Quantifying The Economic Value of Greenway Benefits: Leveling The Budget Playing Field
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Transcript of Quantifying The Economic Value of Greenway Benefits: Leveling The Budget Playing Field
Quantifying The Economic Value of Greenway Benefits: Leveling The Budget Playing
FieldRichard Hartman, AICP, CNU-a
St. Petersburg, FLBased on preliminary paper, A Review of Methodologies
to Determine the Economic Value of GreenwaysTexas State University, San Marcos
Presented at:Texas Trails and
Active Transportation ConferenceFort Worth, TexasMarch 26, 2014
In the beginning: Frederick Law Olmsted
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• Central Park• Economic impact of
parks and open spaces on property values
Distinct analysis: greenways are not linear parks
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• Parks and Open Space
• Large contiguous space
• Single responsibility• Passive use
• Greenways are not linear parks
• Linear; connected• Multi-jurisdictional• Incremental
proximity• Different benefits
Why measure economic value of greenways? Scarce resources
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• Budgets• Cost-Benefit Analysis
One-sidedValidity
• 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 Cost-Benefit Analysis
Budget impacts from greenways
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• Long-range Transportation Plans
• Capital Improvement Elements
• 5-year Capital Improvement Plans
• Open Space and Parks Master Plans
• Levels of Service
Two distinct problems
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• 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.
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)
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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)
Greenway benefits
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• MonetaryEconomicHealthHazard managementSafetyTransportationEcologicalEquity
• Non-monetaryCultural and Historic
preservationQuality of Life
Benefits: Provide Choices
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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.
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Americans want choices
of Americans want more transportation options so they have the freedom to choose how to get where they need to go.
Future of Transportation National Survey (2010)
66%73%57%
currently feel they have no choice but to drive as much as they do.
would like to spend less time in the car.
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The Tremendous Potential
Of all trips:
National Household Travel Survey (2009)
39% are less than 3 miles
17% are less than1 mile
47%are driven
of these trips…
Benefits: EnvironmentTransportation 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.
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Benefits: Reduce Infrastructure Costs
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Lee County, Florida• Re-examined 5 road-
widening projects• Found widenings
unnecessary = $58.5 million savings
• Use Greenways as ROW retainers for future use
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.
Benefits: Health
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17% of kids and teens are obese.
Limited physical activity contributes to the obesity epidemic.
Dedicated, safe space for bicycling and walking help kids be active and gain independence.
Benefits: Community Cohesion
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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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ValueCategory
Value Path
Primary Valuation Methods
Recreation (active) Walking, jogging, cycling, skating, nature observation
Travel cost Unit day value
Property People are willing to pay more for properties with accessibility to trails or for properties with amenities such as views of green space
Hedonic pricing method
Health/fitness User physical activity produces health benefits that generate secondary economic benefits
Avoided medical costs
Transportation Users value greenways trail as an alternative route for commuting and errands (utility trips)
Value of commuting time; avoided pollution costs
Ecological biodiversity and services
Value provision of biological habitat and environmental services such as carbon sequestration or mitigation of runoff
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 development
Economic impact analysis (input-output models)
Lindsey’s taxonomy of methods
Methodologies reviewed
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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
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
• Beneficial impacts may come from view, aesthetics, proximity, accessibility.
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Hedonic pricing - Limitations
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• Proximity limit omits significant amounts of incremental benefit
• Overlapping benefits• Benefits fall outside
of single jurisdiction• Context of greenway
and neighborhood – topography, view?
• Other concernsBenefits fall outside
single jurisdiction
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
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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.
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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
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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
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Collective Analysis Approach
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• 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.
Collective Analysis - Limitations
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• 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.
Suggestions - Public Side Inputs
Budget for more of the benefits
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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 criteriaCypress 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
Ways to Quantify the Benefits of Greenways — 1 (Litman 2013; Complete Streets)Benefit Quantification MethodSafety 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 — 2Benefit Quantification MethodDirect 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 — 3Benefit Quantification MethodSupports 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 KnowIncrease the Impact of the Benefit
and Increase the Number of People Who Benefit
Public support and property values
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• Public intuitionNo harmSome benefit, maybeNegative impacts
• RealityStabilization or
increased values even with significant lack of knowledge and little, if any, marketing
EDUCATION WITH THE FACTS
Planning initiatives that complement Greenways
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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
Public inputs to enhance economic value; now and future
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• Adopt trail-friendly Future Land Uses and zoning
Trail-oriented Development (TrOD)
• Trail design to max return
• Direct benefitsTrail businessesTourist-oriented biz
• Indirect benefitsServices, businesses
• Community marketingCompetitive
AdvantageBrandingWayfinding
Public inputs to enhance economic value; now and future
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• 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
Plan for different types of Greenways
RuralBarton Creek, TX
Industrial corridorMidtown Greenway, MN
ExurbsAustin, TX
Multifamily suburbBarton Creek, TX
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Develop Performance Measures and Outcomes
• Proposed Trails • Existing Trails
Suggestions
Private inputs
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Private opportunities (market inefficiencies)
• Land developersAssessing price of land
• HomebuildersPricing homes:
Design/locationCompetitive analysisAmenitiesResale
• Business communityID & location of profitable
services; maximizing profits
Developers, Homebuilders, and Real Estate Agents
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• Land acquisition and pricing
Pro-formaIRR
• Comparative advantage
• Marketable amenity• Subdivision and
community branding
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, --------