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This document is disseminated under the sponsorship of the U.S. Department of Transportation in the interest of information exchange. The U.S. Government assumes no liability for the use of the information contained in this document.
The U.S. Government does not endorse products or manufacturers. Trademarks or manufacturers' names appear in this report only because they are considered essential to the objective of the document. They are included for informational purposes only and are not intended to reflect a preference, approval, or endorsement of any one product or entity.
The contents of this document do not have the force and effect of law and are not meant to bind the public in any way. This document is intended only to provide information and clarity to the public regarding existing requirements under the law or agency policies. Value capture techniques and policies are often implemented outside of Federal funding or regulatory requirements.
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Form DOT F 1700.7 (8-72)
Reproduction of completed page authorized
The Federal Highway Administration (FHWA) would like to express appreciation to the local officials who provided feedback during the development of this primer, as well as to the members of the FHWA Value Capture Implementation Team.
State and local governments have traditionally relied on State and Federal transportation funding to maintain, improve, or expand their transportation networks. However, transportation needs have outpaced the availability of these funds, creating a funding gap that significantly impacts the ability of transportation agencies to deliver critically needed transportation projects. Value capture techniques have the potential to help communities narrow this funding gap, making possible the delivery of necessary transportation projects)(1).
Value capture refers to a set of techniques that generally take a share of increases in property tax revenues, business activity, and economic growth linked to infrastructure investments to help fund those infrastructure improvements. Transportation reinvestment zones (TRZs) are a value capture technique available to local governments in the States of Texas and Utah. A TRZ creates funding for transportation projects by capturing and leveraging the real estate and land development values and business activity resulting from those transportation projects. TRZs allow local governments to leverage multiple traditional Federal and State funds to deliver transportation projects critical for their communities. Local governments often use TRZ revenues as a complementary funding source to help close the funding gap, meet local match when required, or pay for project development costs (2).
This primer was developed on behalf of the Federal Highway Administration’s (FHWA) Value Capture Implementation Team and is based on a review of relevant literature, interviews with practitioners, case studies, and lessons learned from practicing agencies. Its audience includes two groups of practitioners:
This primer presents the basic concepts needed to understand how TRZs work and explains the implementation stages. Additionally, it highlights the role that TRZs play in the delivery of transportation projects, the types of projects that can be funded using TRZ revenues, and the TRZ financing methods commonly employed by local governments. Finally, this primer shares the opportunities and challenges associated with the use of TRZs to fund transportation projects and provides a case study that illustrates how the local government of a small community used TRZs to deliver a critically needed transportation project. The information contained in this primer is based on the current TRZ legal framework of the States of Texas and Utah. Like all value capture techniques, a TRZ is an optional funding tool that is not regulated or required by FHWA.
