Transit-oriented development (TOD) is a planning strategy that promotes high density, mixed-use (residential and commercial) development centered around public transportation services. While TOD can improve access to resources, it poses the risk of increasing housing prices and 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 second installment in Eno’s continuing series examining how metropolitan areas across the country are approaching TOD and ETOD 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: Austin and CapMetro

Issues in housing affordability 

Between 2010 and 2022, the Austin, TX metro area was the fastest growing metropolitan area in the country, and as of 2025, it remains the country’s 4^th fastest growing metro area. Given its population growth, Austin is faced with the challenge of providing residents with enough housing and ensuring that residents can afford housing.

In 2017, the City of Austin adopted a Strategic Housing Blueprint, which set an ambitious goal of creating 60,000 housing units for households earning up to 80 percent Median Family Income (MFI) and 75,000 units for households earning more than 81 percent MFI for a total of 135,000 units by 2027. As of 2023, the city produced 22,429 housing units for households earning 80 percent MFI, reaching 37 percent of the 60,000-housing unit target in six years. In 2025, the city received a $6.7 million Pathways to Removing Obstacles to Housing (PRO Housing) Grant and is dedicating $750,000 towards updating the Strategic Housing Blueprint. In 2026, the City of Austin released a report on Missing Middle Housing and Zoning, which evaluated the City’s zoning tools as they relate to housing development.

While Austin has worked towards expanding affordable housing options, housing affordability remains an issue. According to the National Association of Realtors’ Housing Affordability Index, Austin ranks towards the middle of the pack among ten selected metropolitan areas when it comes to affordability. The ten selected metro areas are shown in Table 1 below along with their Housing Affordability Index score. The index measures whether the typical family in each region earns enough income to qualify for a mortgage loan on a typical 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 Austin is 94, just below the threshold for affordability. In other words, the typical family in the Austin region would be just shy of the income needed to qualify for a mortgage on a typical home.

Table 1. Housing Affordability Index

The rental market in Austin is even less affordable than the home-buying market. According to 2025 data from the National Low Income Housing Coalition, the Austin region has 33 affordable and available units per 100 households who earn at or below 50 percent of area median income. Across the U.S., there are an average of 53 affordable and available units per 100 households at that income level.

Origin of CapMetro TOD Work

The Capital Metropolitan Transportation Authority, or CapMetro, is the public transit provider for Austin, Texas and its surrounding suburbs, providing bus service since 1985 and rail service since 2010.

CapMetro’s first commuter rail line was approved in 2004, and the City of Austin recognized that the construction of a commuter rail line was an opportunity to promote development around future rail stations. Following the approval of the commuter rail line, the City of Austin approved a TOD Ordinance in 2005 that created new TOD districts around future CapMetro Rail stations citywide. The Red Line (Austin’s commuter rail service) began operating in 2010.

Austin took an important step towards expanding its TOD efforts with the adoption of Project Connect in 2020. Project Connect is a citywide initiative aimed at expanding public transit in the Austin region with new light rail, commuter rail, and express bus lines. Project Connect presented an opportunity for the City of Austin in partnership with CapMetro and the Austin Transit Partnership (a local government corporation leading the planning, construction, and implementation of the light rail) to address the growing population through public transit expansion. The initiative also laid the groundwork for housing and TOD work, encouraging the city and transit agency to address the region’s growing population needs in a comprehensive and collaborative manner.

The initiative includes $300 million towards anti-displacement efforts. To date, anti-displacement funds have been allocated towards a wide range of programs including the following:

• Loans to eligible 501(c)(3) nonprofit organizations to preserve and develop affordable housing as well as purchase small sites for future development.
• Empowering tenants to exercise their rights through mediation, advocacy, and education and tenant-organizing for community benefits agreements for developments vulnerable to redevelopment along the transit corridor.
• Assisting tenants with rent and utilities and providing economic mobility and opportunity through collaborations that provide access to early childhood, youth financial literacy, adult education, and job training.
• Supporting homeowners with mortgage assistance, estate planning, and homeowner resiliency education.
• Growing the capacity of nonprofit organizations to increase community land trust availability, establishing long-term affordable homeownership opportunities along Project Connect transit lines to help households stabilize their finances and avoid displacement.
• Land acquisition, preservation, and development of affordable housing.

TOD at CapMetro

In support of its TOD work as part of Project Connect, CapMetro received five FTA grants and one Build America Innovative Finance and Asset Concessions grant to prepare TOD plans for proposed station areas and an ETOD study. The study summarizes the efforts to develop several deliverables including a Policy Plan, Policy Toolkit, Interactive Conditions Analysis Tool, and Priority Tool. CapMetro is the only agency to have been awarded FTA TOD funds in four consecutive years.

Austin’s ETOD Policy Plan

CapMetro and the City of Austin worked closely to produce the ETOD Policy Plan (“The Plan”), which the Austin City Council voted to accept in March 2023. The Plan lays out a policy toolkit and provides a framework to implement it. The document’s ETOD vision refers to “thriving neighborhoods with safe transit, housing for all income levels, with a strong public realm and a complete community that meets everyday needs.” Broadly, the plan outlines the objectives, goals, and the engagement process with the community. The Plan was trailblazing for CapMetro and the City of Austin in many ways- intentionality to focus on equity, prioritize underrepresented voices, align transit and housing strategies across multiple agencies, as well as the opportunity to implement policies to advance major construction projects.

