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The Potential for Private Investment in Transit

11:03 AM EDT on May 17, 2010

5th_street_bridge_420x291.jpgAn old streetcar line built by a private developer in Richmond, Virginia, around the turn of the last century. (Photo via North Richmond News)

Could private developers be the key to developing the nation’s transit infrastructure?

That’s the question that has engaged many members of the Streetsblog Network over the weekend.

The catalyst for what has become a very lively discussion was an article by Christopher Leinberger on the Atlantic’s website, part of their month-long "The Future of the City" special report.

Leinberger suggests that we might look to an earlier model of financing for mass transit — one in which real estate developers pay to build not only housing, but also rail lines to serve those new neighborhoods.

It worked in pre-World War II America, Leinberger notes, creating the "streetcar suburbs" that later were rolled over by federally funded highways and the sprawl they enabled.

But Human Transit’s Jarrett Walker warns against looking to the past for solutions. He argues that current labor and environmental regulations, concerns about sufficient competition, and integration into existing transit systems are potential pitfalls of privatization. He does think that there are funding mechanisms involving private enterprise that could be effective:

I am not arguing against value capture or tax-increment financing, which Leinberger also endorses.  These are methods of financing a rail line partly through debt that will be repaid based on higher land values — and thus higher land taxes — that the line will generate. There is no reason we can’t continue to expand on these principles as a revenue source. I’m criticizing only the more simplified nostalgia on which Leinberger builds his argument.

Also weighing in with posts on the topic are City Block and Discovering Urbanism. Both are rich with links and resources, so jump on in. And check out Washington, D.C.’s plans to have commercial landowners pony up for its new streetcar line.

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