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How to Measure the Economic Effect of Livable Streets

Retail sales on the section of Columbus Avenue with a protected bike lane (the green line) outperformed retail sales on a parallel stretch of Amsterdam Avenue and an adjacent part of Columbus with no bike lane (the pink line). Image: NYC DOT

When a street redesign to prioritize walking, biking, or transit is introduced, the headlines are predictable: A handful of business owners scream bloody murder. Anecdotes from grumpy merchants tend to dominate the news coverage, but what’s the real economic impact of projects like Select Bus Service, pedestrian plazas, road diets and protected bike lanes? How can it be measured?

A report released by NYC DOT last Friday [PDF] describes a new method to measure the economic effect of street redesigns, using sales tax receipts to compare retail activity before and after a project is implemented. DOT and consultants at Bennett Midland examined seven street redesigns — including road diets, plazas, protected bike lanes, and Select Bus Service routes — and compiled data on retail sales in the project areas as well as similar nearby streets where no design changes were implemented.

While the authors do not claim that all of the improvement in sales is directly caused by street redesigns (there are a lot of factors at work), they did conclude that a street’s “gain in retail sales can at least in part be attributed to changes stemming from the higher quality street environment.” The study also found that the impact becomes apparent relatively quickly: Retailers often see a change in sales within a year of a project being implemented.

While it makes intuitive sense that a better pedestrian environment and high-quality transit and bikeways will draw more foot traffic in a city environment than a car-dominated street, evidence that livable streets are good for business tends to be indirect. Customer intercept surveys have shown that most people in urban areas (including New York) walk, bike, or take transit to go shopping. While customers who drive spend more per trip, they also visit less often than shoppers who don’t drive. The net result: Car-free shoppers spend more than their driving counterparts and have a bigger impact on the bottom line of local businesses. Nevertheless, merchants tend to overestimate the percentage of customers arriving by car and insist on the primacy of car parking as means of access.

With this study, DOT used a third-party data source to see how well sales are actually doing in two large categories: retail outlets like grocery stores, clothing stores and florists, and hospitality services like bars, restaurants, and hotels. The study uses state sales tax receipts because they are available on a quarterly basis can be categorized by business type, allowing for an up-to-date and detailed understanding of how retailers are faring on a particular street. Results can be examined before and after a street design change, and compared with sales trends both borough-wide and and on “control streets” nearby that did not receive street design changes.

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New Stats on the Health and Business Benefits of Sunday Streets

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Sunday Streets on outer Mission Street in the Excelsior last October. Photo: Frank Chan/Flickr

When San Francisco streets are opened up to people for Sunday Streets, the influx of foot traffic brings a host of health and economic benefits to the city’s neighborhoods, according to findings presented by Dr. Susan Zieff, a professor of kinesiology at SF State University, at a Board of Supervisors committee hearing yesterday.

Zieff and her team surveyed 600 Sunday Streets participants at events 2010 and 2011, collecting data that makes a strong case for investing in open streets events. One of the data points we reported in late 2011, for instance, is that every dollar spent on running Sunday Streets yields an estimated savings of $2.32 in medical costs.

The studies “have been really invaluable to us,” said Tom Radulovich, executive director of Livable City, which organizes Sunday Streets with help from city agencies.

The top reason people come to Sunday Streets, said Zieff, is to enjoy the city’s streets in a way that’s impossible at nearly any other time, when the space is primarily reserved for traffic and parking.

“Over and over again, people talk about being able to walk down the middle of the street with their families, do physical activity in a safe environment, not to worry about vehicle traffic, and generally be around people who are having a good time,” said Zieff.

In Zieff’s survey, 51 percent of participants reported coming from outside the neighborhood, and the average participant traveled 3.25 miles, round trip, to the event. Among those who had attended Sunday Streets more than once, 25 percent reported an overall increase in physical activity since they began participating in the events. And, Zieff noted, the ethnic demographics at Sunday Streets are generally representative of the city as a whole, meaning the events appear to be effective at increasing physical activity among African-American and Latino residents, who tend to suffer the highest rates of cardiovascular disease.

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Neglecting Muni Costs the Economy at Least $50 Million Per Year

Photo: Aaron Bialick

Every time a Muni train breaks down or a bus is stuck in car traffic, San Francisco pays big time.

City staffers are beginning to tally up the economic toll of Muni delays, and presented [PDF] some alarming figures at a hearing yesterday called by Supervisor Scott Wiener.

In April, riders were delayed a cumulative 86,000 hours, or, as SF Weekly calculated, 19 years and eight months. That amounts to an economic loss of $4.2 million, or $50 million per year, according to the City Controller’s Office. And that’s a conservative estimate — it doesn’t account for delays outside of rush hours or the loss of potential customers who might otherwise use Muni to shop if the system were more reliable, a Controller’s Office staffer said.

