“Creating Value: Assessing the Return on Investment in Complete Streets” webinar recap

Last week the National Complete Streets Coalition hosted the second installment in our monthly webinar series, Implementation & Equity 201: The Path Forward to Complete Streets. “Creating Value: Assessing the Return on Investment in Complete Streets,” held on March 23, 2017, discussed ways for advocates to quantify and communicate the diverse benefits of Complete Streets projects. Watch the full video recording of the webinar above, or download the PDF of the presentation.

A discussion recap

Debra Alvarez, Vice Chair of the Coalition’s Steering Committee, provided a brief introduction and explained that Complete Streets projects can provide substantial economic benefits at less cost than other transportation projects. She referenced our 2015 report Safer Streets, Stronger Economies, which found that Complete Streets projects tended to improve safety for everyone, and are remarkably affordable, and were an inexpensive way to achieve transportation goals. Helping advocates communicate these returns on investment is an important part of building support for Complete Streets projects, she explained.

“Economics isn’t just about the dollars, it’s also about the community…Money is simply the vehicle that carries our values, our wishes, our hopes and dreams.”

Following Debra was Scott Lane, Senior Community Planner at Stantec. Scott discussed how to examine the economic trade-offs that result from transportation project decisions. He explained that being able to calculate a return on investment to capture the far-reaching benefits of Complete Streets is one pathway to get community members and decision makers excited about these projects. Scott then walked through the process of performing a benefit-cost analysis to assess return on investment in Complete Streets, beginning with understanding the local context and construction timeline, identifying benefit categories, and quantifying them using local data sources and existing models from similar studies. He explained that benefits such as increased access to jobs and training centers, travel times, reduced crashes, and walkability can be monetized and incorporated into benefit-cost analyses. He also advocated for combining qualitative methods such as focus groups and video interviews with quantitative analysis to create a more complete picture of project impacts. “Economics isn’t just about the dollars, it’s also about the community,” Scott stated. “Money is simply the vehicle that carries our values, our wishes, our hopes and dreams.”

Want to learn more?

Check out the following case studies of return on investment of Complete Streets projects:

Questions and answers

We had so many great questions during the webinar and we couldn’t get to all of them during our Q&A. Here are the answers to a few of the questions we missed:

How do you account for long-term costs of Complete Streets, like maintenance and operations?
Scott: The concept of lifecycle cost analysis is a central tenet of sustainability, and it’s equally important to project-level economic impact analysis. Since many of the benefits from a project are accrued well after its construction, a fair comparison to downstream costs is also necessary. Typically, both are featured in annualized amounts, with each year being adjusted by an appropriate discount rate. I’ve found that local governments, particularly the public works department, are a good starting point for obtaining local data – or at least vetting third-party information. Keep in mind that metropolitan planning organizations are also required to contemplate maintenance and operations costs and may be a good source of data, as are state departments of transportation. Consult the resources linked above for additional ideas.

Do you provide return on investment analyses for Complete Streets projects to state DOT offices?
Yes! Our Practical Design workshops work with DOTs to determine strategic goals and create performance metrics with the community to meet those goals. Many of the challenges addressed through this program have included, but are not limited to, cost-effectiveness, safety for all modes, equity, mobility, accessibility, economic development and health.

Materials can make a big difference in how expensive a project is, but also in how attractive the results are. How do you assign value to the aesthetics of different design material choices that add to neighborhood character?
Scott: We certainly all enjoy a beautiful street or plaza, but quantifying that value is extremely challenging. The best approach I have found is to present an aesthetic argument alongside the economic one, and to include renderings of what the completed project will look like along with economic analysis. If you must go forward with a quantitative approach, then there are generally two ways to tackle it: a Visual or Other Stated Preference Study, which must then take the extra step of assigning a degree of preference to choices that can be monetized, or “A-posteriori Effects” such as considering different outcomes from multiple cases where the proposed actions / treatments / designs have and have not occurred, such as increased business occupancy, sales, home prices and so forth.

Existing case studies and academic analyses of some of the techniques like contingent valuation (option 1) and hedonic pricing models (option 2) are pretty numerous and can be found with a minimum of searching; one such example that serves as a good introduction into the methods (if not the pitfalls) is Quantifying the aesthetic benefits of urban forestry by Colin Price.

