The development of the urban transport sector is essential in determining the standard of living in cities worldwide. To this end, transit-oriented development (TOD) is being promoted as a vital urban growth strategy for the future growth of cities. TOD is an infrastructure and mobility planning concept that centres around a transit node while integrating land use and various transport networks. It employs the method of land value capture with enhanced or additional land value tax, a one-time betterment levy, development charges or impact fees, and transfer of development rights, among others, within its influence zones. Under TOD, city densification is being promoted along mass transit corridors through vertical construction, substantially enhancing the floor area ratio. This approach is supported by the promotion of non-motorised transport infrastructure, the development of street networks in the influence zone of transit corridors, and effective first- and last-mile connectivity through feeder services. TOD offers multiple opportunities for independent built-to-suit and multi-client facilities such as commercial establishments, and parking and office spaces.
TOD aims to integrate the planning of transit projects such as metro and regional rapid transit system (RRTS) with urban planning and development authorities. However, maintaining an effective synergy between these two remains a key challenge. Many states already have TOD policies in place, and some are in the process of formulating similar policies. As per the Union Budget 2023-24, a Rs 100 billion urban infrastructure development fund will be established from the corpus of priority sector lending shortfall. This fund will be utilised for urban planning reforms that include the implementation of TOD initiatives.
Owing to mounting operational losses and increasing capital expenditure requirements in the urban rail sector, the central government mandated the inclusion of private investment components and the incorporation of innovative forms of financing in the Metro Rail Policy, 2017. The aim was to mobilise resources for metro rail projects. The policy seeks to promote TOD as a viable solution for state governments, metro corporations, municipalities and business enterprises. In the same year, the Ministry of Housing and Urban Affairs notified the National TOD Policy with the objective of encouraging compact mixed-use development, reducing the need for travel and improving access to public transport.
The Delhi Development Authority (DDA) has approved the TOD policy, which allows for a higher floor area ratio (FAR) in developments along or around transit corridors to accommodate more residential, office and recreational spaces within a walking or cycling distance of the transit stations. Following this, the city’s first TOD hub has been planned in Karkardooma, which will bring together metro stations, residences, workplaces, and recreational spaces such as museums. The project is expected to be completed by September 2026. Moreover, the DDA approved a modified TOD policy in March 2021, aiming to unlock the economic potential by facilitating compact vertical development around public transport hubs. The National Capital Region Transport Corporation (NCRTC) has been working with the DDA in the formulation, updating and operationalisation of the TOD policy.
Moreover, the Karnataka government approved the TOD policy in November 2022, which advocates for a higher floor space index (FSI) in the TOD zones to encourage the use of public transport. This will be achieved through better land use via the amalgamation and reconstitution of plots, relaxation of setbacks, redevelopment of old areas and promotion of mixed land use. More recently, the Directorate of Urban Land Transport, which coordinates the planning and implementation of urban transport projects and programmes, has shortlisted six metro stations along the Central Silk Board and Kempegowda International Airport stretch for the pilot implementation of the TOD.
Recently, the Mumbai Metropolitan Region Development Authority (MMRDA) partnered with the World Bank to foster the advancement of sustainable transportation and TOD policy within the region. As part of the TOD policy, the MMRDA will impose a certain premium on development activities in the vicinity of the influence area. Currently, the region is undergoing significant infrastructure transformation with the objective of enhancing its transit systems and establishing an integrated network.
Furthermore, the Uttar Pradesh TOD policy, which was approved in September 2022, mandates the preparation of TOD-based zonal development plans for the TOD zones by concerned transit agencies to facilitate integrated development. In line with the provisions of the state’s TOD policy, the NCRTC is coordinating with development authorities to delineate the TOD zones of the RRTS and integrate them into the masterplans (2031) of Ghaziabad and Meerut.
Key initiatives and developments by development authorities and corporations
In order to increase development along the transit lines, improve employment accessibility and mobility, and build economic housing facilities in areas designated, metropolitan development authorities and municipal corporations are implementing numerous measures.
For instance, the Pune Municipal Corporation has sanctioned 78 proposals under the TOD zone on Lines 1 and 2, and five proposals on Line 3 of the ongoing metro rail route. The corporation has permitted a maximum FSI of up to four in the TOD zone, enabling developers to utilise additional FSI to increase the population density within the TOD zone. Besides, the Chennai Metropolitan Development Authority is planning to increase the FSI for properties along the Chennai metro rail corridors to 6.5 from 4.87 in its TOD zones. Further, the Gurugram Metropolitan Development Authority is aiming to enhance last-mile connectivity for commuters and prioritise TOD along the key areas of the city. Additionally, the Haryana Mass Rapid Transport Corporation has identified key metro stations in the new corridor, such as Sector 29 and Subhash Chowk, that have the potential to be utilised for TOD schemes.
Commercial complexes such as retail stores, food stalls, malls and restaurants, both inside and around the metro stations, enhance ridership and the overall experience. Residential development and parking facilities near the metro stations also contribute to the viability of travel by the metro rail. TOD encourages the use of public transit by integrating these commercial establishments with the metro rail. Some of the projects that have witnessed significant growth in ridership, owing to the successful integration of commercial and real estate development under the DDA, are Nehru Place, Bhikaji Cama Place, Mayur Vihar Extension, Dwarka Sector 21, and Rohini Sector 18, among others. In an endeavour to accommodate multiple retail stores, Bengaluru Metro Rail Corporation Limited is constructing a two-storey commercial space below the viaduct in Indiranagar, capable of accommodating around 25 shops. Besides, Chennai Metro Rail Limited (CMRL) has opened up opportunities for businesses and entrepreneurs to set up shops or establish office spaces within CMRL-owned premises. Through this initiative, metro corporations will be able to generate additional revenue and foster a conducive environment for businesses to thrive.
In order to improve last-mile connectivity, metro development authorities have started providing parking facilities. The MMRDA is providing parking facilities to commuters of Mumbai metro Lines 2A and 7, with the service currently available at five bus depots near metro stations. Furthermore, CMRL has opened additional parking space at Koyambedu metro station, with separate facilities for women. More recently, the DMRC has opened a parking facility at the Palam metro station on the Magenta Line which can accommodate approximately 40 cars and 450 two-wheelers, including bicycles.
Suggestions and the way ahead
The development scenario varies across geographies, necessitating a customised implementation modality for TOD that considers the local requirements, strengths and constraints of areas. In the event of contract termination, compensation should be equitable for both metro lenders and TOD lenders, without differentiation between the two. When TOD is implemented, the increased FSI will result in an escalation in land price adjacent to and around metro stations for both commercial and residential construction. Consequently, the government can secure higher returns and utilise them for further economic development.
Going forward, TOD remains the key to creating more efficient, sustainable and equitable communities because it prioritises the “3Cs” – compact, coordinated and connected development. By following a TOD approach, decision-makers and urban planners can strengthen their communities and contribute towards the growth of the economy.