The Economic Benefits of Vehicle Miles Traveled (VMT ...€¦ · not limited to complete streets, pedestrianized streets or malls, highway caps, bike lanes and bicycle sharing. (2)

TheEconomicBenefitsofVehicleMilesTraveled(VMT)-ReducingPlacemaking:SynthesizingaNewView

November2017

AWhitePaperfromtheNationalCenterforSustainableTransportation

MarlonG.Boarnet,UniversityofSouthernCalifornia

EygenyBurinskiy,UniversityofSouthernCalifornia

LaurenDeadrick,UniversityofSouthernCalifornia

DanielleGuillen,UniversityofSouthernCalifornia

NicholasRyu,UniversityofSouthernCalifornia

AbouttheNationalCenterforSustainableTransportationTheNationalCenterforSustainableTransportationisaconsortiumofleadinguniversitiescommittedtoadvancinganenvironmentallysustainabletransportationsystemthroughcutting-edgeresearch,directpolicyengagement,andeducationofourfutureleaders.Consortiummembersinclude:UniversityofCalifornia,Davis;UniversityofCalifornia,Riverside;UniversityofSouthernCalifornia;CaliforniaStateUniversity,LongBeach;GeorgiaInstituteofTechnology;andUniversityofVermont.Moreinformationcanbefoundat:ncst.ucdavis.edu.DisclaimerThecontentsofthisreportreflecttheviewsoftheauthors,whoareresponsibleforthefactsandtheaccuracyoftheinformationpresentedherein.ThisdocumentisdisseminatedunderthesponsorshipoftheUnitedStatesDepartmentofTransportation’sUniversityTransportationCentersprogram,intheinterestofinformationexchange.TheU.S.GovernmentandtheStateofCaliforniaassumesnoliabilityforthecontentsorusethereof.NordoesthecontentnecessarilyreflecttheofficialviewsorpoliciesoftheU.S.GovernmentandtheStateofCalifornia.Thisreportdoesnotconstituteastandard,specification,orregulation.AcknowledgmentsThisstudywasfundedbyagrantfromtheNationalCenterforSustainableTransportation(NCST),supportedbyUSDOTandCaltransthroughtheUniversityTransportationCentersprogram.TheauthorswouldliketothanktheNCST,USDOT,andCaltransfortheirsupportofuniversity-basedresearchintransportation,andespeciallyforthefundingprovidedinsupportofthisproject.TheauthorswouldalsoliketothankBruceGriesenbeckoftheSacramentoAreaCouncilofGovernments,JeanieWard-WalleroftheCaliforniaBicycleCoalition,MaggieWittoftheCaliforniaAirResourcesBoard,andSuzanneHagueoftheCaliforniaStrategicGrowthCouncilforprovidingreviewcommentsandfeedbackonpreliminaryversionsofthiswhitepaper.


ANationalCenterforSustainableTransportationResearchReport

November2017

MarlonG.Boarnet,USCSolPriceSchoolofPublicPolicy,UniversityofSouthernCalifornia

EygenyBurinskiy,USCSolPriceSchoolofPublicPolicy,UniversityofSouthernCalifornia

LaurenDeadrick,USCSolPriceSchoolofPublicPolicy,UniversityofSouthernCalifornia

DanielleGuillen,USCSolPriceSchoolofPublicPolicy,UniversityofSouthernCalifornia

NicholasRyu,USCSolPriceSchoolofPublicPolicy,UniversityofSouthernCalifornia

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TABLEOFCONTENTSEXECUTIVESUMMARY...................................................................................................................iiIntroduction...................................................................................................................................1II.WhyStudytheEconomicBenefitsofPlacemaking?..................................................................2III.HowMightVMTReductionContributetoNeighborhoodVitalityandNeighborhoodEconomies?....................................................................................................................................3

A.TheOldView:TransportationandEconomicDevelopment.................................................3

B.ANewView:VMT,Placemaking,andtheValueofPlace.....................................................6

IV.PlacemakingandAgglomerationBenefits................................................................................8V.ResidentBenefits.....................................................................................................................11VI.BusinessBenefits....................................................................................................................20VII.Discussion:SynthesizingaSystemsViewoftheEconomicBenefitsofTransportation........27References....................................................................................................................................31

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EXECUTIVESUMMARYThispaperanalyzesevidenceontheeconomicbenefitsofplacemakingeffortsthatprioritizepedestrianandnon-motorizedaccessandthat,attimes,reducevehiclemilestraveled.Thepreviousliteratureontheeconomicimpactsoftransportationhasfocusedontheorizingandgatheringevidenceonwaysthattransportationinfrastructuregenerateseconomicbenefitsatlargegeographicscales–oftenstatesornations.Thatliteratureoverlooksmanyoftoday’stransportationprojectswhichareatthescaleofaneighborhoodandwhichtypicallyincludenon-motorizedtransportation.Wesummarizeevidenceonhowthosemorelocallyorientedplacemakingeffortsareassociatedwithbenefitsthataccruetoresidentsandfirms.Thereisahighdegreeofevidencethatthereareeconomicbenefits,oncommercialpropertyvalues,residentialpropertyvalues,businesssentiment,andproductivity,fromdensitythataresummarizedastheyrelatetoneighborhoodorientedplacemakingtransportationpolicies.Weconcludebysuggestingasystemsviewofmetropolitantransportationthathasahierarchyofnetworks,fromhigh-throughputmetropolitanarteriestolocal,multi-modal,neighborhoodplanningwithconnectionsbetweenthedifferentlevelsofthesystem.

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IntroductionCaliforniacities,andregionsacrosstheworld,areembarkingonaseaofchangeintransportationpolicy.Movementstolimittheautomobile,reducedriving,andsupporttransitandnon-motorizedtravelarenowpopularworldwide.Thischangeismotivatedinpartbyenvironmentalregulations.California,forexample,encourageslocalgovernmentstoreducevehiclemilestraveled(VMT)tocomplywithstateregulationsforgreenhousegas(GHG)emissionreduction.ButthetrendtowardlowerVMT,andpoliciesthatareaimedatreducingVMT,goesdeeperthancompliancewithenvironmentalregulations.VMT-reducingplanning–programsthatincludecompletestreets,pedestrianneighborhoods,bicycleinfrastructure,ortransit–ispartofamovementtoreconnecttransportationtoplaceandplacemaking,andtoviewtransportationnotsimplyasamobilitytoolbutasanintegralpartofthebuiltenvironmentinourcommunities.

TheProjectforPublicSpacesdefinesplacemakingas…“thecollaborative,community-basedprocessbywhichwecanshapeourpublicrealminordertomaximizesharedvalue.Morethanjustpromotingbetterurbandesign,Placemakingfacilitatescreativepatternsofuse,payingparticularattentiontothephysical,cultural,andsocialidentitiesthatdefineaplace

andsupportitsongoingevolution.”(ProjectforPublicSpaces,2009)

Inthispaper,weexaminehowVMT-reducingplacemakingcanhelpboostlocal(i.e.neighborhood)economies.Thisisanewquestionintwoways.First,thelinkbetweeneconomicdevelopmentandtransportationhasbeenlargelyalinkfromincreasedmobility–attimesfromincreasedVMT–toeconomicgrowth.Second,theacademicliteratureoneconomicbenefitsandtransportationhasbeenregionalandnational,andrarelyneighborhoodfocused.ChangingthefocustotheeconomicroleoflessVMTandshiftingthegeographyfromthemetropolitanareatotheneighborhoodarebothchallengingshifts.Theincreasingpolicyimportanceofmulti-modaltransportation,oftenwithanexplicitgoaltoreduceVMT,requiresabetterunderstandingofhowVMT-reducingplacemakingis,orcouldbe,linkedtoneighborhoodeconomicbenefits.Thispaperaddressesthatgapforpolicymakersandresearchers.Thispaperproceedsinthefollowingsections.InSectionII,wediscussthemotivationforanewviewofVMT-reducingplacemakingandthelinktolocaleconomicbenefits.SectionIIIarticulatesboththeold(ortraditional)viewofhowtransportationinfluenceseconomicdevelopment,andanewviewthatweargueshouldbesynthesized.Thetwoviews,wenote,arenotmutuallyexclusive,butratherfocusondifferentproblemsatdifferentgeographicscales.SectionsIVthroughVIarticulatedifferentcategoriesofbenefitsfromplansthatreduceVMTinneighborhoods.SectionIVsummarizesevidenceonagglomerationbenefits(i.e.increasesinbusinessproductivity),SectionVdiscussesresidentbenefitsthataccruefromVMT-reducingplacemaking,andSectionVIsummarizesbusinessbenefits.WeclosewithconclusionsinSectionVII.

