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Urban Paper Series 2013

Transit-Oriented Development in the United States


What Can the Dutch Learn?
Thomas Straatemeier

2013 The German Marshall Fund of the United States. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without permission in writing from the German Marshall Fund of the United States (GMF). Please direct inquiries to: The German Marshall Fund of the United States 1744 R Street, NW Washington, DC 20009 T 1 202 683 2650 F 1 202 265 1662 E info@gmfus.org This publication can be downloaded for free at www.gmfus.org/publications. GMF Paper Series The GMF Paper Series presents research on a variety of transatlantic topics by staff, fellows, and partners of the German Marshall Fund of the United States. The views expressed here are those of the author and do not necessarily represent the views of GMF. Comments from readers are welcome; reply to the mailing address above or by e-mail to info@gmfus.org. About GMF The German Marshall Fund of the United States (GMF) strengthens transatlantic cooperation on regional, national, and global challenges and opportunities in the spirit of the Marshall Plan. GMF does this by supporting individuals and institutions working in the transatlantic sphere, by convening leaders and members of the policy and business communities, by contributing research and analysis on transatlantic topics, and by providing exchange opportunities to foster renewed commitment to the transatlantic relationship. In addition, GMF supports a number of initiatives to strengthen democracies. Founded in 1972 as a non-partisan, non-profit organization through a gift from Germany as a permanent memorial to Marshall Plan assistance, GMF maintains a strong presence on both sides of the Atlantic. In addition to its headquarters in Washington, DC, GMF has offices in Berlin, Paris, Brussels, Belgrade, Ankara, Bucharest, Warsaw, and Tunis. GMF also has smaller representations in Bratislava, Turin, and Stockholm. On the cover: A streetcar traveling through a Portland, OR neighborhood.

Transit-Oriented Development in the United States


What Can the Dutch Learn?
Urban Policy Paper Series May 2013

Thomas Straatemeier1
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 What Can the Dutch Learn from the United States? . . . . . . . . . . . . . . . . . . . . . . 3 Introduction to Portland, OR and Washington, DC . . . . . . . . . . . . . . . . . . . . . . 5 Important Lessons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12

1 Thomas Straatemeier is a senior transportation consultant at Goudappel Coffeng, the oldest consultancy firm in transportation planning in the Netherlands. He is interested in the integration of transport and land-use policies. He is also a part-time lecturer at the University of Amsterdam.

Executive Summary

n the spring of 2011, I was awarded a fellowship by the Urban and Regional Policy Program of the German Marshall Fund of the United States (GMF). Through my fellowship, I travelled to two U.S. metropolitan regions Portland, OR and Washington, DC to examine transit-oriented development (TOD). In my practice as a transportation planning consultant in the Netherlands, I help municipalities and regional governments stimulate TOD. The visit to the United States offered me the opportunity to study approaches to TOD in a

different context, and to challenge my own assumptions about planning practice and discourse. This policy brief discusses several key factors for the successful implementation of transit-oriented development. These key factors are a shared set of regional values, trust between public and private parties, a coherent long-term vision, a clear set of invectives and investments to support TOD, and effort by all involved actors for urban quality in each development.

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Introduction

n spite of the breathtaking progress of information and telecommunication technologies, these are challenging times for urban transportation planners. For one thing, there is a global need to improve the physical mobility systems that all individuals use. On the other hand, because of increasing fiscal constraints to infrastructure expansion, and possible impact of new infrastructure on energy consumption and air quality, there is a mounting resistance to the expansion of urban transport systems. Transportation planners must therefore balance the positive and negative effects of mobility in order to achieve more sustainable mobility patterns. Transit-oriented development (TOD) is widely recognized as a promising strategy that combines improved accessibility with more sustainable mobility patterns. However, achieving integration between the development of transit systems and

land use planning in practice is difficult. Transport and land-use planning often function as separate worlds, with their own institutions, financial schemes, culture, and planning concepts. Furthermore, TOD requires participation of different layers of government and support from real estate developers and local communities. For these reasons, TOD is complex and demands learning from best practices. In this research, I am not interested in what constitutes good TOD, but much more in the process that makes TOD happen. More specifically, I am interested in best practices of how to support and implement TOD within a metropolitan region, where planners must contend with different layers of government, the private sector, and citizen participation. In the United States, Washington, DC, and Portland, OR are inspiring cases that European planners should closely examine.

