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Practices for Evaluating the Economic Impacts and Benefits of Transit (2017)

Chapter: Chapter Five - Case Examples

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Suggested Citation:"Chapter Five - Case Examples." National Academies of Sciences, Engineering, and Medicine. 2017. Practices for Evaluating the Economic Impacts and Benefits of Transit. Washington, DC: The National Academies Press. doi: 10.17226/24768.
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Suggested Citation:"Chapter Five - Case Examples." National Academies of Sciences, Engineering, and Medicine. 2017. Practices for Evaluating the Economic Impacts and Benefits of Transit. Washington, DC: The National Academies Press. doi: 10.17226/24768.
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Suggested Citation:"Chapter Five - Case Examples." National Academies of Sciences, Engineering, and Medicine. 2017. Practices for Evaluating the Economic Impacts and Benefits of Transit. Washington, DC: The National Academies Press. doi: 10.17226/24768.
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Suggested Citation:"Chapter Five - Case Examples." National Academies of Sciences, Engineering, and Medicine. 2017. Practices for Evaluating the Economic Impacts and Benefits of Transit. Washington, DC: The National Academies Press. doi: 10.17226/24768.
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Suggested Citation:"Chapter Five - Case Examples." National Academies of Sciences, Engineering, and Medicine. 2017. Practices for Evaluating the Economic Impacts and Benefits of Transit. Washington, DC: The National Academies Press. doi: 10.17226/24768.
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Suggested Citation:"Chapter Five - Case Examples." National Academies of Sciences, Engineering, and Medicine. 2017. Practices for Evaluating the Economic Impacts and Benefits of Transit. Washington, DC: The National Academies Press. doi: 10.17226/24768.
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Suggested Citation:"Chapter Five - Case Examples." National Academies of Sciences, Engineering, and Medicine. 2017. Practices for Evaluating the Economic Impacts and Benefits of Transit. Washington, DC: The National Academies Press. doi: 10.17226/24768.
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Suggested Citation:"Chapter Five - Case Examples." National Academies of Sciences, Engineering, and Medicine. 2017. Practices for Evaluating the Economic Impacts and Benefits of Transit. Washington, DC: The National Academies Press. doi: 10.17226/24768.
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Suggested Citation:"Chapter Five - Case Examples." National Academies of Sciences, Engineering, and Medicine. 2017. Practices for Evaluating the Economic Impacts and Benefits of Transit. Washington, DC: The National Academies Press. doi: 10.17226/24768.
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Suggested Citation:"Chapter Five - Case Examples." National Academies of Sciences, Engineering, and Medicine. 2017. Practices for Evaluating the Economic Impacts and Benefits of Transit. Washington, DC: The National Academies Press. doi: 10.17226/24768.
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Suggested Citation:"Chapter Five - Case Examples." National Academies of Sciences, Engineering, and Medicine. 2017. Practices for Evaluating the Economic Impacts and Benefits of Transit. Washington, DC: The National Academies Press. doi: 10.17226/24768.
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Suggested Citation:"Chapter Five - Case Examples." National Academies of Sciences, Engineering, and Medicine. 2017. Practices for Evaluating the Economic Impacts and Benefits of Transit. Washington, DC: The National Academies Press. doi: 10.17226/24768.
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Suggested Citation:"Chapter Five - Case Examples." National Academies of Sciences, Engineering, and Medicine. 2017. Practices for Evaluating the Economic Impacts and Benefits of Transit. Washington, DC: The National Academies Press. doi: 10.17226/24768.
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Suggested Citation:"Chapter Five - Case Examples." National Academies of Sciences, Engineering, and Medicine. 2017. Practices for Evaluating the Economic Impacts and Benefits of Transit. Washington, DC: The National Academies Press. doi: 10.17226/24768.
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Suggested Citation:"Chapter Five - Case Examples." National Academies of Sciences, Engineering, and Medicine. 2017. Practices for Evaluating the Economic Impacts and Benefits of Transit. Washington, DC: The National Academies Press. doi: 10.17226/24768.
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45 chapter five Case examples Overview This chapter profiles five individual studies to illustrate in more detail the current state of practice for EIAs of transit. The case examples were selected to represent a range of situations, addressing differ- ent development contexts and geographic regions of the United States, transit agencies of different sizes, and evaluations of both existing and proposed services from multiple analytical perspectives. Table 21 presents a summary of select case example attributes. For each study, this chapter addresses the following questions: • Context and purpose: Why was the analysis undertaken? • Effects considered and comparative framework: what types of effects are included in the analy- sis? How does the analysis define a comparative framework to address its analysis objectives? • Tools, methods, and resources: What tools, methods, and data sources were used in the analy- sis? Were they adapted from outside the region, and if so, how? • Results, planning process, and communication strategy: How does the analysis relate to other planning processes or decisions within the region? How were results communicated to the tar- get audience(s)? and How did the presentation of results address issues such as uncertainty or the use of multiple analytical perspectives? individual Case studies milwaukee County transit system economic assessment (Huron Consulting Group 2015) summary Milwaukee County chose to conduct an economic study of the Milwaukee County Transit System (MCTS) to update information from a 2005 study and to support the case for transit, given increasing funding pressures experienced by the agency. The study focused on the social benefits of the avail- ability of transit services from multiple stakeholder perspectives. It demonstrated that transit affects travel costs experienced by stakeholders in a variety of ways, and that it also supports employment and access to health care for those without other travel options. MCTS has used the study results in conversations with funding partners at the local, state, and national levels. MCTS also used the study process itself to further engage stakeholders in the transit planning process. Context and purpose Milwaukee County engaged a team of consultants and university researchers to provide an economic assessment of MCTS. The study was a follow-up to a prior assessment completed in 2005 and was timed to provide updated findings and to address the increasingly salient funding pressures experi- enced by the agency. A stated objective of the study was to present estimates of the negative impacts the region would experience from a decrease in transit funding. The study noted an annual ridership decrease of 10 million trips between 2005 and 2013 as a result of service cuts and fare increases over that period. It also highlights the use by MCTS of short-term federal funding to establish and tem- porarily maintain express routes. This demonstrates the context and need for analysis of the benefits

