SHRP2 C03: Interactions between Transportation Capacity, Economic Systems, and Land Use

Presented by:

Glen WeisbrodEconomic Development Research Group, Inc.

Presented at:

Transportation Research Board, Annual Meeting, January 2014Using TPICS to Build Credibility into Steps in the Planning Cycle

www.tpics.us1SHRP2 C03 - Economic InteractionsFebruary 9, 2012EDR Group, Inc.1TPICS: Transportation Project Impact Case StudiesSHRP2 Project C03: Interactions Between Transportation Capacity, Economic Systems, and Land UseCase-Based, Web-Based Tool for Illustrating and Communicating Economic ImpactsTeam: EDR Group with ICF, Cambridge Systematics, CDM Smith, TTI, Susan Moses2SHRP2 C03 - Economic InteractionsFebruary 9, 2012EDR Group, Inc.2SHRP2 Database: Case Studies

3Economic Distress. This measure can affect the timing and magnitude of economic impacts associated with a transportation project. Various agencies define economic distress on the basis of per capita income, unemployment, and/or percentage of population below the poverty line. However, this study specifically focused on unemployment since it is very easy to obtain is available at the community level from the US Census. The economic distress metric used for this project is one of relative position, defined by the ratio of adjusted local unemployment level to that of US level. This helps to avoid distress classification changes associated with economic booms and downturns, and thus allows pre/post characterizations of economic conditions for projects that are started and completed at different times. SHRP2 C03 - Economic InteractionsFebruary 9, 2012EDR Group, Inc.3www.tpics.us4

5Case SearchSHRP2 C03 - Economic InteractionsFebruary 9, 2012EDR Group, Inc.5

6Case Search RefinementSHRP2 C03 - Economic InteractionsFebruary 9, 2012EDR Group, Inc.6

7Results: Cases FoundSHRP2 C03 - Economic InteractionsFebruary 9, 2012EDR Group, Inc.78

Economic & Development ImpactsSHRP2 C03 - Economic InteractionsFebruary 9, 2012EDR Group, Inc.8Decision-making has multiple phases9Much of the disagreement about measuring economic development 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 planning 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.

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 SHRP2 study of the collaborative decision-making process, and are summarized on this slide along with an identification of the appropriate type of tools to use at each stage in the process. Note that several states and MPOs have their own economic impacts modeling systems, and these are generally used at the project development/EIS stage (e.g., Ohios QEIM, etc.)

There was wide divergence among interviewees as to which of these stages most needed economic development impact analysis. Actually, that is not surprising; given that they had different positions and played different roles in planning and decision-making. For instance, several interviewees noted that some projects are motivated by economic development (rather than merely congestion reduction or safety), and that can play a major role in their stated purpose and need. Others noted that analysis of economic development impacts is particularly useful for public information and public participation purposes. Yet others noted that there can be value in examining economic development impacts as a way to gain insight into cost recovery opportunities, or to give recognition to long-term mobility and capacity needs at a regional level (that goes beyond impacts of individual projects). Clearly, the form of analysis needed to address each of these issues can vary widely, and no single method or tool can be equally applicable for all of them.9February 9, 20129EDR Group, Inc.SHRP2 C03 - Economic InteractionsDifferent issues and audiences (1)10What is a realistic range of economic impact expectations?

Concepts: Bypass, Widening, etc.Audience: Public Hearings, Elected Officials

Much of the disagreement about measuring economic development 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 planning 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.

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 SHRP2 study of the collaborative decision-making process, and are summarized on this slide along with an identification of the appropriate type of tools to use at each stage in the process. Note that several states and MPOs have their own economic impacts modeling systems, and these are generally used at the project development/EIS stage (e.g., Ohios QEIM, etc.)

There was wide divergence among interviewees as to which of these stages most needed economic development impact analysis. Actually, that is not surprising; given that they had different positions and played different roles in planning and decision-making. For instance, several interviewees noted that some projects are motivated by economic development (rather than merely congestion reduction or safety), and that can play a major role in their stated purpose and need. Others noted that analysis of economic development impacts is particularly useful for public information and public participation purposes. Yet others noted that there can be value in examining economic development impacts as a way to gain insight into cost recovery opportunities, or to give recognition to long-term mobility and capacity needs at a regional level (that goes beyond impacts of individual projects). Clearly, the form of analysis needed to address each of these issues can vary widely, and no single method or tool can be equally applicable for all of them.10February 9, 201210EDR Group, Inc.SHRP2 C03 - Economic InteractionsDifferent issues and audiences (2)11What configurations & settings work best?Alternatives: Urban, Suburban Fringe, RuralAudience: Planners, Area residents & businesses

Much of the disagreement about measuring economic development 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 planning 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.

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 SHRP2 study of the collaborative decision-making process, and are summarized on this slide along with an identification of the appropriate type of tools to use at each stage in the process. Note that several states and MPOs have their own economic impacts modeling systems, and these are generally used at the project development/EIS stage (e.g., Ohios QEIM, etc.)

