Linking Transportation, Planning and Economic Growth

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LinkingTransportation,Planning,andEconomicGrowth:LessonsforMetropolitanLasVegas
RobertPuentesandAdieTomer1
November2015
I.
Overview
IntheaftermathoftheGreatRecession,adramaticchangeisoccurringinhowmetropolitanareasplan
fortheirfuture.Intheseplaces,adedicatedsetofcivic,corporate,political,andphilanthropicleaders
areexplicitlymakingtheconnectionbetweentransportationplanningandinvestmentswitheconomic
growth.Thisisanewformoftransportationplanningandplacemakingthatdoesnotleavegrowthto
chance,butstartswithanoverarchingeconomicvisionbasedonatrueassessmentoftheirstrengths,
challenges,andopportunities.Itrepresentsadeliberateandintentionalsetoftacticsandstrategies.
MetropolitanLasVegascanbepartofthisnewcohortofmetropolitaninnovators,butitwillrequirea
well-designedcombinationoftransportationandregionalplanningthatrecognizesstate-of-the-art
practicesfromacrosstheworld.Asaregionaleconomyhighlysusceptibletonationalbusinesscycles,it
hasagenerationalopportunitytobuildoffitsexistingassetsanddynamictourismindustrybyacting
withpurposeandclarity.
Thepurposeofthiswhitepaperistoillustratehowleaderscanputforthastrategicandvisionary—yet
groundedandpragmatic—approachtoplanningregionaltransportationtosupportbotheconomic
developmentandmodernurbanplanning.
II.
LinkingTransportation,Planning,andEconomicGrowth
Transportationiswidelyrecognizedasakeycomponentinurbaneconomicgrowth.Muchofthisis
intuitive.Over27percentofallpersonaltripsaresocialorrecreationalinnature.Everythingelseisin
somewaysrelatedtoeconomicproductivity,suchascommutingandworkrelatedtrips(17percentof
alltrips),shoppingandrunningerrands(45percent),andtripstoschool(10percent).2
Byenablingworkerstoreachemployment,movingcitizenstoandfromareasofserviceandopportunity,
facilitatingglobaltrade,andshippingproductsbetweenproducersandconsumers,economicgrowth
andtransportationarecloselylinked(Porter,2000).Improvingphysicalaccesstoeconomicopportunity
enhancestheefficiencyoflabormarkets,bringspublicserviceswithinreachofallcitizens,andgenerally
canimprovequalityoflife(Litman,2011).
Itisimportanttonotethatwhilethereisagreementabouttheconnectionbetweentransportationand
theeconomy,therelationshipiscomplex.Doesaregionbegintoinvestintransportationtoboostits
economy,ordoesaregionfirsthavetoestablishanindustrialbasebeforeitinvestsinitstransportation
infrastructure?Transportationiscertainlyareflectionofeconomicactivity,inasmuchasproductsmust
1
RobertPuentesisaseniorfellowwiththeBrookingsInstitution’sMetropolitanPolicyProgramwherehealso
directstheprogram’sMetropolitanInfrastructureInitiative.AdieTomerisafellowattheprogram.
2
Schoolandchurchtripsarecombined.SeeFederalHighwayAdministration,“SummaryofTravelTrends:National
HouseholdTravelSurvey,”2009.
1
bemovedtomarketsbutthecausalityoftheserelationshipsisunclear:transportationinfluences
economicconditions,andeconomicconditionsinfluencetransportation.
AreviewbytheNationalAcademyofSciencesofrecentmodelsforassessingtherelationshipbetween
transportationandtheeconomyfoundthatthereisasuggestionofarelationship.(NRC,2002).Butthe
relationshipistenuousgiventhequestionofcausality.Atcertaintimes,investmentsinthe
transportationsystem,suchastherapidcreationofpassengerrailnetworksinEuropeinthelate19th
centuryandthecompletionoftheU.S.interstatehighwaynetworkinthe1950s,areassociatedwith
majorincreasesinproductivity.However,thisonlyoccurswhentheimprovementsaregenuinely
transformative.Instead,mosttransportationimprovementswillhaveanincremental(butnot
insignificant)impactonproductivityandgrowth.Thereforethedetailedlinkagesbetween
transportationandothersectorsshouldbethefocusofattentionforpolicymakersinadvanced
economies,astheywillguidepolicytowardmakingthemosteffectiveimprovements.
Thebestinvestigationintotransportationasameanstoimproveeconomicperformancecomesfroma
2007Britishstudythatidentifiedsevenmicro-economicdriversthatmayserveasgatewaysfor
transportation’simpactoneconomicproductivity.(UKDepartmentforTransport,2008).Awell
performingtransportationnetworkwould:
1. Increasebusinessefficiency,throughtimesavingsandimprovedreliabilityforbusinesstravelers,
freightandlogisticsoperations.
2. Increasebusinessinvestmentandinnovationbysupportingeconomiesofscaleornewwaysof
working.
3. Supportclustersandagglomerationsofeconomicactivity.Transportationimprovementscanexpand
labormarketareas,improvejobmatching,andfacilitatebusiness-to-businessinteractions.
4. Improvetheefficientfunctioningoflabormarkets,increaselabormarketflexibility,andthe
accessibilityofjobs.
5. Increasecompetitionbyopeningupaccesstonewmarkets.
6. Increasedomesticandinternationaltradebyreducingthecostsoftradingforservicesandfreight.
7. Attractgloballymobileactivitytoaregionbyprovidinganattractivebusinessenvironmentandgood
qualityoflife.
Thefocusonthesevenmicro–driverssuggeststhatonlywell-targetedtransportationinvestments
wouldhavetheexpectedresults.Inotherwords,therightlevelofinvestmentislessimportantthan
wheretransportationprojectsarefundedandhowtheyarechosen.Inthisway,investmentsin
congestedorgrowingareas,choseninatransparent,prioritizedmanner,basedonafullappraisalof
theirbenefitsandcosts,shouldbethemainstayofanymetropolitantransportationpolicy.
Beyondthesedrivers,wedoknowthattransportationalsosupportsAmericanworkers,providing
millionsofjobseachyeartobuildandmaintainthestructuresandfacilitiesthatpoweroureconomy.