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II.WhyStudytheEconomicBenefitsofPlacemaking?Californiahasapolicyinterestinencouragingalternativestoautomobiletravel.SenateBill(SB)375(TheSustainableCommunitiesandClimateProtectionActof2008)requiresthatmetropolitanplanningorganizations(MPO’s)meetGHGreductiontargetsforthegroundtransportationsector.SB375doesnotrequireVMTreductionperse(thetargetisGHGemissions),butSB375hasaccelerateddiscussionabouttheco-benefitsofpoliciesthatreduceGHGemissions,andthoseco-benefitsareoftenrelatedtoquality-of-lifeattributesassociatedwithreduceddriving.1Additionally,inresponsetoSB743(2013),theCaliforniaGovernor’sOfficeofPlanningandResearchhasproposedshiftingthecriteriafortransportationimpactsforCaliforniaEnvironmentalQualityAct(CEQA)reviewfromlevel-of-service–acongestioncriterion–toVMT,whichwillfavorprojectsthatreducecurrentlevelsorfuturegrowthofVMT.Atthesub-statelevel,citiesandmunicipalitiesareincreasinglypursuingpoliciesthatareconsistentwithVMTreduction.LosAngelesMayorEricGarcetti’sGreatStreetsprogramhasbeenasignatureofhisadministration.2Completestreets–streetsthataccommodatepedestriansandbicyclists,thatareenvironmentallysustainable,andthatintegratethestreetspaceandassociatedsidewalksintopubliclife–havebeenapriorityinmanyCaliforniacommunitiesforsomeyears.3Trafficcalmingisincreasinglypopularandisrelatedtocompletestreetsandpedestrianization.AllofthesereflectapolicycontextthathasshiftedfromviewingstreetsandhighwayssolelyasmobilityinfrastructuretoviewingthoseroadwaysaspublicspaceandhencevaluingpoliciesthatfavorlowerlevelsofVMT.Forpurposesofthispaper,wedefineVMT-reducingplacemakingaseffortsthathavetwobroadcharacteristics.

(1) VMT-reducingplacemakingprojectslinktransportationinfrastructuretoplace,suchthatthetransportationprojectbecomesaneighborhoodamenity.Examplesincludebutarenotlimitedtocompletestreets,pedestrianizedstreetsormalls,highwaycaps,bikelanesandbicyclesharing.

(2) VMT-reducingplacemakingprojectshavetheeffectofreducingVMT,eitherthroughpurposefulefforts(e.g.trafficcalming)orthroughaconcomitantoftheproject(e.g.infrastructurethatsupportsbicycleorwalkingtravel.)

Wefocusonneighborhoodscalegeographies,becausethatisthescaleformanyVMT-reducingorsimilarplacemakingprojects,andbecausesmallercommunities(orsmalllocaleswithin

1Seethesetof25policybriefsdevelopedfortheCaliforniaAirResourcesBoard.Eachbriefincludesasectiononco-benefits.Here:https://arb.ca.gov/cc/sb375/policies/policies.htm.2SeeLAGreatStreetsInitiativewebsiteformoreinformationonthisprogram,here:http://lagreatstreets.org/.3See,e.g.,theproceedingsofa2011UCLAconference,availablehere:http://www.lewis.ucla.edu/wp-content/uploads/sites/2/2015/02/2011-Complete-Streets-for-Los-Angeles.pdf.

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largercities)haveoftenbeenmostconcernedaboutwhetherandhowVMT-reducingplacemakingwillaffecttheirlocaleconomy.OurresearchaimstoinformotherresearchersandlocalpolicymakersontheeffectsofneighborhoodscaleVMT-reducingplacemaking.III.HowMightVMTReductionContributetoNeighborhoodVitalityandNeighborhoodEconomies?TheideathatVMTreductioncanhaveeconomicbenefitsmightseemoddatfirst–particularlysoafterdecadesofpracticeandscholarshipthatfocusedonwaysthatmobility(andhenceattimesincreasedVMT)isassociatedwitheconomicgrowth.Inthissub-section,wediscusstwothings.First,wewilldiscussthetraditionalliteratureontransportationandeconomicdevelopment,toprovidebothabenchmarkandlessons,andthentheoreticalperspectivesonwhyandhowVMT-reducingplacemakingcanhavepositivelocal(neighborhood)economicoutcomes.A.TheOldView:TransportationandEconomicDevelopment

Thelinkbetweentransportationandeconomicgrowthbegan,intuitivelyenough,withtheideathatbettertransportationimproveseconomicdevelopment.Increasingmarketaccess,bybuildingtransportationinfrastructure,improvestradeandincreaseseconomicgrowth.Thatisparticularlytruefortheearlystagesofinfrastructureconstructionwhichcanhavelargeimpactsonthegeographicscopeofmarkets.Donaldson(2010)andDonaldsonandHornbeck(2016)foundthatearlyrailwayconstructioninboththeU.S.andIndiainthe1800sledtoeconomicgrowth.Thoseearlyrailroadsconnectedmarkettownsandfar-flunglocationsthat,often,werenotpreviouslyreadilyorreliablyconnectedtothelargermarket.TheconstructionoftheInterstateHighwaysysteminthe1950sand1960sprovidedanotheropportunitytoexaminethelinkbetweenlarge-scaletransportationinfrastructureinvestmentandeconomicgrowth.NadiriandManuneas(1996,p.110)examinedhowhighwaycapitalisrelatedtototalfactorproductivity(TFP)for35industriesintheU.S.Theyfoundthatfrom1964through1972,25percentofTFPgrowthinthoseindustrieswasassociatedwithincreasesinthestockofhighways,butthatinlateryears,whentheInterstateHighwaynetworkwaslargelycomplete,theeffectwassmaller.From1973through1979,highwaycapitalaccountedfortwopercentofTFPgrowthintheindustriesstudiedbyNadiriandManuneas(1996).Liketherailroadsbeforethem,theconstructionofanew,nationaltransportationnetworkwasassociatedwitheconomicgrowth(inthiscasemeasuredbygrowthinproductivity.)Buttheeffectofadditionalchangestothetransportationnetworkissmallerwhenthenetworkismature.MohringandHarwitz(1962)examinedtheimpactoftheearlyInterstateHighwaysystemanddevelopedacritiquewhichstillappliestoday.Insomecases,improvementsintransportationinfrastructureshifteconomicactivityfromonelocationtoanother.Distinguishingbetween

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aggregategrowthandshiftsinactivityacrossthelandscapeisanimportantissue.Agoodpieceofintuition,whichisconsistentwiththeoryandevidence,isthatlargeinvestmentsinnewnationalinfrastructure(railwaysinthe1800s,highwaysinthemid-1900s),byconnectinglargenumbersofpreviouslypoorlylinkedmarkets,cangenerateaggregateeconomicgrowth.Oncethenetworkmatures,theeconomicimpactoftransportationinvestmentismorelikelytoshifteconomicactivityfromonelocationtoanother,asbusinessesmovetotakeadvantageofthenewpatternoftransportationaccessibility.Thishasledtothedoublecountingcritique,firstformalizedbyMohring(1961)inadifferentcontext(landprices).Appliedtoeconomicgrowth,thedoublecountingcritiquecautionsustobecarefultodistinguishbetweentwocases:(1)whentransformativenewnetworksconnectpreviouslyunconnectedplaces,andhenceleadtoneweconomicgrowth,and(2)whenmoremarginalchangesintransportationinfrastructureadvantagesomelocations,shiftingeconomicactivityfromonelocationtoanother.Thedoublecountingcritiquehasbeenamainstayofacademicthinkingontransportationandeconomics.Thecritiqueimpliesthatnewjobsnearhighwaysorrailstationsoughtnotbecountedaseconomicimpacts,becausethosejobsmovedfromsomewhereelse,andhencearecountervailedbyjoblosseselsewhere.Thiscritiquehasledmany,includingthispaper’sfirstauthor(Boarnet,1997),tobeskepticaloftherolethathighwaybuilding,orbyextension,anyimprovementintransportationaccessinamaturesysteminadevelopedeconomy,canhaveonaggregateeconomicgrowth.Yetthereisonemorenuance,andapotentiallyimportantone.Knowledge-basedeconomies,relyingonaccesswithinmetropolitanareas,benefitfromsmoothtransportation.Hymel(2007)foundthattrafficcongestionisassociatedwithlowerratesofemploymentgrowthinasampleofU.S.metropolitanareas.Thedampeningeffectofcongestiononemploymentgrowthislargerathigherlevelsofcongestion(Hymel,2007,p.134).Startingfromalesscongestednetwork,inSanDiego,a10%reductionintraveltimegivesa2.48%increaseinemploymentgrowth.InthemorecongestedLosAngeles-OrangeCountynetworka10%reductionintraveltimegivesa4.6%increaseinemploymentgrowth.Thisresulthasbeenreproducedbycomputablegeneralequilibrium(CGE)modelsthatexaminehowtransportationinvestmentisrelatedtoeconomicgrowthwithinametropolitanarea.TheSouthernCaliforniaAssociationofGovernments(SCAG)isthemetropolitanplanningorganizationforthegreaterLosAngelesregion,asix-countyareathatishometoover18millionpersons.Beginninginthe2012RegionalTransportationPlan,andcontinuingwiththe2016plan,SCAGhasmodeledhowtransportationspendinginthegreaterLosAngelesregionwillincreaseemployment.Theresultsshowthatthe2016RegionalTransportationPlan,aprogramofover$500billionintransportationinvestmentsover25years,cancreateanaverageof539,000annualjobsfrom2016-2040,ofwhich188,000jobsineachyearwillbefromtheconstruction,operation,ormaintenanceoftransportationprojects.Theother351,000annualjobsflowfromincreasedeconomiccompetitiveness(SCAG,2016).4Thisissimilartothemarket

4“Annualjobs”intheSCAG(2016)analysisisjobyears.Onejobforadurationofoneyearisone“annualjob.”

