Economic development impacts of transportation investments reflect the increased accessibility provided by the project to the surrounding area. If an area becomes more accessible compared to other areas, residents and businesses will be willing to pay more to locate there and property values will increase. If land use regulations allow for more development and the general economic environment is favorable to additional development, investment will flow to the project corridor. Due to the difficulty of distinguishing economic development impacts from the previous land-use measure and the role of land-use plans and policies in promoting economic development, FTA will combine into a single criterion the land-use and economic development rating.
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 facilitate 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.
220.127.116.11 Mobility for Transit Dependents
Federal Transit AdministrationPage 6
Guidance on New Starts Policies and ProceduresJuly, 2007