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6 1. INTRODUCTION TCRP project H-39, âMethodology for Determining the Economic Development Impacts of Transit Projects,â was intended to arrive at a recommended methodology for US transit agencies to follow when estimating the likely economic benefits of proposed transit capital investment projects. Transit projects, such as the extension of a rail system or the creation of a new bus rapid transit corridor, have economic benefits mainly when they make faster travel possible. Estimates of the direct value of faster travel times are already included in current evaluation procedures. Those benefits are economic impacts, and they potentially affect productivity, property values, and land development, but they are only part of the possible economic impacts. Both the reduction in travel times and the higher occupancy and denser development made possible by faster travel can in turn, at least in some cases, make firms and workers more productive in places with access to the new or improved transit services. It is important to note what we do not address in this study. First, there are significant direct expenditure impacts of transportation construction projects, in the form of direct jobs and indirect multiplier effects. These are important economic impacts. However, they do not necessarily distinguish transit projects from alternative uses of public funds like constructing roads, building schools, or funding food stamp programs. Second, we do not explore whether there may be benefits directly associated with the redistribution of economic activity, or more compact or clustered development that may follow transit investments. Most planners and transit agency professionals would say that a transit extension or new line leading to residential and non-residential development near stations would represent real success. They would argue that such an outcome demonstrates the role of transit to support compact community development patterns and population growth. However, from the perspective of this study, these spatial patterns are only of interest in terms of how they may increase the productivity or size of the regional or national economy. Densification near stations, or higher land values, are of less interest because they do not, by themselves, necessarily represent economic growth; they may instead represent local benefits at the expense of forgone growth elsewhere. The distinction is subtle and bears repeating: alteration of development patterns is partly a process of redistribution of economic activity, which does not by itself represent an increase in productivity when considered at the regional or national level. Third, and related to the above, our focus on agglomeration avoids double-counting user benefits. Under current procedures, travel time savings are already counted as user benefits. These travel time savings are capitalized into what most people refer to as land development benefits; and land development benefits have their own category. Fourth, this report does not address whether and under what circumstances transit investments may decrease poverty or unemployment within an area. Such impacts would be in addition to current evaluation criteria, and potentially worth serious consideration. A transit investment in an economically depressed area might have equivalent productivity impacts as one in a thriving area, but its actual benefits would likely be greater in the depressed area. In Chapter 2, we explore existing knowledge on how to estimate the economic benefits of transit projects, based on the academic literature, interviews and practice reports, and other practice-related reports and legislative/administrative guidance. In Chapter 3, we describe how to improve these methods, and explain the scope of work for the empirical phase of the project. Chapter 4 contains our primary research results. It describes an extensive analysis of a nationwide dataset of metropolitan statistical areas that includes economic data and measures of
7 transit capacity, and which is used for the basis of the spreadsheet tool described later. In Chapter 5 we describe supplementary analysis of geo-coded firm-level data for two metropolitan areas with relatively new rail transit systems: Dallas-Fort Worth, and Portland, Oregon. Chapter 6 describes three case studies of regions with recent transit investments: Los Angeles, Salt Lake City, and Dallas-Fort Worth. The case studies provide supplementary information on agglomeration effects and the barriers to achieving them, not easily incorporated into the quantitative analysis. Chapter 7 is a concluding chapter that also contains a description of the spreadsheet tool that could be used by transit agencies and others to estimate the GDP and wage impacts of proposed transit investments, given five input measures about those investments. Volume 2 of this report includes an additional set of appendixes, including a complete review of the academic literature, a detailed description of the agency interviews, a review of practice in the US and the UK, detailed tables of results from our US metropolitan area-level statistical analysis, and a glossary of terms used within the report.
