July 2, 2024 | Matt Frommer, Transportation & Land Use Policy Manager
Land Use & Transit Legislation Blog Series: Part 1
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This blog post covers the first bill in a series of recently adopted land use bills. For more background, read our blog series introduction, A deep dive into Colorado’s 2024 housing, land use, and transit legislation.
One of the most impactful land use bills passed in Colorado’s 2024 legislative session was House Bill (HB) 24-1313. This measure aims to address Colorado’s housing and climate crises by encouraging more density and housing development in Transit-Oriented Communities (TOCs) so that more people can live within walking distance of frequent transit, jobs, and other destinations. Such a policy is widely popular. According to a January poll, 68% of Colorado voters support a state law requiring cities and counties to allow more housing near businesses and transit.
What does a TOC look like? Here are a few examples in Colorado:
- 10th & Osage light rail station in Denver is surrounded by mid-sized apartment buildings, most of them reserved for permanently affordable housing. With easy access for nearby residents, the station is busy with the 10th highest ridership on the Regional Transportation District’s (RTD) rail system.
- The Ridgegate Station in Lone Tree is a brand new community built around the new light rail station and will include a mix of market-rate and affordable housing and commercial space. As you move closer to the light rail stations, the zoning allows building heights to gradually increase from single-family homes to duplexes, triplexes, and fourplexes and then taller 5-10 story apartment and office buildings. Of the 700 new homes planned for Ridgegate Station, half will be affordable to low-income households.
- Belmar in Lakewood was developed on the site of an old shopping mall and includes 22 blocks of 3-5 story buildings with a mix of housing, offices, retail, restaurants, and grocery stores. Belmar has good transit access and a high Walkscore rating, earning the title of “Walker’s Paradise.” As a result, the average daily driving for Belmar residents is 18 miles per capita, 20% below the regional average, making it one of the greenest neighborhoods in Lakewood.
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While there are a handful of good TOC examples along the Front Range, the vast majority of rail stations and bus corridors don’t have nearly enough housing density to support frequent transit service and generate high ridership. As a rule of thumb, areas around transit stations need a minimum built density of 15 homes per acre to support frequent transit service where buses and trains come every 15 minutes or more frequently.
For RTD, just 8% of rail station areas and 15% of frequent bus corridors meet this threshold, a major reason the system is underperforming and underutilized. RTD’s ridership and efficiency lag behind peer agencies in Minneapolis, Portland, and Seattle, which move 2-4 times more people per service mile than RTD. This is partly because those metro areas have planned their communities so that the majority of residents can easily walk to train stations and bus stops.
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Built residential density around RTD rail stations and frequent bus corridors (homes per acre)
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Note: To achieve a built density of 15 homes per acre in an existing neighborhood, the zoning capacity must be significantly higher. This is because only a small fraction of parcels (less than 1% per year) will be redeveloped into housing. In addition, some of the parcels that are developed may not reach their full zoning allowance because, beyond certain thresholds, adding additional units isn’t necessarily cost-effective. That explains why some developers choose to build a 4-story project where zoning technically allows an 8-story building. It also shows why cities need to zone for much more housing than they need.
Rather than compact, walkable neighborhoods, many RTD stations are surrounded by massive parking lots, underutilized strip malls, warehouses, vacant land, and low-density zoning. For example, RTD owns more than 30,000 parking spaces at 80 Park-n-Rides in the Denver region. In 2023, 80% of those parking spaces were unused during peak periods — about 8.4 million square feet of land and the equivalent of 145 football fields. These empty surface lots are ripe for redevelopment into affordable housing and other transit-supportive land uses, yet local zoning and land use policies often stand in the way of development.
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Ample opportunities for more TOCs:
Source: RTD’s Transit-Oriented Development Update (2024)
Source: Colorado Public Radio “Denver’s train network was built for car commuters. With parking lots empty, RTD thinks housing could help save it” (2024)
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The Denver region has spent over $6 billion building RTD’s FasTracks rail and Bus Rapid Transit (BRT) system and plans to complete four new BRT corridors by 2030. It’s critical that communities throughout the region maximize the potential of these investments by enabling transit-supportive density around frequent transit service.
