Southeast Minnesota offers a high quality of life to its residents and has tremendous economic growth potential. HR&A’s newly released study for the Southeastern Minnesota League of Municipalities calls for several major policy shifts to achieve this potential over the next 25 years. Among the recommendations are zoning changes to support greater housing production, expanded transportation networks, a regional tourism strategy, immigrant support resources, and programs to increase access to childcare – all designed to grow the region’s economy.
HR&A’s Guiding Principles for Investment
Opportunity Zones are part of a new federal initiative to direct much-needed capital to low-income communities by allowing investors to defer and reduce capital gains taxes by reinvesting gains. To participate, an investor can direct capital gains to businesses and properties located within nearly 8,700 designated census tracts.
For investors, this program allows them to reduce their taxable basis on their original gains and forgo taxes on gains from new investments (with benefits increasing the longer the investment is held). For cities, developers, and businesses, this opens up a potentially significant source of equity capital to stimulate growth in low-income and historically disinvested communities. This program has the potential to be a game-changer in steering a portion of approximately $6 trillion in unrealized capital gains to communities that need quality jobs, safe and affordable housing, and amenities for their residents.
Since the announcement of Opportunity Zone designations earlier this spring, potential investors, project sponsors, and policymakers have awaited clarification from the federal government about how to leverage this new tool and to understand the potential impact on local communities. The federal government will release additional guidance as soon as late October, which is expected to address questions on project eligibility, registration requirements, and the timeline of when capital must be deployed. This guidance is important both because many communities are eager to attract Opportunity Fund capital to jumpstart long-planned projects, and because still other communities are concerned that concentrated investment in certain distressed communities could exacerbate the risks of displacement.
Over the past six months, we’ve spoken with clients and colleagues interested in Opportunity Zones to develop a set of principles for investors, funds, cities, and neighborhoods. These guiding principles are meant to help direct and attract investments in a manner that strengthens local economies and promotes community-serving growth to achieve the promised impact of Opportunity Zones.
Guiding Principles for Opportunity Zone Investment:
- Deploy capital to realize competitive returns and tangible community benefits. Opportunity Zones were designed not merely as a tax benefit but as a means of spurring economic growth and opportunity in communities that have struggled to attract capital. Investors should perform rigorous market analyses to understand the local development and community contexts, and partner with cities and local stakeholders to balance investor objectives with comprehensive, community-based strategies.
- Link Opportunity Zone investments to human capital and small business growth strategies. Align investments to provide benefits to low-income residents and local businesses, and to help mitigate displacement pressures. Where possible, business and employment opportunities created by investments should be accessible to, and promoted among, local businesses and residents through established channels and partnerships.
- Combine Opportunity Zone investments with other incentives to maximize impact and stretch public dollars. Such incentives could include New Markets Tax Credits, Low-Income Housing Tax Credits, Historic Tax Credits, Brownfield Opportunity Area funds, Community Development Block Grants, HOME funds, and property tax abatements. States and cities should also reassess existing economic development incentives to maximize public benefits in light of capital available through Opportunity Funds. States should also consider whether to align their tax treatment of capital gains with federal tax law.
- Favor investments that support sustainable, equitable, and community-serving economic growth. Opportunity Funds should avoid investing in projects that reduce the supply of affordable housing, displace important cultural or civic assets, or worsen environmental quality. Cities should reexamine land use, tax, and other regulations to encourage or fast-track investments that achieve public policy goals, and to discourage investments that would undermine local goals.
- Prioritize accountability through transparent reporting. The next round of federal guidelines is unlikely to require detailed impact reporting, but investors still have the option to self-report and hold themselves to meaningful standards. Outcomes should detail benefits such as the number of new living-wage jobs created, affordable housing units constructed, and increases in incomes (per capita and household).
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As we await further guidance from Washington, cities and development districts have begun to outline investment opportunities and community goals; investors have begun to catalog opportunities and outline their investment goals; and foundations have defined conditions for matching investments. We encourage interested parties to apply these and other principles to position themselves for impactful investment. Just like pending regulations, these actions will help to define the early successes and long-term impact of this potentially transformative new program.
