American Rescue Plan of 2021
How Will the $2.25Trillion Infrastructure Stimulus Bill Affect the Future of TOD?
In March 2021, The Biden administration proposed a $2.25T infrastructure and stimulus bill. Within the total package, approximately $630Billion is targeted to transit, highways and affordable housing with $115 Billion towards bridge and road upgrades and $25B to airports.
The goal behind the massive bill is to unclog highway with dedicated bus lanes, queue jumps and faster public transit to encourage commuters off the road from their cars to public transportation. Within the $600B, 1/3 is dedicated to affordable housing which includes aging in place housing near transit and affordable housing to create racial equity near public transit. It is expected that with these funds, affordable housing monies will create housing that is less expensive, has easy access to transit and reduces road and highway congestion.
In addition to the $600B earmarked for transit and affordable housing, $5B has been allotted to brownfields. This will help free up dirty sites, many of which are urban, to real estate development, including affordable housing. The current government looks at TOD as urban, and as such, preserves bio-diversity by shifting new development from the countryside to the urban areas and preserves natural resources.
So, the next question is how much TOD could possibly be supported by this bill? For example, a 250-unit affordable mixed multi-family residential TOD complex with associated commercial space, say 50K sf of commercial, including retail or office, would cost $75M to $100M depending on the location. There is a possibility that the American Rescue plan could support up to 30 to 40 new major TOD projects which is almost one per state. Obviously the east and dense west coast states, such as CA, NY, CT, MA and PA would probably benefit the most.
Conclusion: With double the usual transit money allocated in the bill, it is good news for future TOD development.
The Williams Group Real Estate Advisors has been on the leading edge of TOD advisory services for over 15 years and has substantial experience teaming with brownfield redevelopment in New York and MA, so let’s work together!