All posts in “Featured Work”

Derek Fleming Receives the 2024 Jason Jenkins Corporate Community Pillar Award

HR&A congratulates Senior Advisor Derek Fleming for receiving the 2024 Jason Jenkins Corporate Community Pillar award from Mayor Levine-Cava, the Miami-Dade County Commissioners, the Black Affairs Board, and the Miami Dolphins Foundation.  

  

Derek was honored for his work in Overtown, a historic African American community in South Florida, where he led a team advising the City of Miami on Master Planning and Redevelopment Strategy for Overtown’s Cultural & Entertainment District. The work involved a mixed-use project encompassing 300,000 square-feet of commercial/retail, 600-unit mix of market rate, workforce, and affordable-income housing, open space, and environmentally sustainable initiatives. Derek was the developer on the first phase of the Plan. His award-winning adaptive re-use of the historic Clyde Killens Pool Hall, where Muhammad Ali, Aretha Franklin, Nat Kjng Cole and others spent time socializing, is a centerpiece to the area’s rebuilding.

  

Dr. Enid Pinkney, an educator, community developer, and activist who has been a vital mentor to Derek, nominated him for the award. Dr. Pinkney’s legacy, including the restoration of the Historic Hampton House, has inspired much of Derek’s work in South Florida and beyond. This recognition reflects HR&A’s growing presence in South Florida and Derek’s work across the country leveraging cultural districts to drive equitable revitalization in all areas of need, in particular BIPOC communities.

HR&A Report for Service Employees International Union (SEIU) finds that 1 in 5 California Households Lack Basic Banking Services, New Program Would Save Billions

This news announcement is based on a press release that was originally issued by Service Employees International Union (SEIU).

 

The Service Employees International Union (SEIU) released a report conducted by HR&A Advisors, which reveals that 1 in 5 California households cannot access basic financial services such as checking and savings accounts and debit cards, underscoring the ongoing crisis of underbanking that restricts financial opportunities for many California families, particularly in communities of color. The report finds that the proposed CalAccount program, a free, public banking option for Californians that the State of California is considering, would save un- and underbanked Californians a total of over $3 billion a year and generate $5 billion in economic activity.

 

When they cannot access banking services, low-income Californians have to rely on alternative financial service providers like pawn shops and check cashers, which can be costly, predatory and exacerbate their already precarious economic situations. For Californians without access to reliable, foundational banking services, financial stability remains out of reach. 

 

The report details how the lack of adequate access to basic financial services hurts California’s families, communities and statewide economy. Specifically, it finds: 

  • Seven million Californians are either unbanked, meaning they do not have a bank account – or underbanked, meaning they rely on costly alternative financial services
  • Black households are 3.5 times more likely to be underbanked than white households
  • Black, Latino/a, and single-female headed households are most likely to be underbanked or unbanked
  • 61% of unbanked households make less than $30,000 annually and 41% make less than $15,000 annually. 40% of underbanked households make more than $75,000 per year
  • Underbanking is of particular concern to California’s rural communities as 70% of census tracts in California do not have any physical banking outlets and another 15% have only one banking outlet
  • The widespread lack of adequate access to basic banking services costs Californians $3.1 billion each year
  • Saving Californians from overdraft fees, account maintenance fees, ATM fees, money orders, and check cashing with CalAccount, will generate $5 billion in the California economy

 

HR&A Advisors found that a solution like CalAccount is necessary to help address the financial service access gap and could be feasible for the State to implement. The proposed CalAccount program, currently under consideration by the CalAccount Blue Ribbon Commission, would generate billions and help Californians keep more of their hard-earned money instead of paying fees to banks or check cashers. 

 

Public Banking Option Would Reduce Income Inequality, Lift Low-Income Communities 

Even Californians with access to traditional banking services have to pay exorbitant fees for transactions, account maintenance, ATM use, money orders, check cashing and more. Current barriers to financial services leave Californians vulnerable to predatory lending and other financial risks. With a fee-free public banking service option like CalAccount, unbanked and underbanked households would on average save $1,300 a year, with many households saving much more. 

 

While the report finds households across income levels are underbanked, banking services are most out of reach for single parents, low-income households and communities of color. Low-income, Black, brown, single-parent and immigrant households face arbitrary requirements, like minimum account balances, to access basic banking services that are the building blocks to economic stability and security. These practices trap families in a cycle of debt, making it nearly impossible to save for emergencies or build a secure future. Meanwhile, the same fees that exclude these families from access to banking provide billions of dollars in revenue to some of the largest U.S. banks. 

