Comparative Domestic Policy Program
Policy Brief
June 7, 2010
Summary: Public transit systems
in Germany are becoming increas-
ingly strapped for funds to support
capital infrastructure investments,
as traditional funding sources are
no longer available. As CDP fellow
Oliver Mietzsch states in this policy
brief, fiscal realities dictate that
Germany begin looking at alterna-
tive methods of financing, especially
public-private partnerships and
land value capture policies that
take advantage of transit oriented
development strategies. The United
States has been at the forefront of
many of these innovative financing
approaches for many years and
could provide valuable lessons for
Germany as it seeks to maintain
existing and build new transit infra-
structure.
Through a first-hand examination
of alternative financing strategies
employed in Seattle, Washington;
Portland, Oregon; the San Francisco
Bay Area and San Diego, California;
Chicago, Illinois; and Denver, Colo-
rado; the author identifies a number
of potential strategies that might be
applicable in the German context
and sets them forth for further
consideration.
1744 R Street NW
Washington, DC 20009
T 1 202 683 2650
F 1 202 265 1662
E info@gmfus.org
Non-Fiscal Instruments of Public Transit Infrastructure
Funding: Engaging Beneficiaries and Private Capital at
the Local Level
Experiences in the United States and Lessons for German Cities
by Oliver Mietzsch1
Introduction
In 2007, for the first time in recorded
history, more than half of the world’s
population lived in cities. Since 80
percent of global energy consumption
now takes place in urban agglomera-
tions, adequate infrastructure be-
comes critical for environmental and
other reasons. The supply of adequate
infrastructure (i.e., water, energy, and
transport) constitutes one of the main
challenges confronting the world today
and in the future. Public transit, which
combines the mobility needs of indi-
viduals, the economy, and society as a
whole with environmentally friendly
modes of transport, such as buses, light
and heavy rail, streetcar, and subway,
is a vital element of urban infrastruc-
ture and a prerequisite for sustainable
urban development. Not surprisingly,
worldwide demand for public transit
continues to grow, which requires in-
creases in public transit infrastructure.
This is even true in Germany, where
demographic trends would seem to
undermine this statement. However,
German demographic developments do
not follow a single path: there are areas
1
Oliver Mietzsch, head of the Transportation Unit within the Department for Urban Planning, Construction, Housing and Transporta-
tion of the German Cities Association (Deutscher Städtetag), served as a Comparative Domestic Policy (CDP) Fellow at the German
Marshall Fund (GMF) from December 2009 until February 2010. A longer version of this report is available for purchase from the
Kölner Stadt- und Verkehrsverlag for a price of €29. The publication is in both English and German with color pictures and can be
ordered by visiting the website www.ksv-verlag.de.
with shrinking populations (e.g.,
Mecklenburg-Vorpommern or the
Ruhr valley) and cities that are growing
(e.g., Munich or the Rhine-Main area).
Furthermore, if Germany is to meet its
obligations under the Kyoto protocol and
the United States is to play a meaningful
role in addressing global climate change,
public transit must be strengthened on a
larger scale in both countries.
Although there are stark differences in the
use of public transit in the United States
and in Germany, both countries face
similar problems with regard to public
transit financing. The total cost of public
transit in almost every case exceeds the
revenues received from ridership. While
100 percent of operating expenses might
be covered by fare-box revenues in some
instances, infrastructure and maintenance
costs clearly outpace the revenues in many
cases. That is the primary reason why pub-
lic transit is largely dependent on public
funding. This disparity is felt particularly
with rail infrastructure, which is generally
calculated on a marginal cost basis.
Public funding primarily derives from tax
income and often is vulnerable to chang-
Comparative Domestic Policy Program
Policy Brief
ing political priorities. The impact of shifting political priorities on
transit can currently be seen in Germany and has also been evident
in the United States, where federal grants were significantly reduced
first by the Reagan administration. Although this is about to change
under the Obama administration due to the overall poor state of
public budgets as a result of the world economic crisis, the prospects
for state funded infrastructure projects are all but promising. Given
the less favorable structural preconditions, municipalities and re-
gions must become much more active in promoting public transit.
