This month, Building Better Communities with Transit is all about value capture. We chat with Professor Deborah Salon of Arizona State University her research on the topic and how institutional structure, entrepreneurship, and creativity play into successfully using value capture.
This month on Building Better Communities with Transit, our host Jeff Wood talks with Stan Wall of HR&A Advisors about value capture is and the NoMa–Gallaudet U station in Washington, DC. According to Stan, that station is “the most textbook, beautiful example of the possibilities in creating value and leveraging that to extreme positive benefit for a city.”
This month on Building Better Communities with Transit we’re joined by the Executive Director of the KC Streetcar Authority, Tom Gerend. In 2016, Kansas City, MO opened the first streetcar the city has seen in almost 60 years and transformed the city’s downtown. Former skeptics of the line are now some of the KC Streetcar’s biggest proponents as businesses have boomed and more people are moving to—and spending in—the center city. The 2.2 mile KC Streetcar, akin to a downtown circulator, is “a demonstration of the possible.”
The failure of Atlanta’s transportation ballot measure late last month led to speculation among many analysts about what the vote meant for other regions across the country looking for ways to fund infrastructure projects. But though the Atlanta vote captured the lion’s share of media attention, another vote cast in July could hold as much – if not more – importance in coming years.
In an increasingly contentious political environment, it can be difficult to get important transportation projects off the ground. Finding funding sources for these projects, no matter how valuable they might be, can prove politically impossible, with many people skeptical over both increased spending and revenue creation sources. Gas taxes are almost entirely a non-starter, and despite the fact that 79 percent of transportation ballot measures overall passed in 2011, according to the Center for Transit Excellence, they can still fall victim to the kinds of pressures seen in the metro Atlanta area.
Officials in Shenzhen, China, this month announced a $900 million project to expand the city’s metro system in anticipation for the XXVI Universiade Games. City officials hired the Mass Transit Railway (MTR) Corporation – best known for running and managing Hong Kong’s mass transit system – to build and operate the ten-mile-long, ten station extension.
Unlike most transit operators around the world, MTR maintains a robust development portfolio that produces revenue far greater than its transit fares. Most of MTR’s properties surround the company’s rail lines, and in many instances – such as in Hong Kong – MTR received the properties from the city in return for financing and operating a transit system. In essence, MTR provides metro service below ground in return for property above. This strategy is called “value capture.” Although it’s not yet clear whether Shenzhen’s expansion will use this model, the speculation about using value capture there reaffirms the idea’s financial viability.
In Latin America, value capture has been utilized to help fund Bus Rapid Transit (BRT) in cities such as Bogota, Columbia and Sao Paulo, Brazil. Property values have increased dramatically along BRT corridors as a result of the improved transit, and the local government has been able to recoup public funds used to finance the system through increased value of government-owned properties along the line. Both Bogota and Sao Paulo helped pay for new transit lines by betting property values would increase along those corridors.