In February, Dena had the honor of being asked to give the closing plenary keynote speech at the New Partners for Smart Growth Conference. This was a very last minute invitation because it was only that morning when the conference organizers learned that the scheduled speaker couldn’t get to Denver due to the now infamous Polar Vortex that dumped much snow and bad weather on the East Coast, right at the same time as the conference. While Dena’s speech was brief, it was intended to inspire conference attendees to go home thinking about the future in slightly different terms than they might have been coming into the conference, and to inspire people to take on new and different approaches to building healthy, sustainable and just communities.
In her speech, Dena focused on five trends facing the planning and smart growth world– which are all interconnected and can be broken out in many ways, but here is her cut: (1) technological innovation will continue to shape the built environment in ways that will almost certainly continue to create “winners and losers”; (2) there is an increased need for government be to be more proactive in shaping the built environment using a cost/benefit calculus that is more equitable or just than the way we have calculated the costs and benefits of public investment in the past; (3) there is continued fragmentation in the way people define “community,” and a growing interest in funding “what I want to fund,” rather than being willing to invest in a shared future beyond one’s personal interests; (4) there is an increasing tendency of government to be reactive—in “crisis management” mode, rather than acting in ways which encourage sustainability, thus better positioning ourselves to get out in front of rapidly evolving trends, and (5) there is increasing tension across generations—between those who don’t want to change versus those who are accepting of change, and an increasing income inequality within generations that also serves as a source of tension around community change.
To address those needs, Dena suggested, we have to redefine our role to focus on being the implementers of smart growth, not just the dreamers who paint the picture of what a more beautiful world we could have, if we could only grow “smarter.” But to do this, we have to acknowledge the types of barriers to implementation that the trends Dena pointed out will make this a challenging task. Therefore, what we must all do is take on the hard work it takes to understand how to deliver –actually deliver our vision across a wide range of contexts, using a wide range of solutions, knowing that we might not reach our full aspirations, but that we can still have a positive impact. We can no longer merely spout high-minded ideals and produce vague plans that make us feel good, but are in fact, impossible to execute. In a word, we need to focus on what works for people in a particular place, and not get mired in the intricacies and ideology. We must learn how to make the vision of smart growth an implementable reality for all people and all communities.
March 7, 2014
Strategic EconomicsDena Delivers Keynote Address at New Partners for Smart Growth Conference
Last April, we told you about the U.S. Environmental Protection Agency’s release of our report on existing and emerging tools for financing infrastructure for transit-oriented development in this blog post.
Recently, our colleague at CH2MHill published an article in Public Works, featuring the report. The article has just been posted to the Public Works website as part of the January 2014 annual outlook issue. You can view it here.”
January 22, 2014
Strategic EconomicsReport Published By “Public Works”
Strategic Economics and ARUP recently completed a study for the Grand Boulevard Initiative on infrastructure needs and financing mechanisms in the El Camino Real corridor, which stretches 43 miles from Daly City to San Jose, and falls under the jurisdiction of 19 cities, two counties, and multiple special districts and other agencies. The study provided us with an opportunity to think creatively about how cities and counties might benefit from working together to fund and implement infrastructure projects, and to explore emerging tools for financing infrastructure in infill and transit-oriented development (TOD) settings. My personal favorite part of the study was researching five emerging tools and strategies in the field of infrastructure finance that may have medium- to long-term potential to help pay for TOD and infill improvements:
California’s greenhouse gas (GHG) emissions cap-and-trade program, which went into effect in 2013, will generate new revenues for investments that advance the state’s long-range climate goals. Sustainable Communities & Clean Transportation is one of three programs in which the state plans to focus investments, and could include funding for complete streets improvements, bicycle and pedestrian infrastructure, projects that increase transit mode share, and other types of infrastructure that contribute to the implementation of local and regional Sustainable Communities Strategies (SCSs).
Corridor-level parking management strategies would set parking prices and manage parking demand across a transit corridor, including publicly-owned on- and off-street spaces. Revenue from parking fees throughout the corridor could be pooled to finance needed improvements at strategic locations, generating more revenue than a more localized approach. The city of Aurora in the Denver metro area conducted a “Strategic Parking Plan and Program Study” that lays out what this type of innovative parking management strategy would look like for the planned I-225 light rail corridor.
Congestion pricing mechanisms are a type of user fee where drivers are charged higher fees at peak periods of demand in order to manage traffic congestion and encourage use of transit and other alternatives to driving. Fee revenues are typically used to cover the cost of operating, maintaining, and enforcing the program, and additional revenues can provide funding for transit or other mobility improvements that reduce traffic demand.
