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Guide to Joint Development for Public Transportation Agencies: Appendices (2021)

Chapter: Appendix E: Literature Review: Annotated Bibliography and Discussion

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Suggested Citation:"Appendix E: Literature Review: Annotated Bibliography and Discussion." National Academies of Sciences, Engineering, and Medicine. 2021. Guide to Joint Development for Public Transportation Agencies: Appendices. Washington, DC: The National Academies Press. doi: 10.17226/26194.
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Suggested Citation:"Appendix E: Literature Review: Annotated Bibliography and Discussion." National Academies of Sciences, Engineering, and Medicine. 2021. Guide to Joint Development for Public Transportation Agencies: Appendices. Washington, DC: The National Academies Press. doi: 10.17226/26194.
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Suggested Citation:"Appendix E: Literature Review: Annotated Bibliography and Discussion." National Academies of Sciences, Engineering, and Medicine. 2021. Guide to Joint Development for Public Transportation Agencies: Appendices. Washington, DC: The National Academies Press. doi: 10.17226/26194.
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Suggested Citation:"Appendix E: Literature Review: Annotated Bibliography and Discussion." National Academies of Sciences, Engineering, and Medicine. 2021. Guide to Joint Development for Public Transportation Agencies: Appendices. Washington, DC: The National Academies Press. doi: 10.17226/26194.
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Suggested Citation:"Appendix E: Literature Review: Annotated Bibliography and Discussion." National Academies of Sciences, Engineering, and Medicine. 2021. Guide to Joint Development for Public Transportation Agencies: Appendices. Washington, DC: The National Academies Press. doi: 10.17226/26194.
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Suggested Citation:"Appendix E: Literature Review: Annotated Bibliography and Discussion." National Academies of Sciences, Engineering, and Medicine. 2021. Guide to Joint Development for Public Transportation Agencies: Appendices. Washington, DC: The National Academies Press. doi: 10.17226/26194.
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Suggested Citation:"Appendix E: Literature Review: Annotated Bibliography and Discussion." National Academies of Sciences, Engineering, and Medicine. 2021. Guide to Joint Development for Public Transportation Agencies: Appendices. Washington, DC: The National Academies Press. doi: 10.17226/26194.
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Suggested Citation:"Appendix E: Literature Review: Annotated Bibliography and Discussion." National Academies of Sciences, Engineering, and Medicine. 2021. Guide to Joint Development for Public Transportation Agencies: Appendices. Washington, DC: The National Academies Press. doi: 10.17226/26194.
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Suggested Citation:"Appendix E: Literature Review: Annotated Bibliography and Discussion." National Academies of Sciences, Engineering, and Medicine. 2021. Guide to Joint Development for Public Transportation Agencies: Appendices. Washington, DC: The National Academies Press. doi: 10.17226/26194.
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Suggested Citation:"Appendix E: Literature Review: Annotated Bibliography and Discussion." National Academies of Sciences, Engineering, and Medicine. 2021. Guide to Joint Development for Public Transportation Agencies: Appendices. Washington, DC: The National Academies Press. doi: 10.17226/26194.
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Suggested Citation:"Appendix E: Literature Review: Annotated Bibliography and Discussion." National Academies of Sciences, Engineering, and Medicine. 2021. Guide to Joint Development for Public Transportation Agencies: Appendices. Washington, DC: The National Academies Press. doi: 10.17226/26194.
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Suggested Citation:"Appendix E: Literature Review: Annotated Bibliography and Discussion." National Academies of Sciences, Engineering, and Medicine. 2021. Guide to Joint Development for Public Transportation Agencies: Appendices. Washington, DC: The National Academies Press. doi: 10.17226/26194.
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Suggested Citation:"Appendix E: Literature Review: Annotated Bibliography and Discussion." National Academies of Sciences, Engineering, and Medicine. 2021. Guide to Joint Development for Public Transportation Agencies: Appendices. Washington, DC: The National Academies Press. doi: 10.17226/26194.
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Suggested Citation:"Appendix E: Literature Review: Annotated Bibliography and Discussion." National Academies of Sciences, Engineering, and Medicine. 2021. Guide to Joint Development for Public Transportation Agencies: Appendices. Washington, DC: The National Academies Press. doi: 10.17226/26194.
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Suggested Citation:"Appendix E: Literature Review: Annotated Bibliography and Discussion." National Academies of Sciences, Engineering, and Medicine. 2021. Guide to Joint Development for Public Transportation Agencies: Appendices. Washington, DC: The National Academies Press. doi: 10.17226/26194.
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Suggested Citation:"Appendix E: Literature Review: Annotated Bibliography and Discussion." National Academies of Sciences, Engineering, and Medicine. 2021. Guide to Joint Development for Public Transportation Agencies: Appendices. Washington, DC: The National Academies Press. doi: 10.17226/26194.
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Suggested Citation:"Appendix E: Literature Review: Annotated Bibliography and Discussion." National Academies of Sciences, Engineering, and Medicine. 2021. Guide to Joint Development for Public Transportation Agencies: Appendices. Washington, DC: The National Academies Press. doi: 10.17226/26194.
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Suggested Citation:"Appendix E: Literature Review: Annotated Bibliography and Discussion." National Academies of Sciences, Engineering, and Medicine. 2021. Guide to Joint Development for Public Transportation Agencies: Appendices. Washington, DC: The National Academies Press. doi: 10.17226/26194.
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Suggested Citation:"Appendix E: Literature Review: Annotated Bibliography and Discussion." National Academies of Sciences, Engineering, and Medicine. 2021. Guide to Joint Development for Public Transportation Agencies: Appendices. Washington, DC: The National Academies Press. doi: 10.17226/26194.
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Suggested Citation:"Appendix E: Literature Review: Annotated Bibliography and Discussion." National Academies of Sciences, Engineering, and Medicine. 2021. Guide to Joint Development for Public Transportation Agencies: Appendices. Washington, DC: The National Academies Press. doi: 10.17226/26194.
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Suggested Citation:"Appendix E: Literature Review: Annotated Bibliography and Discussion." National Academies of Sciences, Engineering, and Medicine. 2021. Guide to Joint Development for Public Transportation Agencies: Appendices. Washington, DC: The National Academies Press. doi: 10.17226/26194.
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Suggested Citation:"Appendix E: Literature Review: Annotated Bibliography and Discussion." National Academies of Sciences, Engineering, and Medicine. 2021. Guide to Joint Development for Public Transportation Agencies: Appendices. Washington, DC: The National Academies Press. doi: 10.17226/26194.
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Suggested Citation:"Appendix E: Literature Review: Annotated Bibliography and Discussion." National Academies of Sciences, Engineering, and Medicine. 2021. Guide to Joint Development for Public Transportation Agencies: Appendices. Washington, DC: The National Academies Press. doi: 10.17226/26194.
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Suggested Citation:"Appendix E: Literature Review: Annotated Bibliography and Discussion." National Academies of Sciences, Engineering, and Medicine. 2021. Guide to Joint Development for Public Transportation Agencies: Appendices. Washington, DC: The National Academies Press. doi: 10.17226/26194.
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Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

Appendix E Literature Review E-3 1. Chapple, Karen and Anastasia Loukaitou-Sideris. 2019. Transit-Oriented Displacement or Community Dividends? Understanding the Effects of Smarter Growth on Communities. Cambridge, MA: The MIT Press. This book briefly reviews the history of the adoption of smart growth strategies and utilizes qualitative and quantitative methods to examine the effect of transit-oriented development on displacement. Referencing both US and international research, the authors’ findings reveal that data limitations and inappropriate methodological strategies have resulted in an incomplete understanding among academics and policymakers regarding the negative effect of transit- oriented development on vulnerable communities, and that novel policies, research strategies, and frameworks are needed to prevent displacement of vulnerable residents. The findings apply to TOD, including but not limited to joint development. 2. Vadali, Sharada, Johanna Zmud, Todd Carlson, Karin DeMoors, Rick Rybeck, Steven Fitzroy, Naomi Stein, and Mark Sieber. 2018. NCHRP Research Report 873: Guidebook to Funding Transportation Through Land Value Return and Recycling. Washington, DC: Transportation Research Board. https://doi.org/10.17226/25110. From the foreword: “[This report] presents guidance for state departments of transportation (DOTs) and other agencies seeking to mobilize some portion of that property-value increase to fund maintenance and operations as well as investment in the infrastructure. Because local government typically has authority to deal with matters related to land use and land-related revenue-generating mechanisms, DOT access to land value return and recycling—a subset of real estate–based value capture methods—may require enabling legislation or partnering with local agencies. The Guidebook includes examples of applications of land value return and recycling as well as model legislation and institutional structures to facilitate the strategy.” The report compares a number of land value strategies, including joint development. 3. HR&A Advisors. 2018. “Working Better, Together: Improving Joint-Development Agreements for Transit-Oriented Development.” [Blog Post]. https://www.hraadvisors.com/improving-joint- development-agreements-for-transit-oriented-development/. The authors suggest that there is much to be gained from joint development projects by both transit agencies and developers, and that the concerns stemming from the complexity of partnerships between these two entities can be mitigated. This online article provides a set of suggestions for creating opportunities for successful joint development partnerships. These recommendations were developed though conversations with the Washington Metropolitan Transit Agency (WMATA) and local real estate developers. 4. Shoup, Donald (ed.). 2018. Parking and the City. New York, NY. American Planning Association, Planners Press (Routledge). This book, edited by Prof. Shoup, is a follow-on to his seminal work of 2005, The High Cost of Free Parking. In that book, he argued the distorting effect of traditional parking supply regulations in city zoning and of the parallel practice by employers, landlords, and developers of providing off-street parking for free. Particularly in mixed-use areas and places served by transit, Prof. Shoup’s findings suggest that these practices generate parking supply in excess of what is