It is against this background that non-fiscal means of public transit
funding, i.e., alternative funding instruments, gain importance.
There also exists a more theoretical argument in favor of non-fiscal
public transit infrastructure funding. Aside from the direct positive
effects of having access to good public transit infrastructure for com-
muters and businesses, there are also indirect benefits for the general
public, employers, businesses, and property owners. These actors
take advantage of the public transit supply in terms of cost savings,
increases in sales, better living conditions, and reduced health care
costs, all without paying for them. Therefore, justification exists to
capture at least some of the value of these gains. In addition, one may
argue that like any other public infrastructure such as sewer, water
supply, and roads, access to public transit infrastructure provides an
optional benefit, in that one can choose to use (or not use) public
transit. However, for riders to benefit from public transit requires not
only transit infrastructure but also an operator. The quality of the
service, therefore, depends not only on the state of the infrastructure,
but also on the quality of the operation. If quality of service is insuf-
ficient, for example operating schedules do not match the needs of
commuters or the nearest station is not within walking distance of
housing areas, why would one pay extra for the infrastructure? It is
exactly for this reason that the questions of public transit
infrastructure funding and funding of operating costs of public
transit cannot always be clearly separated, but have to be addressed
collectively.
As a fellow of GMF’s Comparative Domestic Policy Program in
2009/2010, the author took particular interest in case studies 1)
where value capture strategies leveraged Transit Oriented Develop-
ment (TOD) initiatives, and 2) where Public-Private Partnership
(PPP) strategies were utilized. Accordingly, the author made site vis-
its to Victoria, British Columbia; Seattle, Washington State; Portland,
Oregon; the San Francisco Bay area and San Diego in California;
Chicago, Illinois; and Denver, Colorado, in addition to interviews
with transit experts in Washington, DC.
Case Study Summaries
Seattle, Washington
The Seattle Streetcar opened in December of 2007 with half of the
line’s $52 million capital investment paid by property owners, while
the other half came from federal and state grants and funds from
the sale of surplus city properties in South Lake Union district.
Intended as a redevelopment and economic development tool in a
close-in commercial and industrial area adjacent to downtown that
had been targeted for redevelopment, the Seattle Streetcar exceeded
ridership projections from the outset. The 1.3-mile route from the
downtown retail core through the Denny Triangle and South Lake
Union districts to a waterfront park on Lake Union had attracted
significant development activities along its route in the South Lake
Union district by 2008. Microsoft co-founder Paul Allen’s Vulcan
Real Estate company owns 60 acres near the Lake Union shore, and
has built 7,500 housing units and more than two million square feet
of commercial/biotech and mixed-use projects, with another 1.3
million square feet under construction.
The most important aspect of the King County Metropolitan Transit
Agency’s (King County Metro) strategy, which serves
Seattle and surrounding King County, in attracting private
money for public transit, is its partnership approach, which
consists of “carrot” or incentive measures that are backed by pressure
or “stick” measures. The strategy focus is to create partnerships that
increase the use of public transportation and improve the commu-
nity process by involving stakeholders in planning changes to the
public transportation network. The
latter includes coordination of land use and transportation,
development of public-private partnerships, and ensuring
diversity of economic opportunities. King County Metro’s partner-
ship strategy is also a good example of the sometimes overlapping
nature of infrastructure and operating funding in the field of public
transit.
The current economic and fiscal crisis, however, harms the funding
resources for the partnership programs, in which King County Metro
contributes two-thirds and the other partners one-third of the total
costs. The private sector and other municipal partners, with whom
King County Metro is under contract for delivering transit services,
also have been severely impacted. King County Metro cannot turn to
other funding sources such as parking revenues, since it has no legal
control over parking policies, which rest with the individual munici-
palities. King County Metro, therefore, is now seeking state funding in
order to back up lending requirements for offering a new service.
