Value Capture and SMART

photo from Images_of_MoneyIf you follow the Marin IJ online, you’ve probably seen me posting a lot on SMART-themed articles.  Sometimes the comments from critics can be, to be kind, ill-informed, although it’s typically a fun and spirited debate on the subject.  One comment that falls into the latter category recently got me thinking about value capture for SMART.

I had just posted about Larkspur Landing’s owners.  The SMART train was originally slated to extend down to the Larkspur Landing area and connect with a ferry into the City but has been scaled back to extend only as far as Central San Rafael as a cost-saving measure.  This, I argued, was a loss for the Larkspur Landing neighborhood and that the owner might want to pay to extend that last couple of miles:

Something I’ve been wondering about has been whether the owner of Larkspur Landing would be willing to help finance the Larkspur station. Although whoever does own that area isn’t the most transit-oriented (to understate), being able to market your location as only 30 minutes to anywhere by bus, train, or ferry would significantly lift the value of that property.

Kevin Moore, who had seemed to be in opposition to the SMART project, replied:

In that line of thought… for every housing unit built near the new SMART stations, there should be a reasonable, but substantial “permit fee” for each bedroom and parking space. When Disney put in the monorail from his hotel to the theme park, he paid for it!

Although I was imagining a public-private partnership between SMART and Larkspur Landing, rather than a fee or tax levied across the whole system, Mr. Moore touched on an important concept.  When a station is built, it typically increases the value of the land around the station, boosting property tax receipts.  One method of value capture returns that extra boost to the transit agency, giving a consistent stream of income to the transit agency.

Mr. Moore’s idea is another type of value capture, allowing the agency to assess a one-time fee on new residential development that occurs around the stations.  To tweak it a bit, the fee would be levied on whole units rather than bedrooms, to discourage strictly studio apartment developments, and would apply to retail square footage or some other commercial metric.  This would allow the SMART development to capture some of the value created by their system, hopefully bringing the system into a better financial position in the process.  A fee on parking would discourage parking spaces, which would be good for the County’s traffic and for neighborhood walkability.  Ostensibly the developments would be exempt from parking minimums, allowing them to opt out of the spaces they felt they didn’t need.

I’m hesitant to fully endorse the concept, however.  This provides a one-time stimulus to the system but doesn’t have the staying power of a value-capture tax.  If SMART is really successful, it would eventually expand to a Phase 3, perhaps to Sausalito, Richmond, or even San Francisco itself, and slowly add a second track, and these expansions will need a stable funding mechanism.  Sales tax, as we now see, is not terribly stable, and is not terribly dependent upon whether the system works well or not.  As well, imposing a fee on any new development would disincentivize the new construction so desperately needed by the downtowns served by SMART.

The parking fee, though – that’s a marvelous idea.  Any new space within a half-mile of a station could be levied at one rate, and any new space above the local parking minimum (at time of construction) would be levied at a higher rate, discouraging developers from overbuilding their parking capacities.  Although there shouldn’t be a parking minimum in the first place, this would go some way to produce a less car-dependent corridor.


Midweek Links: Get SMART

SMART was making news this week, what with TAM voting not to rescind last month’s approval of an $8 million bailout for the transit project.  MTC then voted to approve its own transfer of $33 million.  Sonoma had already contributed $3 million.  Larkspur officially approved of the project, votes raised my eyebrows.  When the original vote deadlocked at 7-7 on whether to approve the bailout, it was Larkspur Councilwoman Joan Lundstrom who switched her vote.  She was not at the second meeting, allowing her alternate, Larkspur Mayor Larry Chu, to sit in her place.  Despite his city’s official approval of the project, he voted to rescind.  In any case, RepealSMART would have none of it, suing the organization for violating open meeting laws and general nefariousness.  All the while, the SMART board reported that they were “fundamentally sound and on track” and continued its search for a new executive director.

Meanwhile, Corte Madera and San Rafael passed their budgets.  Turns out the San Rafael gas tax doesn’t always go to transportation.

Not all budgets are in yet, with a number of cities contemplating sales taxes to close gaps that keep coming up.

Novato gets a new bicycle lane to bypass a stretch where bikers shared 101 with vehicular traffic.

Not all vehicular safety news is good.  A boy was hit by a driver outside of a crosswalk in a Mill Valley shopping area.  Police blame the kid for crossing outside of a crosswalk, but there’s a problem: there aren’t any crosswalks there.

In other local drama, Novato has revised their list of sites to zone for affordable housing.  Looks like the churches are off the hook, but I still wonder why the city insists on building single-purpose affordable units.

From here on, the only thing shocking about San Rafael’s Pizza Orgasmica is going to be the name.  Its owner has given up a fight to keep its bright yellow, Brazil-inspired hue.  SFist calls San Rafael’s objections an “Orange County-mentality“.

TAM is considering high-occupancy toll, or HOT, lanes on 101.  Despite research that congestion pricing is the only way to keep down traffic, I can’t help but think the $66-120 million required to install might go to a better use like, say, transit.  At least it makes the $8 million SMART bailout look like the chump change it is.

Lastly, and as an offering for being a day late, I bring you meaty theory.  Free parking, that ubiquitous scourge of the suburbs and thing that exists all over Marin, is really a huge drain on our local, regional, and national economies.