“The system’s struggles have real-life consequences for our city,” said Wiener. “When service is unreliable, people are delayed and frustrated in getting where they’re going, leading to negative economic impacts and reduced quality of life.”

Last week, the N-Judah — Muni’s busiest line — shut down twice in two days due to damaged overhead wire equipment, leaving trains sitting on the street for most of a 24-hour period. Such meltdowns not only have internal costs for Muni, like overtime labor to run shuttle buses as a substitute for train service and the cost of repairing equipment. They also cost commuters time, and repeated delays lead them to consider other ways of getting around — or to question whether to make a trip at all.

“The bottom line,” said SFMTA Director Ed Reiskin, “is the transportation system matters to people when they’re choosing where to live, where they work, what modes of travel they’re going to use, and how they’re going to allocate their household budget between housing and transportation.”

With Muni being deprived of funding for decades — a situation that’s only getting worse — the system’s outlook is grim. Here are the stats, as reported by Muni and summed up by SF Weekly, since July:

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The Incredible Shrinking Megastore: Retailers Think Outside the Big Box

They lord over empty parking lots in Hazard, Kentucky; Twinsburg, Ohio; and Lewiston, Washington like the ruins of a lost civilization. Vacant Walmart stores are slowly decomposing in more and more American towns these days. More than 100 of them have been memorialized as part of the group Flickr pool known smugly as “They Sold for Less.”

Another one bites the dust. A vacant Walmart in Lewiston, Washington. Photo: Flickr/Happy Vampire

These empty husks — yet to be filled by any other retail tenant — are part of the detritus left behind by a paradigm shift in the real estate industry. Signs of the changing times, they tell us what kind of society we were before the bubble burst.

Now, as the commercial real estate industry regroups, evidence is mounting that Walmart and other mega-retailers will take a much different form than they have in the past. The new American shopping experience, according to many industry observers, will be less “suburban big-box” and more “urban destination.”

The demise of several mega-retail chains during the recession, including Circuit City and Linens ‘n Things, helped produce a vast oversupply of retail space, particularly that of the giant, boxy, just-off-the-interstate variety. Last summer, the research arm of giant commercial real estate firm Colliers International reported that there was nearly 300 million square feet of vacant big box retail space on the market — 34 percent of total retail vacancy left behind by a recession that walloped commercial real estate almost as hard as housing.

Since 2008 alone, 120 million square feet of big box retail space has become available. To put such numbers in perspective, that is the equivalent of the total shopping center space in Cincinnati, Kansas City and Baltimore combined, Colliers reported.

This period of retrenchment has humbled even the once-mightiest of retail forces. CNN reported last month that Walmart stores suffered their ninth-straight quarterly drop in sales. Another sign of the times: Walmart is no longer enough of a bargain for U.S. consumers, it appears. The mega-retailer has been losing market share to dollar stores.

The situation has apparently reached the point where the retail monolith is rethinking its whole carbon-gulping model. Walmart is joining other retailers in thinking smaller and more urban, says Ed McMahon, a fellow at the Urban Land Institute.

“What the recession has made completely clear is that we have way too much retail,” McMahon said. “We are going from the era of the big box to the era of the small box.”

Enter the “Walmart Express.”

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Boxer and Johnson Warn Senators of Job Losses If Transpo Bill Isn’t Extended

State-by-state impact from shutdown of federal highway and transit programs. Source: Senate EPW Committee.

Two key Democratic senators today released state-by-state numbers showing how many jobs would be lost if the current surface transportation authorization bill is not extended by September 30. Sen. Barbara Boxer (D-CA), chair of the Environment and Public Works Committee, and Sen. Tim Johnson (D-SD), chair of the Banking, Housing, and Urban Affairs Committee, sent a letter to their Senate colleagues urging them to act and highlighting the job loss numbers for their state.

Across the country, they say, 1.8 million jobs will be threatened nationwide if the SAFETEA-LU transportation law is allowed to lapse. They say they are working on “a bipartisan proposal to reauthorize surface transportation programs for two years at current funding levels” but they need an extension in the meantime “to allow time to complete work on this legislation.”

Boxer’s home state of California stands to lose the most in case of a lapse: More than $4.6 billion and nearly 165,000 jobs are at stake. But that doesn’t mean that rural, low-population states like Johnson’s South Dakota are unaffected. According to Robert Puentes at the Brookings Institution, South Dakota is one of 11 states that rely on the federal government for more than half of their road money. That could give Republican senators from states like Wyoming, Alaska, and Alabama pause before letting the federal transportation program founder.

You can see the state job numbers here.

