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David Levinson

RP Braun/ CTS Chair in
Transportation, 

University of Minnesota

fable 1 :  .

handing Mechanism Measurem...
David Levinson
RP Braun/ CTS Chair in

Transportation, 
University of Minnesota

 

fable 1
Funding Mechanism Beneficiaries...
Accessibility
measures the
proximity of a

place to everyone
and everything

Access creates
Value
and everything

Access creates
Value

We have evidence
of that value by
looking at the price
We have evidence
of that value by
looking at the price
Land Value».  $IIq. rn
Source:  Access Across America (2014) Transit Accessibi’ ly

e. g. Each additional job within 20
Source:  Access Across America (2014) Transit Accessibility

e. g. Each additional job within 20
minutes by car adds $0.25...
Current Logic

Transportation creates access. 
Access creates value. 
Landowners receive value. 

Insufficient funds for ca...
Value can be used
to fund Transport

The Lifetime of ‘Ruin Cities Trolley

1872
The Lifetixne of ‘Ruin Cities Trolley

1872
C
I trw-t-‘nr
' n‘ X street-Lu
*-- ‘ ~ - - - -- 119: C
" " '“'_'_"“ 9115.):  C...
Closing the
feedbackloop

Transportation creates access. 
Access creates value. 

Landowners receive value. 

Fraction of ...
Development

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Y
"'“” »4.--. r---- -,  I
Dr-vnlntl I l
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Traditional distribution of
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Traditional distribution of Georgist distribution of revenue
revenue...
x
Increment
Financin

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Richfield forgoes a certain
amount of the increase in
property ta...
“v" " 33’€': "T'F '$
~ "‘ Te. 'm1r. af. ed

COTTRELVYLLE YOWNSHIP

SPECIAL ASSESSMENT
DISTRICT ‘.3!-2

“wan

  
 
  
  
  ...
.I . --Ilsun u, -_-, u-1. u»’mr¥‘! $ uafi
;  »— » . , .  , . ‘,-'5-"""'¥.5.-""'. —!"'! 'F'3.", ’|flafl‘. 

*. :m; ... ;,. 'ga...
‘ . .,, ,.. ,._. _,. ':. _., ::. ,.. .". .'. v TRANSPORTATION
i': :"""""""". ;"'f"“""“ IMPACT FEES
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Ig ts eve opment: 
The Minnesota Context

HGUFIE 4 Belnrs-and-after cross nation at our r-#1::  development

Characteristi...
Table-2“ ‘ ~ l

Value Capture Stmoglu

Spodll Aasewnonu
tnmponadon Utility Fm
Development Impact Fees

Negotiated Enaions
...
mu:  2: Feouus at value (spun stvattgles

I!  MHMII
§iL_§ Ii E 3

 

lunsdiction:  land Value Tax. 
Transportation Utility...
Jurisdiction.  -t3i'1J  uv:  Tm, 
i'. 'i ‘: t,i, :it‘. .‘: [i. iii‘ UT T T‘,  i[‘[‘ lfacility (linky
 / ' Air Rights
r
SIT...
CTS (2009) Value Capture for Transportation Finance blip; /_L
www. cts. umn. edujResearch/ FeaturedjVa| ueCapture/ index. ...
Sessions

0 Dav -'_l Levir‘isr_'»'i ()v-'_'r~. ' -2w of
sessiuri goals ar‘ii'_l oi_1|cctvcs: 

lL‘lT'1ll"_l'u'l_‘ Clobal L...
Comments

0 All investments cost money before they make
money

0 All require some means of financing (getting the
S) and fu...
i S r
Place and
Plexus

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TH? 
lQANS'°’: ‘.l2lAT| ON
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RV 2014: Value Capture- Myth or Reality? by David Levinson

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Value Capture: Myth or Reality? AICP CM 1.5
Capturing the value of public transit investments can be a tricky business. Everybody has a vested interest. Everyone wants a piece of the pie. Value capture strategies include joint development, special assessment districts, tax increment financing and development impact fees. But how much of the value actually makes it back to the transit agency? Where have these strategies been successful and why? What does the FTA think about value capture? Explore the concepts of value capture, learn from real projects and hear the latest thinking directly from the FTA.
Moderator: David M. Levinson, Professor, Center for Transportation Studies, University of Minnesota, Minneapolis, Minnesota
Nadine Fogarty, Principal/Vice President, Strategic Economics, Berkeley, California
Dan Ngo, Program Analyst, Federal Transit Administration, US Department of Transportation, Washington, DC
John Howe, Vice President of Strategic Consulting, Parsons Brinckerhoff, Toronto, Ontario

