The new issue of the Journal of Transport and Land Use 5(1) has landed. Inside are:
Introduction to the Special Issue on Value Capture for Transportation Finance
by David Levinson and Jerry Zhao
This special issue includes 5 articles on value capture strategies used in transportation finance.
Joint Development as a Value Capture Strategy in Transportation Finance
by Zhirong Jerry Zhao, Kirti Vardhan Das, Kerstin Larson
This article examines joint development as a value capture strategy for funding public transportation. We start from the concept of joint development, its rationale, a brief history, and the extent of its use. Joint development projects in Hong Kong, Taiwan, Tokyo, and Thailand are proﬁled, as well as domestic examples in Washington, DC, New York, NY, and Portland, OR, etc. Then we provide a framework to classify joint development models by ownerships (public or private) and by types of transaction (real property or development rights). Next, joint development is evaluated along four revenue criteria including efficiency, equity, sustainability and feasibility. Finally, we summarize the advantages and disadvantages of joint development as a transportation finance strategy, and provide recommendations for policy consideration or implementation.
Rail integrated communities in Tokyo
by John Calimente
Tokyo’s railway station areas are models of transit-oriented design. To differentiate them from transit-oriented developments (TOD), the term rail integrated community (RIC) has been created to describe these high density, safe, mixed-use, pedestrian-friendly developments around railway stations that act as community hubs, served by frequent, all-day, rail rapid transit and are accessed primarily on foot, by bicycle, or by public transit. Japanese private railways have been instrumental in creating these RICs. Though they receive little financial support from the government, private railways in Japan achieve profitability by diversifying into real estate, retail, and numerous other businesses. Tokyu Corporation is used as the case study to exemplify how government policy and socioeconomic context contributed to the successful private railway model. Ten indicators, such as ridership, population density and mode share are used to analyze two stations created by Tokyu to demonstrate how this model is manifested in Tokyu’s rail integrated communities.
Prospects for transportation utility fees
by Jason Junge and David Levinson
Transportation utility fees are a financing mechanism for transportation that treats the network as a utility and bills properties in proportion to their use, rather than their value as with the property tax. This connects the costs of maintaining the infrastructure more directly to the benefits received from mobility and access to the system. The fees are based on trips generated and vary with land use. This paper evaluates the fees as an alternative funding source in terms of economic, equity and administrative effects. The experiences of cities currently using utility fees for transportation are discussed. Calculations are included to determine the fee levels necessary for transportation maintenance budget needs in three sample cities and a county in the Twin Cities metropolitan area. Proposed fees for each property type are compared to current property tax contributions toward transportation. The regressive effects of the fees and the effect of adjusting for the length of trips generated are also quantified.
Financing transportation with land value taxes: Effects on development intensity
by Jason Junge and David Levinson
A significant portion of local transportation funding comes from the property tax. The tax is conventionally assessed on both land and buildings, but transportation increases only the value of the land. A more direct, efficient way to fund transportation projects is to tax land at a higher rate than buildings. The lower tax on buildings would allow owners to retain more of the profits of their investment in construction, and have the expected side effect of increased development intensity. A partial equilibrium simulation is created for Minneapolis, Richfield and Bloomington, Minnesota to determine the intensity effects of various levels of split-rate property taxes for both residential and nonresidential development. The results indicate that split-rate taxes would lead to higher density for both types of development in all three cities.
The value capture potential of the Lisbon Subway
by Luis Miguel Garrido Martínez and Jose Manuel Viegas
This paper tries to build on traditional value capture measures, to estimate the potential of application of some of these mechanisms to the Lisbon subway, examining their ability to contribute to cover the financial costs of the system operation and development. The study will just focus on the municipality of Lisbon where this system mainly operates. This research uses spatial hedonic pricing models of the real estate of the region, calibrated on previous stages of the study, to asses, to which extent, transportation infrastructure is currently capitalised into the real estate market. The paper uses a Monte Carlo simulation procedure to estimate a synthetic population of residential and non residential properties that matches the census blocks statistics, allowing, measuring the subway valuation for each synthetic property and aggregate the results for the whole municipality. This potential value capture estimate is then used to estimate an annual tax that could be charged under different value capture measures configurations (i.e. land value tax, special assessment). The results suggest that there is a significant potential of the use of this instrument to finance the subway infrastructure.