On January 14th, the Build Housing, Unlock Benefits and Services (Build HUBS) Act was introduced by bipartisan champions Sen. Blunt Rochester (D-DE), Sen. Curtis (R-UT), Rep. Friedman (D-CA), and Rep. Lawler (R-NY). This legislation will make critical reforms to the Railroad Rehabilitation and Improvement Financing (RRIF) and Transportation Infrastructure Finance and Innovation Act (TIFIA) programs to support the creation of more transit-oriented development (TOD) projects.

Communities across the country are facing a housing affordability and access crisis. While addressing the shortage of affordable homes will take a constellation of policy interventions, unlocking financing for the development of housing near jobs, services, and transit projects through refinements to two existing programs—the Railroad Rehabilitation and Improvement Financing (RRIF) and the Transportation Infrastructure Finance and Innovation Act (TIFIA) programs—is a meaningful step. The LOCUS-championed Build HUBS Act was introduced on January 14 and is intended to make just such changes.

Background

Originally signed into law in 2015, RRIF and TIFIA are two federal financing programs that offer very low-interest direct loans for transit-oriented development (TOD) projects within a ½ mile of a qualifying station/facility. While they have great potential, burdensome requirements not aligned with typical development processes have prevented many developers from accessing the loans. The loan time lags the standard market timeline for real estate, and the lengthy and uncertain process has often proved unworkable for projects. Smaller projects can barely cover the high base-level fees, killing them almost immediately. Other issues, such as extensive NEPA requirements, also slow down projects and deter developers. These hurdles have weakened the programs so much that only one TOD project has been successfully financed to date. In addition to these stumbling blocks, Smart Growth America’s LOCUS coalition of real estate developers and investors identified other areas within the programs that would allow it to better support transit-oriented development projects.

LOCUS took a leadership role in championing language in the FAST Act that added transit-oriented development project eligibility in the RRIF and TIFIA programs and has worked in the intervening years to make those programs work for developers and communities. As purpose-driven developers and investors championing smart growth policy, LOCUS understands the benefits of TOD, an urban planning strategy that focuses on building commercial and residential spaces near transit stations to maximize the benefits of current transit investments. TOD has many economic advantages that stem from better connecting people to job opportunities and providing housing in desirable walkable communities. From a transit agency’s perspective, TOD can increase ridership, a boon for transit systems seeking more riders and financial stability. By improving access to transit, promoting productive land use, and boosting economic activity, TOD can strengthen communities and create new economic opportunities.

The reforms in Build HUBS

LOCUS collaborated extensively with members of Congress to develop the newly introduced Build HUBS Act. The Build HUBS Act aims to address existing problems with both programs by easing burdensome and mismatched requirements around creditworthiness, instead adopting a proven underwriting model to reduce process delays, and providing specific regulatory relief. It also looks to promote the development of workforce housing by providing additional incentives for attainable housing projects.

Specifically, the Build HUBS Act would improve the two programs by:

• Allowing measures of project creditworthiness other than an investment grade rating under the TIFIA program;
• Creating a delegated origination and underwriting model for both RRIF and TIFIA in which delegated originator-servicers perform origination, underwriting, and servicing under DOT supervision;
• Creating a new attainable housing project designation that would allow projects where a majority of residential units are affordable to people at 80 percent of AMI, and all units are under 120 percent AMI to access financing at 1/2 the Treasury rate,
• Extending the authorization for both programs to fund TOD projects;
• Providing relief on certain requirements under the National Environmental Policy Act, including for office to residential conversion and infill development; and
• Making a collection of important administrative adjustments, including changes aimed at streamlining the loan consideration process, providing clarity on fees and MPO coordination requirements, and clarifying the definition of TOD to better capture the wide range of types of transportation assets that can anchor TOD across communities of all sizes.

By making these changes, the Build HUBS Act would improve government efficiency, strengthen public-private partnerships, and unlock new homes and economic growth. As the bill moves forward, LOCUS and Smart Growth America will continue to champion the bill and ensure priority reforms are included in the upcoming surface transportation reauthorization bill.

Support Build HUBS

If passed, the Build HUBS Act could support TOD projects in communities of all sizes and create new housing in well-connected locations. Now is the time to call on your representatives to support transit-oriented development and the benefits it can bring to your community. Your members of Congress need to hear from you. Email your representatives here and have your voice heard today!

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