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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:

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quantifying the economic value of greenway benefits leveling the budget playing field

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
In the beginning: Frederick Law Olmsted
  • Central Park
  • Economic impact of parks and open spaces on property values
distinct analysis greenways are not linear parks
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
why measure economic value of greenways scarce resources
Why measure economic value of greenways? Scarce resources
  • Budgets
  • Cost-Benefit Analysis

One-sided

Validity

  • Public perceptions
  • Public support

Make the budget fair by accounting for economic return from greenways in the ‘Plus’ column of a Cost-Benefit Analysis

  • Construction
  • Maintenance
    • Lack of care = lack of use = loss of economic advantage
budget impacts from greenways
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

two distinct problems
Two distinct problems
  • Study limitations

The most commonly mentioned problem of earlier studies was that almost all findings were based on anecdotal evidence and not on market data.

Benefits omitted

what defines a greenway traverse or not
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)

ability to traverse
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
Greenway benefits
  • Monetary

Economic

Health

Hazard management

Safety

Transportation

Ecological

Equity

  • Non-monetary
    • Cultural and Historic preservation
    • Quality of Life
benefits provide choices
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.

americans want choices
Americans want choices

of Americans want more transportation options so they have the freedom to choose how to get where they need to go.

66%

73%

currently feel they have no choice but to drive as much as they do.

57%

would like to spend less time in the car.

Future of Transportation National Survey (2010)

the t remendous p otential
The Tremendous Potential

Of all trips:

47%

are driven

39% are less than 3 miles

17% are less than

1 mile

of these trips…

National Household Travel Survey (2009)

benefits environment
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.

benefits reduce infrastructure costs
Benefits: Reduce Infrastructure Costs

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
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
Benefits: Health

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
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.

methodologies reviewed
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
property values hedonic pricing method
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.
hedonic pricing limitations
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
contingent valuation cv
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
contingent valuation limitations
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.
travel time cost model
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
travel time cost limitations
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
collective analysis approach
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.
collective analysis limitations
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.
suggestions public side inputs
Suggestions - Public Side Inputs

Budget for more of the benefits

sustainable communities
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
sustainable communities criteria cypress creek greenway case study appendix a
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
slide34
Take Advantage of What We KnowIncrease the Impact of the Benefit and Increase the Number of People Who Benefit
public support and property values
Public support and property values
  • Public intuition

No harm

Some benefit, maybe

Negative impacts

EDUCATION WITH THE FACTS

  • Reality
    • Stabilization or increased values even with significant lack of knowledge and little, if any, marketing
planning initiatives that complement greenways
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

public inputs to enhance economic value now and future
Public inputs to enhance economic value; now and future
  • Adopt trail-friendly Future Land Uses and zoning

Trail-oriented Development (TrOD)

  • Trail design to max return
  • Direct benefits

Trail businesses

Tourist-oriented biz

  • Indirect benefits
    • Services, businesses
  • Community marketing
    • Competitive Advantage
    • Branding
    • Wayfinding
public inputs to enhance economic value now and future1
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

plan for different types of greenways
Plan for different types of Greenways

Rural

Barton Creek, TX

Exurbs

Austin, TX

Industrial corridor

Midtown Greenway, MN

Multifamily suburb

Barton Creek, TX

develop performance measures and outcomes
Develop Performance Measures and Outcomes
  • Proposed Trails

Existing Trails

private opportunities market inefficiencies
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

developers homebuilders and real estate agents
Developers, Homebuilders, and Real Estate Agents
  • Land acquisition and pricing

Pro-forma

IRR

  • Comparative advantage
  • Marketable amenity
  • Subdivision and community branding
discussion
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
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
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 cont1
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, --------