A Value Planning Framework for Predicting and Recapturing the Value of Rapid Transit Infrastructure
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A VALUE PLANNING FRAMEWORK FOR PREDICTING AND RECAPTURING THE VALUE OF RAPID TRANSIT INFRASTRUCTURE A VALUE PLANNING FRAMEWORK FOR PREDICTING AND RECAPTURING THE VALUE OF RAPID TRANSIT INFRASTRUCTURE By CHRISTOPHER DONALD HIGGINS, B.A, M.A. A Thesis Submitted to the School of Graduate Studies in Partial Fulfilment of the Requirements for the Degree Doctor of Philosophy McMaster University © Copyright by Christopher D. Higgins, August 2015 DOCTOR OF PHILOSOPHY (2015) McMaster University (School of Geography and Earth Sciences) Hamilton, Ontario TITLE: A Value Planning Framework for Predicting and Recapturing the Value of Rapid Transit Infrastructure AUTHOR: Christopher D. Higgins B.A. (Brock University, 2006) M.A. (McMaster University, 2010) SUPERVISOR: Professor Pavlos S. Kanaroglou NUMBER OF PAGES: 231 ABSTRACT Land value capture (LVC) has been used to capitalize on the symbiotic relationship between rapid transit and its potential land value uplift (LVU) benefits for more than a century. For the public sector in particular, the rationale to engage in LVC to recapture the ‘unearned increment’ is strong. While interest in LVC has wavered over this time, planners and policymakers in Ontario and around the world are increasingly looking to value capture as a potential solution for raising more revenue to fund the construction and operation of rapid transit projects. However, significant theoretical, conceptual, and practical gaps remain in our knowledge of LVU and LVC that prevent the wider adoption of value capture as a strategy. First, a fundamental flaw in applications of LVC is that the value increment caused by rapid transit must to some degree be known a priori to set benchmark levels and ensure LVC tools capture the actual changes in land values caused by the project. Yet despite a rich history of research into the LVU benefits of rapid transit in cities around the world, a method for arriving at more empirical predictions of future LVU beyond simple approximation remains elusive. This leads to a second issue. Previous research into the LVU effects of rapid transit has produced a body of work that exhibits significant heterogeneity in results. Such diversity in research outcomes is due to a singular focus on expectations of LVU from rapid transit accessibility, which has led previous research to ignore the potential for additional land value impacts from sorting into different bundles of transit-oriented development (TOD) based on individual preferences. As such, the results of previous i studies consider the value placed on a bundle of transit and TOD characteristics. This context-dependency makes them unsuitable for extensions to estimate the potential for LVC in future transit corridors. To overcome these issues, the present dissertation develops a value planning framework for rapid transit. This is accomplished through five objectives. First, Chapter 2 establishes a theoretical framework for understanding the LVU effects of rapid transit accessibility and TOD. Second, Chapter 3 develops a typology of station area TOD to reduce the complexity of station area heterogeneity and control for such contextual factors in further research. Third, Chapter 4 applies the TOD typology to unbundle the LVU effects of existing rapid transit in the City of Toronto. Fourth, Chapter 5 develops the value planning framework to better conceptualize the drivers of LVU benefits and capturable revenues, the policy interventions to maximize them, and the beginnings of a model to utilize unbundled estimates of LVU in other study areas to derive context- sensitive predictions of LVU in future transit station areas. Finally, Chapter 6 conducts a theoretical application of the value planning framework to the case of a light rail transit line in Hamilton, Ontario, to demonstrate a rationale for engaging in value planning to promote value capture. In accomplishing these objectives, the present dissertation makes a number of contributions to research and practice. However, it also raises a number of questions for future research. Nevertheless, this work presents a significant first step towards realizing research on rapid transit’s LVU effects that is more theoretically comprehensive and practical for better informing LVC planning and policy around the world. ii ACKNOWLEDGEMENTS I am forever grateful to my supervisor Dr. Pavlos Kanaroglou for the opportunity to conduct my Ph.D. research in the Centre for Spatial Analysis (CSPA) and the McMaster Institute for Transportation and Logistics (MITL). I could not imagine achieving as much as I have over the previous four years without his endless support and guidance. I am also thankful to the members of my dissertation