 

As the report explains, a public banking option like CalAccount would narrow the financial services gap, increase opportunities for low-income communities to build wealth and put financial stability within reach for the Black, Latino/a, and single-female headed households which are most likely to be underbanked or unbanked. CalAccount is a common-sense solution that ensures all Californians have access to free basic services which are critical to financial security. 

 

You can read the full report here.

San Francisco Board of Supervisors Unanimously Accept Plan to Implement the First Municipal Bank in the Nation

This press release was originally issued by Supervisor Dean Preston.

 

San Francisco, CA — As the city and the country grapple with severe shortages of financing for affordable housing, green infrastructure, and small businesses, the San Francisco Board of Supervisors formally accepted a plan to create the first municipal bank in the nation.  

 

The approved proposal comes at a critical time as the city continues to navigate ongoing concerns with the post-pandemic economic recovery. The plans include a business and governance plan for creating a publicly owned municipal financial corporation (MFC) and then converting the MFC into San Francisco’s first public bank 

 

“As we continue to chart a path to economic recovery and a sustainable economy, the plans approved today provide a road map for our city to create the first municipal public bank in the country, a crucial strategy to ensure that our city funds are used to reverse inequities, not perpetuate them,” said Supervisor Dean Preston. “The approved plans are a huge step forward toward establishing a San Francisco Public Bank.” 

 

Public banks are not novel, with over 900 institutions worldwide controlling tens of trillions in assets, but a municipal bank would be a first for America.  

 

“The plan for the new public bank in San Francisco prioritizes social impact over shareholder returns while being financially self-sustaining, robustly managed, and accountable to San Franciscans’ policy goals and values,” said HR&A Advisors Partner Andrea Batista Schlesinger, “It will collaborate with community lenders and organizations to achieve this vision. 

 

The business and governance plans were over a year in the making. The Working Group consisted of community leaders, public banking and Community development financial institution experts, and small business leaders. The Working Group worked closely with HR&A Advisors, leaders in inclusive economic development, investment, governance, and stakeholder and community strategies; the Findley Companies, experts in establishing de novo banks and providing guidance on management, operations, and compliance in California; and Contigo Communications, San Francisco-based practitioners who co-construct solutions that reflect the needs of community members. 

 

“Given the continuing failures of our banking industry, we are stepping up in innovative ways to provide a green and equitable alternative to big banks. Our investment in the public bank protects the future of our local economy and the financial interests of San Franciscans,” said Budget Committee and Local Agency Formation Commission Chair, Supervisor Connie Chan. “We will continue to build on this momentum until we get this done.” 

 

Traditional private banking has failed to offer sufficient access to financial services for residents and small businesses, especially in communities of color. The consequences of that lack of access include inequitable economic, employment, health, affordable housing, and environmental outcomes that continue to this day. 

 

“It’s crucial we move immediately on these plans and establish a green bank.” said Jackie Fielder, co-founder of the San Francisco Public Bank Coalition “President Biden’s Inflation Reduction Act presents a rare opportunity to get substantial funding for community-centered and equity-focused green banks.” 

 

Now that the plans have been approved by the Board of Supervisors, the city can now take action to implement an MFC or public bank in San Francisco. 

 

For more information on the final plans, visit https://sfgov.org/lafco/reinvestment-working-group  

 

Photo: Jared Erondu

Urban Land Institute Panel Provides National Insight on Downtown San Francisco Recovery

This press release was originally issued by Urban Land Institute.

 

WASHINGTON (June 15, 2023) – San Francisco can create a more commercially vibrant and socially inclusive downtown that attracts a diverse range of industries and employers, advances housing attainability, and promotes stronger leadership, according to findings released today by the Urban Land Institute (ULI).

 

The recommendations are the product of a panel of renowned urban planning and real estate experts convened in May through ULI’s Advisory Services Panel (ASP) offering. The panel is a multi-day program that is tailored to meet a community’s specific needs, wherein ULI members from across the country hold in-depth interviews with local stakeholders and deliberate on potential courses of action before making a final presentation of their recommendations. This ASP represents the first time ULI has worked with the City and County of San Francisco and provides an opportunity for communities across the country to learn from the findings.