Appendix E Literature Review E-4 actually needed (with an associated cost in construction dollars or land consumption), with significant consequences for equity and sustainability. The 2005 book introduces three proposed reforms: (1) eliminate off-street parking minimums; (2) establish market-based pricing for on- street parking; (3) use the revenues from that parking to improve the affected districts. In Parking and the City, Prof. Shoup provides: (1) an Introduction that summarizes and updates the findings and thesis of The High Cost of Free Parking, and (2) 45 curated case studies of local policies and initiatives that reflect these three reform principles. 5. Smith, Jeffery J., and Thomas A. Gihring. 2018. “Financing Transit Systems Through Value Capture: An Annotated Bibliography.” American Journal of Economics and Sociology 65 (3): 751–86. https://doi.org/10.1111/j.1536-7150.2006.00474.x. 6. Bains, Rabinder, Shadonna Bansu, Kimberly Gayle, Justin John, Anthony Loui, and Daniel Schned. 2017. “Joint Development: Partnering to Build Complete Communities Near Transit.” Washington, DC: Federal Transit Administration. https://www.transit.dot.gov/sites/fta.dot.gov/files/docs/funding/funding-finance-resources/joint- development/64731/joint-development-brochure.pdf. This report and guidebook reviews the Federal Transit Administration (FTA) joint development assistance efforts. It includes a brief list of capital grant programs and a summary of outcomes from the FTA joint development projects. The report centers around four case studies of FTA- assisted joint development projects in Seattle, WA; Saint Paul, MN; Tyler, TX; and Prince George’s County, MD. 7. Cervero, Robert, Erick Guerra, and Stefan Al. 2017. Beyond Mobility: Planning Cities for People and Places. Washington, DC. Island Press. The organizing principle of this case-focused book is “urban recalibration”—described as, among other things, prioritizing building great places over mobility as an end goal, and planning for “places” rather than “nodes” at critical locations in a region’s transportation and economic geography. The subject matter content is far-ranging, embracing planning constructs like complete streets, right-sized parking, and transit-oriented development. The case studies include numerous examples of TOD and joint development. These range from the London Docklands to Dallas’ Mockingbird Station to the densification and diversification of Seattle’s Northgate Mall as it becomes a major transit hub. 8. Davis, Steve, Alex Dodds, and Chris Zimmerman. 2017. “Empty Spaces: Real Parking Needs at Five TODs.” Washington, DC: Smart Growth America. https://todresources.org/app/uploads/sites/2/2017/02/empty-spaces.pdf. This report reviews five TOD case studies with the goal of understanding how much less parking is required for TODs compared to development without a transit component, and how many fewer vehicle trips are generated. The authors find that in all five TODs less parking was needed and fewer trips were created relative to other development types, and they suggest that current engineering standards are not a good fit for TOD development and that updated standards may reduce the cost of development near transit. Four of the report’s five case studies are joint

Appendix E Literature Review E-5 development projects: Wilshire/Vermont in Los Angeles, Fruitvale Transit Village in Oakland, Rhode Island Row in Washington, DC, and Redmond, Washington. 9. Macek, Nathan M., Elizabeth G. Neely, and Ella C. Claney. 2017. TCRP Research Report 191: Public Transportation Guidebook for Small- and Medium-Sized Public-Private Partnerships (P3s). Washington, DC: Transportation Research Board. https://doi.org/10.17226/24754. The authors suggest that most research on public-private partnerships (P3s) have previously focused on larger scale efforts, while medium to small sized public transit P3s have received little attention. This report reviews a diverse set of planned and implemented small and medium-sized P3 case studies across the US, and offers approaches for identifying, planning and implementing medium and small-sized P3s. The report illustrates the overlap between the P3 construct and various forms of joint development, and several of the case studies involve real estate development on or connected to transit property. 10. Lynott, Jana, Mariia Zimmerman, and Patricia Happ. 2017. “Communities Are Embracing Development Near Transit: A Snapshot of Transit-Oriented Development Support across the United States.” Washington, DC: AARP Public Policy Institute. https://www.aarp.org/content/dam/aarp/ppi/2017/08/communities-are-embracingdevelopment- near-transit.pdf. This report provides a “snapshot” of local, regional and state government support for TOD from 2015 to 2016 and aims to enhance the understanding of the variety of TOD programs and policy in the US. The report notes some trends in TOD support, such as that local governments have played a key role while states are becoming more active as financial partners, and equitable TOD has emerged as an important priority. 11. Salon, Deborah, Elliott Sclar, and Richard Barone. 2017. “Can Location Value Capture Pay for Transit? Organizational Challenges of Transforming Theory into Practice.” Urban Affairs Review, June, 107808741771552. https://doi.org/10.1177/1078087417715523. From the abstract: “This article defines location value capture, and synthesizes lessons learned from six European and North American transit agencies that have experience with location value capture funding. The opportunities for and barriers to [implementation] fall into three categories: agency institutional authority, agency organizational mission, and public support for transit. When any of these factors is incompatible with a location value capture strategy, implementation becomes difficult. In four of the cases studied, dramatic institutional change was critical for success. In five cases, acute crisis was a catalyst for institutional change, value capture implementation, or both. Using value capture strategies to fund transit requires practitioners to both understand agency organizational constraints, and to view transit agencies as institutions that can transform in response to changing situations.” 12. Friedman, Stephen B. 2016. “Successful Public/Private Partnerships: From Principles to Practices.” Washington, DC: Urban Land Institute. https://uli.org/wp- content/uploads/ULIDocuments/Successful-Public-Private-Partnerships.pdf.

Appendix E Literature Review E-6 The Urban Land Institute previously published the “Ten Principles for Successful Public/Private Partnerships,” which provided a set of key ideas for facilitating public/private partnerships. This report further adds to the topic with the goal of revealing both public- and private sector perspectives, needs, and resources. The authors suggest a series of tools and methods to bridge the understanding between the two sectors. 13. Page, Sasha, William L. Bishop, and Waiching Wong. 2016. TCRP Research Report 190: Guide to Value Capture Financing for Public Transportation Projects. Washington, DC: Transportation Research Board. https://doi.org/10.17226/23682. This report describes the factors for successful value capture implementation, among which the authors highlight the need for strong relationships among stakeholders and project partners, a supportive land use regulatory environment, and the use of applicable public-private finance tools, including those now available through federal TIFIA and RRIF loans. The report reviews five US case studies and one in Hong Kong. Three of the case studies (Boston Landing, Denver Union Station, and the Hong Kong MTRC real estate development program) are examples of joint development, and the other three (the Kansas City and Portland streetcars and the Dulles Metrorail extension) are examples of TOD value capture used to fund the transit improvement itself. The authors argue the importance of articulating a TOD/land value business case for developers and for local government (including transit agencies) and provides recommendations for framing persuasive fiscal arguments. 14. Hersey, John K, and Michael A Spotts. 2015. “Promoting Opportunity through Equitable Transit- Oriented Development (ETOD): Barriers to Success and Best Practices for Implementation.” Washington, DC: Enterprise Community Partners. https://www.enterprisecommunity.org/download?fid=1945&nid=4098. This is the second report in the “Promoting Opportunity through eTOD” series and adds to the 2010 paper “Making Affordable Housing at Transit a Reality: Best Practices in Transit Agency Join Development.” Through a literature review, interviews with 20 transportation agencies and other analysis this report reviews the barrier to building and preserving eTODs and some recommended solutions. The report highlights the need to avoid a one size fits all approach, due to the diverse and complex nature of eTODs, and the benefit of aligning priorities and efforts among stakeholders across sectors. The detailed discussion of methods and strategies identifies joint development as a primary way to make publicly assembled land available for equitable TOD, and most of the other methods and strategies are applicable to joint development projects with affordable housing or other eTOD components. 15. Kilcoyne, Ron, et al. (APTA Urban Design Working Group). 2015, “Transit Parking 101.” SUDS-UD- RP-008-15. Washington, DC: American Public Transportation Association. https://www.apta.com/wp-content/uploads/Standards_Documents/APTA-SUDS-UD-RP-008- 15.pdf This report addresses several inter-related aspects of parking in the transit, land use, and TOD context. The focus is on the tradeoffs encountered by transit agencies in deciding where to locate customer park & ride facilities and how much existing parking capacity to replace when

