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 seventh 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: New Jersey 

Issues in housing affordability  

There is a geographic divide between the affordability of homeownership in New Jersey. Data from the National Association of Realtors Affordability 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.  

Northern New Jersey’s main metro area, the New York-Newark-Jersey City area scored 81, placing it among the least affordable markets among ten selected metropolitan areas. Southern New Jersey tells a different story, with a score of 144, making it the most affordable among the selected areas, as shown in Table 1.  

Table 1. Housing Affordability Index 

Metropolitan Area	Index (2022)
San Francisco / Bay Area	47
Seattle	78
Denver	80
Northern New Jersey: New York-Newark-Jersey City	81
Salt Lake City	83
Austin	94
Raleigh	106
Chicago-Naperville-Elgin	133
Minneapolis-St. Paul-Bloomington (MN-WI)	141
Huntsville	142
Southern New Jersey: Philadelphia-Camden-Wilmington	144

 

For renters, the picture is more challenging. According to the National Low Income Housing Coalition, a full-time worker in New Jersey must earn nearly $40 per hour to afford the average two-bedroom apartment in the state without spending more than 30 percent of their income on housing. The NLIHC Gap report found that New Jersey has only around 43 affordable and available units for every 100 renter households with incomes at or below 50% of area median income (AMI). Nearly three-quarters of these households are severely cost-burdened, spending more than half their income on rent, leaving less resources for food, healthcare, transportation, and other needs. 

Across the state, the data on renters also shows a split between North and South Jersey. In North Jersey, there are 47 affordable and available units for every 100 units for households at or below 50% AMI, compared to 53 units per 100 households in South Jersey. North Jersey’s rental market is tied to its proximity to New York City, where access to high-wage employment and densely populated corridors is reflected in high rents. Rents across North Jersey range from $2,200-$2,700 per month for a two-bedroom unit, while rents in South Jersey close to Philadelphia range from $1,600-$1,800 per month. South Jersey’s relatively higher affordability ratio reflects lower rents, but it does not mean that renters in South Jersey are free from affordability challenges. These numbers underscore why transit-oriented development (TOD) and its potential to bring affordable housing to transit-rich areas like New Jersey is critical to the state’s housing future.  

 

Evolution of TOD in New Jersey  

NJ Transit was founded in 1979 to acquire, rejuvenate, and operate privately-run transit services that became financially insolvent following World War Two. The agency also acquired some, but not all the former companies’ real estate holdings. The property acquired was by and large needed to operate and support transit service. Over the last 45 years, some of this property has been strategically made available for TOD. 

TOD is not new to New Jersey. In the 19th and early 20th centuries, many of its towns and cities developed around train stations and streetcar lines. For the past three decades, the agency’s planning department has been promoting TOD, beginning with its “Planning for Transit Friendly Land Use” handbook in 1994. In 2018, state legislation required NJ Transit to formalize its TOD work with a dedicated TOD Office within its Real Estate Department and a yearly inventory assessment of its real estate holdings. The agency splits its TOD responsibilities between the Real Estate Office and the Planning Department—Real Estate focuses on NJ Transit-owned property while Planning focuses on station area planning around transit stations. 

Today, NJ Transit defines TOD as walkable, mixed-used development centered around and integrated with transit stations (such as bus stops, bus terminals, and rail or light rail stations), which creates an environment that encourages increased transit ridership. The agency’s TOD Policy has eight core goals for its TOD programming: increasing ridership, building complete communities, expanding transportation choice, advancing equity and affordability, promoting sustainability, capturing value, engaging communities, and strengthening local economies. 

 

Current TOD Policy  

Transit Friendly Planning Guide 

In 2022, NJ Transit published a “Transit Friendly Planning Guide” designed to help municipalities, developers, state agencies, and other stakeholders implement transit-friendly planning principles. The guide recommends how communities should design and develop projects, improve connectivity, manage parking, and introduces a set of “place type” categories to help communities understand the scale and density of development best suited for their transit context. Equity is a central theme throughout the guide, which connects to one of the agency’s TOD Policy goals to ensure all developments prioritize inclusive outcomes, including affordable housing.  .  

 

TOD Policy Statement 

In April 2024, NJ Transit published a formal TOD Policy Statement. The policy identifies TOD’s benefits and the agency’s goals, objectives, and steps to implement TOD within a half mile (or ten-minute walk) of rail and bus stations and supporting policies relating to development located wholly or partially on NJ Transit-owned or controlled land. The policy also commits the agency to an Equitable TOD policy and requires that community engagement be built into every project. 

On affordable housing, the policy is clear. The agency, per state law, requires 20 percent of newly built residential units in TOD projects on land owned or controlled by NJ Transit to be reserved for low- and moderate-income households. If NJ Transit does not own the entire development site, the required number of affordable units will be 20 percent of the units attributed to its portion of the development site.  

 

The LAND Plan 

In October 2025, NJ Transit launched the LAND Plan (Leveraging Assets for Non-farebox Dollars). This is a 30-year strategy to unlock the economic potential of the agency’s 8,000-acre real estate portfolio. If implemented, the plan projects up to $1.9 billion in potential revenue, 50,000 jobs, 20,000 housing units, including 4,000 affordable units, and $14 billion in state economic activity. NJ Transit plans to solicit development proposals (which can include housing, retail and TOD projects) in 2026 for several sites, using a competitive public process to evaluate submissions. 