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arearesultsofDonaldson(2010)andDonaldsonandHornbeck(2016),butitreflectsadvantageswithinthemetropolitanareathatlikelygobeyondsimpleone-for-oneshiftsineconomicactivityfromonelocationtoanother.Thisresultappliesattheregional(metropolitanorcounty)level(theunitofanalysisinHymel’sstudyandsimilarresearch)notattheneighborhoodlevel.Theresearchresultssuggestthatimprovedregionaltransportationaccess,ofthesortthatwouldflowfromcongestionpricingorimprovedaccesstojobs,isassociatedwithregionaleconomicgrowth,whileattheneighborhoodlevelknowledge-basedindustriesbenefitfromdensityandhenceoftencongestion.Theresearchliteraturedoesnotgiveevidencethatneighborhoodcongestionisafactorinlocaleconomicgrowth,buttheliterature(summarizedbelow)doessupporttheideathatVMTreductioncanboostneighborhoodeconomicgrowth.Summarizing,thefollowingresultsareimportant:1. Mostresearchhasfocusedonhowmoretransportation,oftenmeasuredasmore

infrastructure,relatestoeconomicgrowth.Theresultsaretwofold:(a)Newnetworks,oftenbuilttorespondtonewtransportationtechnologies,canconnectfar-flungmarkets,increasingmarketaccess,trade,andhenceeconomicgrowth.(b)Aftertheinitialnetworkconstruction,marginalchanges(forexample,addingalinktothenetworkorexpandingcapacitybyaddingalane)oftenhavenooratbestlittlerelationshiptoeconomicgrowth.

2. Recentevidence(e.g.Hymel,2007,SCAG,2016)haslinkedcongestionreductiontoeconomicgrowth.Congestionreduction,however,isnotthesameassimplyinvestinginmoretransportationinfrastructure.Inlarge,congested,metropolitanareas,evidenceindicatesthataddingmorehighwaylanemilesinducesmoredriving(DurantonandTurner,2011).Managingthesystem,includingpricingcongestion,willbeimportantfortherelationshipbetweentransportationaccessandeconomicgrowth,particularlysoinmaturenetworksandsystems.

3. Thepracticecommunityshouldbewareofdoublecounting.Intheearlystagesofnetworkconstruction,theeconomicbenefitsfromincreasedconnectivitylikelyextendbroadlyandhenceeconomicgainsarelikelytogobeyondsimplymovingactivityfromonelocationtoanother.Butasthenetworkmatures,continuedimprovementsintransportationaccessmostoftenshifteconomicactivityfromonelocation(withrelativelypooraccess)toanother,moreaccessible,location.Seeinganewofficeparkdevelopnearanintersectionoftwohighways,orinatransit-orienteddevelopment(TOD),doesnotimplythatallthosejobsarenew.MuchofthateconomicactivitymighthavelocatedelsewhereabsentthenewfreewaysorTOD.

4. Doublecountingappliesmostclearlytocaseswheretheeconomyisconstantreturnstoscale–insimpleterms,caseswheredoublingeconomicinputsleadstotwiceasmucheconomicoutput.Knowledgeeconomiesrelyonlearningthatisfacilitatedbyinteraction,

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andisperformedbyworkerswhovalueamenities.Sucheconomiesmaybecharacterizedbyincreasingreturnstoscaleif,asisoftenthecase,firmsbecomemoreproductivewhentheyandtheiremployeesinteractwitheachother.Thisisthekeytowhycongestionreductioninheavilycongestedlocationsisassociatedwithmoreemploymentgrowth.

Whatdoesthisallmean?Weshoulddrawtwodistinctions–betweenmetropolitanandneighborhoodgeographies,andbetweenefficiencyofmovement(access)andsimplybuildingmoreinfrastructure.Theevidencesuggeststhatimprovingconnectionsacrossametropolitanareacanincreaseeconomicactivity(e.g.Hymel,2007;SCAG,2016).Thisisnotaformulaforsimplybuildingmoreinfrastructure,butacalltobuildinfrastructurewisely.Theevidencesuggeststhateaseofmovementacrossametropolitanareacanbeimportant,andindensecities,suchmovementisusuallymulti-modal,requiringinpartthehigherpassengerthroughputthatrailtransit(particularlyheavyrail)canprovide.Atthesametime,foottrafficandinvitingstreetscapesareimportantforneighborhoods,andarelikelyincreasinglyvaluedbyresidentsandbusinessvisitorsalike.Allofthissuggestsaplaceforanewviewoftransportationandeconomicdevelopment,whichhasaroleforplacemakingthatcan,attimes,belinkedtoreductionsinVMTratherthanincreasesindriving.B.ANewView:VMT,Placemaking,andtheValueofPlace

Theideathatplaceisvaluableisnotnewinplanning.Itisatthecoreofthefield.Butitisarguablynewtotransportationplanning–atleastnewinthewaywearecurrentlyaskingthequestionandinthepolicydebatesthatthequestioninforms.Thepurposeofthiswhitepaperistosummarizetheevidenceinwaysthatcaninformpolicy.TherearethreewaysthatVMT-reducingplacemakingcanenhancethevalueofandtheeconomyinaneighborhood:(1)amenitiesassociatedwithplacemakingaspectsoftransportationpoliciesorprojects,(2)increasedresidentialpropertyvalueswhichreflectimprovedresidentqualityoflife,and(3)increasedbusinessactivityoreconomicbenefitsthatflowfromtheVMTreduction.Eachisdescribedbelow.1.PublicorExternalBenefits

VMTreductioncanhavemanypositiveeffects.LowerVMT,orthereducedcartravelspeedsthatareoftenassociatedwithlowerVMT,canleadtoloweraccidentrates,increasedphysicalactivity(frompedestrianandbicycleprogramsandprojects),improvedairquality,andamenitiesthatrangefrominvitingstreetscapestosidewalkcafestowalkingneighborhoodsthatmaybedesiredbylocalresidentsandshoppers.Someoftheseeffectsarereductionsinwhateconomistswouldcallnegativeexternalities.Anegativeexternalityisacosttopersonswhodidnotbuyagoodbutwhoareaffectedbyotherswhopurchase(orsell)thegood.Emissionsfromcarsarenegativeexternalities,becausepersonswhodidnotdrivebreaththeemissionsgeneratedbytripsfromotherdrivers.Followingthatlogicinreverse,improvementsinlocalairqualityfromreduceddrivingareexternalbenefits.Increasedphysicalactivity,totheextentthatphysicalactivityproducesorreflectssocietalbenefitsthatarenotfullycapturedby

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theindividual(e.g.reducedsocietalhealthcarecosts)canbeexternalbenefits.Accidentreduction,particularlywhenindividualscannotperfectlyinsureagainstthefulleffectoftrafficaccidents,canbeexternalbenefits.Thereisalargeliteratureoneachofthesetopics,andforthatreasonthispaperwillnotgointodepthoneacheffect.ThesesummariescoverthelinkbetweenVMTreductionandneighborhoodamenities:Fordrivingspeedandaccidents,seeAartsandSchagen(2006);forVMTreductionandphysicalactivity,seeFranketal.(2007)andSallisetal.(2004);fordrivingandairquality,seeZhangandBatterman(2013).Allofthesethingsareneighborhoodamenities.Assuch,thebenefitswillbedispersedthroughouttheneighborhood–nosingleprivateactorcanbeexpectedtocapturethefullvalue.Havingsaidthat,acommonwaytomeasureamenitiesistolookforhowthoseamenitiesarereflectedinlandvalues.Iftheseimpacts–loweraccidents,improvedairquality,invitingstreetscapes,andaneighborhoodthatisvisuallyattractive–arevaluedbyresidents,thatvalueshouldbereflectedinhigherlandpricesandhence,holdingallelseequal,higherhomeprices.Thisisatime-honoredconcept–placeswithhigheramenitieshavehigherhomevalues.ThetheorybehindthisdatestothepioneeringurbaneconomicsworkofAlonso(1960),Muth(1968)andMills(1972),andlargeliteratureshavedemonstratedthatplacebasedamenitiesarereflectedinlandvaluesandhomevalues.Forareviewoftheliteratureonhousepricesandtransit-orienteddevelopments,seeBartholomewandEwing(2011).2.ResidentBenefits

Residentsvaluelivinginneighborhoodswithmoredesirableamenities.Thatvalueshouldbereflectedinhigherlandpricesandhencehigherhousevalues.Henceacommonwaytomeasureresidentbenefitsistomeasureincreasesinhomeprices.Thosehomepriceswillmeasuretheoverallpackageofamenitybenefits–thecombinationof,forexample,slowervehiclemovement,pedestrianization,businessactivity,andinvitingstreetscapes,inadditiontoschoolquality,accesstojobs,andahostofotherfactors.Somestudiesdisentangletheeffectofindividualamenitiesonhomeprices,whileotherstudiesexaminetheeffectofapackageofamenitiesbymeasuringthehousepricepremiumassociatedwithaneighborhoodorspecifickindofneighborhoodwithoutseparatingtheeffectoftheseveralamenitiesintheneighborhood.3.Businessbenefits

Non-motorizedandpublictransportation,pedestrianization,andtrafficcalmingmeasurescanincreaseretailbusinessbenefitsbydoingthreedifferentthings.First,increasedpedestrianactivityandaccessibilityforcustomerscanleadtomoreopportunitiesforwalk-byorpass-bycustomervisitstoretailbusinesses.Thatincreaseinretailsalescanleadtoanincreaseincommercialpropertyvalues.Lastly,walkablebusinessdistrictswithlinkstohigh-throughputtransitcanincreasepedestrianactivityandtransportationaccessinwaysthatmightleadtomorebusinessinteractionsandhencehigherbusinessproductivity.