Institutional investors – including pension plans, endowments, foundations, and insurance companies – are demonstrating an increasing interest in investing in infrastructure projects such as transportation, utilities, communications, renewable energy, and other assets. For example, the California Public Employees’ Retirement System (CalPERS) has invested over $1 billion in international and domestic infrastructure since 2007, and in 2012 earmarked an additional $800 million for infrastructure investment within California.
Several state departments of transportation, including those in California, Colorado, Massachusetts, Texas, and Ohio, are conducting feasibility studies to explore the potential for integrating renewable energy technologies in highway right-of-ways. In the near-term, such projects may take the form of installing solar panels or wind turbines or planting biofuel crops (e.g., switchgrass) adjacent to the roadway. However, new technologies are emerging for embedding solar cells or other solar-energy-capturing technologies in the roadway itself, or harvesting the energy generated by road vibrations.
In addition to much more information on each of these tools, we also evaluated the amount of revenue that various value capture tools could generate (including infrastructure financing districts (IFDs) and assessment districts), and the potential to target regional grant funds. The report also details ARUP’s innovative new methodology for assessing roadway, water, sewer, storm drain, electricity, gas, and complete streets infrastructure needs at a regional level. Check out the study or Nadine’s recent presentation of our work at California APA!
November 25, 2013
Strategic EconomicsFive Emerging Tools for TOD and Infill Infrastructure Finance
I recently attended a lunchtime forum covering research findings regarding occupation and job opportunities for low and moderate income workers in the Bay Area. The event was hosted in San Francisco by SPUR, an urban planning and good government organization of which I’m a member. My colleagues and I previously had the privilege of collaborating with lecturers Jon Haveman and Steve Levy on our report for the East Bay EDA entitled “Building on Our Assets: Economic Development & Job Creation in the East Bay,” so I was curious to learn more about their current work for the Bay Area’s Economic Prosperity Strategy (funded by a HUD Sustainable Communities grant).
The lecture focused on pathways and opportunities for the Bay Area’s low and moderate income (“LMI”) workers to access better-compensated jobs. As presented, over 35 percent of the Bay Area’s workers qualify as LMI by earning wages of less than $18 per hour. These workers primarily differ from others by their relatively low education levels (46% hold a high school degree or less) and concentration in the age group 35 and under. They work and live throughout the Bay Area since their jobs are typically on-site service jobs within all industry sectors of the economy, which leads to a surprising result: their commutes are slightly shorter than the average worker, and are more likely to occur via bus or on foot rather than by rail or automobile.
So what are these workers’ opportunities for advancement? First of all, Jon was careful to point out that this is an analysis of workers rather than households; these workers are not necessarily living in lifelong poverty since the study does not examine household income, and the data shows many will “graduate” to higher incomes over time. That said, the study’s linkage of occupations and industry growth projections provides an opportunity to identify pathways to accelerate and widen this advancement.
Jon and Steve’s analysis has found that occupations in various office positions, sales, and construction tend to have the highest concentration of jobs in the $18 to $30 per hour salary range. These occupations require strong interpersonal skills, yet otherwise often only require on-the-job training (unfortunately, “soft skills” can be hardest to teach). All-in-all, the analysis has identified approximately 155 occupations paying $18 to $30, of which about 46% have zero “hard-to-train” skill requirements. Other middle-income occupations can still provide opportunities for advancement, but require a greater investment of education and training resources for success.
I’m excited to read the final reports that emerge from this project; I think the findings and recommendations will be useful for lots of my Bay Area projects, particularly those in economically distressed communities. Jon and Steve are taking their findings on the road now, presenting at community and stakeholder meetings throughout the Bay Area. In the meantime, check out Egon Terplan and Tony Vi’s blog post about the first phase of work.
August 22, 2013
Strategic EconomicsA Middle Class Pathway for Bay Area Workers
At Strategic Economics, we’ve been closely following the commentary on the Supreme Court’s decision last week in Koontz v. St. Johns River Water Management District(and, to speak for myself at least, experiencing some intense flashbacks to land use law class!). For those of you who have been distracted from land use wonkery by the Court’s other major cases last week, Koontz could have important implications for local governments’ ability to mitigate the impacts of development and pay for infrastructure, protection of wetlands, affordable housing, climate change preparation, and other important community needs. The Court’s decision extended the Nollan/Dolan test – under which local governments may only require a land owner to dedicate or relinquish a portion of their property as a condition for a land use permit if there is a “nexus” and “rough proportionality” between the requirement and the permit – to the payment of fees, as well as the dedication of physical property. Previously, development fees had been subject to a less stringent test established under Penn Central Transp. Co. v. New York City, which asked local governments to balance the common good with economic impact on property owners (although many states, including California, had already enacted stricter rules). Now, local governments will need to establish that their fees have a direct relationship and are proportionate in amount to the impacts caused by a development project, or be subject to challenge under the takings clause of the Fifth Amendment. (For a more complete discussion of the case and all the legal mumbo jumbo, see the excellent summaries on The Atlantic Cities blog and CP&DR.) Cities have used development fees to pay for everything from wetland mitigation banks to new affordable housing, schools, streets, and sewers. Now, these fees could be threatened.
