1. 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

2. In the beginning: Frederick Law Olmsted 2 Central Park Economic impact of parks and open spaces on property values

3. Distinct analysis: greenways are not linear parks 3 Parks and Open Space Large contiguous space Single responsibility Passive use Greenways are not linear parks Linear; connected Multi-jurisdictional Incremental proximity Different benefits

4. Why measure economic value of greenways? Scarce resources 4 Budgets Cost-Benefit Analysis One-sided Validity Public perceptions Public support Construction Maintenance Lack of care = lack of use = loss of economic advantage Make the budget fair by accounting for economic return from greenways in the ‘Plus’ column of a Cost- Benefit Analysis

5. Budget impacts from greenways 5 Long-range Transportation Plans Capital Improvement Elements 5-year Capital Improvement Plans Open Space and Parks Master Plans Levels of Service

6. Two distinct problems 6 Study limitationsBenefits omitted The most commonly mentioned problem of earlier studies was that almost all findings were based on anecdotal evidence and not on market data.

7. What defines a greenway: Traverse or not? 7 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)

8. 8 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)

9. Greenway benefits 9 Monetary Economic Health Hazard management Safety Transportation Ecological Equity Non-monetary Cultural and Historic preservation Quality of Life

10. Benefits: Provide Choices 10 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.

11. 11 Americans want choices of Americans want more transportation options so they have the freedom to choose how to get where they need to go. Future of Transportation National Survey (2010) 66% 73% 57% currently feel they have no choice but to drive as much as they do. would like to spend less time in the car.

12. 12 The Tremendous Potential Of all trips: National Household Travel Survey (2009) 39% are less than 3 miles 17% are less than 1 mile 47% are driven of these trips…

13. 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. 13

14. Benefits: Reduce Infrastructure Costs 14 Lee County, Florida Re-examined 5 road- widening projects Found widenings unnecessary = $58.5 million savings Use Greenways as ROW retainers for future use

15. 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.

16. Benefits: Health 16 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.

17. Benefits: Community Cohesion 17 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.

18. 18 Value Category Value Path Primary Valuation Methods Recreation (active) Walking, jogging, cycling, skating, nature observation  Travel cost  Unit day value Property People are willing to pay more for properties with accessibility to trails or for properties with amenities such as views of green space  Hedonic pricing method Health/fitness User physical activity produces health benefits that generate secondary economic benefits  Avoided medical costs Transportation Users value greenways trail as an alternative route for commuting and errands (utility trips)  Value of commuting time; avoided pollution costs Ecological biodiversity and services Value provision of biological habitat and environmental services such as carbon sequestration or mitigation of runoff  Contingent valuation  Value of comparable technological services Amenity Visual/aesthetic Neighbors and passers-by benefit psychologically from views of open space and vegetation  Hedonic pricing method  Contingent valuation Economic development Greenway development may spur tourism and commercial investment and development  Economic impact analysis (input-output models) Lindsey’s taxonomy of methods

19. Methodologies reviewed 19  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

20. 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. 20

21. Hedonic pricing - Limitations 21 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

22. 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 22

23. 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. 23

24. 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 24

25. 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 25

26. Collective Analysis Approach 26 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.

27. Collective Analysis - Limitations 27 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.

28. Suggestions - Public Side Inputs Budget for more of the benefits

29. 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 29

30. Sustainable Communities criteria Cypress Creek Greenway Case Study, Appendix A 30 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

31. Ways to Quantify the Benefits of Greenways — 1 (Litman 2013; Complete Streets) BenefitQuantification Method Safety benefits – reduced traffic crashes due to Improved facilities for alternative modes and reduced vehicle travel. Estimate crash cost reductions from reduced traffic and reduced total vehicle travel. Improved public health – increased public fitness and health from more walking and cycling. Estimate increases in walking and cycling activity and assign monetary values as indicated by NZTA (2011). Energy conservation and emission reductions – from reduced total vehicle travel. Estimate energy conservation and emission reductions and assign dollar values. Supports more efficient land use (maybe?) – encourages more compact, multi-modal development to take advantage of greenway proximity. Estimate the community savings and benefits from more compact development and reduced sprawl. Assign monetary values to each household that locates in existing urban areas and avoids urban expansion.

32. Ways to Quantify the Benefits of Greenways — 2 BenefitQuantification Method Direct user benefits – improved convenience, comfort and enjoyment from improved walking, cycling and public transit, and reduced driver stress Survey travelers to determine their preferences. Adjust travel time unit costs downward as travel conditions improve. Reduced barrier effects – reduced pedestrian and cyclist delays. Quantify and monetize the incremental delays and shifts from active to motorized modes. [Check amt. of motorized to active] Vehicle cost savings – reduced vehicle ownership and operating costs if residents own fewer vehicles and drive less. Use vehicle ownership surveys to determine whether residents tend to own fewer vehicles and drive less in areas with more multi-modal transport systems Parking savings – reduced parking problems and subsidy costs if travelers shift mode. Estimate parking cost savings from reduced vehicle ownership and use in areas with multi-modal transport.

33. Ways to Quantify the Benefits of Greenways — 3 BenefitQuantification Method Supports social equity objectives – improves affordable modes and access for disadvantaged people. Weigh savings and benefits in favor of physically, economically and socially disadvantaged people (e.g., an hour saved by a person with an impairment, or a dollar saved by a lower-income household is worth several times more than the same savings by able and wealthy people). More livable communities – improved local environmental quality Measure increases in residential and commercial property values along complete streets.

34. Take Advantage of What We Know Increase the Impact of the Benefit and Increase the Number of People Who Benefit

35. Public support and property values 35 Public intuition No harm Some benefit, maybe Negative impacts Reality Stabilization or increased values even with significant lack of knowledge and little, if any, marketing EDUCATION WITH THE FACTS

36. Planning initiatives that complement Greenways 36  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

37. Public inputs to enhance economic value; now and future 37 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

38. Public inputs to enhance economic value; now and future 38 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

39. Plan for different types of Greenways Rural Barton Creek, TX Industrial corridor Midtown Greenway, MN Exurbs Austin, TX Multifamily suburb Barton Creek, TX

40. Develop Performance Measures and Outcomes 40 Proposed Trails Existing Trails

41. Suggestions Private inputs

42. Private opportunities (market inefficiencies) 42 Land developers Assessing price of land Homebuilders Pricing homes: Design/location Competitive analysis Amenities Resale Business community ID & location of profitable services; maximizing profits

43. Developers, Homebuilders, and Real Estate Agents 43 Land acquisition and pricing Pro-forma IRR Comparative advantage Marketable amenity Subdivision and community branding

44. 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?

45. 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.

46. 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.

47. 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, --------