Have more questions about Opportunity Zones or Funds? For more information, contact Eric Rothman or Bret Collazzi in HR&A’s New York office or Paul Silvern in HR&A’s Los Angeles office.
“Phillip applies creativity and an unparalleled knowledge of federal policy to serve clients in our resilience and affordable housing practices, two issues of seminal importance to the future of American cities. We welcome him to the Partnership. ”
– John Alschuler, Chairman
We are thrilled to announce that Phillip Kash has been promoted to Partner. As a leading expert on urban policy, Phillip works across the country to develop and implement strategies and programs that address two of the most pressing challenges facing cities today: resilient climate adaptation and housing affordability. He joins fellow partner Stan Wall as a leader in HR&A’s growing Washington, D.C. office.
Phillip began his career adapting cities to changing climate conditions in New Orleans following Hurricane Katrina. Since joining HR&A in 2015, he has led some of the firm’s largest resiliency work, including the delivery of technical assistance to states and local governments throughout the country as part of the National Disaster Resilience Competition (NDRC); the development of Climate Ready Boston; and the financing, development, and governance strategies for the Ohio Creek Watershed Transformation project in Norfolk, VA, the Gentilly Resilience District in New Orleans, and the Ilse de Jean Resettlement Project effort in Southern Louisiana.
As a leader of HR&A’s affordable housing practice, Phillip works closely with local governments and stakeholders to establish comprehensive approaches that revise land use regulation, leverage public subsidy, and strengthen tenants’ rights. He has supported the creation of numerous plans that improve affordability and meet community goals, including helping the City of Detroit design and implement a Multifamily Affordable Housing Strategy; facilitating the approval of the first annual allocation plan by Pittsburgh’s Housing Opportunity Fund; and creating a housing plan for Wake County, NC, which dedicated $75M to affordable housing and added 1,400 affordable housing units to its development pipeline in 2018.
Prior to joining HR&A, Phillip advised on affordable housing, nonprofit business planning, neighborhood revitalization, and resilient recovery programs at Enterprise Community Partners. Several of his engagements were in part of HUD’s One Community Planning and Development program and the National Resource Network.
Phillip can be reached at PKash@hraadvisors.com.
As our cities become more dynamic, the growth of an inclusive innovation ecosystem is essential to ensuring that all residents are able to access a better economic future.
In cities across the country, innovation ecosystems are coalescing in places with large employment bases, strong institutional anchors, and diverse mix of uses that prioritize a high quality of life.
New York City is home to several of these clusters – including Flatiron, Lower Manhattan, downtown Brooklyn, and Long Island City. Across the city, over 322,000 people are directly enabling, producing, and facilitating the technologies that drive the industries at the city’s core – advertising, media, finance, fashion.
HR&A worked with the Queens Borough President’s Office to develop a roadmap for growing in inclusive innovation ecosystem in Western Queens.
With this plan, Western Queens, which employs 8,400 people, is well-positioned to transform into a full-fledged tech district. By commissioning a strategic plan, the Borough President aimed to keep Western Queens competitive while ensuring that the growth of the local innovation ecosystem could generate meaningful economic mobility for all local residents, including the 20% who live below the poverty line today.
In developing strategic recommendations for Western Queens, HR&A utilized a planning framework structured around People, Place and Programs to support inclusive growth of the local innovation ecosystem. The framework focuses on providing educational and employment opportunities, creating tech-friendly places, and promoting programs and incentives that make tech-supportive investments and job creation possible.
An imperative for growing any successful place is to ensure that people can learn, create and innovate. In Western Queens, this means working with educational institutions and existing tech employers to create a stronger pipeline for connecting disadvantaged residents to tech training and jobs in a sector that is ripe for growth.
Communities looking to grow their tech ecosystems should also consider making place-based investments to create a physical environment that promotes and supports growth. Indeed, a successful tech district must be attractive to tech talent, employers, and residents. Density of activity is essential for generating interest among companies, as it encourages the informal, serendipitous connections that are the linchpin of collaboration and innovation. Additionally, tech companies, drawn to places by presence of talent, also seek affordable office and production spaces with digital connectivity. In Western Queens, we recommended strategic place-based investments designed to leverage existing concentrations of tech ecosystem assets – education institutions, production zones, and buildings desired by tech companies.