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Wesummarizetheliteratureoneachimpactinturn.Wefirstdiscusswaysthatneighborhood-scaleplacemakingcanleadtohigherbusinessproductivity,thenwesummarizestudiesthatmeasureresidentbenefits,followedbystudiesofretailsalesandbusinesspropertyvalues.IV.PlacemakingandAgglomerationBenefitsThereisconsensusinboththetheoreticalandempiricaleconomicliteraturethatincreasedurbandensityisbeneficialforlocaleconomicgrowth.Thephenomenoniscalled“agglomerationeconomies”andreferstothefindingthatfirmsaremoreproductive,onaverage,whentheylocatenearotherfirms.SeveralstudiesonagglomerationeconomiesaresummarizedinTable1.Agglomerationbenefitsdeclinesharplywithdistance.Forsomeindustries,mostoftheproductivitybenefitsfromlocatingnearotherfirmsaccruewithin1-5miles(RosenthalandStrange,2003).Inotherwords,firmsaretypicallymoreproductivewhentheylocatenearotherfirmsinthesameindustry,butthateffectoperatesoversmalldistances,assmallas1to5miles(RosenthalandStrange,2003).Anolderstudythatmeasuredtheeffectoftrainstationsonemploymentcentersfindsthatthepositiveinfluenceofstationsonemploymentdeclinessharply,droppingatarateof20-25%permile(McMillenandMcDonald,1998).Ingeneral,thereisevidencethatagglomerationbenefitsarestrongestovershortdistances(McMillenandMcDonald,1998).TheRosenthalandStrange(2003)studyfindsthatsmallfirms(1-20people)benefitthemostfromco-locatingneareachother.Moreover,theyfindthatsomeindustriesbenefitmorefromco-locating.Firmsincreativeindustries,suchassoftwareandfashionapparel,benefitedmorefromco-locatingnearothersimilarfirms,suggestingtheimportanceofknowledgespilloversasasourceofagglomerationeconomies.Aseriesofstudiesfindsthattrafficcongestionisnegativelyrelatedtoeconomicgrowth.Forexample,workerswhospendmoretimecommutingneedtobecompensatedwithhigherwages(WheatonandLewis,2002).Asaresult,ifcongestionleadstocommutetimesthatareexcessivelylong,itisintheinterestoffirmstomoveclosertotheiremployeestoreducecommutetimes.Onewaytomitigatethisshufflingistoallowformixed-usedzoningthatenablesfirmsandemployeestoco-reside(WheatonandLewis,2002).Anotherstudythatmodeledtrafficflowinurbanareasreachedasimilarconclusionthatmixingland-useinsidecommercialdistricts,increasingdensity,andimprovingroadnetworkconnectivityinordertostemcongestionhelpseconomicefficiencyandspatialequity(TsekerisandGeroliminis,2013).AnotherstudyexaminedBritain’slargestcitiesandfoundthatcongestionandincreasinghousingpricesnegativelyaffecteconomicgrowth(HanlonandMiscio,2017).TheseconclusionsareconsistentwiththoseofGordon,Richardson,andWong(1986)whofindthatcitiessuchasLosAngelesarehighlypolycentric,meaningthattrafficcongestionisencouragingfirmstomoveclosertoemployeesinordertoreducetheircommutingtimes.However,firmrelocationstoplacesoutsideoftheurbancoremayalso

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reducethebenefitsofagglomerationunlessenoughfirmschoosetolocateinthesamearea.Asaresult,theLosAngelesareamaynotbeasproductiveasitcouldbe.Similarly,Hymel(2007)findsthathighcongestionreducesemploymentgrowth.Importantly,benefitstofirmsfromlocatingneareachotherdonotbenefiteveryoneequally.Services,shopping,andknowledgeindustriesbenefitthemostfromagglomeration(Graham,2007b).Bacolod,Blum,andStrange(2009)findthatagglomerationbenefitsaccruemosttosectorsrequiringhighcognitiveandsocialskills.Inasimilaranalysis,Rosenthal(2008)andRosenthal(2001)findthatbenefitsaccruefromhumancapitalspilloversasevidencedbyhighagglomerationeffectsamongcollegeeducatedworkers.Allofthisisconsistentwithaviewthatagglomerationbenefits–thebenefitsoffirmsandemployeesquicklyinteractingwitheachother–arestrongestincreativeandknowledge-basedindustries.Althoughnostudiesexaminedagglomerationeffectsattheneighborhoodlevel,presumablyduetolackofappropriatedata,someinferencescanbemadefromthestudiesonagglomerationthatmayapplyattheneighborhoodlevel.First,forindustriesrequiringsocialandcognitiveskills,densityleadstohigherproductivity.Second,congestionreducesproductivityatallsurveyedgeographiclevelsandincreasesthespreadoffirmswhichcanreduceagglomerationbenefits.Combiningthesefindings,wecansurmisethatshoppingorhigh-skilledindustryclusterswouldbenefitfromVMTreductionsifhighdensitytransportalternatives(i.e.,walking,cycling,transit)couldenableretailersandfirmstoco-locateattheneighborhoodlevel.Table1.SummaryofStudiesonAgglomerationEconomics

Author(Year) Results

Bacolod,Blum,andStrange(2009)

Urbanwagepremiumisapremiumoncognitiveandsocialskills.

Graham(2007a)

Transportinfrastructureincreasesfirmandresidentialdensity.

Graham(2007b)

Alltestedsectorsexperiencepositivereturnsfromagglomeration.Inthestudy,manufacturinghasthelowestagglomerationbenefits.Theindustriesthatbenefitsmostfromagglomerationeconomiesare:publicservices,businessservices,andbankingfinanceandinsurance.

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Author(Year) Results

HanlonandMiscio(2017)

Congestion,measuredthroughcommutingtimes,hasanegativeeffectoncitygrowth.

Hymel(2007)

Highlevelsofcongestionreduceemploymentgrowthinurbanareas.

McMillenandMcDonald(1998)

Averageemploymentdensitydecreasesby34%to35%permilefromemploymentsubcenters.

RosenthalandStrange(2001)

Foragglomerationbenefits,labormarketpoolingworksatthezipcodelevelwhileknowledgespilloversworkatthecountylevel.


Thebenefitsofco-locatingdiminishrapidlywithdistance.Forexample,forsoftwarefirms,100additionalsoftwareworkerswithinonemileisassociatedwith0.04newsoftwarefirmbirthsand1.17additionalemployeesateachfirm.


Beinglocatedclosertoanemploymentcenterincreaseswages.Humancapitalspilloversareespeciallyimportantforcollegeeducatedworkers.

TsekerisandGeroliminis(2013)

Improvingroadnetworkconnectivitycanreducecongestionandincreaseeconomicefficiency.

Wheaton(2004)

Inageneralequilibriummodelwithagglomerationeconomiesandcommutingcosts,firmslocateinapolycentricpatterntoobtainagglomerationbenefitswhilereducingcommutingcosts.

WheatonandLewis(2002)

A1%increaseinworkerspecializationleadstoa23%increaseinwages.Specializationleadsto30%wageincreasesattheMSAlevelwithvariationbetweenindustriesandoccupations.

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V.ResidentBenefitsBenefitstoresidentscanbecapitalizedintoincreasedhousepricesorrentalvalues.Thosebenefitswouldbeoftwotypes:

1. BenefitsfromaccessibilitycreatedbyprojectsassociatedwithreducedVMT.Multi-modaltransportationprojects,improvednon-motorizedaccess,andclusteringofdestinationsnearresidencesmightallincreasetransportationaccesswhilereducingVMT.

2. Benefitsfromlarger“qualityoflife”impactsoramenitiesrelatedtoimprovedaccess.Examininghousepricesorrentalrateswillcapturebothbenefits,andmoststudiesintheliteraturecannotdisentangletheeffectofaccessibilityfromotherqualityoflifeorplacemakingbenefits.Onemethodforunderstandingifacharacteristiciscapitalizedintopropertyvaluesisbyperforminghedonichousepricemodels.Duetodataavailability,moststudiesusehousepricesratherthanrents,andwesummarizethosestudieshere.Hedonichousepricemodelsusepropertyvaluesasthedependentvariablewithavarietyofenvironmentalandhomecharacteristicsastheindependentvariables.Theliteratureonhedonichousepricingmodelspublishedsince2000wasreviewed.Thestudieslookedatbothcommercialandresidentialpropertyvaluesasthedependentvariable.Mostofthestudiesusedproximity(distance)toatransitstationasthemeasureofaccessibility.Themeasurementofwalkabilitydifferedslightly;somestudiesusedWalkScore,whileothersusedneighborhoodcharacteristicssuchassidewalkdensityortheslopeofsidewalks.Theimpactoftransit-andpedestrian-orienteddevelopmentonpropertyvaluesvariedacrossstudies,likelyduetogeographicaldifferences,walkabilitymeasurementdifferences,andothermodel-relatedfactors.ThestudiesandtheirresultsarelistedinTable2.ThepatterninTable2alignswiththefindingsofthemeta-analysisbyDebrezion,Pels,andRietveld(2007),wholookedattheimpactoftransitrailwaystationsoncommercialandresidentialpropertyprices.Debrezionetal.(2007)findthataccessibilitytoamarketorcentralbusinessdistrict(CBD),measuredasrailwaystationproximity,isassociatedwithpropertyvalues.However,thereisvariabilityintheresultsofstudiesthatattempttomeasurethatimpact;somehedonicpricinganalysesfindstatisticallysignificantsmall,positive,andmodestimpacts,whileothersfindnegativeorstatisticallyinsignificantimpacts(Debrezionetal.,2007).Debrezionetal.(2007)performedameta-analysisof57studiestobetterunderstandwhythereisvariationinresults.Thisanalysisconcludesthatsixfeaturesoftheanalyzedstudiescouldexplainthevariation:typeofproperty,typeofrailwaystation,typeofmodelused,thepresenceofspecificvariablesrelatedtoaccessibility,demographicfeatures,andthetimingofthedata.Moredetailedfindingsofthemeta-analysisinclude(Debrezionetal.,2007):

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● Propertiesnearcommuterrailwaystationsshowconsistentlyandsignificantlyhighervalues,controllingforotherfactors,comparedtolightandheavyrailstations.