2
Comparative Domestic Policy Program
Policy Brief
Portland, Oregon
In Portland, Oregon, the last streetcar routes, once the trans-
portation lifeblood of the city, ceased operating on February 28,
1950. This action was followed by a total abandonment of the
remaining suburban routes eight years later. A similar experience
took place in most large American cities. However, unlike most
other American cities, Portland decided to reinstate its streetcar
network. In 1995, the city established Streetcar, Inc., a nonprofit
corporation to coordinate and direct new streetcar development.
Construction of new lines began in March 1999, and on July 20,
2001, Portland Streetcar began carrying passengers.
The Portland Streetcar fleet started with Czech-built Skoda cars,
but now operates cars built in the Portland region. The total
construction cost of Portland Streetcar system was $103.15 mil-
lion, of which approximately one-fifth ($21.50 million) had been
contributed by property owners, who had formed a Local Im-
provement District (LID) for this purpose. Local Improvement
Districts, or Business Improvement Districts (BID), are special
tax assessment districts allowed by state law. These districts are
characterized by private property owners funding public im-
provements that create “benefits” to properties within a specified
geographic area. The LID, however, differs from a classic BID, in
that the governing jurisdiction may create the resolution without
any vote of the affected property owners. In the Portland case,
this has not been a problem since the private interests already are
represented in Portland Streetcar Inc.’s Board of Directors.
Another 20 percent of the total cost of the Portland Streetcar sys-
tem was financed by Tax Increment Fund (TIF) revenues from the
city’s urban renewal agency (Portland Development Center). In
contrast to LIDs, state law allows local jurisdictions such as a city
to create urban renewal areas (a form of TIF) in order to capture
the expected increase in property value due to public investment
such as transit infrastructure. Another distinctive feature of TIF
is the timing of the revenue streams. Unlike a LID, where the
financial contribution takes place prior to the capital investment,
TIFs work only after the infrastructure is in place. Bonds can then
be sold to pay for infrastructure investments with the future TIF
proceeds paying off those bonds. In the Portland Streetcar case it
was essential that the LID funding come first. Now that the infra-
structure is in place, TIFs function well.
The private involvement in Portland Streetcar funding has
already borne fruit. It has helped stimulate $3.5 billion in new
development in downtown Portland and revitalize old neighbor-
hoods such as the Pearl District that were previously in decline.
The result is that within a three-block distance from the street-
car lines, real estate investment has surged, increasing density
over 40 percent in just a few years. The subsequent develop-
ment surrounding the streetcar system represents over 5 million
square feet of new construction including 10,000 housing units.
Together with Portland’s light rail and bus systems, the streetcar
has led to a decline in automobile use by six percent since 1990,
thereby reducing approximately 70 million miles of vehicle travel
annually. This compares favorably with the average for American
cities, which grew by 10 percent in the same period.
What makes the Portland Streetcar system so unique in the
United States, apart from linking transportation investments
and development, is its size, which suits the particular needs of
medium-sized cities and downtown areas. Medium sized cities
are usually too small to accommodate higher speed commuter
rail systems, which have fewer stations, but desperately need to
displace car traffic from the city centers. Streetcar systems can be
easily integrated into a city environment because cars are small,
can run in mixed traffic, and are able to share stops with buses.
These positive aspects of streetcar systems, and the fact that they
do not require a separate right-of-way, which often fences off
established neighborhoods, contribute to their overall positive
image with city residents.
Portland Streetcar is also modeling a new kind of downtown
neighborhood for Portland, characterized by an increasing
number of single-family households and households with no
children. In almost all post-industrialized societies the trend
of people moving back to the city center can be observed. This
trend reflects changing lifestyles but also the needs of an aging
population that realizes that at some point in life dependence on
automobiles is no longer feasible.
San Francisco Bay Area
The San Francisco Bay area has probably one of the most de-
veloped and diverse public transit systems in operation in the
United States—with historic cable cars, local shuttles, paratransit
vehicles and buses, express buses, light-rail, rapid-rail and com-
muter rail services, and ferries crisscrossing the bay. However,
as a highly dispersed region in terms of population density as
well as politically diverse, improving transit’s core performance
and financial stability is one of the region’s biggest challenges.