Appendix E Literature Review E-7 making a park & ride lot available for joint development. The dollar, land use, and opportunity costs of parking are discussed. The case studies presented involve creative solutions to these tradeoffs, including through the use of shared parking facilities. 16. WSP–Parsons Brinckerhoff, GB Place Making, Robert Cervero, and The Overhead Wire. 2016. TCRP Report 182: Linking Transit Agencies and Land Use Decision Making: Guidebook for Transit Agencies. Washington, DC: Transportation Research Board. https://doi.org/10.17226/24629. This report attempts to answer the question of how transit agencies can become more involved in land use decisions and when it is most beneficial for them to do so. As part of their analysis the authors identify five preconditions that are shown to improve transit agencies involvement in land use decisions. Additionally, they provide a method for transit agencies to perform a self- evaluation to inform the most appropriate course of action with regard to land use decisions. The report includes strategies for transit agencies to effectively engage stakeholders to promote desired land use decisions. 17. Schlickman, Stephen E., Jordan Snow, Janet Smith, Yittayih Zelalem, and Tom Bothen. 2015. “Transit Value Capture Coordination: Case Studies, Best Practices, and Recommendations.” Tampa, FL: National Center for Transit Research. https://www.nctr.usf.edu/wpcontent/ uploads/2017/07/NCTR-79060-02C-Transit-Value-Capture-Coordination.pdf. From the abstract: “This study is based on the hypothesis that coordination between transit capital planners, municipal taxation authorities, and private developers and stakeholders can be a benefit to transit capital projects that choose to use value capture as a funding mechanism. The research team engaged in case studies of four major projects to observe how coordination between the relevant parties is conducted and, from the information gathered, a series of conclusions, best practices and recommendations were compiled. It is the conclusion of this study that in order for coordination of value capture mechanisms to be effective there must be a focus on both ingrained staff knowledge in the public sector as well as unique organizational attributes in the municipal and transit organizations that interface with private developers.” Three of the case studies covered are joint development projects (or on the definitional borderline): Park-Merced in San Francisco, NoMa-Gallaudet University Station in Washington, DC, and Hudson Yards in New York. 18. Suzuki, Hiroaki, Jin Murakami, Yu-Hung Hong, and Beth Tamayose. 2015. Financing TOD with Land Values: Adapting Land Value Capture in Developing Countries. Urban Development Series. Washington, DC: The World Bank. This book provides an international perspective by reviewing examples of cities around the world that have successfully captured higher land values around TODs. The authors provide observations and lessons earned form a set of cases studies featuring modernized and developing countries. 19. Florida Department of Transportation. 2014. “Promoting Joint Development in Florida.” Tallahassee, FL. https://fdotwww.blob.core.windows.net/sitefinity/docs/default- source/content/transit/pages/jdtechmemofinal20140109.pdf?sfvrsn=5eb25c9_0

Appendix E Literature Review E-8 This report, prepared for the Florida DOT by the Renaissance Planning Group, is a joint development guidebook. Its aim of is to guide agencies that are embarking on a joint development project, particularly in cases that may involve Federal Transit Administration jurisdiction. It explains how to work with FTA on joint development and introduces tools for planning and evaluating projects. The report provides an overview of the then-current FTA guidance, such as procedural requirements and funding eligibility. The report also provides a framework for determining whether an agency should pursue a joint development project. It does this using a set of questions to ask, which are organized into four main categories: market feasibility, agency capacity, eligibility for FTA support, and local and state policy environment. Additional guidance is provided for encouraging and implementing projects. 20. Vadali, Sharada R. 2014. NCHRP Synthesis 459: Using the Economic Value Created by Transportation to Fund Transportation. Washington, DC: Transportation Research Board of the National Academies. https://doi.org/10.17226/22382. From the preface: “This report presents information on financing mechanisms used by transportation agencies to capture a portion of the economic value created by public investment in transportation infrastructure to fund transportation improvements. The report provides an overview of 10 types of “value capture” mechanisms and presents case examples of how transportation agencies have used these mechanisms to help fund specific projects. Information used in this study was acquired through a review of the literature and interviews with agency staff involved with implementing value capture mechanisms presented in the case examples.” Two of the 10 value capture models addressed in the report are joint development and air rights development, which in the transit context is generally a form of joint development as well. 21. Enterprise Community Partners. 2013. “Unlocking MAP-21’s Potential to Fund Equitable Transit- Oriented Development.” https://www.enterprisecommunity.org/resources/unlocking-map-21s- potential-fund-equitabletransit- oriented-development-13012. Moving Ahead for Progress in the 21st Century (MAP-21) is a funding and authorization bill for surface transportation. This report seeks to provide a clearer understanding of how funds under MAP-21 can be used to support equitable TOD. The report ends with recommendations for promoting and facilitating equitable TODs. 22. Lou, Yingyan, Jay Lindly, Steven Jones, and Frances Green. 2013. “Role of Transit Service Providers in Land Development.” 11103. Tuscaloosa, Alabama: University Transportation Center for Alabama. http://www.reconnectingamerica.org/assets/Uploads/20130726RoleTransitProvidersLandDevel opment.pdf. From the abstract: “Compared to the US, several counties have been very successful in transit development. One particular strategy is to encourage (and subsidize) transit service providers to compete and invest in land development. This study is helpful in identifying barriers that need to be overcome in order for transit agencies to reap the benefits from investing and participating in land development. This study also conducted a cost-benefit analysis on data

Appendix E Literature Review E-9 from the financial reports of two agencies praised in the literature for their involvement and investment in land development. These agencies are the Washington Metropolitan Transit Authority and the Mass Transit Rail Corporation. The analysis showed that participation yields significant profits, but participation coupled with investment is extremely profitable, with a calculated internal rate of return for the MTRC‘s property development activities being 571%.” 23. Pollack, Melinda, and Brian Prater. 2013. “Filling the Financing Gap for Equitable Transit-Oriented Development: Lessons from Atlanta, Denver, the San Francisco Bay Area and the Twin Cities.” Washington, DC: Enterprise Community Partners. https://todresources.org/app/uploads/sites/2/2016/06/filling_the_financing_gap.pdf. The authors identify ways to make equitable TOD projects easier to finance and build. From their review of projects in the last decade the authors observe that ideas about equitable TOD have become more nuanced and that TOD financing tools have become outdated. They also suggest that equitable TOD requires an interdisciplinary approach that engages land use, economic development, and community development. They identify four significant factors that influence the success of equitable TOD: strength of economies, political will, collaboration and shared vision of TOD among stakeholders, and the nature of the transit system. The authors identify transit agencies as key players in eTOD planning and outcomes, and several of the case studies are joint development projects. 24. Coffel, Kathryn, Jamie Parks, Conor Semler, Paul Ryus, David Sampson, Carol Kachadoorian, Herbert S. Levinson, and Joseph L. Schofer. 2012. TCRP Report 153: Guidelines for Providing Access to Public Transportation Stations. Washington, DC: Transportation Research Board of the National Academies. https://doi.org/10.17226/14614. From the abstract: “[This report] provides a process and spreadsheet-based tool for effectively planning for access to high capacity transit stations, including commuter rail, heavy rail, light rail, bus rapid transit (BRT), and ferry. The potential effectiveness of transit-oriented development opportunities to increase transit ridership is also assessed. This report and accompanying materials are intended to aid the many groups involved in planning, developing, and improving access to high capacity transit stations, including public transportation and highway agencies, planners, developers, and affected citizens.” Of particular importance to joint development are the chapters on TOD and on park & ride (which often competes with joint development for land close to rail stations). 25. Mathur, Shishir, and Adam Smith. 2012. “A Decision-Support Framework For Using Value Capture to Fund Public Transit: Lessons From Project-Specific Analyses.” 11–14. San José, CA: Mineta Transportation Institute. https://transweb.sjsu.edu/sites/default/files/1004-decision-support- framework-valuecapture- public-transit-funding.pdf. From the abstract: “While the literature has extensively demonstrated the property-value impacts of transit investments and has empirically simulated the potential magnitude of VC revenues for financing transit facilities, very little research has examined the suitability of VC mechanisms for specific transit projects. This report aims to fill this research gap by examining five VC mechanisms in depth: tax increment financing (TIF), special assessment districts (SADs),

