transportation finance advisory committee, june 2012 fafa value capture strategies for...
TRANSCRIPT
Transportation Finance Advisory Committee, June 2012
fafaValue Capture Strategies for Transportation Finance
Zhirong (Jerry) ZhaoAssociate [email protected]
Land Value (EMV/Acre)
2
The General Framework of Transportation Finance
3
4
Value capture strategies: Type-I-- on property owners
Land value tax Tax increment financing Special assessment Transportation utility fees
5
Land Value Tax The conventional property tax
Tax on buildings Tax on land
A land value tax or split-rate tax Captures more value from transportation More efficient in land use
6
Henry Georgia in 1865
Tax Increment Financing (TIF)
Public improvements tend to cause a rise in property values in adjoining areas, causing an increase in property taxes.
TIF uses these future increments in property taxes generated by new development to finance the initial costs of the development itself.
Tax Increment Financing (TIF)
Source: How TIFs work, Chicago, Illinois, 2004
8
9
Special Assessments District
1. A compulsory levy used to finance a particular public improvement program
2. Its only levied against those parcels receiving a special benefit from the improvement
3. Assessment amount is directly related to the value of the benefits the property receives
(Source: League of Minnesota Cities)
10
The Peachtree Street
Streetcar Line Midtown
NeighborhoodSAD
Atlanta, GA
11
Transportation Utility Fees
Transportation network functions as a utility
Facility use does not correlate with property value Depends on property type
More direct connection between costs and benefits
12
TUF Simulation: Annual fee by land use - Minneapolis
13
Value capture strategies: Type-II-- on estate developers
Negotiated exactions Development impact fees Joint development Air rights
14
Negotiated Exactions
Non formulaic or preset contributions for the local transportation improvements decided through negotiation.
15
One-time predetermined assessments levied on new development
Offset the impact of the development on the capital cost of providing regional transportation infrastructure
Development Impact Fees
16
Development Impact Fees
With new highway exist
Development Impact Fees
17
Defining Joint Development
Joint development private-sector sharing of capital costs private-sector payments to the public entity
Incentives Public: additional $ for capital improvements Private: enhanced development potential
18
Mechanisms of Joint development
19
Air Rights Development
“The legal capacity to make use of a three-dimensional area for
development or improvement.”
-The Use and Abuse of the Term “Air Rights,” Sam
Galowitz, 1996
20
Air Rights Development: The Minnesota Context
Characteristics of Minnesota’s freeway system provide unique opportunities for air rights
development
21
22
Air Rights Development: Oases in Illinois State Tollway
Features of Value Capture Strategies
23
Value Capture Strategies
24
Land value tax
TIF
SADDIF
JD
Transportation Utility Fee
Air Rights
25
26
TH610: Value capture study
Summary Value capture
The rationale to link benefits to costs A useful toolset with various features
Policy considerations State authorization Local discretion Policy research and design Public engagement
27