In addition, legalizing multifamily housing development near transit addresses the two largest expenses for Coloradans: housing and transportation. On average, multifamily housing like apartments and condominiums are 14-43% more affordable than single detached units. When it comes to transportation, car ownership is painfully expensive. AAA reports that the cost to own and operate a new car is nearly $1,000 per month, and most households have two cars. In contrast, the monthly transit pass offered by RTD is only $88. By selling one vehicle and switching to transit, a two-car household could potentially save approximately $10,500 annually.
Expanding opportunities to live in deed-restricted affordable housing near low-cost transportation options could be a game-changer for low-income Coloradans, many of whom spend over 70% of their take-home incomes on transportation and housing. Approximately 20-40% of Coloradans cannot or do not drive, many because it’s prohibitively expensive. For these residents, the transit-oriented affordable housing created by HB24-1313 will measurably improve access to jobs and other opportunities.
What are the major barriers to building more housing in TOCs?
- Local zoning and land use regulations limit the amount and type of housing opportunities near transit and require too much parking.
- Discretionary project approval processes deter or delay development by adding time, cost, and uncertainty to potential housing projects.
- Insufficient infrastructure capacity, such as water, sewer, utilities, transportation, and other public services, to support new development.
- Lack of affordable housing strategies to produce and preserve deed-restricted homes for low and middle-income households and protect existing residents from involuntary displacement due to rising housing prices.
- Market factors such as local demand for housing, interest rates, construction costs, labor, landowner interest in development, etc.
Not every transit station area faces all of these barriers, and for some, it may only be one or two. HB24-1313 aims to address the first four barriers to TOC development, creating the conditions for the 5th potential barrier, market factors, to deliver more housing when conditions are favorable.
How does HB24-1313 work?
HB24-1313 facilitates the development of TOCs by directing cities and counties to designate one or more “Transit Centers” or districts near frequent transit that:
- Collectively provide enough residential zoning capacity to meet a local government’s Housing Opportunity Goal (more on that below),
- Offer a streamlined and objective administrative review process for new housing projects,
- Incorporate at least three affordable housing strategies from a menu created by the Department of Local Affairs, and
- Have been assessed for risk or involuntary displacement and include potential displacement mitigation strategies to protect vulnerable residents.
The bill applies to local governments with more than 4,000 people in Metropolitan Planning Organizations, Colorado’s five big metro areas, with frequent transit service. This amounts to approximately 31 cities and counties, only two of which are outside the Denver metro area (Fort Collins and Colorado Springs). State agencies will publish an official map of transit areas by September 30, 2024. To be clear, the bill doesn’t require local governments to build any housing, only to make sure their zoning allows it if local market conditions make it financially feasible.
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Preliminary map of eligible transit stations and corridors. Source: Colorado Department of Local Affairs: HB24-1313 Technical Webinar and FAQ (April 8, 2024)
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What’s a “Transit Area?”
The following distances from transit are common definitions in TOC planning and, for the most part, include land within a 10-minute walk of a current or planned rail station or bus line.
- Light rail and commuter rail: all parcels within a half-mile radius of stations,
- Commuter BRT primarily operating on highways (e.g., the Flatiron Flyer on US 36): all parcels within a half-mile radius of stations, and
- Urban BRT and other bus routes with a service frequency of 15 minutes or better: all parcels within a quarter-mile of bus corridors.
The bill takes a snapshot in time based on the most recent transit plans adopted as of January 1, 2024, and implemented before January 1, 2030 (e.g., RTD’s System Optimization Plan). Future service expansion beyond what’s included in adopted plans will not be subject to the bill’s zoning and land use requirements. This also means that local governments cannot decrease or reject planned transit service to avoid the bill’s requirements.
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Denver’s Preliminary TOC map of “Transit Areas” within a half-mile radius of rail stations and a quarter-mile radius of frequent bus routes and planned BRT corridors. Note: This map is not final and has not been reviewed for compliance.
