Panel 4: Transportation and New Starts/Small Starts Reform
Mariia Zimmerman, Reconnecting America (Moderator); Jeffery Lubell, Center for Housing Policy; David Vozzolo, HDR Engineering Inc; Paul Marx, Sacramento Regional Transit District; Steve Goldin, Washington Metropolitan Area Transit Authority (WMATA)
Transit ridership is on the rise but 53 percent of people have no access. A third of transit funding comes from the federal government. FTA funds have their own strings, most of which are directed by Congress through statutory language. The annual FTA budget is about $10 billion, but the New Starts/Small Starts program (which funds new transit lines) is only 18 percent of this funding. Supply is outstripping demand. The 13-year development timeline is just too long. The FTA ratings and review process includes six criteria for project justification. Given the complexity of the current process we are not advocating to add more layers, but rather how to make the program work better for TOD and innovative finance partnerships.
First question for panelists: What are the biggest current federal challenges to meeting this goal?
Paul Marx: Transit is necessary for TOD, but it’s not sufficient. Federal goals don’t align with local needs. The Sacramento rail project was designed to meet federal criteria and not local need, not where development would logically occur. Transit agencies backed away from buying more local land that could be used for TOD to meet the federal cost-benefit criteria. On the other hand, they could buy land for park and ride and not hurt their score. Those people who live out in far-flung areas are being subsidized. Few developers have TOD experience. New Starts does what it was intended to do, but it delays projects.
Steve Goldin: We have so many rules and goals to meet. I’m a five-year timeframe guy. I want to find a way to monetize our real estate. I honestly don’t know how all these federal programs address TOD. DOT’s websites are about the program not the problem I’m trying to address. To site just one example, “How do you pay for commuter decks and for one-for-one replacement?” The road impacts of transit go beyond the half-mile radius. TOD isn’t just about the transit.
Jeffery Lubell: TOD leads to better mobility and less GHG emissions. I hope this isn’t the moment where low-income people get pushed out of the central city as happened in Paris. TOD can push housing prices up. We need to learn to love permanent affordability. We need to think about what happens after year 31, when the affordable housing contract expires. New Starts has no affordable housing component and that needs to change.
David Vozzolo: FTA was looking to expand the eligibility for bike/ped project service areas. Surprisingly transit agencies were unsure of this because they’re afraid they’re going to lose their share. FTA and DOT may go from a grant mindset to loans, like TIFIA. Go from mobility to place based. FTA should be less risk adverse. All risk is now on the project sponsors. FTA and DOT need to allow local decisions to have priority. They need to make it less about the criteria and more about the locally preferred option.
Second question for panelists: Is there anything more specifically about the New Starts program? New Starts doesn’t deal with existing stations. We’re hearing about a desire to build parking structures that agencies are having trouble with.
David Vozzolo: We need to challenge long-standing goals. The focus on one corridor at a time is not how local planning is done. The one-size-fits-all approach, applied the same way to bus rapid transit and rail. The level playing field, projects being sanitized to meet criteria. Also with the funding decision not being made until the end of an uncertain project, it hurts the potential for private involvement.
Jeffery Lubell: They need to fund based on the federal goal created by a clear set of national priorities. This would create the right set of incentives. Look at permanent affordable housing. Portland has it set at 30 percent, California at 20 percent. High-speed rail will change citywide housing demand. Look at credit enhancement around existing stations. Make a set percent of tax-increment financing revenue dedicated to affordable housing. Transportation for America has some good national transportation objectives.
Paul Marx: By the time preliminary engineering starts you must know the costs. But the design builder will not know that effectively. Look at banding around project cost and scope, allow a provisional contract with the design builder. If I’m missing a third of my funding, I have no authority to start procurement. Until I get the full funding agreement, I get no federal funding.
Steve Goldin: The risk of gentrification is that it turns into displacement. DOT needs to address how we can identify models without strict adherence to value creation.
Jeffery Lubell: What would be a game changer? Right now the financing side is more sophisticated than the ability to meet our needs. Being able to create denser and more affordable places allows us to eat our cake and have it too. That said, the majority of development will still be in other areas. Transit can be the glue to make it work.