Green Financing for Transit Oriented Development - MIT Center for Real Estate

Green Financing for Transit Oriented Development

In The News

Juan Huicochea Mason MSRED ‘22 and Fábio Duarte published an article in Urban Land magazine last week. They discuss how green financial tools can be used to foster transit-oriented development (TOD) in cities, with mutual advantages to residents, government, and real estate developers. According to the article, the world needs, “more than $6 trillion in annual infrastructure commitment to achieve proper sustainable development by 2050,” the problem of funding this actually comes from a lack of projects in which to invest.

Duarte and Mason outline a framework for making TOD projects attainable involving six key points:

  1. Revenues – top priority
  2. De-risking liabilities – should help link revenues, financial vehicles, and policies with legal liabilities.
  3. Local policies – significant for TOD’s short-term financial performance.
  4. Governance – has direct influence over a project’s financial performance.
  5. ESG market maturity – comes from the achievement of a more scalable, transparent, and liquid market.
  6. ESG finance and asset liabilities – the rapprochement of asset and financial standards. 

The authors want to thank: Siqi Zheng, Juan Palacios, James Scott, Steven La, Kairos Shen, Sara Anzinger, Zachary Solomon, Roger Mann, and Christina Marin for helping with this research.

This article is based on a full research report, by the same authors, to be released by CRE. The research was supported by CRE’s Wang Award.

Green Financing for Transit Oriented Development