The United States must continue to invest in its transportation infrastructure to maintain a competitive economy in the 21st century. Two broad sets of questions arise: (1) where to invest, and (2) how to fund the investment. In a new paper, “Access for Value,” two scholars with the Brookings Institution address the second question, making the case that the nation can finance much of its transportation needs through the capture of increased land values created by that investment.
David M. Levinson and Emilia Istrate make three broad recommendations.
Use accessibility as a performance metric in funding transportation projects. Transportation planners typically use the metric of “mobility,” which describes how fast people move along the transportation network. When mobility is the chief criteria, traffic congestion is the chief evil because it slows the speed of travel. But mobility is not the same thing as access. Access describes the number of potential destinations that can be reached within a certain time. Thus, increased development density may lead to congestion and slower travel speeds yet improve access if the higher density places a greater number of destinations within closer geographic proximity.
Employ value-capture techniques to fund local transportation. When government builds new roads, highways and passenger rail lines, it adds value to property located at key interchanges and stations. Why? Because the new infrastructure improves access. As a rule, private property owners capture the increased value of that investment. That’s why developers invest so much money influencing the political system. But that gain constitutes a windfall to the property owner. It is not unreasonable for the public to “capture” some of that added value to help finance the construction of the infrastructure.
The authors discuss a variety of techniques that have been used to capture the value created by improved access: impact fees, joint development (as in public-private partnerships), the sale or lease of air rights over rail and transit stations, special tax districts, land-value taxes (taxing property on the value of its land rather than on the improvements made to it), and transportation utility fees.
Increase accessibility by coordinating local transportation and local land-use policies. Local land use policies often restrict development at the optimum locations, such as around rail stations. Intelligent zoning decisions can increase property values which, in turn, can be captured for purposes of paying for infrastructure.
Virginia, as best I can determine, follows most states in tracking mobility rather than access. Average travel speed is not the best metric. The average number of destinations reachable within a certain frame of time give us more useful information. In particular, we need to recognize that increased density can worsen traffic congestion (decreasing mobility) while simultaneously putting more destinations within reach (increasing access).
Instead of funding transportation improvements through a dog’s breakfast of taxes, levies, local proffers, impact fees and selling bonds, which severs the connection between those who use and benefit from transportation improvements and those who pay for them, Virginia should rely more upon revenue sources that capture the value created by the public investment.