Appendix E Literature Review E-10 transit impact fees, joint development, and air rights. The report is intended to assist practitioners in gauging the legal, financial, and administrative suitability of VC mechanisms for meeting project-specific funding requirements.” 26. Zhao, Zhirong Jerry, Kirti Vardhan Das, and Kerstin Larson. 2012. “Joint Development as a Value Capture Strategy in Transportation Finance.” Journal of Transport and Land Use 5 (1). https://doi.org/10.5198/jtlu.v5i1.142. From the abstract: “Synthesizing relevant experiences in US and some Asian countries, this article reviews joint development as a value capture strategy for funding public transit. We review starts from the concept of joint development in transportation, its rationale, and the extent of use. We then provide a classification of joint development models with respect to ownerships and transaction methods. These models are illustrated with case examples from multiple countries. After that, we assess the efficacy of joint development with a set of criteria for transportation finance evaluation, including economic efficiency, social equity, revenue adequacy & sustainability, and political and administrative feasibility. Finally, we conclude and provide recommendations for policy consideration.” 27. Renne, John L., Keith Bartholomew, and Patrick Wontor. 2011. Legal Research Digest 36: Transit- Oriented and Joint Development: Case Studies and Legal Issues. Washington, DC: Transportation Research Board of the National Academies. https://doi.org/10.17226/14588. This article is an update to the Zoning and Real Estate Implications of Transit Oriented Development (TCRP LRD 12), published in 1999. It reviews federal, state and regional statues and regulations adopted to promote and facilitate TOD and joint development. The authors also discuss relevant legal cases organized around the topics of procedural due process, vested rights, consistency, National Environmental Policy Act, eminent domain, and religious land uses. The authors suggest the existence of a market for TOD and joint development is the most fundamental element to success, but also comment that structure of public and private law condition the ability to implement projects. 28. Kniech, Robin, and Melinda Pollack. 2010. “Making Affordable Housing at Transit a Reality: Best Practices in Transit Agency Joint Development,” 8. While transit agencies primary goal is to provide transit service, some also promote affordable housing in joint development as there are tangible benefits such as increased ridership, greater efficiency through fewer parking, increased equitable access and others. This brief report reviews best practices for creating and promoting affordable housing in transit agency joint development. 29. United States Government Accountability Office. 2010. “Federal Role in Value Capture Strategies for Transit Is Limited, but Additional Guidance Could Help Clarify Policies.” GAO 10-781. https://www.gao.gov/assets/310/308012.pdf. From the introduction: “GAO was asked to review (1) the extent to which transit agencies and local governments use joint development and other value capture strategies to fund or finance transit; (2) what stakeholders have identified as facilitators of, or hindrances to, the use of

Appendix E Literature Review E-11 these; and (3) what stakeholders have said about the effects of federal policies and programs on the use of these strategies. GAO analyzed data from 55 of the 71 transit agencies that responded to its information request; reviewed literature, statutes, and regulations; and interviewed transit agency, local government, and Federal Transit Administration (FTA) officials; developers; and experts. The FTA should issue additional guidance on federal joint development requirements to clarify the types of developments eligible under current law, and requirements and conditions for parking replacement.” 30. Kanarek, Jack, Paul Bay, and Jeffrey Harris. 2009. “Forming Partnerships to Promote Transit- Oriented Development and Joint Development.” SUDS-UD-RP-002-09. Washington, DC: American Public Transportation Association. http://www.reconnectingamerica.org/assets/Uploads/APTA- SUDS-UD-RP-002-09jointdevelopment.pdf. This report provides TOD and joint development recommended approaches for creating partnerships between transit agencies and public and private entities. A series of recommendations are provided and are organized by three categories, 1. guidelines those for creating internal agency policies and processes, 2. guidelines for joint development processes and 3. partnerships and guidelines facilitating public support and collaboration. The report also reviews a set of case studies of transit agencies implementing TODs in the US cities of Washington, DC, Chicago, San Francisco Bay Area, Baltimore, and New Jersey. 31. Reconnecting America. 2009. “Case Studies for Transit Oriented Development.” 2009. Briefing Report Number 3. http://www.liscphoenix.org/wpcontent/ uploads/2015/10/Case-Studies-for- TOD.pdf. This report provides summaries of 10 select TOD tools used across the US. These are described through case studies to demonstrate the benefits of each. The report seeks to find the most relevant ideas for promoting TOD in the Phoenix metropolitan region. Very brief case studies are included on the Rosslyn Ballston Corridor in Arlington, VA; Highlands Garden Village in Denver, CO; Mission Meridian Village in South Pasadena, CA; Fruitvale Transit Village in Oakland, CA; Dudley Village in Boston, MA; the Gaia Building in Berkeley, CA; Seaside Park; and Colombia Pike in Arlington, VA. This item was republished in 2014 by the US Environmental Protection Agency. 32. Arrington, G. B. and Robert Cervero. 2008. TCRP Report 128: Effects of TOD on Housing, Parking and Travel. Washington, DC: Transportation Research Board of the National Academies. https://www.transitwiki.org/TransitWiki/images/5/51/TCRP_TOD_Report.pdf This report references data from four metropolitan areas and 17 TOD projects to generate findings on residential trip generation and parking in TOD projects, and the behavior and motivation of TOD residents, employees, and employers in their mode choice. The four metro areas included in this study are Philadelphia/Northeast New Jersey; Portland, Oregon; metropolitan Washington, DC, and the East Bay of the San Francisco Bay Area. Findings include that parking requirements are often the same in TOD projects as they are in conventional developments, yet TOD projects produce considerably less traffic than conventional developments. Erroneous assumptions regarding parking needs likely result in the underproduction of TOD projects.

Appendix E Literature Review E-12 33. Fogarty, Nadine, Nancy Eaton, Dena Belzer, and Gloria Ohland. 2008. “Capturing the Value of Transit.” Oakland, CA: Reconnecting America’s Center for Transit-Oriented Development. https://todresources.org/app/uploads/sites/2/2016/06/ctodvalcapture.pdf. From the abstract: “A multitude of studies illustrate that the presence of transit can increase property values and result in valuable development opportunities. Given constrained transit funding, rising costs, and widespread demand for new and expanded transit systems, policy makers, transit planners and elected officials are increasingly interested in finding ways to capture this value to fund transit infrastructure. This paper summarizes the findings of previous studies that measure the impact of transit on nearby property values; explores the role of property owners and developers in value capture strategies; and offers examples of tools currently used by transit agencies. The paper offers several key conclusions regarding the opportunities and limitations of value capture strategies for funding transit.” 34. Shoup, Donald. 2005. The High Cost of Free Parking. New York, NY. American Planning Association, Planners Press (Routledge). See the discussion under Shoup, Donald 2018 35. Willson, Richard. 2005 A. “Parking Policy for Transit-Oriented Development: Lessons for Cities, Transit Agencies, and Developers.” Journal of Public Transportation 8 (5): 79–94. https://doi.org/10.5038/2375-0901.8.5.5. From the abstract: “This article is based on the study of residential TODs, office TODs, and joint development of transit agency station parking in California. The research includes surveys of travel behavior, station area characteristics, parking supply, interviews with real estate developers, and studies of replacement parking issues at joint development sites. Research results show that TOD parking supply and pricing policy seldom are structured to support transit ridership goals. Policy recommendations for improving parking policy for TODs are offered to transit agencies, cities, and developers.” This article is closely related to another 2005 report by Prof. Willson, “Replacement Parking for Joint Development,” an applied analytic tool for BART in making park & ride replacement decisions (Willson, Richard. 2005 B). It is accessible at: https://todresources.org/app/uploads/sites/2/2016/06/2005_access_policy_methodology.pdf. 36. Cervero, Robert, Stephen Murphy, Christopher Ferrell, Natasha Goguts, Yu-Hsin Tsai, G. B. Arrington, John Boroski, Janet Smith-Heimer, Ron Golem, Paul Peninger, Eric Nakajima, Ener Chui, Robert Dunphy, Mel Myers, Shannon McKay, and Nicole Witenstein. 2004. TCRP Report 102: Transit-Oriented Development in the United States: Experiences, Challenges, and Prospects. Washington, DC: Transportation Research Board of the National Academies. https://www.nap.edu/catalog/23360/transit-oriented-development-in-the-united-states- experiences-challenges-and-prospects From the abstract: This report defines TOD and joint development and offers insight into the various aspects of implementing TOD, including political and institutional factors; planning and land-use strategies, benefits, and impacts; fiscal considerations and partnerships; and design challenges and considerations. The report focuses on TOD and joint development and practice; the level of collaboration between various partners (e.g., the development community, financial