46 of MCTS services as part of an ongoing discussion about the value of investment in transit services. Addressing this need, the study includes both a quantitative assessment intended to provide con- crete estimates of value to MCTS stakeholders, based on benchmarks from well-regarded national resources, and a qualitative process that engaged stakeholders to explore community perceptions and strengthening partnership relationships in the region. effects Considered and Comparative Framework The study investigates the value provided MCTS services, relative to a hypothetical scenario in which transit services are unavailable. The study focused primarily on quantifying the economic Case Example (1) Milwaukee (2) San Francisco (3) Atlanta (4) Minneapolis– St. Paul (5) Michigan Subject of Evaluation Existing transit system Existing transit system Future transit and real estate scenario Future transit and land-use scenarios Existing transit system Location Milwaukee, Wisconsin San Francisco, California Atlanta, Georgia Minneapolis/St. Paul, MN Michigan, Statewide Transit Mode Share* 5.7% (Milwaukee County) 34% (San Francisco County) 3.1% (Atlanta–Sandy Springs–Marietta, GA Metro Area) 4.8% (Minneapolis–St. Paul–Bloomington, MN–WI Metro) 1.5% (Michigan) Study Sponsor Milwaukee County (houses the transit agency, MCTS) San Francisco Municipal Transportation Agency (transit agency; also in charge of streets and taxis in the city) Central Atlanta Progress (private non- profit)/Atlanta Downtown Improvement District (public– private partnership) Itasca Project (employer-led alliance) Michigan Department of Transportation Transit Type Bus and demand- response Bus, light rail, cable car, street car (all existing services) Commuter rail, light rail, streetcar, BRT, bus (prospective) Light rail and bus/ BRT (prospective) Fixed-route bus and demand response Analysis Perspective** Social benefits of availability of transit services, worker income impact, and stakeholder perspectives Social benefits of availability of transit services Economic impacts (including land redevelopment) and financial effects of planned investments Social benefits, economic impacts, and qualitative business perspectives on planned investments Social benefits of availability of transit service; economic impacts of transit O&M expenditures and redirected household cost savings *2014 American Community Survey U.S. Census Bureau. ** “Social benefits” refer to net societal gains typically considered in benefit–cost analysis; “impacts” include changes in jobs and flow of income within the economy. See Glossary for further definitions of terms. Source: EDR Group, based on detailed case example findings. TAblE 21 SUMMAry oF SElECTEd CASE ExAMplES

