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Although many studies have shown, ex poste, that transit projects have had an impact on economic development, few predictive tools are available in standard practice and development of new tools seems infeasible in the short run.  Consequently, the best-available measures of likely economic development/land-use benefits may be derived from the circumstances in which the projects would be implemented rather than from forecasts of their specific development impacts. A good deal of research on the development impacts of transit indicates that increased accessibility and permanence of the transit investment are the primary transit-related drivers of development.  Those project-related characteristics, plus indicators of the availability of land for development or redevelopment, may provide a workable representation of likely development benefits.  Specific measures will include:


Current land-use conditions characterized by population and employment density as well as the degree to which the existing development patterns facilitates access to transit and pedestrian movements;


The degree to which development plans and land-use policies support transit oriented densities and pedestrian-friendly land uses in the future;


The economic development climate in the corridor characterized by corridor population and employment growth over the past 5 years and the assessed value of property within a 1/2 mile radius of each proposed station for each of the past 5 years;


The project-related change in transit accessibility for developable areas in the corridor as measured by total user benefits vs. the baseline alternative; and


The economic lifespan of new transit facilities proximate to those developable areas as measured by the value of fixed assets in the corridor (including stations and guideway elements but excluding yards and shops) divided by the total cost of the proposed project in constant base year dollars.

2.1.2 Small Starts Cost-Effectiveness

Since 2002, user benefits have been used as the sole denominator for its measure of New Starts cost effectiveness.  This focus on mobility has not meant that FTA believes that there are not other important benefits, like economic development, which should be considered in evaluating the merits of proposed Small Starts projects.  Rather, it is a consequence of the state of the practice of measuring mobility, which, despite some deficiencies in some local travel forecasting models, is still far more advanced than the tools and measures used to estimate the economic development impacts of major transit investment projects.  In addition, beginning in 2002, FTA no longer included the rating for mobility improvements in the rating of a Small Starts project’s project justification rating, leaving a mobility-based cost effectiveness measure as a logical compliment to the measures used to capture the transit supportiveness of the land use, land use policies, and policy performance (and, implicitly, the anticipated economic development impacts) of communities in which Small Starts projects are proposed.

Federal Transit AdministrationPage 14

Guidance on New Starts Policies and ProceduresJuly, 2007

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