Appendix E Literature Review E-13 partners, planning and land-use agencies, and government entities); the impacts of TOD and joint development on land values; the potential benefits of TOD; and successful design principles and characteristics. This report will be helpful to transit agencies, the development community, and local decision makers considering TOD. 37. Feigon, Sharon, David Hoyt, and Gloria Ohland. 2004. Lindbergh City Center (the Atlanta Case Study). In Dittmar, Hank and Gloria Ohland (Eds.), The New Transit Town: Best Practices in Transit- Oriented Development. Washington, DC: Island Press. https://islandpress.org/books/new-transit- town. This chapter discusses the Lindbergh City Center joint development project, a partnership in the late 1990s between MARTA and BellSouth, a regional telecommunications company that announced its intention to consolidate its suburban offices into six towers on three sites adjacent to the Lindbergh metro station following decades of outward sprawl in the Atlanta metropolitan region. Take-aways from this case study including that community involvement, connecting pedestrian infrastructure and streetscape improvements, affordable housing are all crucial elements in successful TOD projects, and that large amounts of parking drive up costs, discourage transit ridership, and aggravate traffic congestion. 38. Parzen, Julia and Abby Jo Sigal. 2004. Financing Transit-Oriented Development. In Dittmar, Hank and Gloria Ohland (Eds.), The New Transit Town: Best Practices in Transit-Oriented Development. Washington, DC: Island Press. https://islandpress.org/books/new-transit-town. As of the time of publication, the authors remark that financing TOD projects in many metro areas was becoming easier, but that most projects were still relying on public subsidies. From the introduction: “This chapter discusses the challenges to financing TOD, the strategies people are using to succeed in spite of the challenges, and ideas people have about how to make it easier to finance TODs in the future.” The authors reference case studies to provide recommendations in four areas: increasing certainty in early phases of the development process; enabling value capture for public investors; structuring the deal so as to secure both equity and debt from a variety of sources; and “addressing place and node,” that is, address the financing issues that create a “main street” feel. 39. California Department of Transportation. 2002.”Statewide Transit-Oriented Development Study: Factors for Success in California.” Sacramento, CA. https://community- wealth.org/sites/clone.community-wealth.org/files/downloads/report-parker-et-al.pdf This work includes case studies and recommendations that bear directly on joint development projects and practice. From the abstract: This study provides a state-of-the-practice review of transit-oriented development (TOD) with an emphasis on recent experience in California. The main objective of this study is to define strategies that the State of California could undertake to encourage the broader implementation of TOD near major transit stations: bus, rail, and ferry. An executive summary and Technical Appendix are also available…. [T]he report concludes with recommendations for 14 strategies that the State of California could undertake to facilitate the broader implementation of TOD at local and regional levels. A number of possible state strategies to overcome TOD barriers are presented and described in four major categories: State

Appendix E Literature Review E-14 policies and practices; planning and zoning; finance and implementation; and information dissemination and research. 40. Cervero, Robert, Christopher Ferrell, and Stephen Murphy. 2002. TCRP Research Results Digest 52: Transit-Oriented Development and Joint Development in the United States: A Literature Review. Washington, DC: Transportation Research Board of the National Academies. http://onlinepubs.trb.org/onlinepubs/tcrp/tcrp_rrd_52.pdf From the abstract: “This digest provides definitions of transit-oriented development (TOD) and transit joint development (TJD), describes the institutional issues related to TOD and TJD, and provides examples of the impacts and benefits of TOD and TJD.” The literature review additionally discusses the historical background on the uptake of TOD in the US and challenges for implementation. 3.0 Summary of Research Findings 3.1 Introduction The literature in the annotated bibliography was selected based on the search and screening criteria described in the Introduction (Section 1.0). This section of the literature review summarizes the key findings of the works in that bibliography. It is organized thematically and covers the following topical areas: • Modern Joint Development in the United States • International Joint Development Experience • Why Undertake Joint Development Projects? • Joint Development Models • Factors that Contribute to Successful Joint Development Projects • Joint Development and Real Estate Market Risk • Joint Development and Affordable Housing • Joint Development and Parking 3.2 Modern Joint Development in the United States In reviewing the joint development literature, the Washington Metropolitan Area Transit Authority (WMATA) is often cited as having the largest and most successful joint development program among transit agencies in the United States. This success should be understood within the historical context of when the WMATA system was built. According to Suzuki et al. (2015), the Washington system was one of the earliest “modern” American transit systems to be built after World War II, along with Bay Area Rapid Transit (BART) and the Metropolitan Atlanta Transit Authority (MARTA). Dating back to the 1960s, WMATA saw itself as having a real estate function and was able to acquire land for future development using federal transportation funding made available through various authorizations extending through the late 1970s. This funding enabled WMATA and BART, and to some extent MARTA, to acquire land that was initially used for surface parking lots, but with the express intent of developing this land at a later date to generate revenue for the transit agencies (Mathur & Smith, 2012). Other heavy rail

Appendix E Literature Review E-15 systems—Boston’s MBTA, a multi-corridor legacy system, and the newer, single-corridor systems in Los Angeles and Miami—undertook joint development programs as well. Since the 1990s, federal investment in new or replacement transit corridors, while significant, has not kept up with the emerging demand. The New Starts/Small Starts program has been spread across numerous projects, most of them light rail and bus rapid transit rather than the more land- and construction-intensive heavy rail. Nonetheless, a substantial interest in joint development has emerged in these new systems. Interest in joint development has also emerged, to a degree, in some commuter rail systems, both legacy and new, reflecting the extensive surface parking inventory that such corridors often control. Joint development projects from a number of US transit systems are referenced in the research works reviewed here and in the Index of Practitioner Case Studies presented in Part E of this Technical Memorandum. 3.3 International Joint Development Experience The most commonly cited international joint development example is Hong Kong’s Mass Transit Railway Corporation (MTRC), which supports one of the densest cities in the world and carries four million passenger trips per day (Suzuki et al., 2015). MTRC is a quasi-public company, selling shares on the Hong Kong stock market. The majority shareholder is Hong Kong Special Administrative Region (HKSPAR) which is Hong Kong’s local government. HKSAR typically owns 60% to 70% of MTRC. However, like every other transit system in the world, the MTRC does not cover all its operating expenses through farebox recovery; revenues from joint development projects close this gap (Page, Bishop & Wong, 2016). MTRC has been exceptionally successful with its joint development program for three reasons. First, HKSPAR controls all land in Hong Kong and will grant MTRC a long-term (99 year) land lease for large holdings around stations at a “pre-rail” price. Second, when a commitment is made to build and open a new rail station, MTRC can then sell development rights to developers at the “with-rail” price. This price differential in congested, land-constrained Hong Kong is enormous. And, third, the joint development projects are very large-scale and can often include multiple buildings where the development is fully integrated with the transit system (ibid.). To achieve this high degree of success with joint development, MTRC uses a Rail + Property (R+P) program that ensures close coordination between rail alignment and land use potential, and enables MTRC to then fully capture the value of placing stations in strategic locations by using its special zoning powers to grant high densities for joint development projects (Suzuki et al., 2015). In fact, historically 60% to 70% of all MTRC revenues were development-related using the R+P model; MTRC also owns and leases shopping centers and concession areas near (and often abutting) rail stations. Japan also has notable examples of private transit companies using land value capture and rail- controlled TOD to offset the capital and operating costs for rail transit (Lou et al., 2013). These models vary by transit operator (some are public and some private) and by how much land they have been either granted or been able to assemble. Like Hong Kong’s, the Japanese transit value capture model relies heavily on creating development opportunities supported by strong land use policy. Japan’s national comprehensive land use plan mandates livable communities and transit-oriented development (ibid.). 3.4 Why Undertake Joint Development Projects?

