Transcript Win-Win Transportation Solutions Innovative Strategies

Quantifying The Economic
Value of Greenway Benefits:
Leveling The Budget Playing
Field
Richard Hartman, AICP, CNU-a
St. Petersburg, FL
Based on preliminary paper, A Review of Methodologies to
Determine the Economic Value of Greenways
Texas State University, San Marcos
Presented at:
Texas Trails and
Active Transportation Conference
Fort Worth, Texas
March 26, 2014
In the beginning: Frederick Law
Olmsted
• Central Park
• Economic impact of
parks and open
spaces on property
values
2
Distinct analysis: greenways
are not linear parks
• Parks and Open
Space
• Large contiguous
space
• Single responsibility
• Passive use
• Greenways are not
linear parks
• Linear; connected
• Multi-jurisdictional
• Incremental
proximity
• Different benefits
3
Why measure economic value of
greenways? Scarce resources
• Budgets
• Cost-Benefit Analysis
One-sided
Validity
• Public perceptions
• Public support
• Construction
• Maintenance
Lack of care = lack of
use = loss of
economic
advantage
Make the budget fair by accounting for economic
return from greenways in the ‘Plus’ column of a CostBenefit Analysis
4
Budget impacts from greenways
• Long-range
Transportation Plans
• Capital Improvement
Elements
• 5-year Capital
Improvement Plans
• Open Space and
Parks Master Plans
• Levels of Service
5
Two distinct problems
• Study limitations
• Benefits omitted
The most commonly mentioned problem of
earlier studies was that almost all findings
were based on anecdotal evidence and not on
market data.
6
What defines a greenway:
Traverse or not?
Trail not required:
“A greenway is defined here as a linear open
space that connects parks, improves recreational
opportunities, or aids in the protection of wildlife,
natural areas, and scenic places.”
(Lindsey and Knaap, 2005)
7
Ability to traverse
A greenway is a…”linear
open space established
along a natural corridor
such as a riverfront or
stream valley, and
abandoned railroad
right-of-way, a canal, a
scenic road or some
other linear route.”
(Little, 1990)
8
Greenway benefits
• Monetary
Economic
Health
Hazard management
Safety
Transportation
Ecological
Equity
• Non-monetary
Cultural and Historic
preservation
Quality of Life
9
Benefits: Provide Choices
Residents are 65%
more likely to walk in a
neighborhood with
sidewalks.
Cities with more bike
lanes per square mile
have higher levels of
bicycle commuting.
10
Americans want choices
66%
73%
57%
of Americans want more transportation
options so they have the freedom to choose
how to get where they need to go.
currently feel they have no choice but to drive
as much as they do.
would like to spend less time in the car.
Future of Transportation National Survey (2010)
11
The Tremendous Potential
Of all trips:
39% 17%
47%
are less than
are driven
3 miles are less than
1 mile
of these trips…
National Household Travel Survey (2009)
12
Benefits: Environment
Transportation accounts
for nearly 1/3 of all
greenhouse gas
emissions.
Switching to walking or
bicycling for short trips =
reduce CO2 emissions
by 12 to 22 million
tons/year.
13
Benefits:
Reduce
Infrastructure
Costs
Lee County, Florida
• Re-examined 5 roadwidening projects
• Found widenings
unnecessary = $58.5
million savings
• Use Greenways as ROW
retainers for future use
14
Greenways Benefit Children, Parents,
and Schools
• Enable and
encourage children,
including those with
disabilities, to walk
and bike to school
• Reduce # of car trips
to schools, miles
driven and time (grid
reduces gridlock)
• Improve health,
safety, socialization,
and school
performance.
17% of kids and
teens are obese.
Benefits: Health
Limited physical
activity contributes
to the obesity
epidemic.
Dedicated, safe
space for bicycling
and walking help
kids be active and
gain independence.
16
Benefits: Community Cohesion
Greenways increase and
improve the quantity and
quality of interactions
among community
residents. They can
increase mental and
physical health by
increasing friendships
and by improving
community security.
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Lindsey’s taxonomy of methods
Value
Category
Value
Path
Primary Valuation
Methods
Walking, jogging, cycling, skating, nature
observation
People are willing to pay more for
properties with accessibility to trails or
for properties with amenities such as
views of green space
User physical activity produces health
benefits that generate secondary
economic benefits
Users value greenways trail as an
alternative route for commuting and
errands (utility trips)
Value provision of biological habitat and
environmental services such as carbon
sequestration or mitigation of runoff



Travel cost
Unit day value
Hedonic pricing method

Avoided medical costs

Value of commuting
time; avoided pollution
costs
Contingent valuation
Value of comparable
technological services
Amenity
Visual/aesthetic
Neighbors and passers-by benefit
psychologically from views of open
space and vegetation


Hedonic pricing method
Contingent valuation
Economic
development
Greenway development may spur
tourism and commercial investment and

Economic impact
analysis (input-output
Recreation (active)
Property
Health/fitness
Transportation
Ecological
biodiversity and
services


