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Interactions Between Transportation Capacity, Economic Systems, and Land Use (2012)

Chapter: Chapter 1 - Study Issues and Process

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Suggested Citation:"Chapter 1 - Study Issues and Process." National Academies of Sciences, Engineering, and Medicine. 2012. Interactions Between Transportation Capacity, Economic Systems, and Land Use. Washington, DC: The National Academies Press. doi: 10.17226/22085.
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Suggested Citation:"Chapter 1 - Study Issues and Process." National Academies of Sciences, Engineering, and Medicine. 2012. Interactions Between Transportation Capacity, Economic Systems, and Land Use. Washington, DC: The National Academies Press. doi: 10.17226/22085.
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Suggested Citation:"Chapter 1 - Study Issues and Process." National Academies of Sciences, Engineering, and Medicine. 2012. Interactions Between Transportation Capacity, Economic Systems, and Land Use. Washington, DC: The National Academies Press. doi: 10.17226/22085.
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Suggested Citation:"Chapter 1 - Study Issues and Process." National Academies of Sciences, Engineering, and Medicine. 2012. Interactions Between Transportation Capacity, Economic Systems, and Land Use. Washington, DC: The National Academies Press. doi: 10.17226/22085.
×
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Suggested Citation:"Chapter 1 - Study Issues and Process." National Academies of Sciences, Engineering, and Medicine. 2012. Interactions Between Transportation Capacity, Economic Systems, and Land Use. Washington, DC: The National Academies Press. doi: 10.17226/22085.
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3C h a p t e r 1 project Background and Overview Project SHRP 2’s Capacity Project C03, Interactions Between Trans- portation Capacity, Economic Systems, and Land Use, involved the development of interviews, case studies, a database, and a web tool for assessing the economic and land development impacts of highway capacity investments. This final report of the project describes the data collection process, results of sta- tistical analysis, and study findings. Motivation The project was funded by SHRP 2 to enhance the effective- ness of highway project planning, prioritization, and selection processes by providing complete and accurate information on the nature of typical economic impacts of highway capacity expansion projects. The data collection process, the database tool, and analysis findings all focused on enhancing the effec- tiveness of local and state public meetings, policy discussions, and planning processes. Thus, the research study focused on assembling informa- tion for the range of highway projects that would be expected to generate economic impacts. These are classified as “capacity expansion projects” and typically they either (a) extend high- way access to new areas or (b) enhance the throughput (flow) of existing highway facilities to enable greater speed, reliabil- ity, and volume of movement. For these types of highway proj- ects, the research study assembled before and after information to observe economic and land development impacts and how they tend to vary by type of project or local setting. It should be noted that other types of highway investments were not covered in this study because they do not typically lead to economic impacts. These include (a) safety improve- ments and (b) facility reconstruction, rehabilitation, and preservation investments. These types of highway projects have notable user benefits, in reduced deaths and injuries (in the case of safety projects) or avoided facility performance degradation (or closure). Case Study Database The most notable accomplishment of this project was the devel- opment of 100 case studies of highway projects that (a) com- pared pre- and postproject changes in economic and land development conditions, (b) contrasted them with correspond- ing conditions for a base of comparison, and (c) included quan- titative impact measures and qualitative assessments based on local interviews. This collection of case studies, completed in 2010, was compiled with the goal of representing the full range of high- way-related project types, distributed among urban/rural set- tings in all regions of the United States. An effort was also made to build on highway impact studies in the United States and Canada, to the extent that those studies fit within the case study selection design, which is discussed in greater detail later in this chapter. T-PICS Web Tool The case studies were put into a web-based viewing and analy sis system called T-PICS (Transportation Project Impact Case Studies). This system includes (a) a search function that allows for user-defined screening and selection of relevant cases, (b) a case study viewer that provides user access to impact measures, discussion text, maps, and related docu- ments, and (c) an impact estimation calculator that shows the expected range of impact associated with any user-defined project profile. The T-PICS system was designed to assist transportation agencies in project planning and evaluation by providing agency staff and interested stakeholders with a means for estab- lishing the range of job, income, and development impacts Study Issues and Process