 

Following the release of Mayor London Breed’s Roadmap to Downtown San Francisco’s Future, in February the panel was tasked with helping the city prioritize implementation actions and policy changes that will create a downtown neighborhood benefitting San Francisco’s residents, businesses, and the broader Bay Area region. While the panel’s findings are applicable to the entirety of Downtown, the recommendations focused on a 239-acre study area that falls mostly within the city’s historic financial district.

 

“San Francisco has a track record of responding to challenges by collaborating across sectors and thinking outside the box – it’s time to apply that muscle to the Downtown Core,” said panel co-chairs Eric Tao, managing partner, L37 Development in San Francisco, Calif.; and Kate Collignon, partner, HR&A Advisors in Oakland, Calif. “Our panelists have shown us how city government, community groups, and institutions such as ULI can evolve the current narrative of Downtown San Francisco as a place only for business interests.  We can profoundly transform Downtown into a place that welcomes everyone, drives economic benefit, serves as a center for arts, culture, entrepreneurship, wellness, and entertainment beyond 9-5, and reflects the diversity of and is embraced by all San Franciscans.”

 

Sponsored by ULI San Francisco, the City and County of San Francisco, the ULI Terwilliger Center for Housing, and the ULI Foundation, the panel provided short- and long-term strategic recommendations for leveraging the city’s existing physical assets, identifying opportunities for financial incentives, and implementing public policy reforms that promote the economic and social health of Downtown, with many of the recommendations aligning with key elements of the Mayor’s Roadmap.

 

Top recommendations include:

    • Pursue placemaking and programming to make Downtown a magnet for residents, businesses, and visitors. Ground-plane activation is needed to help transform public spaces and empty storefronts into vibrant city attractions. Revitalized Downtown community spaces will enliven the neighborhood and provide compelling spaces for arts and cultural expression. The panelists recommended specific Downtown destination zones to meet the needs of current and future residents, workers, and visitors.
    • Ensure public transit provides comfortable, safe, and easy access to Downtown, along with a welcoming arrival experience. Public transit, including Bay Area Rapid Transit (BART) and Muni are reliable, but the panel recommends an infusion of funding to ensure comfortable rider experiences into and out of Downtown. Enhanced collaboration between the City and BART will be essential to ensure the transit experience, and the surrounding points of arrival downtown, are clean and feel safe.
    • Reduce and restructure business taxes to facilitate a diverse mix of companies Downtown. A meaningful reduction in the gross receipts tax, CEO tax, commercial rents tax, and transfer tax will help the city retain its current employers and help attract new businesses. Mayor Breed has initiated a process to identify broader business tax reforms to ensure the city’s tax structure is more resilient and competitive and that will be informed by the panel recommendations.
    • Incentivize office to residential conversions to address the housing shortage. Building on recently approved legislation to reduce zoning and building code barriers to adaptive reuse projects, the panel recommends providing a bundle of incentives to catalyze conversions in the short-term, with a goal of establishing a basis for purely market-supported conversions in the future. The city should require some level of affordable housing by reducing other taxes and fees. Incentives could include temporarily waiving impact fees or the transfer tax, providing property tax abatement through the Mills Act or other state legislation, and identifying other direct funding tools.
    • Counter the negative narrative about Downtown San Francisco. The panel found the negative narrative about Downtown does not match reality. While the city and Downtown stakeholders have launched a series of focused campaigns to attract visitors and businesses, the city should embark with its partners on a strong and sustained branding and public relations campaign that celebrates Downtown and rebrands it as a vibrant neighborhood, rather than just a business district.
    • Build community and governmental capacity to facilitate action. The panel emphasized the importance of coordinated leadership within City Hall to champion Downtown recovery efforts in partnership with stakeholders and the community, building on the efforts of the Economic Recovery and Regeneration division within the Office of Economic and Workforce Development. Enhanced governance and an internal champion will help expedite decision-making and approvals to reduce uncertainty, break down silos, and identify financial tools to attract and drive investment. The panel also suggested building the capacity of Community Benefit Districts (CBDs) to direct public and private resources to implement the recommendations.

     

    “The roadmap the Mayor has laid out for Downtown’s future is a strong foundation for the work we have ahead, and the contributions of this panel of national urban planning experts both affirm and expand upon that vision,” said Sarah Dennis Phillips, Executive Director of the City of San Francisco’s Office of Economic and Workforce Development. “While we’re already moving ahead on many of the ideas called out by the panel, from business tax reforms and attraction efforts to supporting a diverse mix of arts and culture events, I look forward to collaborating with city and state leaders as well as private-sector and community partners to take further actions.”

