#58 – A Transit Oriented Development Financial Incentive Program — A Tool to Encourage More Bicycling and Walking

San Mateo County, California

Felicia Leonard, Bicycle and Pedestrian Coordinator, City of Clearwater, Florida


There are two primary obstacles to using non-motorized transportation for personal, shopping, and commuting trips: lack of facilities and longer than reasonable trip length. People will bicycle and walk more if the proper facilities are provided and their destinations are within a relatively short distance.

The 2002 National Survey of Pedestrian and Bicyclist Attitudes and Behaviors noted that the average trip length on a bicycle was 6.3 km (3.9 mi) and 38.6 percent were 1.6 km (1 mi) or less. The average trip length for walking was 1.9 km (1.2 mi) and 26.9 percent were shorter than 0.4 km (0.25 mi). Unfortunately, as a result of land uses in San Mateo County, CA, and many communities throughout the United States, distances from residential housing locations to employment and shopping destinations are typically greater than the average trip lengths noted in the 2002 survey.

Use of land and its specific location, as determined by local governments throughout the United States, is traditionally targeted to maximize sales tax revenue. The focus on increasing tax revenue results in a greater tendency for land development projects such as office and retail space, while creating a disincentive to develop residential projects. This often produces an environment where employment, shopping and housing are separated by distances that are much greater than the average bicycling and walking trip distances. In addition to discouraging non-motorized trips, this land use pattern also burdens the motorized transportation infrastructure and reduces air quality.

Phase 1 of the Franklin Street Project, near completion. The project received $1.2 million in TOD Incentive Program funds.

To further complicate the issue, land use decisions generally are made by local jurisdictions while transportation decisions are made by regional coalitions. Such regional coalitions might be, for example, Metropolitan Planning Organizations or Congestion Management Agencies (such as the San Mateo City/County Association of Governments (C/CAG).

The goals of this program are not only to promote local land use decisions that reduce the distances between residential units and employment and shopping land uses, but also to provide an alternative source of funding for transportation projects, including non-motorized projects. In addition, efforts to increase the numbers of people or amounts of bicycling and walking may improve individual safety through a phenomenon of improved “safety in numbers.” [See case study #54, references, for studies that document this phenomenon]. Promoting transit-oriented development may therefore help to improve safety for bicyclists by increasing the numbers of people able to bicycle.


In order to influence land use decisions that would create shorter trip lengths and provide funding for adequate facilities, the San Mateo C/CAG has sought to implement a tailored Transit Oriented Development (TOD) Program. In general, TOD programs seek to develop shared-use, higher-density neighborhoods that take advantage of proximity to transit alternatives. The resulting development encourages more walking and bicycling by offering shorter trip distances between origins and destinations.

Using the TOD concept as a foundation, the San Mateo C/CAG has developed a unique initiative that provides a financial incentive to influence their local jurisdictions (20 cities and the county) when these jurisdictions develop and implement a critical component of Transit Oriented Development: higher density residential uses that are close to transit locations. To fund this financial incentive program, the San Mateo C/CAG allocates up to 10 percent of its State Transportation Improvement Program funds.

Through the program, the San Mateo C/CAG distributes incentive funds to a local jurisdiction for a development that meets the program’s basic criteria. To achieve eligibility for the program, the development must include housing that is located within 0.5 km (0.3 mi) of a rail transit station, and density must be at least 40 residential units per acre. Local jurisdictions receive the incentive funding upon the start of construction.

The local jurisdiction typically receives up to $2,000 per bedroom that is located in the eligible project. Funds are then used to support improvements either on-site or off-site, as determined by the local jurisdiction. In addition to transportation improvements such as non-motorized transportation projects, many general improvements such as landscaping, lighting, plazas and recreational projects are also allowed. The funding or incentive goes to the land use agency to use as they wish on transportation projects. It many times is used on the qualifying project but is not required. It could potentially be used to address a neighborhood concern of the project to help sell it.

Evaluation and Results

Since October 1999, the San Mateo City C/CAG has allocated $5.2 million to the TOD Incentive Program, supporting the development of 3,689 bedrooms in 15 projects. The resulting projects promote more bicycling and walking by providing acceptable trip lengths between origins and destinations. These projects also have provided adequate facilities for bicycling and walking by offering flexibility in the expenditure of the financial incentives.

This innovative TOD Incentive Program, as crafted by the San Mateo C/CAG, has resulted in linking land use and transportation decisions that encourage trip lengths that are suitable for walking and bicycling. In addition to providing an alternative funding source for bicycling and walking facilities, TOD developments reduce traffic congestion and improve air quality.

Conclusions and Recommendations

This program truly has provided a link between local land use and transportation decisions. The TOD incentive program has resulted in the creation of shared use, higher-density development in San Mateo County. The higher-density uses in these developments create shorter, acceptable trip lengths for bicyclists and pedestrians. In addition to encouraging more non-motorized trips, the program also provides an alternative funding source that local jurisdictions can use for bicycle and pedestrian improvements.

This program is easily replicated, having already been duplicated in the San Francisco Bay Area through the Metropolitan Transportation Commission’s Housing Incentive Program, which has already allocated $9 million for such uses.

This program was also the recipient of the Environmental Protection Agency’s Smart Growth Award in 2002.


Costs and Funding

The San Mateo C/CAG allocates 10 percent of its State Transportation Improvement Program to fund the TOD Incentive Program. However, a new program could start with less funding.


Richard Napier
Executive Director
City/County Association of Governments of San Mateo County
County Office Building
555 County Center, 5th Floor
Redwood City, CA 94063
(650) 599-1420