4typically associated with various types of transportation proj- ects in different settings. Stakeholder Interview process Motivation At the outset of this project, the research team held discus- sions with state and regional transportation planning officials to obtain additional information on their needs and concerns regarding current methods for assessing economic develop- ment impacts of highway projects and the potential use of case study research. Key findings are summarized here. Topics The specific topics of conversation fell into four groups: 1. Level of interest in economic impact analysis among stake- holders. Levels of awareness of economic impact issues and issues of major concern for impact measurement, assess- ment, and forecasting. 2. Uses of economic impact analysis by stakeholders. Uses made of those impact estimates (for planning and decision mak- ing) and types of impact metrics stakeholders find most useful. 3. Situations in which economic impact analysis is most relevant. Types of projects and situations in which those impact mea- sures are most needed, timing of when the impact measures are useful, and audiences for them. 4. Perception of needs for improvement. Perceived problems with the definition of currently available impact measures, gaps in their reliability and credibility, and weaknesses in how they are being used. Interviewees The discussion findings were compiled by staff of the Eco- nomic Development Research Group, ICF International, Wil- bur Smith Associates, Cambridge Systematics, Texas A&M Transportation Institute, and Susan Jones Moses & Associ- ates. The team members assembled findings from their con- versations with state and regional agency staff, including new interviews conducted for this study supplemented by recent conversations from other related projects. Staff of the research team reported on discussions with representatives from transportation planning agencies in the states of Iowa, Texas, California, North Carolina, New York, Wisconsin, Michigan, Oregon, Maine, Montana, and New Mexico and the Appalachian Regional Commission. In addi- tion, a focus group of consultants was invited to determine the factors that they collectively thought were most critical for improvement to the state of practice. Stakeholder Needs for Decision Making The stakeholder interviews and focus group discussions led to the findings described in the following sections. Importance of Economic Development Impacts Among state and regional transportation planning officials and staff, there is widespread recognition that economic development is a legitimate and important public policy goal and that transportation investment can (at least sometimes) have an impact on it. However, there are many among them who are not sure how economic development impacts and opportunities can be reliably and legitimately measured. A growing number of state and regional agencies do use economic impact models or tools, but concern remains about the empirical basis of those tools. There is also uncertainty about how to interpret information about wider economic impacts and use it without double counting transportation system benefits. Nearly all of the interviewees saw the project effort—to build a national database of case study research on economic impacts of highway projects—as providing a solid base of empirical information to help address those concerns. Types of Information Needed in Decision Making Much of the disagreement about measuring economic devel- opment impacts and much of the concern about their use can be traced back to confusion about the intended purpose of economic impact analysis. For DOT staff and other decision makers, there are distinctly different types of information and communication needed at different stages in the plan- ning and decision-making process. Yet there is no simple way to match economic impact tools or results to those stages in the decision-making process. With better guidance and case study examples, such problems can be addressed and the mis- application of evaluation tools reduced. Differing Analysis Needs at Planning and Decision Stages The interviews identified at least six distinct stages in the planning process at which economic development impacts become a consideration. At each stage, the issues concerning economic development and the necessary form of input information are different. These stages conform roughly to key decision points in the separate SHRP 2 study of the col- laborative decision-making process.

51. Policy/funding allocation; 2. Planning strategy; 3. Programming (including funding); 4. Prioritization; 5. Project development/environmental impact statement; and 6. Preservation, operations, and maintenance. There was wide divergence among interviewees as to which of these stages most needed economic development impact analysis, a divergence that is not surprising in light of the respondents’ different positions and roles in plan- ning and decision making. For instance, several interview- ees noted that some projects are motivated by economic development (rather than merely congestion reduction or safety), which can play a major role in their stated “purpose and need.” Other interviewees noted that analysis of eco- nomic development impacts is particularly useful for pub- lic information and public participation. Finally, some interviewees noted that there can be value in examining economic development impacts as a way to gain insight into cost recovery opportunities or to recognize long-term mobility and capacity needs at a regional level (beyond the impacts of individual projects). Clearly, the form of analy- sis needed to address each of these issues can vary widely, and no single method or tool can be equally applicable for all of them. Consideration of Wider Economic Benefits Consultants and academics (rather than planners or officials) tended to be most aware of the recent European advances in formally recognizing what they call WEBs—wider economic benefits—in decision making. Whereas economic impacts have often been seen in the United States as a way of justifying projects that would otherwise not pass the traditional user benefit/cost test, the WEB approach shows how economic development assessment can encompass land use and devel- opment considerations and serve to either increase or decrease estimates of the payback from transportation investments. The range of impacts observed in the case study examples can inform the development of a more systematic and appropriate set of economic benefit metrics for investment decision mak- ing in the United States. refining economic Impact Concepts The interviews with practitioners identified, from a practi- tioner’s perspective, the following key needs and concerns to enhance analysis methods for assessing economic development impacts of transportation investments. Need for Case Studies of Economic Development Impacts There is a strong need to establish realistic expectations about economic impacts of transportation projects at the earliest possible point in planning and decision making. Staff of state DOTs continually face, on the one hand, unrealistically high expectations of positive job creation benefits from proponents and, on the other, unrealistically high alarm about loss of land values and uses from opponents. Efforts to address the two perspectives can increase the resources required and the time involved in planning, analysis, and public discussion. They drive demand for analysis of potential economic development impacts, although they also “raise the bar” in the need for transparency in defining impact measures and estimating their values. Case study examples selected from a national database can help provide a more realistic range of likely impact expectations for projects under consideration in early planning discussions. Defining and Measuring Economic Development Impact More than one interviewee noted that the definition of eco- nomic development impacts is not a simple matter. Most types of economic development impact analysis focus on measuring economic activity expansion by looking at mea- sures of jobs, income, GDP (value added), and business sales. Public groups sometimes broaden the scope of analysis to encompass a wider range of societal goals for economic development, including economic standards (e.g., unem- ployment rate, average wage, standard of living, and job skill level) and business factors (productivity and competitive- ness). Such analyses may also incorporate broader measures of quality of life (e.g., safety/security, air quality, and carbon footprint). The following are the most common factors used in eco- nomic development impact analysis: • Jobs; • Income (or gross regional product); • Productivity; • Property values; • Competitiveness (relative costs); and • Quality of life (e.g., air quality, safety). Most agencies focus on jobs because they are most easily understood by the public and do not require potentially con- fusing inflation adjustments. However, a number of interview- ees from different agencies noted the importance of tax base and property values for public-sector decision making, and others expressed interest in competitiveness and productivity

