A Decision-Support Framework For Using Value Capture to Fund Public Transit: Lessons From Project-Specific Analyses
A May 2012 report on value capture mechanisms for funding transit has been added to the Resource Center best practices database. "A Decision-Support Framework For Using Value Capture to Fund Public Transit: Lessons From Project-Specific Analyses" examines tax-increment financing (TIF), special assessment districts (SADs), transit impact fees, joint developments, and air rights.
"The performance of the five VC mechanisms in our case studies is evaluated based on the criteria that transit providers should consider when designing and implementing a funding mechanism: the enabling legal environment, stakeholder support, institutional capacity, revenue yield, revenue stability, and equity. Using these criteria, we develop a decision-support matrix that should help policymakers, local governments, and transit agencies assess the suitability of these mechanisms," the executive summary notes.
Among the key findings:
- TIF and SADs are the mechanisms likely to yield the highest revenue.
- Local governments may use a combination of VC mechanisms. For example, TIF and SADs fund the Portland, OR, Central Streetcar Project. TIF and joint development fund Contra Costa Centre Transit Village in Contra Costa County, CA, and the Ground Transportation Center in Cedar Rapids, IA.
- The use of TIF requires significant institutional capacity, community support, and agreement among taxing agencies.
- The use of transit impact fees is rare. It benefits from state- and local-level enabling legislation, robust nexus studies, a strong real estate market, and developer support.
- Transit impact fees and SADs must be carefully designed and implemented to minimize inequities.
- Strong real estate markets, significant institutional capacity, and clear policy guidelines are needed to undertake joint development.