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RV 2014: Value Capture- Myth or Reality? by David Levinson

  1. 1. David Levinson RP Braun/ CTS Chair in Transportation, University of Minnesota fable 1 : . handing Mechanism Measurement of Ienelit ’ hnante Instrument General Revenue . zmais un- Cm Reszuned non-user Land value gvomh Land value taxes hem. -fioanes Property 1.1:: growth Lu unoemeni finanorg Aupund xnorul fbnahk
  2. 2. David Levinson RP Braun/ CTS Chair in Transportation, University of Minnesota fable 1 Funding Mechanism Beneficiaries Measurement of Ieneiit finance Instrument General Revenue .35-'i--'.1i: u:! >.' . Jw‘>3v: 1.1- Liz; 1': ‘.'. tr ! }~: ’6-'. n ‘ ' ' ‘h: « .4‘ «:47 : 'i»; 'w$, M- T . H‘: {>; I‘. .1' Cr’ ’-iesrxiaesz nan use: _.3r-); m'ievs . ar-1.3 LE glCM'. i' Lam: mm la-es Ire‘-'i£-h(i. !Iie"~'. -"i-I, »-VT. 2.11 : ;ri. ml" l. u | V'L‘I‘VY‘l‘1". 'Tl.1'! l rg . >', '.t3', :~t_~1'. c-rt. ..» twwrhfs L51‘-Qf. -J . _r, '.cmr"47-'«Is ".1r-, ;w. rt. ;'. »ar mlity Tr. -.v1'. c«: r‘. ar ca ut :7. ‘errs - £1?‘ we :12-reiacrevnt »: -:>ocrimme'. [1?W. ":-Um? ?? nmcoct 1995 C1?‘ st. » a-1953 D6?’1El! ‘.3 V-eugaiiafefi 43- 3;’. -3'15 I>e'ae! :cr"w. >'w! :1"w-: ~_)¢. >s fawn? ZlE'~‘? C(W'€"" Cir 5:79 de. e<co'ne"f acc-3v1=. r-Tm -‘cu 'n'. t«‘. z~ Uggy F99; ' “" jviviuj’ . F"M. 0 in’ "r, ,"'[‘1r ! ;.}. V_'4IP’; l . . . ’ zii 2 4, "' ‘ ‘'1' "V 3 ’ ‘, ' equja Y. ‘ .13.}: -b‘. ',: -1m'i'j: v', . . .9" i v‘ . i’ ‘i‘I.7,[‘0'; ‘. >'? '« 5 ': .l! €J', ' u . :'i‘, ni1:i‘; ; , ‘,h>vuo}u ! 'i. |l1|", . 'n-V‘v‘i- H. -.. i, '~'. in T; . _u~. g~ij4 W’-‘W: »-u~_w_'i'- W 1I0', l!l“’ rm; . ~' vi 1 V mm in ' vi; u 2- ll1'! ‘.‘6‘‘'lll'!5’''. - wwi. mm. ‘. .-. . . v _‘, .. , ',. ,i_ .1 , g,. ,._i. L T , . , ‘,. ,.. ,,. _ Accessibility measures the
  3. 3. Accessibility measures the proximity of a place to everyone and everything Access creates Value
  4. 4. and everything Access creates Value We have evidence of that value by looking at the price
  5. 5. We have evidence of that value by looking at the price
  6. 6. Land Value». $IIq. rn
  7. 7. Source: Access Across America (2014) Transit Accessibi’ ly e. g. Each additional job within 20
  8. 8. Source: Access Across America (2014) Transit Accessibility e. g. Each additional job within 20 minutes by car adds $0.25 to price of a single family home on average in the Twin Cities (all else equal). Current Logic Transportation creates access. Access creates value.
  9. 9. Current Logic Transportation creates access. Access creates value. Landowners receive value. Insufficient funds for capital investment in transportation. Landowners receive less value. Value can be used to fund Transport
  10. 10. Value can be used to fund Transport The Lifetime of ‘Ruin Cities Trolley 1872
  11. 11. The Lifetixne of ‘Ruin Cities Trolley 1872 C I trw-t-‘nr ' n‘ X street-Lu *-- ‘ ~ - - - -- 119: C " " '“'_'_"“ 9115.): CC n-erases I07. Lxr-.4.-t: I ll f&‘C Closing the feedbackloop Transportation creates access. Access creates value.