committee: Dr. Antonio Páez and Dr. Darren Scott for their support in many personal and professional facets. I would also like to acknowledge Matti Siemiatycki and Li Yuo at the University of Toronto and Michael Sutherland at Metrolinx for their early guidance on the topic of this research, Laurie Miller, Paul Fischer, and Greg Tokarz at the Ontario Ministry of Transportation for making this project possible, and finally, Peter Harrison, Marc-André Roy, and Elizabeth Drake at CPCS Transcom Inc. for the partnership opportunity to complete this research in as part of a larger study for the Ministry of Transportation. Furthermore, I owe thanks to colleagues at MITL and CSPA, including Mark Ferguson, Moataz Mahmoud, Pat DeLuca, Deane Maynard, and Laura Labate, as well as Bruce Newbold and other faculty and staff in the School of Geography and Earth Sciences. In fostering an environment that is incredibly supportive, engaging, and inspiring, all have helped me to accomplish many goals, this dissertation included. I would also express my thanks to my family, friends, and lab-mates for their support along the way. Finally, I owe a debt of gratitude to my fiancé Jessa, as without her unwavering support, patience, and encouragement none of this would have been remotely possible. iii TABLE OF CONTENTS ABSTRACT ......................................................................................................................... i ACKNOWLEDGEMENTS ............................................................................................ iii TABLE OF CONTENTS ................................................................................................. iv LIST OF FIGURES ................................................................................................................. vii LIST OF TABLES .................................................................................................................. viii LIST OF ABBREVIATIONS .................................................................................................. ix PREFACE .......................................................................................................................... xi CHAPTER 1. INTRODUCTION ..................................................................................... 1 1.1 LAND VALUE CAPTURE IN THE PROVINCE OF ONTARIO ................................. 3 1.2 RESEARCH PROBLEMS .................................................................................................. 4 1.2.1 The Unknown Value Increment ..................................................................................... 4 1.2.2 The Simultaneous LVU Effects of Transit and TOD ..................................................... 6 1.3 RESEARCH OBJECTIVES ............................................................................................... 7 Objective 1: Establish a Theoretical Framework for Understanding the LVU Effects of Rapid Transit and Transit-Oriented Development .................................................................. 8 Objective 2: Develop a Typology of Station Area Rapid Transit and Transit-Oriented Development ........................................................................................................................... 9 Objective 3: Unbundle the LVU Effects of Transit and TOD in Toronto ............................... 9 Objective 4: Develop a Value Planning Framework for Rapid Transit ................................ 10 Objective 5: Theoretical Application of the Value Planning Framework ............................. 11 1.4 REFERENCES .................................................................................................................. 11 CHAPTER 2. 40 YEARS OF MODELLING RAPID TRANSIT’S LAND VALUE UPLIFT IN NORTH AMERICA: DIVERSE METHODS, DIFFERENTIATED OUTCOMES, DEBATABLE ASSUMPTIONS, AND FUTURE DIRECTIONS ..... 13 ABSTRACT ............................................................................................................................. 13 2.1 INTRODUCTION ............................................................................................................. 15 2.2 DIVERSE METHODS AND DIFFERENTIATED OUTCOMES................................ 30 2.3 DEBATABLE ASSUMPTIONS ....................................................................................... 34 2.3.1 Hedonic Pricing and Spatial Equilibrium ..................................................................... 34 2.3.2 Alonso and Accessibility .............................................................................................. 36 2.3.3 Accessibility Revisited ................................................................................................. 41 2.4 FUTURE DIRECTIONS..................................................................................................