Brookings’analysisofdatafromtheBureauofLaborStatisticsrevealsthatnearly7percentofall
workersinmetropolitanLasVegasaredirectlyemployedinfieldsrelatedtotransportationoffering
manyemploymentopportunitiesthathavelowbarrierstoentryandareprojectedtogrowoverthenext
decade.Thisincludeseverythingfromhighwaymaintenanceworkers,tobusdrivers,totransportation
engineers.(KaneandPuentes,2014.)
Freightandgoodsmovementisperhapstheclearestexampleofhowtransportationimpactseconomic
growth.Amajorreviewof“acenturyofdata”forfoundpositiverelationshipsbetweenpublic
2
infrastructureinvestmentsandeconomicproductivity—especiallyinthefreightandindustrialsector.
Thebenefitsandsavingsfortruckingalonejustifyone-thirdtoone-halfofthefederalhighway
investmentsbetween1950and1973.(HLB1999).Swift,highlyreliable,andrelativelyinexpensive
truckingfacilitatedtheadoptionofjust-in-timelogisticspracticesduringthe1990sbyfirmsacrossthe
economy,inboththemanufacturingandservicesectors.Thisisclearlyevidentinthecontinentalsupply
chainsthatconnectAmericanfirmstoCanadaandMexico,theUnitedStates’largesttradingpartners.
Thosesupplychainscouldnotoperatewithoutreliabletruckandrailconnectionsbetweenandwithin
thecountries(ParillaandBerube,2013).
Inspiteofthiselaborateandthoroughinlanddistributionsystem,thedistancetoaninternational
gateway—anairport,alandborder,oraseaport—isstillenormouslyimportantforpotentialexporters
(Griesandothers,2009).Allthingsbeingequal,exportingfirmsthatareclosertoagatewayhavean
advantageoverthosethataremoredistant.Forfirmsthatexporthigh-valueproductsbyair,proximity
toamajorinternationalpassengergateway(e.g.,LosAngeles,Miami,Chicago,NewYork)orcargohub
(e.g.,MemphisorLouisville)willprovideadistinctadvantageoveralocationfromwhichalengthytruck
triporadditionalairbornesegmentisnecessarytoreachamajorairport.Forexportersbysea,thereis
greatadvantageinbeingcloseenoughtoamarineterminal(oran“inlandport”offeringnonstop
intermodalrailservicetoamajorseaport)thatadrayagetruckcan,withinasingledayofservice,make
aroundtripbetweentheirloadingdockandtheport.IfmanufacturingincreasesasashareofU.S.
exports,metrosthathostoneormoresuchgatewayswillhaveadistinctadvantageoverthosethatdo
not.Inturn,theportionsofmetrosthathavethegreatestaccesstosuchgatewayswillreceivethelion’s
shareofgrowthinthesectorsthatutilizethemmost(Tomerandothers,2013).
Butwhiletheconnectionbetweentransportationandeconomicgrowthiswellunderstood,successful
citiesandmetropolitanareasintheU.S.andaroundtheworldalsoneedtorecognizethefundamental
relationshipbetweentransportationandphysicalgrowth.
Today,transportationplanningandcapitalprogramminghaveasmuchtodowithhowplacesgrowand
developasanyothersuiteofpublicpolicies.Yetthetransportationnetworkincitiesandregionsisnot
anephemeralconceptandwithfewexceptionsAmericancitiesfailtoconsidergrowthanddevelopment
dynamicsintransportationontheproperscale:themetropolitanlevel.Landuseandmost
transportationplanningremainshyperlocalizedwithspotimprovementsmadetoamelioratespecific
problems.Foritspart,metropolitantransportationplansaremostlyjustaggregationsoflocalprojects.
Thisisdespitethefactthattherelationshipbetweenthebuiltenvironmentandtransportationhasbeen
oneofthemostactiveareasofinquiryforurbanplanningscholarssincethemid-1990s(Muroand
Puentes,2004;EwingandCervero,2010).Lately,attentionhasreturnedtothepotentialusefulnessof
urbanplanninganddesigninreducinggreenhousegasemissionsbyreducingthenecessityof
automobileusage.ThisisamajorfocusoftheupcomingParisClimateChangeConference,forexample.
Thisconnectionbetweentransportationandphysicalformisimportantbecauselanduseanddensityin
andofitselfisnoguaranteeofspatialefficiency(GordonandRichardson,1997).LosAngelesisbysome
measuresthenation’smostdenselypopulatedmetro,duetothelackofsignificantdifferencein
populationdensitybetweenthecentralcityanditssuburbs,aswellasadearthofopenspacewithin
urbanizedportionsofthemetropolitanarea.Itprovidesanexcellentandcautionaryexampleofa
denselydevelopedyetautomobile-dependentregion,withprevailingland-usepatterns(longblocks,
widearterialroads,strictfunctionalseparationofprimarylanduses)thatdiscouragewalkingand
consequentlyinhibitthedevelopmentoftransitridershipoutsidethelowestsocioeconomicstrata
3
(Eidlin,2005).Thatregionisnowembarkingonsomeofthemostadvanced,intentionalplanningtolink
uptransportationandlanduseinordertoreconcilethesepastgenerationalmistakes.(CityofLos
Angeles,2015).
Carefulurbanplanning,withaparticulareyetofactorsthatimpactresidents’willingnessandabilityto
usealternativestotheautomobileformanytrips—oratleastminimizethelengthofcartrips—canbea
powerfultoolforreducingtransportation’scontributionstoregionalproblems(e.g.,carbonemissions,
spatialmismatch,trafficcongestion.)Eveninsuburbswherethevastmajorityofcommutingoccursby
automobile,individualswholivenearpedestrian-orientedshoppingdistrictsaremorelikelytowalkto
shoppingthanthosewholiveinautomobile-orientedareas(Boarnetetal.,2011).Whilethecollocation
ofhousingandshoppingcanreducevehicletravelsignificantly,thecollocationofhousingand
employmentyieldsevengreaterreductionsindriving(CerveroandDuncan,2006).
Onekeystrategyistodevelopplansforcreatingwalkableurbanplaces—mixingoffices,retailspace,and
residencesatapedestrianscale—athighlyaccessiblelocations(Leinberger,2010).Thedowntownsof
olderstreetcarandcommuterrailsuburbslikeNaperville,Illinois,andBethesda,Maryland,havebeen
theprimarysitesofsuchdevelopment.However,thesuccessofmany“towncenter”projects,which
havetransformednumerousmoribundindoorshoppingmallsintopedestrian-orientedoutdoor
shoppingcenterswithofficesandapartmentsnextdoor—effectivelyprovidingdowntownstosuburbs
oftendevoidofthem—demonstratesthepotentialfordevelopingwalkableplacesinlocationswithno
previoushistoryofpedestrianorientation.
