Transit-oriented development (TOD) is a planning strategy that promotes high-density, mixed-use (residential and commercial) development centered around public transportation services. Focusing development in the vicinity of public transit increases potential ridership and fare revenue while also generating less traffic and household transportation costs for the new development. While TOD can improve access and mobility, it can also increase housing prices, which poses the risk of gentrification. As a result, some governments have turned to equitable TOD (ETOD) as a strategy to ensure a more inclusive environment around transit developments, and affordable housing is a key element in ETOD strategies. 

This is the fifth installment in Eno’s continuing series examining how metropolitan areas across the country are approaching TOD work, including how agencies coordinate across housing, land use, and transportation, what tools they use, and what constraints they encounter on affordable housing and transit policy.  

This Week: Huntsville 

Issues in housing affordability  

Huntsville, Alabama is one of the fastest growing cities in the country. U.S. News & World Report ranked it the second-best place to live in the United States in 2023, citing the city’s strong job market, relatively low cost of living, and overall quality of life.  

Much of the region’s growth has been tied to the aerospace and defense industries. NASA’s Marshall Space Flight Center is located just outside Huntsville’s borders, about seven miles from downtown Huntsville. The Center is part of Redstone Arsenal, a US Army installation that employs nearly 50,000 people. These institutions have helped attract a broad range of employers and highly skilled workers, including firms such as Boeing, Raytheon, and Northrop Grumman. 

The housing market reflects the region’s growth. Huntsville has recently experienced a boom in market-rate apartment construction. The Low-Income Housing Coalition Index does not measure the affordable and available units for the Huntsville area, making it harder to compare the city directly with peer markets. However, between 2019 and 2022, the inventory of new apartments in Huntsville increased by 9.3 percent, far exceeding the national average of 1.8 percent. In addition to a strong apartment supply, Huntsville residents benefit from affordable rental costs: average rent across different apartment types in the city is only $1,248 compared to $1,740 nationwide. The city’s average apartment size is also larger—950 square feet compared to 900 square feet nationwide.  

According to the National Association of Realtors’ Housing Affordability Index, homeownership in Huntsville is relatively affordable among ten selected metropolitan areas. The ten selected metro areas are shown below in Table 1 along with their Housing Affordability Index scores. The index measures whether the typical family in each region earns enough income to qualify for a mortgage loan on a typical single-family home. An index above 100 signifies that a family earning the median income has more than enough income to qualify for a mortgage loan on a median-priced single-family home, assuming a 20 percent down payment. The index for Huntsville in 2022 was 142, placing it above the threshold for affordability. In other words, the typical family in the Huntsville region is very likely to earn enough income to qualify for a mortgage on a typical home. Single-family homes make up roughly 72.6 percent of the Huntsville metro area’s housing stock.  

Table 1. Housing Affordability Index 

Accommodating Growth and the BRT Plan 

As Huntsville grows, transportation pressures are becoming hard to ignore. Population growth has intensified congestion, raised infrastructure demands, and sharpened concerns about how future development should be conducted. In that context, city leaders and planners have included transit improvements and TOD as part of their growth strategy. 

Huntsville began running fixed-route bus service in 1990 in response to population growth and traffic congestion. The system, now known as Orbit, is owned and operated by the city, and is funded by city and federal funds. The service is designed to meet the needs of low-income residents: the fare is only $1 per trip, and a monthly pass costs only $30. Seniors, Medicare/Medicaid cardholders, students, and children six and under pay a reduced fare of 50 cents. 

In 2022, the Huntsville Metropolitan Planning Organization completed a High-Capacity Transit Concepts & Corridors Plan to identify corridors with the greatest long-term potential for high-capacity transit. A related transit improvement plan conducted by the city’s consultants called for Sunday service, extended service hours, additional buses, and increased frequency. Fully implementing those recommendations would require roughly doubling the number of buses operating during peak periods. 

That work led the city to pursue an 8.9-mile bus rapid transit (BRT) corridor with 32 stations, primarily along University Drive. The corridor would connect several major employment and activity centers. Although dedicated lanes would offer the most time savings, the city has been leaning towards mixed traffic operations for most of the route because that approach is more flexible, less expensive, and faster to implement. City officials hope to offset the project cost by developing partnerships with local firms and organizations. Huntsville Hospital, for example, has expressed interest in improved transit service and more affordable housing options for its workforce. 