47 value of social benefits, but also includes some economic impacts associated with the income of transit-dependent workers. It divides the benefits of transit services into two categories. First, “trans- portation cost savings” are defined to include: • Ownership and operating cost savings associated with automobile use, based on per-mile cost factors. • Parking cost savings benefit, based on daily savings in parking costs for commuters who would drive in the absence of transit. • Net environmental emission savings, based on reductions in vehicle-miles traveled and per-mile emissions costs factors. • Avoided chauffeuring cost savings, valued using per-mile cost factors. • Taxi fare cost savings, derived from the share of trips diverted to taxis in the absence of transit and a per-mile cost factor. • Safety cost savings associated with the relative safety performance of buses and cars. • Travel time value savings from congestion reduction effects. • Pavement damage avoidance benefits that capture reduced wear and tear on pavement associ- ated with increased vehicle mileage on the road system. Second, “low-cost mobility benefits” are defined to include: • Estimates of jobs foregone and associated employee earnings, from an estimate of those who could no longer afford to work in the absence of transit services. • The value of unemployment compensation and food stamp costs associated with an individual who forgoes work in the absence of transit services. • Medical cost savings derived from the national research on the value of non-emergency medi- cal transportation. The study acknowledges stimulus effects of transit system operations, but excludes them from the scope of the analysis, opting instead to focus on effects “associated with mobility and accessibility”— that is, the performance effects of transit services. This decision was influenced, in part, by the additional resources required to conduct an EIA (e.g., use of a regional economic model). tools, methods, and resources The study relied on a combination of national and region-specific resources. Cited national resources included: The National Center for Transit research’s report Cost-Benefit Analysis of Rural and Small Urban Transit (Godvarthy et al. 2014), and the Altarum Institute report on Cost Benefit Analysis of Pro- viding Non-Emergency Medical Transportation (Hughes-Cromwick et al. 2005), as well as American Automobile Association data on automobile costs. The study further relies on factors and methodology developed in the earlier Milwaukee transit economic study by (Hlb decision Economics Inc. 2005) and on regional-specific data sources on transit usage patterns, including the 2013 MCTS Customer Study that segmented transit users by trip purpose, and the 2012 on-board public Transit ridership Survey by the Southeastern Wisconsin regional planning Commission that identified alternative modes of trans- portation in the absence of transit. The study therefore leveraged national research to identify accepted cost factors for different types of benefits, while relying on local knowledge and data to understand the current usage profile of transit in the county and therefore the likely implications of a loss of transit service to individual users. Unique facets of MCTS are further elucidated by interviews with regional stakeholders, including representatives of individual employers, higher education institutions, the health care industry, and others concerned with livability and economic development issues in the county. results, planning process, and Communication strategy The results of the MCTS analysis are presented in a report that includes a concise summary of ben- efits in an executive summary and a comparison of these benefits to the costs of operating services. The estimated total benefits number is referenced on the MCTS website on the “Who Is MCTS” web page. The figure has also been cited by local news. Table 22 shows the reported benefits, which are notable for the inclusion of costs that would be incurred without the transit system. This supports a

48 narrative about the many ways that transit affects various parties. In technical terms, some of these factors are more commonly referred to as economic impacts, as they may be viewed as income redis- tributions rather than additional benefits depending on the perspective being taken. (For instance, avoidance of taxi and chauffeuring costs may be seen as a cost savings for transit riders, but income loss to drivers of those other services. likewise, riders who would lose their jobs without transit may receive unemployment compensation and food stamps instead of wages.) The executive summary of the report presents quantitative results alongside stakeholder views col- lected during the interview process. The stakeholder views are used to corroborate analytical results, for example, by substantiating the relationship between transit services and access to employment. Qualitative findings are also used to highlight specific effects not captured by aggregate quantitative methods; for example, the role of transit in serving special events such as Summerfest. MCTS has used the study results in conversations with funding partners at the local, state, and national levels. Interestingly, MCTS used the very process of completing the economic analysis as an opportunity for engaging stakeholders within the transit planning process. Stakeholders offered suggestions for transit improvements that are then included in the study’s high-level findings. Finally, the study notes in its conclusions the role of “community stakeholders and organizations in advocating for and part- nering with Milwaukee County doT and MCTS, moving forward.” The study therefore serves as a vehicle for opening and encouraging two-way communication between MCTS and transit stakehold- ers, rather than a one-way presentation of results. san Francisco transit economic Benefits study (EPS and CHS 2015) summary The San Francisco Municipal Transit Agency (SFMTA) commissioned an economic benefits study with the goal of increasing stakeholder awareness of transit’s contribution to the economy and sup- porting transportation funding initiatives underway at the time. The 2015 study followed a November 2014 approval by voters of two transportation funding measures and was viewed by SFMTA as a way of providing accountability to and education of stakeholders regarding the value of their spending. It was also conceived of as a tool to further additional discussions about funding initiatives—including Transportation Cost Savings Estimated Benefits, 2013 Ownership and Operating Cost Savings $13,822,380 Parking Cost Savings Benefit $7,725,773 Net Environmental Emission Savings $910,102 Avoided Chauffeuring Cost Savings $17,273,444 Taxi Fare Cost Savings $15,750,193 Safety Cost Savings $3,669,552 Travel Time Value Savings $9,802,909 Pavement Damage Avoidance Benefit $69,807 Total $69,024,160 Low-Cost Mobility Benefits Estimated Benefits, 2013 Work Trips Employment Value $119,089,006 Additional Unemployment Compensation $46,831,752 Additional Food Stamp Cost $13,675,654 Jobs Lost 4,962 Work Trips Subtotal $179,596,412 Medical Trips Cost of Forgone Medical Trips $93,519,371 Medical Trips Subtotal $93,519,371 Source: Huron Consulting Group (2015). TAblE 22 bENEFITS ANd AddITIoNAl IMpACTS: MIlWAUkEE STUdy

