Transit Oriented Development faces its share of challenges
Edmonton is investing $3.2 billion in a new LRT line from Mill Woods to downtown, then out past West Edmonton Mall, but the bet only pays off if it spurs Transit Oriented Development (TOD) and a massive increase in people living along the line.
Part of the reason to build LRT is to densify the city so we don’t have to keep expanding out like a pancake, chewing up farm land to build unsustainable suburbs and road systems.
We’ve had LRT for 39 years, but we don’t yet have one such mixed-use residential tower, a.k.a. vertical TOD, anywhere on the LRT outside of downtown.
Why not?
For some answers, I went to residential developers.
Here are their Top 7 reasons: 1. TOD was not part of the original plan for LRT, says Jarret Campbell, principal at Sparrow Capital, who worked on the proposed Muttart TOD near Stadium station. The northeast LRT followed an existing railway line to our main sports facilities through the industrial northeast.
“It wasn’t a natural place for LRT TOD,” Campbell says.
2. It’s too easy to get around the city by car and we have relatively cheap downtown parking. Unlike jammed Toronto, Vancouver and Calgary, where TOD has taken off, it’s more convenient to drive here.
“We haven’t had a lot of areas where it is quicker to get on transit than it is to get in my car and drive,” says developer George Cantalini of Beaverbrook, who is building the new West Block Glenora TOD.
3. There’s too much land downtown for highrise residential towers for many people to want to live in a vertical TOD out on the LRT line. In Vancouver’s downtown, land is rare and expensive, so that pushes development out of the core, Campbell says. But we have decades of a relatively cheap land supply in our downtown.
4. Our LRT system hasn’t been built out sufficiently. It doesn’t go out to all four corners of the city, so that makes it less possible for people to give up their cars and move to TOD, says Dave Kent of Nearctic, which is building the massive Strathearn Heights TOD.
5. There’s been a huge learning curve for developers. To design vertical TOD, a developer must integrate the needs of office workers, store owners and private condo owners. It’s not simple and not something Edmonton developers are used to doing, says Cantalini. “It’s a big learning curve ... It is much more challenging and much more time-consuming.”
6. For a developer, it’s been much easier to put money into outer suburban developments on open fields. And with TOD, they’re not only building the residences, they’re doing neighbourhood renewal on crumbling streets and inadequate utilities in older areas, which is costly.
“It’s very expensive and time consuming. There are only so many players that can bring these projects forward,” Kent says.
7. There’s been a huge learning curve for city officials. The city has a development rule book for single-use development, but it needs updating for mixed-use projects, including cost-sharing on public infrastructure.
It takes extra time to meet with city officials over the numerous issues that come up, says Salima Kheraj, a principal in Cantalini’s firm. “I think they’re keen, but not necessarily in the time frame we need.”
For local developers, it’s a new and risky field. It’s hard to know if consumers will pay to live in TOD and if profit can be made, because there are no comparables, no blueprint, Campbell says.
“If I see a building going up and I hear from someone in the industry that they made a bunch of money on it, I think, ‘OK, I’ll do the same thing because somebody made money on that.’ But when you go, ‘Who has made money on TODs?’ You go, ‘I don’t know. Nobody.’ ”
To proceed at Strathearn Heights, Kent’s company has to invest $380 million.
“That’s a pretty big hurdle. You need a real level of comfort and chutzpah to say, ‘OK the economy is going to do well enough to justify this.’ Because you really got your ass out the window.”
These major hurdles aside, the developers say there are many desirable Edmonton neighbourhoods outside the core suitable for TOD, the LRT is going to more places soon, and developers and the city are learning how to master this building form.