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What Can the Dutch Learn from the United States?


convince local communities of their TOD strategies. This is a process that planners in the Netherlands are not accustomed to completing. While Dutch policymakers are often strong on a conceptual level, they sometimes lack the instruments, strategic capacity, and persuasiveness to make things happen. This is an area where the Dutch could benefit greatly from the experiences in metropolitan regions in the United States, where different forms of metropolitan government have been in place since the 1960s.1 Additionally, policymakers in the United States are accustomed to working in a context in which real estate developers and citizens have a strong voice. The Netherlands has an impressive public transport network for international standards, but in the last 20 years, the country has generally failed to orient land-use planning in order to concentrate new development around transit stops. As a recent research paper on the topic concluded: Spatial and transport planning in the Netherlands has been held up frequently as an example in the planning world. However, this rosy image belies frustration and difficulties that are experienced by planners, real estate developers, and local communities.2 Though TOD continues to be high on the agenda of all the metropolitan governments, progress so far has been limited to areas surrounding high speed rail stations, where the national government is heavily involved. The metropolitan regions of Washington, DC, and Portland, OR are hailed as the best examples of transit-oriented development in the United States. Both metropolitan regions have been involved in
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hat can you guys learn from us? was a question that many practitioners asked me several times during my visit to Portland and Washington in September 2011. Most U.S. practitioners perceive that they lag behind European cities in designing effective urban transportation systems. However, European cities can learn a lot from U.S. cities in terms of actual planning processes and strategies. As a small country with one of the highest population densities in the world, land use has always been a major factor in the Netherlands. Since World War II, the national government has strongly controlled spatial planning and the housing market. During most of the post-war period, state-of-theart National Spatial Planning documents came out every ten years to guide transport and land-use integration in a top-down manner. However, during the last part of the 20th century, this power structure changed significantly; the grip of the national government on land-use planning and the housing market weakened as the social welfare state became too costly. Subsequently, the national government transferred some of its tasks and infrastructure funding to the provinces and new metropolitan governments. These metropolitan governments can be seen as a partnership between municipalities in the urban region. These municipalities work together in the sphere of spatial development, traffic and transport, economic affairs, housing, and youth welfare. The board of the metropolitan governments is filled by locally elected politicians. The current national administration is debating the future of these recently installed metropolitan governments since not all of them have been very successful. In terms of achieving transit-oriented development, metropolitan governments have to adapt to the changing relations between governments, the private sector, and local communities. They have to negotiate with real estate developers and must

While Dutch policymakers are often strong on a conceptual level, they sometimes lack the instruments, strategic capacity, and persuasiveness to make things happen.

The regional government in the Portland region is METRO, which is a unique case since it is the only Metropolitan Planning Organization in the United States with directly elected officials. In the Washington, DC region, the regional government is a board with appointed elected officials. Tan, W. & L. Bertolini (2010) Barriers to Transit-oriented Developments in the Netherlands, research paper, University of Amsterdam.

Transit-Oriented Development in the United States

TOD for over 25 years and thus have considerable experience with what works and what does not work. Both regions have developed a rich variety of instruments, policies, and financing mechanisms for TOD. In addition, transit-oriented development

in these cities is not limited to one or two locations, but each of the cities has many examples of TOD to examine. Both cities know what it is to engage with local communities and to stimulate real estate developers to support their policies.

