Today’s post, the fourth in a weeklong series, highlights a few national examples of land value capture.
San Francisco: Transit Impact Development Fee (TIDF). In 1981, the City of San Francisco enacted an ordinance to collect a TIDF on new non-residential development as a funding strategy to cover the operating and capital expansion costs of the San Francisco Municipal Transportation Agency (SFTMA). The TIDF is a one-time fee applied to developments (fees vary based on amount of square feet and type of use), has generated $142 million in revenue for San Francisco’s transit system and has been used to fund the extension of transit services in the South of Market neighborhood.
Currently, there is a proposal to replace TIDF with a Transportation Sustainability Program (TSP), whose funds would be dedicated to projects that improve pedestrian, bicycle and transit projects including two bus rapid transit lines and converting diesel buses to electric. The San Francisco Board of Supervisors will vote on this proposal in the fall.
Chicago: Tax Increment Financing (TIF). The Wilson Yard TIF district was established in 2001, and includes the area around the Wilson Station of the Chicago El Red Line. Constructed in 1900, the Wilson Station serves the Red Line and four bus connections, and over time became deteriorated. When the TIF district was created, 85 percent of buildings in the area were more than 35 years old, and several buildings were dilapidated, exhibiting no growth value. As a result, the area was deemed a redevelopment project area.
TIF revenues totaled close to $7 million in 2010, and funds are used for maintenance and improvement of the station. Since 2001, the Wilson Yard TIF district has created 219,000 square feet of new commercial development, 615 new or rehabilitated affordable rental units, and more.
Washington, D.C.: Special Assessment District (SAD):The District’s Silver Line extension of Metrorail to Dulles Airport in Northern Virginia has employed the use of special assessment districts to fund two phases of the proposed expansion. The first, already under construction and slated for opening in 2013, provided $400 million through special assessment taxes on commercial properties that will benefit from the project; the second will raise up to $330 million to fund the extension to the airport and further into Loudon County, VA.
Tomorrow’s final post will highlight local examples of value capture strategies implemented in the tri-state region.