Itisnotacoincidencethatmanyprominentindustryclustersexisteitheratthepedestrianscaleinhighly
accessiblecentralbusinessdistricts(e.g.,fashioninManhattan,financialengineeringintheChicago
Loop),orattheautomobilescalealongmajorregionalhighwaycorridorsandattheirintersections(e.g.,
informationmanagementalongtheDullesTollRoadinthewesternWashingtonsuburbs,biotechnology
alongI-5northofdowntownSanDiegoandI-270inthenorthernWashingtonsuburbs).Giventhe
failureofsomany“blackbox”attemptstoformclustersthroughtheprovisionofphysicalspaceinhighly
accessiblelocations,though,cheapofficespacenearafreewayinterchangeclearlydoesnotprovidea
sufficientpreconditionforasustainableclustertoform(MuroandKatz2010).
However,simplydesignatingaplacetobeapedestrianorientedretailnodedoesnotmeanitcanbe
sustainedbylow-densityresidentialareassurroundingthem.Instead,mostvisitorsarrivebyautomobile,
oftenleadingtoconflictbetweenbusinessdistrictsandtheirsurroundingresidentialareasoverparking
andthroughtraffic.Whilemanyplaceshavesomescopefordensification(e.g.,byreplacingsingle-story
retailstructureswithmultistorymixed-usebuildings),oftensuburbanretailclustershavestreetplans
andsurroundinglandusepatternsthatmakeaccommodatingdenserdevelopmentdifficult.Anyplanto
redistributecommercialactivitytothesenodeswillneedtheaccompanimentofanewmobilityand
accessibilitystrategyencompassingpedestrianandbicyclefacilitiesandlocalcirculatortransit—
especiallycriticalgiventhetendencyofwalkablecenterstoincreasepropertyvaluesnearby,andthus
reduceaffordabilityforlow-incomepopulations.3
3
Itisalsonecessarytodevelopstrategiestoovercomethehostilityofmanyresidentstoresidentialstructures
otherthansingle-familyhousesandgarden-styleapartmentandtownhousecomplexes(Levine2006).Thislineof
inquiryiswelltraveled,withconclusionstoolengthytosummarizehere.
4
Howandwheredevelopmentoccurs—thosecrucialpreoccupationsofsmart,intentionalplanning—
matters.Reducingurbansprawl,promotingurbanfocus,andencouragingmorecompactdevelopment
(alongwithprovidinggoodtransportationlinks)maywellenhanceoutcomes.Thisoccursthroughthe
deliberateandintegrateduseoftheplanning,regulatory,andfiscalauthorityofstateandlocal
governmentstoinfluencethepatternofgrowthanddevelopmentinordertomeetprojectedneeds.
Includedinthisdefinitionaresuchtoolsascomprehensiveplanning,zoning,subdivisionregulations,
propertytaxesanddevelopmentfees,andotherpolicyinstrumentscoupledwithinfrastructureand
transportationinvestmentsthatsignificantlyinfluencethedevelopmentoflandandthepotential
regionaleconomicoutcomes.
Whilemuchoftheempiricalworkisstillemerging,urbaneconomistshavelongtheorizedthaturban
forminfluenceseconomicoutcomes.Andnow,researchershaveactuallybeguntodemonstratethat
suchkeygoalsascompactness,density,well-integratedland-useandtransportation,growth
managementsystems,andrejuvenatedurbancentersmayeachbeassociatedwithenhancedeconomic
growth.
FastTrackingTransportationinDenver
In2004,residentsinmetropolitanDenvervotedforamulti-billioncomprehensiveplan,FasTracks,to
buildmorethan122milesofnewlightrail,commuterrail,andbusrapidtransitlanesserving60new
transitstations.ItincludestheredevelopmentofUnionStationasamulti-modalhubindowntown
Denver.Othercommunitiesaroundthenewtransitstationschangedzoninglawstoallowtighter,taller
developmentneartherailstops,providingthedensitythatenablesmoreresidentstoreaptherewards
ofthisgreatpublicinvestment.
Inmakingthelinkbetweendeliberateurbanplanningandinfrastructuredevelopment,theDenverPost
notedthatFasTracks“wouldbenomorethanajumbleofrailandconcretewithoutcarefulzoningand
transportationplanningbythecitiesandcountiesservedbytheproject.”Thisiscriticallyimportant
becausetheregionisexpectedgrow50percentby2035.Duringpeakconstruction,theplanis
estimatedtocreateover7,000jobs.Oncecompleted,FasTrackswilladd$150millionayearinwages
andsalariestotheDenvermetroeconomy.(KatzandBradley,2013).
Theprojectisexpectedtocost$6.8billion,andisfundedfromavarietyofsourcesincludingsalestax
bonds,federalTransportationInfrastructureFinanceandInnovationAct(TIFIA)programloans,federal
NewStarts,localcontributionsandpublic-privatepartnerships.In2004,residentsoftheDenverregion
approvedafour-tenths-centsalestaxincrease,usedascollateralagainstbondstofinancetheplan.To
design,build,finance,operateandmaintainthecombinedGoldLineandEastLine(knownastheEagle
Project)RTDcontractedwithaconcessionaireinapublic-privatepartnership.Localcommunities
impactedbytheprogramwillcontribute2percentofthetotalprojectscosts,about$95million.
Recentincreasesinconstructioncostsandsignificantdecreaseinsalestaxesrevenueduetothe
recessionhavedelayedtheprogressoftheproject,leavinga$2billiongaptofinishthebuildoutinthe
nextdecade.Theprojecthassupportfromavarietyofstakeholdersintheregion,andproject
developersareworkingwiththeprivatesectortodesign,build,andoperateportionsofFasTracks,as
wellbuildtransit-orienteddevelopment(TOD)communitiesaroundstationstoserveasexamplesof
public-privatecollaboration.
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III.