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How does a community calculate its Housing Opportunity Goal (HOG)?
To determine its HOG — essentially, its residential zoning capacity target in Transit Areas – a local government adds up the total acreage of parcels in Transit Areas (see Denver’s map above). From that total, they subtract exempt parcels that aren’t fit for housing development like roads, right of ways, cemeteries, mobile home parks, industrial areas, parks and open space, etc. (A full list of exempt parcels is on page 16 of the bill). The resulting acreage is then multiplied by 40 units per acre to calculate the community’s HOG — the amount of housing units, both existing and potential, they need to allow across all of their collective Transit Centers.
Communities with a greater number of frequent transit routes have higher HOGs (Denver, Aurora, Lakewood, Colorado Springs, Boulder), while those with fewer frequent transit routes have lower HOGs (Cherry Hills Village, Superior, Northglenn, Broomfield).
To be clear, the HOG is not additional, and a community can count its existing zoning capacity toward its HOG. In other words, the bill sets a zoning capacity floor. A good number of communities on the Front Range already have enough zoning capacity to meet or exceed their HOG. Those who don’t must identify and implement land use strategies to meet their HOG by the end of 2026.
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Let’s consider a hypothetical example. City X has two rail stations and five miles of frequent bus service. Therefore, the amount of land in their Transit Areas is 1,800 acres. 50% of the land is exempt because it’s not suitable for housing development (roads, mobile home parks, industrial uses, cemeteries, etc.). Therefore, the HOG calculation for City X would be 900 acres x 40 units per acre = 36,000 units of zoning capacity.
As previously mentioned, not all zoning capacity translates into new development, and only a tiny fraction of potential housing is built every year. There are plenty of parcels in Colorado that are zoned for higher-density housing but, for one reason or another, have other uses like car dealerships, surface parking lots, smaller housing projects, and single-story strip malls. A site may be zoned for a 4-story mixed-use development (allows both residential and commercial) and only get a one-story commercial chain business like Starbucks or McDonald’s. Overall, less than half of Colorado’s available zoning capacity is typically utilized, and the state still has a housing shortage. This demonstrates the need for further upzoning to maximize housing development opportunities on as much suitable land as possible.
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Maximum allowed heights versus what’s built. The image above from Denver’s East Central Area Plan illustrates the gap between existing building heights (the white line) and the building heights allowed by zoning (red and pink shapes). Less than a quarter of the zoning capacity along this stretch has translated into built density. In short, while it’s critical to expand opportunities for more housing, realistically, not all capacity will be realized, and housing that is built will be developed slowly over time.
For a more thorough explanation of how to calculate a local government’s HOG, watch the Department of Local Affairs (DOLA) HB24-1313 technical webinar from April 8, 2024.
Why 40 units per acre?
The density multiplier of 40 units per acre was chosen based on national research on the zoning allowance required to support frequent transit service and affordable housing. According to US Census data, households in neighborhoods with 40 homes per acre drive 40% less than the average Colorado household, which demonstrates the potential greenhouse gas savings of TOCs.
It can be hard to visualize residential density, but picture a 3-to-5-story residential building. Some of these may be “3-over-1s” — three floors of housing over ground-floor retail or commercial space. This is a mixed-use development type that encourages walkability by locating jobs and shops near and, in some cases, below housing.
From an affordable housing perspective, larger multifamily projects provide the economies of scale necessary to lower per-unit housing costs and stretch affordable housing subsidies further. Out of a sample of 65 publicly subsidized affordable housing developments, half had over 50 units per acre, and 20% had over 100 units per acre.
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The images above illustrate the range of housing densities and building forms that might be allowed in Transit Centers to achieve a community’s HOGs.
Most local codes set dimensional standards for new development, including requirements for setbacks, building heights, unit sizes, parking requirements, floor area ratios, open space, and other standards. Taken together, these dimensional standards determine how big a new building can be and how many homes a multifamily project can fit. To help cities accurately estimate housing potential in their Transit Centers, the bill directs the Colorado Department of Local Affairs (DOLA) to publish tools and methods to calculate the reasonable net density based on a city’s dimensional standards.
