Transit-Oriented Development (TOD)

Transit-Oriented Development (TOD) is a planning strategy that promotes compact, mixed-use, pedestrian- and bicycle-friendly urban development with mass transit by clustering jobs, housing, services, and amenities around rail and/or bus rapid transit stations. A lighter form of TOD may also be feasible along high-quality bus corridors. TOD can serve as an infill strategy to integrate housing development within traditionally commercial areas in accessible, high-resource areas. Housing developments near transit result in multiple benefits – they provide housing with good transit access, they support transit through increased ridership, and they require less parking, which reduces development costs and makes affordable units more feasible.

TOD would clearly be possible in Valley communities served by existing and planned fixed rail transit stations as identified in the figure below, with significant added potential at future High-Speed Rail stops in Stockton, Modesto, Merced, Madera, Fresno, Kings/Tulare, and Bakersfield with ultimate linkages to the Bay Area and Los Angeles.

Altamont Corridor Express (ACE) Valley Rail Service Plan


Source: San Joaquin Regional Rail Commission (SJRRC), 2021.

Assembly Bill No. 1324 (AB 1324)(discussed below) may provide a significant funding opportunity for adding housing in these transit districts. Additionally SB 10 (Upzoning in Transit-Rich Areas and Urban Infill Sites), which was signed into law in September 2021, enables local agencies to upzone parcels in transit-rich areas or urban infill locations and reduces CEQA requirements. SB 10 also allows upzoning along “high-quality bus corridors” (see Related State Laws and Statutes for more information), which could prove to be a useful strategy for Valley communities that do not have fixed-rail forms of transit but do have good bus service.

Technical assistance. Undertaking the creation of a TOD area or plan is no small task. A great deal of advance planning and coordination with transit providers, stakeholders, and the community will be required. To this end, one best practice is to engage a team of professionals to assist with the project. Aside from hiring a consultant team, many communities have sought early assistance from the Urban Land Institute (ULI) Technical Assistance Panel (TAP) program that provides expert, multidisciplinary advice to local government, public agencies, and non-profit organizations facing complex land use and real estate issues (see links in Available Resources below).

Prepare TOD plans. Cities can take advantage of available funding opportunities to prepare TOD plans. Both short- and long-term goals should be kept in mind (e.g., Valley Rail may exist today, but it may be supplemented by improved bus service and/or high-speed rail in the future). In areas where increased transit service is envisioned, allow for some initial development while preserving long-term intensification potential. for example, a phasing plan that includes:

  • An initial phase of the project may be developed at lower intensities than required in the TOD plan if there is an acceptable plan for interim land uses and a long-term master plan. 
  • Subsequent phases of projects provide an increase in intensity of land use. 
  • The final phase achieves minimum development intensities indicated in TOD plan.

Relevant State Law

AB 710 (Infill Development and Sustainable Community Act of 2011) limits jurisdictions from requiring more than one parking space per unit or one space per thousand square feet of non-residential development within “transit intensive areas” as defined, with few exceptions. The parking limitations in this law were attributed to the cost of parking (estimated to be 10 to 20 percent to the cost of an infill project) and lost opportunities for infill development. As such, these parking limitations can make TOD more financially feasible and improve overall housing affordability. Note, however, that the law does not prevent a builder from providing more parking unless there is a local parking ordinance that also limits how much parking can be provided (i.e., through parking maximums).

AB 1324 – The Transit-Oriented Affordable Housing Funding Program Act (2021-2022) is currently under review in the State legislature and may provide significant funding opportunities for affordable housing in qualifying transit areas. The bill envisions the formation of a separate legal entity, namely a “Transit-Oriented Affordable Housing District,” and a State-administered trust fund that uses tax increment dollars from the district to fund the development of multi-family housing projects that include a minimum percentage of units that are restricted to very low-, low-, or moderate-income households. The bill would authorize the issuance of revenue bonds by the State using the property tax increment as the source of debt repayment. Not unlike subsidized affordable housing projects, prevailing wage requirements would apply within these districts. Additional TOD funding is listed in the Available Resources section.

Stakeholder Interviews

Stakeholders noted that it is hard to find housing sites that are near transit and other services, especially in smaller communities. Stakeholders stated that there should be a focus on transit station area planning around both bus and rail locations, either with conditional funding or incentives for both market-rate and affordable housing. Additionally, stakeholders recommended that these and other priority infill areas should be regionally identified and ranked for funding opportunities. A local example that was cited is the Fresno COG TOD plan that enables developers to request funding for infrastructure improvements for high-density projects.


Urban Land Institute (ULI) – Technical Assistance Programs. The Technical Assistance Panel (TAP) & Technical Assistance for Communities (TA4C) program: 

California Housing Consortium. Affordable Housing and Sustainable Communities Program.

Institute for Transportation and Development Policy. What is TOD?

Transit-Oriented Development Institute Website.


ULI. Stockton ULI Report (Downtown Revitalization). 

The Center for Global Metropolitan Studies. Transit Oriented Development for High Speed Rail (HSR) in the Central Valley California: Design Concepts for Stockton and Merced. 

Funding Resources

HCDs Transit-Oriented Development (TOD) Housing Program offers low-interest loans to provide gap financing for rental housing developments near transit that include affordable units. In addition, grants are available to localities for infrastructure improvements necessary for the development of specified housing developments, or to facilitate connections between these developments and the transit station.

California Housing Consortium. Transit-Oriented Development (TOD) Housing Program. 

Fresno Council of Governments. Measure C Transit Oriented Development.