Appendix E Literature Review E-16 As the Hong Kong case study demonstrates, joint development in the international context can be very lucrative for transit agencies (Zhao, Vardhan Das, & Larson, 2012), with the development revenue stream making a significant contribution to ongoing transit operating costs. When WMATA and other transit systems built in the 1960s and 1970s began executing joint development projects, their primary objective was also to generate a steady revenue stream to offset system operating costs (Mathur & Smith, 2012). However, in the US context, where urban densities and transit mode shares are lower and transit agencies more constrained in their ability to assemble land for development purposes, joint development is typically situated within a much broader value capture discussion. Interest in using value capture tools to help fund transit capital and operating costs has been ongoing since the 1990s but has accelerated since 2013 when transit ridership began to surge, precipitating the need for more transit funding, while at the same time federal funds were becoming increasingly constrained (Page, Bishop & Wong, 2016). (The same could be said of the subsequent decline in ridership that has affected many US transit systems in the last two or three years.) According to Suzuki et al. (2015), the WMATA case study offers evidence that the most significant value of joint development projects for US transit agencies is not from direct revenue generation but from its more indirect consequences. To the extent that joint development projects can catalyze or leverage additional TOD around stations, then there is a much more significant benefit to the transit agency through increased ridership, and to the surrounding jurisdictions through increased tax revenues. These increased tax revenues can then be funneled back to the transit agency via captured sales tax revenues, tax increment financing, and special assessment districts (ibid.). In fact, Cervero et al. (2002) found in their review of TOD and joint development literature found that with respect to WMATA’s joint development program, ridership increases and farebox returns were much larger than direct joint development income from ground leases, air-rights leases, and station-connection fees. This was due in part to the fact that joint development projects were better designed and integrated than other station- area projects without public-private coordination – i.e., architectural integration, more efficient use of leasable space, and better pedestrian and vehicular circulation. Although joint development programs were initially considered an ongoing revenue source for transit agencies, many studies use the WMATA example to illustrate that while joint development revenues can appear large in absolute terms (and can always be put to good use), they are, in percentage terms, a minor source of operating revenue (Bains et al., 2017; Page, Bishop & Wong, 2016; Hersey & Spotts, 2015; Suzuki et al., 2015; Mathur & Smith, 2012). A study by the US Government Accountability Office (2010) found that in FY 2008, joint development made up just 0.2%, 0.7%, and 1.0% of the total rail transit operating expenses of Los Angeles Metro, WMATA, and MARTA, respectively. These same articles enumerate a broad set of goals that transit agencies can achieve with joint development projects. These goals generally include ridership generation; cost sharing for capital improvements and/or station operation and maintenance; providing affordable housing near transit; providing other community facilities such as day care centers; generating revenue that can pay for specific projects or improvements such as structured parking or affordable housing subsidies; and leveraging other Transit Oriented Development which in turns helps communities and regions meet their goals of fostering infill development near transit and reducing auto-dependency (Bains et al., 2017; Lynott, Zimmerman & Happ, 2017; Page, Bishop & Wong, 2016; Hersey & Spotts, 2015; Vadali, 2014;

Appendix E Literature Review E-17 Florida Department of Transportation, 2014; Kniech & Pollack, 2010; United States Government Accountability Office, 2010). 3.5 Joint Development Transaction Models Joint development transactions come in many forms. The most common are the lease or sale of land parcels or air rights (Smith & Gihring, 2018; Zhao, Vardhan Das & Larson, 2012). Most transit agencies prefer long-term leases because these provide an ongoing revenue stream and greater project control (Macek, Neely, & Claney, 2017; Smith & Gihring, 2018; United States Government Accountability Office, 2010). The literature is replete with joint development projects based on long-term leases of transit agency land or air rights, including Denver Union Station (Page, Bishop, & Wong, 2016) and the major ground lease projects at Seattle’s Capitol Hill, St. Paul’s Allianz Field, and Maryland’s New Carrollton Station highlighted by FTA in its joint development brochure (Bains et al., 2017). But there are drawbacks to ground leases. Not all developers are familiar with ground lease transaction structures. Some investors may not be comfortable with a ground lease, resulting in their seeking a higher rate of return on their investment (Vadali, 2014; Florida Department of Transportation, 2014). Notwithstanding transit agencies’ general preference for long-term leases, they sometimes sell land, particularly in instances where the developer wants to build for-sale housing, which is rarely financed in conjunction with a ground lease, or where the transit agency wants to use the sale proceeds to fund some other transit related activity such as providing structured parking (United States Government Accountability Office, 2010). In recent years, transit agencies are starting to use a hybrid lease structure in which they will accept a lower lease payment up-front in exchange for a percentage of gross revenue generated by the project. While the gross revenue approach allows the transit agency to capture any market “upside” from a project, gross revenues can also be more volatile and potentially less reliable than fixed lease payments (Mathur & Smith, 2012). Joint development transactions—especially when the private development is located within the station facility itself or on air rights over it—can also include the sharing of capital expenditures as well as operating and maintenance costs. The WMATA air rights lease at the Bethesda Metrorail Station is an example. In this case, WMATA leased air rights over the station to a developer who built an office tower, supporting retail space, a hotel and a five-story garage (Mathur & Smith, 2012). In addition to a minimum annual lease payment and shared station operating costs, the project’s developers and Metro also shared station construction costs, ventilation systems, and auxiliary generators (Macek, Neely, & Claney, 2017). Retail concessions within station premises are also a form of joint development transaction, and in some cases the retail developer may be assigned responsibility for common areas or other aspects of station operation and maintenance (ibid.). Joint development transactions can also occur in situations where the private development is not located on transit property at all, or only intersects it tangentially. One such model involves station access. Some transit agencies charge connection fees when developers wish to connect their projects to an existing transit station, as well as requiring the developer to build the physical connection itself (Vadali et al., 2018; Mathur & Smith, 2012). Transit agencies favor station connection programs because they help increase ridership and off-load some of the cost of constructing pedestrian access routes.

Appendix E Literature Review E-18 Similar but greater benefits occur when adjacent, off-site land owners pay some or all of the cost of an entirely new station (or the renovation and replacement of an old one). This can occur in a strong real estate market, where the land value ”unlocked” by the new station constitutes a sufficient inducement to act. Boston Landing, a new commuter rail infill station funded entirely by the adjacent TOD developer, is a prime example (Page, Bishop, & Wong, 2016; Macek, Neely, & Claney, 2017). There are also instances in which multiple adjacent land owners, rather than a single entity, agree to jointly fund the cost of a new station. A well-known example is the NoMa-Gallaudet University Station on the WMATA Red Line (Schlickman et. al, 2015). In this case, the mechanism used to assign the appropriate share to each participating landowner was a special assessment district. There are examples of a land developer paying for part of a transit extension as well as the associated station. The Parkmerced project is the redevelopment of a low-density housing development on San Francisco’s west side. The redevelopment, which is just starting construction, will include almost 6,000 new housing units. This area is already served by transit, but the existing “Muni” line stops at the project’s periphery, not in its core. Because the developer believed that having more central transit service was essential to the project’s success, he agreed to pay the entire cost of relocating the transit line and building a new free-standing station (Schlickman et al., 2015). A second well-known example occurred two decades ago in the implementation of Portland’s “Airport MAX” light rail extension. A private joint venture funded the portion of project costs corresponding to the two-station segment adjoining the airport, in exchange for the development rights to a 120-acre public parcel, eventually developed as “Cascade Station”, a retail, office, and hotel center (Zhao, Das, & Larson, 2012; Fogarty et al., 2008). There is an important overlap between joint development and land value capture. Most of the value capture studies cited in this review treat joint development, by definition, as one form of value capture. Moreover, district value capture (like tax increment finance or special assessment districts) can be combined with traditional on-site joint development, as in Denver Union Station; or serve as a mechanism for off-site joint development, as in NoMa-Gallaudet University Station. The overlap between joint development and public-private partnerships (often referred to as P3s) is less robust, as clarified by the literature. Clearly joint development is, on its face, a partnership between public and private entities. But in most cases, the private developer is building a real estate project in conjunction with a transit agency to capture the underlying value created by the transit investment. By contrast, traditional P3s are a project delivery mechanism, in which the private entity delivers (and in some cases operates) the transit facility itself in exchange for a payment that is generally not tied to the transit line’s development potential. This is the P3 model used to build the Eagle commuter rail in Denver and the Purple Line light rail in Maryland, neither of which includes joint development projects involving the P3 partner (Fogarty et al., 2008)87. 3.6 Factors That Contribute to Successful Joint Development Projects Location. The most fundamental characteristic in determining whether a joint development project will be successful is the underlying market strength of its location (Vadali et al., 2018; Page, Bishop & Wong, 87 For recent information on the Purple Line project, see the transportation.gov webpage (accessed on May 1, 2019 at https://www.transportation.gov/tifia/financed-projects/purple-line-project).

