Menendez Proposes Tax Credit for Transit-Oriented Development

New construction projects that are within a half-mile of transit stations and exceeding national energy-efficiency standards would be eligible for a tax credit under legislation introduced today by Sen. Robert Menendez (D-NJ), the senior member of the Banking Committee’s transit panel.

menendez.jpgSen. Robert Menendez (D-NJ) (Photo: Paterson Online)

Menendez’s "green buildings" tax credit is aimed at spurring denser development in both rural and urban areas, particularly mixed-use properties that allow residents to walk between home, work, and other daily errands.

Construction projects claiming the 30 percent credit would have to meet several criteria, including the half-mile proximity to transit, the energy-efficiency minimums, and a requirement that at least 5 percent of any apartment properties be more affordable housing.

The credit could not be claimed until the year the development in question is completed, leaving the bill without an immediate cost to the Treasury.

The bill was immediately endorsed by the non-profit transit advocacy group Reconnecting America. The group’s president, John Robert Smith, said in a statement that Menendez’s plan "will help to meet this growing demand" for more transit-oriented, walkable development.

  • Elana,

    Could you explain some more how this would help rural areas? I’m guessing that by transit stations, the legislation refers to train or BRT stations and not bus stops. Therefore, I wouldn’t see much opportunity for this legislation to be used in rural areas.

    By the way, you are one of my favorite writers. Keep up the great work!

  • Jonathan

    While I like this idea, I think .5 miles is too small a radius. Has Menendez actually visited a train station in his state? Either the area is already built up, or you need to go .5 miles just to get by the parking lots for the trains (unless we’re including the parking lots?

  • Danny G

    Sounds good. Get it passed, tweak it as you go. (Think of the success of Gmail, which was in “beta” for like, ever.)

  • W. K. Lis

    .5 mile? Make it 1 km (.62137119 mile), for the future people.

  • Westchesterite

    This is a great idea, but does the bill have density requirements. Hate to see a bunch of 4500 square foot houses with 4-member families taking up all that space.

  • Effie S

    As one of the first proponents of TODs, I believe this is a great idea. However, we need to be careful that we don’t have “cookie-cutter” stations and that we take the needs and desires of the neighborhoods that will be affected into consideration. Often in the past, TODs became places that pushed out those that needed transit the most; thus good planning and public involvement are essential to making this legislation work if passed.

  • Tacony Palmyra

    I’d caution against widening the half mile radius and hope that eligibility requires projects to actually be walkable, dense, and mixed use.

    New Jersey’s state programs in this area include the UEZ program and the Urban Transit Hub tax credit program — both of which have been gamed to subsidize development that’s not walkable at all. The UEZ program, while not expressly related to transit, has spurned a lot of commercial growth in NJ’s “urban” municipalities which have good transit-served downtowns, but the program’s biggest recipients have been unwalkable strip-style development on the very fringes of these municipalities, far from transit (Think Jersey Gardens/Elizabeth Center where the Ikea is, or the little arm of the city of New Brunswick that touches route 1)

    In the case of the Urban Transit Hub program, while there is a half mile radius, South Jersey politicos were somehow able to weasel an exception for Camden. There corporations can get a credit for moving jobs or improvements within a full mile of mass transit. There’s no good reason Camden should get a pass here– it’s a small city in area to begin with– as all the horrible non-accessible suburban style redevelopment will now qualify, in what was once a dense urban city.

  • Great reporting Elena! Too good in fact, since I can’t find any more info on this anywhere!

    It’s no surprise that Senator Menendez would be the one to propose a bill like this. He has always been a leader on transit and TOD, and he has a wealth of examples to draw from in NJ (as Tacony Palmyra alluded to). I think there is some danger of getting bad projects near transit as a result of a bill like this (especially if the threshold were extended), but I think by and large, at least in NJ, developers are beginning to realize there is a big demand for good TOD, and we’ll see fewer of the projects that T/P described (I would add the Cherry Hill station to that list as the worst example of Transit-Adjacent Development in the state). The bigger problem that we see is not that developers don’t want to do it, they do, its that municipalities won’t zone for it. Unfortunately, this bill won’t address that.

  • Jass

    I was reading today about a government program that encourages people to buy homes in rural areas with massive tax incentives.

    Left hand does one thing, right hand does another…


What Wasn’t in This Week’s Highway Trust Fund Patch

Transportation’s make-or-break week in Washington has ended with a funding face-off postponed until fall, thanks to Senate passage of a short-term, $7 billion rescue for the nation’s highway trust fund. Sen. Robert Menendez (D-NJ) (Photo: PatersonOnline) The trust fund patch, designed to keep U.S. DOT dollars flowing to local road projects until September 30, keeps […]

Transit Planners to Congress: Please Figure Out How to Fund Us

To all but the most ardent transit wonks, the phrase "New Starts" sounds like a motivational tape sold on late-night TV. But those two words actually represent Washington’s predominant mechanism to pay for major transit expansions — everything from expanding an existing rail station to building a new bus line. Minnesota’s Hiawatha rail line is […]

New Jersey’s TOD Tax Credit Is Producing Jobs

The state of New Jersey appears to have found a winning formula for encouraging transit-oriented development. Since 2008, the Garden State has been using a special tax credit to reward businesses that relocate, build or expand within one-half mile of a transit hub, or take advantage of freight rail. The Urban Transit Hub Tax Credit […]

Menendez: Transit Agencies Need Help Escaping Tax-Shelter Trap

Lingering questions over the role that tax shelters played in the D.C. Metro crash continue to pique congressional interest in helping local transit agencies break free of lease deals with Wall Street. Sen. Robert Menendez (D-NJ) has just written to House Majority Leader Steny Hoyer (D-MD) — who is working on a new funding package […]