Private developers should pay for transit projects that will increase their profits, according to developer Chris Leinberger as quoted in Streetsblog San Francisco. The relatively new concept is technically known as “value capture.”
“We in the private sector need to be at the table because, a) we need these systems, and b) we have the financial means to pay for it,” Leinberger said. US Rep. James Oberstar of Minnesota, who chairs the House Transportation Committee, expressed interest in the concept.
The federal government typically pays for about half of any given transit project, with local governments contributing the other half. Leinberger said that any private funds should be applied toward the local contributions. He also suggested that many developers would be willing to pay for some of the cost to ensure local investment in transit and mixed-use developments.
Leinberger spoke at the Texas Triangle Megaregion conference, co-hosted by Houston Tomorrow and America 2050, in September. He told the audience, “Transportation drives development. It dictates what we in real estate can build.”
Yet despite value capture’s increasing presence in transportation financing debates, it has a long way to go before members of Congress could consider enshrining it in legislation. Increased property taxes are one established method of requiring land owners to contribute to transit construction, but cities such as Portland have attempted a largely opposite approach by offering property-tax exemptions to developers who build up in walkable areas.
University of Minnesota study (July 2009): Value Capture for Transportation Finance