Chicago–Do multifamily properties that are part of, or near, transit-oriented developments really have an edge when it comes to renting? It might be a boom time for apartments, with demand outpacing supply in many places, but the question of competitiveness will never fade away completely. Even in flush times, some properties lease up faster than others, and there’s also the consideration that flush times don’t last forever.
There’s some evidence that TOD attracts certain renters that might not otherwise be interested, but studies on the matter haven’t been entirely conclusive. “The majority of TOD residents along new transit systems are childless singles or couples,” notes a 2008 study called “Effects of TOD on Housing, Parking, and Travel,” by the Transit Cooperative Research Program, sponsored by the Federal Transit Administration. “The age spectrum is wide: often younger working professionals or older empty-nesters. TOD residents may have low, medium, or high incomes; this is driven by the design and price of the specific TOD housing.
“TOD developers are researching the market and proactively building products for targeted market sectors,” the study continues. “The demographic characteristics allow developers to more finely target their product to potential end users. … The top three reasons households give for selecting a TOD are housing/neighborhood design, housing cost, and proximity to transit.”
Which is to say that a TOD project’s proximity to transit, which is a TOD’s distinctive feature, is only one top factor in a renting decision; others include more standard considerations. “Like other amenities or conveniences, being able to offer residents proximity to public transportation is definitely an advantage for an apartment community,” Diana Pittro, executive vice president of RMK Management Corp., tells MHN. RMK manages more than 8,000 apartment homes in Illinois, Minnesota and Indiana, some of which are part of TODs or otherwise in close proximity to public transit.
“To say that proximity to transit would equal higher rents or higher occupancies is a little general, but it’s certainly something that is appreciated by many residents,” she continues. “It’s even a ‘must have’ for some renters.”
The pressures of urban congestion improve the appeal of TOD residential properties, especially in places such as in Chicago, RMK asserts. Recently, and for the first time, metro Chicago has earned the not-so-prestigious designation of having the worst traffic jams in the country, according to the Urban Mobility Report by the Texas Transportation Institute.
“Renters are putting an increased emphasis on the importance of proximity to public transportation as commuting times–and costs–increase here in Chicago,” says Anthony Rossi Sr., president of RMK. “People would much rather spend that time and money on things they enjoy, and so they look for apartment communities that offer easy access to the Metra or CTA.”