In 2005, the Metropolitan Transportation Commission, which
serves the area in all transit and housing development related
3
Comparative Domestic Policy Program
Policy Brief
matters, together with the Association for Bay Area Governments,
the Bay Area Quality Management District, the Bay Conservation
and Development Commission, commissioned a study on the
future demand for housing and jobs near transit lines.
According to this study the demand for housing and jobs near
public transit hubs and corridors over the next 25 years is ex-
pected to rise significantly. Another 250,000 households seeking
transit-oriented homes, which would be a forty percent increase
over the existing 600,000 households already located within a
half-mile of an existing rail transit or bus stop, are expected. The
study expects an increase in demand of about 800,000 new jobs
near transit nodes, which would constitute more than 40 percent
of all new jobs expected to be created in the region over the next
25 years.
While the description of what the future might hold for transit-
oriented development in the San Francisco Bay area sounds prom-
ising, the reality is somehow less optimistic. According to a White
Paper prepared by Reconnecting America, Center for Transit
Oriented Development on the financial details of TOD in the Bay
area, a number of challenges including 1) financial and regula-
tory barriers to TOD and infill development, including higher
land costs around transit stations; 2) a lack of cohesion between
infrastructure upgrades and population density-related measures;
3) the prevalence of small parcels of land, which must be realigned
in order to reach a critical mass; and 4) the existence of surface
parking spaces that must be converted into structured parking
prior to TOD infill development, still dominate. The White Paper,
therefore, recommends several key actions to enhance TOD and
infill development. Because of the diversity of the San Francisco
Bay area it is difficult to find a one size fits all model.
San Diego, California
San Diego is California’s second largest city and is served by trol-
ley, bus, commuter rail (Coaster), and inter-city rail (Amtrak) ser-
vice. The trolley primarily serves downtown and the surrounding
urban communities of Mission Valley, East County, and coastal
South Bay. A planned Mid-Coast line will operate from Old Town
to University City along Interstate 5. There are also plans for a
Silver line to expand trolley service downtown. The Coaster is a
commuter rail service that connects the North County area to the
metro area. Most riders are commuters who live in North County
and work downtown. Bus service is available along almost all
major routes with a large number of stops concentrated in central
San Diego.
According to its 2030 Regional Transportation Plan, the San Di-
ego Association of Governments (SANDAG) expects to welcome
more than a million new people within the next 25 years, creat-
ing approximately 465,000 more jobs and 290,000 additional
new homes. To meet this future growth, SANDAG envisions a
meritorious plan to strengthen the land use-transportation con-
nection by offering regional transportation funding incentives
to support smarter, more sustainable land uses. Consequently,
the SANDAG board of directors and several interested parties
entered into a settlement agreement that identified additional
studies to be completed in preparation for the 2050 Regional
Transportation Plan. One of the studies was to identify and ana-
lyze obstacles to public transit, including all known and reason-
ably foreseeable impediments to public transit in terms of costs,
ridership, and financial resources with a view toward funding to
support operating expenses. In its report, SANDAG lists all local,
state and federal funding sources available for public transit and
the extent to which they sustain operations.
One of the sources listed in the report was TransNet. TransNet is
the half-cent sales tax for local transportation projects that was
first approved by voters in 1988. Administered by SANDAG, the
program has been instrumental in expanding the region’s trans-
portation system, reducing traffic congestion, and bringing criti-
cal transportation programs to life. During the 60-year life of the
program, more than $17 billion will be generated and distrib-
uted among highway, transit, and local road projects in approxi-
mately equal thirds. 67 percent of the county’s voters approved
a 40-year extension of TransNet in 2004, which is expected to
generate an additional $14 billion for public transit, highway,
and local street and road improvements. However, the estimated
revenues are insufficient to account for inflation over that period
of time, or a drop of sales tax revenues due to instable economic
situations in times of crisis.
