7 Factors Behind the Demand for New TOD Projects

Friday, January 29th, 2016
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What does the city of the future look like? As Australia’s population increases to 35 million to 42 million by 2040, transit oriented developments (TODs) are vital to managing social and economic growth challenges.

With an additional 11 to 18 million people in Australia over the next 25 years, an estimated 4.4 to 7.1 million new homes must be built, which is around 150,000 homes per year. As household demands change and upwardly mobile professionals dominate the workforce with their inner-city careers, there will be a demand for new and innovative TODs to support people through various life stages.

TODs will be crucial to Australia’s sustained growth and urban liveability, with federal government reports showing that car traffic congestion alone will cost the Australian economy around $20.4 billion in 2020.

TODs are used to describe medium to high-density residential buildings that are constructed adjacent to or on top of public transport hubs. The proximity to transit hubs allows residents to rely on public transport instead of private vehicles, easing congestion in our cities. This has many advantages, including greater access to different jobs. TOD development opportunities are usually designed to take advantage of existing transport infrastructure as an in-fill development. This helps to create a healthier, sustainable and more vibrant density-mix in our cities.

A success story: Perth City Link TOD

The Perth City Link development is seen as a great example of a high-density TOD that would connect the CBD and Northbridge areas. Following the construction of an underground rail line and the Wellington Street Bus Station, 13.5 hectares of land was zoned to allow for new development potential above and around the transport infrastructure, with the first buildings due for completion in 2015.

Once finished, the Kings Square and Yagan Square precincts in the Perth City Link will host a range of luxury and affordable housing for 3,000 people along with mixed shops, restaurants, services and leisure including the new Perth Arena. The Perth City Link has also been planned to create five new north-south connections through the city to improve the appeal of walking and access to the new city precincts.

Seven Factors Behind the Demand for New TOD Projects:

  1. New government policies are now helping to encourage more densification near rail transit corridors and stations.
  2. There is a decrease in productivity when more time is spent travelling to work, and new evidence shows how this erodes urban lifestyles and living standards.
  3. A range of project and infrastructure funding sources now recognise the benefits of integrated TOD projects, which provide a higher return on investment.
  4. Growing rates of urbanisation and city sprawl are leading to unsustainable increases to traffic congestion and declining demand for outer-suburban living.
  5. Business and consumer preference trends to have access to public transport services, diverse services, better schools and healthcare, and high quality work and living environments.
  6. A more innovative and energised development industry is realising the value in mixed-use TOD developments, which can create much valued social spaces for families and young people.
  7. Government is shifting its focus toward public transport and more diverse economic precincts as a means of managing traffic congestion.

What could possibly be in the way?

Despite their benefits, TOD projects can often be more complex than brownfield or greenfield mixed-use projects. Arguably, the benefits for the community certainly do outweigh these challenges when TOD developments are well planned. Government support can play a large role in the provision and rezoning of sites, planning approvals and transport upgrade proposals. To ensure the long-term success of Australia, the government must play a role in reversing the trend of urban sprawl for more compact, connected and coordinated growth patterns.

With the growing preference by city residents for public transport services, the trend is unstoppable and TODs will play a large role in shaping Australian cities of the future.

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