  12. 12. Closing the feedbackloop Transportation creates access. Access creates value. Landowners receive value. Fraction of value is captured by infrastructure funding organizations to fund transportation. 'i [', !llIl= JI‘
  13. 13. Development I. ... .. ..g m_m‘_': ' ' I Y "'“” »4.--. r---- -, I Dr-vnlntl I l l V ' ‘ ‘L " I warn» l ' 3 C: e*qnlIu I _ r. ... ... - - - - f — . . | >- L. ¢». t, I I l e - - - . . , .,. ,., w,' _ l Ccgzauli I Tuuul r| l.LUnl: Ill‘f ‘ m; r.. w er, r,r, -sunny; Value Captured Value can be captured in many
  14. 14. Traditional distribution of revenue between private sector and government l, 'tt, K§lt§l~_‘lE1 ij. ... ,.. l—| D Georgist distribution of revenue between private sector and government LL , l,I, l:(ilf(§l£li l Wages l private
  15. 15. . H s _ 7 . J I " I g -. -« Ii » I l I . i - - _ Traditional distribution of Georgist distribution of revenue revenue between private between private sector and sector and government government Interest private ax Increment Financing Richfield forgoes :1 certain amount of the Increase in property tax generated by the new developments. Applies to “blighted New Pan-
  16. 16. x Increment Financin eii Q , ;; 2'. - - T3!‘ . Richfield forgoes a certain amount of the increase in property tax generated by 3 the new developments. Applies to "blighted districts" I New Post- Prolect EAV Ioeiauee Yaucurue " «mu rum iaciiuseo aw [g 'g' 1.5:. pupa Q“ Tmal (AV rirrw diam K-He-5 to all ts-mg Iizliittzin prqect yea 1‘. JG » . . 23ye: ai TIF {O J“ leil‘ilIFia'. &Cl - - " ' ‘ -31 COTTREl_VlL'. ETUWN$I-ii? -. . ‘ , tl! j_ SPECIAL ASSESSMENT ‘ ‘ ’ ; DISTRICT :3!-2 ‘jg’-, -’. "Boon-: A Special Assessments 1.. r~. ..*p. .a. - , -- . raj
  17. 17. “v" " 33’€': "T'F '$ ~ "‘ Te. 'm1r. af. ed COTTRELVYLLE YOWNSHIP SPECIAL ASSESSMENT DISTRICT ‘.3!-2 “wan Special Asvcssmcms 1.. r-. . m. ... — , ~»»» Vvhp I: M': r;« Mnmzy ‘*Jr~: «:1»’a‘| ? G: u.irv_: .-’~h: :a: i cf the l: L"'f: I-' -. . . ..- vn"-tv-J .9: ‘¢¢: n:: : -. .~. . . _« . r. u. ..» ". “." ‘IO F‘xg. ':! E‘-cr; .~: n:~3a: ~:aL: : 's'-33: . Fvzsrr '1'-‘ell M'. nt; :.iI¢. :L‘ Slrue'_‘; ,
  18. 18. .I . --Ilsun u, -_-, u-1. u»’mr¥‘! $ uafi ; »— » . , . , . ‘,-'5-"""'¥.5.-""'. —!"'! 'F'3.", ’|flafl‘. *. :m; ... ;,. 'ga: .fi. ..‘; -»tm _ S *'“‘= '"“'- "“"“". v +“" ¥C£§‘? H¢Ii; !-hfl‘ivI‘li’n‘l"IITs * ‘ tin: tn: -:¢ Y0n‘IN| :m¢: u1-: :I= :i. 'f: l'rL'9:rn: , »I-k9|: I:ll¢a‘n(J4l-! .I‘A5l£K! £41w‘3.t! cI_ mg; 'a? inxm¢u: sEtnm. um; «ml e ’ fie3‘: fiE’E. Eii: ’Isl'c! g: fifi‘ - tmIwxcaximai: vtras1siax: xtt1«zy‘: i hr" ' Hslnhnbiug-II»: -1,! (0 -“(’-'-‘VA; -'-'-, H1l§4.'HN'I0|£ . . . 7- . . . . ‘ I > 7 7 1 _ ‘ ‘ S"-= """""""'”"'. ""'. "‘. ""v IMPACT FEES _, _, _l Hi-Iinllnulllulbululiifilr ‘puny-Idntnxpnnlnuv-Iqrnuflt fllflfifilllihlllfilfiflfl-r‘ rfilthfiklflijlltji fiqztlullullpmlu - nu AIT-MINI. «Ir