     

    Tao and Collignon were joined on the panel by Antoine Bryant, planning director, City of Detroit, Detroit, Mich.; Mike Grisso, senior vice president, development and land planning, Kilroy Realty Corporation, San Francisco, Calif.; Paul R. Levy, president & CEO, Philadelphia Center City District, Philadelphia, Pa.; Nolan A. Marshall III, executive director, South Park Business Improvement District, Los Angeles, Calif.; Rico Quirindongo, acting director, City of Seattle Office of Planning & Community Development, Bainbridge Island, Wash.; Geeti Silwal, principal, Perkins&Will, San Francisco, Calif.; Michael Spies, founder, Fuse Strategies LLC, New York, N.Y.; Sujata Srivastava, San Francisco director, SPUR, San Francisco, Calif.; and Carl Weisbrod, director, Lower Manhattan Development Corporation, New York, N.Y.

     

    “We’re grateful for ULI’s work to assemble a team of accomplished industry leaders with fresh perspectives. We’ve already rolled-up our sleeves and begun the work to take the panel’s ideas and shape them into policy,” said Rich Hillis, Planning Director for the City and County of San Francisco.

     

    A summary of the panel’s recommendations can be found here.

     

    For more information, contact media@uli.org.

     

    Photo: Sebastien Gabriel

Non Profit Equity Action Tea

Strengthening L.A.s’ Nonprofits for the Committee for Greater LA

HR&A was proud to support the Committee for Greater LA and partner with the Nonprofit Finance Fund to create “Resetting LA City to Meet Urgent Community Needs,” a report that outlines immediate actions the City can take to reduce unnecessary financial strain on the nonprofits it partners with to deliver critical services.

 

23% of all City of Los Angeles jobs are nonprofit jobs, and nonprofits are vital to the economic well-being of Los Angeles.

 

Nonprofits are critical to helping meet the needs of some of the city’s most vulnerable populations, including people experiencing homelessness. Unfortunately, too many nonprofits face barriers limiting their ability to deliver critical services to those most in need. BIPOC-led nonprofits face additional barriers, even though their cultural expertise is essential to reaching people most in need.

 

Resetting LA City to Meet Urgent Community Needs outlines immediate actions to overhaul how the City of Los Angeles works with nonprofits with the goal of eliminating unnecessary financial strains to the city’s nonprofit partners. The report reveals that nonprofits are unfairly burdened by cumbersome bureaucracy, delayed payments, and underpayments, impacting their ability to meet increased demands for social and supportive services.

 

Mayor Bass endorsed the recommendations in the report, saying ““The Committee for Greater L.A. is spot-on – Los Angeles nonprofits confront so many obstacles every day, but City bureaucracy should not be one of them.” 

 

Read more about the report findings on the Committee for Greater LA’s website here, and you can read the full report here.

 

Photo: Committee for Greater LA

Downtown DC Parks Master Plan Release

Congratulations to our client, the DowntownDC BID, on the release of the DowntownDC Parks Master Plan!

 

Working with a multi-disciplinary planning and design team, HR&A conducted a real estate market analysis for the new plan, with the goal of understanding current and future drivers of demand for parks within downtown Washington DC.

 

As part of the market scan, our team conducted a real estate market analysis scan, highlighting trends in office, residential, and retail uses Downtown, and the impacts of COVID-19 on office occupancy and visitation trends within the BID. We developed case studies of aspirational office typologies that could drive further downtown foot traffic and increase available funding for parks.  We also identified opportunities where investment in parks and open space could further Downtown’s economic development goals.

 

“The DowntownDC Parks Master Plan was created to spark interest in developing an intentional, vibrant, and meaningful downtown park system. Based on community engagement and coordination with concurrent planning efforts, the plan offers six system-wide recommendations.” Find out what they are and explore the new plan on the DowntownDC website.

 

We look forward to seeing how this new plan will help shape strategic investment to create a more vibrant, prosperous downtown DC!

Governor Hochul, Majority Leader Schumer, Senator Gillibrand Announce New York State Will Receive $100 Million in Federal Funding to Expand Broadband Infrastructure

Congratulations to our client, Empire State Development (ESD) on this important milestone! This funding will help provide access to New York families who need it most. We have been proud to support ESD in this critical work.