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Chamber of Commerce: Empty Asphalt = Good Transportation Performance

The Chamber of Commerce report states that American transportation performance has been through the roof lately, a finding that should lead the Chamber to question some of its assumptions. Source: U.S. Chamber TPI 2011 Update

The Chamber of Commerce released its annual Transportation Performance Index (TPI) last week [PDF], and you can tell it’s due for a total overhaul, because according to the Index, recession-battered 2009 was a banner year for transportation performance.

Using 2009 data, the Chamber, a powerful lobbying group that represents millions of American businesses, determined that the performance of the nation’s transportation infrastructure is improving. However, even the Chamber dismisses the significance of its own results, saying the “improvement” is illusory — due to the decline in driving, and thus congestion, during the recession. But there’s another good reason to dismiss the results: The Chamber is measuring the wrong things.

The Chamber uses the TPI “to track the performance of transportation infrastructure over time… and demonstrate the connection between infrastructure performance, rather than spending, and the economy.” It claims to be the first organization to ever measure the correlation between the quality of transportation systems and economic growth.

But the Chamber’s metrics produce some truly baffling results. During the economic torpor of 2009, the index experienced its greatest improvement in a single year since 1990. Despite the nonsensical figures, the Chamber uses the report release as an opportunity to call for renewed infrastructure investment.

“By all accounts, the nation’s transportation networks continue to languish.” said Janet Kavinoky, head lobbyist for the Chamber’s infrastructure program. “The improvement of the TPI is not sustainable and does not represent a long-term trend… It is due to the economic downturn, rather than strategic policy and regulatory reforms or new investment.”

That’s all true, but that’s not the only reason to question the results of the TPI.

Of the 21 indicators the Chamber uses in its complex formulas, none deal with emissions. Of all of the ways the Chamber chooses to evaluate the U.S. transportation system, none investigates the effect on air and water quality. They certainly don’t take public health into account, ignoring the effect of our transportation choices on our waistlines or our lungs. In fact, the Chamber completely glosses over non-motorized transportation. Pedestrian and bicycle infrastructure doesn’t count as one of the “fixed facilities” the Chamber examines.

Here’s all you need to know to be convinced that the Chamber’s measurements of transportation performance don’t add up: Though it didn’t name the top states for transportation performance this year (that listing only comes out every other year), these were the top winners last year:

Source: U.S. Chamber of Commerce TPI 2010

Maybe that’s what you get when you evaluate performance on congestion based on “route-miles per 10,000 population” — the higher the better. That’s right. The Chamber judges congestion using a simple formula: asphalt divided by people.

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The Once and Future Auto Bailouts

You’d think the Obama campaign had confused Michigan and Ohio with Iowa and New Hampshire. As his 2012 Republican challengers flooded early primary states last month, the President instead headed to where he could stand beside beaming auto executives and watch proud workers toiling on once-idle assembly lines. The Obama administration and the industry have been making a hard media push this summer, celebrating the auto bailout as a big win — for the politicians who supported it, for the economy that they claim needed it, and for the taxpayer who still begrudges it.

President Obama speaking at a Chrysler assembly plant in Toledo last month. Photo: Paul Sancya/AP

To this day, Americans remain unconvinced of the bailout’s wisdom, and fewer than half of likely voters are optimistic that we will be repaid the total $80 billion we coughed up. And if Americans were more familiar with one underreported aspect of the bailout — the rescues of the automotive financial firms — they’d feel even less enthusiastic about joining the party in Detroit and Washington.

Between 2008 and 2009, we taxpayers forked over $17 billion to GMAC (now Ally Financial) and $1.5 billion to Chrysler Financial under the vague theory that they formed an essential part of the auto industry. In doing so, we preserved two entities that, like the banks and mortgage companies, were making subprime loans to consumers: high-interest loans made to high-risk borrowers. Chrysler Financial has paid us back, but despite making more auto loans than any other company last year, Ally just delayed its planned IPO because it is not doing well enough to enable the government to reduce its majority stake.

To repay taxpayers and be profitable going forward, these institutions have concluded that they must expand their portfolio of subprime loans, and they are doing so with gusto. Last month, the credit scores of those buying new cars hit a five-year low. Overall, lending to buyers with credit scores under 680 has been rising quarter after quarter so that four out of 10 auto loans today are subprime. That’s right: 42 percent of Americans — including many economically vulnerable people — are taking on auto debt at high rates of interest, making purchases set to become albatrosses dragging down their tissue-thin household budgets.

Although these lenders assert that subprime auto loans do not pose a risk to the financial system similar to that presented by subprime home loans, this is distinctly disingenuous. Yes, the auto loan market is smaller than the mortgage market, and yes, lenders can quickly repossess cars against which loans are made. But this by no means ensures that these companies won’t fail or find themselves in need of another bailout. Subprime auto lenders might not be the principal driver of a financial crisis, but they absolutely contributed to and suffered from the last one. Like the mortgage lenders, they bundled, securitized, and sold off car loans into a market that collapsed, and GMAC actually diversified into home loans at the bubble’s peak. Obviously, these firms can feed into — and falter from — the next crisis as well.