There was wide divergence among interviewees as to which of these stages most needed economic development impact analysis. Actually, that is not surprising; given that they had different positions and played different roles in planning and decision-making. For instance, several interviewees noted that some projects are motivated by economic development (rather than merely congestion reduction or safety), and that can play a major role in their stated purpose and need. Others noted that analysis of economic development impacts is particularly useful for public information and public participation purposes. Yet others noted that there can be value in examining economic development impacts as a way to gain insight into cost recovery opportunities, or to give recognition to long-term mobility and capacity needs at a regional level (that goes beyond impacts of individual projects). Clearly, the form of analysis needed to address each of these issues can vary widely, and no single method or tool can be equally applicable for all of them.11February 9, 201211EDR Group, Inc.SHRP2 C03 - Economic InteractionsDifferent issues and audiences (3)12Which projects have priority for funding and implementation?Alternatives: Projects, TimingAudience: Transportation Agency staff & leaders

Much of the disagreement about measuring economic development 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 planning 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.

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 SHRP2 study of the collaborative decision-making process, and are summarized on this slide along with an identification of the appropriate type of tools to use at each stage in the process. Note that several states and MPOs have their own economic impacts modeling systems, and these are generally used at the project development/EIS stage (e.g., Ohios QEIM, etc.)

There was wide divergence among interviewees as to which of these stages most needed economic development impact analysis. Actually, that is not surprising; given that they had different positions and played different roles in planning and decision-making. For instance, several interviewees noted that some projects are motivated by economic development (rather than merely congestion reduction or safety), and that can play a major role in their stated purpose and need. Others noted that analysis of economic development impacts is particularly useful for public information and public participation purposes. Yet others noted that there can be value in examining economic development impacts as a way to gain insight into cost recovery opportunities, or to give recognition to long-term mobility and capacity needs at a regional level (that goes beyond impacts of individual projects). Clearly, the form of analysis needed to address each of these issues can vary widely, and no single method or tool can be equally applicable for all of them.12February 9, 201212EDR Group, Inc.SHRP2 C03 - Economic InteractionsDifferent issues and audiences (4-5)13What supporting actions need to be taken to enable broader community benefits?Project: Supporting Actions, Involvement, InitiativesAudience: Local Developers, Public Officials

Much of the disagreement about measuring economic development 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 planning 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.

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 SHRP2 study of the collaborative decision-making process, and are summarized on this slide along with an identification of the appropriate type of tools to use at each stage in the process. Note that several states and MPOs have their own economic impacts modeling systems, and these are generally used at the project development/EIS stage (e.g., Ohios QEIM, etc.)

There was wide divergence among interviewees as to which of these stages most needed economic development impact analysis. Actually, that is not surprising; given that they had different positions and played different roles in planning and decision-making. For instance, several interviewees noted that some projects are motivated by economic development (rather than merely congestion reduction or safety), and that can play a major role in their stated purpose and need. Others noted that analysis of economic development impacts is particularly useful for public information and public participation purposes. Yet others noted that there can be value in examining economic development impacts as a way to gain insight into cost recovery opportunities, or to give recognition to long-term mobility and capacity needs at a regional level (that goes beyond impacts of individual projects). Clearly, the form of analysis needed to address each of these issues can vary widely, and no single method or tool can be equally applicable for all of them.13February 9, 201213EDR Group, Inc.SHRP2 C03 - Economic InteractionsWhat is a reasonable range of economic impact expectations?

What configurations and settlings work best?Early Stage QuestionsSHRP2 C03 - Economic InteractionsFebruary 9, 2012EDR Group, Inc.14Match Models to Planning NeedsScreening Tool (TPICS)Economic Model (TREDIS, REMI)15Much of the disagreement about measuring economic development 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 planning 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.

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 SHRP2 study of the collaborative decision-making process, and are summarized on this slide along with an identification of the appropriate type of tools to use at each stage in the process. Note that several states and MPOs have their own economic impacts modeling systems, and these are generally used at the project development/EIS stage (e.g., Ohios QEIM, etc.)

There was wide divergence among interviewees as to which of these stages most needed economic development impact analysis. Actually, that is not surprising; given that they had different positions and played different roles in planning and decision-making. For instance, several interviewees noted that some projects are motivated by economic development (rather than merely congestion reduction or safety), and that can play a major role in their stated purpose and need. Others noted that analysis of economic development impacts is particularly useful for public information and public participation purposes. Yet others noted that there can be value in examining economic development impacts as a way to gain insight into cost recovery opportunities, or to give recognition to long-term mobility and capacity needs at a regional level (that goes beyond impacts of individual projects). Clearly, the form of analysis needed to address each of these issues can vary widely, and no single method or tool can be equally applicable for all of them.15February 9, 201215EDR Group, Inc.SHRP2 C03 - Economic Interactions16BecauseTransportation professionals need to do a better job of communicating the need for investment in transportation to support the economy and improve quality of life