 

Governor Hochul said it best: “This critical funding to unlock high-speed internet for thousands of New York renters will build on the success of our ConnectALL broadband initiative while supporting the goals of our five-year plan to build and preserve more affordable housing. Thanks to the Biden administration and New York’s Senate and Congressional delegations, New York will continue to lead the nation in bridging the digital divide and making broadband available to all.”

 

You can learn more about this historic investment in Broadband in the Governor’s press release.

A Simple Housing Fix for Wake County: Buy the Building, Cap the Rent

This opinion piece by Phillip Kash was originally published in INDY Week.

 

Change is a natural phenomenon in any neighborhood – families move in and out, businesses come and go, new immigrant groups bring different languages, cultures, and cuisines. When rents begin to grow faster than the incomes of residents, however, the resulting economic pressure can force people from their homes before they are ready to leave. The result is displacement that harms individuals, families, schools, and communities.

 

Displacement, sometimes called gentrification, is primarily driven by affordability, the difference between the cost of housing and a household’s income. As rents rise far faster than incomes, long-time residents are forced to leave and are replaced by higher-income newcomers.

 

In North Carolina, unprecedented population growth and limited housing development over the past decade has eroded housing affordability.

 

The most powerful tools to prevent displacement require systemic changes to the housing market – building more housing in desirable areas, dedicating more public funding, and adopting legislation that balances tenant and property owner interests. Even in an optimistic scenario, these reforms will take years to adopt and decades to create a healthy, equitable housing system.

 

Wake County is one of a small handful of local governments around the country that are taking on a more direct solution to affordability: buying existing apartment buildings and imposing limits on future rent increases.

 

The benefits are myriad – the purchases can be targeted to neighborhoods facing displacement pressure, limited public or grant capital can be leveraged to create far more affordability, and, most importantly, the impact of these policies is immediate. Current residents can stay in their homes with the confidence that their rent will only rise in relation to income.

 

This year, Wake County has established its own loan fund to purchase existing apartment buildings, preserve their affordability and prevent the displacement of current tenants. With an investment of $10.5 million, the county is leveraging over $40 million from banks and the City of Raleigh, and is expected to preserve over 1,000 affordable homes in the next two years.

 

Buying apartment buildings is the most effective tool available to Wake County – and potentially hundreds of other counties and municipalities nationwide – to protect residents from rapidly rising rents and forced displacement.

 

Amazon has already taken up this strategy as a corporate stakeholder. The company’s Housing Equity Fund was created to preserve affordable homes in communities where Amazon has a significant employee base. Part of its $2 billion commitment to preserve or create 20,000 affordable homes, in less than 21 months since launch, the fund has committed financing for the purchase of more than 20 existing apartment buildings, representing nearly 5,000 rental homes.

 

In cities like Arlington, VA and Bellevue, WA this represents a 20%+ increase in the number of long-term affordable homes. Rents in these apartments will now remain permanently affordable, rising only as an area’s median income rises. More than half of those investments have gone to minority-led developers and thousands of those units have easy access to public transit.

 

Amazon’s story in Seattle and Arlington is one that can be replicated across the country – and local governments like Wake County can take action without the support of a major private backer like Amazon.

 

Housing affordability and displacement require solutions that provide immediate relief to give time for longer-term solutions that rely on grinding zoning fights and policy reform. Stakeholders with financial means, both public and private, can have a near-immediate impact by buying and preserving affordable housing options.

 

Photo: Unsplash

Can congestion pricing help cities become more equitable?

Written by Jamison Dague, Jee Mee Kim, and Eric Rothman

 
This spring New York City took a major step toward becoming the first U.S. city to charge drivers a fee to enter its central business district by passing the Traffic Mobility Act as part of the 2020 New York State Budget. Following in the footsteps of cities such as Stockholm, London, and Singapore, congestion pricing will reduce traffic in Manhattan and help fund New York City’s crumbling transit system, improving mobility options for the 67% of New Yorkers who take the bus or subway each day. And congestion pricing will likely help New York’s poorest residents, 56% of whom take transit to work/school and 50% of whom don’t own a vehicle.
 
