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Transportation Funding & Financing

Value Capture

Value capture refers to cases where the public sector is able to capture some of the increased value, usually property value, that results from public investment. Some transportation investments, such as a new freeway or interchange for example, increase the value of adjacent properties by improving access. Alternately, traffic calming investments on a local street may boost residential property values by reducing through traffic. Public transit stations too can create or improve the market for adjacent development. Without local government efforts to capture this value, the increased value accrues solely to private landowners.

The amounts recovered from such transportation projects may range from the partial payment of initial capital costs to full repayment of capital costs and operating expenditures. The most basic methods of funding capital facility costs involve development impact fees, assessment districts, and special taxes. Sometimes, these methods are initiated by private property owners who require the public improvements in order to develop their land.

Although the associated fees are paid to a government agency or are administered through a public entity, they are considered private funding rather than public funding. Private financing of a facility occurs when the costs of providing and/or operating the facility are paid by those who will benefit most from it. Public financing of a facility or improvement occurs when the cost is shared with the general public through taxes.


Special Assessment Districts
Tax Increments
Development Exactions
Joint Development