Finally, the development of tech-supportive programs is essential to support an innovation district. A district’s organizational infrastructure, tailored to address the area’s specific opportunities and challenges, represents the connective tissue that makes a district more than just a place. With its wealth of tech talent and existing tech activity, Western Queens would benefit from strategic actions and activities to help differentiate it from other New York City tech districts and better engage the community to build a more robust homegrown tech workforce.
THE ROAD AHEAD
Our work with Western Queens resulted in a plan with 21 specific actions to grow an inclusive innovation economy in Western Queens. As a first step, HR&A’s Roadmap recommended that a group of key stakeholders form a Western Queens Tech Council charged with creating a strong, tech-focused brand for the neighborhood, and coordinating events, networks, and resources to increase the district’s visibility and attractiveness to the tech ecosystem. The Council, whose creation was announced on June 28, 2018, will strategize to create and tech-supportive incentives tied to performance metrics to ensure that the growth of Western Queens tech economy directly funds local, high-mobility jobs and workforce development efforts.
As the area’s leaders come together to grow the local tech ecosystem, they must do so with an eye towards ensuring that the 20 percent of local residents who live below the poverty line are given every possible opportunity to participate in and benefit from this growth. Implemented holistically, the strategic initiatives in the roadmap can meaningfully shape Western Queens’ growth and secure its future as one of New York City’s most desirable tech districts.
If you’d like to learn more about how you can attract tech investment to your city -reach out to our urban tech practice leads Kate Wittels, Danny Fuchs and Bob Geolas.
On September 20th, 2017, Hurricane Maria made landfall on Puerto Rico. Electricity was knocked out across the island and the accumulated damage was widespread and unprecedented. Already burdened with weak physical and economic infrastructure, the island is still struggling to restore basic services and recover from the staggering storm-related death toll, which is in excess of 4,600 lives.
To support those on the front lines of recovery, HR&A has partnered with the Open Society Foundations to design, manage, and execute the Mayor Exchange, a peer exchange and technical assistance program to improve the capacity of and resources available to Puerto Rico’s mayors. Through the exchange, we have matched 14 mayors from the US mainland with 14 Puerto Rican mayors to create a network of support through knowledge sharing and a series of reciprocal visits.
The Exchange also facilitated two day-long technical assistance workshops to build the capacity of Puerto Rico’s mayors and municipal staff on topics such as resiliency planning, fiscal health, and economic development.
HR&A’s is honored to be leading the charge on this work. “We are already making an impact,” says partner and lead of the Inclusive Cities practice, Andrea Batista Schlesinger, “influencing the ways Puerto Rican cities think about resilience, bringing mayors across party lines together for the first time to advocate for their interests, and offering technical assistance that would otherwise be unavailable. It’s work to be proud of, but the needs are so profound that we are but scratching the surface.”
The Exchange is co-chaired Mayor Pedro García Figueroa of Hormigueros, Mayor Javier Jiménez Pérez of San Sebastián, and former Mayor Mitch Landrieu of New Orleans, whose deep understanding of the important role that mayors play in leading their cities through recoveries from disaster has been an invaluable resource to this program. See below for the list of mayors matched to date.
| Puerto Rico | Mainland US |
|---|---|
| José Santiago Rivera, Comerío | Rahm Emanuel, Chicago, IL |
| Roberto Ramírez Kurtz, Cabo Rojo | Gary McCarthy, Schenectady, NY |
| Nelson Torres Yordán, Guayanilla | Jorge Elorza, Providence, RI |
| Ángel Pérez Otero, Guaynabo | Tom Tait, Anaheim, CA |
| Pedro García Figueroa, Hormigueros | Mike Duggan, Detroit, MI |
| Carlos Delgado Altieri, Isabela | Stephen Hagerty, Evanston, IL |
| Julia Nazario, Loíza | Rahm Emanuel, Chicago, IL |
| Jesús Márquez Rodríguez, Luquillo | Chris Cabaldon, West Sacramento, CA |
| Jorge Márquez Pérez, Maunabo | Catherine Pugh, Baltimore, MD |
| María Eloisa Meléndez Altieri, Ponce | Mitch Landrieu, New Orleans, LA |
| Carmen Yulín Cruz, San Juan | Jim Kenney, Philadelphia, PA |
| Javier D. Jiménez Pérez, San Sebastián | Mark Stodola, Little Rock, AR |
| Bernardo Márquez García, Toa Baja | Paul Soglin, Madison, WI |
| Luis Javier Hernández Ortiz, Villalba | Ravinder Bhalla, Hoboken, NJ |
Interested in learning more about the program? Contact Partner Andrea Batista Schlesinger.
