RTA launches joint development study to leverage land near transit

In January, the RTA published its Transit-Friendly Communities Guide, a roadmap for local decision-makers, developers, and community advocates to create equitable, accessible neighborhoods across the Chicago region. One recommendation from the guide is for the RTA—in partnership with CTA, Metra, and Pace—to lead a Joint Development Study.

Joint Development allows a transit agency to partner with private developers to sell or lease agency-owned land near transit stations for real estate development. These partnerships can help the agency capture some of the land’s increased value and reinvest it into transit operations. Joint development is also a tool to meet equitable transit-oriented development (ETOD) goals, such as building affordable housing near transit stations.

The RTA is kicking off a two-phase study to determine whether a joint development program is feasible in the Chicago region, and if so, what it will look like and how it will benefit the region long term.

What is joint development?

The Federal Transit Administration defines joint development as “a form of value capture, as a transit agency captures some of the economic value created by its transit system and uses the funds to help finance expenses”. In practice this means agencies may lease, sell, or grant development rights on land they own – often near stations – to generate new revenue and encourage development aligned with transit goals.

While traditional ETOD can happen on land owned by local governments or private entities, joint development is unique because the transit agency is a direct partner in the process. This gives the agency a role in shaping the project and the potential to share in its long-term benefits.

Each strategy—whether selling land for a large upfront payment or leasing it for long-term income—has its pros and cons. Leasing can provide recurring revenue and more control over project goals, while selling offers immediate funds but removes future influence and income potential.

Joint development offers a way to:

Realize economic development near transit
Support ETOD and housing goals
Offset construction and development costs by shifting those expenses to private partners
Maintain partial control over how land is used near transit

Joint development is a strategy for transit agencies to realize economic development goals near their transit service and potentially offers an alternative revenue stream, but in addition, it also allows the transit agency to keep some control of their parcel of land while saving the agency construction costs and other expenses related to the high cost of development, as the developer takes on these financial responsibilities.

What can we learn from peer regions?

While joint development has not been a prominent pursuit in the RTA’s legacy transit system due to limited ownership of parcels near stations, other transit agencies have been using joint development as a form of value capture for decades.

Washington Metropolitan Area Transit Authority (WMATA)

The Washington Metropolitan Area Transit Authority’s (WMATA) earliest joint development project began in 1975, and its portfolio has grown into the nation’s most active with 55 projects completed or under construction.

Key principles of WMATA’s joint development program are to:

Maintain or grow transit ridership and enhance customer safety and/or access.
Maintain or enhance Metro’s ability to operate transit services.
Increase farebox revenue, real estate proceeds, and other sources of revenue.
Mitigate financial risk to Metro.
Encourage high-quality design that connects to surrounding communities.
Support or enhance local economic development goals.

The program involves public-private partnerships (PPPs), where WMATA collaborates with developers to create projects that complement transit infrastructure. These developments typically include:

Mixed-use residential, commercial, and retail spaces.
Affordable housing components, depending on the community’s needs.
Transit-related amenities such as parking garages or bike-sharing stations.

While WMATA occasionally sells land to developers, the agency typically leases land to them under long-term agreements, ensuring the projects align with transit-oriented goals. The developments are designed to make stations more accessible, integrate with surrounding communities, and provide amenities that attract transit users.

New Jersey Transit

NJ Transit’s joint development program is designed to leverage its real estate assets to support ETOD projects. The program aims to improve public transit access, enhance community livability, generate revenue, and stimulate economic growth by collaborating with private developers. The revenue-generating initiative helps fund improvements to transit infrastructure, reduces the financial burden on taxpayers, and promotes sustainable urban development.

The program began in the late 1980s, when NJ Transit recognized the potential value of its land holdings and sought ways to leverage them for mutual benefit. The first major projects were initiated in the early 1990s as part of broader efforts to revitalize urban areas and align development with transit access.

The program generally involves entering into partnerships with private developers to build mixed-use, transit-oriented developments on NJ TRANSIT-owned land. These developments typically include residential, commercial, retail, and office spaces, and are designed to encourage the use of public transportation. NJ TRANSIT typically leases land and enters into long-term development agreements with the development community, with the goal of maximizing both transit access and property value.

RTA’s joint development study: Phase 1

The goal of RTA’s Joint Development Study is to assess the extent to which putting Service Board property assets to work for ETOD could be a win/win for Chicago area communities, private developers, and transit agencies by:

Creating affordable housing near transit thereby reducing housing and transportation costs, the two largest household expenses for lower income households;
Attracting private investment to create walkable and vibrant ETOD communities;
Increasing transit ridership thereby increasing system revenues and enhancing regional sustainability; and
Generating ongoing revenues for transit agency operations.

Phase 1 of the study involves exploring the efficacy of joint development supported by a consultant. This phase of the project will engage a steering committee and involve researching joint development case studies and past joint development efforts in the region. The creation of an interactive inventory map will aid in classifying market potential for each site, and the team will research joint development policy and conduct a developer focus group. After a cost-benefit analysis of joint development and a comparison of joint development to alternative approaches to advancing ETOD, a final Phase I report will be prepared in summer 2026.

Next steps

If joint development seems feasible based on Phase 1 of the study, Phase 2 will commence, and the team will establish a joint development framework for the region by the end of 2026.