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Methodologies reviewed
 Hedonic Pricing
method
 Contingent Valuation
 Willingness to Pay
 Travel or Time Cost
Valuation
 Collective methods
analysis
 Property values
• Value of public good
• How much would
user pay for amenity
 Value from costs of
use or time
committed
 Combining methods
to capture more of
total value
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Property Values – Hedonic Pricing
Method
 Proximity Principle (1/4 to ½ mile typically)
• The value of an amenity is at least partially
related to the price of residential properties in
relation to their location relative to an amenity.
• Hedonic Pricing
• Used to determine value of a non-marketable
good.
• Allows capture of the true value of multiple
characteristics
• Separates out small incremental values that
become significant when aggregated from large
number of benefactors
20
Hedonic pricing - Limitations
• Proximity limit omits
significant amounts
of incremental benefit
• Overlapping benefits
• Benefits fall outside
of single jurisdiction
• Context of greenway
and neighborhood –
topography, view?
• Other concerns
Benefits fall outside
single jurisdiction
21
Contingent Valuation (CV)
 CV provides an indication of overall economic
value in terms of public good.
• Assessment through use of general population
surveys
• Effective tool for quantifying large-scale public
projects
• Often relies upon subjective Willingness to Pay
(WTP) to extrapolate how much public values a
conservation or environmental project
22
Contingent Valuation - Limitations
 Findings lack level of validity specific to public
expenditures
 Amount willing to pay typically overstated,
especially in relation to an immediate solicitation.
 Surveys do not have immediate consequences
 People tend to value losses more than gains;
leads to WTP more to prevent loss of a public
good than pay for creation of a new good.
23
Travel / Time Cost Model
 Determines economic value of greenway by
assessing the amount of money or time users
spend to use the greenway.
 Extrapolates findings to total number of trail users
to determine full economic impact.
 Example: Study of impact of greenways on
Lindsey et al. 2004
24
Travel / Time Cost - Limitations
 Unreliability of extrapolating use of particular
location and/or day to determine total usage.
 Omission of many greenway benefits
 Difficulty aggregating different categories of
benefits
25
Collective Analysis Approach
• Use of two or more methodologies to present a
more complete analysis of economic impact of
greenway.
• Lindsey et al. (2004) combined findings of hedonic
pricing method on property values and travel cost
method for recreational values in study of
Indianapolis, IN, greenways, including the Monon
Trail.
26
Collective Analysis - Limitations
• Complementary, not combinable; Different method
findings have different confidence levels in data.
• Overlapping benefits, may lead to double counting
• Some benefits are not counted
• Constrain use for policy-making and budget
justification.
27
Suggestions - Public Side Inputs
Budget for more of the benefits
Sustainable Communities
• Federal grant program under HUD, DOT, and
EPA
• Application requires monetary benefit analysis of
multiple impacts from proposed greenway
• Model to combine studies of multiple benefits to
capture reliable data for many benefits usually
omitted
• Example: Houston Bayou Greenways 2020 proposal to construct or complete 13 greenways
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Sustainable Communities criteria
Cypress Creek Greenway Case Study, Appendix A
• Benefit Projections:
• Proximate
Population
• Recreation benefits
• Health benefits
• Vehicle Operating
cost savings
• Congestion relief
• Crash reduction
• Air Quality
• Carbon Sequestration
• Ecosystem Services
benefits
• Property Value
• Total annual benefits
(aggregated)
• Average benefit per
person
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Ways to Quantify the Benefits of
Greenways — 1 (Litman 2013; Complete
Streets)
Benefit
Quantification Method
Safety benefits – reduced traffic
crashes due to Improved facilities
for alternative modes and reduced
vehicle travel.
Estimate crash cost reductions from reduced
traffic and reduced total vehicle travel.
Improved public health –
increased public fitness and health
from more walking and cycling.
Estimate increases in walking and cycling
activity and assign monetary values as
indicated by NZTA (2011).
Energy conservation and
emission reductions – from
reduced total vehicle travel.
Estimate energy conservation and emission
reductions and assign dollar values.
Supports more efficient land use
(maybe?) – encourages more
compact, multi-modal development
to take advantage of greenway
proximity.
Estimate the community savings and benefits
from more compact development and reduced
sprawl. Assign monetary values to each
household that locates in existing urban areas
and avoids urban expansion.
Ways to Quantify the Benefits of
Greenways — 2
Benefit
Quantification Method
Direct user benefits – improved
convenience, comfort and
enjoyment from improved walking,
cycling and public transit, and
reduced driver stress
Survey travelers to determine their
preferences. Adjust travel time unit costs
downward as travel conditions improve.
Reduced barrier effects –
reduced pedestrian and cyclist
delays.
Quantify and monetize the incremental delays