● Commercialpropertyvalueslocatedwithina0.25-milerangefromarailwaystationare,onaverage,16.4percentmoreexpensive.AsDebrezionetal.(2007,p.176)explain,“…whentheofficeiswithinwalkingdistanceofthestation,itbenefits,otherwisethestationisoflittleuse…”

● Residentialhomepricesincrease2.4percentforevery250metersclosertoarailwaystation.

● Omittedvariablebiasmayoccur.Ifastudyleavesouthighwaysinitsregression,theregressioncanoverestimatetheimpactofstationaccessonpropertyvalues.

Mostresearchfoundthatwalkabilityispositivelyassociatedwithhomeprices.Additionally,MatthewsandTurnbull’s(2007)researchfoundthatthedesignofthetransportationnetworkcanaffectthemagnitudeofwalkabilitybenefits;grid-likestreetpatternsincreasedhomevalues.PivoandFisher(2011)studieddifferenttypesofpropertiesandtheirvaluesacrosstheUnitedStatesbetween2001and2008tounderstandhowwalkabilityaffectsdifferentpropertytypes.TheirstudyfoundthatapartmentpropertieswithhighWalkScoreswereassociatedwitha6percentincreaseinmarketvalue,whileofficeandretailpropertiessawa54percentincrease(PivoandFisher,2011).InCortright’s2009CEOforCitiespaperontheeffectofWalkScoresonhousingprices,hefoundarangeofpriceimpactsdependingonthecitystudied.LookingattheCaliforniaresults,Fresno,Stockton,SanFranciscoandSacramentoeachsawpositiveassociationsbetweenWalkScoreandhouseprices,whileBakersfieldsawanegativeassociationofWalkScorewithhouseprices,,wherea1-pointincreaseinwalkabilitywasassociatedwitha$112decreaseinhomevalue.However,theresultforBakersfieldwasnotstatisticallysignificantatthe.1(two-tailed)level.Fora1-pointchangeinWalkScore,thepriceofahomeinFresnoincreased$675,Stocktonincreased$795,SanFranciscoincreased$2,985,andSacramentoincreased$2,642(Cortright,2009,Table5).

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Severalstudiesobservedthattransit-orienteddevelopmentscoupledwithpedestrian-friendlyneighborhoodenvironmentsareassociatedwithhigherhomesalesprices(BartholomewandEwing,2011;Duncan,2011).Duncan(2011)examinedwhetherproximitytotransitaddsmorevaluetoacondominiumpropertyinagoodpedestrianenvironmentthanitdoesinabadpedestrianenvironment.HisstudyfocusedonSanDiegoandmeasuredgoodpedestrianenvironmentsinneighborhoodswiththreevariables:densityofcommercialactivity,flatpathto

ResidentBenefitsinGuerreroStreet,SanFrancisco,CA

InthequicklytransformingMissionDistrictinSanFrancisco,residentsalongGuerreroStreetcametogetherinanefforttomaketheirstreetmorepedestrian-friendly.Withspeedingcarsalongitssixtrafficlanesandeightunsignalizedintersections,thecommunitycalledforGuerreroStreettobeincludedintrafficcalmingplans(ProjectforPublicSpaces,pg.58).Thecitizen’sorganization,SanJose/GuerreroCoalitiontoSaveOurStreets,successfullyadvocatedforthefollowingpedestrian-friendlyimprovements:

§ Changedthestreetfromthreelanesoftrafficeachwaytotwolanesoftrafficwithabicyclelane

§ Createdwidermedians§ Installednewtrafficlights

Thesechangesresultedinresidentsfeelingsafertowalkintheirneighborhoodandareductionindrivingspeeds(Roth,2009).Images:

Aftertrafficcalming,beforegreening:http://pavementtoparks.org/wp-content/uploads//2015/10/plaza-guerrero-park-before.jpg

Aftergreening:https://www.flickr.com/photos/54560762@N04/22199523316Sources:

ProjectforPublicSpaces.(2016).“TheCaseforHealthyPlaces:ImprovingHealthOutcomesthroughPlacemaking.”Accessed:https://www.pps.org/wp-content/uploads/2016/12/Healthy-Places-PPS.pdf

ProjectforPublicSpaces.(2006).“CreatingStreetsforthePeopleintheSanJose/GuerreroNeighborhoodinSanFrancisco.”Accessed:http://www.sanjoseguerrero.com/Planning/DraftPlan/SanJoseGuerreroNeighborhoodRecommendation.pdf?lang=en

CityandCountyofSanFranciscoPlanningDepartment.(AdoptedDecember2008).“EasternNeighborhoodsPedestrian/Bicycle/TrafficCalmingImprovements.”Accessed:http://generalplan.sfplanning.org/images/EN_Pedestrian_Bicycle_Traffic_Calming_Improvements.pdf

Roth,Matthew.(July2009).“SanJoseandGuerreroPlazaCouldMarkTriumphOverDeadlyTraffic.”StreetsBlogSF.Accessed:http://sf.streetsblog.org/2009/07/17/san-jose-and-guerrero-plaza-could-mark-triumph-over-deadly-traffic/

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astation,andwell-connectedstreetnetwork(intersectiondensity).Resultsfoundthattransitstationsinpedestrian-friendlyneighborhoodsseehighermarketvalues(estimatedpremiumof$20,000)thantransitstationsinpoorpedestrianenvironments(Duncan,2011,p.120).Thissupportstheuseofamoreholisticlanduseanddesignapproachtotransitstationprojects,toensurepedestrian-orientedprojectsareprovided.Duncan’sresultsalsoemphasizethevaluethatresidentsplaceongoodpedestrianaccessibilityinTOD’s.ThestudybyBoyle,Barilleaux,andScheller(2013)differsfromthemoregeneraltrendofpositiveassociationsbetweenhomepricesandpedestriancharacter.UsingdatafromMiami,Boyle,Barilleaux,andScheller(2013)usedfixedeffectstocontrolforunobservedheterogeneityinthedata.Walkableneighborhoodsmightbevaluableforreasonsthatarecorrelatedwiththewalkability(suchas,possibly,betteraccesstodowntownjobcenters),ratherthanthepedestriancharacteritself.TheBoyle,Barilleaux,andScheller(2013)studyattemptedtocontrolforneighborhoodcharacteristicsotherthanwalkabilitybyincludingcontrolsforthesubdivision,onesquaremilesection,andzipcodeofeachhouseinthedata,andwhenanyofthosegeographiccontrolswereincluded(tomeasureneighborhoodcharacteristics),theWalkScorevariableintheirhedonichousepriceregressionwasinsignificant.Whilethedatawerecross-sectional,theuseofthese“fixedeffects”tocontrolforneighborhoodcharacteristicsisastronganalyticalapproach,andsotheresultsprovidesomecaution.Duncan(2011)alsousedneighborhoodcontrolsinhisSanDiegostudy–inhiscase,usingdummyvariablesforneighborhoodsrangingfrom0.5to4squarekilometerstocontrolforneighborhoodquality.Duncanfoundastrongandstatisticallysignificanthousevaluepremiumforpedestriancharacteristicsinlocationswithinahalfkilometerofarailtransitstation.Goodpedestriancharacteristicsincreasehomepriceswithinahalfkilometerofrailtransitstationsby15percent,accordingtoDuncan(2011).Onthewhole,themethodologicalqualityofstudiesinthisliteraturevaries,withtwoofthestrongeststudies–Boyle,Barilleaux,andScheller(2013)andDuncan(2011)–reachingopposingconclusions.Summarizing,thehedonichousepricemodelsthatfocusedonmeasuringtheimpactoftransitsawlessconsistentresultsthandidthestudiesexaminingpedestrian-orienteddevelopment.Thissuggeststhereisapremiumassociatedwiththequalityoflifeamenitiesfoundinwalkableneighborhoods,andthateffectofawalkabilityhousepricepremiumismorerobustintheliteraturethantheevidencefortransitaccessandhouseprices.WiththeexceptionoftheBoyle,Barilleaux,andScheller(2013)study,theevidenceonpedestrianenvironmentsandhousepricessupportstheideathatplacemakingcharacteristicsassociatedwithVMTreductionbringresidentialandqualityoflifebenefits.Itmustbeacknowledgedthatpropertyownerswillbetheprimarybeneficiariesofincreasedpropertyvalueandtherearedisplacementandgentrificationimpactsofplacemakingamenities.Theseequityconcernsareimportantanddeservefurtherresearch.

