December 8, 2015

New Transportation Bill: A Few Silver Linings to a Missed Opportunity

Last Friday, President Obama signed the Fixing America’s Surface Transportation (FAST) Act into law, which reauthorizes $305 billion in spending on surface transportation programs over the next five years. This is the first time in over a decade that Congress has been able to pass a long-term transportation authorization bill, bringing stability to highway and transit projects. As covered on this blog on Friday, the FAST Act contains an important provision that will improve energy and water efficiency in HUD-assisted properties.Beyond this provision, the transportation components of the FAST Act will affect where and how communities are built for decades to come. While our colleagues at Transportation for America have produced an informative summary of the FAST Act’s “highs” and “lows” from a transportation practitioner’s standpoint, below we highlight three key takeaways from the perspective of community developers and advocates for equitable transit-oriented development (eTOD).

The FAST Act includes provisions that can support more sustainable, equitable communities.

Let’s start with the positives. Several provisions in the new law can boost TOD. TOD-supportive infrastructure is now eligible for loans and credit support from both the Transportation Infrastructure and Financing Innovation (TIFIA) and Railroad Rehabilitation and Improvement Financing (RRIF) programs. Another win for eTOD is the preservation of the TOD Pilot Planning Grant program, which supports planning around new transit investments and includes efforts to create or preserve affordable housing.

While a few harmful measures were left out, others remain.

Looking at the transportation-specific aspects of the FAST Act, our colleagues at Transportation for America and the Natural Resources Defense Council have highlighted some problematic elements of the law, including the failure to find a sustainable revenue source, stalled momentum on performance measurement, cuts to the TIFIA program, and weakening of environmental protections.Thankfully, some particularly harmful provisions were left out of the bill. Past proposals to completely eliminate federal public transit funding were rightfully discarded. A proposed amendment that would have eliminated positive consideration for “enrichments” (such as joint development, green improvements and last-mile connections) in the evaluation of Major Capital Investment Grant applications was left out.  Finally, while many of the bill’s “pay-fors” are problematic, one off-set that was not adopted was the use of a portion of the guarantee fees that Fannie Mae and Freddie Mac charge on insured home mortgages. This would have set a bad precedent of using unrelated housing revenues to fund transportation spending.

The FAST ACT missed the opportunity to reform the way we build our infrastructure and plan our communities.

Many have cheered the fact that the FAST Act is our first long-term transportation law in a decade. While the certainty provided by the law is beneficial, it also makes the much needed fundamental reforms to the federal transportation system more difficult over its five-year term. This system faces many challenges, with the lack of a sustainable funding source being the most notable. While Congress avoided the aforementioned precedent of using guarantee fees for transportation, it continued and expanded the ongoing practice of using other unrelated funds to supplement the gas tax, functionally removing the “user fee” element of the Highway Trust Fund. This increases the likelihood of the misallocation of resources across the system.Yet fiscal sustainability is just one problem with our transportation policy. Major transportation infrastructure investments have the ability to connect, but can also divide. In just one example, a recent profile in The Atlantic highlighted the problems in Syracuse’s urban core, which were exacerbated by a major interstate highway project. This formula was repeated in many other American cities in past decades. As the most costly public investment that many communities will ever experience, it is imperative that transportation projects advance, rather than detract from, the goals of improving connectivity and promoting social equity. Achieving these goals would require federal policies that:

  • improve the integration between housing and transportation planning and investment;
  • create an equal playing field between highway projects and transit and other multi-modal investments;
  • tie transportation investments to system performance; and
  • ensure that the planning process is representative of the communities being served.

Given that many of the planning and investment decisions are made at the state and/or local level, it is clear that federal policy alone cannot ensure that these goals are accomplished. While the FAST Act falls far short of this standard, we hope that future legislative efforts build off of the regulatory activities of the past five years (most notably the Federal Transit Administration’s increased support for the coordination of affordable housing and transit investments) to set the context in which smart, equitable and sustainable transportation decisions can be made.For more information on Enterprise’s efforts to support equitable TOD, visit the TOD Initiative webpage or read our Promoting Opportunity through eTOD research series.