Capturing the value of transit to rebuild the system
Land next to transit is worth more, and as a result government should capture some of that additional value to pay for transit improvements. This statement seems intuitive to many in the planning field, so intuitive it even has its own nickname: "value capture." The premise is that government can "capture" the "value" that investment in transit provides for surrounding properties and use some of that value to pay back the initial costs of transit projects.
Given Illinois' $43 billion backlog for rebuilding our transportation infrastructure, we need to access all available tools—so why not capitalize on the potential of value capture to help fund it?
To be sure, there are abundant factors that can contribute to the impact any given transit investment can have in a community—crime, quality of the housing and schools, even the frequency of transit service—all have an impact on the results.
Taking all these factors into account, value capture is a viable tool where it makes sense. Chicago has a couple projects in particular where value capture may be the only way the City will see them through.
The Chicago Transit Authority (CTA) is currently planning to rebuild the crumbling Red and Purple lines on the North Side, a major undertaking for which the first phase is projected to cost nearly $2 billion. Twenty percent of all CTA El rides occur on this stretch of track making it a critical segment to be sure. The federal government is a source for much of the necessary funds, but they require a local match.
Chicago's Union Station is another transit project with tremendous potentially positive impacts to the region. Metra and Amtrak riders swarm the station each year in greater numbers than at Midway Airport, but it is in need of some serious expansion. Amtrak has a plan, but—you may have guessed it—they need some money.
The Metropolitan Planning Council supports a bill in Springfield, SB 277, that would create a"value capture" district around both projects to help cover costs, and we are confident that this funding would provide the essential boost to make them happen. The bill, sponsored by Ill. Sen. Heather Steans (D-Chicago), was passed by the Senate in May of last year, but now we need it to pass the House.
Sen. Steans' bill addresses concerns leveled toward similar efforts; her bill, for example, does not impact revenues that would otherwise be distributed to Chicago Public Schools. SB 277 also allows a portion of critical funds to flow to the other taxing bodies that rely on property tax.
Now's the time to reach out to Speaker Madigan's office and let him know you support passage of SB 277. This legislation is not part of the larger budget discussion and shouldn't be held up until that issue is resolved. Until the CTA and Amtrak can access these funds, these critical projects will only be further delayed.