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Access for Value: Financing Transportation Through Land Value Capture

The worsening financial straits of governments at all levels pose a significant challenge to discretionary programs, such as transportation. The United States transportation system must become more efficient if it is to provide the same level of services with less money at all levels of government. At the same time, the competitive forces in the global economy require an increasingly effective U.S. transportation network, able to support a changing American economy. This study examines accessibility and its importance in assessing transportation performance and in creating a sustainable transportation funding source. It first delineates the concept of accessibility through a comparison with the common transportation performance metric of mobility. The paper then explains how accessibility can help fund transportation through a virtuous circle of access, land value, and transportation infrastructure. Local, state, and federal governments must better understand the structure and characteristics of value-capture policies if they are to develop their full potential as a sustainable funding source.
The Virtuous Circle: Infrastructure creates access, access creates value, value can be captured to finance infrastructure and therefore create further access, and thus value

The Virtuous Circle: Infrastructure creates access, access creates value, value can be captured to finance infrastructure and therefore create further access, and thus value

I. Introduction

The worsening financial state of the federal, state, and local governments is a frequent subject in media and political circles. As discretionary expenditures, transportation programs likely face significant changes if they are to cope with spending cuts across all levels of government. These changes would require not only reprioritizing the use of scarce funds, cutting ineffective programs, and improving the performance of remaining programs, but also encouraging states and local partners to find other sources of funding for transportation.

Measuring accessibility is an essential tool in such a makeover because it reveals the benefits of a transportation system. Accessibility is the ease of reaching valued destinations, such as jobs, shops, schools, entertainment, and recreation. As such, accessibility creates value. Capturing some of this value would allow state and local governments to invest in the operations, maintenance, and in some cases expansion of their transportation networks. Accessibility, as an outcome-oriented metric, can effectively assess transportation’s economic impact, and capturing the value of accessibility would help states and metropolitan areas develop sustainable transportation funding streams.

This study examines accessibility and its importance in assessing transportation performance and in creating a sustainable transportation funding source. It first delineates the concept of accessibility by comparing it with a common transportation performance metric, mobility. The paper then explains how accessibility can help fund transportation through a virtuous circle: infrastructure creates access, access creates value, and value can be captured to fund infrastructure. Although this paper uses evidence mainly from the Minneapolis–St. Paul metropolitan area, the final section provides policy recommendations for all levels of government involved in funding the U.S. transportation system.

Accessibility may be defined in different ways. However, the goal in measuring it is to use a measure that is clear to all constituents; cumulative from block to neighborhood to city to metropolitan area; comparable on the same scale and across multiple modes; comprehensive across different types of land use; and readily computed with available data. On the basis of these criteria, this study defines accessibility as the number of jobs that can be reached from a location (for example, a residence) by car or transit within 30 minutes during the morning peak hour (7:30 to 8:30 am).

 

I. Introduction
The worsening financial state of the federal, state, and local governments is a frequent subject in media and political circles. As discretionary expenditures, transportation programs likely face significant changes if they are to cope with spending cuts across all levels of government. These changes would require not only reprioritizing the use of scarce funds, cutting ineffective programs, and improving the performance of remaining programs, but also encouraging states and local partners to find other sources of funding for transportation.  
Measuring accessibility is an essential tool in such a makeover because it reveals the benefits of a transportation system. Accessibility is the ease of reaching valued destinations, such as jobs, shops, schools, entertainment, and recreation. As such, accessibility creates value. Capturing some of this value would allow state and local governments to invest in the operations, maintenance, and in some cases expansion of their transportation networks. Accessibility, as an outcome-oriented metric, can effectively assess transportation’s economic impact, and capturing the value of accessibility would help states and metropolitan areas develop sustainable transportation funding streams.
This study examines accessibility and its importance in assessing transportation performance and in creating a sustainable transportation funding source. It first delineates the concept of accessibility by comparing it with a common transportation performance metric, mobility. The paper then explains how accessibility can help fund transportation through a virtuous circle: infrastructure creates access, access creates value, and value can be captured to fund infrastructure. Although this paper uses evidence mainly from the Minneapolis–St. Paul metropolitan area, the final section provides policy recommendations for all levels of government involved in funding the U.S. transportation system.
Accessibility may be defined in different ways. However, the goal in measuring it is to use a measure that is clear to all constituents; cumulative from block to neighborhood to city to metropolitan area; comparable on the same scale and across multiple modes; comprehensive across different types of land use; and readily computed with available data. On the basis of these criteria, this study defines accessibility as the number of jobs that can be reached from a location (for example, a residence) by car or transit within 30 minutes during the morning peak hour (7:30 to 8:30 am).