Special Assessment District’s Ability to Fund Transit: Lessons from Project level Analysis

摘要

This paper reviews four transit projects funded using special assessment districts (SADs) acrossthe US. It examines the SADs’ revenue yield and stability and focuses on the actions taken bypublic agencies to enhance them, resulting in three important findings. First, SAD revenues arehighly stable and can be expected to generate large sums of money. However, as a proportion ofproject cost, these revenues might fund a small portion of capital-intensive transit projects suchas heavy rail. Second, these revenues typically do not accrue upfront because property ownershave the option to pay the fee over time. Therefore, public agencies must rely on other fundingsources (usually assessment-fee-backed bonds) to address this revenue-expenditure mismatch.Finally, to ensure that assessment revenues do not decline in real dollars when paid over time,property owners are charged interest, usually based on the interest paid to service theassessment-backed bonds.Public agencies can take the following steps to enhance SADs’ revenue yield andstability. First, try to capture as large a portion of property value increment as is politicallyfeasible. Second, use SADs to demonstrate local community support for transit project, therebyleveraging state and federal funds. Third, minimize the number of properties exempt from payingassessments. Fourth, minimize real estate market risks to SAD revenues by formulating arevenue calculation methodology based on factors other than or in addition to property value,such as a parcel’s street frontage and size, and a property’s building area. Additionally, theassessment fee could be a proportion of the property’s previously assessed value or a proportionof a fixed property value increment.