TOD strategy in LAC Region

Vanessa Velasco, Urban Specialist.welascobernal@worldbank.org

Source: Metro Sabana,2017

HOW TRANSIT ORIENTED DEVELOPMENT -TOD -COULD TRANSFORM URBAN SPACE

1. TOD context

2. How TOD supports urban transformation• Key aspects for implementing TOD • Urban Transformation trougth TOD • Key aspects for implementing TOD in LAC• Urban Transformation trougth TOD in LAC

3. Developing a TOD strategy• General strategy LAC• Lima Metro Project

TOD Context 1

Resilient toNatural Hazards

More Competitive

Access and MobilityLower Transport and Housing

cost

High quality neighborhoods with lower infrastructure costs and lower CO2

Partly self financing by

capturing value created

WHY TOD?

Source: Gerard Ollivier, World Bank TOD-COP 2018

TOD HAS A KEY ROLE IN URBAN TRANSFORMATION

Positive outputs of TOD include: higher economic productivity in densified areas, and residents spend lower income on transport and housing in nearest stations.

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Social Aspect

Institutional Categories Infrastructure Categories

For TOD implementation, it is necessary to engage different stakeholders using physical and technical instruments, social agreements and enabling factors

TOD HAS A KEY ROLE IN URBAN TRANSFORMATION

Source: Gerard Ollivier, World Bank TOD-COP 2018

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Regulatory framework for TOD implementation include: urban regulations, institutional framework and municipal finance tools

TOD HAS A KEY ROLE IN URBAN TRANSFORMATION

Source: Autor, based on Gerard Ollivier, World Bank TOD-COP 2018

National and Municipal Regulations

Land Use Planning Municipal FinanceInstitutional

How TOD supports urban transformation

2

Key aspects should include: scoping, planning, financing and implementation of TOD

KEY ASPECTS FOR IMPLEMENTING TOD

Source: Gerard Ollivier, World Bank TOD-COP 2018

comercio

Rural LandReadjusted Land

Univ. Housing Housing Retail

• Tokyu Corportation: Urban and Transport Development Corporation

• Owner of Metro Stations and Land Bank for nearest áreas

Transport OperationBusiness

Real Estate Business Line

Land Readjustment/ (re)development

Housing

Offices / Hotel

Station secureshigh user demand

TOKIO- TokyuCorporation

Source: Murakami, Jin. 2012. Transit Value Capture

Key aspects include: an strong urban and transport corporation, a planning instrument including land assembly, and station secures higher usser demand .

URBAN TRANSFORMATION THROUGH TOD

A B C D F Fa b c d e f

publicA,B,C,D,E & Fa, b, c, d, e, & f

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sale $ Subsidie

Social infrastructure

New Urban regulation, Biggest FAR

Scheme for (re)Development and land use incluse renewal Project incentral areas

TOKIO (re)Development Metro Tokio (urban areas)

Fuente: Murakami, 2010; Suzuki, Murakami, Hong and Tamayose, 2013

Key aspects include: revenues of real estate project finance public social infrastructure

URBAN TRANSFORMATION TROUGH TOD

Unbalance in LAC countries related to scoping, planning, and financing tools for implementing TOD

KEY ASPECTS FOR IMPLEMENTING TOD IN LAC CITIES

Source: Author, 2018

Country Scoping Planning Financing Implementation

Argentina Macro-Micro level National-Subnational planning-implementation

LVC, Municipal Finance Tools

Subnational and National Leadership, IA

Bolivia Macro-Micro level National- planning Municipal Finance National leadership

Brazil Macro-Micro level Municipal-National planning-implementation

LVC, urban development, municipal finance

SPV, Local Political Leadership, IA

Colombia Macro-Micro level Municipal-National planning-implementation

LVC, urban development, municipal finance

SPV, IA, National political leadership

Ecuador Macro-Micro level National-Municipal planning- implementation

Urban development, municipal finance

Local and National Political Leadership

Peru Macro-Micro level National-Subnational planning-implementation

LVC, Municipal Finance Tools

National Leadership, IA

Mexico Macro-Micro level National-Subnational planning-implementation

LVC, Municipal Finance Tools

National - subnational leadership, IA

Uruguay Macro-Micro level National- planning Municipal Finance National leadership

Paraguay Macro-Micro level National- planning Municipal Finance National leadership

Costa Rica

Macro-Micro level National- planning Municipal Finance National leadership

Strategic urban projects and densification could give additional land value

Sustainable urban projects

Economic growth of cities1) Instruments for financing the

future urban development trough capture the potential value of the land

a. Additional development rightsb. Impact Feesc. Tax Increment Financing-TIFd. Betterment and leviese. PPP

Highest land value could finance urban development

How to finance urban development?