Motivation for Projects: Access* Excluding Passenger and Freight Intermodal

17This chart shows the percent of all projects in metro/mixed, rural, and all areas by stated motivation. Projects can have more than 1 motivation, so they do not sum to 100%. This chart shows that the most common project motivation for projects in both rural and metro areas was congestion mitigation. After congestion mitigation, site access and delivery market access were top reasons in both metro/mixed and rural settings, while tourism was key in rural areas and labor market access was key in metro/mixed areas. It is interesting to note that air access is more prevalent as a motivational issue for metro area projects, while rail access is more important in rural areas.SHRP2 C03 - Economic InteractionsEDR Group, Inc.17February 9, 201217EDR Group, Inc.SHRP2 C03 - Economic InteractionsRange of Economic ImpactsMetro/Mix SettingRural Setting # CasesJobs Created# CasesJobs CreatedLowHighLowHighAccess Road24783,19557680Beltway72,10643,753---Bridge6011,77130319Bypass5023,977601,420Connector6014,57820412Interchange12023,520---Freeway139050,505---Widening *614,98915,48423,7854,080All Project Types57050,5051804,080*Excluding Passenger and Freight Intermodal Jobs reflect total economic impacts

18Explain that project types are different in rural areas than in metro areas for example, a widening in an urban area is functionally different than one in a rural area, they benefit different groups of people. In a rural area, the benefits accrue far from where the widening occurs, to long distance truckers, so just because the job impacts in the study area were low doesnt mean the project had less of an impact. It could have been distributed over a wider area.

This table shows the wide range of job impacts for each of the project categories.

Also removed 3 outliers (santan freeway, AZ101 and Central Artery)

SHRP2 C03 - Economic InteractionsEDR Group, Inc.18February 9, 201218EDR Group, Inc.SHRP2 C03 - Economic InteractionsComplementary Infrastructure and Policies

19The economic impact was often supported by non-transportation factors, most commonly as the presence of other infrastructure investments, land use policies and/or business development incentive programs. In some cases, the synergy among multiple factors created a positive economic development climate that lead to further job creation. In other cases, a lack of complementary infrastructure and supportive policies diminished job impacts. This table shows the frequency with which these various non-transportation factors were cited in case study interviews as matters affecting the long-term job growth impacts of highway projects. SHRP2 C03 - Economic InteractionsEDR Group, Inc.19February 9, 201219EDR Group, Inc.SHRP2 C03 - Economic InteractionsEffects of Non-Transportation Factorsand Economic Setting

20The median job creation was slightly over 180 for projects where a lack of complementary infrastructure or policies inhibited economic development, compared to over 1,420 for projects where supportive factors were reported. Projects that cited both positive and negative policies included a wide range of job impacts which resulted with a median of 1,050 jobs.

The influence that local factors can have on economic outcomes is even more apparent when grouped by level of economic distress, as shown. Non-Distressed areas with positive local factors resulted in higher median ratios of jobs per $ million than distressed areas. February 9, 201220EDR Group, Inc.SHRP2 C03 - Economic InteractionsEffects of InteractionsEffects of Concurrent InfrastructureWater, sewer, broadband, power, etc.Range of effects: -40% to +31%Supportive Land Use PoliciesPermitting, zoning, special districts, etc.Range of effects: -34% to +24%Business IncentivesTax increment financing, abatements, job training programs, etc.Range of effects: -12% to +20%21Based on analysis of the case study database, the estimated economic impacts are scaled by project size (as reflected by a combination of highway length and traffic level) and then adjusted upward or downward based on the factors shown in this slide. It should be noted that the potential for upward adjustment in economic impacts is larger than the potential for downward adjustment. The reason is that the range of actual project impacts is far broader above the median than it is below the median (as few projects have net impacts below zero). In actual use, the economic impact calculations shown in My Project Tools can reflect the compounded effects of any or all of these factors. In the web-tool, which we will preview in a minute, the midpoint on slider assumes these elements are adequate in the subject context.SHRP2 C03 - Economic InteractionsFebruary 9, 2012EDR Group, Inc.2122

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25SHRP2 C03 - Economic InteractionsFebruary 9, 2012EDR Group, Inc.25

26SHRP2 C03 - Economic InteractionsFebruary 9, 2012EDR Group, Inc.26Missouri Route 370Connects I-270 in Bridgeton with I-70 in St. Peters12 miles, including Discovery Bridge built across Missouri RiverBuilt between 1988 and 1996$343 m ($1996) cost

27Supporting Policies

Tax Increment Financing DistrictTransportation Development DistrictRezoned hundreds of acresCity and FEMA resolved flood plain issuesEstablished Discover!370 to promote corridor

28Route 370 Impacts60,000 AADT6.74 m+ sf of commercial and industrial space2,000+ housing units7,000+ jobs$3 m+ in real property taxes (not including residential)$230 m+ in property values$25 m+ in retail tax revenue

29Economy-Transportation Connection30

There are three inputs to business operations and hence job/ income generation. Transport affects the cost & characteristics of all three.Benefit PerspectivesDifferent Stakeholders3131Learning from the PastMonitoring the PresentPlanning for the Future32To improve program effectivenessObjective of Program Measurement Estimate Impacts Across Different Time Dimensionswith Common Economic Metrics- Economic Impact, Jobs- Cost-Effectiveness

- Benefit-Cost- Return on Investment

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