Financing transit-oriented development (TOD) infrastructure presents several challenges. Revenue-generating infrastructure like parking and toll roads can be funded through user fees, but non-revenue generating assets require other funding sources. A successful TOD financing strategy considers the local real estate market context, infrastructure needs and costs, a phasing plan, and potential funding sources. Tools for funding TOD infrastructure include various types of debt, credit assistance, direct fees, value capture, grants, equity, and public-private partnerships. Real estate development around TOD zones faces challenges like the need for affordable housing and assembling land from multiple owners. Potential solutions include regulatory reforms, development control norms, slum redevelopment, social and economic integration, and
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Financing Transit Oriented Development (TOD)
1. Financing | Allied Developments | Challenges
Sumeet Sharma
Asst. Vice President
Infrastructure Services
TRANSIT
ORIENTED
DEVELOPMENT
- The Indian context
Source – www.indianexpress.com
2. Outlines
TOD – Complications
Aspect of financing TOD Infrastructure
Tools for Funding
Real Estate & Challenges
Probable Solutions
Questions | Suggestions
3. Financing TOD Infrastructure – Aspects
Revenue Generating Infra – Parking | Toll Roads | Bridges
Non revenue generating Infra – sidewalks | bike trails | local roads | parks
TOD Infra Financing Strategy: -
• VISION AND GOAL for the entire area rather than a particular project
• Assessment of LOCAL REAL ESTATE market context
• Key infrastructure NEEDS and associated COSTS
• PHASING PLAN for infrastructure improvements
• INSTITUTIONAL MECHANISM for implementing the project
• Identification and assessment of POTENTIAL FUNDING SOURCES tailored to
accommodate above.
4. Tools for Funding TOD Infrastructure
• User Fees &
Transportation Utility
Fees
• Congestion Pricing
DEBT CREDIT ASSISTANCEDIRECT FEES
VALUE CAPTURE GRANTSEQUITY
• Term loan /
commercial debt from
financial institutions
• Bond Financing
• Grants / Terms Loans
/ Soft Loans from
Donor Agencies
• Public Private
Partnerships
• Infrastructure
Investment Funds
• Development / Impact
Fee
• Special Districts
• TIF
• Joint Development
• Budgetary provisions
for infrastructure
development by
Central / State / local
governments
5. Real Estate & Challenges
PRIORITY
TRANSIT
CORRIDOR
TOD ZONETOD ZONE SUB-URBAN
AREA
PERIPHERAL
AREA
SUB-URBAN
AREA
PERIPHERAL
AREA
BASELINE – DISTANCE IN KMs BASELINE – DISTANCE IN KMs
MEASUREMENT
UNITS
NEED
AFFORDABILITY
6. TOD - Complications
2.Already developed high density residential and commercial markets
1. Variant transit stations with different development patterns and market strengths
3.Assembling of land from multiple owners – government as well as private
4. Need for affordable housing, social and economic inclusiveness
6. Need for affordable housing, social and economic inclusiveness
5. Difficulty in recovery of revenues in terms of user fees
7. Need to put in place funding sources before inviting private investments
7. Probable Solutions
Regulatory reforms to control the use and parking of personal vehicles
Improvised development control norms for the TOD zone
Enforce in-situ slum redevelopments to the extent possible
Integrate TOD and allied projects with social and economic reform for increased quality of life
Restrictive FAR with incentivized development norms for premium housing in peripheral zones
Increased incentives for affordable housing in TOD zones
Effective use of Transferable Development Rights (TDRs) for public development in TOD zone