Strategic public investment ( infrastructure + transport + land use accessibility and ) creates land value

Financing of urban infrastructure

Instruments for financing future urban development in LAC are relatively new and main destination is urban infrastructure

KEY ASPECTS FOR IMPLEMENTING TOD IN LAC CITIES

Strategic urban projects and densification

Sustainable urban projects

Economic growth of cities

Financing of urban infrastructure

Highest land value could finance urban development

How to finance urban

development?

Strategic public investment= infrastructure + transport + land use

2) Instruments to capture the value of the land after urban development -EX-POST infrastructure investmentsa. Property taxb. Plusvalee capture

Instruments for financing future urban development in LAC are frequently used, main destination is municipal budget, affordable housing and urban infrastructure

KEY ASPECTS FOR IMPLEMENTING TOD IN LAC CITIES

Strategic urban projects and densification

Sustainable urban projects

Economic growth of citiesHighest land value could

finance urban development

How to finance urban development?

Strategic public investment= infrastructure + transport + land use

3) Urban operation including multiple land value capture instruments –LVC-1. Urban Operation (PP, operaciones interlagadas)2. Land readjustment Financing of urban

infrastructure

KEY ASPECTS FOR IMPLEMENTING TOD IN LAC CITIES

Instruments for financing future urban development in LAC are relatively new and main destination is urban infrastructure

URBAN TRANSFORMATION THROUGH TOD IN LAC

PlanningManagement

Land use plan “PartialPlan/ Operaciones

Interligadas”

Planning instrument that transforms extended portions of land trough “land pooling” toguarantee an equitable distribution between the cost of urban infrastructure and the benefitsof urban development.

Building and urban infrastructure codes, and land

use regulations

Conditions for stakeholder’s participation

Distribution of benefits (FAR) and cost (urban

infrastructure)

Scope for the project

Land management processes

Institutional schemes

Stakeholder’s participation

Land management processes

Institutional schemes

Colombia planning framework has an instrument (PP) combining landmanagement and urban development process

Urban Regulations Framework

BRT Station, PP. ESTACION CENTRAL, Bogota

SCOPE OF THE PROJECT

Source: ERU, 2014

Conditions Objectives

• Part of the

Macro project

of the Center

Area

• 10,5 hectares

– 3 UAU

• 5000

Inhabitants

• 60% of current

activities are

commerce,

local service,

20%

educational

services and

20% residential

area

• Completion Date 2018 – 3-phase

plan

• 235,0000m2 of mix use

development, 140,000m2 of

office space, 60,000m2 of retail,

25,000 m2 of housing of middle

income level and affordable

housing, and 10,000 m2 of

education

• 4,6 hectares of open spaces and

urban infrastructure

• Public SPV: ERU-TRANSMILENIO

• BRT STATION 60% cost financed

by utilities of urban

development

• 20% of land approved by the PP

is for affordable housing

Integrated project’s scope: Urban transformation including social inclusion andtransport infrastructure

URBAN TRANSFORMATION THROUGH TOD IN LAC

Readjusted Land

Univ. Housing Housing Retail

• Public Urban Development Corportation: planning, land bank, and real estate planning functions. In charge of private developer agreement.

• Transport Corporation: BRT operation, and transport infrastructure

Transport Infrastructure and Affordable housing

cost is paid by urban development

Real Estate BusineesLine

Land Readjustment/ (re)development/eminent domain

Housing

Office / Hotel

Station secureshigh user demand

ERU-TRANSMILENIO

Source: Author based on ERU,2018.

Key aspects include: a non effective IA between TM and ERU; higher expectation of land owners in revenues of the urban development; and long-term political changes.