DesigningaTransportationSystemAroundEconomicOutcomes
TheGreatRecessionwasawake-upcalltometropolitanAmerica.Debt-fueledconsumptiondefinedthe
economicapproachofthepriordecades,withmetropolitanareascompetingtostealbusinessesfrom
oneanotherandmakingbigbetsonspeculativerealestate(KatzandBradley,2013).Thisleftregions
particularlyvulnerabletodropsinaggregateconsumptionortightercapitalmarkets.
ThiswasespeciallythecaseinLasVegas,whichwasoneofthemetroareasmostaffectedbythe
downturn.Bynearlyeverykeyeconomicindicator,LasVegasstruggled—andbysomemeasures
continuestodoso.OverallmetropolitanGDPpeakedinmid-2007andcontinuedtofalluntilmid-2012—
andGDPisstilllowerthanitwasduringthepre-recessionpeak.Similarly,totalemploymentisstilllower
thanthe2007peakandunemploymentisstillover1percentagepointhigherthanthenationalaverage.
Evenhousepricesarejustoverhalfoftheiraveragevaluein2007(FriedhoffandKulkarni,2015).
Fortunately,LasVegasanditspeershaverecognizedtheneedforaneweconomicgrowthmodel,one
thatfocusesonthecoreproductivitydriversthatmaderegionaleconomiessuccessfulforcenturies:
tradableindustries,socialequity,andenvironmentalresiliency.Andacrosseachofthosethreedrivers,
thephysicallandscapeandtransportationplayacriticalrole.
Tradehasalwaysbeentheeconomicfoundationofcities(Jacobs,1992).Itcreatesamarketplacefora
metroarea’sgoods,bringingnewvalueintothecommunitythroughthefinancialassetspaidforlocallyproducedexportsandvaluecreationthoughlow-costand/orhigh-valueimportsthatcannotbelocally
produced(Tomerandothers,2013).InthecaseofLasVegas,itwouldbeimpossibletoimaginethe
desertoasisevergrowingtonearly2millionpeopleifitcouldn’tsellitsworld-leadingbrandof
entertainmentservicesorahospitableclimatefornewresidents.Ineachmetroarea,theirownunique
collectionoftradableindustriespowertheregionaleconomybypayinghigherwages,attractingnew
investmentcapital,andrecyclingmoneythroughtheirownprocurementoflocalserviceslikefood,
education,andhealthcare(ParillaandBerube,2012).
Buttogrowthesetradablesectors,metropolitanareasneedphysicalaccesstomarketsandstrong
connectionswithinthem.GettingallofthosetouriststoLasVegasrequiresaglobally-connectedairport
andseamlessaccesstohotels.Sheltering,feeding,andentertainingallofthoseout-of-townguests—
plusthemillionsthatpermanentlyliveinLasVegas—requiresfreightcorridorsthatbringconstruction
materials,freshfood,electronics,andotherconsumergoods.Likewise,theinnovationandproductivity
benefitsgeneratedbydenseclustersoffirms—knownasagglomerations—relyheavilyonbuildingsin
closeproximityandtheinfrastructureassetsthatmakesuchbusinessdistrictspossible(MuroandKatz,
2010).Transportationisthegreatenableroftradableindustries.
Whilegrowingtradableindustriesisfundamentaltometropolitaneconomichealth,accesstoeconomic
opportunityisequallyimportant.Unfortunately,inequalityisacontinualprobleminmetropolitan
America.ToomanyAmericansarenotonlypoorbutalsoliveinwhatareneighborhoodsof
concentratedpoverty,whichthemselvesareassociatedwithhighercrimerates,worsehealthoutcomes,
failingschools,andfewerjobopportunities(Sharkey,2013).Whilethemajorityofthesehigh-poverty
neighborhoodsarestillincentercities,themajorityofallpoorhouseholdsnowliveinthesuburbs—and
thosecommunitiestendtonotofferthesamesocialservicesthatpreviousgenerationshadavailablein
centralcities(KneeboneandBerube,2013).Highlevelsofemploymentdecentralizationalsocomplicate
6
theabilityforhistoricallyunder-employedworkerstoconnecttojobopportunitiesnowspreadallacross
theexpandedmetropolitanboundaries(Kneebone,2009).
Hereagain,transportationandurbanplanningplayacriticalroleinbothcreatingandaddressing
inequality.Thevastdistancesbetweenwherepeopleliveandwheretheywork,study,andshop
compelslowincomehouseholdstotakeontheaddedcostofowningandmaintainingacar(Tomer
2011).Thisintroducesafarhigherhouseholdexpensethanridingtransit,biking,orwalking,butthe
alternativeformanyindividualsisthelosttimeittakestotravelbynon-privatevehicles.Onemajorfor
whythemajorityofpoorhouseholdsliveinthesuburbsandmusttravelsuchlongdistancesisapursuit
ofaffordablehousing.Thisreflectsafailureoftheplanningpractitionerstoprovideenoughaffordable
housinginneighborhoodsthatofferthekindofconnectivitywherepeoplecanchoosetonotownacar.
Inresponse,plannersmustdoabetterjobusingland-useandtransportationtoolstoenhance
opportunitiesfortraditionallydisadvantagedpopulations.
Finally,protectingaregion’senvironmentalhealthandfosteringresiliencyisofparamounteconomic
import.High-profilenaturaldisasters,suchasSuperstormSandy,elevatedtheprofileofAmericancities’
susceptibilitytomajorenvironmentalevents.Thecombinationofwashed-outroads,floodedtrain
stations,andshortedelectricalcircuitryhighlightedtheeconomy’srelianceonthesenetworksandthe
poorandagingconditionofmanyoftheseimportantsystems.Atthesametime,theclimateimperative
createsnewopportunitiesinthe“greeneconomy,”orthoseadvancedindustrieslikesolarpanel
manufacturingandarchitecturaldesignthatwilldeveloptheproductsandplansthatfacilitatea
transitiontoalower-carbonfuture.
Yetit’simpossibletoachievelong-runsustainabilityandresiliencewithoutanenvironmentallycoordinatedtransportationsystem.Duetothesheervolumeofcarsontheroad,thedistancesthey
drive,andtheirnearsole-relianceonfossilfuels,transportationisthesingle-largestpollutingsector.The
physicaldesignoftransportationfacilitiesalsoharmstheenvironment,mostnotablythroughthe
impervioussurfacesonroadsandinparkinglotsthatcauseexcessivestormwaterrunoff.Plus,by
continuingtobuildroadsthatpromoteoutwardgrowth,humansconsumeopenlandthatprovide
naturalhabitatstootheranimalsandwhosevegetationoffernaturaloffsetstocarbonemissions.By
buildingdenserandwithbetterstreetdesign,transportationplanningcanreduceenergyconsumption
andmitigateenvironmentalimpacts.