and shifts from active to motorized modes.
[Check amt. of motorized to active]
Vehicle cost savings – reduced
vehicle ownership and operating
costs if residents own fewer
vehicles and drive less.
Use vehicle ownership surveys to determine
whether residents tend to own fewer vehicles
and drive less in areas with more multi-modal
transport systems
Parking savings – reduced
parking problems and subsidy
costs if travelers shift mode.
Estimate parking cost savings from reduced
vehicle ownership and use in areas with
multi-modal transport.
Ways to Quantify the Benefits of
Greenways — 3
Benefit
Quantification Method
Supports social equity
objectives – improves affordable
modes and access for
disadvantaged people.
Weigh savings and benefits in favor of
physically, economically and socially
disadvantaged people (e.g., an hour saved by
a person with an impairment, or a dollar
saved by a lower-income household is worth
several times more than the same savings by
able and wealthy people).
More livable communities –
improved local environmental
quality
Measure increases in residential and
commercial property values along complete
streets.
Take Advantage of What We Know
Increase the Impact of the Benefit
and Increase the Number of People
Who Benefit
Public support and property
values
• Public intuition
No harm
Some benefit, maybe
Negative impacts
• Reality
Stabilization or
increased values
even with significant
lack of knowledge
and little, if any,
marketing
EDUCATION WITH THE FACTS
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Planning initiatives that complement
Greenways
 Trail-oriented Design and
Development
 Sustainable Development
 Smart Growth
 Multi-modal planning
 Context Sensitive Design
 Street Connectivity
 Manage Transportation
Demand
 Fix-It-First
 Least-cost planning
 Road Diets and Traffic
Calming
36
Public inputs to enhance economic
value; now and future
• Adopt trail-friendly
Future Land Uses
and zoning
• Indirect benefits
Trail-oriented
Development
(TrOD)
Competitive
Advantage
Branding
Wayfinding
• Trail design to max
return
• Direct benefits
Trail businesses
Tourist-oriented biz
Services, businesses
• Community marketing
37
Public inputs to enhance economic
value; now and future
• Integrate into
transportation plan
• Connected to other
trails, streets, and
transit
• Ease of accessibility
is key
• Connected to
business district
• Main Street
• Clear directionals to
key nodes
38
Plan for different types of Greenways
Rural
Barton Creek, TX
Multifamily suburb
Barton Creek, TX
Exurbs
Austin, TX
Industrial corridor
Midtown Greenway, MN
Develop Performance Measures and
Outcomes
• Proposed Trails
• Existing Trails
40
Suggestions
Private inputs
Private opportunities (market
inefficiencies)
• Land developers
Assessing price of land
• Homebuilders
Pricing homes:
Design/location
Competitive analysis
Amenities
Resale
• Business community
ID & location of profitable
services; maximizing
profits
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Developers, Homebuilders, and Real
Estate Agents
• Land acquisition and
pricing
Pro-forma
IRR
• Comparative
advantage
• Marketable amenity
• Subdivision and
community branding
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DISCUSSION
 What engineering, education, and
encouragement would you recommend?
 What are the expected outcomes?
 What benefits would you measure?
 How could you measure those benefits?
 Monetary
 Non-monetary
 What are some anticipated costs?
 Would Typology by Transects help?
 What are we overlooking?
Readings
•Crompton, John L. 2001(a). Perceptions of How the Presence of
Greenway Trails Affects the Value of Proximate Properties.
Journal of Park and Recreation Administration Volume 19,
Number 3 Fall 2001 pp.114-132.
• _____. 2001(b). The Impact of Parks on Property Values: A
Review of the Empirical Evidence. Texas A & M University, Dept.
of Recreation, Park and Tourism Services. Vol. 33, 1:1-31.
•_____ and Nicholls. 2006. An Assessment of Tax Revenues
Generated by Homes Proximate to a Greenway. Jnl of Park and
Rec Administration, Fall 24:3 103-108.
•_____ and Marsh Darcy Partners, Inc. 2011. Bayou Greenways –
A Key to a Healthy Houston. Houston Parks Board, August.
•Danzer. R. (2006) “Trails and tourism.” Rails to Trails Magazine,
Summer.
Readings (CONT.)
• Fields, Billy. 2009. From Green Dots to Greenways: Planning
in the Age of Climate Change in Post-Katrina New Orleans,
Journal of Urban Design 14:3 325-344.
• Lindsey, Greg. 1999. Willingness to Pay for Urban Greenway
Projects, APA Journal, Summer.
•_____, G., Payton, S., Man, J., and J. Ottensmann. (2003)
Public choices and property values: Evidence from greenways
in Indianapolis. The Center for Urban Policy and the
Environment.
•_____, et al., 2004. Property Values, Recreational Values,
and Urban Greenways. Journal of Park and Recreation
Administration, Fall.
•_____, et al. 2006. Neighborhood Correlates of Urban Trail
Use. Journal of Physical Activity and Health. Supp 1:139-157.
•
Readings (CONT.)
• Litman, Todd. 2013. Evaluating Complete Streets: The Value
of Designing Roads For Diverse Modes, Users and Activities,
Victoria Transport Policy Institute, 6 June 2013
•Nicholls, Sarah and John L. Crompton. 2005. The Impact of
Greenways on Property Values: Evidence from Austin, Texas.
Journal of Leisure Research V. 37, 3:321-341
•Rails to Trails. -----. “From Trail Towns to TrOD: Trails and
Economic Development.” Magazine, --------