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From page 20... ... 20 This chapter describes the land value return and recycling and land value return–like methods listed below. • Land value return and recycling methods: – Land value tax or split rate tax, – Betterment levy, – Special assessment district fee, – Sale of public land or public air rights, – Lease of public land or public air rights, and – Joint development fee and interface fee. Read the entire page →
From page 21... ... How Land Value Return Works 21 Land Value Return and Recycling Methods Land Value Tax or Split Rate Tax Definition A land value tax and a split rate tax are variants of the traditional property tax. Most jurisdictions tax land value and improvement value at the same rate. Read the entire page →
From page 22... ... 22 Guidebook to Funding Transportation Through Land Value Return and Recycling Land value incorporates the benefit of nearby infrastructure investments and, therefore, represents the value of the public goods and services available at the location, along with other locational attributes. Because property tax is shifted off of the value of improvements (i.e., value created by private entities that build on the site) Read the entire page →
From page 23... ... How Land Value Return Works 23 Tax rates typically are expressed per $100 or per $1,000 (a millage rate) of assessed value (e.g., $2 per $100 or $1,000 of assessed value) Read the entire page →
From page 24... ... 24 Guidebook to Funding Transportation Through Land Value Return and Recycling Case example 2: Betterment Levy Project: Road and bridge improvements Location: Bogotá, Colombia Bogotá, Colombia implements a betterment levy to fund road and bridge improvements. As of 2011, Bogotá had completed approximately $1 billion worth of investment in public works by using this approach and planned to collect $1.1 billion from 2008 to 2015 for financing road and bridge investments. Read the entire page →
From page 25... ... How Land Value Return Works 25 Revenue There are two options for calculating revenue for a betterment levy: • Option 1. Tax the full amount of the value increase: revenue = (value of land in benefit area with investment) Read the entire page →
From page 26... ... 26 Guidebook to Funding Transportation Through Land Value Return and Recycling Case example 3: Special Assessment District Fee Project: State Route 28 improvements Location: Fairfax and Loudoun Counties, Virginia Fairfax and Loudoun counties formed Virginia's first transportation improvement district (TID) , which is a form of special assessment district. Read the entire page →
From page 27... ... How Land Value Return Works 27 Levy Basis The basis for the levy is frequently the assessed value of the property (land and improvements) used for standard property taxation. Read the entire page →
From page 28... ... 28 Guidebook to Funding Transportation Through Land Value Return and Recycling the sale price is, therefore, a land value return method. This payment allows transportation facility owners to extract additional revenue when they identify that residential and commercial density has increased in the surrounding areas and created a high demand for additional space. Read the entire page →
From page 29... ... How Land Value Return Works 29 Considerations • Sales may be relatively straightforward if there are comparable commercial transactions on which to base the sale price. Sales of air rights, however, can be more challenging because of the uniqueness of each location. Read the entire page →
From page 30... ... 30 Guidebook to Funding Transportation Through Land Value Return and Recycling • A long-term lease provides an income stream over several years, and long lease terms are typical (e.g., 99 years) Read the entire page →
From page 31... ... How Land Value Return Works 31 Joint Development Fee and Interface Fee Definition Joint development is the cooperative undertaking of a development project by a public agency and a private developer. Joint development often includes the sale or lease of publicly owned land or air rights (discussed earlier in this chapter) Read the entire page →
From page 32... ... 32 Guidebook to Funding Transportation Through Land Value Return and Recycling An interface fee is a similar fee paid by a private entity to create or maintain a direct connection to a transit facility that enables access from private property without first going into public right-of-way (e.g., an entrance from a private building into a transit station) Read the entire page →
From page 33... ... How Land Value Return Works 33 Levy Basis The levy basis is determined by the fee level and the basis for measuring the intensity of transportation system use, such as • Number of trips generated; • Length of street frontage (feet or some other measure) ; • Number of units (apartments, condominiums, offices) Read the entire page →
From page 34... ... 34 Guidebook to Funding Transportation Through Land Value Return and Recycling Considerations • Imposition prior to construction of the transportation facility may reduce the attractiveness of locating near the transportation facility. • Demonstration that the fee is associated with a particular benefit and that that benefit is not shared by members of community who are not being charged may be required. Read the entire page →
From page 35... ... How Land Value Return Works 35 As tax increment financing revenue results from infrastructure investment, it is often characterized as land value return. Property owners and businesses within the tax increment financing district pay the same level of taxes (and at the same tax rate) Read the entire page →
From page 36... ... 36 Guidebook to Funding Transportation Through Land Value Return and Recycling Considerations • Establishment of a tax increment financing district does not require imposition of new taxes or fees. As a result, the taxpayer burden does not change. Read the entire page →
From page 37... ... How Land Value Return Works 37 Case example 10: Development Impact Fee Project: Transportation system development charge Location: Portland, Oregon Portland, Oregon, imposes a transportation system development charge (TSDC) , which is a development impact fee. Read the entire page →
From page 38... ... 38 Guidebook to Funding Transportation Through Land Value Return and Recycling Revenue The amount of the fee is the total of benchmarked public infrastructure spending across all areas of public investment to cover system expansion costs including schools, water and sewer, police and fire protection, roadway capacity, parks and recreation, and other areas shown to be lacking the capacity to accommodate new development. Payment is made one time, not on a recurring basis. Read the entire page →
From page 39... ... How Land Value Return Works 39 proportional to the infrastructure requirements created by the proposed development. Exactions and proffers are more accurately described as cost avoidance rather than as land value return. Read the entire page →
From page 40... ... 40 Guidebook to Funding Transportation Through Land Value Return and Recycling Revenue Case by case, revenue can be cash or in-kind goods. Contribution or payment is made one time, not on a recurring basis. Read the entire page →

From page 20...

... 20 This chapter describes the land value return and recycling and land value return–like methods listed below. • Land value return and recycling methods: – Land value tax or split rate tax, – Betterment levy, – Special assessment district fee, – Sale of public land or public air rights, – Lease of public land or public air rights, and – Joint development fee and interface fee.