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Introduction to Portland, OR and Washington, DC


tion embodied a new direction for Portlands urban transportation policy. Since this point, TOD has been at the core of planning policy in the region. The city built four light rail lines, and several more are still planned.

n both Portland and Washington, DC, a focus on TOD began with a defining event, without which the urban forms of both cities would now be remarkably different. METRO Portland

In the post-war period, Portlands planners aimed to modernize the city through a new east-west freeway. This proposed Mt. Hood Freeway would have required the destruction of several historic Portland neighborhoods, and plans for the freeway triggered a public outcry during the late 1960s and early 1970s, which led to the projects cancellation in 1974. At the same time, other proposed freeways were also scratched. Funds that had been set aside for the freeways were spent on other transportation projects, including the first section of the MAX Light Rail system that opened in 1986 and cost 214 million. It was one of the first federally funded light rail projects, with the Federal Transit Administration paying 83 percent of the cost. This alloca-

All the aspects of Portlands development strategy came together in the recently adopted Regional Vision: 2040 Growth concept. Portlands elected regional government, Metro, developed the vision in concert with the regions stakeholders. Though an elected regional government is unique in the United States and also in many European countries, it has been a key element in Portlands success. Metro has its own TOD program with funding to invest in real estate development adjacent to transit. In addition to developing a comprehensive streetcar system, and after several decades of effort, Portland and the Portland Development company have redeveloped vast amounts of brownfield land in the inner city in partnership with several inspired developers. Current and planned high capacity transit corridors in the Portland Washington, DC Metropolitan Area Metropolitan Area To develop a regional rail system in a region that traverses two states, a special district, and several counties that have heavy federal government presence is a remarkable achievement. During the 1960s, opponents of the Metrorail system in the Washington, DC region tied funding for subway construction to funding for new freeways. When plans for new freeways in the inner city came to a halt as a result of public opposition as in Portland,

In both Portland and Washington, DC, a focus on TOD began with a defining event.

Source: Regional High Capacity Transit System Plan (2010) METRO

Transit-Oriented Development in the United States

High density development around Rosslyn

funding for Metrorail was also in danger. However, with a margin of only 13 votes, the U.S. House of Representatives decided to release funds to create the Metrorail system on December 2, 1971. The construction of one of the best modern rapid transit systems could begin, but a different regional transportation future was also nearly adopted. Development in the Washington, DC metropolitan region is less systematic compared to Portland. Though regional planning is less developed and the region has experienced extensive urban sprawl, development is often nonetheless successfully concentrated around Metrorail. In terms of total square footage realized under TOD, Washington

is the model for the United States (its strong real estate market is an important factor). TOD developments have occurred in different parts of region, especially in Montgomery County, Maryland, and the District of Columbia. However, Arlington County, Virginia is the most impressive example. Since the orange and blue lines opened in 1977 and 1978 respectively, over 31 million square feet of office space and over 30,000 housing units have been constructed. Arlington Countys ability to promote and sustain growth for some 30 years is a result of maintaining the original vision while adapting to the changing needs of its communities.

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Important Lessons

rom interviews with both public and private parties and site visits, I have compiled a number of important lessons that are crucial to implement transit-oriented development. Within the Washington region I focused on the city of Arlington, because it has the most interesting set of policies, which often that often contrast other parts of the region. Shared Regional Values A key inquiry of this brief is to determine how politicians and policymakers were able to sell bold strategies such as implementation of an urban growth boundary in Portland and investment in public transportation in Washington to people that previously prioritized fringe development and automobile transport. Portland and Arlington both heavily incorporated community development. However, they focused less on the type of strategies they wanted to implement and more on the type of city, region, and environment in which they wanted to live. As Rex Burkholder, councilor of the Regional Government in Portland and a 2011 GMF Urban and Regional Policy Fellow, said: You have to start with what people care about. Together with citizens and local businesses, Portland embraced the necessity to identify regional values. These values needed to be important in peoples everyday lives and not abstract concepts such as compact urban form. In a regional visual preference survey, planners displayed images of cityscapes and asked over 5,000 residents what they preferred. Most people found the same assets to be important, including vibrant communities, economic prosperity, clean air and water, and safe and reliable transportation. Next, planners showed the tradeoffs between the different values. As one policymaker stated: Most people think that transportation is not about decisions [when instead] transportation decision-making is about choice and allocation of scarce resources.