6to enable better economic evaluation. Case studies can inform the examination of all these impact elements. Time and Space Aspects of Economic Development Impacts Urban planners have noted that economic development impacts can unfold over time and over space. The most com- mon sequence of impacts is the following: • Change in land prices/valuation (as demand grows for some locations); • Change in property sales volume and prices (as land is pur- chased for new or more intensive uses); • Change in amount of construction spending (as building investment is made for new or more intensive uses); • Change in employment, associated wages, and total busi- ness sales (as buildings are occupied); and • Change in public-sector tax revenues (as business activity occurs in the new buildings). This sequence leads to a wide set of potentially relevant indicators of economic development impacts and of potential spatial areas for measuring those impacts. Error can be intro- duced when postproject studies attempt to measure some of the later forms of impact prematurely or focus on too narrow a spatial area. Error can also be introduced when preproject forecasts focus on an overly narrow indicator or are defined for an overly narrow or broad study area. Errors Caused by Multiple Indicators The proliferation of ways to measure economic impacts leads to confusion among analysts and users of this information. One example is preproject impact forecasting methods that attempt to focus on just one impact indicator (e.g., jobs) with- out acknowledging the potential for other forms of impact (e.g., land use). There is also concern about double counting of impacts by combining overlapping impact measures. Study Design After completion of the initial stakeholder interviews and focus group discussions (described in the preceding sections), the research team developed 100 case studies of highway impacts on local and regional economic development. The cases were carefully selected to ensure a wide range of project types in different settings (as described in Chapters 2–5). The case studies and accompanying database and T-PICS web tool were designed with the specific intent of addressing issues raised in the stakeholder interviews. The following sections present the key elements that emerged from those interviews. Coverage of Projects, Contexts, and Impact Measures The stakeholder interviews underscored the need to distinguish impacts among a wide range of different types of transporta- tion projects and settings. The SHRP 2 program is required to focus specifically on highways; within that class, case studies were carefully selected to cover 10 types of highway-related capacity projects, representing essentially the entire range of project types. These spanned all regions of the United States and a wide range of urban/rural settings and economic conditions. The characteristics of the projects and their settings are repre- sented in the case study database. Economic impacts of the case study projects were defined to include both quantitative data and qualitative observations on how economic conditions changed before and after comple- tion of each highway project, covering impacts on jobs, income, land values, and building investment. The research team also sought to distinguish the extent to which impacts occurred at a localized or regional level. In this way, the case studies illus- trated the multifaceted impacts of economic development, depending on the type of project and its setting. The T-PICS web tool provides tables of quantitative impact metrics and detailed text to describe different forms of eco- nomic development impact. The only major limitation in terms of data coverage is that it was not possible to assemble information on how traffic conditions have changed over time, largely because preproject data were not available. Explanation of Factors Affecting Observed Economic Results The stakeholder interviews and focus group comments under- scored a need to recognize and (to the extent possible) control for outside factors that affected changes in economic develop- ment. Accordingly, the case studies included not only a com- parison of before and after changes in economic conditions but also a comparison to reference areas, to control for external business cycles, as well as interviews with local planners and business representatives to assess the extent to which observed changes were due to the highway project versus other factors. This approach has value in two ways. First, it provides a basis for distinguishing the extent to which the highway project was actually responsible for observed economic development impacts. Second, it clarifies the ways in which local economic and institutional factors served to either mute (reduce) or amplify (expand) the magnitude of observed economic devel- opment impacts. Thus the case studies establish the extent of causal connection between highway-related improvements and resulting economic impacts. However, the research team cautions that the case study database cannot relate observed economic impacts to the mag- nitude of before and after changes in transportation conditions.

