Transit-oriented development has been held up as a practical answer to the limits of urban growth. But new data from the Urban Institute suggests that, across much of the U.S., the concept is still more aspiration than reality—particularly when it comes to the kind of transit service that actually changes how people live and move.
Cities have been grappling for years with a basic question: where does growth go when space runs tight? Building taller and denser is one option. Expanding outward is another. Increasingly, planners are trying to split the difference by concentrating development around transit corridors, creating what amounts to a hub-and-spoke model for urban expansion.
That approach—known as transit-oriented development—focuses on building dense, mixed-use, walkable neighborhoods within easy reach of public transportation. As Yonah Freemark, a principal research associate in the Housing and Communities Division at the Urban Institute, describes it, these areas are meant to channel growth into activity centers while making transit a more viable alternative to driving.
The idea is straightforward. The execution, less so.
Data from the Urban Institute shows just how uneven adoption has been. Looking at housing located within a half-mile of frequent transit service, only 11 states and the District of Columbia meet even a modest benchmark, with at least 10% of housing meeting that threshold. Those markets are largely clustered in coastal or historically transit-oriented regions, leaving much of the country well behind.
Even in cities that appear transit-rich, the picture is more complicated. A large share of housing may sit near a bus stop or rail line, but that doesn't mean the service is frequent enough to be useful. And frequency, more than proximity, is what ultimately drives ridership.
Los Angeles is a good example. According to the Urban Institute, 92% of housing in the metro area was within a half-mile of transit in 2022. But only 36% was near frequent transit. San Francisco shows a similar pattern, with 91% of housing near transit but just 43% near frequent service. New York performs better than most, yet even there the gap is noticeable—84% of housing is near these systems, compared to 56% near frequent service.
In less transit-oriented markets, the drop-off is much sharper. The Urban Institute reports that 42% of housing in Atlanta is near transit, but only 4% is near frequent service. Dallas comes in at 44% and 6%, respectively. Detroit and Tampa both have more than half of their housing near infrastructure, yet just 1% near frequent service.
That disconnect matters. Simply being close to convenience doesn't mean people will use it.
Freemark's research underscores that point. Among urban areas with populations of at least one million, each additional mile of transit service provided per capita is associated with an increase of 2.5 annual transit trips per resident. In practical terms, more service—more routes, more frequency—translates directly into higher usage.
Not surprisingly, the metros that lead in transit performance combine both density and service. Freemark points to San Francisco, New York and Washington, D.C. as the strongest examples, with high levels of transit availability paired with significantly higher ridership. By contrast, more car-dependent metros like Detroit, Indianapolis, and Memphis lack both the density and the service levels needed to support meaningful transit use.
For transit-oriented development to work as intended, Freemark argues that several pieces have to come together. Cities need frequent, reliable transit service. Zoning has to allow for greater density near stations. There has to be sustained investment in the surrounding neighborhoods. And, critically, transportation and housing planning need to be coordinated rather than operating in silos.
Absent those elements, proximity to transit risks becoming more of a marketing point than a meaningful advantage.
For commercial real estate investors, that distinction is becoming harder to ignore. Assets located near transit may still carry a premium—but only if the service is robust enough to support real demand. In markets where transit infrastructure exists without frequency or reliability, that premium may be harder to justify.
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