Plenty of flexibility for local governments.
Unlike Senate Bill 23-213, the failed land use bill from 2023, HB24-1313 does not require any specific parcel to be upzoned. Rather, it sets an overall zoning capacity target (the HOG) and allows local governments to locate potential housing development wherever it makes the most sense for their community, as long as it’s near transit. For example, City X may decide to “spread the peanut butter” and allow 3-4 story buildings (approximately 40 units per area) on every eligible parcel in its Transit Areas, or they may decide to preserve certain neighborhoods like single-family zones and focus additional housing opportunities where they already allow multifamily, mixed-use, or commercial uses. It’s up to them.
There are a few additional guardrails for new Transit Centers. Cities cannot rely on areas with zoning capacity below 15 units per acre, which, as explained above, is too low for transit-supportive density. Depending on the size of the lots, 15-20 units per acre can be achieved by legalizing duplexes, triplexes, and townhomes in some of the more compact single-family neighborhoods. In addition, local governments cannot count any density above 500 units per acre toward their HOG. This accounts for areas with “infinite zoning,” like Aurora’s transit-oriented development zones around their light rail stations, which have neither a height nor density maximum.
The bill avoids being overly prescriptive, but here are a few strategies local governments might explore if they don’t already meet their HOG:
- Increase maximum building heights for multifamily and mixed-use development near transit,
- Adjust other dimensional standards or parking requirements to increase density without increasing height,
- Allow duplexes, triplexes, townhomes, and other middle housing types in single-family zones (e.g., to achieve at least 15 units per acre net density),
- Allow multifamily residential development in light-industrial zones or commercial-only zones (e.g., rezoning for mixed-use development),
- Allow more multifamily development with administrative approval or reform Planned Unit Developments, and
- Identify Transit Centers that extend up to a quarter-mile outside the Transit Area.
The bill recognizes that some Transit Areas are not appropriate for new housing, either because they lack the infrastructure to support density, are near pollution sources like cement factories, or are cut off from transit station access by six-lane highways. In addition, there may be situations where a city wants to locate new housing in an emerging walkable neighborhood with a grocery store, school, and park that’s slightly outside of the defined Transit Areas (a half-mile from rail stations, a quarter-mile from bus corridors). In these cases, the bill gives local governments additional flexibility to extend Transit Centers up to a quarter-mile outside of the Transit Area buffer as long as the Transit Center is contiguous and they get approval from state agencies.
Streamlined and simplified approval processes for new housing projects
Currently, one of the major barriers and cost drivers of housing production is the uncertainty and delays created by the discretionary approval process. These are often cited as the main reason developers choose not to build more housing in certain communities.
To address this, HB24-1313 requires local governments to create an administrative approval process for proposed housing in Transit Centers that applies clear and objective standards to project review. This does not prevent a community from establishing rules and standards for development, such as height limits, maximum density, setbacks, greenspace requirements, etc., but it does prevent them from “moving the goalposts” or changing the rules once the proposal is submitted. For example, if a proposed project complies with all of the predetermined land use and zoning standards in local codes, a city cannot reject or weaken the project based on the subjective claim that it does not fit with the neighborhood character.
Expanding affordable housing opportunities
The largest housing deficit in Colorado is for low-income households making 60% or less of the area median income. Low-income households are also less likely to own a vehicle and more likely to use public transit, making Transit Areas the perfect place to locate affordable housing.
HB24-1313 prioritizes affordable housing by requiring local governments to select and implement at least three affordability strategies from a menu of options by the end of 2026. This includes at least two “standard” affordability strategies and one “long-term” affordability strategy from a list (see page 36). This approach encourages local governments to be proactive about affordable housing without being overly prescriptive about which strategies they need to choose.
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In addition, the legislature approved $30 million in tax credits for affordable housing near transit in another bill, HB24-1434.
