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CAP planned highway projects in Arkansas. (Source: http://www.arkansashighways.com/2012_hcstax/HalfCent_ Statewide_10_12_2012.pdf.)
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This synthesis report documents the current state of the practice with respect to how agencies
capture the economic value created by transportation to fund the transportation system. This
report examines the following aspects of value capture in detail:
• Methodology underlying the concept.
• Legal framework enabling methods to be used for highway...
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The aim of this paper was to discuss different theoretical perspectives of competence and to present the results of wide-scale international survey on the competencies of project managers. The differences between objectivist and constructivist points of competence construct were analyzed by emphasizing contextuality vs universality of the its conte...
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... The impact of infrastructure development and improvements on property values has been studied extensively in the literature (e.g., Ahlfeldt & Wendland, 2011;Bowes & Ihlanfeldt, 2001;Voith, 1993). The economic impact of infrastructure improvements derives from the bid-rent theory of urban economics which posits that an improvement in accessibility or local amenities increases land and property values due to higher productivity, superior quality of life and lower transportation costs (e.g., Vadali, 2014;Mulley et al., 2016). Extant empirical evidence is generally consistent with this notion. ...
Prior studies show infrastructural improvements impact property values positively. The effect is often reflected soon after the announcement and continues until the project is complete. These studies, however, are primarily set in developed countries. Emerging markets pose unique risks where uncertainty around implementation and funding could dampen these positive effects significantly. We utilize a quasi-natural experiment around an inner-city road redesign and improvement project in Bangalore, the fastest growing city in India. We exploit the difference-in-difference regression approach to examine the project’s impact on residential and commercial property values around two sets of geographically proximate roads, one of which was chosen for the redesign. Unlike in developed countries, we find that property values are unaffected by the announcement when uncertainty is the highest but start reflecting the positive value of the infrastructure once construction starts and show significant gains upon completion. Our findings carry important policy implications for structuring value capture strategies in emerging markets.
... In addition to the State Highway Fund, Texas has other financial mechanisms available, such as Highway Improvement General Obligation Bonds, which are payable from the general revenue fund. At the local level, municipalities can establish funding sources from their general tax revenue fund and establish financial mechanisms such as Transportation Reinvestment Zones (TRZs) (21), and Tax Increment Reinvestment Zones (TIRZs) (22). In Mexico, SCT developed the country's National ITS Strategic Plan in 2010. ...
Many metropolitan regions around the world straddle one or more international borders and many of them include at least one developing country. A binational metropolitan region consists of two (or more) different municipalities belonging to two different countries with interconnected mobility patterns and transportation networks. Management of the transportation network in these regions is complicated by their inherent amount of cross-border travel and number of agencies involved. Using the Texas-Mexico border as a case study, this paper discusses the implementation of Cross-Border Virtual Transportation Management Centers (TMCs) at binational metropolitan regions where at least one of the municipalities involved is in a developing country with limited Intelligent Transportation System infrastructure available. TMCs collect and disseminate relevant traffic information to road users and the media and serve as a communication point between different agencies to coordinate actions to improve network flow. This paper proposes the concept of Cross-Border Virtual TMC to allow agencies in binational metropolitan regions to exchange traffic data and provide travelers across the region with accurate traffic information. The Virtual TMC model would minimize the capital cost required to build a centralized TMC in a specific geographic location, making its implementation more affordable. The paper identifies requirements and actions to implement the Cross-Border Virtual TMC concept in the following areas: (i) legal and regulatory; (ii) institutional and policy; (iii) financial; and (iv) technology. The paper proposes a phased approach to facilitate implementation, moving first into a Basic Virtual TMC System, and subsequently into an Advanced Virtual TMC System. ABSTRACT Many metropolitan regions around the world straddle one or more international borders and many of them include at least one developing country. A binational metropolitan region consists of two (or more) different municipalities belonging to two different countries with interconnected mobility patterns and transportation networks. Management of the transportation network in these regions is complicated by their inherent amount of cross-border travel and number of agencies involved. Using the Texas-Mexico border as a case study, this paper discusses the implementation of Cross-Border Virtual Transportation Management Centers (TMCs) at binational metropolitan regions where at least one of the municipalities involved is in a developing country with limited Intelligent Transportation System infrastructure available. TMCs collect and disseminate relevant traffic information to road users and the media and serve as a communication point between different agencies to coordinate actions to improve network flow. This paper proposes the concept of Cross-Border Virtual TMC to allow agencies in binational metropolitan regions to exchange traffic data and provide travelers across the region with accurate traffic information. The Virtual TMC model would minimize the capital cost required to build a centralized TMC in a specific geographic location, making its implementation more affordable. The paper identifies requirements and actions to implement the Cross-Border Virtual TMC concept in the following areas: (i) legal and regulatory; (ii) institutional and policy; (iii) financial; and (iv) technology. The paper proposes a phased approach to facilitate implementation, moving first into a Basic Virtual TMC System, and subsequently into an Advanced Virtual TMC System.
... In a number of countries, mechanisms within the land value capture concept have been used to raise funds to finance the development of road infrastructure. In fact a number of studies (see Debrezion et al 2011;Peterson, 2009;Vadali, 2014;Chapman, 2017) have linked public 1 ephraim.munshifwa@cbu.ac.zm 2 anthony.mushinge@cbu.ac.zm 3 natashakalunga@gmail.com investments to increased property values. Thus this paper examined this concept in relation to financing transport infrastructure in Zambia. ...