Huntsville is also planning to increase frequency on its Route 4 (University Drive) service, which already runs along much of the proposed BRT corridor. This move will help build ridership, strengthen the service case for the project, and improve Huntsville’s competitiveness for federal funding. 

Even so, the BRT project remains in the early stages. Huntsville still needs to complete the environmental review process, identify a local funding source, and compete for FTA funds. After that, it can move through engineering and design, construction, and vehicle procurement. For local planners, the larger goal is not just a single line, but the foundation of a more robust regional transit system. 

Part of the appeal for BRT is cost. A light rail line option was ruled out because BRT can be constructed at 5 to 10 percent of light rail costs. BRT systems similar to the one that Huntsville is proposing have cost between $1 million and $5 million per mile, assuming level boarding, off-board fare payment, improved station amenities, improved pedestrian access, and selected transit-priority treatments. The city plans for a frequency of 15-minute headways for its buses, but that level of service would require additional buses and operating costs.  

TOD Study 

In May 2024, the city of Huntsville was awarded an $850,000 FTA grant to plan for TOD along the proposed University Drive BRT line. The planning grant is fully federally funded, with no local or state match required. That support has allowed the city to begin thinking more deliberately about how future transit investment could shape land use, housing, and redevelopment. 

The project is emphasizing three key areas with the greatest potential for TOD:  

• Northwoods: a 447-unit public housing development. 

• University of Alabama in Huntsville, which is seeking to create a mixed-use development with student housing, a research building, commercial office space, and retail/entertainment. 

• MidCity District: a mixed-use area on land that was formerly a shopping mall. 

In the summer of 2024, the city issued an RFP for consultants to conduct a TOD planning study. Huntsville is therefore advancing its BRT and TOD planning efforts simultaneously. There is some overlap among consulting teams, and that coordination is intended to help the city strengthen its case for future FTA Capital Investment Grant support. 

Affordable Housing 

Affordable housing is not a side issue in Huntsville’s TOD work—it is one of the reasons the work is moving forward in the first place. The FTA’s 2024 Pilot Program for TOD Planning emphasized affordable housing, and Huntsville’s application aligned with that priority.  

As part of the TOD effort, city officials are considering changes to the zoning ordinance to support the development of diverse housing types, including affordable stock. Potential strategies include reducing parking minimums along high-frequency transit corridors, expanding the range of districts that allow duplexes and accessory dwelling units, and offering development bonuses—such as building height—for projects that include affordable units. 

Barriers to TOD 

Promoting TOD in areas with low density  

The city’s TOD and affordable housing ambitions face real constraints. City officials recognize the difficulty of promoting TOD before a BRT line is in place, especially because the existing corridor does not yet have the kind of dense population base that often supports high-capacity transit from day one.  

The city’s manager of Urban and Long Range Planning noted in a 2024 article: “One of the challenges in planning for transit is that a lot of times you want to have ridership before you’re willing to make the investment in transit. You want to know that you’ve got riders that you’re actually serving, but it’s also hard to get riders without showing them that transit is actually happening. So, there’s a little bit of a kind of a chicken and an egg thing going on there.” 

TOD Funding 

Huntsville has a funding challenge. Previous case studies in this series—including the Bay Area, Chicago, and Denver—benefit from strong state support for transit. Alabama does not. In fact, Alabama provides no direct state funding for transit operations.  

Unlike many other states, Alabama does not use any gas taxes to support transit. In fact, a 1952 amendment to the state’s constitution prohibits it. Although the state created a Public Transportation Trust Fund in 2018, the program has never been funded. In 2024, lawmakers considered a bill that would have provided about $26 million per year to the trust fund through a $5 increase in vehicle registration fees, but the bill was voted down in a State Senate committee. 

Key Lessons 

Community Engagement 

TOD coalitions can form even in places without a long history of major transit investment. Supporters of the city’s TOD efforts include the Huntsville-Madison County Chamber of Commerce, the University of Alabama, Huntsville Hospital, and the local elected officials. According to local planners, coalition building has been aided by early and sustained community engagement. Before presenting specific TOD corridors or TOD sites publicly, city officials spend time identifying community needs and talking with potential partners. That groundwork appears to have generated support with limited opposition.  

Affordability Language 

When discussing housing affordability, planners focus on providing a variety of housing types at a range of price points, so people can get the housing they need at a price they can afford. Planners often characterize housing by income level: “public or affordable” housing for incomes at or below 30% AMI; “workforce” housing for incomes at 60% AMI; and “attainable” housing for incomes at 80-120% AMI.