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Table2.SummaryofStudiesofHedonicHousePriceModels

Author(Year)

StudyArea Methodology WalkabilityResults TransitResults

BartholomewandEwing(2011)

Meta-analysissummarizingseveralstudies

Surveyandsummaryofexistingliterature

Transit-orienteddevelopmentpairedwithpedestrian-orienteddevelopmentincreaseshomevalues

Transit-orienteddevelopmentsresultinvaryingimpactsduetodifferingmagnitudesofamenitiesanddisamenities

Boyle,Barilleaux,andScheller(2013)

Miami,FL Linearhedonicfixedeffectsregression

Walkability(measuredbyWalkScore)wasnotassociatedwithhomevaluesusingafixedeffectsmethodtocontrolforunobservedheterogeneity

Cervero(2002)

SantaClaraCounty,CA

Commercialretailvaluesincreasedby23percentforatypicalcommercialparcelnearalightrailstationCommercialretailvaluesincreasedby120percentlocatedwithin0.25milesofacommuterrailstation

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Author(Year)


Cortright(2009)

Multi-city Log-linearhedonicOLSregression

ThirteenoutoffifteencitiesshowedpositiveimpactofWalkScoreonhouseprices.

Debrezion,Pels,andRietveld(2007)

Meta-analysissummarizingseveralstudies

Meta-regressionmodelwiththeeffectsizeoftheimpactofrailwaystationproximityasthedependent(Y)variable

Commercialpropertieswithin0.25mileofarailstationseealargerpricegapfrompropertieslocatedoutsidethatrangethandoresidentialproperties-onaverage,commercialpropertieshavea16.4%priceincreasewhereasresidentialpropertieshavea4.2%priceincreaseCommuterrailwaystationshaveaconsistentlyhigherpositiveimpactonpropertyvaluescomparedtolightrailstationorbusstop

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Author(Year)


Duncan(2011)

SanDiego,CA

Linearhedonicfixedeffectsregression

Homevaluesincreasedwhentransitstationdistancewasinteractedwithpedestrian-orienteddevelopment(measuredbysidewalkslope,intersectiondensity,andpopulation-servingbusinesses)

Lietal.(2015)

Austin,TX Cliff-Ordspatialhedonicregression(alsoknownasGeneralSpatialModel)

Homevaluesincreasedinareasofhighwalkability(measuredbyWalkScoreandsidewalkdensity)Walkabilitypremiumonhomepricesishigherareaswith:morecollegeresidents,higherproportionHispanicresidents,higherincomeresidents,lowercrimerates.

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Author(Year)


MatthewsandTurnbull(2007)

KingCounty,WA

LinearhedonicOLSregression

Pedestrian-orientedneighborhoodswithamoregridiron-likestreetpatternassociatedwithhigherhomevalues

PivoandFisher(2011)

VariousacrossU.S.

LinearhedonicOLSregression

Using2001-2008realestateperformancedatafromtheNationalCouncilofRealEstateInvestmentFiduciaries,foundwalkability(measuredbyWalkScore)increasedthemarketvaluesofoffice(54percent),retail(54percent)andapartment(6percent)propertiesWalkabilityhadastatisticallyinsignificanteffectonindustrialproperties

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Author(Year)


SongandKnaap(2003)

WashingtonCounty,OR

Semi-loghedonicOLSregression,datafrom1990to2000

Pedestrianwalkabilityhasmixedeffectsonhomevalues:1)singlefamilyunitswithinaquarter-mileofcommercialuseshavehigherprices;and2)singlefamilyunitswithinaquarter-mileofabusstophavelowervalues,controllingforothercharacteristics

Seo,Golub,andKuby(2014)

Phoenix,AZ Translog(ln-ln)hedonicOLSregressionincludingspatiallagandspatialerrormodel(tomitigatehetero-skedasticityandspatialdependence)

Homevaluesincreasednearlight-railtransitnodes

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Author(Year)


Wang(2016)

Seattle,WA LinearhedonicOLSregression;before,during,afterTODconstructiontimeperiods

Aftertheconstructionperiod,transit-orienteddevelopmenthasapositiveimpactonsingle-familyhomevalueslocatedwithin0.25to0.5milesfromalightrailstation

VI.BusinessBenefitsInsomeinstances,neighborhoodsreduceVMTinbusinessdistrictsthroughtrafficcalming,closingstreetstovehicletraffic,orsupportingalternativestodriving.TherearemultiplewaysthatVMTreductioncanbenefitneighborhoodbusinesses.Forinstance,increasedpedestrianactivityandaccessibilityforcustomerscanleadtomorevisitingopportunitiesforretailbusinesseswhichcanincreasepropertyvaluesandretailsalesiftheincreasedfoottrafficorlonger“lingering”timesoffsetstheeffectofreducedautomobileaccessibility.Itispossiblethatclosingstreetsmightnotreduceautomobileaccessibilitymuch,ifnearbystreetsremainopentovehicletrafficasistypicallythecase.Thestudiesinthissectionincludestreetclosuresandothereffortsthatinstallpedestrianorbicycleamenitiesorcalmtrafficwhilekeepingstreetsopen.Severalstudiessurveyedbusinessesontheirperceptionoftheimpactofpedestrianization(includingstreetclosures)andwalkability.(Foralistofthestudiesreviewed,seeTable3.)Inthesestudies,thesamplesizerangedfrom9to777firms.Surveysandquestionnaireswereusedbothbeforeandafterperiodsofdifferentpedestrianizationandtrafficcalmingmeasures,someofwhichspannedyears.Thestudiesvariedintheirresearchperiod,withsomeexaminingtimeframesbeingasearlyasthe1990’sandthemorecontemporarystudiesbeinginthe2010’s.Someofthestudiesanalyzedpoliciesthatcloseoffstreetsfromvehicletrafficorthatlimitedvehicletraffic.Initially,businesseswereconcernedthatthereductioninautomobiletraffic

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wouldhurttheirbusiness.Thestudiesshowedthatbusinessownersshiftedtoapositiveperceptionafterthetrafficcalmingpoliciesorstreetclosureswereinstituted.Forinstance,aftertheimplementationofbicyclelanesonValenciaStreetinSanFrancisco,66%ofmerchantssurveyedindicatedthattheybelievedthatbikelaneshadagenerallypositiveeffectonbusinessand/orsalesandwouldsupportmoretrafficcalming(DrennanandKelly,2003).Attimes,businessowners’positiveperceptionledthemtoattributeseveralbenefitssuchasincreasedpublicsafetyandincreasedbusinessrevenuetothetrafficcalmingpolicies(Woolleretal.,2012;Kumar2006).Theretailgainsofthebusinessownersvariedineachstudybutshowedincreasesinthemajorityofstudies.IntheKhaoSanRoadproject(astreetclosureandpedestrianizationinBangkok,Thailand),47%ofretailshopsreportedanincreaseinsalesvolume(orturnover)with35%reportingnochange(Kumar,2006).Similarly,inHongKong,thepedestrianizationofatwo-waystreetretailarealedtoanapproximately17%increaseinretailsalesonaverage(Yiu,2011).Hass-Klau’s(1993)workmirroredthesefindings.Hass-Klau(1993)conductedacross-countrystudyofretailbusinessesinGermanyandtheUnitedKingdom.Inadditiontoincreasedretailsales,betterpedestrianflow,andimprovedperceptionofpedestrianstreets,theHass-Klaustudyfoundthatpedestrianizationledtoincreasesinhousepricesandrentsinthepedestrianstreetareasafterthepolicieswereimplemented(Hass-Klau,1993).

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AccordingtoWeisbrodandPollakowski(1984),pedestrianprojectsincreasedtheentryofnewbusinessesintodowntownareas.IncreasedpropertyvaluewasassociatedwithpedestrianizationandwalkabilityinitiativesinToronto,CanadaandWashingtonD.C.(Prokai,1991;Alfonzoet.al,2012).Alfonzoet.al(2012)studied71neighborhoodswithintheMetropolitanWashingtonD.C.areaandfoundthatmorewalkableplacesperformbetter

CompleteStreetsinLancaster,CA

TheCityofLancaster,locatedinLosAngelesCounty,wantedtorevitalizeitsdowntown.Partoftheprobleminattractingpeopleandbusinesseswasduetothedangerousandun-walkablenatureofLancasterBoulevard.Afour-laneroadwithmanytrafficsignals,carsspedbyat50milesperhour,makingitinhospitabletopedestriansandshoppers(NationalCompleteStreetsCoalition,2012,p.22).TheCitybeganitsrevitalizationeffortsin2006andin2008theCityCouncilpasseditsfinalplanwhichincludeda$10millionCompleteStreetsdesign.Thegoalsoftheprojectweretoimprovewalkability,increasepedestriansafetyandreducespeeds(George,2013,p.65).ThefollowingchangesweremadetoLancasterBoulevardaspartofitsCompleteStreetsdesign:

§ Reducedthenumberoflanesfromfourtotwo,removedseveraltrafficsignals,installedaroundabout

§ Createdacentral“rambla”(resemblingthefamousBarcelonastreet)whichincludespedestrian-friendlyinfrastructure,parkingspaces,andacommunityeventspace

§ Widenedandrepavedsidewalks,addedstreetlighting,andlandscapedwithmoregreenery.LancasterBoulevardisnowbrandedas“TheBLVD.”TheCompleteStreetsdesignhasspurredeconomicdevelopmentinthedowntownbyimprovingroadwaysafetyforpedestrians.Morethan40newbusinessesopenedfollowingtheredesign,privateinvestmentisestimatedtobe$125millionindowntown,andsalestaxrevenueincreased26percent(NationalCompleteStreetsCoalition,2012,p.22).Images:

https://i.ytimg.com/vi/pojylzK2uSM/maxresdefault.jpghttps://www.huduser.gov/portal/casestudies/images/artist_hsg/Image_10.jpghttps://www.cnu.org/sites/default/files/LancasterBoulevard_streetscape.jpg

