Sourcing Cheaper and Greener Capital for Transit Oriented Developments

Abstract

The concept of a Transit Oriented Development (TOD) today lies firmly in the urban planning realm as a fixture of sustainable development, smart growth, and new urbanism. What is missing is the ability use TODS beyond an urban planning tool into one where that can yield financial benefit for real estate developers by focusing on the environmental benefits in facilitating the modal shift from single occupancy vehicles to greener commuting options. This thesis establishes a hypothesis that if there was a manner in which the environmental benefits of a TOD could be accurately quantified and modelled then this could pave the way for real estate developers to source a cheaper and greener capital through qualifying ESG gains for impact investors.

First this thesis explores different technologies available in the market that could potentially offer this capability as a service. Second this thesis then proposes a pathway for how the quantification can be certified by suggesting amendments to the LEED certification framework in order to solve the information asymmetry between real estate developers and financiers. Finally, this thesis establishes a hypothetical case study for a new TOD in the Fort Point area in Boston to demonstrate the financial outcomes applying this newly proposed financial tool.