But what works for New York City will not likely apply to all cities—and in some cases, may worsen conditions for a city’s poorest residents (as defined by earning 80% or below Area Median Income). There are a few steps to consider as cities around the country like Portland (OR), Seattle, Philadelphia, and even auto-centric Los Angeles contemplate congestion pricing.
 

  1. Provide appealing and affordable alternatives. The efficacy of congestion pricing depends on providing viable substitutes for driving. Alternatives should be convenient, reliable, and reasonably priced. For example, in advance of starting its congestion charging zone, London made radical improvements to bus service, replaced much of its fleet with new buses, and offered discounted fares on buses for regular commuters. Upon implementing Singapore’s road pricing initiatives, the city-state increased the frequency of public transport and built more than 15,000 public park-and-ride spaces outside the charging zone to encourage drivers to switch modes.
  2.  

  3. One size (and shape) does not fit all. Relatively few of New York City’s poorest residents and people of color commute by driving from the outer boroughs into the proposed charging zone. Most use the city’s transit network and failing subway and bus systems disproportionately impact these low-income communities of color. In contrast, 84% of residents in Los Angeles rely on a car, including the 32% of low-income drivers1 who would be affected by any future congestion pricing plan. New York’s model of charging a toll to enter the city center cannot be replicated across the board without thoughtful consideration of local issues and impacts.
  4.  

  5. Plan for equity. Early and continuous public dialogue should inform an understanding of the needs of a city’s most vulnerable residents, including low income households, people of color, immigrants, and seniors. In Los Angeles, Metro’s board recommended a motion authored by Supervisor Hilda Solis to consult academics, community groups, and local officials to lessen the impact on low income drivers. Seattle recently released a report to study the potential equity implications of congestion pricing. Like sales and property taxes, congestion pricing can be regressive—with lower income residents paying a higher share of their income to the fee compared with wealthier residents. Upfront planning and engagement can also build coalitions to garner broad support for a typically controversial proposal.
  6.  

  7. Beware of unintended consequences. The Wall Street Journal reported that congestion pricing may boost residential real estate values in the pricing zone by making streets quieter, cleaner, and safer. A 2018 study showed homes inside London’s charging zone are valued at a 3 percent premium, translating into a $13 billion windfall for homeowners. Conversely, some have argued that neighborhoods outside of New York’s proposed charging zone will suffer increased traffic as drivers cruise for limited on-street parking.
  8.  

  9. Establish an adaptable framework. Despite the political lift necessary to introduce congestion pricing, policymakers should be prepared to revisit and adjust the system to meet policy and equity objectives. For example, Singapore’s congestion pricing system, established more than 40 years ago, has incorporated electronic charging, parking fees, and is currently transitioning to a GPS-based system to refine its dynamic pricing policies. London’s traffic congestion has increased in recent years largely due to a surge in for-hire vehicles, which are exempt from congestion pricing charges and are proliferating with the use of mobile apps like Uber and Lyft. Ensuring the public continues to benefit equitably from congestion pricing requires nimble administration of the system.

 
Jamison Dague supports the firm’s implementation and management of public policy initiatives. Prior to joining HR&A, Jamison worked at the Citizens Budget Commission as Director of Infrastructure Studies where he provided ongoing economic, budgetary, and financial analysis of public sector infrastructure entities.
 
Jee Mee Kim is leader in HR&A’s Transit-Oriented Development and Transportation Practice. She works with clients to develop funding strategies, create corridor and station-area plans, and build public support for TOD.
 
Eric Rothman is a nationally-renowned expert in transportation planning, transit-oriented development, and economic development. Eric works extensively in transportation planning and transit-oriented development and He leads the firm’s work creating transit-oriented development strategies across the United States.

Leveraging Transportation Investments to Create Inclusive Cities

Building transit with neighborhoods in mind

 
Originally published in the October 2018 issue of MyLiveableCity. Written by Amitabh Barthakur and Ignacio Montojo
 
Cities in developing countries are experiencing an astonishing pace of urbanization and rapid growth with an unprecedented increase in transportation infrastructure investment. Around the world, almost 1,500 urban rail infrastructure projects are under construction, amounting to a total of 140,000 kms of new rail lines.
 
The growth of urban transit presents an opportunity to improve the standard of living for countless people, connecting them to economic opportunities and jobs. However, if transportation infrastructure is delivered without thoughtful consideration of the communities it serves, or the critical issue of focusing urban density, cities will be unable to fully leverage these significant investments and miss a once-in-a-generation opportunity to shape vibrant and sustainable neighborhoods through increased transit usage and access.