Sources:

George,Sherie.(June2013).“ACompleteStreetsAnalyisandRecommendationsReportfortheCityofBakersfield.”Accessed:http://digitalcommons.calpoly.edu/cgi/viewcontent.cgi?article=2037&context=theses

NationalCompleteStreetsCoalitionLocalGovernmentCommission.(February2012).“It’saSafeDecision:CompleteStreetsinCalifornia.”Accessed:https://www.smartgrowthamerica.org/app/legacy/documents/cs/resources/cs-in-california.pdf

TheBLVDwebsite:http://www.theblvdlancaster.com/downtown-lancaster.html;CityCounciloftheCityofLancaster.(2010).“ResolutionNo.10-68,[DowntownLancasterSpecificGeneralPlan].”Accessed:http://www.cityoflancasterca.org/home/showdocument?id=12940

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economically.Onaverage,morewalkableplaceshad$6.92/sq.ft.peryearhigherretailrentsandgenerated80percentmoreinretailsaleswhencomparedtotheplaceswithfairwalkability(Alfonzoet.al,2012).Inaddition,anincreaseinwalkscoreresultedinanincreaseinretailsales,officerents,andresidentialpropertyvalues(Alfonzoet.al,2012).

Whenanalyzingthestudies,thetypeofpedestrianprojectandthelocationoftheeffortsshouldbeconsidered.Whenanalyzinghowdowntownrevitalizationprojectsaffectedretailsales,WeisbrodandPollakowski(1984)discoveredthatrevitalizationofdowntownshadlittletonoimpactonemploymentgrowthofexistingretailbusinessintheareabutrevitalizationeffortsdidincreasenewbusinessopeningsinthedowntownareas.Thestudiesoffullstreet

UnionSquareNorth,Manhattan,NewYorkCity

UnionSquareinManhattan,NewYorkCity(anareathatisabout9acresoralittlelessthan400,000squarefeet)isaconstantlytraversedarea,“sometimesseeingupto200,000pedestriansonpeaksummerdays”(NYCPressRelease,2010).ItisapopulardestinationknownforitsGreenmarket,shops,restaurants,streetchess,andbeingagatheringpointforsocialandpoliticalactivism. In2010,theNewYorkCityDepartmentofTransportation(NYCDOT)announceditsstreetredesignprojectforUnionSquare.Thegoalwastoimprovepedestriansafetyandparkaccesswhilemaintainingeconomicvitalityinanareathathad95pedestrianinjurycrashesfrom2004to2008(NYCPressRelease,2010).Theproject,developedwithinputfromthecommunity,supportedbythearea'sCommunityBoardandbackedbytheUnionSquarePartnershipandlocalbusinesses,wasabletoimplementthefollowing(NYCPressRelease,2010andUnionSquareProjectProposal,2010):

§ Convertingportionsof17thStreettoone-waytraffic§ Addingpedestrianareas§ ReducingthroughtrafficlanesonBroadwayfrom23rdto18thStreetstoonelanewithsafety

islandsandprotectedbikepath§ Simplifiedtrafficsignalstoimprovepedestriansafety.

ThestreetredesignprojectallowedUnionSquaretoremainavibrantneighborhoodwhilealsobecomingmoresafe(NYCPressRelease,2010).AnNYCDOTevaluationin2012foundthatinjurycrashesinUnionSquarehaddropped26percentwhilecommercialvacancieshaddroppedby49percent.Sources:

NYCDOT(2012)MeasuringtheStreet:NewMetricsfor21stCenturyStreetshttp://www.nyc.gov/html/dot/downloads/pdf/2012-10-measuring-the-street.pdf

NYCDOTAnnouncesCompletionofUnionSquareRedesign,ImprovingSafetyandParkAccessPressRelease.http://www.nyc.gov/html/dot/html/pr2010/pr10_043.shtml

UnionSquareProjectProposal.NewYorkCityDepartmentofTransportation.6/21/2010.http://www.nyc.gov/html/dot/downloads/pdf/20100610_broadway_union_square.pdf

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closuresareoutsideoftheU.S.,andwecautionthattheevidenceofpositiveimpactsofpedestrianprojectsintheU.S.islargelyfromprojectsthatincreasepedestrianandnon-motorizedtravel,ratherthanfullstreetclosures.PedestrianizationeffortsinToronto,Canadasawanincreaseinvacancyrateseventhoughpriorliteraturehadshownanegativerelationshipbetweenpedestrianizationandvacancyrates(Prokai,1999).Summarizing,therearerelativelyfewstudiesinthisarea,butthesurveysofbusinessownerssuggestthatinitialbusinessconcernsaboutpedestrianprojectsshiftedtoapositiveattitudeaftertheprojectwascompleted.Studiesofpropertyvalues,whilerelativelyfewinnumber,suggestthatwhenimplementedinareasofhighfoottraffic(orhighpotentialfoottraffic),pedestrianizationisassociatedwithincreasedsalesand,throughthat,increasedcommercialpropertyvalues.Table3.SummaryofEconomic/RetailBenefitsofPedestrianization

Author(Year)

StudyArea Methodology Results

Alfonzo,et.al(2012)

WalkablePlacesandEconomicPerformance,MetropolitanWashington,D.C.

HedonicregressionanalysisusingWalkScoreandIrvine-MinnesotaInventorytomeasurewalkability

HigherWalkScorelocationsperformedbettereconomically.WalkScorecorrelatedwithincreasesinretailsales,officerents,andresidentialhousingvalues.Inaddition,higherWalkScorelocationsbenefittedfrombeingnearotherhighWalkScorelocations.

DrennenandKelly(2003)

EconomicEffectsofTrafficCalmingonUrbanSmallBusinessesonValenciaStreetinSanFrancisco

Interviewswithstreetmerchants,N=27

66%ofmerchantsbelievedthatthebikelaneshavehadapositiveeffectonbusinessand/orsales.TheystatedtheywouldsupportmoretrafficcalmingonValenciaStreet.

37%ofsurveyedbusinessownersbelievethatsales

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Author(Year)


increasedduetonewcustomersfromoutsidetheneighborhoodbeingabletovisittheirbusinessbecauseoftrafficcalmingpolicies

Hass-Klau(1993)

HowdoespedestrianizationaffectretailinUnitedKingdomandGermany

Survey,GermanyN=777UKN=400

Increasesinpedestrianflowwereassociatedwithbusinessturnover.

Housingrents/costsincreaseinpedestrianareasaftertrafficcalmingmeasures

Kumar(2006)

KhaoSanRoad,Bangkok.Effectsofpedestrianisationoncommercialandretailsales.Businesstypescategorizedbyfoodstalls,shops,guesthouses,andtravelagencies

Survey,N=110 47%ofretailshopshadincreaseinrevenuesales,35%hadnochange,while18%hadareduction

65%increaseinfavorabilityofpedestrianprojectafterdevelopmentfrom20%favorability(before)to85%favorability(after)

NewYorkCityDOT(2012)

NewYorkCity Post-projectmetricsofeconomicvitality

UnionSquareNorthinManhattansaw49%fewerretailvacanciesaftertheadditionofanewpedestrianplazaandprotectedbicyclelanes.PearlStreetinBrooklynsaw172%increaseinretailsalesafterpedestrianplaza

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Author(Year)


Prokai(1999)

ImpactsofpedestrianfriendlystreetscapeimprovementsontworetailareasinToronto,Canada

IndicatorAnalysisofTrendsandDistribution,OftenSimpleBefore-AfterComparisonofDatawithoutStatisticalControls

Propertyvalueswerehigherwherestreetscapeimprovementsweredone.

Studiesindicatedanincreaseinvacancyfollowingpedestrianprojects.

Robertson(1991)

ExaminesthecitycentersofsixSwedishcitiestohelpbetterunderstandtheextenttowhichpedestrianstreetshavechangedovertimeintermsofretailtrends.

Interviews Interviewees’believedthatpedestrianstreetshelpedtostrengthenthecommercialcoresofSwedishcities.Priortotheexpansionofcentralpedestriandistrict,downtownmerchantshadanegativeperceptionofcentralpedestriandistricts.

WeisbrodandPollakowski(1984)

EffectsofDowntownImprovementProjectsonRetailActivity

Regressionofdatafor14shoppingmallsthatwerepartofdowntownpedestrianrevitalizationprojects

Downtownrevitalizationprojectssometimeshadnostatisticallysignificantimpactonobservedgrowthorexitsofexistingestablishments.

Revitalizationprojectsdidhaveastatisticallysignificantpositiveeffectonratesofnewestablishmententryintorevitalizationareas.

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Author(Year)


Wooller,Badlam,andSchofield(2012)

PedestrianizationBenefits,NewZealand

Semi-StructuredInterviews,N=9

Perceptionofintervieweeswasthatpedestrianizationencouragedleisurebusiness.Perceptionofco-benefitsincludedpublicsafety,accessibility,andexercise

Yiu(2011)

PedestrianizationandRetailRents,HongKong,China

Two-street,Two-periodRegressionModel

Pedestrianizationincreasedtheretailrentalvalueofthestreetbyapproximately17%.

