Density requirements are key to TOD, says new report

New analysis by the Urban Institute compares density requirements and other strategies to promote transit-oriented development (TOD) within recently enacted state and provincial laws . The authors observe an uptick of housing growth near transit in 21 U.S. states from 9.7% in 2000-2010 to 13.7% in 2010-2020, and find such growth almost always outpaced statewide housing growth. Policy recommendations include: (1) density requirements, (2) fund public infrastructure, (3) develop on public lands near transit, (4) balance developer requirements with incentives, (5) empower transit agencies to develop housing, and (6) appoint agencies to track progress.

The primary mechanism used to regulate transit-oriented development is a density requirement. The target area for TOD is typically within a half mile of transit stations, or sometimes less for bus routes. Policymakers set density and height requirements within these areas, although a key difference is the mandate for minimum versus average density. For example, California’s Affordable Housing and High Road Jobs Act of 2022 (A.B. 2011) mandates a minimum of 80 units per acre within a half mile of major transit stops. By contrast, Washington H.B. 1491 (2025) mandates a minimum average floor area ratio (FAR) within transit areas. Setting an average density allows municipalities more control of their zoning, but, according to the report, this strategy also creates opportunities to evade the intent of the law. Municipalities may concentrate high density zoning into small areas, leaving most of the surrounding area as low density, thus diminishing opportunities for mid- to large-scale housing near transit.

Additional complementary strategies are highlighted with several examples:

• Density bonus for affordability. Washington H.B. 1491 offers an extra 1.5 FAR bonus for projects wherein all units are considered affordable or workforce housing for 50 years, or dedicated to permanent supportive housing.
• Subsidize TOD. Hawaii H.B. 1409 (2025) allocates funding to counties that zone for the minimum density thresholds within transit areas.
• Invest in infrastructure. Washington H.B. 1491 creates a grant programs to support necessary infrastructure to accommodate development in transit areas.
• Reduce parking minimums. California (A.B. 2097; 2022), Colorado (H.B. 24-1304; 2024) Illinois (S.B. 2111; 2025), Oregon (2022), and Washington (S.B. 5184; 2025) each reduced or eliminated minimum parking requirements, either near transit or more broadly.
• Leverage public land. Illinois  S.B. 2111 (2025) empowers transit agencies to acquire land for TOD.