Can Californian Households Save Money on Transportation Costs by Living in Transit-Oriented Developments (TODs)?

Many residents in large Californian metropolitan areas are heavily burdened by housing costs. Advocates, researchers, and elected officials in California are debating whether transit-oriented development (TOD) could be an effective tool to mitigate the housing affordability problem by increasing housing supply and reducing transportation costs in transit-rich neighborhoods. This study contributes to this debate by estimating how much Californian families can save on transportation costs by living in transit-oriented developments (TODs). By utilizing the confidential version of the 2010–2012 California Household Travel Survey, this study evaluates the impact of TOD on household transportation expenditures by comparing TOD households with two control groups. When controlling for household demographics, TOD households save $1,232 per year on transportation expenditures—18% of their total annual transportation expenditures. When controlling for both demographics and neighborhood environment, TOD households save $429 per year—about 6% of their total annual transportation expenditures. The study confirms that Californian households save money on transportation costs by living in TODs mainly because they own fewer vehicles. About two-thirds of the savings can be attributed to transit-friendly neighborhood environment and one-third to access to rail transit, which highlights the importance of integrating a rail transit system with supportive land use planning and neighborhood design.