These financial cuts cannot be compensated by California’s
Transportation Development Act (TDA), even though the TDA
comprises the largest source of subsidy for the San Diego re-
gion’s transit operators. The TDA provides two funding sources:
the Local Transportation Fund and the State Transit
Assistance fund. The report, therefore, analyzes possible new
funding sources. To begin with, a Quality of Life Funding
initiative is discussed as a potential option to increase available
tax dollars for transit operations. However, since this measure
would be regarded as a new sales tax and not as merely extending
an existing tax (e.g., TransNet), such a step must be carefully consid-
ered, especially in times of economic crisis. Based on current esti-
4
Comparative Domestic Policy Program
Policy Brief
mates, a new quarter- to a half-cent sales tax applied to transit could
provide the region with up to $234 million annually. It is doubtful,
however, that the two-thirds voter approval required in California for
such a step would be achieved.
Chicago, Illinois
The Chicago Transit Authority (CTA) serves 3.9 million in the city of
Chicago including 40 suburbs. Forty one percent of the 1.4 million
households in the region actually use CTA services, which equates to
328 million bus and 198 million train rides per year. CTA operates
150 bus routes and 8 rail lines with a total of 77,701 bus stops and
144 rail stations. The fleet consists of 2,065 buses and 1,190 rail cars;
10,500 are employed by CTA.
CTA’s huge numbers are matched by the financial challenges it faces.
Starting with an estimated $723 million in revenues at the beginning
of 2009, public funding revenues continuously decreased during the
course of the year. As a result, the 2010 operating budget proposal
estimates a 30 percent decrease in public funding revenues compared
to 2008 which would lead to a projected deficit of $300.9 million.
Needless to say, such a tremendous decrease in public funding
cannot be compensated by normal methods. The reason for this
dramatic shortfall of public funding is a shrinking tax revenue base
as a result of the ongoing economic and financial crisis. The main
sources of public revenues for transport in the state of Illinois are
sales taxes, real estate transfer taxes, and formula and discretionary
funds provided by the federal government. The real estate transfer
tax revenue contribution, to mention only one example, was esti-
mated by the state of Illinois at approximately $100 million, but in
fact proved to be only $20 million.
Unsurprisingly, CTA has decided to broaden its revenue base by
working to attract financial contributions from the private sector for
new infrastructure projects as well as maintenance investments. This,
however, is proving to be a considerable challenge given the fact that
capital investment needs are extremely high and CTA must prioritize
any capital investments. Moreover, in transport systems with a long
record of public engagement, as is the case in almost all larger cities
in the eastern United States, a culture of private sector involvement
in transit financing does not exist and is not easy to cultivate. One
also should not underestimate the overall negative image of public
transit as the “blue collar worker’s” favorite mode of transport, which
makes it less attractive to potential private investors.
Despite these challenges, CTA has embarked on a $100 million capi-
tal investment project to renew its fare collection infrastructure. The
project aims at downsizing fare collection costs which have grown
faster than fare revenues. In another attempt to attract private capital,
CTA is planning a joint development program with investors for new
rolling stock to be acquired on a reverse sale-and-leaseback basis.
CTA, as a nonprofit, tax exempt enterprise, will buy rolling stock
and then lease it back to the seller. This allows the private sector to
take advantage of CTA tax exemptions without any financial risk for
CTA. This strategy will only apply to new rolling stock and not to ex-
isting fleets because of opposition from maintenance staff. The joint
development project, therefore, is still in the concept stage. A similar
state of affairs applies to the possible renaming of existing stations in
return for private sponsorship. Apple has already contributed $3.5
million for renovating North Clybourn Station, and De Paul Uni-
versity has offered financial support if a station will be named after
it. Again, given the relatively long history of Chicago’s public transit
system and all of the vested interests and traditions pertaining to it,
such steps have to be considered carefully.