URBAN TRANSFORMATION TROUGH TOD

FAR Affordable H

BRT Station, PPESTACION CENTRAL, Bogota

LAND MANAGEMENT AND STAKE HOLDERS PARTICIPATION

.

Each UAU project has its own prefeasibility process. However, an integrated landmanagement strategy aligning 3 UAU is needed for the whole partial planimplementation

URBAN TRANSFORMATION TROUGH TOD IN LAC

BRT Station, PP ESTACION CENTRAL, Bogota

Source: ERU, 2014

ECONOMIC INCLUSIONLOCAL BUSINESSCOMPENSATION

REAL ESTATE PROJECT

SOCIALINCLUSION

LAND OWNERS AND INVESTORS:

EXCHANGE RATIO CURRENT M2 /NEW M2 CONSTRUCTION

FOR RESIDENT LAND OWNERS/HOUSING

COMPENSATION UNIT

PARTICIPATIONNEIGHBORHOOD RESIDENTS IN FORMULATION OF PP AND LAND MANAGMENT SCHEME

URBAN DEVELOPMENT CORPORATION –SPV

TRANSMILENIO LAND OWNER : 60% OF

CONSTRUCTION COST OF THE BRT STATION

BRT Station, PP. PEDREGAL, Bogota

URBAN TRANSFORMATION TROUGH TOD IN LAC

SCOPE OF THE PROJECT

Conditions Objectives

• 6,5 hectares

– 1 UAU

• 50% of

current

activities are

commerce,

local service,

• 20%

educational

services and

30%

residential

area

• Completion Date 2018 – 2 phase plan

• 115,0000m2 of mix use development,

20,000m2 of retail, and 85,000m2 of

commerce offices, affordable housing

obligation was transfer to Metrovivienda land

bank

• 3 hectares of open spaces including 2 BRT

stations, an underground transport public

depot, and urban infrastructure

• Private developer joint with TRANSMILENIO

• 2 BRT STATION, 1 public depot, and

transport connection infrastructure “anillo

vial” are 100% cost financed by utilities of

urban development

• Land acquisition was made by the private

owner before/after PP approval

Integrated project’s scope: Urban transformation including economicdevelopment, and transport public facilities and urban infrastructure

Readjusted Land

Retail

• Private Urban Development Corportation: planning, land acquisition, real estate development

• Transport Corporation: BRT operation, and transport infrastructure

Transport Infrastructure and public facilities cost paid by

urban development

Real Estate BusineesLine

(re)development/Land acquisition

Offices

Offices / Hotel

Stationssecures highuser demand

ALDEA PROYECTOS -TRANSMILENIO (TM)

Source: Author based on ALDEA,2018.

Key aspects include: a non effective IA between private developer and TM/IDU, technical and political disagreements that changes the project in long term perspective.

URBAN TRANSFORMATION TROUGH TOD

PEDREGAL, Bogota

Transport Depot

Developing a TOD strategy in LAC 3

IMPLEMENTING TOD IN LAC CITIES TROUGH TRANSPORT PROJECTS

1. Regional

2. Local• Multimodal Integration

• Urban Context of Lima: opportunity áreas, job areas, (re) Development zonning areas , CDB, socio-economic development (local) y social + participation process

3. National

Accesibility analysis to determine potential central áreas and developingthrough TOD .

LINE 2 METRO OF LIMA

.

Accesibility anaysis shows areas were public facilities, public services, real estate market demand, and employment areas are concentrated, over theMetro Line 2 corridor. Some of the areas were selected as TOD pilots

LINE 2 METRO OF LIMA

Source: WB,2016

Urban redevelopment

program

Accesibility and Integration Plan

Metro L2

Concession L2 + corridor L4

Tarifary integration Policy ofthe Metropolitan TransportSystem

+

Potencial of urbanredevelopment areas

articulated withimprovement of local

accesibility (pedestrian, roads) in the Line 2

Source: Felipe Targa, WB,2016.

LINE 2 METRO OF LIMA

Key aspects for pilots development include: an effective IA between private developer and national and subnational governments; flexible LVC and planning instruments; PPP agreements; and political changes strategy in a long term perspective.

Thank you