49 developer fees under consideration as part of the Transportation Sustainability program and additional bond measures. The study demonstrated the social benefits of the availability of transit services in both quantitative and qualitative terms, and compared monetized benefits with annual operating and “state of good repair” costs. SFMTA has used the results of the study to communicate with a variety of audi- ences including SFMTA’s board of directors and the SFMTA Citizens Advisory Council. results were also published in the local news. The Transportation Sustainability Fee under discussion at the time of the completion of the study in August 2015 was ultimately signed into law in November 2015. Context and purpose SFMTA engaged a team of consultants to “document and estimate the economic benefits of provid- ing Muni transit services in San Francisco.” The study is framed relative to a context of high-growth and aging infrastructure, which both highlights the importance of transportation and the pressures brought to bear on continued transportation system performance. The study also provides statistics to assist elected officials and the public with decisions relating to funding to improve and expand Muni transit services. Given the public mandate to invest, SFMTA commissioned the study to help dem- onstrate how maintaining and expanding transit provides a positive roI to the city. The study was scoped to quantify the current benefits and costs of Muni operations, while also working to advance an analytical framework for understanding future investment decisions. effects Considered and Comparative Framework The study considers a hypothetical scenario in which Muni transit services are unavailable, com- pared with current operations of the system. The study monetizes social benefits and then compares them with annual operating and “state of good repair” costs, using benefit–cost ratios and calcula- tions of net present value of benefit. Table 23 summarizes the benefits that were monetized within the study, as well as additional social benefits that are acknowledged but not monetized. tools, methods, and resources The study combines region-specific data sources and tools with state-level and national resources, including SFMTA’s 2014 Systemwide on-board Survey, the San Francisco County Transportation Authority’s travel model, FTA’s Transit performance Monitoring System and the National Transit database, U.S. Census data, Muni transit collision reports, the Statewide Integrated Traffic records System for auto accident rates, carbon dioxide emissions rates from the San Francisco Climate Action Monetized Benefits Description Travel time savings to drivers By reducing auto trips in the city, Muni reduces congestion and improves travel times Reduced parking costs Muni customers reduce parking costs at both destinations and residence Improved travel safety Muni travel results in fewer collisions than autos on both a per passenger trip and per mile basis Travel cost savings to Muni riders Muni customers avoid auto operations and maintenance and life-cycle costs (e.g., fuel, insurance, and depreciation) Air quality and greenhouse gas (GHG) reductions Muni travel produces less GHG and other emissions than autos on both a per passenger trip and per mile basis Non-Monetized Benefits Description Worker productivity Economic agglomeration effects (concentration of workers and industries in a centralized location) Public health Active transportation choices that promote physical movement Livability Enhanced transportation options, pedestrian friendly streets, less traffic Social equity Accessibility for lower income and other disadvantaged groups Source: Economic & Planning Systems (2015). TAblE 23 MoNETIzEd ANd NoN-MoNETIzEd bENEFITS: SAN FrANCISCo MUNI STUdy

50 Strategy, other auto emissions rates published by the California Environmental protections Agency Air resources board, and local data on parking rates and travel mode split. The Systemwide on-board Survey, the San Francisco County Transportation Authority’s travel model is a critical tool for estimat- ing the congestion effects of putting more cars on the road in a scenario without Muni services. Given the increasing density and transportation demand in San Francisco, congestion relief is one of the top three benefit categories monetized in the study. benefit valuation factors (e.g., value of time, vehicle operating costs, emissions, and safety) are sourced from U.S.doT and EpA guidance. The study is notable for its emphasis on transparency of methods and calculations. Wherever pos- sible, the study uses multiple sources of information to arrive at a range of plausible benefit estimates (the high and low values reported in Table 24). For example, estimates of the number of transit users who would drive if Muni transit service were unavailable are bounded by estimates from local and national survey data. This approach was adopted to account for the inherent complexity and uncertainty of an exercise aimed at understanding hypothetical behavior in the absence of transit services. results, planning process, and Communication strategy Study results are summarized by type of benefit and aggregated for a comparison to costs within a benefit–cost framework (see Table 24). The results are presented as a range of high and low values. The report’s summary of findings further highlights the three largest sources of monetized eco- nomic benefit: “(1) reduced travel costs from taking Muni instead of driving, (2) parking cost savings to local residents at their homes attributable to Muni’s role in facilitating lower car ownership rates, and (3) the value of reduced travel times attributable to Muni’s contribution to congestion relief.” The summary section also states that estimated benefits omit a variety of effects that are difficult to quan- tify. This statement serves to both highlight the ways in which results are sensitive to assumptions and to bolster the impact of the numbers that are reported by presenting them as conservative estimates. Within the full report, sections on individual benefit types conclude with a discussion of “results and implications.” These discussions guide the reader in the interpretation of results and anticipate some of the questions or caveats an astute reader might have after reviewing the adopted methodology, including sensitive assumptions and excluded effects that influence the reported findings. • SFMTA has used the results of the study to communicate with a number of audiences, includ- ing formal presentations to SFMTA’s board of directors and the SFMTA Citizens Advisory Council. In these presentations, the agency identified the following next steps: improving awareness of transit benefits among the public and policymakers, Economic Benefit Category Annual Impact (high) Annual Impact (low) Net Present Value (high) Net Present Value (low) Travel time savings to drivers $236.8 $192.4 $3,946.7 $3,206.7 Reduced travel costs $830.4 $515.6 $13,840.0 $8,593.3 Improved travel safety $191.6 $90.1 $3,193.3 $1,501.7 Travel cost savings to Muni riders $15.8 $15.8 $263.3 $263.3 Air quality and greenhouse gas reductions $50.1 $29.5 $835.0 $491.7 Parking cost savings at residence $458.6 $589.6 $9,818.3 $7,636.7 Total quantified economic benefits $1,898.0 $1,285.8 $36,633.3 $21,430.1 Muni costs (less fare revenues) $651.8 $651.8 $10,863.2 $10,863.2 Net Muni economic benefits $1,246.2 $634.0 $20,770.1 $10,566.9 Benefit–cost ratio 2.91 1.97 2.91 1.97 Return on investment 191% 97% 191% 97% Expressed in millions of 2014 dollars. Source: Economic & Planning Systems (2015). TAblE 24 SUMMAry oF FINdINGS: MUNI STUdy