“Martha’s exceptional career as a civic change-maker and her wide range of interdisciplinary skills are unique and perfectly complement our work to bring large, complex transformative projects to life. HR&A gives her an international platform to continue to shape the character of urban life in Los Angeles and beyond.”
– John Alschuler, Chairman
We are delighted to welcome Martha Welborne to HR&A as a Senior Advisor to the firm and our clients. For over 30 years, Martha’s impressive career has spanned the country, with a focus on complex development and mobility management in Los Angeles. Martha will join Partners Paul Silvern, Amitabh Barthakur, and Judith Taylor in HR&A’s Los Angeles office, advancing our mission to improve quality of life in one of the world’s great cities.
“HR&A is an amazing firm that takes on the most complicated, seemingly impossible, urban problems and always finds winning solutions. I am delighted to take on the role of Senior Advisor with this incredible team as our goals are perfectly aligned. “
– Martha Welborne
With experience in the private, public, and nonprofit sectors, Martha has spearheaded some of Los Angeles’ most innovative public transportation and revitalization projects in recent history—including the installation of the county’s first rapid bus lines and the redevelopment of the Grand Avenue corridor. Most recently, Martha was the Senior Vice President of Corporate Real Estate for the Walt Disney Company and served as the Chief Planning Officer at the Los Angeles County Metropolitan Transportation Authority, where she was responsible for planning the long-range mobility future of the county.
Martha began her career as an architect and planner, working on both individual building design and large-scale projects at Skidmore, Owings & Merrill LLP and Sasaki Associates, Inc. She has served on the board of the Exposition Metro Line Construction Authority and as President of the Los Angeles Chapter of the American Institute of Architects. Martha is a former member of MIT’s Visiting Committee for the Department of Urban Studies and Planning, the Board of the Community Foundation Land Trust, and the Board of Councilors for USC’s School of Architecture and for KUSC.
In addition to her role as Senior Advisor at HR&A, Martha will also serve as Project Director of LA Aerial Rapid Transit Technologies, LLC, the first permanent public transit link to Dodger’s Stadium since it was built nearly 60 years ago.
Please reach out to welcome Martha to the firm at MWelborne@hraadvisors.com.
For transit agencies, joint-development projects can look like an easy win. Agencies can extract value from their incredible real estate assets, enliven station areas, and boost farebox revenues from new riders. Developers also have much to gain – incredible locations, built-in foot traffic, unique uses, etc. – but the complexity of partnering with a transit agency through joint-development agreements can leave them slightly wary.
These concerns usually stem from the increased difficulty, time, and costs typically associated with joint-development. But, transit agencies can offset these risks and increase value by building greater confidence with developers – establishing clear expectations, minimizing delay from process, and sharing an appropriate amount of risk for necessary improvements.
Earlier this year, we sat down with the Washington Metropolitan Transit Agency (WMATA) and a group of local real estate developers to discuss how each party could create better opportunities for successful joint-development agreements. The agency is a leader in advancing joint-development since it began rail service in 1976. Now, under the leadership of Nina Albert, Director of Real Estate and Parking, WMATA is continuing to push innovative approaches toward leveraging its real property to build ridership and create value for the agency.
Our conversation was enlightening and productive, revealing concerns and seven practical solutions that can increase confidence and create better outcomes for both parties.
1. Signaling: Policies and Support for a Feasible Concept
To attract development partners, transit agencies can start by defining their expectations and requirements through a set of clear policies, procedures, and development guidelines. This reduces uncertainty and helps developers understand the costs of requirements like transit infrastructure, parking, and affordable housing.
