Public investments in transit, highways, roads and other infrastructure generate value for nearby property owners. The term “value capture” refers to any strategy whereby a public agency “captures” a portion of the increased property values to help pay forthe infrastructure itself. Around the country, commonly used value capture tools include special assessments and taxes, tax increment financing, various forms of developer contributions, and joint development or other public sector real estate transactions.
In Massachusetts, value capture is being considered as one potential source that can be tapped to provide much-needed funding for a variety of state and local transportation projects. This study identifies opportunities for expanding the use of value capture in Massachusetts to pay for transit, other transportation projects, and infrastructure required to support transit-oriented development (TOD).
The study examines the Commonwealth’s current value capture tools, drawing on examples from around the country, as well as interviews with 35 state, regional and local officials. The study also considers the potential for value capture through five case studies of transportation and TOD projects currently planned or underway in Massachusetts. Based on this research, the study recommends a number of ways in which Massachusetts laws, policies, and regulations could be changed in order to encourage broader use of value capture for transportation and TOD infrastructure generally, with a special focus on transit.