TransitioningtoamoreproductiveeconomicmodelisalreadyunderwayinNevada.Thestateis
pursuinganaggressiveapproachtogrowingtradableindustriesandimprovingSTEMeducationtoboost
futureeconomicopportunities(Leeandothers,2014).ThenewTeslabattery“gigafactory”inRenohas
positionedthestateasanationalleaderinbothadvancedindustriesandthegreeneconomy.LasVegas
issimilarlyseekingtodiversifytheregionaleconomy,likewiththedevelopmentofthenewUNLV
medicalschool.ManyotherhighdeserteconomiesalreadylooktoLasVegasforitsinnovativewater
conservationefforts.
Yetwhatcan’tbeoverlookedbylocalleadersarethetransportationinvestmentsthatwillunleashthe
potentialofthesefoundationaleconomicdecisions.Equallyimportanttoareformedeconomicvisionis
recalibratingtheirplanningmodelsandfindinginnovativewaystopayfornewinvestments.
7
MoveSeattle:UsingTransporttoBuildaModernUrbanEconomy
Byanymeasure,theSeattleeconomyisbooming.Thecombinationofadvancedmanufacturingthrough
firmslikeBoeingandthemoderndigitaltechnologyboomledbyMicrosoftandAmazonhashelped
Seattlesecureclearcomparativeadvantagesintheglobaleconomyandanenviableamountofhighpayingjobs.Seattleisalsoconsistentlyoneofthefastest-growinglargecitiesinAmerica,addingnearly
100,000residentsbetween2000and2015.
Butallthiseconomicgrowthhascausedsignificantphysicalgrowthpains.WhileSeattleisworld-famous
foritsinimitableskyline,itiseasytoforgetthatstunningviewispartiallyduetoseriousgeographic
constraints.Thecityishemmed-inbyPugetSoundtothewestandLakeWashingtontotheeast.
Downtownisontheskinniestlandmass,creatinganeffectivefunnelforcommutersinalldirections.It
maybebeautiful,butitishardtofitallthosenewpeopleandgrowingbusinessesinsuchatightspace.
MoveSeattleisthecity’splantobothsupporttheregion’slong-termeconomichealthandaddress
thosephysicallimitations.Firstoff,theplanitselfdoesnotstartwithtransportationobjectives—it
describedthealignmentofthecity’scorevalues(e.g.,safety,vibrancy,affordability.)Second,it
recognizesthatthecityislargelybuilt-outandthereisnoroomformoremajorroadways.Asaresult,
thebestwaytoconnectpeopletoeconomicopportunityistosupportamorecompetitive
transportationlandscape.Thatmeansimprovedmultimodaloptionslikemorebikelanes,greatertransit
access,andimprovedsidewalks.Buildingfromtheregion’sindustrialbase,theplanalsorecognizesthe
disruptivepotentialofnewtransportationtechnologylikemobiletravelerinformationandshared
vehiclesandconsidersthepotentialimpactsonthebuiltenvironment(SeattleDOT,2015).
Butthisismorethanjustasmartplan—itnowhasthefinancialsupporttoachieveimplementation.
Seattlecityvotersapproveda$930millionballotreferendainNovember2015tofundtheprogram
(Kroman,2015).ThenewpropertytaxrevenueswillallowSeattletoimmediatelystartworkonthese
transformativeprojects.Ifimplementationgoeswell,Seattlemaysoonbeknownasmuchforhowits
transportationidentityastheplanesandsoftwareitbuilds.
Establishinganeconomicvisionclarifiestheoutcomesametroareahopestoachievethroughits
transportationsystemandurbanplans.Movingforward,thatmustincludeeffortstoimprove
pedestrianaccess,high-capacitytransitandbicycleinfrastructurealongsideeffortstoimprove
automobilemovement.Metroareasmustgomultimodaltoachievetheireconomicobjectives.
Toimplementsuchamode-neutralapproach,economists,planners,andengineersrefertoaccessibility
astheeaseofreachingvalueddestinations(jobs,shops,schools,entertainment,andrecreation),
typicallybymeasuringthetotalnumberofplacesreachableinagivenamountoftime.Thatpermits
simultaneousconsiderationofresidential,commercial,andindustrialrealestateconcernswhenmaking
transportation-baseddecisions.Itisalsodesignedtobeoutcome-orientedmetric,meaningaccessibility
caneffectivelyreflecttransportation’seconomicandsocialimpact(Geurs&vanWee,2003).Ortoputit
anotherway,accessibilitybetterreflectshowindividualsthinkwhenplanningtheirtrips:“canIgetto
thatnewjobfromhere?;howfaristheclosestgrocerystore?;canmychildrenwalkorbiketoapark?”
WhilethemobilitymodelcontinuestoserveAmericanmetrosasamethodtodesignnewinvestments,
thatmodelisflexibleenoughtoincludeanaccessibilitylens.Forexample,comparingtheamountofjobs
reachablein60minutesbetweenprivatevehiclesandtransitshowsanextremeadvantageforvehicles
8
(OwenandLevinson,2014).Accessibilitymodelshelpexplainwhyoldercitieswithmoredefinedstreet
grids—suchasWashington,DCandBoston—exhibitfarhigherratesofwalkingandbicyclingthanpeer
citieswithmoresuburbandesigns—suchasNashvilleandDetroit(McKenzie,2014).
Manyofthesesamecommunitiesthatdeliverthehighestaccessibilitylevelstotheirresidentsand
visitorsalikealsoshareanothervitalcharacteristic:theyvalueandfosterthedevelopmentofpublic
spaces.
Considersomeofthegreatpublicspaces,manyofthemtouristhubs,synonymouswithpopularglobal
cities.Thegreatcathedrals,pedestrian-onlystreets,andpublicsquaresofEuropeancitieslikeVienna,
Milan,andBarcelonahavelongattractedtouristsandlocalresidentsfortheiraestheticcharmandmix
ofretailandfoodoptions.Buttheseplacesarealsoalive,aspeopleliveandworkinthesameplace.The
sameappliestomanygreatAmericanneighborhoods,fromManhattan’sVillagetoChicago’sRiverNorth
toSanFrancisco’sEmbarcadero.Placeswithatruemixofuses,orientedtoservepeopleandnot
necessarilytheircars.Incontrast,considerthearchetypalAmericancommunalspaceofthelater
twentiethcentury:themall.Itselfawalledgardenofretailoptionssurroundedbyaveritablemoatof
parking,themalliseffectivelyaprivatecommercialcastle.