... Value capture mechanisms have been used in a number of countries to raise funds for intercity and local infrastructure (see Debrezion et al 2011;Casey, 2011;Ma et al., 2013;Vadali, 2014;Xu, 2015;Chapman, 2017). These mechanisms include an array of instruments such as: inkind contributions, negotiations and voluntary contributions, sales of development rights, public land leasing, land acquisition and resale, land sales, impact fees and development charges, property taxes, property tax surcharges, tax increment financing (TIF), betterment levies/taxes and other similar taxes and levies (Peterson, 2009;McGaffin et al., 2016). ...
... A number of arguments though still exist on what the term really means. For instance Vadali (2014) argues that value capture is an open-ended term with various definitions, however the basic essence of the concept is the "capturing [of] value increments created by public investments in infrastructure" (Ingram and Hong, 2012, p. 3). ...
This paper examined the concept of land value capture in relation to financing of land transport infrastructure in Zambian cities. In recent years, Zambia has borrowed massively to fund road infrastructure around the country with the current foreign debt estimated to be about US$8 billion. Unable to continue borrowing from the traditional partners, such as the World Bank and International Monetary Fund (IMF), the country has opted for alternative sources from China; often attached to specific infrastructural development. A number of studies link land transport infrastructure development to improved property values; hence it is argued that this additional increase in private property values should be taxed by government. However for Zambia, this raises three interrelated questions: firstly, what types of investments do local authorities undertake and how do these compare with those envisaged within the land value capture concept? Secondly, how can this increase in private property values be identified and measured? Thirdly, how much knowledge do local authorities have on this concept and its mechanisms? This study used the seven local authorities in the Copperbelt Province (i.e. Chililabombwe, Chingola, Kalulushi, Kitwe, Luanshya, Mufulira and Ndola) to answer these questions. Data was collected through questionnaires and interviews with local government officials. The study found that local authorities in Zambia have a number of challenges in adopting the value capture concept, these include: low value of infrastructure developed, measurement of value increment and limited knowledge on the concept by would-be implementers.
... Although value capture taxation in the United States is used primarily at the local level, it is worthwhile for the national government to investigate its use for some infra- structure investments. 1 The national government will continue to face fiscal constraints, and will potentially ameliorate these constraints by shifting costs to the local govern- ments, and therefore infrastructure provision often has both a national and local dimen- sion. In particular, the Department of Transportation has begun to study seriously this technique of expanding roadways (Vadali, 2014). Because other countries have used value capture techniques, this device should not be off the radar for the U.S. government. ...
... These PPPs are almost all negotiated on a project by project basis. In the United States, there are two kinds of PPPs: One in which there is public ownership of land in which, for example, the public sector may sell or lease public-owned properties for fund- ing and one in which there is private ownership of land, in which case the public entity may exact land from private property owners who receive, in exchange, property improvement benefits (Vadali, 2014). • • Special assessment districts (sometimes called benefit assessment districts) help to fund local infrastructure by providing a mechanism to add a fee or tax on a politically defined district that receives benefits from the improvements that come from the new infrastructure. ...
... Pennsylvania has used a land tax for several decades, and it does appear to have some efficacy in stimulating development. A land value tax is a progressive tax and is consistent with the smart urban growth movement (Vadali, 2014). Dye and England (2010) have found that it is in use in 40 countries. ...
A legitimate argument is that the public sector must restore its contribution to the financing of the new infrastructure. However, for both political and economic reasons, an increase in broad-based taxes or debt seems to be off the table; new funding vehicles are clearly necessary. This essay identifies value capture taxation as a partial solution to this infrastructure funding problem. Value capture is a set of techniques that take advantage of the increase in property values to finance service and infrastructure improvements.
Value capture offers the promise of recouping the additional value that public transportation infrastructure investments confer to local property. The totality of the empirical evidence supports the contention that such investments do indeed add value to proximate residential property. However, little research to estimate just how much any additional property value changes from year to year is evident in the empirical literature. The absence of evidence on the reliability of accessibility premiums is problematic from a policy perspective because transit operators need dedicated sources of funds to compensate for the retrenchment of government sources. Adoption of a multilevel approach expands the temporal scale of analysis to more than a decade and the spatial scale of analysis to an entire heavy rail system, Metro in Washington, District of Columbia (DC), in order to estimate just how much accessibility premiums change year over year. Results advance the state of knowledge on value capture since public rail infrastructure adds property value across an entire heavy rail system, but the additional value is modest and the year-to-year changes are dramatic. Overall, a strategy to capture any additional property value to fund public transportation may technically qualify as a dedicated source of funds, but it is not a reliable source of funds.
Today, transportation planning is very much concerned with transportation finance and funding sources. This chapter describes some key finance and funding concepts and terms that are common across most transportation planning efforts. It discusses the finance strategies and the evolving nature of both public and private investments in the transportation system. Several concepts and terms are important in understanding the substance and process of transportation investment programming and financial analysis. The chapter also explains an important step in the planning process from a financial strategy perspective is identifying future revenues as part of the capital investment program. It discusses the importance of environmental justice analysis in developing an investment program. Transportation planners thus need to understand the basics of financial analysis as well as the types of strategies that can be considered as part of a state or regional investment program.
