Jeff Tumlin is an expert in urban transit-oriented planning, but these days he spends most of his time working on developments in small towns and suburbs.

That's because from the East Bay to Marin, high-density housing organized around public transit is happening in the most seemingly unlikely places.

"One of the things we have found is that all the innovative, sustainable and infill housing is really occurring in the suburbs and not in the traditional cities," said Tumlin, principal at Nelson/Nygaard consulting associates. "Hercules, San Mateo and Petaluma are doing the most interesting work in the entire western United States. It's been fascinating to watch."

Smart growth and transit-oriented housing have been buzzwords since the 1970s as urban planners sought an answer to the traffic gridlock, pollution and sprawl created by decades of suburbanization. Now in many old suburban downtowns and railroad towns in the greater Bay Area, market forces are finally catching up with the professional proponents of so-called New Urbanism, a movement to build dense, vibrant communities.

"The market is demanding more infill product and the zoning codes are changing to discourage it less, and in some cases to encourage or require it," said Tumlin.

Large new transit-oriented projects include Paragon at the Crossing in San Bruno, which will eventually see 900 housing units. In San Mateo, the proposed 1,250-home Bay Meadows community will include 1.2 million square feet of offices, 15 acres of parkland and 150,000 square feet of stores and restaurants.

Christopher Meany, a principal with Wilson Meany Sullivan LLC, which is developing the site, calls it a "compact walkable new community built around a major train station and park system and shops.

"We have come to believe with near religious fervor that California is being strangled by sprawl and that we just have to change how we live," he said. "And in doing the right thing, we're actually going to build housing people want."

But massive projects have often been met with controversy. Opponents of Bay Meadows have been fighting it for years and are now pushing a lawsuit related to the project. A proposal to build 1,900 units in 17-story towers in Redwood Shores was killed by voters in 2004.

Aside from the massive projects, smaller infill developments are popping up in every town in the Bay Area. In San Carlos, Legacy Properties is building 200 units on property owned by Caltrain. In Millbrae, the Paul Corp. is putting up the 105-unit 88 South Broadway on the old King's Bowl site. In South San Francisco, two new projects are slated to be built next to the BART station: a 360-unit Fairfield transit village and the 99-unit Park Station Lofts. In Petaluma, plans for a light rail in Sonoma County are fueling projects downtown, including an 81-unit affordable housing complex next to the Petaluma River.

Alex Seidel of Seidel/Holzman, the company that built Atherton Place adjacent to the BART station in Hayward, the first dense housing project in that town, said he has watched as a half-dozen other urban-style housing developments have come up out of the ground since his project was finished.

"It's done a lot to reinvigorate downtown Hayward," he said. "I think it's seen as a desirable place to live. The attitude use to be, who would want to live next to a BART station? Well, you know what? It's convenient and we've shown it can be done well."

The market for urban-style housing within walking distance of cafes, stores and trains is booming in the 'burbs, said TMG Partners' David Cropper.

Cropper said he's been pleased with the response to phase one and two of the Paragon at the Crossing in San Bruno, which TMG developed.

"We thought there would be a discount in San Bruno, as compared to (rents in) San Francisco," he said. "We were much closer to San Francisco prices, which was frankly a real surprise."

Cropper said San Mateo, Foster City and Millbrae are all ripe for more urban infill development.

New housing proposals are coming in weekly across the Peninsula, according to Chris Mohr, executive director of the Housing and Leadership Council of San Mateo County.

"It's a hot concept," said Mohr. "There is a younger generation of people who grew up here and can't afford to stay unless they can get into a different kind of home that is less expensive than a single-family detached house."