51 • developing a methodology to calculate benefits of other SFMTA services (e.g., bicycling, pedestrian circulation and safety, and parking management), and • Incorporating cost–benefit metrics into SFMTA resource allocation decision processes. atlanta: economic impacts of downtown redevelopment and transit improvements (Bleakly Advisory Group, Inc. et al. 2012) summary Central Atlanta progress (CAp) commissioned a study to provide realistic and quantified documen- tation of the likely economic outcomes of a proposed multi-modal passenger terminal (MMpT) in downtown Atlanta, along with associated regional transit investments. The research was funded in part by the Atlanta regional Commission (ArC), Atlanta’s Mpo, with additional local funding provided by the Atlanta downtown Improvement district (AdId). The goal of the research was to quantify expected economic impacts from implementation of the Green line vision plan prepared previously by CAp/AdId. The study projected economic and financial impacts of a future transit and real estate scenario in Atlanta, distinguishing effects for the city of Atlanta, the Atlanta Metro- politan region, and the state of Georgia. because the analysis required the development of plausible supportive transit scenarios for the MMpT, the study served to facilitate a regional visioning exercise with broader implications than that of an EIS alone. Georgia doT proceeded with additional plan- ning activities following the study analysis. However, activities have since been put on hold and the MMpT remains a long-term vision concept for Atlanta, with no immediate prospects for funding. Context and purpose This report quantifies economic and financial impacts of a set of future transit investments and associ- ated real estate developments in Atlanta. Unlike the first two case examples, this report focuses exclu- sively on impacts within the economy (and their associated tax revenue effects), as expressed in terms of changes in output, value added, and jobs for three different levels of geography. The report contributes to a long-standing planning and policy discussion in the Metro Atlanta region surrounding a proposed MMpT downtown. The terminal, along with its associated regional transit investments (including new commuter rail, light rail, streetcar, bus, and brT services), is expected to catalyze redevelopment of the surrounding area. The study addresses a need for “realistic, quantified documentation” of what “could reasonably be expected to follow development of this project.” The study was prepared by a team of consultants for CAp and the AdId. CAp is a private nonprofit community development organiza- tion funded by businesses and institutions. AdId is a public–private partnership funded by a commu- nity improvement district and charged with creating a livable environment in downtown Atlanta. The research was funded in part through a grant from ArC, Atlanta’s Mpo. Given interest in the project by a wide range of stakeholders, the study also considered the relative incidence of economic impacts on the city of Atlanta, the 20-county Atlanta Metropolitan region, and the state of Georgia. effects Considered and Comparative Framework The study addresses the following sources of economic impacts: • Spending on construction, operations, and maintenance of the MMpT, public amenities in the downtown area, and expanded regional transit systems; • Spending associated with land redevelopment, including investment in commercial/office space, housing, and educational and institutional facilities; • Increases in economic activity associated with new downtown development; and • Travel efficiency gains accruing to users of the improved regional transit system and to users of the highway network who benefit from congestion relief. The study also quantifies fiscal (tax) impacts associated with the forecast economic growth. Although the report discusses project costs and user benefits, it does not calculate a social benefit–

