities for financial product innovation that could help make equitable TOD projects a reality.

First, there is potential to better enable mission-driven developers to compete for sites near transit. TOD projects are often more complicated than traditional real estate transactions because of added considerations such as the need to patch together public and private land for large projects, environmental remediation, and others. Providing more flexible predevelopment financing could allow developers the time and patience required to address these challenges, as well as enable them to compete with conventional developers for the sites that best advance their visions.

“TOD projects are often more complicated than traditional real estate transactions…”

Second, there is an opportunity to structure financial products in ways that consider the land value increases that are expected to come with transit expansion. Today many mission-driven developers seeking loans to acquire land have difficulty obtaining the amounts they need because lenders traditionally base lending on historical land values, which do not reflect the likelihood that land values will go up once transit projects go online.

As a collaborative of both philanthropic and financial institutions, Living Cities is interested in understanding the capital resources we can bring to bear in support of improving access to jobs, housing and services through equitable TOD. We have already begun testing financial innovation in this space through our investment in the Bay Area Transit-Oriented Affordable Housing Fund. Moving forward, we hope to continue using the flexible capital we can provide through our Catalyst Fund to support the build-out of equitable TOD in other regions.

3. LOOKING BEYOND MASS TRANSIT TO UNDERSTAND HOW LOW-INCOME PEOPLE ACCESS OPPORTUNITY

While our work to date has been more focused on how low-income people can better connect to jobs and essentials through public transit, we also know that transit is not an end, but rather _a means _for accessing opportunity. So we are also working to understand other ways in which low-income people access job opportunities and essential services. Specifically, we commissioned the Institute for Transportation and Development Policy (ITDP) to explore the potential of new shared transportation models such as bike-share or car-share to increase access for low-income communities.

Though we are still refining the findings from this research, a couple early themes have emerged:

  • The field is still learning about how low-income people currently access jobs and essential services and what their biggest access needs are. Government funding has prioritized access to jobs, but we don’t know to what extent that reflects the actual needs of low-income communities.
  • The business models for bike-share and car-share are not yet proven, especially as they relate to targeting low-income communities. If the services are going to successfully reach low-income people, then we need to know how to make them accessible, affordable and appealing to that market while also making them financially sustainable.
  • Local government plays an important role in helping low-income people benefit from shared mobility innovations. This role ranges from regulating where shared transportation infrastructure goes, to funding these systems and subsidizing individual memberships for those who would otherwise be unable to afford them.

We look forward to sharing further insights from this work in the coming months.

4.CONNECTING LOW-INCOME PEOPLE TO JOBS AND ESSENTIAL SERVICES

Across the country, low-income individuals face significant challenges in navigating the often-sprawling urban landscape to reach the jobs and services they need. At Living Cities, we believe that if one of our goals is to help restore cities as engines of opportunity for low-income people, then we need to address these fundamental issues of access and connectivity to job opportunities and essential services.

We recognize that this is difficult work. Addressing this challenge requires all of us to collaborate across sectors with new partners to exchange ideas and foster innovation. We’re both excited and grateful to be a part of today’s dialogue, and invite others grappling with these issues and questions to engage with us in an ongoing discussion.

Please contact us at achung@livingcities.org and jarias@livingcities.org to join the collaboration.