Understanding the real estate market conditions and gaining support from the local community and municipality is paramount before pursuing development. This step is crucial for decreasing the risk of project derailment – especially where there are community pressures and concerns about density, gentrification, displacement, and congestion. This involves identifying a range of feasible development concepts through a market analysis, along with generating support from local communities and authorities through well-thought out, community-driven planning.
2. Procuring Better Odds
An ideal procurement process allows developers to deliver higher-quality responses with strong financing proposals. To get the most out of a procurement, agencies can increase the number and quality of respondents by reducing the difficulty and cost burden of the solicitation process.
One strategy includes employing a two-step solicitation process – a request for qualifications followed by a request for proposals – that narrows the field of respondents to a small group of well-qualified candidates. Rather than developing detailed proposals against an unknown and/or large field of competitors, respondents can better justify investing the time and resources to respond to a much more rigorous Request for Proposals with a unique offer that is truly the right fit.
3. Empowering Teams to Work at the Speed of Development
Once an agency selects a development partner, the development team must be empowered to “work at the speed of development.” To reduce the risk of missing a favorable property market, transit agencies must enable their development staff to make routine decisions along an established timeline that is responsive to private sector. Also, teams should be positioned to address unexpected obstacles without delay by bringing key transit agency decision-makers (real estate, rail operations, bus operations, safety, etc.) to the table when meeting with development partners.
4. Leveraging Outside Real Estate Capacity and Support
To execute tasks confidently and quickly and inform key decisions, transit agencies need reliable information and analysis. While transit agencies regularly communicate and work with private developers to increase ridership and promote transit-oriented development, a trusted real estate advisor can provide support, capacity, and expertise to pursue more advance real estate tasks including the negotiation and structuring of complex public-private partnerships. When transit agencies can rapidly increase capacity and make data-based decisions in partnership with a real estate advisor, development partners trust that a fair and timely deal can be made.
5. Increasing Demand Through Placemaking
In WMATA’s case, many of its remaining development sites don’t attract enough foot-traffic or activity – think stations surrounded by huge surface parking lots in suburban locations. To increase the desirability of dormant sites to potential users and developers, WMATA and other transit agencies can direct resources into placemaking. A particularly innovative approach could involve sponsoring a Business Improvement District focused on site activation and branding during the initial years of a new development.
6. Sharing Risks: A Partnership for the Necessary Infrastructure
Many large sites with development potential often require a significant infrastructure investment to support new development. These costly up-front investments are a large financial risk for developers, however transit agencies – in partnership with local municipalities– can help address this risk and cost burden. Solutions might involve working with the municipality to provide the infrastructure financing for and creating a tax increment finance or special assessment district by which the eventual development reimburses the costs. Alternatively, transit agencies themselves can explore strategies for establishing a revolving TOD infrastructure fund to enable co-investing in projects that create value and ridership for the agency.
7. Creating a Toolkit for Success – Structuring the Deal
Ground leases for joint-development are complex documents that must address numerous uncertainties about the future real estate market. Ensuring that the terms and conditions are reasonable for both sides can be a drawn-out affair, and mistakes can be very costly. By creating a familiar, financeable ground lease template from a particularly successful joint-development, transit agencies can create a replicable and market-tested toolkit that reduces uncertainty for development partners, expedites the negotiation period, and enables a fair allocation of risk and value.
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Executing a successful joint-development project is inherently challenging as agencies balance the needs of transit riders while also creating commercial development opportunities to attract new riders and revenue. But, getting this balance right can reap considerable rewards and an opportunity to provide incredible benefits for agencies, developers, neighbors, and riders.
As transit agencies look to build more transit-oriented developments through joint-development agreements, it’s important to consider best practices for minimizing risk for themselves and their development partners. By ensuring internal process are well-communicated and designed to reduce obstacles and delays, transit agencies can use joint-development as a tool to maximize value from their real estate assets and achieve shared development and policy goals.
Thanks for reading! If you’re interest in learning more about our joint-development and transit-oriented development advisory services, contact Stan Wall to discuss how HR&A can help your organization navigate the joint-development process.
Technology is changing the way we work faster than ever before.