In other words, residents must understand the complexities involved in development decisionmaking. Burkholder emphasized that framing is particularly important: If you find these values important, then this is what we should be doing. The success of Portland planners thus stems partly from their ability to illustrate the implications of the region that residents want. TOD is a means to an end, a development strategy to achieve a livable and sustainable region. If you ask regular citizens in Portland about planning and the urban growth boundary, they will easily answer why they are important to local planning the strategies are part of the local psyche. In Arlington, a similar situation occurred when Metrorail was built and local communities became anxious about the development it would spur. Again, it was critical for planners to show the tradeoffs behind particular strategies. Local politicians convinced people that high density, mixed-used development in the Rosslyn-Ballston corridor was a good idea, since it would prevent large-scale development elsewhere, thus leaving most communities unaffected and expanding the local tax base. Planners turned something that peopled feared into a vision they could see the benefits of. Public-Private Trust is Key TOD involves many different actors, including real estate developers, local communities, transit agencies, planning professionals, and politicians. Above all, most interviewees emphasized that a successful TOD strategy must begin with trust. Only when different actors trust and desire cooperation can discussion of actual urban policy and design begin. In Portland, planners referred to this as a coalition of the willing. The best example of this in Portland is the Pearl District development adjacent to the citys downtown, a former brownfield that was turned into a lively mixed-use urban district in less than 20 years. Based on a shared vision of the area,

Both Portland and Arlington focused less on the type of strategies they wanted to implement and more on the type of city, region, and environment in which they wanted to live.

Transit-Oriented Development in the United States

Open dialogue between citizens, the private sector, and government is part of the psyche in Portland and Washington.

public and private partners created a development agreement that was the product of mutual trust and long-term interaction. The landowners were willing to give up some of their land if the city would turn it into public parks. The city also agreed to build a streetcar line instead of choosing a much cheaper bus option. In turn, developers agreed to adopt higher densities and build more affordable housing, and paid for a portion of the streetcar costs. All these outcomes materialized, proving the importance of trust in partners that they will honor agreements and persist in doing so over the long term. Open dialogue between citizens, the private sector, and government is part of the psyche in Portland and Washington. This is reflected in the governance structure of both regions, such as with citizen advisory committees, private leaders that are also board members of transit agencies, and special grants for community planning. A special course at Portland State University even teaches developers how to be civic minded. For governments, it is important that they are willing to give up authority and empower others so that they will cooperate with the public sector. Otherwise, TOD will fail against any developer or community opposition. Planners must create transit-oriented communities; transitoriented development will follow. Strategic Concept and Incremental Change In order to make TOD a popular instrument, all actors must make a long-term commitment. Both Portland and Arlington have been implementing the concept for over 30 years. Both started with rail infrastructure investments, and quickly followed with a strategic vision on land use development following identification of important regional values. In Portland, the introduction of an Urban Growth Boundary by the state of Oregon in 1973 initiated this policy progression as it began efforts to prevent urban sprawl and preserve open land. It also created a fertile breeding ground for urban development and especially for intensifying existing

land-use around transit centers and the citys downtown. In Arlington, the bulls-eye concept was the strategic spark that initiated the citys TOD pattern. The concept outlines a concentrated level of development density around the areas five metro stations. Further, it requires development to be centered on station entrances, with that high density gradually diminishing away from each station. This transitions the high intensity area smoothly into the low density communities that surround each station area. Local planners refer to the concept of block-by-block density increases as the wedding cake strategy. Though the bulls-eye concept has been the guide for the development of the Rosslyn-Ballston corridor, it has been readapted several times. With each adjustment, planners have increased allowable densities closer to the stations. Although TOD has taken off in other Metrorail corridors in the Washington region, it is of an incidental nature and is not In Arlington Countys revitalization of the Rosslyn-Ballston Corridor, new growth was concentrated in high-density development within one-quarter mile of new Metro stations as in the bulls eye concept.

Source: Arlington County (1972) RB72: Rosslyn-Ballston Corridor Alternative Land Use Patterns

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the result of a simple and coherent strategic vision.