7Those relationships require more data (currently unavailable) on how transportation conditions have changed and a more sophisticated economic model that can establish costs and benefits for various elements of the economy. Basis for Sketch Planning The T-PICS web tool provides a way for transportation plan- ners to search for relevant types of projects in specific types of setting (e.g., region, urban/rural population density). It also enables users to research a given type of proposed project and see the range of impacts actually observed. These features have three important uses. First, they can have value for early policy or strategy development, in which it can be useful to initially identify the magnitude and types of impact trade- offs to be considered. Second, they can be useful for early “sketch planning” processes to identify the types of local bar- riers and success factors that will need to be addressed in later, more-detailed planning steps. Third, the case study findings can be useful in public hearings because they provide a way of responding to the sometimes unrealistic hopes of propo- nents or fears of opponents with information about the types of impacts that have actually occurred. Complementarity with Economic Development Impact Models The case studies provide empirical evidence of actual economic development impacts of past highway system improvement projects. Besides being directly useful for initial strategy devel- opment and public hearings, benchmarks of economic impact from past case studies (now available from this study) can be used to help validate the reasonableness of predictions made by economic impact forecasting models for proposed future proj- ects. Until now, there has been a paucity of such data available for validating predictive models. However, it should also be clear that the case study database and T-PICS web tool cannot serve as a substitute for predictive economic impact models. For, although such models forecast shifts in economic growth resulting from changes in transpor- tation conditions (e.g., traffic levels, travel times, distances, access, reliability), the case studies lack such detailed informa- tion. That was unavoidable given the long time span of the economic impact case studies (often 10–20 years) and the fact that data on preproject transportation conditions were never collected or are no longer available. As a result, the case studies are useful for portraying the range of impacts observed from specific types of projects (e.g., bridge widening in urban areas or town bypass projects in rural areas). But they have neither the transportation data nor the statistical controls to show how variation in travel characteris- tics (travel times, costs, and access features) affect economic impacts. For this reason, the case study database is designed for use as a sketch planning tool that is most useful for initial pol- icy or strategy development, whereas economic impact models are most useful in later stages of planning and priority setting, when more details are available on the nature of proposed projects and their expected transportation system impacts.

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TRB’s second Strategic Highway Research Program (SHRP 2) Report S2-C03-RR-1: Interactions Between Transportation Capacity, Economic Systems, and Land Use provides information on the development of a large database of case studies and a web-based T-PICS (Transportation Project Impact Case Studies) tool that allow for more rapid assessment of the long-term economic impacts of highway capacity projects.

SHRP 2 Report S2-C03-RR-1 and the accompanying T-PICS web-based tool are intended to serve as a resource for transportation planners and others who are interested in better understanding the long-term economic impacts of highway capacity projects. The T-PICS web-based tool provides transportation planners with a way to search for relevant case studies by type of project and setting. The case studies include details of the projects, their impacts, and factors affecting the impacts. The web tool also provides users with an option to specify the type of proposed project and see the range of likely impacts based on the studies.

SHRP 2 Capacity Project C03 also developed three additional related materials: a data dictionary, a users guide, and performance metrics.

SHRP 2 Report S2-C03-RR-1 includes an explanation of how the case studies were selected and developed, an introduction to T-PICS, and a meta-analysis of the key relationships among factors such as project type, traffic volume, project location, and nontransportation policies aimed at fostering economic development.

An e-book version of this report is available for purchase at Google, iTunes, and Amazon.

Errata: Figure 4.3 (p. 23) was cut off along the right edge and did not display all of the information in the bar graph. The figure has been corrected in the electronic version of the report.

Disclaimer: This software is offered as is, without warranty or promise of support of any kind either expressed or implied. Under no circumstance will the National Academy of Sciences or the Transportation Research Board (collectively "TRB") be liable for any loss or damage caused by the installation or operation of this product. TRB makes no representation or warranty of any kind, expressed or implied, in fact or in law, including without limitation, the warranty of merchantability or the warranty of fitness for a particular purpose, and shall not in any case be liable for any consequential or special damages.

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