  19. 19. ‘ . .,, ,.. ,._. _,. ':. _., ::. ,.. .". .'. v TRANSPORTATION i': :"""""""". ;"'f"“""“ IMPACT FEES IM$lU'QfiVj'Iiil| Il'Il7fl"§I, _ Q-uyimnnn-2-mlaulunnnllni ‘llflfifillijhjlflfilfitfii Uhvuulhfin-udhzfii-lufiui_ Vlnnulllnrhqn-jlllunlnntig-' ifflullélhuflnfillgn For! usnmu Tmr if-'rr. vr| n'I Pp‘-. 'I Fer: I. »p $n‘i'Wm ‘iv ‘ .9‘ ‘ : > cs H ‘ ‘ un-Itp-- . . . ... ... ... . . ... .. ... ... ._. ... ... ... ~. g. .. I¢. ... . . ... -.. ... .., ... ... ... .. ..u. ... ... ... . . ... -.. . Infrastructure Provision
  20. 20. Joint Development he ' ‘V 7: O l I . ' I a 4, ' - . . ‘ K n ' l: " . .. ._ , _ __ f_ { Land Development " 2 . , . I , ’ . . ' ‘ l‘ I Infrastructure . Provision Jomt . - v- I I : - -- ll . _ “_ Private = .x__ . _ I ointness in Jointness ' S Time Place I Air Rights
  21. 21. ~ . ' I3 . d _A I II II II at an; "L _ _ I‘ II II II II v-1' ‘ | II II II II °~g ' ' II an un an - - tn 1- an I -1 II II as 9: I: II I- I In in u ' II II’ u an 3 2 7 Air Rights Development: The Minnesota Context . ;-n; ‘ 4-1 ‘Jn-, v Nu, -a--1 HGURE 4 Belura~ond~uitr cross aowun cf our rwta development Characteristics of Minnesota's freeway system provide unique opportunities for air rights
  22. 22. Ig ts eve opment: The Minnesota Context HGUFIE 4 Belnrs-and-after cross nation at our r-#1:: development Characteristics of Minnesota's freeway system provide unique opportunities for air rights development Sauce; David long. Kevin j. Krlaek. and David Levinson. Designing and assessing a teas-Jung laboratory for an integrated land use and transportation course. Transpormlon Raearch Record. 2046185-93. 2000. Air Rights in Minnesota
  23. 23. Table-2“ ‘ ~ l Value Capture Stmoglu Spodll Aasewnonu tnmponadon Utility Fm Development Impact Fees Negotiated Enaions Joint Development
  24. 24. mu: 2: Feouus at value (spun stvattgles I! MHMII §iL_§ Ii E 3 lunsdiction: land Value Tax. Transportation Utility Fee 7 Facility (link): Mums Site: Negotiated Exactions ’ vi Spenalnssessment. Increment Fiuanch Figaro 2: value caonuue strategies can be applied indiv-oualty 0! combined I0 sun spoof-t suuat-ons
  25. 25. Jurisdiction. -t3i'1J uv: Tm, i'. 'i ‘: t,i, :it‘. .‘: [i. iii‘ UT T T‘, i[‘[‘ lfacility (linky / ' Air Rights r SITE‘ ‘T-. ‘:_)iT. tIi. ‘;Ii'-i. ‘. fractions -. ,__ L Facility (node); Joint Development Impad Area: Impact T special Assessment, Tax, Increment Financing HguyQ2j, > ‘, i , ",T‘i"; ~ ‘JD: it 7‘}HH! ‘, HI . ir "Sim "r 'r; «i tr’ Key References CTS (2009) Value Capture for Transportation Finance bttp. v’ -’ www. cts. umn. edu Research’Featured Va| ueCa ture index. htm| Istrate. E. and Levinson. D. (2011) Access for Value: Financing Transportation Through Land Value Capture. Brookings Institution http: //www. brookings. edu/ research/ papers/2011/04/28- transportation-funding-| evinson—istrate
