De-risking transport-oriented development regeneration

Abstract

Many global cities are poorly configured to cope with population shifts, climate change and peak oil. Transport-oriented development (TOD) could help reconfigure cities towards sustainability. TOD projects have dual logistical and place-enhancement functions however, and this ambiguity carries over to form and extent. The allocation, coordination and construction of multiple projects to revamp, connect and beautify can be contentious, complex and expensive. Planning regimes are usually conservative, and have competing objectives and dislocated organisational architectures. The consequence is often high-risk. The resolution to functional, financial and institutional TOD dispute is de-risking in two modes. In Mode 1, developers and government agencies remain separate but collaborate on an ad hoc basis, contaminated by uplift advocacy. In Mode 2, a Special Purpose Vehicle is formally constituted and risks are distributed more transparently. Given transport and financial constraints in many regional cities, Mode 2, or a public-private TOD partnership (PPP), is appealing but not without danger. PPPs are prone to agency problems while, empirically, their cost-effectiveness track record is mixed. Whatever the mode, coherent spatial development requires cooperation for efficient use of resources.