52 cost ratio. The report indicates that this is because of a lack of information on financing sources and arrangements, which could affect opportunity costs. To evaluate economic impacts, a key task within the study was to define the base and build future scenarios to be evaluated. This was particularly important given the co-dependence of pro- posed improvements: the attributes of the expanded transit network directly influence the scope of travel efficiency effects, which in turn influence the MMpT’s capacity to catalyze redevelopment in the downtown area. The definition of scenarios required a significant amount of planning and concrete specification of the nature of transit investments, as well as the likely real estate response to these investments. tools, methods, and resources This study follows a series of steps that trace from project definition to the final calculation of economic impacts, as shown in Figure 3. Two of the key intermediate analytical steps are: (1) sim- ulating regional network effects on the combined highway and transit system using the ArC transportation demand model, and (2) constructing realistic scenarios of real estate development over time. The development forecasts were based on case study findings from three comparably catalytic multi-modal transit terminal investment programs already completed elsewhere in the United States, past planning studies completed for the Atlanta region, and an analysis of current and future market conditions. by nature, these development forecasts are not simple outputs of some prescribed model- ling process, but rather a reflection of professional judgment, local knowledge, and key findings from prior experience. The final economic impact modelling step used the TrEdIS model, which translates three inputs (spending, jobs associated with new real estate development, and direct user benefits from transportation efficiency gains) into estimates of total economic impacts, including indirect and induced effects. results, planning process, and Communication strategy The study summarizes economic impacts using two different stratifications: (1) differentiation by the region benefiting, and (2) differentiation by the source of the economic impact, as can be seen in Table 25. The first stratification captures impact within three progressively larger geographic boundaries, the city of Atlanta, the metro area, and the state. These boundaries reflect the differ- ent audiences of the analysis and trace how very localized investments such as the MMpT can influence larger geographies. FIGURE 3 Analysis process overview: Atlanta study. Source: Atlanta case study review.

53 These results also acknowledge redistributive effects: economic impacts to the Metro Atlanta region are marginally larger than those to the state as a whole. This reflects “the possibility that Metro Atlanta will capture a marginally increased share of future statewide employment growth in comparison to the No-build condition” and highlights the consequence of boundary definitions when conducting economic analyses. The differentiation of sources of economic impact is similarly important to the original pur- pose of the study and its role within broader planning conversations. Given remaining uncertainty regarding the exact nature of the potential improvement program, the report enables traceability and comparison by readers of different components of the analyzed “project.” Finally, the report presents results along two other dimensions, time and uncertainty, offering summaries of impact for two forecast years (2020 and 2040) and two build scenarios (partial-build and full-build). This multi-faceted approach to analysis and results strengthens the ability of the report’s findings to shape further planning conversations. put differently, the economic analysis process itself serves as a form of visioning, facilitating a conversation about potential gains and the program of improve- ments that would deliver such gains. Source: Bleakly Advisory Group, Inc. et al. (2012). TAblE 25 prESENTATIoN oF ECoNoMIC IMpACTS: ATlANTA STUdy

54 regional transit improvements in minneapolis–st. paul (Cambridge Systematics 2012) summary The Itasca project, an employer-led civic alliance, commissioned a study of the expected return-on- investment from transit investments as proposed in the Minneapolis–St. paul 2030 long-range transpor- tation plan. overseen by a project task force comprised of major employers and supported by technical advisors from local government agencies (including the Mpo) and universities, the study investigated likely outcomes from three alternative investment scenarios, measured against a base case. The study demonstrates the value of a built-out transit system and tests outcome against a variety of assumptions, including speed of program implementation. Findings of the report were presented to a wide range of community groups and were cited in news articles and editorials about the need for transit investments. The transit report ultimately inspired a follow-on study by the Minnesota doT (MndoT) in late 2013, which examined the roI in the state highway system. Context and purpose The Itasca project, a “stakeholder in regional discussions around proposals for transit investment,” commissioned a consultant study of the expected roI from the region’s proposed transit system, as defined in the Minneapolis–St. paul Mpo 2030 long-range plan. The Itasca project is an employer- led civic alliance focusing on supporting economic development, quality-of-life, and equity in the region. The study addresses three questions posed by the Itasca transportation task force: 1. A built-out regional transit system would require substantial investment. What would be the return on that investment? 2. Investments can be made more or less quickly. Would accelerating the build-out change the return on investment? 3. Many communities with developing transit systems experience more growth near transit stations. Would such expectations for regional growth change the return on investment? effects Considered and Comparative Framework Addressing the questions outlined earlier, the study adopts a traditional benefit–cost perspective, supplemented by an analysis of other regional impacts, both qualitative and quantitative. The bCA incorporates the following types of effects: • Vehicle operating costs • Travel times and travel reliability • Shippers and logistics costs • Emissions • Safety costs • road pavement conditions. The supplementary analyses include estimation of economic impacts from construction (mea- sured in jobs and Gross regional product) and from transportation costs savings and efficiencies, a quantification of changes in the accessible labor market, and collection of business perspectives on transit’s role in supporting economic development objectives. The study is constructed around four scenarios that are used to compare a base case with alterna- tive investment scenarios differentiated by timing and land-use patterns, as shown in Figure 4. tools, methods, and resources The study estimates the effect of transit build-out on transportation system performance using the travel demand model maintained by Metropolitan Council, the Minneapolis–St. paul Mpo. To model the focused growth scenario, the underlying socioeconomic characteristics were modified in

