With increased interest in new transit systems for congestion relief, or pollution mitigation and limitations on the amount of funding available, governments and planners are looking at many new ways to finance transit infrastructure. One method being pursued is capturing some of the value conferred to sites when transit is introduced. This paper discusses a proposal to capture that value through a market based bid process, examines means of overcoming several related stakeholder issues, and discusses potential pilot project sites. As early as 1826, German economist Johann Heinrich von Thünen developed a theory that transport adds a measure of accessibility and value to a site. Research has continued for almost two centuries and UC Berkeley professor Robert Cervero has conducted several studies that identified a ten percent premium for locations that have enhanced accessibility due to transit's proximity. Capturing this value, though rare, is typically achieved through standard local finance mechanisms like property tax levies, assessment districts, and TIF. These methods have seen limited implementation as each presents significant issues for policymakers, transit operators, and the public, when compared to alternative grant funds from state or federal transport departments. In hopes of finding a new value capture alternative, this paper explores the possibility of a market-based bid system where property owners volunteer a portion of the anticipated increase in value to deliver the property enhancing transit infrastructure. These "bids" would help determine the optimal location for transit based on a cost/benefit analysis of various route and station alignments. This concept was originally developed in the author's graduate thesis research at the Department of City and Regional Planning. Subsequent coursework outlined the process, identified stakeholders, and proposed techniques to mitigate potential stakeholder concerns. Important conclusions include identifying a need for a non-profit oversight entity to coordinate implementation and a focus on proposed transit systems that do not qualify for federal funding grants.
Globally, urban development near transit stations has long been understood to be critical to transit's success primarily because it can contribute to ridership and improve the efficiency of transit investments. In the United States in particular, fixed-guideway transit's land use-shaping capability has been an important justification and goal for transit investment. In fact, today's U.S. federal funding policies increasingly focus on achieving transit-oriented real estate development near new transit infrastructure. However, the widespread implementation of transit and land use coordination practices has been considered an uphill battle. The academic literature suggests the most effective practice may be for U.S. transit planners to locate transit stations where pre-existing conditions are advantageous for real estate development or transit investments can generate the political will to dramatically alter local conditions to make them amenable to real estate development. However, prior to this study, no research had investigated the influence of real estate development considerations on U.S. transit project planning, particularly whether transit planners purposefully located alignments and stations as described in the literature.Based on interviews with more than 60 transit planners and case studies of three transit projects, I found that transit planners have modified transit planning processes and project designs in numerous ways for multiple real estate development-related reasons on billions of dollars of transit investments. Integrated transit and land use planning is not necessarily the exception it was once considered. I found abundant examples across 18 U.S. regions of route realignments, station relocations, and station designs that were carried out in order to influence real estate development. Interviewees explained that some real estate development-related project elements escalated capital costs, increased operating costs, and reduced ridership forecasts relative to the alternative designs that were under consideration. The costs were thought to be worthwhile because of real estate development-related benefits that transit planners expected to accrue, such as more compact regional growth and increased ridership from station area real estate development. Yet, numerous interviewees also explained that their efforts had often resulted in less real estate development than they had anticipated.I found that transit planning professionals' theories regarding real estate development around transit helped explain why their expectations may not have been met. Through interpretive analysis of interviews with nearly 100 transit professionals--including transit planners, federal policymakers, and federal policy implementers--and a review of federal policy documents, I developed a taxonomy of transit professionals' theories-of-practice regarding station area real estate development. I found that many were oversimplified and decontextualized versions of academic theories. Such theories helped explain interviewee's commonly-held view that transit-oriented development was likely around many, if not all, newly constructed transit stations.Indeed, when transit planners rely on oversimplified and decontextualized theories about transit-oriented development, it can contribute to unrealistic development expectations that inspire real estate development-related elements of transit planning processes and project designs. Ultimately, the costs incurred to promote the anticipated development may not be justified by the transit-oriented development benefits that accrue. Ineffective theories and practices may contribute to an inefficient allocation of scarce transit funding resources and significant opportunity costs incurred directly by governments, transit agencies, private investors, and citizens.This qualitative investigation establishes the existence of these theories and practices and can serve as the foundation for future research that more thoroughly quantifies the actual costs and benefits of real estate development-inspired transit planning practices across a representative sample of transit projects. If the overall scale of transit planning inefficiencies are found to be significant and worth addressing, policymakers can rely on findings from this research to adapt public policies. Also, researchers can rely on the findings to launch studies that will help us better understand how transit planners' theories-of-practice emerge, disseminate, and persist. Further, scholars can engage with transit planners in reflective research to help them improve their efficacy, and ultimately, the efficiency of transit systems in the United States.