Denver, Colorado
The Denver Regional Transportation District’s (RTD) Fastracks
program is probably one of the most promising examples of PPP in
the United States. RTD’s existing 35-mile rail transit system serves
34 stations on four corridors. The Fastracks program, approved by
district voters in 2004, proposed adding 122 miles of rail service,
18 miles of Bus Rapid Transit (BRT) service, approximately 60 new
stations along six new corridors, and extensions to the three existing
lines by 2017. In order to fund these extensions, the existing sales tax
was increased by four-tenths of a cent in 2004 to raise a total of $4.7
billion. Due to the current economic crisis and its impact on the sales
tax revenue stream, however, only the so-called Eagle P3-Program,
which includes the East Corridor to Denver International Airport,
the Golden Line Corridor to the West, the segment of the Northwest
Rail Corridor between Pecos and 1st/Lowell, and the commuter rail
maintenance facility will be constructed for now.
RTD has released a Request for Proposals for this project for a De-
sign-Build-Finance-Operation-Maintenance (DBFOM) concession
contract, worth $2.2–$2.4 billion. However, without massive support
from a federal grant via the Penta-P program, which is part of the
New Starts Program, the project would never be realized. RTD is
the only remaining transit agency that qualified for participation in
the Penta-P program, which, among other things, allows it to take
advantage of a sped-up approval process.
Apart from speeding up the federal approval process, for the
very first time the Penta P-program allows private capital invest-
5
Comparative Domestic Policy Program
Policy Brief
ment not to be included in the cost efficiency index-threshold for
federal funding. The Penta P contracting period will last 46 years,
with the first six years scheduled for construction and the remain-
ing 40 years for operation of the lines. RTD at all times retains the
ownership and, for this reason, receives all fare-box revenues. It
is even more important, therefore, that the concession contract
explicitly provides for detailed service criteria, since the private
contractor does not assume the ridership risk and hence does not
have an initial interest in increasing ridership by offering good
service. However, according to RTD, the basis upon which the
service criteria are defined should be on performance rather than
on how a certain quality standard is met by the contractor. RTD,
therefore, has laid down four main quality standard metric
indicators according to which the contractor’s performance will be
measured: 1) number of trains; 2) meeting of time schedules;
3) state of the infrastructure, in particular of the stations; and
4) quality of and timely maintenance work.
Another PPP-project currently under way in Denver has taken
the form of a “joint development,” but can also be described
as TOD. In order to create a multimodal transit hub, which
integrates light rail, commuter rail, and intercity rail (Amtrak)
on the site of Denver’s Union Station, RTD has sought a private
sector master developer, who would be willing to pay for the
transit infrastructure by developing the area surrounding it.
Unfortunately, due to the depressed state of the economy, the
city and Denver Regional Council of Governments, the state of
Colorado, and the Denver metro region’s planning agency had
to act quickly in order to pay for the projected private capital
investment required to create a TIF. Since TIF can be utilized
only upon the realization of a project, RTD had to secure federal
funds in order to fund the upfront costs.
Evidence from Denver as well as many other PPP-projects has
shown that the utilization of a PPP is not a matter of funding
but of financing, which means that the involvement of private
capital investment should not be regarded as a “cheap” solu-
tion to funding problems. The private investor expects a certain
return on investment, which might lead to even higher costs
for the public sector over a given contracting period than if the
infrastructure would have been fully paid by the public sector
in the first place. However, this is not the question at stake, since
public budgets are in constant decline. Private sector invest-
ments that support up-front payments are sought after by transit
agencies all over the United States and around the world. To
make private investment in public transit infrastructure a suc-
cess story for both the public and the private sector, the follow-
ing questions have to be answered carefully: Is there really a need
for a particular transportation system? Will there be sufficient
political support for the project and the private involvement?
And, finally, is there a real need for private money?
Conclusions and Lessons for German Cities
Although great financial need to support daily public transit
services exists, the financial challenges to keep public transit
infrastructure in a good state of repair are even greater. These
challenges result from the economic reality of public transit
infrastructure, which is characterized by high financial entrance
barriers, scarce space provision (especially in urban areas), and a
highly regulated administrative environment. As a consequence,
public transit infrastructure is often confronted with either
ignorance (i.e., as something which has to be there or was always
there), or even hostility, especially when it comes to enlarging or
renovating existing infrastructure. This makes it difficult to at-
tract the attention of potential investors. Without private invest-
ment in public transit infrastructure (or a renewed commitment
to direct tax revenues), however, the existing infrastructure often
cannot be maintained in a state of good repair, and network
extensions necessary to provide more riders with good public
transit are even less likely.
