THE $366 MILLION TRANSIT village at the Pleasant Hill BART station is the right project, in the right location at the right time. Such a positive view was not always the case.

When a transit village was first proposed 28 years ago, there were few civic leaders who thought it was a good idea. Suburban sprawl was advancing as families moved into homes farther and farther from job centers.

Gasoline prices hovered around $1 a gallon and a large suburban home in the far eastern stretches of the Bay Area was affordable for many buyers in the 1980s and 1990s.

But things have changed dramatically in the past few years. Home prices skyrocketed, with easy short-term financing leading to a flood of foreclosures. Gas prices are well above $4 a gallon and mortgage money is more difficult to obtain.

As a result, the rental market is looking good, especially in areas closer to jobs and public transportation. That's why the Contra Costa Centre Transit Village at the Pleasant Hill BART station has become so attractive.

The first phase of the project, a 1,547-space parking garage, opened last month. On Thursday, ground was broken on the second phase of the project.

Construction is under way on 422 upscale apartments and 35,590 square feet of retail space, with a completion date in late 2010. Work on the 100 condominiums in phase two will be delayed for two years because of the housing slump.

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The combination of residential, retail and office space near mass transit has a bright future as oil prices rise and people make greater efforts to conserve energy by driving less.

If more people are able to live, work and shop in one location as well as have easy access to mass transportation, transit villages are likely to sprout up in many other locations.

Transit villages already have been established successfully at the Richmond, El Cerrito Del Norte and Fruitvale BART stations.

Pittsburg is paving the way for a similar village of retail, office and residential development at what will become an e-BART station near the intersection of Highway 4 and Railroad Avenue.

Walnut Creek also is considering such a development, and Dublin plans to build a retail hotel complex near its station.

Transit villages not only provide a more energy-efficient and convenient lifestyle, they can give downtown areas new economic and cultural vitality, and help compensate for the sharp downturn in single-family home construction.