Abstract
Public-Private Partnership (PPP or P3) projects have received attention as they can increase private sector participation in transportation projects. However, P3s are not a panacea. Worldwide, almost 40% of P3 projects initiated during the 1990s required that the contractual agreement be renegotiated, implying some type of project failure. Because some (not all) types of P3 projects require a toll, one viewpoint is that P3 projects can be proposed only if tolls will render them financially self-sustaining. For passenger transportation, this generally means encouraging modes that can be more easily tolled—usually auto travel—and not necessarily modes that are subsidized—such as transit travel. However, it has been argued that multimodal projects can yield societal benefits, such as increased property values or better jobs-housing balance.
The emphasis on modes which will generate user fees may naturally reduce the likelihood of a P3 investment that will enhance multiple transportation modes. However, if it were possible to translate the socially beneficial impacts of multimodal investments into revenue sources, it might be possible to increase private sector participation in multimodal P3 projects. One such mechanism is value capture, where a part of the created property value that results from a P3 investment can be captured in the form of revenue. The problem, however, is that the impact of a multimodal P3 project on property values is not completely clear.
Given the possible benefits of a value capture strategy, the purpose of this research is to quantify how a multimodal P3 project influences property values; conceptually, such a model could be used in a value capture mechanism. Fulfilling this goal requires satisfying five objectives: (1) to identify lessons learned from previous use of toll facilities (necessary because Virginia stakeholders are concerned that insights from more distant eras may be overlooked); (2) to examine how agencies include multimodal components in P3s (necessary because there may be ways to achieve multimodal P3s beyond the value capture strategy noted here); (3) to develop a way to quantify jobs-housing balance that is sensitive to transportation investments across multiple modes (necessary because jobs-housing balance is one societal impact of interest to decision makers); (4) to develop a taxonomy for classifying the degree of multimodality for P3 projects (necessary because such projects are not completely “multimodal” nor completely “unimodal); and (5) to quantify the impact of multimodal P3s on property values. The research that satisfies these five objectives uses real data sets from P3s in Virginia, Florida, Colorado, and Rhode Island. Most data elements are available in the public domain (only property value data had to be requested from the county government), and no data elements were fabricated. Thus, the methodology used herein should be replicable in other locations.
As an initial research effort to consider a value capture mechanism based on urban form impacts, this research suggests four key contributions: (1) lessons learned from practitioners’ implementation of multimodal P3s; (2) a methodology to scale multimodality; (3) a way to relate jobs-housing balance (given observed travel patterns) to the aforementioned multimodality scale; and (4) a method to identify urban form and property value impacts of P3s. Ultimately the fourth contribution may inform guidelines for adopting value capture mechanisms in P3s.
