Strategies for agencies to recover a portion of public transportation investments that result in increased land values. Public investment in transportation assets that improve access benefits owners of adjacent properties through greater land value and other economic impacts. Many techniques are available to the public sector to share in a portion of this increased land value to build, maintain, or reinvest in
the transportation system.
Value capture begins with the assessment created by the access transportation provides. Value is then enhanced through private sector investment and economic development enabled by the public
investment. A portion of that appraisal created by the infrastructure can be “captured” by the public sector to reinvest in, operate, or maintain transportation infrastructure. These principles can be
applied to most development scenarios, whether new infrastructure for new land development or rebuilt or enhanced existing infrastructure.
Both the planning and implementation for value capture rely primarily on local government initiatives. For these local public agencies, value capture provides the opportunity to raise matching funds for
Federal-Aid Highway Program projects and others.
Continuous Improvement. Value capture strategies can provide a sustained revenue source that can support operations and maintenance or, in some cases, the financing of
the transportation improvements.
Financial Equity. Value capture promotes equity by reinforcing the “beneficiary pays” principle of economics. When private landowners benefit from a public investment, value capture provides
a way for a portion of the gain to directly support the public investment that enabled their benefit.
Environmental Resiliency. When value is captured from land but not the improvements (e.g., buildings) made to it, it supports denser development near highways. Landowners would
pay the same land tax regardless of land use, so they are incentivized to develop or sell the land close to transportation. This can help limit sprawl.
FHWA EDC-5 Value Capture: Capitalizing on the Value Created by Transportation
FHWA Center for Innovative Finance Support – Value Capture