Preventing involuntary displacement
The bill acknowledges the potential for large TOC developments to displace existing residents and local businesses from their communities, either through direct displacement (demolishing homes to make way for new, higher-density housing) or indirect displacement (when large investments drive up local property values, increasing rents and pushing people out of their neighborhoods).
To address displacement risk, HB24-1313 directs DOLA to complete a Displacement Risk Assessment by June 30, 2025, that identifies the appropriate entities and potential financial resources to mitigate displacement, as well as tools to measure displacement risk in different communities, similar to the one created for Denver in 2022.
DOLA must also produce a menu of displacement mitigation strategies as a resource for local governments with vulnerable communities, including the following strategies:
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New carrot: TOC Infrastructure Grant Program
Lack of infrastructure capacity, whether it’s water supply, sewer infrastructure, bicycle and pedestrian access to transit, or other utilities, is a major barrier to TOC development. To address this, HB24-1313 creates a new $35 million TOC Infrastructure Grant Program at DOLA to help local governments upgrade infrastructure to enable the production of affordable housing near transit.
Enforcement and timeline:
To become a certified TOC, a local government must submit a Preliminary TOC Assessment to DOLA by June 30, 2025, and a final Housing Opportunity Goal Report by December 31, 2026. This gives them roughly two-and-a-half years to update their local codes to comply with the legislation’s zoning, permitting, affordability, and displacement mitigation requirements. They must report to DOLA every three years to stay in compliance.
If DOLA hasn’t received and approved a HOG Report from a subject jurisdiction by December 31, 2027, that community will be deemed non-compliant, at which point it will not be eligible for the TOC infrastructure grants or the affordable housing tax credits and may open itself up to potential legal challenges from the state and developers for not complying with state law.
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What if a community doesn’t have enough water to support their HOG?
Today, proposed housing projects do not get approved if they don’t have enough water to serve new residents, and HB24-1313 wouldn’t change that. Local governments can still condition permits and housing approvals based on available infrastructure capacity. Additionally, the bill allows local governments to request a modification of their HOG if the city and county, along with their water provider(s), can demonstrate with sufficient evidence that they don’t have enough water supply to support their HOG. (See page 23)
According to Colorado water consumption data, multifamily homes are inherently more water-efficient and use 86% less water than typical single-family units. This demonstrates the bill’s potential to advance more water-wise land use planning and more efficient and sustainable growth.
A voluntary “opt-in” for communities without frequent transit to access state grants.
There are a number of growing communities in metro areas that do not have frequent transit service, but are planning for it in the future and would like to create their own TOCs with the help of state TOC grants. For example, the Town of Erie is planning a new compact, walkable, mixed-use community near a mobility hub off of I-25. For these situations, HB24-1313 creates a “Neighborhood Centers” concept to be further defined by DOLA with specific criteria for a community to opt-in to access state TOC grants.
Lastly, state agencies will identify potential transit corridors outside the developed urban areas that are expected to experience growth to promote more integrated transportation and land use planning. The final section of the bill directs CDOT to study policy barriers and opportunities related to roadway design and bicycle and pedestrian infrastructure and update policies to support TOC development.
Looking ahead to HB24-1313 implementation
To maximize the benefits of HB24-1313 for Coloradans, local governments should consider going above and beyond the basic requirements of the bill to legalize a greater diversity and intensity of housing across their communities, including “middle housing” such as duplexes, triplexes, fourplexes, and townhomes in single-family zones and more mid-rise multifamily development. However, allowing more housing density won’t automatically create neighborhoods and spaces where people want to live, work, and play. To promote good placemaking, cities should co-locate new residential developments with other uses like shops, jobs, parks, and other public places. They should also pair upzoning with significant investment in multimodal transportation projects that make it easier, safer, and more convenient to walk, bike, and take transit. Advocates who want to see more affordable housing and climate-friendly land use in their communities should urge local elected officials to reform zoning near transit and approve new multifamily projects.
The post Housing in Transit-Oriented Communities (HB24-1313) first appeared on Southwest Energy Efficiency Project.