For TODs, medium density often yields best value

New Urban News Article with graphs, 9/1/2008

Studies of transit-oriented development show that rising materials costs are a factor — but more placemaking and less parking can make high density lucrative.

In many urban locations, medium-density wood-frame buildings are more feasible and profitable than taller, higher-density buildings, according to several analyses by Strategic Economics of Berkeley, California. Rapidly rising costs for steel and concrete frequently make higher density less profitable, principal Nadine Fogarty told New Urban News.

The good news for advocates of transit-oriented development is that reduced parking requirements and better placemaking — high-quality civic spaces and attractive streetscapes — can improve the feasibility of high-density development. Also, developments of townhouse density (25units per acre) and relatively low-rise apartment buildings can provide support for transit, help to establish a market, and potentially pave the way for higher density in the future.

These dynamics were outlined in a 2006 report on Houston —  called “Houston Smart Growth Implementation Assistance,” sponsored by the US Environmental Protection Agency and the National Oceanographic and Atmospheric Administration. Similar relationships between density and profitability were found in 2008 Strategic Economics studies in Berkeley, California, and St. Paul, Minnesota.