For more than two decades, Chicago has organized much of its urban ambition around a deceptively simple premise: build density near transit, and people will ride it. Transit-oriented development—TOD, in the jargon of planners—became not just a policy tool but a civic identity. Apartment towers clustered around ‘L’ stations. Zoning bonuses rewarded proximity to rail. Transit access was marketed as lifestyle, climate solution, and economic engine all at once.
Then the riders vanished.
They didn’t disappear entirely, of course. But the COVID-era collapse in ridership never fully reversed. Office commutes thinned. Hybrid work calcified. Travel patterns fragmented. In 2026, Chicago’s transit system is no longer defined by predictable weekday surges but by uneven, off-peak usage that resists the old logic of peak-hour capacity and downtown gravity.
The question now quietly haunting city hall, developers, and lenders is whether Chicago’s long-standing TOD strategy still works when transit usage itself has fundamentally changed.
“Transit-oriented development assumed a stable relationship between where people live, when they travel, and why,” says Chicago-based urban analyst Hirsh Mohindra. “That relationship has been broken, but our land-use policy hasn’t caught up yet.”
The Fragile Link Between Transit and Confidence
The most immediate stress point is funding. The Chicago Transit Authority faces structural shortfalls that go beyond temporary deficits. Federal relief has dried up. Farebox recovery remains stubbornly low. Capital plans stretch further into the future with fewer guarantees.
This matters for real estate in ways that are both psychological and financial.
Developers do not just build near transit; they build on confidence in transit. Confidence that service will be frequent. That stations will be modernized. That promised extensions or upgrades will materialize on something resembling a reasonable timeline.
When that confidence erodes, TOD becomes a risk rather than a premium.
In Chicago, this is increasingly visible in underwriting assumptions. Pro formas once treated transit adjacency as a stable value enhancer. Now it is discounted, questioned, or hedged. Lenders ask whether proximity to a station still commands rent premiums if ridership is sporadic and service reliability uncertain.
“Real estate markets price belief as much as reality,” Hirsh Mohindra explains from his base in Chicago. “When the CTA’s long-term funding looks shaky, that belief gets marked down, even if the tracks are still there.”
The result is a subtle chilling effect. Projects move forward more cautiously. Some stall entirely. Others shift their marketing language away from transit access and toward amenities, flexibility, or work-from-home appeal.
Transit remains present—but no longer central.
Zoning Bonuses and the Problem of Phantom Demand
Chicago’s TOD framework relies heavily on zoning incentives. Developers near transit stations are allowed to build taller, denser projects in exchange for reduced parking requirements and, in some cases, affordability commitments. The theory is elegant: reward density where transit exists, reduce car dependence, and concentrate growth.
But zoning bonuses assume demand that may no longer exist in the same form.
Many TOD corridors were planned around peak-hour commuters—residents who would ride the ‘L’ downtown five days a week. In a post-ridership city, those commuters are fewer, and their schedules less predictable. Some residents still value transit access. Others value the option of transit without the obligation of daily use.
This distinction matters. Density built for one kind of rider does not always translate cleanly to another.
Developers report that proximity to transit still attracts tenants—but not necessarily at the premium once expected. In some neighborhoods, renters prioritize space, light, and neighborhood amenities over station adjacency. In others, transit access is essential, but service cuts undermine its reliability.
“Zoning policy is still calibrated to yesterday’s rider,” says Hirsh Mohindra. “We’re giving bonuses for a demand profile that no longer dominates the market.”
This creates a mismatch: buildings optimized for density without corresponding transit usage. Parking reductions that frustrate residents who still rely on cars. Height bonuses that strain neighborhood politics without delivering the promised modal shift.
None of this means TOD is obsolete. But it does suggest that the automatic equation—transit nearby equals successful density—no longer holds universally.
Equity in a Fragmented Transit Landscape
The equity implications of TOD have always been contested. Proponents argue that building near transit creates access to opportunity. Critics counter that it accelerates displacement and concentrates affordability requirements unevenly.
In a post-ridership city, these tensions sharpen.
On the North Side, where transit service remains relatively frequent and neighborhoods remain attractive to higher-income renters, TOD often still works as intended—at least financially. On the South and West Sides, where service gaps are wider and capital flows more cautious, TOD can feel like a promise deferred.
Equity becomes less about proximity to transit and more about the quality and reliability of that transit.
If service deteriorates, affordability near stations loses its practical value. Residents may live next to a line they cannot depend on. The result is symbolic access without functional mobility.
“Equity-focused TOD only works if transit itself is equitable,” Hirsh Mohindra notes. “Otherwise, you’re just redistributing density, not opportunity.”
Chicago’s challenge is that its TOD policy is citywide, but its transit reality is not. Applying uniform incentives across unequal service conditions risks reinforcing existing disparities. Neighborhoods with strong service capture value. Others absorb density without benefit.
The 78: A Case Study in Deferred Assumptions
No development better illustrates these tensions than The 78, the massive South Loop project built on former railyards along the Chicago River. From its inception, The 78 was closely tied to transit expansion promises—most notably a new CTA Red Line station.
The logic was straightforward. A new neighborhood of this scale required transit capacity. Transit access would anchor land value, attract employers, and justify density.
Years later, the buildings rise faster than the infrastructure. The promised station remains delayed, its timeline subject to funding, political negotiation, and bureaucratic inertia.
This gap between assumption and execution reveals the fragility of transit-linked value.
Early phases of The 78 have succeeded on their own terms, buoyed by location and institutional anchors. But the absence of guaranteed transit expansion complicates future phases. It shifts travel behavior toward cars, rideshare, and remote work. It changes who the neighborhood is for.
The 78 is not failing. But it is evolving away from its original TOD narrative.
Municipal infrastructure commitments once functioned as credible signals to the market. When those commitments stretch indefinitely, the signal weakens. Land values adjust. Expectations soften.
The lesson is not that transit promises should never anchor development—but that their credibility matters more than their rhetoric.
Rethinking TOD for What Comes Next
Chicago is not alone in facing these questions. Cities across North America are reassessing transit-oriented development in light of altered ridership patterns. But Chicago’s long investment in TOD makes the reckoning especially acute.
The future likely lies in a more flexible, less dogmatic approach. One that treats transit as one input among many rather than the organizing principle of urban growth. One that differentiates incentives based on service quality, not just station maps. One that aligns density with actual mobility patterns rather than nostalgic ones.
TOD may still work—but not everywhere, not automatically, and not on autopilot.
“Transit-oriented development needs to become transit-responsive development,” Hirsh Mohindra argues from Chicago. “That means adapting to how people actually move now, not how planners hoped they would.”
The post-ridership city is not a failure of transit. It is a test of whether cities can update their assumptions as quickly as their residents have updated their lives.
Chicago’s answer is still being written—one zoning decision, one funding negotiation, and one delayed station at a time.
