How can our nation drive inclusive growth and reduce inequality? For one thing, the projected $2 trillion in public and private investment for transportation and housing over the next decade could be a game-changer. A new paper I have co-authored with Audrey Choi, Managing Director and Head of Morgan Stanley Global Sustainable Finance, “Equitable Transit-Oriented Development: A New Paradigm for Inclusive Growth in Metropolitan America” proposes we take a new look at the potential of equitable transit-oriented development to create more inclusive, prosperous cities and communities.
For more than 30 years, community development has invested in affordable housing, schools, child care, small businesses and other community-building services across the country. But these investments were made in silos without fully appreciating the inter-dependence of each element in getting to the big picture: better lives and stronger, more equitable communities. It is now clear that each of these elements reinforces one another and must be coordinated to create great places to live, learn, work and play. Inclusion is at the heart of the matter.
eTOD builds affordable housing and other community services around transit stations, as a strategy to ensure all people benefit from these investments.
Major investments on the horizon have a chance to make a difference in this. Over the next decade, investment in public transportation in the United States is likely to exceed $1 trillion. Federal investment in low-income housing programs will likely exceed $500 billion over the same period, and will leverage many times more in private capital. It is up to both public and private investors to make sure that these funds are used in ways that break down isolation and segregation, creating a more equal society.
One of the most promising strategies in our toolkit is equitable transit-oriented development (eTOD). eTOD builds affordable housing and other community services around transit stations, as a strategy to ensure all people benefit from these investments. The Low Income Investment Fund (LIIF) and Morgan Stanley’s new paper explores the potential economic and social benefits of eTOD.
eTOD strategies have been shown to spur economic growth and social inclusion, reduce greenhouse gas emissions and create more healthy, walkable communities. New research also suggests that if used to reduce social isolation and enable poor children to grow up in connected, economically diverse neighborhoods, eTOD can be an effective tool for helping them escape poverty as adults.
Meeting eTOD’s capital needs is cutting edge work and requires collaboration between public, philanthropic and private investors to develop innovative financing solutions. Investors like Morgan Stanley and LIIF are engaged in developing innovative capital tools to break new ground for capital providers and to offer scalable eTOD approaches in cities and regions throughout the United States. As a result of these efforts, eTOD models are emerging in diverse regions throughout the U.S. — Denver, Seattle, Atlanta, Salt Lake City, San Francisco, Los Angeles, to name a few. We must continue to explore and innovate on these promising solutions to ensure that the trillions of dollars invested in our cities and regions create communities where all families can thrive and every child can live up to her potential.