Due to the depressed state of the global economy, transit opera-
tors should not anticipate any more funding from government
sources than those sources already in place for public transit
infrastructure, at least for the foreseeable future. Although this
same argument is also valid to a certain extent for private invest-
ment, there are still financial reservoirs that could and should
be exploited in the interests of both the public and the private
sectors. Moreover, there are good reasons for doing so, even from
a merely private investor’s perspective.
Seattle and Portland and, to a lesser extent, the San Francisco
Bay area and San Diego provide good examples of value capture
strategies to finance public transit systems through the active
promotion of Transit Oriented Development, including how it
works and its limitations. For example, Portland Streetcar Inc.
utilizes TOD strategies to create substantial financial investment
to support public transit infrastructure. Voluntary contributions
by land owners in Portland, who benefit financially from good
public transit access, also have funneled significant capital back
into the system.
6
Comparative Domestic Policy Program
Policy Brief
In communities where neither the business community nor
the general public grasps the importance of public transit for
improving the urban environment (including the economic
competitiveness of a city), “carrot and stick” measures are em-
ployed. A typical “carrot measure” might be tax reductions for
employers in order to persuade them to take some responsibility
for the traffic impact of their business’s activities. This would ap-
ply to commercial activities but also to the traffic behavior of the
workforce. In contrast, “stick measures,” such as legal require-
ments for improving environmental standards, can be imposed
on developers in order to make them more aware of the need of
fostering public transit.
With PPP, the situation proved even more complex. To begin
with, the demand for private capital investment in transit infra-
structure is highest in older systems. However, as demonstrated
in Chicago and is likely the case with most older public transit
systems, the general public and business community usually are
not aware of shortfalls in public transit funding, because the
systems have been in place and working for such a long time.
This reality makes it difficult to attract private capital for transit
infrastructure investment.
From a German perspective, the importance of the examples
studied has nothing to do with the magnitude of private com-
mitment to transit infrastructure funding, which is, for Ameri-
can standards, rather modest, but instead with the fact that the
private sector could and should play a role. To attract more
private capital investment for transit infrastructure in Germany,
is not a merely an interesting idea, but has become a matter of
necessity.
About CDP
At the turn of the 21st century, metropolitan regions are home to
nearly three quarters of the population of the United States and
Europe and are projected to continue growing. The major economic,
environmental and social transformations shaping these nations over
the next century, as well as the severe economic crisis facing them
today, will necessarily play out in urban contexts. Thus, the
metropolitan built environment, its impact on the natural
environment, and the resources available to citizens will be crucial
for successfully meeting the complex challenges facing the
transatlantic community.
While cities in the United States and Europe face similar policy
challenges in related post-industrial contexts, individual
communities that attempt to implement creative strategies have
limited opportunities to learn from one another’s experiences.
Recognizing the necessity for communities to collaborate in crafting
approaches to local problems that have global implications, GMF’s
Comparative Domestic Policy (CDP) Program provides a framework
for dialogue between individuals who make, influence, and
implement urban and regional policy on both sides of the Atlantic.
At the core of the CDP program is the Transatlantic Cities Network,
a durable structure for ongoing exchange among a select group of
civic leaders representing 25 cities in the United States and Europe.
The CDP program is made possible by the support of the Compagnia
di San Paolo and Bank of America.
About GMF
The German Marshall Fund of the United States (GMF) is a non-par-
tisan American public policy and grantmaking institution dedicated
to promoting better understanding and cooperation between North
America and Europe on transatlantic and global issues. 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 sup-
ports a number of initiatives to strengthen democracies. Founded in
1972 through a gift from Germany as a permanent memorial to Mar-
shall Plan assistance, GMF maintains a strong presence on both sides of
the Atlantic. In addition to its headquarters in Washington, DC, GMF
has seven offices in Europe: Berlin, Bratislava, Paris, Brussels, Belgrade,
Ankara, and Bucharest.