MTC Links Funding to Sustainable Communities Policy for the First Time with $45M Incentive Program
FOR IMMEDIATE RELEASE
February 25, 2026
Contact: Zack Deutsch-Gross, [email protected], (415) 637-0101
San Francisco – Today, the Metropolitan Transportation Commission formally adopted the Transit-Oriented Communities (TOC) Incentive Program, setting aside $45 million in One Bay Area Grant (OBAG 4) funds to reward cities that adopt housing, parking, and transportation policies that support the building of homes near transit.
Transform applauds MTC’s decision to maintain a strong link between transit and housing through its TOC Policy and OBAG grants. Building new housing near transit is proven to reduce traffic congestion, air pollution, and transportation costs, making it one of the most effective ways to combat climate change.
This vote finalizes an evaluation framework first considered when MTC adopted its original TOC Policy in 2022. The program establishes a 100-point scoring system across four priority categories: density, housing production and tenant protections, parking management, and station access. Jurisdictions must meet scoring thresholds to qualify for OBAG 4 incentive funds.
“As a regional leader and a steward of significant public resources, MTC has a responsibility to advance our collective regional transit, housing, climate, and equity goals,” said Zack Deutsch-Gross, executive director of Transform. “The Commission’s vote today showed real leadership in leveraging regional dollars to support local policies that contribute to those goals.”
The TOC Incentive Program follows MTC’s January approval of the broader OBAG 4 framework, which set aside the funding for the next round of grants. With today’s vote, jurisdictions can apply for grants from the $45 million in OBAG 4 funds if they demonstrate compliance with TOC standards across the four categories. The deadline to qualify for grant funding has been extended to July 1, 2027.
The original TOC Policy, adopted in September 2022, was designed to better align land use and planning decisions within a half mile of transit areas with the Bay Area’s climate, transportation, economic, and housing goals, as articulated in Plan Bay Area. Since then, MTC has debated how tightly to tie transportation funding to specific policies that advance these goals. Today’s vote represents a victory for advocates who have urged the Commission to use OBAG funding as a means to encourage communities to develop affordable, equitable, transit-oriented housing.
“For years, Transform has pushed MTC to tie transportation funding to integrated policy outcomes near transit stations, including tenant protections and smarter parking policies. Today’s vote makes that linkage real,” said Deutsch-Gross.