 

Affordable Housing Requirements in NJ 

New Jersey has a long history of legally guaranteeing affordable housing, collectively known as the Mount Laurel doctrine. In 1975, the NJ Supreme Court held that all New Jersey municipalities are responsible for their ​“fair share” of affordable housing. In practice, this forced municipalities to ensure that low-income and disadvantaged communities can afford to live where they like. The court subsequently set up a system in which a developer can sue a municipality if it does not permit more housing construction. 

In 1985, the New Jersey Legislature passed the Fair Housing Act to implement the Mount Laurel doctrine. The law created the Council on Affordable Housing to define housing regulations, estimate housing needs, and set criteria and guidelines for municipalities to create housing. 

Per state law, “moderate income housing” refers to households with a gross household income equal to more than 50 percent but less than 80 percent of the median gross household income for households of the same size within its region. “Low income” refers to housing affordable to families at 50 percent or less. 

 

NJ Transit’s Partnership Programs 

Transit Friend Planning Newsletter and Data Application 

NJ Transit and the Voorhees Transportation Center at Rutgers University publish a weekly “Transit Friendly Planning Newsletter” designed to keep municipal officials, planners, and advocates updated on where communities could build projects or redevelop existing spaces around transit stations. The Voorhees Transportation Center also conducts and shares TOD-related research (e.g., benefits of transit friendly planning, its effect on housing values, guides to implementing TOD).  

Along with the newsletter, NJ Transit and Rutgers developed a Transit Friendly Data Application, which aggregates station-area data on demographics, land use, environmental conditions, real estate, and transit availability. This data application gives planners and developers one resource they can use to evaluate TOD potential across the state.  

 

Transit Village Initiative 

The Transit Village Initiative is a co-managed program between the NJ state DOT and NJ Transit that creates incentives for municipalities to redevelop or revitalize the areas around transit stations using station area planning and TOD design standards. Designated transit villages benefit from direct assistance from state agencies, priority funding, technical assistance, and grant eligibility. As of 2026, the state has designated 37 transit villages. For example, Old Bridge Township began pursuing a Transit Village designation along Route 9 in early 2025 and was supported by a NJ Transit TOD corridor study that identified significant opportunities to build housing near bus stops. 

The initiative requires transit villages to use as-of-right zoning, rather than overlay zoning which can be subject to legal challenges. As-of-right zoning demonstrates a municipality’s commitment to embrace transit-oriented development and give developers certainty about what they can build, making projects easier to finance.  

 

Interagency Coordination 

NJ Transit participates in a wide range of interagency partnerships to advance TOD. The agency holds seats on all three of the state’s metropolitan planning organizations’ committees, co-leads the Transit Village Task Force, and works closely with the state DOT, Department of Environmental Protection, and Department of Community Affairs. 

The Department of Community Affairs plays a particularly important role, administering the Affordable Housing Trust Fund Program, which provides funding that helps municipalities, nonprofit developers, and for-profit developers build affordable housing. 

 

Financial Tools  

Funding for TOD projects in New Jersey typically comes from multiple sources, and NJ Transit’s Transit Friendly Planning Guide identifies a broad range of available funding mechanisms. At the federal level, programs include Community Development Block grants, BUILD grants and Low-Income Housing Tax Credits administered through the state’s Housing and Mortgage Finance Agency.  

State level tools include NJ DOT’s Safe Streets to Transit program (to improve safety and accessibility near transit facilities), the Transit Village Initiative, municipal aid programs, and metropolitan planning organization funding. Other state programs include tax credits to carry out comprehensive revitalization plans and incentivizing development through PILOT (payment in lieu of tax) agreements, which are agreements between developers and municipalities. Developers receive a property tax exemption if the project meets certain conditions and the developer pays an annual service charge for a period of up to 30 years, with the municipality collecting 95% of the revenue. PILOT agreements are particularly common in transit-served communities seeking to attract affordable and mixed-income housing.  

 

Key Lessons 

Promoting TOD Without Owning the Land 

NJ Transit is a compelling example of an agency that owns relatively few properties that are ripe for major TOD development, yet still takes a leading role in promoting TOD near its train stations and bus stops. By investing in planning capacity, publishing accessible guidance, building partnerships with municipalities, and participating in interagency coordination, NJ Transit has become a recognized driver of TOD across the state.  

 

Employing Specialized Staff 

NJ Transit employs planners with dedicated land use, community engagement, partnership development, and zoning expertise. These employees connect the agency with local governments, helping to overcome common barriers such as resistance to density and parking concerns. They also break down internal silos, connecting NJ Transit’s real estate, planning, operations, and government relations functions around shared TOD objectives. 

 

Leveraging State Policy 

New Jersey’s Mount Laurel doctrine is one of the most powerful affordable housing tools in the country. By requiring every municipality to provide its fair share of affordable housing, and by linking TOD projects to bonus credits and tax credit priority, the state has created a policy environment in which affordable housing near transit is strategically advantageous. The 2025 State Development and Redevelopment Plan centers TOD and affordable housing in its vision for the state’s growth through 2050, reinforcing the state’s historic focus on affordable housing. 

 

Expanding Beyond Rail 

TOD in the state has historically been concentrated around rail stations. NJ Transit has increasingly expanded its lens to include high-frequency bus corridors. Bus services often connect lower-income communities that are underserved by rail. Recent corridor studies along Route 9 and profiles of bus transit villages reflect how NJ Transit’s approach has evolved, and the 2024 TOD Policy Statement formally extends the agency’s TOD goals to stops on qualifying bus routes statewide.