Greateraccessibilityisalsoconnectedwithhigherlandvalues,signifyingitseconomicvaluetoresidents,
businesses,and—duetothegreatertaxreturnspersquaremile—government(Hansen,1959).In
particular,manyofthemostaccessibleneighborhoodsalsoincludestopsalonghigh-frequencytransit
lines,andthetransit-orienteddevelopmentsurroundingthesestopstendstodeliverhigherlandvalues
andsubstantialcapitalizationbenefits(CerveroandDuncan,2002).Somewhatironically,thesame
neighborhoodswithhighlevelsofaccessibilityandhigherlandvaluestendtohavepermanent
automobilecongestion.ConsiderthatManhattaniscongestedatanytimeofday,butit’sthatvery
clusteringofeconomicactivitythatmakeitsuchadesirableplacetolive,work,andvisit.
Ofcourse,carswillcontinuetobeavaluabletransportationcomponentofeveryAmericanmetroarea.
Thekeymovingforwardistoreversethedirectionalityofplanningpractice,bystartingwithtothe
promotionofeconomicoutcomesandthenconsideringthoseoptionsthroughthelensofall
transportationmodes.Forexample,communitiesaroundtheworldfromBerlin,toLondon,toSeattle
haveremovedmandatoryparkingminimumsfordowntownbuildingsandotheractivitycenters,intheir
placeusingspatialplanningtechniques,improvedtransitoperations,andnewbikelanestripingto
attractamixoftransportationmodesandreducetheparkingburden.Thiskindofplanningisespecially
importantastheriseofon-demandrideservices,e-commerce,andothertechnology-fueledtrendsmay
reducetotalindividualtrips,therebyrequiringlessfutureroadspaceandparking(Beenandothers,
2012).
LasVegasiswell-positionedtoimplementanaccessibility-basedapproachtocomplementitsfocuson
mobility,urbanplanning,transportationinvestment,andplacemaking.TheRegionalTransportation
CommissionofSouthernNevada’s(RTC)certificationastheofficialmetropolitanplanningorganization
(MPO)fortheregion—togoalongwithitspriorresponsibilitiesfortransitoperations,traffic
management,andconstructionfunding—makesitanidealcentralactortocoordinateametropolitanwidestrategyforimprovedaccessibility.Meanwhile,theSouthernNevadaStrongRegionalPlan
providesaclearblueprintforbuildingaproductive,inclusive,andsustainableeconomy.Finally,the
region’simpressivetourismindustryoffersacaptiveaudienceinterestedinnon-automobiletravel.
9
Munich’sTourism:MadePossiblebyTransportation
LongthehubofGermaneconomicstrength,Munichisnothingshortofaglobalmanufacturing
powerhouse.Thesectorgeneratesover$37billioninoutputperyear,producedthroughamixof
multinationalfirmslikeBMWandsmall-andmedium-enterprisesfocusedincomplementaryindustries
(ParillaandOthers,2015).Itcomplementsthismanufacturingbasewithstrongtradableindustriesin
financeandinformationcommunicationtechnologies.Thisresultsinoneofthehighestdisposable
incomesacrossEurope,anapprenticeshipsystemtomaintainapipelineoftalentedworkersand
managers,andstrongtradeconnectionsthroughouttheworld.(ClarkandMoonen,2014).
ButMunichismuchmorethanjustanindustrialcenter—itisalsooneoftheworld’sgreattouristcities.
RebuiltafterWorldWarII,Munichoffersanenviablecollectionofphysicalassets:oneofthemost
charmingcitycentersinEurope,grandpublicsquaresandparks,remarkableartmuseums,andmodern
eventcentersliketheAllianzArena.Supportingthesephysicalassetsisafirst-classsetofprogrammed
activities,mostnotablyOktoberfest,classicalmusicseries,andafilmfestival.Asaresult,tourists
continuetoflocktotheBavariancapital:ithosted6.6millionovernightvisitorsin2014,up57percent
sincejust2005(Bavaria,2015).
MovingalloftheselocalworkersandvisitorswithinoneofEurope’slargestcitiesisn’teasy,butMunich
offersapromisingmodelforhowcoordinatedtransportationinvestmentscansimultaneouslysupporta
diversifiedeconomyandheavytourismactivity.
Thebackbonetothissystemisanextensivetransitandnon-motorizedtravelsystemthatseamlessly
connectsallofthosemajortouristattractions.TheMunichTransportandTariffAssociationmanages32
fixedraillinesandover280milesofbusroutes—forametroareaofonly3.9millionpeople—anduses
multilanguagesignageandfocusonservicereliabilitytoattracttouristridership(KinsellaandCaulfield,
2011).Meanwhile,well-markedbikelanes,well-maintainedsidewalks,andpedestrian-onlystreetshelp
touristsspendmoretimeseeingsitesthansimplytravelingbetweenthem.Combined,thishelpstourists
savemoneybystayingoutofcars—rentalortaxi—andleavingmoreroadspaceavailableforcommuters
andlocalfreight.Researchalsoconfirmsthatthesetransit-richinvestmentshelpattracttouriststothe
mobilityoptions(Le-Klähn,Gerike,andHall,2014).
However,itwouldbeimpossibletomaintainasystemofthisscalewithoutclearutilityforthemajority
ofitsusers:localresidentsandbusinesses.Thosesametrainandbuslinesstretchdeepintothesuburbs
andfarbeyondthecenter-citytouristattraction,connectinglocalresidentstojobopportunities,
schools,andotherkeyservices.TheHauptbahnhofoffershigh-speedrailconnectionstotherestof
Europe,facilitatingbusinesstravelalongsidetouristflows.Finally,MunichAirportconnectsthecityto
therestoftheworldviatheLufthansaoperationalhubanddirectconnectionsto68countries.
Munichprovesthatacityneedn’tchoosebetweenadiverseeconomyandstricttourismfocus.Instead,
anycitylookingforthatkindofeconomicdynamismmustnotforgettoinvestinamultimodal
transportationnetwork.
