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Coordinating housing, economic development, and transportation policy

Bus stop illustrates coordinating housing, economic development and transportation


Effective coordination of local housing, economic development, and transportation policies is essential to a strong and sustainable local economy. This brief explains how these issues are intertwined and why it is important for localities and their individual departments and specialized agencies—such as the housing and community development, transportation, public works, and planning departments— to support all three policy areas. It also suggests options for localities to align their economic development, housing, and transportation policies for sustainable economic growth and improved quality of life.

Benefits of a coordinated approach

A coordinated approach to housing, economic development, and transportation can help localities address spatial inequalities, improve residents’ overall quality of life, decrease overall household expenditures on housing and transportation costs, and improve the economic competitiveness and environment of a locality. Some ways a coordinated approach can yield significant benefits include:

Reducing sprawl and associated traffic congestion and greenhouse gas emissions. Residents who cannot find affordable housing close to a city center often decide to live further away. Such affordable housing options are often located farther from employment opportunities and other urban amenities. Moreover, there is often reduced public transit service with increasing distance from the city center due to the high infrastructure and operational costs associated with low-density dispersed development. Residents, therefore, often rely on cars to commute to work, which not only increases households’ transportation costs but can also contribute to traffic congestion and be detrimental to the environment due to increased energy use and greenhouse gas emissions.

In such a scenario, a coordinated strategy can promote phased and compact urban growth that encourages planned densification of transit corridors and urban expansion areas. A coordinated strategy can help: 

  •  Reduce energy use and greenhouse gas emissions by reducing the number and length of required car trips.
  • Provide necessary supporting densities for optimal use of service infrastructure networks—for example, necessary public transit ridership to support public transit operating costs.
  • Increase the availability of housing at various price points close to jobs and transportation networks.

Preserving the ability of low-wage workers to live close to jobs and quality amenities. When an area’s housing supply fails to keep up with the increasing demand for housing, many existing low-income families experience a heightened housing cost burden and displacement. This can push lower-income residents further away from their neighborhoods and jobs, adversely affecting their quality of life. An increase in commute time, trip costs and decreased access to social support networks, jobs and other services such as health and childcare can reduce residents’ quality of life. Businesses may also find it difficult to secure the necessary workforce, especially for low-paying jobs.

Recently, existing residents have opposed economic development proposals that can substantially change their living environment, increase housing costs, and cause displacement. It is important that localities not only find ways to protect existing residents from displacement but also help them benefit directly from the proposed public and private investments. When people of all income groups can stay close to jobs and other opportunities, businesses also prosper.

A coordinated approach to housing, economic development, and transportation policies can ensure equitable growth opportunities for all income groups. It can:

  •  Preserve the ability of low-income and other vulnerable groups to live close to jobs and quality amenities and enable them to benefit from improved neighborhood infrastructure and amenities.
  • Secure community support for economic development initiatives by making community members partners in the process.
  • Ensure an adequate workforce for all types of jobs, including low- and moderate-wage jobs such as service sector jobs (e.g., food industry and restaurant workers, care providers, construction workers, and bus drivers).

Saving costs and time through coordinated and well-planned capital improvements. Localities could benefit from planning simultaneously for supportive investments when dedicating funding for large-scale public projects as part of their economic development strategies. These could include connecting transportation infrastructure, zoning changes for increasing density, and infrastructure investments to improve service network capacity in the areas slated for densification, among others. For example, if the locality is already investing heavily in land acquisition and construction costs for a sports stadium, securing the land necessary for a public transit station and expanding the capacity of underground service networks as part of the project would save costs and time in the future.

Such a coordinated approach requires multiple agencies and departments –- such as the planning, housing and community development and public works departments, and regional transit authority –- to come together to align priorities and integrate different plans. It can help:

  • Avoid duplication of effort that is cost and time intensive, such as digging and filling trenches for different pipelines and service networks at the same location within a short duration due to the lack of coordination between different departments.
  • Promote interagency coordination and an integrated vision for a locality’s future.

Pursuing a coordinated approach

A locality can adopt a coordinated approach to housing, economic development, and transportation by aligning its investments, local plans, zoning code, departmental objectives, and implementation priorities. The following are some initial steps to focus on:

  1. Coordinate planning efforts across agencies to plan for an adequate supply of housing near (or with good transportation access to) jobs and essential services. It is important to pursue a coordinated planning approach to ensure the availability in desired locations of an adequate supply of housing affordable to households with a range of incomes and household sizes. This requires integrating data from different sectors—such as information about transit ridership, commute times, housing and real estate growth trends, zoning density, and employment trends—with demographic measures like age, race, ethnicity, income, and employment. Detailed assessments that compare the location and affordability of housing to the location of jobs and essential services can help localities tailor their policy responses to serve households of all incomes, young workers, larger families, and seasonal workers (where applicable). Outcomes of this coordinated assessment could include proposals for zoning changes in specific districts to encourage the mix of development types needed to meet current and projected future demand as well as proposed investments in public transportation or changes in public transportation schedules.
  2. Coordinate zoning, housing, and transit policies for compact development along transit corridors. Compact development patterns can help reduce the number and length of required car trips, reduce energy use and greenhouse gas emissions, and create opportunities for walking and biking. Planning and zoning for mixed-use and transit-oriented development along designated economic corridors can create integrated communities and improve public transit access for all income groups. To encourage an adequate supply of affordable housing for low- and moderate-income families in these desirable locations, localities can increase density and encourage mixed-income housing development by adopting inclusive housing strategies (such as inclusionary zoning). Additionally, localities can promote joint development of public land near transit stops by private developers with minimal public subsidies to create affordable housing and economic opportunities that can, in turn, boost transit ridership. In appropriate cases, employers can be engaged through employer-assisted housing programs to help develop additional housing options near workplaces to reduce employees’ commutes.
  3. Coordinate infrastructure investments. Independent departments and specialized agencies at the local level – such as planning, housing and community development, transportation, and public works departments – often pursue infrastructure projects identified in sector-specific plans without coordinating across agencies. Where available, local comprehensive plans can help coordinate discrete sectoral goals and provide long-term direction based on community interests. However, localities often need a more fine-grained approach that outlines individual project scope and financials within a 5–6-year period. Capital improvement plans can help individual agencies and departments coordinate and schedule different projects in a unified plan. They also can allow communities to give input on public investment priorities and avoid unanticipated and poorly planned investments.
  4. Coordinate housing and community involvement to ensure existing residents benefit from investments. Even when much needed, infrastructure and economic investments in underserved neighborhoods without careful planning and community buy-in can lead to rising housing costs that displace vulnerable communities from their homes and cause long-term harm. Localities can adopt anti-displacement measures to protect low-income renters and homeowners in these target neighborhoods. They can ensure the continued availability of housing affordable to similarly situated households in those neighborhoods by evaluating the applicability of rent regulation policies, rental assistance programs, property tax abatements, community land trusts, and inclusionary housing policies. Localities can also support Community benefits agreements (CBAs) between new businesses and local communities to help the community engage, guide a proposed project, and protect their interests. CBAs are a list of commitments the developer makes to the community in the form of community facilities such as childcare centers, dedicating a certain number of jobs at specified wage rates to those from the affected community, or creating affordable housing units.

Examples of local practices

Many localities are undertaking comprehensive initiatives to integrate economic development, housing, and transportation strategies by leveraging federal and state funding.

  • MassWorks Infrastructure Program is a competitive state program that offers cities and towns flexible capital funding to support and accelerate housing production and job growth. It is the largest program in Community One Stop for Growth, a single application portal for community development grant programs offered by the Commonwealth of Massachusetts. Funds are available for localities to invest in multifamily housing in walkable and mixed-use districts to spur economic development. Priority is given to applications that promote “sustainable development through integrated housing and economic development, energy and environment, transportation and other policies, programs, investments, and regulations.”
  • The Minnesota Twin Cities Metropolitan Council and Planning Authority (including Minneapolis and St. Paul cities), a regional planning organization, prepared a Regional Economic Framework and Opportunity Clusters Framework for the metro region. Minnesota’s plan is a good example of how localities can coordinate planning efforts to pursue objectives under different sectoral plans in a unified manner towards a regional vision for overall growth. The framework informs spatially targeted investments in transportation, housing, and accessibility to jobs by conducting a regional equity analysis and integrating with the region’s Housing Policy Plan and Transportation Policy Plan. The plan was prepared as a Comprehensive Economic Development Strategy to qualify for economic development assistance and public works grants required by the U.S. Economic Development Administration.

Related resources

Coordinating Economic Development and Capital Planning. This Government Finance Officers Association best practice resource guide suggests how economic development strategies and capital improvement planning should be coordinated and integrated within and among governments.

Enhancing the Competitiveness of Cities. This brief by UNHABITAT discusses factors that underpin city competitiveness in global regions.

Framework for Creating a Smart Growth Economic Development Strategy: A Tool for Small Cities and Towns. The Environmental Protection Agency’s Office of the Sustainable Communities Program released a step-by-step guide to building a place-based economic development strategy.

Local & Regional Economic Analysis. Researchers at the University of Wisconsin-Madison prepared guidance for conducting local and regional economic analysis that suggests different types of local and regional assessments localities can conduct using accessible data sets and resources to analyze gaps and plan needs for comprehensive local economic development.

The Role of Affordable Housing in Creating Jobs and Stimulating Local Economic Development: A Review of the Literature. This Center for Housing Policy report explores how affordable housing can help build economic opportunities.


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