55 the travel demand model, shifting 25% of all forecast growth in transit-served communities to zones within one-third of a mile of existing and proposed transit stations. The study uses the TrEdIS model to translate project expenditures and changes in travel characteristics into a variety of benefit and impact metrics. Travel time benefit valuation factors are drawn from U.S.doT guidance. The TrEdIS model is customized for the Twin Cities, incorporating region-specific information about economic trends and industry composition. results, planning process, and Communication strategy results of the study are published in a concise summary report published on the Itasca website. The executive summary distills the report’s findings into a series of two-line responses to the research questions posed by the Itasca transportation task force, as shown in Figure 5. The results are presented as a range, to account for uncertainty in underlying assumptions, and are used to substantiate a conclusion that “investment in a built-out regional transit system would cre- ate substantial value for the region.” Construction and economic development impacts are reported in terms of jobs and Gross regional product within the body of the summary report, but not in the executive summary. Findings of the report were further summarized into a presentation that was shared with a wide range of community groups, as facilitated by Itasca membership. That presenta- tion, like the published report, includes quotes from interviewed companies, organized to highlight common views on transit and its role within economic development (Figure 6). key facts and figures from the report were cited in news articles and editorials about the need for transit investments. The FIGURE 4 Itasca study scenarios. Source: Itasca Project (2012). FIGURE 5 Itasca study results of key questions. Source: Cambridge Systematics (2012).

56 transit report ultimately inspired a follow-on study by MndoT in late 2013, which examined the roI in the state highway system. michigan: social Benefits and economic impacts of transit, urban and rural (HDR Decision Economics 2010 and 2011) summary Michigan doT commissioned a model to estimate the economic and community benefits of transit services used by local, regional, and state stakeholders. The goal of the tool was to support better decision making and planning for public transportation. A spreadsheet was developed to calcu- late the social benefits of the availability of transit and the ongoing economic activity associated with transit system operations and maintenance. Individual transit agencies that tested the tool reported that its results would be useful for broad marketing and for building support with local officials. The final tool, user guide, and a summary presentation documenting the tool’s purpose and model results are currently hosted on the Michigan doT website. The tool has not been updated since its initial completion in 2011 because of limitations of staff time and resources, and the need for updated and more comprehensive on-board surveys of transit riders to generate model inputs. In 2016, Michigan doT initiated a statewide program of rider surveys. once these results are available, MdoT may update the model. FIGURE 6 Business perspectives on the role of transit in economic development. Source: Business focus groups, as presented in Itasca Project (2012).

57 Context and purpose With the goal of supporting better decision making and planning for public transportation, Michigan doT commissioned a contractor to develop a model to estimate the economic and community ben- efits of transit services. Michigan specified a stand-alone tool that could be used by a variety of local, regional, and state stakeholders to calculate benefits at multiple levels of aggregation: by agency, agency type (urban metro, urban large, urban medium, urban small, nonurban county, nonurban city, and nonurban township), and statewide. effects Considered and Comparative Framework The excel spreadsheet, developed as a result of this project, calculates both social benefits and eco- nomic impacts of transit. The social benefits calculations compare two scenarios, with and without current levels of transit service, and include the following: • Transportation cost savings of transit trips relative to available alternatives. This includes vehicle ownership and operating costs, travel time costs, safety costs, and environmental emissions costs. • Low-cost mobility benefits including (1) affordable mobility benefits of providing access to healthcare, education, retail, and attractions (quantified as the consumer surplus of trip making that would be foregone without transit), and (2) budget savings for welfare and social services. The economic impact calculations include the ongoing economic activity within the state associ- ated with transit system operations and maintenance, as well as the effects within the economy of consumer spending from “redirected” vehicle operating cost savings. tools, methods, and resources To address the state’s objective of providing a tool that is usable by any transit agency statewide, the consultant team maximized the number of inputs that could be drawn from the public Transportation Management System, an existing mandatory reporting system already integrated into the transit agency business process in Michigan. per-unit cost factors were drawn from the public domain. The tool incor- porates two additional types of information that are not available to all transit agencies individually: multipliers from an I-o model and rider behavior information; that is, trip purpose and mode choice in the hypothetical absence of transit service. The former were sourced from IMplAN, a private vendor at the statewide level. The choice of statewide multipliers matches Michigan doT’s policy perspective. rider behavior information was developed from an on-board passenger survey of seven sample transit agencies, with the sample designed to achieve coverage by area type (urban vs. rural), location within the state, service (fixed-route vs. demand-response), ridership, and socio-economic characteristics. The sur- vey was conducted within the same contract as the tool development. This case example demonstrates how a state doT can play a centralized role in funding the procurement of specific types of information that individual transit agencies may not have the resources to obtain—all while achieving some economy of scale from a statewide process. results, planning process, and Communication strategy The final report summarizes two sets of state-level results: (1) social benefits and (2) economic impacts, with a note that the numbers are not to be added together. The downloadable spreadsheet further summarizes results at the user-selected level of analysis within a variety of charts and tables that update automatically when users change the input parameters (see Figure 7). The tool comes pre-loaded with all necessary information for each transit agency in Michigan, but allows for cus- tomization of input variables as desired. The project also involved a tool testing process with two transit agencies, one relatively large agency that operates fixed-bus service and another operating demand-response in a rural part of the state. The feedback from these two agencies is instructive: both agencies stated that the tool results would be of use for stakeholder communication purposes, namely broad marketing and for building