10
IV.
PayingforIt:TransportationPlanninginanEraofFiscalConstraint
Mosttransportationandurbanplanningissuesareinextricablytiedtoarangeoffunding,finance,and
budgetconsiderations,includingthecapitalandoperatingcostsandrelatedpricing/costrecovery
options.Today,stateandlocalgovernmentsareincreasinglyconstrainedbylimitedfinancialresources
andothercompetingspendingprioritiestoacceleratetransportationinvestments.Nevadaisparticularly
constrainedinthisregardwitharecentUNLVreportprojectinga$377millionannualdeficitinthestate
highwayfundby2030ifadditionalrevenuesarenotraised.(BrownandMaravich,2013).
Thereareseveralreasonsforthisshortfallininvestment.Aprimaryculpritisthatmotorfuelstaxesat
thefederalandstatelevels(whichcomprisethelargestsinglesourceoftransportationrevenuefor
federalandstategovernments)arenotproducingadequaterevenuetomeetsystemneeds.Motorfuels
taxreceiptsareleviedonaper-gallonbasis,andunlessthetaxrateisregularlyincreasedorindexedto
accountforinflation,fuelstaxescanfaceerodingpurchasingpower.Nevada,forexample,hasnot
raiseditsfueltaxfor23years.(ITEP,2015).4Thisshortfallisparticularlyacutebecausethecostof
constructionandmaterialshasbeenrisingandisprojectedtocontinuerising.Theresultisthatthe
purchasingpowerofthefederalgovernmentandmanystategovernmentshasbeendecliningatthe
sametimedemandisincreasing.
Sostatesarealsolookingatdebtfinancetoolssuchasstateinfrastructurebankstoleveragetheir
existingresourcesandaccelerateprojects.Forexample,stateinfrastructurebanks(SIBs)canoperate
revolvingloanfundsandtypicallyhaveaboardthatusesspecifiedcriteriatomakestrategicinvestments
intransportation.Aftertheyareprovidedinitialcapital,theycanprovidearevolvingrevenuesourceto
fundpriorityprojectsandsupplementexistingrevenuesources.Sinceestablishedinthe1990sSIBshave
providedbillionsinfinancingformorethan1,000projects.However,thisactivityishighlyconcentrated
injustafewstatesasmanyareunderutilizedorinactive.KansasandGeorgiaaretheonlystatesinthe
UnitedStatesthatoperatestate-onlycapitalizedtransportationbanks(i.e.,nofederalmoney.)
SouthCarolina’sinfrastructurebankisoneofthenation’soldestandmostactive,investingnearly$2.8
billionsinceitscreationin1995andovercomingtheloancapacityissuesofotherSIBsbyleveragingits
capitalization.SouthCarolina’sbankreceivesdedicatedstaterevenuespledgedtobondrepayments:
$25millionfromthestategastax,$35millionfromcarregistrationfees,and$60millionfromtruck
registrationfees.TheSouthCarolinaSIBsupportsprojectsthroughgrantsandloans,givingpreference
tothosewithastronglocalmatch.AlthoughNevadahasastaterevolvingloanfundforwater
infrastructure,itdoesnothaveonefortransportation.(PuentesandThompson2012).
Overthelong-term,statesmayhaveaninterestinreplacingthemotorfueltaxasaprimarysourceof
revenuefortransportation.Onepossiblereplacementstatescanlooktoisavehiclemilestraveledfee
(usingGPSorothertechnologytochargeusersforeverymiledriven).Amilestraveledfeecouldprovide
atechnologicalplatformforgreateruseofcongestionpricingandcouldbemoreeffectiveinmanaging
demandthanthemotorfueltax.Italsowouldbeapplicableregardlessoffuelsource,whereasthe
currentmotorfueltaxdoesnotapplytomanyalternativefuelorelectricvehicles,whichareonly
becomingmorecommoninthefuture.Nevadaisoneofthenationalleadersintermsofstudyingthe
4
MetropolitanLasVegasisuniquenationallygiventheClarkCountyfuelrevenueindexingprogram,whichlinks
thelocalgastaxtoinflation.Thespecialassessmentwillexpireattheendof2016,whenitwillriseto10cents
pergallon.
11
potentialapplicationofaVMTfeebutprospectsforapplicationinthenearfutureareunknown(Baker,
2014).Sofar,VMTfeesareonlyimplementedinOregoninalimitedpilotthatbeganearlierthisyear,
andinGermanyforuseontrucks.
Thesenewandtraditionalmodelsarebeingconsideredatatimewhenpolicymakersatalllevelsworkto
alleviatethepublic’sconcernthattaxpayerswillbearthetotalcostsoftransportationimprovements.
Whichiswhytheuseofalternativefinancingapproaches,suchaspublic-privatepartnerships(PPPs),
attractsomuchattentiongiventheirrealabilitytohelpspreadriskandofferflexibilityforpublic
agencies,acceleratingthecompletionofmanyinfrastructureprojectsovertime(Gatti,2013).
WhilePPPsareneitherasolutiontoallAmerica’sinfrastructurechallengesnoracorporatetakeoverof
publicassets,awell-executedPPPcanbeavaluabletoolforattractingprivatesectorcapitalandproject
expertiseinordertomoveforwardonpriorityprojects.Onetypeofpublic-privatepartnership,anasset
lease,hasthepotentialtoprovidesignificantupfrontcapitalthatcanbeusedtofundanumberof
transportationpriorities.However,thesepartnershipsoftenrequireeithernewuserfeesorprivate
collectionofexistinguserfees(suchastolls)thatprovideareturnoninvestmenttotheprivatepartner.
(SabolandPuentes,2014).
AnotherexampleonthelocallevelisthecreationoftheChicagoInfrastructureTrust(CIT),amarketorientedinstitutionthatattractsprivatecapitalinterestedinsteadyreturnsandmakesinvestment
decisionsbasedonmeritandevidenceratherthanpolitics.LikeCalifornia'sI-Bankitcutsacross
differenttypesofinfrastructuresuchastransportationandtelecommunications,andlikeConnecticut's
GreenBankitemphasizesthegeneration,transmission,andadoptionofalternativeenergy.TheCITwill
becapitalizedthroughdirectinvestmentsfromprivatefinancingorganizationssomeofwhichhave
expressedinterestthatcouldreach$1billionormoreintotalinvestmentcapacity.