  26. 26. CTS (2009) Value Capture for Transportation Finance blip; /_L www. cts. umn. edujResearch/ FeaturedjVa| ueCapture/ index. htm| Istrate, E. and Levinson. D. (2011) Access for Value: Financing Transportation Through Land Value Capture. Brookings Institution http: //wvvw. brookings. edu/ research/ papers/2011/O4/28- transportation-funding-levinson-istrate Overview of Sessions 0 Dav -Ll Lr: v‘Ir‘isr; -'1 U'. 'r: t-. ' cw ul session goals and t; b_| cct mics: . ‘WW, I g r L ”_1 ‘‘ ‘ll . _ Q lt. ‘l1'lllD'i'C Llobal Lxampligs ul- ‘ M ' ' ' ’ ' | r1rii; wa'. i~. 'r. ' L". “C Q CrossRail and lransport for London = 'iLi ll '~lt, ll| 'i. =,'. iliri: _; ml : ~ til '1!‘ . Dan N90 HA perspuhve; Greater Toronto Hamilton Area Metrolinx LVC best practices HI‘ mm nt 'b'm Q EpII"lgL0 U IIQS ECO E study aware of LVC and transit Q NadineFogarty Implementation New directions in private sector , Perspective involvement capital improvement funding 0 How to align transit agency and through New/ Small Starts and l°“| ‘"!9°"""m°m 1° make LVC a LVC contribution to local match "3 V
  27. 27. Sessions 0 Dav -'_l Levir‘isr_'»'i ()v-'_'r~. ' -2w of sessiuri goals ar‘ii'_l oi_1|cctvcs: lL‘lT'1ll"_l'u'l_‘ Clobal Lxarnpliss oi‘ Q l, .~"i>". . ‘L, Ir'cl ‘t Jl| ,i" . _ | ririi; wa'. i~. 'r_' L-. ‘L ‘j, il. lli‘1L". ‘l/ Q CrossRaii and Transport for Q l'i'Li, iri_= ,‘i; i, xi stain, , i_= ,:, ilirii, ; ’ ’ London Ln Ll‘ , !i' . Ddn N90 HA Pmipuuvue 0 Greater Toronto Hamilton Area 0 Helping communities become ° Megohnx LVC be’! p"m”‘°’ aware of LVC and transit 5!” V Q NadineFogarty Implementation New directions in private sector _ Perspective involvement Capital improvement funding 0 How to align transit agency and through New/ Small Sm, “ and local government to make LVC a LVC contribution to local match "Amy Summary Comments 0 All investments cost money before they make money 0 All require some means of financing (getting the $) and funding (paying back the $). 0 Pay-as—you-go puts all burden on today (or yesterday). 0 Generational equity is a challenge. 0 Value Capture applies to more than Streetcars — It can be applied to all accessibi| ity—improving transportation
  28. 28. Comments 0 All investments cost money before they make money 0 All require some means of financing (getting the S) and funding (paying back the $). 0 Pay—as—you-go puts all burden on today (or yesterday). 0 Generational equity is a challenge. 0 Value Capture applies to more than Streetcars — It can be applied to all accessibility-improving transportation Burning Questions
  29. 29. i S r Place and Plexus lvin n TH? lQANS'°’: ‘.l2lAT| ON EXPEFZIENCE ll 3 ' V‘ » g ‘o :4 ' A. : ' I A7 A 16! , .‘.5F‘, ,l ’ _ h L. '. ‘ «Md ‘'1 T i "3: / "A. Transportation Experience Access to V Destinations m“- nexus. umn. edu
  30. 30. '.1,Ll| n lI| iil| .l‘~. Z721.. . . ' . A r l . is ll ; ‘ ii A--- grv. " ‘ I . . ’ The Place and Transportation Plexus Experience dlevinson umn. e neXu5_umn_edu -15:‘: -_u--

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