58 support with local officials. This is consistent with most existing studies nationally: the state of the practice is focused on high-level planning or funding conversations, but not on detailed analysis of incremental investment strategies. The smaller transit agency did express some discomfort with the model calculations and data input/update process. This emphasizes the importance of good docu- mentation and training. The larger agency requested additional guidance on how to present results to a non-technical audience. The final tool, user guide, and a summary presentation documenting the tool’s purpose and model results are currently hosted on the Michigan doT website as a “resource” for the office of passen- ger Transportation. representatives of the doT report that the tool has not been updated since its ini- tial completion in 2011, because of limitations of staff time and resources, and the need for updated and more comprehensive on-board surveys of transit riders to generate trip purpose data for the model. Michigan doT received comments from several transit agencies that noted that they believed the sample of on-board rider surveys (conducted at seven of the state’s 79 transit agencies) was insufficient. Staff also noted that some transit agencies had expressed hesitation about the relative level of impact found by the Michigan tool (which was purposely based on operational investments only) as compared with numbers published by ApTA (which are based on both operating and capital investments). In 2016, Michigan doT initiated a statewide program of rider surveys at most of the state’s transit agencies, with rider surveys being conducted at one-third of the agencies each year. once these results are available for the majority of the state, Michigan doT may update the model. Case studies—Key OBservatiOns The case examples discussed earlier reveal a number of insights about the process and role of eco- nomic analysis of transit within the broader transportation planning process. In particular: FIGURE 7 Michigan study sample tool results: Tables and charts. Source: HDR Decision Economics (2010).

59 • Economic analysis of transit is an “all sources” process. Although transit agencies themselves may develop and maintain data sets on expenditures, system ridership, trip attributes (e.g., aver- age trip length), and user characteristics (often gathered through rider surveys), commonly used travel-demand models are built and maintained by Mpos. Moreover, analysts often choose to source cost factors from state or national authorities (e.g., U.S.doT and EpA) in an effort to ensure credibility and a degree of consistency with other studies or published guidance from funding entities. • ridership surveys are a key data source. Surveys of transit riders offer an invaluable window into the demographics, needs, and perceptions of current transit riders that can be used to under- stand the ongoing role of transit and the implications of losing or altering service. If transit agencies are conducting surveys of riders, they would want to include questions that address (1) trip purpose, and (2) a transit rider’s likely behavior if transit was not available. • Transit agencies are not the only study sponsors. Funding, management, and interest in eco- nomic evaluation of transit comes from many different types of groups including transit agen- cies themselves, Mpos, states, and community and business organizations. Moreover, studies are often completed in partnerships. This reflects the broad sharing of transit funding responsi- bilities, as well as the degree of public scrutiny often attendant with transit investments. • Economic analysis can be a tool for visioning and planning. The process of conducting an eco- nomic analysis of future scenarios demands a certain degree of specificity and thus facilitates focused conversations about (and analysis of) what can be reasonably expected to occur follow- ing a particular set of investments. This process—of defining scenario “input assumptions”—is as important a determinant of study success as is the methodology used to quantify benefits model economic impacts. • Stakeholder views are important and open the door to two-way conversations. Engaging with stakeholders can be a valuable way of validating quantitative findings and exploring the unique ways in which transit supports economic development and community wellbeing in a specific community. However, engagement is not a one-way process; transit professionals and analysts enter those conversations expecting feedback and need to think about how to synthesize and communicate that feedback within a presentation of study results. results are made more compelling when analysts acknowledge uncertainty and other analytical limitations. Given the diverse ways in which evaluations can be undertaken, as well as the inherent uncertainty of travel behavior and economic responses, it is important to acknowledge and discuss the relationship between methodological or input assumptions and reported results. Analysts do this in a number of common ways: by using ranges of estimates (often triangulated from different data sources or analytical processes), by discussing the likely directional influence of excluded factors on published results, and by segmenting results into logical component pieces rather than presenting single impact numbers.

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Practices for Evaluating the Economic Impacts and Benefits of Transit Get This Book
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TRB's Transit Cooperative Research Program (TCRP) Synthesis 128: Practices for Evaluating the Economic Impacts and Benefits of Transit provides state-of-the-practice information for transit agencies to help them in incorporating economic benefits and impacts into their decision-making processes, which may lead to more sustainable funding solutions for transit agencies. The report describes the methods used for assessing transit economic impacts and benefits, the types of effects that are covered by these methods, and the ways that agencies are using the information obtained for planning, prioritizing, funding, and stakeholder support.

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