Onanevenlargerscale,theWestCoastInfrastructureExchangeisbuildingapipelineofprojectsacross
infrastructuretypesforCalifornia,Oregon,Washington,andBritishColumbiabyidentifyingand
preparingassetsforPPPprocurement(Kim2014).Thesearethetypesofmarketswheretheprivate
sectorwilldevoteitstimeandresourcesfortheforeseeablefuture.Indeed,anewIntermountain
InfrastructureExchangewasrecentlylaunchedbetweenColorado,Utah,andArizona(Hendee2015).
Anexampleoflinkingtransportationplanningwithprivatesectorresourcesistheexpansionoftransitorienteddevelopment.Thistypeofdevelopment,aidedbycarefulanddeliberateplanningprocesses,
givescitiesandmetropolitanareastheabilitytopromotemoreaccessibletransportoptionsand
complementarylanduses.Butitalsorevealshowadditionalvaluecanbecapturedfromthese
propertiestofuelfutureinfrastructureimprovements.Afterall,investmentsintransportation
infrastructurecreatevalueforlandownersneartheinvestment.Sohowcanthatvaluebecapturedto
fundtheinvestmentinthefirstplace?
Thetermforthis—valuecapture—referstoatypeoffinancingwherenon-transportationusers,
primarilyadjacentpropertyownerswhobenefitfromtransportationprojects,contributetothecostsof
suchprojects(IstrateandLevinson,2011).Itisoftenproposedasawaytousepublictaxingauthorityto
helpfinanceinvestmentintransportationthroughtaxesonnearbyprivatedevelopment,insomeways
mimickingthelinkbetweenprivaterailtransitandprivatelanddevelopmentacenturyago.
Theideaisthatrailsystems,byimprovingaccessibility,willincreaselandvalues.Theincrementoverany
pre-existingpropertyvaluecanthenbetaxed,thereby“capturing”thebenefitthataccruestoprivate
12
landownersbyvirtueofthepublicrailinvestmentandhelpingtodefrayrailconstructionoroperating
costs.Althoughtheideaofvaluecapturehasbeendiscussedinpolicycirclesforyears,itisemployedin
relativelyfewplacesandmostprominentlyintheformofbenefitassessmentdistrictsinmetropolitan
areaslikeMiami,Florida;andLosAngeles,California.(O’Sullivan,2014).
Forexample,constructionofatransitstationislikelytoincreaselandvaluesinthewalkingradiusnear
thearea.Thelocalgovernmentcouldchoosetodedicatethetaxesfromtheincrementalincreasein
propertyvaluestorepayingbondsissuedforitsconstruction,anapproachknownastaxincrement
financing(TIF).Alternatively,privatepropertyownerscouldchoosetocreateaspecialtaxdistrictthat
wouldallocatecostsoftheprojecttobeneficiaries.The$7billionSilverLinerailprojectinNorthern
Virginiawaspartiallyfinancedthisway(Roukouniandothers,2014).
CapturingValueinPublicAssets:VirginiaAirRights
Ascitiesandstatescontinuetolookforsourcesofrevenue,neweffortsareemergingtocapturethe
enormousvalueinthelandthepublicsectoralreadyowns.Bostonusedthisvaluecapturetechniqueto
deriverevenuefromtheCentralArtery/TunnelProject(the“BigDig”).NewYorkpursuedasimilar
contracttobuildoutaportionoftheBarclay’sCenterinBrooklyn.Today,anideainArlington,Virginia,
couldliterallypavethewayforanew,economicallyintegrated,modelofairrightsdevelopment.
Theideaofpursuingapartnershiponairrightscameoutofadrivetosecurenewrevenuesforthe
state.Fortunately,Virginia’sOfficeofTransportationPublicPrivatePartnerships(OTP3)alreadyhasa
strongtrackrecordinnegotiatingawiderangeofriskandcapitalsharingprojectsbetweenthestate
andtheprivatesector.Notably,OTP3successfullynegotiatedthecomplexhighoccupancytolllane
projectonVirginia’sportionoftheWashingtonbeltwaywithaprivatepartner,Transurban,aswellas
morethan$6.3billioninotherprojectswithinthelasttwoyears.However,theairrightsproject
requiredthestatetofundamentallychangethewayitnormallythinksaboutwhatitownsandcontrols,
notjustasastewardandabuilder,butalsoaspropertyownerandredevelopmentpartner.
Aninitialscanofthestate’stransportationassetssurfacedanumberofpotentialpropertiesindense
urbanareas.ThemostpromisingisaboveInterstate66intheRosslynareaofArlington.Directlyacross
thePotomacRiverfromWashington,D.C.,Unfortunately,thiscenterofbusinessactivityisisolatedfrom
theriverfrontandtheCapitalbythebusyurbanfreeway,limitingopportunitiesforRosslyn’sgrowth.
Throughaninternalanalysis,andinconsultationwiththerealestateinvestmentfirmJonesLangLaSalle,
thestatedeterminedthatitcouldpotentially“create”over10acresofdevelopableland,drivehundreds
ofmillionsofdollarsinprivatesectorinvestment,provide$24millioninadditionaltaxrevenueforthe
county,andgenerateseveralmilliondollarsayearinrecurringrevenueforthestate.(VirginiaOTP3,
2013).
V.
Conclusion
Theoryandpracticehaveestablishedalinkbetweeneconomicgrowthandtransportationinvestments.
However,thepreviouseraoftransformative,large-scaleprojectssupportedbyawell-fundedfederal
governmentisover.Initsplace,metroareasmusttaketheleadondesigningcriticaltransportation
projects,coordinatingthoseinvestmentswiththeirlanduseplans,andlocatingthefinancialassetsto
moveprojectsfromblueprintstoreality.
13
Lessonsfromacrossthecountryandworld—fromeconomictransformationinSeattle,totourist-driven
investmentsinMunich,toregionalrailfinancinginDenver—confirmLasVegashasthetoolsatits
disposaltotransformwhereitstransportationnetworkgoesandthemobilityoptionsitprovides
througha21stCenturyeconomicvision.Ifdonewell,theresultsareenviable:amorerobusttourism
industry,amoreresilienteconomy,andimprovedeconomicopportunityforlocalresidents.There’sno
bettertimetomakethisvisionreal.
14
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