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The Dangers of Touting the Job-Creation Benefits of Transpo Investment

Earlier this week, President Obama spoke to reporters at the White House. Fully aware of the growing concern in the country over the “jobless recovery,” Obama led off by talking about jobs – and pushing Congress to pass a transportation reauthorization. But was he using the wrong talking point?

“Right now, Congress could send me a bill that puts construction workers back on the job rebuilding roads and bridges –- not by having government fund and pick every project, but by providing loans to private companies and states and local governments on the basis of merit and not politics,” the president said. “That’s pending in Congress right now.”

The inclusion of the line about merit went over well in transportation reform circles, where people have been pushing for a greater emphasis on performance metrics and less spending by strict formulas regardless of outcome.

Later, in response to a question about whether the debt debate was hamstringing his ability to take action on creating jobs, Obama talked again about transportation.

“I think it’s important for us to look at rebuilding our transportation infrastructure in this country,” he said. “That could put people back to work right now — construction workers back to work right now.”

Obama’s not the only one to try to sell the transportation bill as a jobs package. Sen. Barbara Boxer likes to have her aides hold up 20 poster-sized pictures of the Dallas Cowboys stadium, filled with people, to illustrate the number of construction workers out of work right now. She uses this to show the urgency of passing transportation investment legislation.

But according to Joshua Schank, CEO of the Eno Transportation Foundation, it’s a mistake to focus on construction jobs.

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How Car Dependency Turns Suburban Dreams into Foreclosure Nightmares

According to an analysis by the Center for Neighborhood Technology of 2002 mortgage data, 250 people applied for mortgages every day in Chicago, and only 150 were approved. The top reason for rejecting the other 100? Applicants had too much credit tied up in car ownership.

And mortgage lenders have only gotten more skittish since then about overextended borrowers.

Once you've filled your three-car garage you won't be able to afford this house anymore. Photo: El Gato Painting

Transportation and housing are inextricably tied, but many people are slow to realize the full implications of this link. CNT President Scott Bernstein says that although lenders understand the link when it comes to rejecting applicants who are overextended on car payments, they don’t include transportation costs in their mortgage underwriting. (Changing this practice was a key recommendation of the Congressional Livable Communities Task Force’s “Freedom From Oil” report.)

“The mortgage crisis was more intense in less location-efficient areas,” Bernstein said at a panel discussion on regional transportation planning for equity at the National Building Museum Monday. “I’m not saying car ownership caused it. But a precipitating factor was a lack of flexibility to tinker with your household budget because you had fixed costs for transportation.”

Transportation options, he said, could be an antidote to future recessions. They helped cushion the blow in urban areas, which saw an overall lower rate of foreclosure, even in poor neighborhoods. A 2010 study by NRDC found that in Chicago, Jacksonville, and San Francisco, “the probability of mortgage foreclosure increases as neighborhood vehicle ownership levels rise, after controlling for income.” [PDF]

Housing affordability looks very different when seen holistically as the cost of living in a certain place. “If you measure affordability as just the cost of housing as a ratio to income, 70 percent of people are living in an affordable situation,” Bernstein said. “When you account for transportation costs, that drops to 40 percent.”

CNT has a Housing + Transportation Affordability Index for people to check the true affordability of where they live, but most people don’t access this kind of information when making decisions about where to live.

When agencies start considering housing and transportation costs at the regional level, major changes in infrastructure investment follow. Bernstein says that when Chicago and the Bay Area set out to reduce the joint costs of transportation and housing, their efforts resulted in the reprogramming of state money away from highway construction.

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New Report Examines the Media’s Role in the Gas Tax Debate

study.png(Chart:
University of Vermont Transportation Research Center)

The
success of state-level plans to increase gas taxes is tied to the
media’s portrayal of the proposals in question, with narratives tied to
"crumbling infrastructure" and "economic progress" showing more success
than those emphasizing long-term transportation budget gaps, according
to a new report released by the University of Vermont’s Transportation
Research Center (TRC).

The TRC report examined six states where lawmakers debated raising
gas taxes to close infrastructure budget gaps between 2006 and 2009.
Three of the states ultimately approved gas tax increases (Oregon,
Minnesota, and Vermont) — two of them over the opposition of the
governor, as seen in the third column of the above chart — and three of
the state (Massachusetts, Idaho, and New Hampshire) nixed the proposed
tax increases.

While acknowledging that "there are many possible explanations for
the success and failure of gasoline tax increases at the state level,"
TRC researcher Richard Watts attempted to categorize the "frames" used
to depict the proposals in local media as well as the Associated Press
wire service.

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