The Transit Cooperative Research Program funds and publishes a bunch of interesting research each year. They recently had a call for proposals on a new project:
TCRP H-57: Guide to Joint Development for Public Transportation Agencies.

Per the RFP: "The objective of this study is to produce a guide that facilitates and enhances the successful delivery of joint development projects. This guide may take a variety of formats but should include requirements, procedures, and tools and techniques for transit agencies that want to pursue or improve their joint development programs. The guide should serve agencies with a range of experience related to land use planning issues and/or in executing complex real estate transactions."

Did you submit a proposal? Our team has our fingers crossed!

​That's great! This is a wonderful example of a TOD where displacement concerns have not come to fruition. It's well worth examining!

However, I am concerned about some commentary related to the study's findings. For example, Brock Keeling at Curbed was full of optimism: "​Perhaps the only downside of the project—the languid time it took to get moving." In particular, CityLab put out an article that quoted the study's lead author, Sonja Diaz, who said, “This strikes me as a scalable project to ensure that there is economic mobility and opportunity for the most disadvantaged while still being something that makes economic sense for the wider community.” ​But from a financial perspective, is Fruitvale a scaleable approach to addressing gentrification and displacement risks?

I fall in the camp of the skeptics. Carolina Reid questioned the study's data sources and whether they are appropriate for reaching their conclusions, but let's assume for now that the findings are completely valid. I doubt that communities can afford to address gentrification by building their own Village projects.

My own studies of TOD for the City of Los Angeles's Transit Corridors Strategy and stalled equitable TOD projects included case studies of Fruitvale Transit Village that found that more than two thirds of the funding for the Village's $69M first phase was provided by sources that required no repayment. Typically, real estate development relies on equity investors that seek to recoup their original investments and also demand an attractive return on top of that original investment.

In addition, the Village's grant funds were complemented by low-interest loans with very beneficial repayment terms. Unlike a typical market-rate real estate project where something like two thirds of the funds come from loans, the Village's loans were a smaller part of the overall project's capital sources because the project was unable to generate enough income to justify larger loans.

All that's to say that the numbers don't look good for replicating this across the country. A simple extrapolation suggests that hundreds of billions in grant funds would be required to copy this model across half of the country's fixed-guideway transit stations.

It's been a while since I've been on the blog, but a recent TCRP project proposal on joint development brought me back to my senses! In fact, I've been so busy working on a ton of value capture-related projects professionally that I have not had time to write about some great research that has come out in the last few years.

For one, TCRP's Report 190 covers a lot of great ground. Because there's nothing like a good story to help people understand complex topics, there are six interesting case studies in the report:

1. Boston Landing at Allston/Brighton Station, Boston, MA
2. Denver Union Station, Denver, CO
3. Hong Kong Mass Transit Railway Corporation (MTRC), Hong Kong
4. Kansas City Streetcar, Kansas City, MO
5. Portland Streetcar, Portland, OR
6. Dulles Metrorail, Washington, D.C., region

There are also some brief explanations of the usual suspects, including:

• Impact fees
• Joint development
• Land value taxation
• Negotiated exactions
• Parking fees
• Sale or leasing of air rights
• Sales tax and special assessment districts
• Station naming rights, and
• Tax increment financing (TIF).

The most interesting parts for me were discussions on creditworthiness and institutional capacity. Seriously, we should talk about these more! For example, my clients are often very excited about a value capture mechanism and how it will help fund their particular project, but hardly ever appreciate the broader organizational factors related to bond issuance.

On the other hand, my clients are often very aware of their institution's limited capacity to pull off value capture efforts in general (that's one reason to hire a consultant!). This report does a great job of illustrating the difficulties faced by agencies. I'm not sure if it was intentional, but this gnarly graphic is worth 1,000 words! Look at the confused relationships, overlaps, informal dotted lines, and dollars going everywhere!

This report is a fun read for any value capture geek. Enjoy!