New look at old problem: Paying for transportation

RED WING, Minn. – Planning consultant Scott Polikov from Fort Worth, Texas, has an idea that needs a bigger audience. It's about how you find money to build transit systems. That's a problem Charlotte is facing, along with dozens of other U.S. cities. Based on his thinking it's something Charlotte has possibly mismanaged, along with many other places.

The key understanding is that building a transit system (or any transportation system, whether it's highways or canals) creates huge profits for real estate interests. Example: A transit authority will announce it's building a line, and where the stations will be. Then it will go out and buy right of way, often through eminent domain, along that planned route, paying now-higher land prices, since the building of the line will make that land worth more.

"In Europe, the landowner pays for the right to have the station," he said.

Why shouldn't the government (that is, all of us, since we are the government) capture some of the value that it's creating (that we're creating) by building that infrastructure?

Indeed, in the pre-crash era there were developers who were seriously thinking about putting up millions to build Charlotte's proposed commuter rail transit lines, because they knew it would make their development significantly more valuable. The same was true for the Triangle Transit proposed transit line.

Sometime, credit for real estate development will re-emerge. When that happens, why shouldn't the Charlotte Area Transit System, for instance, auction off the development rights at the transit stations? And then use that money as a revenue stream? (Yeah, yeah there are a lot of legal issues involved, not to mention political ones.)

Consider how development has occurred along the Lynx light rail line through South End. The line was fixed. In an understandable effort to lure transit-oriented development at the station areas, the city has doggedly gone in and pro-actively up-zoned land to the TOD zoning – thereby giving away huge land value to the property owners. It also gave away any real power the city planners might have had to force better urban design onto that TOD development. If you're already allowed by right to do your TOD, why should you listen to the city's request that you do something different – for instance, including some affordable housing units?

(I'm at a yearly conference among people affiliated with the Citistates Associates, a loose coalition of planners, economists, think-tankers, current and former elected officials, Chamber of Commerce execs, etc., who share an interest in metro region growth issues.)