Would you recommend ignoring “Travel Time Savings” in an economic cost-benefit analysis if the total savings per trip is small (say 30 seconds per vehicle)?
Scott: No. In practice, travel time savings to the individual are always small, but they end up getting multiplied by a really big number. For example, 30 seconds per work trip x 2 work trips per day x 260 workdays each year comes out to 4.3 hours per person per year. If you take the national $24.50 median hourly wage rate that savings comes out to about $105 per person per year. If your road has 10,000 persons (not cars – cars and buses hold more than one person…) traveling on it per workday, that amounts to $1.05 million of benefits in the first year; most road projects are still evaluated on a 20- or 25-year lifecycle so over $21 million of benefits accrue over the life of the project. That calculation doesn’t include the smaller, but still significant, time and money saved by people who use the road on weekends and holidays, increases in traffic volumes over time, or people making the other 75 percent of trips that aren’t work-related.

Before leaving the subject, it is worth mentioning that most people really can’t perceive 30 seconds’ difference in travel time for a 30-minute trip. This kind of “long lever” calculation has been used to justify many transportation projects in the past, some of which have had massive negative consequences in other areas (health, safety, environmental, community cohesion, etc.) that weren’t given much if any consideration. Don’t use in isolation.

You mentioned economics as a tool to measure social equity. People of color and people over the age 65 are most likely to be struck and killed by cars while walking. How can economics measure the importance of preventing these deaths?
Scott: I’ve seen several research efforts that reach similar conclusions about the disproportionate effects of vehicular crashes on minority and lower-income populations. The authors have speculated on many possible reasons for this problem: lower car ownership rates, slower emergency response times, poorer health to begin with, worse medical treatment, and so on. However, when evaluating transportation projects it has become commonplace to assess the effects of crashes regardless of the demographics of the location. Severity of the injury—with property damage-only crashes at one of the spectrum and fatalities at the other end—are used to weight the value of human life. The specific design elements used in a Complete Streets project such as lighting, guardrails, speed limit reductions/enforcement, and features all have the potential to reduce the severity, frequency, and related costs accrued to crashes. To be sensitive to the special issues in a given geographic area or for a certain population, the crash data on which the frequencies and levels of severity of crashes are based should be the same as (ideally) or at least like those found in the proposed project’s study area. In other words, don’t apply a city-wide crash database to one small corridor that may or may not share the same characteristics as the city as a whole. We always do unique “pulls” for crash data for each project, going back at least one to three years for larger urban environments, or five years for less densely populated places. State DMV offices and sometimes local police departments can provide that information, although it may take some time to extract it, so ask well in advance. The data is usually received in one of three ways: dates and locations of crashes only; summaries of conditions like lighting, weather, alcohol effects for each crash or groups of crashes; or the individual police reports, perhaps with the names and addresses removed to protect the people involved. Understanding at least a little about what cause the crashes can help identify potential design elements for the Complete Street project that can serve as countermeasures to prevent future crashes and thereby increase the benefits. FHWA’s Desktop Reference for Crash Reduction Factors is very useful.

Are there any ready-made cost benefit models that you recommend?
Scott: We noted in the webinar that input-output models like IMPLAN, TREDIS, and RIMSII can help calculate wages and jobs created through construction and related activities while the project is being built. I am not currently aware of any off-the-shelf model that can comprehensively assess the full impact of a project after it is completed. There are simply too many local variables that this kind of analysis must evaluate. The TREDIS model has some additional capabilities in this area, and it is a model that is dedicated to transportation projects. However, that model still requires that you input good data ascribed to your project and the local context to get good answers. Again, Smart Growth America’s Practical Design workshops can help DOTs of any size do this type of analysis.

Join us for the next webinar

Thank you to our presenters and to everyone who tuned in to “Creating Value: Assessing the Return on Investment in Complete Streets”. Our Implementation & Equity 201 webinar series will continue on April 5, 2017 with Integrating Complete Streets, Vision Zero, and Transportation Equity. We hope you’ll be able to join us again then.

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