In my column in the new edition of the Bacon’s Rebellion e-zine, I develop an idea that has become a recurring theme in this blog.
The starting premise is this: When government makes transportion improvements — highways, transit stations, interchanges, road widenings, whatever — it creates economic value for the landowners lucky enough, or shrewd enough, to own property in the right location. The public (through the agency of the government) creates this value, not the landowner. Why, then, shouldn’t the public capture some of that value to help finance the transportation improvement?
Virginia transportation policy relies overwhelmingly upon taxation of motorists to build the improvements, and to a lesser degree upon tolls levied upon the users of a particular facility. In some localities, developers contribute to the funding of road improvements through proffers, but the proffers are rarely integrated into a coherent system. I propose a four-part approach to major transportation projects:
- Create a Community Development Authority (CDA) to issue bonds to pay for public improvements such as roads, light and heavy rail lines, transit stations or even bus shelters.
- Overlay the CDA with a Tax Increment Financing (TIF) district that taxes the landowners who benefit from the public investments. Use the revenue stream to pay off the CDA bonds.
- Sweeten the pot, as necessary, by giving landowners the right to develop their parcels at greater density. The combination of higher density and public improvements would more than compensate landowner/developers for the expense of the special tax district.
- Require developers to implement Traffic Demand Management (TDM) plans to offset local congestion resulting from denser development. It is critical that these plans be robust, capable of taking large numbers of cars off local streets. They also must be sustainable, capable of standing on their own after developer has completed the project and has ended subsidies to van pools and other ride-sharing programs.
I don’t pretend this approach will work everywhere. It won’t. But it can work in a lot of places. When combined with the other alternatives explored on this blog — congestion tolls, telew0rk, ride sharing, VDOT reforms, intelligent transportation systems and all the rest — there’s no reason that Virginia can’t stitch together an effective transportation policy without recourse to higher taxes.