In the past, workers typically worked for a single company and businesses generally operated from a single office. Today, 36% of American workers are either freelancers or entrepreneurs. Businesses are following talent back to urban areas and increasingly operating from multiple locations around the world and even within the same city.
WeWork is at the forefront of this change.
Since its founding in 2010, the company has revolutionized the way people work and created a community of over 250,000 members around the world. While WeWork’s growth story is clear, the impact it has on members, neighborhoods, and cities had yet to be quantified. HR&A Advisors partnered with WeWork to get a better understanding of its influence by assessing the company’s economic impact in three major cities: New York, Los Angeles, and Chicago.
Building on our experience assessing the economic impact of the Tech Ecosystem in New York City, the film and post-production industries and disruptive technologies like Airbnb, we measured WeWork’s impact using sales and census data from WeWork and publicly available data from the Census, Bureau of Labor Statistics, Bureau of Economic Analysis, and the Kauffman Foundation. This granular approach enabled us to examine WeWork’s impact at the member, neighborhood, and city level.
Among our favorite findings from the study, we found that:
Source: WeWork, HR&A Analysis
Read the full report on WeWork’s website.
WeWork’s impact is undeniably significant and has far-reaching implications for how cities approach economic development. How can cities partner with innovators like WeWork to recruit new businesses? How can public schools, universities, and workforce developers tap into resources like WeWork’s Flatiron School to train the next generation of talent? What will the future of work look like and what, if anything, should cities and economic development agencies do today to shape it?
We are excited to help cities and innovators like WeWork answer these questions. By bringing together public and private resources, we can build a future of work that is better for every city and every worker.
Interested in learning about the future of work and how your city or company can prepare? Reach out to Kate Wittels, the leader of HR&A’s urban tech practice.
In March, HR&A hosted a discussion with ten transportation and urban development thought leaders on how new mobility options will change our cities. Innovations in mobility – ranging from bike share to transportation network companies (TNCs) like Uber and Lyft to microtransit and future autonomous vehicles – have incredible potential to help cities like Dallas create vibrant neighborhoods and an inclusive and prosperous future. During our conversation, our panelists discussed the possible implications of current mobility trends and identified four key strategies for proactively planning for a driverless future.
Shared-use mobility technologies are rapidly transforming cities.
Ridesharing apps will more than double in users between 2014 and 2020, and bikeshare users have increased more than 10x since 2012. User surveys by the Portland Bureau of Transportation have demonstrated that citizens are already substituting shared-use mobility trips for private car usage and segments of public transit trips. As described in HR&A’s 2017 Driverless Future report, autonomous vehicles are coming soon, and will fuel additional disruption in urban mobility. The average car in America is used only 5% of the time, and there are approximately six parking spaces per car nationwide. TNCs and ride sharing will result in efficiencies that will shift these needs over time, enhancing mobility throughout metropolitan areas and allowing for the reuse of existing vehicular and parking infrastructure.
Cities must anticipate and proactively plan for mobility innovation.
Using the tools within planning, urban design, development policy, and investment, cities can thoughtfully shape private sector innovations. Public guidance and investment is often necessary to support private sector operational excellence and equitable service. Acknowledging that technological change far outpaces the infrastructure that supports it, cities must invest with both strong vision and adaptable policies that can leverage future innovation.
In North Texas, and in similar auto-oriented metro areas throughout the country, new mobility technologies provide a generational opportunity to support inclusive and connected urban development.
Dallas Area Rapid Transit (DART) operates the largest light rail system in the country; however, due to last mile connectivity challenges (only 5% of the regional population lives or works within a half mile of light rail), only 1.5% of the regional population uses public transit. Recognizing the potential of new mobility innovations, DART launched an experimental mobility sandbox program – new GoLink on-demand shuttles connecting to select transit nodes and the GoPass shared mobility payment app – that can increase transit patronage and access. Meanwhile, North Texas remains one of the most active real estate development markets in the country. Mobility and access will shape the next generation of development in North Texas, changing the face of urbanism more significantly than in densely growing cities or shrinking cities.
