A Modest Proposal: Ask Developers to Help Pay For Better Transport

At today’s debate on conservative support for transit, developer Chris Leinberger had a modest proposal for lawmakers who are desperately seeking new transportation financing strategies in an era of diminishing gas tax returns: Ask real-estate developers to pay for projects that will increase their profits.

leinburger_1.jpgChris Leinberger at last year’s Walk21 conference. (Photo: M. Katz)

The concept is often referred to by the wonkish term "value capture," evaluated by the University of Minnesota in a groundbreaking study last fall. But Leinberger, an active player on land-use issues who founded the group Locus to help make urban planners part of the federal transportation debate, kept his case simple and accessible.

Many developers are willing to "share part of our financial upside" to ensure continued local investment in transit and mixed-use development, Leinberger said. "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’s approach, which attracted vocal interest today from House transportation committee chairman Jim Oberstar (D-MN), would not solve the problem of uneven federal support for roads — which are funded through an 80-20 split between Washington and local governments — and transit, which tends to receive a lower 50-50 federal match.

"If we need to lower the federal match, that’s fine," Leinberger said, as long as private-sector buy-in could be counted as part of a locality’s contribution to transit.

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.

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