Appendix E Literature Review E-19 2016; Florida Department of Transportation, 2014; Mathur & Smith, 2012; Renne, Bartholomew & Wontor, 2011; United States Government Accountability Office, 2010). While viable joint development can occur in a variety of transit settings and densities, the most successful locations tend to be places of regional significance that are close to or within major employment centers and can support large-scale projects that include commercial uses and/or high-density housing. These projects also tend to occur where there is enough land or air rights to build a large project; where transit service is frequent and connected to regional destinations; and where there are other kinds of “urban life” amenities (United States Government Accountability Office, 2010). Joint development is less common along bus routes, although King County Metro Transit (Seattle region) has built joint development project in conjunction with transit centers and park & ride lots (ibid., page 18). Transit Agency Capacity. Joint development is a complicated process requiring strong support and engagement from many parts of a transit organization, including policy makers at the board level (HR&A Advisors, 2018; Friedman, 2016; Florida Department of Transportation, 2014; Lou et al., 2013; Mathur & Smith, 2012; Vadali, 2014; Kanarek, Bay & Harris, 2009). Having a clear joint development policy that spells out the transit agency’s goals for its program is also important. A clear policy statement enables developers and other key stakeholders to understand the agency’s priorities and expectations for joint development projects. The policy should address procedural issues as well as substantive issues that could impact the feasibility of a joint development deal, such as affordable housing requirements or revenue expectations. (HR&A Advisors, 2018). Setting clear goals is particularly important in cases where joint development projects are intended to be catalytic, or where, for strategic reasons, the transit agency wants to move forward with a project before its market has fully matured. In such instances, the transit agency must be prepared to negotiate a deal that provides some form of subsidy to the project, either through a reduced land value or by leveraging some other funding source (Friedman, 2016; Vadali, 2014). Transit agencies also need staff or dedicated consultant support with strong real estate expertise. These staff must understand the nuts and bolts of real estate, including how to prepare or procure market studies, conduct developer solicitation processes, develop term sheets, and conduct detailed negotiations with developers (HR&A Advisors, 2018; Florida Department of Transportation, 2014). Transit agencies without this expertise can misjudge market strength, sometimes overestimating the value of their property and therefore having unsuccessful solicitation processes (Mathur & Smith, 2012), or be out-maneuvered by the private developers in the negotiation process such that the transit agency ends up with a weaker deal than necessary. Even transit agencies with in-house real estate expertise sometimes also engage third-party real estate advisors to offer additional skill sets in structuring or negotiating a complex or unusual deal. To the extent possible, transit agency staff must be empowered to make certain secondary decisions without consulting their policy board and must be able to manage ongoing challenges that can occur in any real estate transaction (HR&A Advisors, 2018). Having strong staff and a clear internal decision-making process also helps to lower risk for the developers and make joint development projects more desirable (Mathur & Smith, 2012). Fostering internal staff communication and coordination around roles and responsibilities prior to undertaking a specific joint development project is also important. This allows agency staff to move forward with an efficient and effective joint development process. Early coordination around joint development can be especially valuable for planning new transit corridors by fostering a strategic

Appendix E Literature Review E-20 approach to land acquisition along a transit alignment including identifying property to be acquired for construction staging that can later be used as potential joint development sites (to the extent that this is consistent with FTA guidelines and applicable law) (McMahon et al., 2015; Enterprise Community Partners, 2013). Have a Clearly Defined Joint Development Process. The joint development literature consistently identifies specific steps transit agencies should take to ensure a successful project outcome. These generally include having clearly articulated goals for the joint development program; set specific station access standards to which the joint development program must adhere; define transparent criteria for evaluating joint development proposals; coordinate with local government to define project parameters and roles and responsibilities for project approval; have a well-defined procurement and evaluation process; and empower staff to enter into negotiations (Florida Department of Transportation, 2014; Renne, Bartholomew & Wontor, 2011; Kanarek, Bay & Harris, 2009). 88 Coordination with External Stakeholders. Joint development projects can be very complex to execute because they need to meet the transit agency’s functional objectives, provide sufficient value to attract a developer, and meet community goals. Therefore, transit agencies must be willing and able to work with multiple actors including developers; the local jurisdiction in which the project is located; other public agencies who may contribute resources to the project or be required to grant additional approvals; non-profit partners who may deliver certain project components such as affordable housing or other community benefits; and community members who may be concerned about a new development project in their neighborhood (Salon, Sclar & Barone, 2017; Page, Bishop & Wong, 2016). Generally, transit agencies must lay out clear roles and responsibilities for working with these various stakeholders (Friedman, 2016). Working closely with local communities also helps build trust and can result in higher quality projects, lower entitlement risk factors for the developers, and other supportive infrastructure investments (McMahon et al., 2015; Mathur & Smith, 2012; Kanarek, Bay & Harris, 2009). 3.7 Joint Development and Real Estate Market Risk While real estate market cycles are important for all forms of value capture, they are perhaps most important for a joint development project where all of the value is being captured from one project or mix of projects in a set location, rather than the risk being distributed across a geographic area that incorporates many types of uses. Real estate developers are keenly aware of this and will carefully evaluate all types of risk involved with a joint development project, including the potential risk that the transit itself will not create enough value to make an otherwise infeasible project feasible. Market timing is also a critical consideration. Joint development projects only work where market timing is well- aligned with project timing. And, because joint development projects can be complex and subject to many delays, this creates additional developer risk (Page, Bishop & Wong, 2016). This reliance on market conditions makes it essential for the transit agency to clearly understand market conditions and to have some understanding of what a developer’s pro forma might look like before undertaking a solicitation process (HR&A Advisors, 2018; Friedman, 2016). 3.8 Joint Development and Affordable Housing 88 Part D of this Technical Memorandum summarizes and compares the joint development policies of ten US transit agencies, representing all modes of rail and bus rapid transit.

Appendix E Literature Review E-21 The general economic and demographic trends that have driven a resurgence in urban living, transit ridership, and infill development have also led to an increased concern about the ability to prevent displacing low-income residents from transit-rich neighborhoods (Hersey & Spotts, 2015; Kniech & Pollack, 2010; Chapple and Loukaitou-Sideris, 2019.). This trend has led affordable housing experts to urge transit agencies to explicitly include affordable housing as a key goal for joint development programs either by setting inclusionary housing policies for joint development projects, by selling or leasing land at below market rates to affordable housing projects, or by being a patient property owner willing to hold their land off the market as a developer assembles multiple parcels, including the transit agency’s land, to build affordable or mixed-income housing (Hersey & Spotts, 2015; Enterprise Community Partners, 2013; Pollack & Prater, 2013; Mathur & Smith, 2012; Kniech & Pollack, 2010). In any case, it is also important to note that affordable housing projects generally require subsidies that would likely be necessary even if transit agencies offer project support (Kniech & Pollack, 2010).89 While some authors acknowledge that there is an apparent trade-off for transit agencies between supporting affordable housing and maximizing potential revenue generation from joint development sites (Pollack & Prater, 2013), the broader literature suggests that this trade-off may not be as significant as most transit agencies assume. The reasons why affordable housing may be a critical joint development goal include the fact that joint development projects rarely provide significant revenues for transit agencies (Suzuki et al., 2015); that ridership revenues from affordable housing can be significant because low-income households tend to ride transit more frequently and more consistently than higher income households (Pollack & Prater, 2013); and, that including affordable housing in a joint development policy can help a transit agency increase its New Starts score (Pollack & Prater, 2013; Kniech & Pollack, 2010). 3.9 Joint Development and Parking One of the most common joint development opportunities for transit agencies is to convert surface parking lots into development sites. This was a key strategy for both WMATA and BART (Suzuki et al., 2015). However, replacing parking for transit riders by building structured parking is very costly; and if the joint development project is expected to generate sufficient revenue to absorb the cost of replacement parking, this can negate the residual land value that the transit agency hopes to realize, or it can make the project infeasible (Vadali, 2014). Therefore, transit agencies need to consider a replacement parking policy as part of an overall station access policy prior to undertaking joint development at any affected location (Levinson et al., 2012). Some transit agencies have opted to partial replacement, or even none at all, in building a joint development project. Where such decisions have led to a decline in ridership, the associated revenue loss has been more than offset by ground lease revenues (Willson, 2005). Decisions regarding replacement parking are very context-specific, and transit agencies should be prepared to be flexible regarding park & ride replacement. Key factors to consider include market strength and revenue yield from different joint development and station access scenarios—taking into account both ridership and revenue from the park & ride lot, the joint development sale or lease payments, new transit trips generated by the joint development, and new transit trips generated by 89 The comparison of ten transit agency joint development policies in Appendix G includes a detailed discussion of their affordable housing policies.