To make the most of the mobility revolution, the local and regional governments of North Texas should implement four key strategies:
#1 Update zoning and building codes to support nimble development. Developers are already anticipating a sea change, most notably in parking needs. According to Ben Crawford of HOK, many of today’s developers are providing adaptable parking structures that can be converted to alternative uses such as residential even though it costs as much as a 25-35% premium per space in Dallas. Currently, Dallas, like many other cities, mandates a number of parking spaces per square foot for developments. But the tide is changing – the cities of Austin and Buffalo have already reduced the parking ratios developers are required to meet. Dallas could seize the opportunities associated with new mobility options to implement its own policy changes – such as reducing parking requirements and implementing curb/sidewalk management tools to encourage bike share and on-demand services – that help its real estate developers be more nimble in responding to a changing market.
#2 Make investments in urban nodes that support multiple modes of access. Today, the urban form in many areas of Dallas sends a clear message to residents: road areas are for driving only. This discourages walkability and bike usage, given the lack of lighting, shoulders, continuous sidewalks or other amenities that create a safe path for other forms of transit. Successful urban districts require public space that prioritizes people over cars. Moreover, the success of tech-enabled transportation depends on access to multiple modes, from traditional mass transit to ride-hailing/AVs to walking and biking. Urban nodes will need new and renewed infrastructure for last mile connections: continuous sidewalks, active public spaces, bike lanes and parking, and curb-space designation for ride sharing.
#3 Rethink 20th century transportation infrastructure. As modes of transportation change, so too must our transportation infrastructure. Rather than having mainly empty busses on certain lines, transportation authorities could run lower-capacity vehicles as on-demand micro-transit services that act as feeders for higher volume routes – improving cost efficiencies, customer experience, and ridership. Additionally, as current highway networks fall into disrepair, there may be opportunities to selectively decommission underutilized infrastructure as public space and/or new development. For example, the IH-345 spur, which separates Deep Ellum from the rest of downtown Dallas, has been identified by both community advocates and TxDOT for potential decommissioning and demolition to reconnect the urban grid.
#4 Explore new funding models that maximize return-on-investment (ROI). Funding streams for transportation are likely to change as rapidly as the change in mode of transportation. For example, as riders transition away from private vehicles, gas tax revenue, the most significant source of highway funding, is likely to decline. With these changes come new opportunities, such as mobility providers investing directly in new roadway infrastructure. For instance, Uber or Lyft could create a “ridesharing” tollway for which they deliver the capital investment and charge access fees to other users.
Meanwhile, reduced transportation costs associated with AVs could drive development away from urban cores, in the phenomenon described by Alan Berger of MIT as “infinite suburbs.” However, such development can only be made possible with ongoing investment in suburban and ex-urban roadway infrastructure, which can be extremely costly on a per capita basis. Local governments must therefore rationalize transportation investment where it can be most impactful in terms of value created and people served – in urban multimodal transit and not on highways to nowhere.
North Texas has a generational opportunity to lead the rest of the country in urban innovation. To succeed, local governments, residents, and private businesses must be united in their vision for a vibrant, inclusive, and people-oriented future. Together, guided by this vision, we must prepare for changes in 21st century mobility and its cascading implications for where and how we live, work, and move. This scale of change will require proactive regional coordination between planning processes and policies as well as local design and investment decisions. We can build on a tradition of collaborative planning established with DFW Airport and extend that tradition to engage private businesses and citizens.
This paper was coauthored by the following individuals as part of a conversation convened by HR&A Advisors:
For the first time in nearly a decade, transit ridership is down in almost every major metropolitan area in America. Even as cities experience impressive growth and increased demand for dense, walkable neighborhoods, transit systems in the United States are stressed. According to the American Public Transit Association, U.S. transit ridership has decreased by 400 million rides, or nearly 4%, since its decades-high peak in 2014. Many factors have led to this decline in ridership, but there are a few main culprits in this transit-whodunnit: decades of disinvestment in state-of-good-repair and maintenance; lower gas prices; and transportation networking companies (TNCs) like Uber and Lyft offering low-cost, on-demand, door-to-door service.