Transit development
is more than just infrastructure

Transportation agencies are typically incentivized to deliver transit projects at a fast pace. Most capital funding sources for transit usually have strings attached, and fast delivery ensures mitigating against cost escalations. In highly urbanized cities, land acquisition for transit alignments is another key challenge and transportation developers typically want to keep land acquisition requirements to a minimum. As a result, transit projects are often thought of as pure infrastructure, meaning they are planned in isolation from the greater social and physical environment.
 
This strategy follows the path of least resistance. But, if transit lines and stations are planned with the long-term goal of creating dense, walkable, well-connected nodes, the impacts on the use and value of the land surrounding will be remarkably beneficial. Increased job opportunities, knowledge spillovers, and efficient land use leading to higher transit usage are among the many benefits associated with high density, transit-oriented communities. The largest share of this value manifests in the form of private investment, particularly real estate development around station areas and along transit corridors.
 
While transit and associated development is an economic developer’s dream, it can also be a large factor in the gentrification of neighborhoods and displacement of residents who could benefit from transit the most. What some academics have dubbed ‘transit-oriented gentrification’ is occurring in cities around the world. There’s enough evidence showing that transit proximity, in conjunction with an insufficient housing stock, will often increase housing costs and decrease the number of low-income households.

Linking Value capture with
transit-oriented development

Under the right conditions, the public sector can capture the value transit creates, and create funding streams that use different ‘value capture’ mechanisms to not only fund infrastructure and public realm improvements, but also support equity initiatives like affordable housing and workforce development. Doing this requires big-picture thinking and proactive collaboration among city planners, economic development advocates, the private sector, community stakeholders, and infrastructure agencies at the earliest stage of planning.
 
Urban transit is particularly well-suited for value capture because it sparks development and revitalization. In Hong Kong, the rail property model unlocked development potential for over 600,000 public housing units. The success of the Mass Transit Railway system hinged on the proactive strategy of focusing all the city’s urban growth within proximity to its transit infrastructure. The system benefits directly from the private investment on transit-adjacent publicly-owned properties or from the sale and use of air rights above stations. The system also successfully generates ancillary revenues from retail and advertising within stations. With these streams of revenue, the system can invest in transit and other community benefits, completing a virtuous cycle of investments and benefits.
 
Value capture can be a critical element for cities looking to fully leverage their public investment in transit infrastructure in a manner that is economically sustainable and creates transit-oriented communities. But the ability to create value from transit investments in the first place depends largely on better integrating transit infrastructure with its physical surroundings. By integrating planning and value capture strategies early in the process before alignments are set, transit agencies can identify areas where transit is most urgently needed, urban designers and planners can design an interface that optimizes access and adds most value, economic development professionals can design appropriate value capture tools and, most importantly, transit developers can engage with community stakeholders to determine which services and community benefits are most desired.
 

Case Study | Metro de Medellin

A holistic approach to transit-oriented urbanism

In Medellin, Colombia’s second largest city with almost 4 million people, the public transportation agency Metro de Medellin, co-owned by the City of Medellin and the State of Antioquia, has played a significant role in driving an urban renaissance through a series of public investments in elevated rail, light rail, gondolas, and bus rapid transit. A foundational principle of Metro de Medellin was building the Cultura Metro, or the cultural identity and shared purpose for public good, to help develop marginalized sectors of the metropolitan area through transit investment.
 
Today, areas managed by Metro are perhaps some of the best cared for public assets in the region. While part of this is related to the operational efficiency of Metro as an organization, for the most part it is a manifestation of Cultura Metro. Metro’s goal, as an urban infrastructure provider and city-builder, is to ensure that Cultura Metro permeates the entire urban realm, not just within the transit system, but starting with the station areas and surrounding neighborhoods. To do this, Metro has taken steps to proactively think about integrating transit with its surrounding communities using a range of strategies, but three of them stand out in particular:
 

1. Bring everyone to the table to start thinking about land use from the very beginning.

Develop close collaboration and coordination between transit agencies, city planning and land-use authorities. If a broad range of stakeholders is not communicating prior to implementation of complex infrastructure projects, you cannot leverage your investments. A variety of people must be involved in implementation to ensure that transit infrastructure will be integrated rather than disruptive.
 
