The new federal transportation bill presents both promise and peril for people interested in thriving urban places, said panelists at a session yesterday during ULI’s Fall Meeting in Denver.

MAP-21 (Moving Ahead for Progress in the 21st Century) was signed into law this summer. The two year, $109 billion federal transportation bill—while widely regarded as falling short of delivering hoped for comprehensive transportation reform—contains several significant provisions whose impacts could reverberate for decades, panelists said.

Performance Measures

MAP-21 mandates the creation of the nation’s first set of performance measures, which will be used to rate and compare transportation performance by state. USDOT is moving fast to draft the measures.

“These performance measures will influence transportation investments for the next 30 years,” said Beth Osborne, Deputy Assistant Secretary of Transportation Policy at USDOT. Other panelists echoed her remarks. Nick Donahue, policy director at Transportation for America, worried that if the wrong measures are chosen, they could simply encourage investment in highways, without taking into account that transit, pedestrian, and bicycle facilities are also effective options in urban areas. “This is what keeps me up at night,” Donahue said.

Federal performance measures are being drafted now by the USDOT, and states and Metropolitan Planning Organizations may also develop additional performance measures. Osborne and the other panelists encouraged audience members to weigh in by contacting the USDOT directly or being in touch with their members of Congress. A formal comment period will follow the release of the draft measures.

State Departments of Transportation

State departments of transportation are in the driver’s seat when it comes to spending federal transportation dollars. Federal transportation spending has long been in partnership with states, but MAP-21 expands state flexibility.

“Your relationship with state departments of transportation will be critical,” Beth Osborne told the audience. Other panelists echoed this sentiment: state DOTs need to hear from developers and land use leaders about investment priorities.

TIFIA

Ernst & Young’s Jay Gillespie noted that TIFIA—which provides low interest federal loans for transportation projects—was expanded ten-fold in MAP-21. Projects are now evaluated only for credit worthiness, and on a first-come, first-served basis.

Toll-road projects have traditionally made up the lion’s share of TIFIA funding, and many are already in the pipeline. However, transit projects are also eligible, and panelists including Richard Allen of HRI Properties, stressed that potential transit applicants should move fast to get in the TIFIA queue. Investment-grade value capture strategies—including tax increment financing and real estate based special property assessments—are eligible loan repayment streams.

TOD Planning Grant

The USDOT doesn’t have many competitive or discretionary grants at its disposal under MAP-21, but the $20 million Transit Oriented Development Planning Grant program, championed by Colorado Senator Michael Bennet, is an important exception. Projects that utilize value capture strategies are more likely to be competitive for these grants, panelists predicted.

Road Pricing

MAP-21 provides states with additional flexibility in tolling of highways. Stepping back a bit, David Ungemah of Parsons Brinkerhoff predicted that over the next fifty years road pricing—through tolls, congestion pricing, and other measures—will spread throughout the transportation system. Road pricing, he said, “is game changing for the relationship between land use and transportation.”

Panelists included Beth Osborne from the U.S. Department of Transportation, Roger Low from Senator Michael Bennet’s office, Nick Donahue from Transportation for America, Jay Gillespie from Ernst & Young, Richard Allen from HRI Properties, and David Ungemah from Parsons Brinkerhoff. Christopher Coes of LOCUS moderated the session.