The streetcar stop at Portland State University shows how you can design around transit

As stated above, these strategic concepts laid the basis for TOD and have allowed both Portland and Arlington to slowly develop a sophisticated development tool box. In Portland, an added success factor is a critical reflection of their existing development strategies. Local policymakers constantly ask if what they are doing still contributes to the vision they are attempting to achieve and if they can do better. For example, during development of the citys first light rail line, planners overlooked opportunities for development around new stations and made poor choices when choosing station locations. With the second line, planners learned from this mistake and chose an alignment that enables TOD. This also allows the city to engage with local actors as to future development around proposed station areas. Since skepticism over transits value is widespread, an incremental approach is also useful in selling a new concept to the community and to developers. Thus, planners should slowly raise the bar by gradually increasing development densities and slowly experimenting with different land use mixes. With time, planners can increase their ambition as people express a desire to live near transit, as past developments prove their financial worth, and as planners can point to local case studies. As one official stated: Think big in terms of your vision and small in terms of the steps toward this vision. You cannot win all the battles. Get Your Incentives and Investments Right Ultimately, the market must provide TOD. Other actors must therefore influence the market to develop places that are near transit and to provide the density and urban quality that makes communities attractive. TOD is almost entirely about

Regional and statewide frameworks are especially important since they create a level playing field for everyone and prevent competition between different areas of the region to attract development.
providing a coherent set of incentives and investments, and the Portland and Washington, DC metropolitan areas provide other policymakers with several lessons. First, it is important to have both carrots and sticks. Planners should abate development in undesirable areas that have green space or low transit accessibility, while simultaneously stimulating development in more desirable areas. To their benefit, Portland and Arlington have long-standing, coherent strategies for where urban development is not allowed. This sends a clear message to developers. In addition, the fact that Portland has not invested in new highways (though the city has made investments to increase the capacity of its existing highway network) is a clear indication of the citys development priorities. A successful TOD strategy also achieves coherence between transportation and land-use policies between different layers of government. Although the type of incentives and policies are different, statewide tools, regional tools, and local tools in the Portland region are regulatory and all try to achieve favorable conditions for TOD that developers must

Transit-Oriented Development in the United States

Light Rail Station in Hillsboro (Portland Region)

Developers are now usually convinced that TOD is a worthy investment, and this belief is backed by the financial performance of past TOD development.
conform to. Regional and statewide frameworks are especially important since they create a level playing field for everyone and prevent competition between different areas of the region to attract development. The criteria for federal funding for new infrastructure was difficult to apply toward TOD, but Portland successfully used flex federal highway dollars for transit projects based on the idea that land use influences transportation and therefore falls within transportation funding. In another interesting example, the Portland region uses payroll and self-employment taxes to provide operating revenue for regional transit services. This amounts to $7 per $1,000 of earnings that employers pay in tax. Second, in areas where development is desirable, planners must adjust their actions given the market dynamics at play. If the market is very interested in developing an area that favors TOD, planners can ask the market to apply urban design standards and densities that favor transit, or ask them to incorporate affordable housing. In other areas, planners can capture a portion of the value of public investments in infrastructure and urban amenities through tax increment financing.

In areas where the market does not deliver high quality TOD by itself, planners should use financial incentives to stimulate the market to develop in a different way. In Portland, for example, planners often compare the added costs of building a mix-used, highdensity development and the type of development the market would normally build with the added transit ridership revenue the development would generate. If this sum is positive, the regional government Metro invests some of its funds in the development. Simpler incentives include an extra floor subsidy to stimulate higher densities and a 10-year TOD tax exemption. Finally, in areas with good public transport but without market activity, the wisest thing to do as a government is to wait. As a policymaker in Portland stated: You need to have some leverage with developers; do not go against the flow. On the other hand, sophisticated developers have learned that sites adjacent to transit come with more incentives for development than sites that are not near transit. Due to its consistent strategy, Portland has bred its own strand of transit-oriented developers. As a result, developers are now usually convinced that TOD is a worthy investment, and this belief is backed by the financial performance of past TOD development. Place Making Not Money Making As highlighted above, TOD is a means to an end; ultimately people want to live in attractive places. This means that TOD is much more than ensuring that transit stops have high densities it is also about place making. Transit itself is not enough to lure people away from spacious suburban homes and from the ease of automobile-oriented lifestyles. For its part, Portland uses the 5ps pedestrianbike connectivity, people, places, physical form, and transit performance to holistically measure the transit orientation of areas. The 5ps are basic ingredients to describe attractive urban areas in