Collaboration between several public institutions was a key factor of Metro’s success in completing complex projects that complement its core transportation initiatives. Over time, Metro has also built internal capacity for interdisciplinary collaboration. Its urban development team of more than 30 planners, architects, real estate and financial analysts work closely with the transportation planning team and the City of Medellin’s department of city planning, to deliver integrated projects.
 
The agency is expanding its system, and for each line like the new Ayacucho Tram and H-Line Cable Car, they have started to define influence and intervention areas around stations and alignment. Intervention areas are immediately adjacent to transit stations and slated for physical interventions by Metro, particularly in terms of public realm, signage and access improvements. Influence areas, within the larger surrounding neighborhood, are planning areas that will directly benefit from new transit investments, generate ridership and present value capture opportunities.
 

2. Give transit agencies greater control on land-use along alignments.

The City of Medellín is in the process of granting Metro formal status as an urban development corporation, which will give the agency greater jurisdiction over land use issues, proximate to transit. Beyond defining design guidelines, open space projects and pushing transit supportive zoning, Metro will have the jurisdiction to apply eminent domain, collect revenues from certain value capture mechanisms in special financing districts, and manage the open space and public realm within intervention and influence areas. While empowering transportation agencies to implement station area development may not work everywhere, Metro’s demonstrated commitment towards a better urban environment combined with their intellectual and technical capacity to accomplish their goal of integrated transit use, can be very effective.
 
This approach ensures that planning for station areas happens early on and mitigates any conflicts between transit infrastructure delivery, operation, and the surrounding environment, in turn supporting greater ridership and enhanced economic benefits.
 

3. Strategically acquire land for alignments to support better integration of transit stations with the surrounding station area.

Trying to integrate surrounding land uses with transit infrastructure, once the infrastructure is already built, can be a challenging if not an impossible task. Metro’s approach to transit planning includes proactive strategies to acquire land, particularly around stations, that have the scale and capacity to be developed later. As transit stations are the primary interface between the transit system and the rest of the Metropolitan Area, this approach ensures station areas can support transit-oriented development, as well as safe and easy access to stations. The end goal is to have active station areas and higher ridership. Planning around Medellin’s Metro system also involved developing land in areas with little or non-existent public investment, with a focus on improving public infrastructure and amenities such as parks, libraries and streets.
 

Seeing the benefits

Medellín’s integrative planning process has helped the city harness the value of transit not just in dollars, but also in improved quality of life and transformed the city for many generations to come.
 
Medellin is a narrow valley and Metro operates a range of interconnected modes to maximize transit access to all communities. This includes heavy rail that forms the backbone, connected by trams to the edge of the valley, which are further connected to cable cars that provide access to dense neighborhoods on the hillsides. People living in mountain areas surrounding Medellin have benefited by having their travel time to the city center reduced from an hour to less than ten minutes – improving their access to employment opportunities and other resources in the formal city.
 
The MetroCable planning exemplifies how transit can be used to benefit those who have low access to transportation in the first place. Public safety is another aspect of quality of life that has been improved for countless people in Medellín – the murder rate in the city has fallen by more than 80% since 1991, the decade before many of the integrative planning projects were introduced.
 
The new stations themselves have also transformed neighborhoods into resource-laden cultural and social hubs, with many libraries, schools and sports facilities built around transit stations. Investment in holistic transportation planning that accounts for improved connectivity and quality of life has worked to transform the social fabric of Medellin into one of Colombia’s most livable cities.
 

How can this work in my city?

Urban planning and design professionals have a responsibility to advocate that their respective cities build capacity around inclusive and integrative planning by engaging public, private and civic actors. Lack of cooperation and communication are major roadblocks to creating plans for transit that will encourage efficient, dense and inclusive growth, which in turn can support the long-term economic sustainability of cities.
 
We need to recognize that transit infrastructure development, economic development, community development and real estate development are not discrete activities that contribute to city building. They are interrelated processes that have symbiotic relationships with one another. While there may be a set of private and public actors who appear to have discrete roles in these activities, the lines between them need to dissolve if we are to create livable cities.
 
Amitabh Barthakur is a leading land-use expert and development economist. He’s worked with cities and transit agencies around the world to design value capture opportunities through real estate development and land use for transit systems and cities.
 
Ignacio Montojo advises cities and transit systems on public-private partnerships and innovative financing strategies for real estate and urban infrastructure projects in the United States and Latin America and the Caribbean.