Value capture is a set of powerful funding tools that is gaining in popularity to supplement traditional funding sources. Transportation systems are essential in enhancing the productivity and quality of life in the United States. Funding for streets, highways, and transit is provided by the joint efforts of federal, state, and local governments; taxation and user fees are the primary revenue sources, along with supplemental methods including loans, bonds, public-private partnerships, and concessions. All of the Value Capture strategies involved some degree of financial risks that they rely on large enough increment property value being create to provide adequate revenue. Thus, policies that rely on up-front payments from developers for the provision of new infrastructure generally tend to transfer risk to developers.

This might include policies related to development impact fees, negotiated exactions, and certain types of special assessment districts. The charges are borne as costs by developers, who must then rely on sufficient demand for new development to recover the associated costs. If population growth, economic growth, or other factors that affect the demand for housing or commercial development fall short of expectations, the developer will be unable to recover the costs of infrastructure provision and will likely incur a financial loss.

FHWA has recently developed a Value Capture Risk Assessment Primer designed to provide risks information to transportation agencies that have implemented or are considering the implement of Value Capture strategies. In pursuing these tools, public agencies should plan for anticipate risks when planning (project delays, project scope changes, economic downturns, higher than expected costs) but may need to provide additional guarantees to further attract investors and be flexible with the project timeline. Feature experts share their experiences in assessing risks in their Value Capture program. Come to the Value Capture Virtual Peer Exchanges on September 15,2021 at 1:00PM-3:00PM ET to learn from peer experts on opportunities and challenges of implementing Value Capture Risk Assessment techniques. There is no cost to participate but space is limited. You must register to reserve your connection/space.