Policy Toolkit

The Policy Toolkit is a comprehensive set of 46 policy measures related to workforce development, housing, mobility, land use, and real estate that CapMetro, the City of Austin, and the Austin Transit Partnership can undertake. Each policy typically identifies the implementing agency, supporting partners, timeline, relevant TOD goals, implementation challenges, and success metrics. The toolkit is intentionally broad so that different policies can be applied based on local context and priorities.

Interactive Conditions Analysis

Another tool developed in the 2023 ETOD Policy Plan is the interactive conditions analysis tool, which is a GIS-based dashboard that provides socioeconomic, demographic, physical, and market conditions around Project Connect station areas. The tool provides baseline community data as a reference point and provides data for the Priority Tool.

Priority Tool

CapMetro’s Priority Tool is a web-based application designed to map out TOD areas and identify the appropriate policies that apply to them. The tool serves a broad audience by presenting tailored insights. It enables policymakers to quickly identify relevant policy tools for each planned station area, assists community members in assessing how neighborhoods near future stations are progressing towards TOD goals, and helps developers understand where land uses are aligned to deliver community benefits like affordable housing, on one shared platform.

Upcoming and Updated TOD Materials

In 2025, the agency came out with its Implementation Policy, which reiterates CapMetro’s TOD mission to promote growth in the region through high quality transit and provides a summary of CapMetro’s Joint Development process. The agency’s TOD team is currently working on a TOD Guidebook, which will define the process for TOD implementation, and Transit Development Guidelines, which will provide information on integrating transit-friendly amenities into development, particularly on land not owned by CapMetro.

Elements of Austin’s TOD Plan

• Retail and Community Services

The Plan recommends that where active ground floor uses are required, the currently allowable uses be expanded to allow for a wider variety of services and amenities such as health care, childcare, libraries, co-working space, and community space. CapMetro has also proposed smaller storefronts to accommodate small businesses. The Plan’s recommendations for commercial retail space include limiting ground floor parking within a certain distance to the street, maximizing the transparency of the building facade, and requiring at-grade entrances.

• Parking 

In November 2023, the City of Austin eliminated minimum off-street parking requirements for residential and commercial developments, in line with guidance from the 2023 ETOD Policy Plan. At the time, city officials noted that parking was adding to the cost of construction (surface parking spaces cost $5,000 to $10,000 per space to construct, while structured parking spaces cost up $60,000 per space.)

The City also noted that “the provision of vehicle parking spaces is strongly linked to mode choice” and “minimum parking requirements have resulted in an overabundance of parking in many locations throughout Austin and have continued to encourage people to drive to their destination. These parking spaces are expensive to build and maintain, and promote automobile use even when short trips can be easily accessed by walking, bicycling, or by taking transit.”

The Plan recommends additional measures that have not yet been fully implemented:

• Establish parking maximums. This measure would create a set limit on how many parking spaces a development can have. In May 2024, the City Council approved updated parking maximums for the Central Business District and Downtown Mixed-Use districts, but this policy is not yet city-wide.
• Counting parking as part of the floor-area-ratio to encourage developers to reduce space dedicated to large inactive parking parages above grade, and increase occupied building space. While the city has removed parking minimums, parking remains exempt from floor-area-ratio.

• Land Use

The City of Austin has made numerous zoning changes to increase the production of affordable homes. In December 2023, the City approved a zoning change that would allow up to three housing units to be built on a single-family zoned lot. This was part of the “Home Options for Mobility and Equity” (HOME) initiative.

In May 2024, the City approved Phase 2 of the HOME initiative, which decreased the minimum single family lot size for the first time in 80 years. Property owners can now build a single-family home on as little as 1,800 square feet of land, compared to the previous minimum of 5,750 sq. ft. Additional zoning amendments made by the City recently that support transit include:

• Allowing apartment buildings citywide to be built closer to single-family homes by revising compatibility standards.
• Increasing allowable heigh and density for developments within a half mile of new CapMetro light rail stations if the developer provides income-restricted housing units.
• Restricting certain auto-oriented and inactive land uses that are not transit-supportive from locating near the light rail investments in the future.

Barriers to TOD and Affordable Housing

Market-Rate Housing

Developers may decide to build market rate housing instead of affordable housing because of market conditions and/or the lack of zoning entitlements that would incentivize them to build affordable housing.

Perceptions of Affordable Housing

The term “affordable housing” is often misunderstood. Communities do not always comprehend that affordable housing is often embedded in mixed-income housing developments, and the design and construction of these multifamily buildings are indistinguishable from market rate housing. Some people equate affordable housing with large inner-city public housing projects that were built in the 1950s and 1960s.

State Law

The state of Texas prohibits mandatory inclusionary zoning for housing units. For example, municipalities cannot require a certain percentage of homes in a new development to be sold or rented below a certain sales or rental price to income-qualified households. However, municipalities can establish voluntary programs, known as density bonus programs, that offer additional entitlements beyond one’s base entitlements in exchange for providing income-restricted affordable housing.

Key Lessons

Comprehensive Planning Efforts

• Austin has been able to conduct TOD planning before any major construction associated with its major expansion program. The agency and its partners have taken the time to create a wealth of comprehensive information on TOD, such as the 2023 ETOD policy plan, policy toolkit, priority tools, interactive conditions analysis tool, and its own case studies of other agencies.

Land Use Changes Coupled with TOD Efforts

• Working together, CapMetro and the City of Austin have successfully combined transit and land use planning. CapMetro’s work directly led to zoning changes that will lead to more mixed-use developments and more affordable housing. The City’s work in turn directly impacts and improves the potential ridership of CapMetro’s transit system.