Appendix E Literature Review E-22 other station-area TOD catalyzed by the joint development. (Willson, 2005; Kilcoyne at al., 2015).90 Another advantage to considering joint development on park & ride lots is that these tend to be in suburban locations, which can support more counter-peak transit ridership. Where a transit agency is considering reducing its replacement parking, decisions about the appropriate capacity should be developed in conjunction with the local jurisdiction (ibid.). The parking issue also extends beyond replacing transit customer parking to how much parking should be provided in the joint development project itself. Transit agencies have often turned to other government funding sources to help underwrite replacement parking costs, including tax increment financing or other grant sources (Mathur & Smith, 2012). Reducing parking requirements can help with project feasibility, although this may come with some market challenges. The literature also points out that including affordable units in joint development projects helps to reduce project-based parking demand because lower income households also tend to have lower rates of car ownership (Friedman, 2016; Hersey & Spotts, 2015). Another opportunity for reducing parking supply is shared parking—not only among the different uses within a joint development project, but between the joint development and the park & ride replacement (Kilcoyne et al., 2015). This opportunity may arise particularly in the case of joint development projects involving commercial-retail uses (Arrington and Cervero, 2008). Parking used by rail commuters on weekdays is shared by shoppers patronizing nearby shopping centers on weekends in metropolitan Washington, San Diego, and Miami, among other areas. 90 In Appendix F, the review of FTA joint development policy includes a discussion of the replacement parameters for FTA-funded park & ride lots. Individual transit agency replacement policies are discussed in Appendix G, the comparison of transit agency joint development policies.

APPENDIX F FTA JOINT DEVELOPMENT POLICY AND ITS EVOLUTION

Appendix F FTA Joint Development Policy i TABLE OF CONTENTS 1.0 FTA Joint Development Policy Documents ........................................................................................ F-1 2.0 Background ........................................................................................................................................ F-2 3.0 Features of FTA Policy that Have Remained Constant ....................................................................... F-3 4.0 Features of FTA Policy that Have Changed Materially ....................................................................... F-7 LIST OF TABLES Table F-1: FTA Joint Development Policy Documents Published Since 1997 ...................................................... F-1

Appendix F FTA Joint Development Policy F-1 FTA JOINT DEVELOPMENT POLICY AND ITS EVOLUTION 1.0 FTA Joint Development Policy Documents Joint development falls within the jurisdiction of the Federal Transit Administration (FTA) only if it involves new FTA funding or the use of FTA-assisted real estate. Such cases represent an important subset—but by no means the entirety—of joint development in the US. The purpose of FTA’s joint development policy is to set forth the rules for determining if a proposed project constitutes FTA-assisted joint development, and if so, the conditions under which FTA will approve the use of FTA funding or FTA-assisted property. FTA issued its first joint development policy in 1997 and has periodically updated and modified it through a series of subsequent publications. The policy in effect as of this writing was published in 2020. The joint development policy documents issued by FTA over the last two decades (and addressed in this review) include the following: Table F-1: FTA Joint Development Policy Documents Published Since 1997 1997 Policy on Transit Joint Development (Federal Register Notice) https://www.govinfo.gov/content/pkg/FR-1997-03-14/pdf/97-6462.pdf Hereinafter cited as “1997 FTA Policy”. 1998 Appendix B (“Joint Development Projects”) to the FTA Circular on the Capital Program: Grant Application Instructions (Circular FTA 9300.1A) http://libraryarchives.metro.net/dpgtl/FTA/1998-FTA-Circular-9300.1A.pdf Hereinafter cited as “1998 FTA Appendix”. 2007 Notice of Final Agency Guidance on the Eligibility of Joint Development Improvements under Federal Transit Law (Federal Register Notice) https://www.govinfo.gov/content/pkg/FR-2007-02-07/pdf/E7-1977.pdf Hereinafter cited as “2007 FTA Guidance”. 2014 2014: Federal Transit Administration Guidance on Joint Development (Circular FTA 7050.1) https://www.transit.dot.gov/sites/fta.dot.gov/files/docs/FTA_C_7050_1_Guidance_on_Joint_ Development_Circular.pdf Hereinafter cited as “2014 FTA Circular 7050.1”. 2016 2016: Federal Transit Administration Guidance on Joint Development (Circular FTA 7050.1A) https://www.transit.dot.gov/sites/fta.dot.gov/files/docs/FTA-161221- 001%20Joint%20Development%20Circular.pdf Hereinafter cited as “2016 FTA Circular 7050.1A”. 2020 2020: Federal Transit Administration Guidance on Joint Development (Circular FTA 7050.1B) https://www.transit.dot.gov/sites/fta.dot.gov/files/2020-08/Joint-Development-Circular-C- 7050-1B.pdf Hereinafter cited as “2020 FTA Circular 7050.1B”. These six documents represent, in effect, three successive policy approaches on FTA’s part:

Appendix F FTA Joint Development Policy F-2 • The 1997 FTA Policy addressed a threshold inconsistency between FTA’s intended support of joint development and the operation of various statutory and regulatory provisions which tended to have the opposite effect. The 1998 FTA Appendix codified the 1997 FTA Policy and captured statutory changes enacted in TEA-21 (1998).91 • The 2007 FTA Guidance updated and recodified FTA’s joint development process. Among other things, it reflected statutory changes enacted in TEA-21 (1998) and SAFETEA-LU (2005). • The 2014 FTA Circular 7050.1 was a comprehensive restatement and modification, reflecting statutory changes enacted in MAP-21 (2012). It also implemented FTA’s desire to convert its joint development guidance into a self-contained, stand-alone circular. This circular was slightly amended by 2016 FTA Circular 7050.1A (reflecting statutory changes enacted in the FAST Act of 2015). The circular was further amended by 2020 FTA Circular 7050.1B, which adopted changes originally posted for public comment in April 2019. In the pages that follow, the salient points of FTA’s Joint Development Policy are summarized, and key issues identified. Material changes that have evolved across successive iterations of the policy are highlighted in the narrative. 2.0 Background Starting with the National Mass Transportation Assistance Act of 1974, transit agencies receiving FTA capital grants have been allowed, with FTA approval, to apply grant funds for projects that we would recognize today as joint development. In the 1970s, FTA’s predecessor, the Urban Mass Transportation Administration (UMTA), operated a discretionary program known as “Urban Initiatives” that assisted local grantees in acquiring property for joint development and in building joint development components like shared foundations, air rights decks, or the shells of joint-use facilities. Notable projects were undertaken in Washington, Baltimore, Philadelphia, Denver, and Santa Ana, California; these were documented in Joint Development: a Handbook for Local Officials, published by UMTA in 1983.92 However, appropriations for the Urban Initiatives Program ended in 1981. Since then UMTA and subsequently FTA have not had a dedicated funding program for joint development. With FTA approval, any of several FTA capital programs can be used for eligible joint development costs, although as a practical matter, for reasons explained below, such funding can be difficult to access and use. A more serious threshold problem was that until 1996, joint development on land acquired or improved with FTA funds was subject to the then-prevalent understanding of the Common Grant Rule. This body 91 The multi-year Surface Transportation Authorization Bills enacted since 1991 are commonly known by acronyms, which are used for convenience in this memorandum. They are: (i) 1991: Intermodal Surface Transportation Efficiency Act (Public Law 102-240, “ISTEA”); (ii) 1998: Transportation Equity Act for the 21st Century (Public Law 105-178, “TEA-21”); (iii) 2005: Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (Public Law 109–59, “SAFETEA-LU”; (iv) 2009: Moving Ahead for Progress in the 21st Century Act (Public Law 112-141, “MAP-21”); (v) 2015: Fixing America's Surface Transportation Act (Public Law 114-94, “FAST Act”). 92 See Joint Development: a Handbook for Local Government Officials (1983). Prepared by Public Technology, Inc., for the Office of Planning Assistance, Urban Mass Transportation Administration, in cooperation with the Technology Sharing Program, Office of the Secretary of Transportation. https://babel.hathitrust.org/cgi/pt?id=uc1.c100889882;view=1up;seq=24

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Joint development is a subset of transit‐oriented development. It consists of residential, commercial, civic, or mixed‐use development that is closely coordinated with a transit facility and in which the transit agency participates through the use of its property, funding, or some other form of real estate or business transaction.

The TRB Transit Cooperative Research Program's TCRP Web-Only Document 73: Guide to Joint Development for Public Transportation Agencies: Appendices provides supplemental information to TCRP Research Report 224: Guide to Joint Development for Public Transportation Agencies.

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