Link21 Transportation Planning and Funding

The looming mass transit fiscal cliff threatens the viability of long term operations of BART and future Link21 projects. BART’s historic reliance on farebox recovery for financial stability necessitates an evaluation of available funding sources in an effort to increase funding for both long term project planning and ongoing operations. Given existing State and Federal policies that call for increased investment in public transit and rail and California’s stated goals around greenhouse gas emission reductions and equity improvements, the time is ripe for changes to the current funding mechanisms which have long favored highway and road projects over transit and rail. 

A streamlined process to ensure continuous and advanced planning is necessary for the successful completion of megaregional transit and rail projects that cross political jurisdictions. Further, this type of planning and funding is necessary for California to remain competitive for Federal funding opportunities, especially given the unprecedented amount of funding currently available from the Infrastructure Investment and Jobs Act (2021). 

The purpose of this report is threefold:

• First, we identify the benefits of continuous and advanced planning and funding for transit projects;
• Second, we document the differences in Federal and State funding sources available for planning as they relate to highway and road projects versus transit and rail; 
• Lastly, we present alternative funding that could be used for transit and rail projects, including a detailed look into value capture and joint development mechanisms.

Report Outline: Section 1 outlines the benefits of continuous and advanced planning for transit projects. Section 2 describes the differences in Federal and State funding processes for transit and rail projects in comparison to highway and road projects. It further describes the difference in funding levels for State programs that fund transportation and includes an analysis of eligible project types and eligible phases. Lastly, it puts forth eight recommendations for changes to the current funding landscape that seek to increase the ease and flexibility of transit funding, align priority-based spending to equitably serve all transit users, and achieve emissions reductions from passenger vehicles to meet State climate goals. Section 3 provides an overview of value capture mechanisms and alternative funding sources that could be used for public transit including joint development, land banking, financing tools and tax mechanisms. 

Federal and State Funding Programs and Recommendations: As roughly one third of transportation funding derives from the Federal level, the analysis begins with a high-level overview of Federal funding programs that are distributed down to the State, metropolitan planning organizations (MPOs), and localities. Yet dedicated, legacy Federal funds are no longer able to keep pace with surface transportation demands, relying too heavily on declining gas tax revenue in the face of EVs, inflation, and increased fuel efficiency standards. While there is a known persistent 80/20 split in funding that favors roadways over transit, this section of the report identifies the specific disparities in the planning pipeline, lack of equivalent resources for maintenance and operations, and asymmetric performance targets affixed to transit projects.

Through an analysis of existing State programs that fund transportation in California, it is clear that there is a disparity in funding across modes of transportation. Programs that fund highway and road projects are funded at a higher rate than programs that fund transit and rail projects. Furthermore, programs that fund highway and road projects include funding for planning and operations projects and staffing, whereas programs that fund transit and rail projects incorporate significantly less funding to staff and plan these same types of projects and on-going operations.

Value Capture-- Evaluation of Alternative Sources of Funding for Public Transit: Transit agencies in the United States are perpetually in search of revenue sources to supplement farebox recovery, making value capture an enticing proposition. However, many structural challenges to value capture implementation exist and a robust policy framework is required to mitigate detrimental impacts facing the surrounding community such as gentrification, displacement and land speculation.

This section focuses first on strategies of joint development and land banking through an equity lens with efforts to enhance transit expansion and affordable housing development using case studies in Hong Kong, Washington DC, New York City, Chicago, Denver, and Los Angeles. The report then investigates value capture financing and taxing measures available to local governments and public agencies, such as BART, including special assessments and tax increment financing. This section looks to explain the ways that these tools can be used and then looks into the constraints and theoretical challenges with an eye towards equity implications. This section concludes with key takeaways that have been informed by an extensive literature review and nine interviews with transit agency staff, affordable housing advocates, transportation planners and scholars.

This report would not have been possible without guidance and support from: 

Karen Trapenberg Frick, Ph.D., UC Berkeley, Associate Professor of City & Regional Planning

Christa Cassidy, AICP, HNTB, Project Manager

Jeff Morales, InfraStrategies, Managing Principal

Sadie Graham, BART, Link21 Director

The entire Link21 Project Team and Program Management Consultants

We also would like to thank the following academics and professionals for the invaluable insights they provided during our research: 

Elisa Barbour, Ph.D, Postdoctoral Researcher, UC Davis

Gloria Bruce, Executive Director, East Bay Housing Organizations

Robert Cervero, Professor Emeritus of City & Regional Planning, UC Berkeley

Keith Duncan, Chief of Division of Budgets, California Department of Transportation

Rick Jacobus, Principal Planner, Street Level Consulting

Flávia Leite, Ph.D. Candidate, City & Regional Planning, UC Berkeley

Jeff Levine, Policy Director, East Bay Housing Organizations

Mark Mollineaux, Common Ground

Carli Paine, TOD Group Manager, BART

Angel Pyle, SB1 Program Manager, California Department of Transportation

Derek Sagehorn, Common Ground

Kara Vuicich, Principal Planner, MTC