We often work with cities to identify potential funding sources for public improvements, and developer contributions can be an important component of these financing strategies. For us, the Koontz decision raises more questions than it answers. Some of the questions we’ve been kicking around the office are:
How far do the “nexus” and “rough proportionality” tests now extend, and how will local governments and courts decide what is a development fee (or to use the more technical term, a monetary exaction) and what is a user fee, special assessment, tax, or other types of fee that are not covered by Koontz? For example, will liquor license fees be subject to Koontz? As Justice Elena Kagan points out in her dissent, state courts have long struggled to make these distinctions among different types of fees. Now the distinction will become even more critical.
What will the Koontz decision mean for the emerging field of community benefit payments, in which developers voluntarily pay for community benefits (such as parks or streetscape improvements) in return for building at higher densities? Will these type of incentives be subject to the more stringent Nollan/Dolan test?
Are local governments in California somewhat protected from the effects of the ruling? California’s Mitigation Fee Act already requires local governments to establish a direct relationship between development projects and the improvement being financed, and to limit the size of the fee to the amount needed to pay for the improvement. However, some types of fees are excluded from the Act, such as park (Quimby Act) fees and fees collected under a development agreement.
Is Ehrlich Dead? As Bill Fulton wrote on CP&DR, the California Supreme Court’s ruling in Ehrlich v. Culver City had previously provided more flexibility for exactions that are applied as part of a general policy, rather than on a case-by-case basis. Does Koontz overturn that rule?
July 1, 2013
Strategic EconomicsKoontz and the Future of Local Government Finance
Sujata was a featured speaker at a recent transit-oriented development (TOD) workshop in Hartford, Connecticut, focused on understanding the potential for development along new transit lines in the “Knowledge Corridor” region. The Knowledge Corridor will soon have a new bus rapid transit line linking New Britain to Hartford –set to open in a couple of years — and is also planning a commuter rail connection between Hartford and Springfield, Mass. The workshop was co-sponsored by the Capitol Region Council of Governments (the metropolitan planning organization for the Hartford region) and the Partnership for Strong Communities, a regional organization focused on affordable housing and equitable development. Other presenters included Stephanie Pollack, Associate Director of Research, Dukakis Center for Urban and Regional Policy, and David McCarthy of the Jonathan Rose Companies.
Sujata and David presented their ongoing market study for the Knowledge Corridor, which has found that there is a market for TOD in the region, particularly as “Millennial” workers enter the housing market. But given that the region’s projected population and household growth will be slow, and the real estate market fundamentals are still challenging, David and Sujata recommended that the state, region, and local governments begin by 1) making strategic investments along the transit corridors, including infrastructure improvements; and 2) targeting existing economic development dollars to TOD locations. Sujata highlighted the Cleveland Health Line as a promising example of a BRT corridor that leveraged its existing large anchor institutions, including universities and hospitals, to catalyze TOD. Because the Knowledge Corridor is rich in anchor institutions and major employers – many of them within the BRT and rail corridors – this could be a key strategy for moving forward with implementing TOD in the Hartford region.
June 26, 2013
Strategic EconomicsTOD Workshop in Hartford, Connecticut
One of the things I love about our work at Strategic Economics is that we’re exposed to the range of approaches that local jurisdictions and regional agencies across the country are taking to encourage transit-oriented development in their communities. In some cases, such as our series of case studies for the Puget Sound Regional Council (PSRC) last year, we get to profile a few of the most innovative programs for our clients. Because the strategies and challenges illustrated in these case studies are relevant to a broad audience, I thought I’d use this blog post as an opportunity to share the report with Strategic Economics’ partners and friends.