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recognition that transit orientation is often too narrow a scope to evaluate a space. Thus, TOD is not only about creating transit riders, but also about offering people a place to live that is safe and pleasant to walk and bike around, that has high quality urban design, that has a mixture of different types of people, that offers a variety of local goods and amenities within walking distance, and that offers good connectivity with the rest of the city. Especially in Portland, I was struck by the strong emphasis on urban design. Detailed TOD guidelines include instructions for faade composition and window orientation, and include suggestions on improving the visual impact of parking lots. For European planners, these aspects are obvious, but local planners did not want to leave anything to chance given the poor urban quality of previous developments, and therefore require developers to incorporate even the smallest of details in an effort to create livable and dynamic places. Developers are asked to deliver the whole package (including aspects such as community engagement), and are given financial incentives to do so. While these add-ons can result in higher costs for the

developer, they also result in high quality developments. Planners also recognize that the right mix of density, diversity of activities, and design differs from station to station. Empty retail spaces at small suburban stations suggest that you cannot offer the same mixed-use everywhere. For example, parkand-ride is very important in the Washington, DC area, but the large parking facilities immediately around the transit stops often preclude connections between the station and nearby communities. Planners also put in a lot of effort to make transit stops part of the community. Local art is successfully used at several stations in the Portland region to give each station area a unique identity. The reintroduction of the streetcar in Portland was not entirely about its effectiveness as a transport option, but also about the streetcar as an urban icon and urban place-maker. Further, place-making is not only about physical interventions but also about changing the way people think. While I was in Portland, the city was celebrating the 25th anniversary of the streetcar with music on each tram. This was not a celebration for officials and professionals, but for and by the citizens of Portland.

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In the Netherlands, TOD tends to be something that is advocated by an inner circle of technical professionals, but is rarely discussed within political arenas and with local communities.

Conclusion

have drawn four important lessons from my visit to the Washington and Portland metro regions:

You have to have a shared set of regional values and link these to the need for transit-oriented development. You need a guiding strategic concept to set you on the path of TOD, combined with a pragmatic approach of small steps and learning-by-doing to improve your toolbox to promote TOD and keep local communities on board. You need a coherent set of incentives and investments consisting of both carrots and sticks to create a playing field for private parties to develop TOD in the way you want. You need to develop attractive places with high quality of urban design where people want to live and work.

lands, since some of the funds for infrastructure investments have been decentralized to metropolitan areas. Portland shows the importance of visioning, planning, and investing within a metropolitan area where people undertake most of their daily activities. Collaborating with the real estate market is another activity that Americans are accustomed to. Portland and Arlington show that it is important to send clear signals about the type of development you support (TOD) and the type of development you do not. If you do this, the smart real estate developer will act accordingly and adapt to your vision over time. In the Netherlands, many governments are hesitant to send a clear signal to real estate developers because they fear they will go somewhere else. What struck me most was the spirit and determination with which decision-makers, developers, and planners worked on TOD, and how they are all convinced of the strategys importance. In the Netherlands, TOD tends to be something that is advocated by an inner circle of technical professionals, but is rarely discussed within political arenas and with local communities. Most importantly, planners must link TOD to the assets that people care about, such as preserving green spaces, and must build their partnerships accordingly.

Even with the clear differences between U.S. and European cities, my visit to the Portland and Washington Metro regions has been very inspiring. With a finer mix of activities and morphology that favors biking and transit, European cities seem to have the advantage over U.S. cities to support sustainable mobility. However, Portland and Arlington are quickly catching up and European cities can learn a lot from both places. Metropolitan governments are slowly becoming more important in the Nether-

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