VII.Discussion:SynthesizingaSystemsViewoftheEconomicBenefitsofTransportationTheliteratureoneconomicbenefitsoftransportationfallsintotwoparts–whatwecalledthe“old”andthe“new”views–withlittlecross-talkorconnectionsbetweenthosetwoliteratures.Thedifferentviewsevolvedatdifferenttimes(roughlytheearlyandmid-InterstateHighwayerafortheoldviewversusthepasttwodecadesforthenewview),focusingondifferentpolicyquestions(increasedVMTversusneighborhoodplacemaking)anddifferentgeographicscales(metropolitanareasorlargergeographiesversusneighborhoods).Wefirstsummarizetheresultsfromthe“new”viewstudiessurveyedhere,andthensuggestapolicysynthesis.ThestudiesonresidentialbenefitsofVMT-reducingplacemakingprovideevidencethathousepricesarehigher,controllingforotherfactors,inneighborhoodswithgoodpedestriancharacteristics.HigherneighborhoodWalkScore(indicatingbetterpedestrianaccesstodestinations)isassociatedwithhigherhousevalues,suggestingthatpersonsvaluethepackageofamenitiesthatisassociatedwithwalkableneighborhoods.Transitaccessalsoisassociatedwithhigherhousevalues,althoughthateffectvariesacrossstudiesandthetransithousepricepremiumislargerinmorewalkableneighborhoods.Businesssurveysindicatethatbusinessesinlocationswherestreetswereclosedorwheretrafficlaneswerereducedhadagenerallypositiveviewoftheimpactontheirretailsales.Someevidenceindicatesthatincreasesincommercialpropertypricesareassociatedwithpedestrianization.Someofthesebusinessimpactstudiesmightbesubjectto“survivorbias”,

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surveyingfirmsthatremainedintheneighborhoodafterthepedestrianizationprojectwascompletedandhencemissingfirmswhosebusinesscouldnotadaptandthatthuslefttheneighborhoodorceasedoperations.Yetsomeofthesurveystudiescontactedfirmsbeforeandafterpedestrianimprovements,andthosesurveysshowedlargeincreasesinbusinessfavorabilityfrombefore-projecttoaftertheprojectwascompleted.Onecautionforboththeresidentialhousepriceandbusinessimpactstudiesisthattheresearchmighthavefocusedonplaceswherepedestrianizationandplacemakingwasmostlikelytohaveapositiveimpact.Policyactivityoftenfocusesonlocationsthatareprimedtobenefit,andresearchersmightalsochooseneighborhoodswheretheplacemakingactivitywaslikelytoprovidebenefits,iffornootherreasonthanthatsuchplacesaremorevisibletoresearchers.Whiletheresultssuggestpositiveimpactsonresidentsandbusinesses,itwouldbeprematuretogeneralizethateveryplacewillbenefit.Wesuggestthattheevidenceisbestinterpretedasshowingthatthoughtfullyappliedplacemakingactivityhaspositiveimpacts;notthatanyandeveryVMT-reducingplacemakinginanylocationwillproducebenefits.Thestudiesonagglomerationshowthatthebenefitsfrombusinesseslocatingnearotherbusinessesisoftenashortdistancephenomenon–insomecasesatascaleoffromonetofivemiles.Knowledgeindustriesandcreativeactivitiesparticularlybenefitfromagglomerationeconomies,andhencetransportationplansthatallowfirms,employees,andcustomerstointeractquicklyandseamlessly,ofteninaface-to-facefashion,willbeimportantfortheeconomichealthofcities.Theevidencedoesnotindicatethatthoseinteractionsneedbeatawalkingscale,andthegeographicscopeofagglomerationbenefits,whilecoveringshortdistances,islargerthanthescaleofmanyneighborhoods.Themostapplicable“oldview”studiesarethosemorerecentworksthatshoweconomicbenefitsfromreducedcongestioninametropolitanarea(e.g.Hymel,2007;SCAG,2016).Theseworksindicatethatincreasingaccesswithinametropolitanareaisimportantforeconomicgrowth–afindingconsistentwiththeliteratureonagglomerationeconomies.Butbuildinghighwaysisnotafruitfulwaytoincreaseaccessinmetropolitanareas.Studieshaveshownthatincongestedmetropolitanareas,additionalhighwaycapacityleadstoinducedtravel,suchthatnewhighwaycapacitydoesnotreducecongestion(e.g.DurantonandTurner,2011).Forthatreason,congestionreductionisnotnearlyassimpleasbuildingmorehighways–andhighwaybuildingalonewillnotleadtolowercongestionlevelsinlargemetropolitanareas.Overall,theseresultssuggestasystemsapproach(Figure1).Atthescaleofametropolitanarea,economicgrowthflowsfromtransportationpoliciesthatreducecongestionand/orincreaseaccess,thusallowingmoreseamlessbusinessinteractionsandmoreeasyreachfromfirmstooutputandlabormarkets.ManyneighborhoodswillbenefitfrompoliciesthatreduceVMTwhileproducingplacemakingamenities,butcreatinganentiremetropolitanareaofslow-movingtrafficinpedestrianizedplaceswouldnotallowthehighthroughputthatmetropolitanareasneedtoincreaseaccessibility.Ahierarchyoftransportationlinksisthebestapproach.Highthroughputroutes,ideallycongestionpriced,shouldconnectneighborhoodswithin

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metropolitanareas,whilethoseneighborhoodsshould,asoftenaspossible,supportmultipletravelmodesthathaveamenitiesassociatedwithwalkablelocales.Therewillstillbearoleforsuburbanofficeparkswitheasyautomobileaccessibility(noteveryplacecanbeanurbanneighborhood),buteveninthosemoresuburbanplacesplannersshouldincludetheamenitiesandtransportationoptionsthat,researchhasshown,producevalueforresidentsandfirms.

Figure1.SystemsapproachtotransportationpolicypromotingeconomicbenefitsinbothplaceandlargermetropolitanareaCanacar-onlytransportationsystemsupportthishybridofregionalaccessibilityandneighborhoodplacemaking?Webelievetheansweris“no”,particularlyinlargermetropolitanareas.Thewalking-orienteddesignelementsandpedestrianneighborhoodsthathelpcreateplacemakingbenefitsareoftenseamlesslyassociatedwithalternativestoautomobiletravel.Thosedesignsareoftenassociatedwithfirst-lastmiletransitaccessorwithplanstoincreasenon-motorizedtravel.Thereisaroleforthecar,butacar-onlymetropolitantransportationplanleaveslittleroomforwalkableplacemakingattheneighborhoodscale.Thebestapproachistheonebeingpursuedinmanycities–traveloptionsandalternativesthatviewtheautomobileasoneofmanywaystotravel,butnottheonlytravelmode.Inlargemetropolitanareas,asystemsviewwillrequirehighthroughputtransitthatcansupportdensitiesthathighwayscannotsupport(e.g.thecentralbusinessdistrictsinLosAngelesorSanFrancisco),

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ideallycongestionpricedhighwaysandmajortransitlinks,andcarefulfocusonfirst-lastmileneighborhoodaccessibilitythathasarobustroleforplacemakingamenities.Neighborhoodplacemaking,inthisview,isaconcomitantoftransportationsystemsbasedonabackboneofhighthroughputintra-metropolitanconnectorsthatlinktoneighborhoodsthrougharangeofmodesthatincludetransit,walking,andbicycling.Thetransportationsystem,inthisview,isaboutmorethanmovement.Itconnectspeopleandfirmsatthemetropolitanscale,whilefocusingonprovidingamenitiesandweavingintotheurbanfabricattheneighborhoodscale.Transportationplanning,inthisview,includesurbandesign,humaninteraction,andaccessibility.Equityconsiderationswillbeimportantinaplacemaking-orientedviewoftransportationplanning.Higherincomeneighborhoodsareoftentheplaceswiththeresourcesandpoliticalclouttopursueplacemakinginitiatives.Pedestrianizedstreets,trafficcalming,andbicyclelanesaremorecommonlyfoundinhigh-incomethanlow-incomeplaces.Oneriskofneighborhood-ledplanningisthatthoseneighborhoodswiththeresourcestoengageinplacemakingwilldoso,leavingotherneighborhoodsbehind.Forthatreason,placemakingshouldhaveastrongroleforequity,withpurposefuleffortstobringplacemakingtoneighborhoodsthatmaynothavetheresourcesorpoliticalpowertopursuesuchinitiativesbythemselves.Suchanequity-focusedplacemakingshouldempowerlocalcommunities.Thebestplacemakingistypicallyorganicandinformedbylocalneeds,andhenceitwouldbeunwisetofoistaplacemakingviewonaneighborhoodfromtheoutside.Asneighborhoodsbecomemoreimportantintransportationplanning,transportplannerswillhavetoshiftfromtop-downapproachestomethodsthatempowerandengagecommunities.Overall,theevidencesuggeststhatplacemakinginitiatives,pursuedinwaysthatreduceneighborhoodVMT,bringbenefitsthatarevaluedbyresidentsandfirms.Placemakingwillrequireamoremulti-modaltransportationplanning,focusingonneighborhoodcontextandengagingandempoweringcommunitieswhilebuildingsystembackbonesthatincreaseaccessthroughoutthemetropolitanarea.Thissynthesisisappropriateandnecessaryforanerainwhichtheautomobile,whilestillimportant,cannotmeetallouraccessibilityneeds.Thereisaneedformoreresearchthatfurtherexplorestheimpactsofsmallscaledplacemakinganditseffectsonlocaleconomiesandredefiningaccessibility.

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