The six case studies in the report describe the structure, funding and implementation of regional programs aimed at encouraging TOD. While the case studies focus on regional organizations, the roles of other actors—local jurisdictions, community groups and developers—are highlighted throughout. Four of the programs are led by Metropolitan Planning Organizations (MPOs), one is a joint development program led by a transit agency and one is a regional collaborative of community-based nonprofit and philanthropic organizations. Key themes that emerged across the case studies include the need to advance TOD in a diversity of place types, trade-offs between planning and capital funding, and the importance of ongoing evaluation of program goals.
The case studies were conducted as part of PSRC’s Growing Transit Communities (GTC) program, funded by a Sustainable Communities Regional Planning Grant from the U.S. Department of Housing and Urban Development . Over the next 20 years, the Puget Sound region will be investing $15 billion in light rail and other forms of public transit, creating a significant opportunities for TOD in new and existing station areas and other transit hubs. Other work conducted by Strategic Economics for GTC included a TOD market analysis, TOD housing and commercial demand estimates, and recommendations for promoting equitable development around transit.
Earlier this week our friends at Smart Growth America published a fascinating and innovative report entitled Building Better Budgets: A National Examination of the Fiscal Benefits of Smart Growth Development. Strategic Economics staff members Sarah and Alison led the firm’s contribution to this report and were supported by Dena and Sujata. The report is a must read because it is the first of its kind to aggregate the studies that municipalities across the nation have conducted to understand both the costs and revenues associated with smart growth development. In some cases, like Charlotte, North Carolina the team’s research revealed that the increased road connectivity enabled via smarter development allowed the fire department to reach residents more easily, and thus lowered the city’s service costs. In other instances, like the original research Strategic Economics conducted on smart growth development in Nashville, Tennessee the findings were similarly interesting. SE’s Sarah Graham found that a smart growth project in a brownfield location could generate two times as much revenue per unit (and 42 times as much revenue per acre) as a conventional suburban development in a greenfield location. Wow, talk about incentive to reconsider the ways we develop land!
You can check out SGA’s full press release here and download the full report here. Happy reading and happy Memorial Day Weekend!
May 24, 2013
Strategic EconomicsNew Report on the Savings and Revenues Generated by Smart Growth Development
This last Sunday (April 14th) I blew through Chicago to attend the American Planning Association’s big annual conference. I had the privilege of being on two panels, one of which was organized by John Beutler from Calthorpe Associates and also featured that rock star Jeff Tumlin. This session was about why job location is important to regional planning and what we can do to make more pedestrian/transit friendly employment districts. I talked about why employment locations matter and why regions should work to prevent employment sprawl. John gave a very clever presentation demonstrating how things would look if we treated pedestrians like cars, i.e., privileging the pedestrian and subjecting the cars to all of the absurd things we make pedestrians do to walk from point A to point B. Can you imagine that? Jeff then showed that if you can’t take the jobs to the transit, companies can provide their own transit. He used the company Genentech and its South San Francisco campus as a really excellent example. Overall, I ended the hour feeling that we did a good job of “making the case” and the audience seemed really engaged.
My other session, organized by David Dixon from Goody Clancy and Kaid Benfield from the Natural Resources Defense Council, addressed the issue of planning for smart growth in low income communities. I won’t summarize the content because Jared Green provides an excellent recap on The Dirt (be sure to check the post out). However, beyond the excellent content, I was very impressed by the diversity of the audience. There were many more young people of color in this session than I’ve seen in practically any conference session I’ve ever been to. It was thrilling to see the next generation of planners vote with their feet for equitable planning by showing up in such large numbers for this session! Keep it up!
April 18, 2013
denabelzerAPA Conference 2013: Invigorating Sessions and Audiences
This spring, the U.S. Environmental Protection Agency released our report on existing and emerging tools for financing infrastructure for transit-oriented development (TOD). Written by Strategic Economics in partnership with CH2MHill, Arup, and EPA staff, this report provides local governments with a comprehensive overview of the tools and strategies that are available to help pay for infrastructure. In particular, it focuses on the types of facilities that are commonly needed to support new development near transit. We’ve already heard from partners and planners around the country who have found this resource helpful, and we hope that it will continue to prove useful as debates continue at the federal and state levels about how to pay for rebuilding the nation’s crumbling infrastructure.
What will you find in the report?
Accessible explanations of how particular funding tools work, and how they can be assembled into financing strategies that communities can use to pay for infrastructure
Case studies of how communities from across the country have successfully financed their infrastructure projects
Profiles of innovative efforts to “think outside the box” and come up with creative solutions for financing TOD infrastructure, including partnering with anchor institutions, managing and paying for parking at a regional level, and implementing district energy systems
…and much more. So please download a copy and let us know what you find valuable for your community!
April 1, 2013
Strategic EconomicsFinancing Infrastructure for TOD