Autonomous Vehicles: Disruption on the Horizon
The disruptive impact of TNCs on conventional public transit agencies will only be further compounded by autonomous vehicles, which will make on-demand trips even cheaper and more convenient. Though manufacturers are still testing autonomous vehicles, and have considerable obstacles to overcome, widespread adoption will arrive sooner rather than later. Industry experts expect the technology to be widespread by the early 2020s.
If the advent of the internet, smartphones, and Snapchat filters have taught us anything, it’s that we should embrace this disruption and use it to improve our public services. In fact, cities and transit agencies can start curbing declining ridership now, while also creating a vision for the future of public transit.
How? By embracing microtransit.
Microtransit: A micro-solution to macro-disruption
Microtransit is not new, and you may have even ridden it before. It can go by many names, in many forms – jitneys, airport shuttles, dollar vans, or downtown connectors. No matter the name, these services all have a common purpose. Today, the proliferation of smartphones and route optimization algorithms makes it easier, more customer-friendly, and less expensive for cities and transit agencies to provide microtransit services. Using dynamically generated routes – riders can call a vehicle to any shared destination just by using an app on their phone.
Instead of regulating micro-transit to the edges of our public transportation systems, transit agencies can embrace the convenience of dynamic routing to address the long-standing challenge of first and last mile transit connections. Microtransit can work in concert with existing transit networks by improving accessibility to less-traveled, previously inefficient routes, which eventually connect to higher-capacity transportation corridors already served by fast trains and buses.
Microtransit’s Multiple Benefits
In the short term, the convenience and simplicity of seamlessly integrated microtransit with conventional public transit can help improve customer service and serve more riders. In the longer-term, well-designed microtransit vehicles (perhaps autonomous) will get people out of their own cars and onto the transit system, reducing parking demand at pick-up points and destinations. This behavioral shift will have significant impacts on land-use planning, economic development, and the ability for transit agencies to cultivate new revenue streams.
Will microtransit make the park-and-ride obsolete? Image Courtesy of: Hertfordshire Mercury News
Robust microtransit may help cities and transit agencies reduce parking and catalyze development of underutilized space. Station parking, an often costly and inefficient use of space, can then be redeveloped to build housing that accommodates growth. The Regional Plan Association estimates that in the New York metropolitan area alone, we could build up to 250,000 homes on existing station-area parking lots. Redeveloping park and rides is a no-brainer: it encourages growth, increases the tax base, provides more housing options for young people and baby boomers, and creates more walkable, dense nodes near transit. But residents will be reticent to give up their parking if they are not assured they will have equivalent or better ways to get to the station.
Image Courtesy of: (Aric Crabb/Bay Area News Group)
First-Movers: On the Cusp of a Revolution
Some transit agencies and municipalities are starting to see the potential for microtransit in their communities. The Eno Center of Transportation recently issued a fantastic report on the growth of microtransit systems in the United States. The City of Summit, New Jersey introduced a pilot with Uber, and now with Lyft, that allows Summit residents to ride to and from their commuter rail station during weekdays for the same cost of a daily parking space. This program has already helped the city avoid making capital investment in a new parking deck. East Bay suburbs are piloting programs to replace or enhance existing on-demand shuttle services around BART stations, and to replace low-performing bus systems. Large, sprawling cities are also getting in the mix – LA Metro is building a pilot microtransit program to help address first and last mile issues in target areas in its vast, low-density, service area and Dallas’s transit agency has introduced its own on-demand shuttle service.
As more cities and transit agencies experiment with microtransit, more details on the benefits and challenges associated with the various systems employed will emerge. While we have outlined some potential approaches to creating microtransit pilots around the country, it’s clear that more localized research is needed, particularly on how microtransit’s costs compare to traditional bus or jitney service, and how its use will impact customer transportation and parking behavior.
As our driverless future approaches, new bus and train infrastructure is built, and nascent transportation start-up ventures are being tested, America’s urban centers are moving towards a truly multimodal transportation future. Transit agencies, cities, and states can try to get ahead of the curve – but only if they choose to embrace innovation, and are willing to think big and small about how to improve service today to lay the groundwork for tomorrow.
Are you thinking about the different ways microtransit and autonomous vehicles will imapct urban land use? We’d love to hear your thoughts! Please reach out to Eric Rothman with any questions or comments.