The Economic Case for Carfree Development Gus Yates CarFree City, USA www.carfreecity.us Why Carfree? Typical American Development 10 miles Home Work 2 miles 8 miles Shopping What is Carfree? Carfree areas are compact, mixed-use developments designed for pedestrians, where people can conduct their everyday activities without having to be in or around cars. Carfree Highlights • A type of transit-oriented development (5-minute walking radius from major transit station) • No cars and few trucks within this neighborhood • Narrow streets, irregular grid, plazas • Large greenspace around periphery • Located in existing metropolitan area (brownfield or grayfield) • Peripheral parking garage (for trips outside district not practical by public transit) Carfree Reference District Streets and Plazas Buildings Courtyards and open space ¼ mile radius Reference District Parameters Carfree District Assumptions Area Developed 112 acres Large greenspace 88 acres Total 200 acres Population 12000 people Dwelling units 4,600 homes Average building height: 4 stories Developed area floor-area-ratio 1.4 ratio Shopping, health, recreation, etc. space 1,164,000 square feet Office/school space 2,328,000 square feet Workplaces 8,000 workplaces Household annual driving 5,000 miles per year Impervious area 69.0% percent of total area Parking spaces per dwelling unit 0.2 spaces per DU Land value $3,049,200 dollars per acre Approach • Itemize and quantify economic net benefits • Neighborhood scale of analysis • Evaluate methods for internalizing net benefits Quantitative Net Benefits Decreased costs for: • Car crashes • Health effects of obesity and overweight • Air pollution and global warming • Household transportation • Infrastructure • Land for parking • Home heating • Regional roadway and health care capacity • Oil wars Qualitative Benefits • Less time spent driving and chauffering • Independent mobility for children • Independent mobility for older adults • Quiet, peaceful environment • Safe places for kids to play • Attractive parks and plazas • Aesthetic outdoor dining • Spontaneous social interaction = “Lifestyle” Who Benefits City or Category Developer Residents County World Quantitative Increased benefits P P P P Decreased costs P P P P Qualitative Increased benefits P P P P Decreased costs P P P P Economics 101 Economics 101 What are we comparing carfree to? A. Other patterns of development B. Alternative future conditions: Future A Past Present Future B Economics 101, continued Analysis concepts: • Internalizing externalities • Economics versus finances • Present value of net benefits Car Crashes Car crashes are the leading cause of death in the U.S for people ages 1-24 3 Fatalities and injuries from car crashes cost the U.S. economy $200 billion per year 3 Car Crash Savings •Car crash exposure 75% less for carfree residents •Per-capita avoided costs $500 per year •Savings for entire carfree district = $6.1 million per year Obesity Obesity and physical inactivity: • Shorten lifespans 5 • Are surpassing smoking as the leading preventable cause of death 1,4 • Cost $262 billion per year in health care and lost productivity 1,4 Savings from Fitness $650-$900 per year per person $8.1 million per year for a carfree district Air Pollution and Global Warming Air pollution costs billions of dollars each year •Respiratory illnesses •Crop damage •Ecological disaster Transportation Pollutants Transportation Percentage of Total Emissions 90 80 EPA "Criteria Pollutants" Global 70 Warming 60 nt 50 ce r e 40 P 30 20 10 0 CO NOx ROG PM10 Pb SOx CO2 Emission Offset Credits Economic value of reduced emissions: ($ per household per year) NOx $320 ROG $54 CO2 $15 $1.3 million per year for a carfree district Household Transportation Costs The average American household spends $7,630 per year on driving 6 This equals 15-22 % of household income 6 Household Transportation Savings Annual Household Expenditures $8,000 $7,000 Public transit $6,000 Automobile $5,000 $4,000 $3,000 $2,000 $1,000 $0 U.S. average Carfree Annual savings of $4,950 per household $22.7 million per year for carfree district Infrastructure Costs Road, water, sewer and stormwater infrastructure costs 10 times more per household in sprawling subdivisions than compact urban development 10 Infrastructure Savings Savings for a carfree district: Streets $22 million Water, sewer, &drainage $62 million Total $84 million Parking Costs 30%-40% of a typical American downtown area is dedicated to parking 11 Cars spend 96% of the time parked 7 Parking Savings Savings for a carfree district: Land area $270 million -Peripheral parking garage -$29 million Total $241 million Qualitative Benefit: Time Savings The average American spends 66 minutes per day driving 7 46% of all trips are for errands or to chauffer family members 1 Summary of Annual Benefits Annual District-Wide Savings $25,000,000 Total = $38 million $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 Obesity Car crashes Air pollution Household transportation costs Present Value of All Benefits Total = $915 million Present Value of District-Wide Savings (5%, 30 years) 400 Total = $915 million 350 300 rs a 250 ll o D 200 on 150 Milli 100 50 0 Obesity Car Air Household Parking Infrastructure 1 2 3 4 5 6 Crashes Pollution Transportation Expenses Who Benefits City or Category Developer Residents County World Car crashes P P Obesity P P Air pollution P P P Household transportation P Infrastructure P P P Parking P P P Internalizing Net Benefits Benefit: Car crashes and Obesity Naturally accrues to: Residents Internalization methods: • Discounted group health plan • Discounted life insurance plan ... Both based on actuarial statistics related to fitness and annual miles driven Internalizing, cont’d Benefit: Air pollution and global warming Naturally accrues to: • Residents • City or county • World Internalization methods: • Payments to developer from Air Resources Board for mobile source emission reduction • Payments to developer from carbon offset credits sold on Chicago Climate Exchange Internalizing, cont’d Benefit: Decreased household transportation costs Naturally accrues to: • Residents Internalization methods: • Location efficient mortgages (higher loan- to-value ratio) • Greater ”willingness to pay” for home sales Internalizing, cont’d Benefit: Decreased infrastructure and parking costs Naturally accrues to: • Developer Internalization methods: • None needed • Possible bonus from city/county for decreased infrastructure O&M costs CarFree City, USA www.carfreecity.us Citations -1 1. Frumkin, H., L. Frank and R. Jackson. 2004. Urban sprawl andpublic health. Island Press, Washington, D.C. 2. McLoughlin, E., December 2004. Profile of injury in San Francisco. San Francisco Department of Public Health, San Francisco, CA. 3. Center for Disease Control and Prevention (CDC). 1999. Motor-vehicle safety: a 20th cenury public health achievement. Morbidity and Mortality Weekly Report 48:369-374. [Cited in Frumkin et al. 2004] 4. Chenowith, D. April 2005. The economic costs of physical inactivity, obesity and overweight in California adults. Chenowith & Associates, Inc. New Bern, NC. Prepared for California Department of Health Services, Sacramento, CA. 5. Barnum, A. March 17, 2005. Obesity threatens to cut life expectancy in U.S. San Francisco Chronicle, p. A13. 6. Surface Transportation Policy Project. July 2003. Transportation costs and the American Dream. [Data from U.S. Bureau of Labor Statistics, Consumer Expenditure Survey 2003]. Available at www.transact.org/reports/ 7. Hsu, P.S. and T.R. Reuscher. December 2004. Summary of travel trends: 2001 National Household Transportation Survey. U. S. Department of Transportation, Federay Highway Administration. Washington, D.C. Citations -2 8. Surface Transportation Policy Project. 1999. High mileage moms. 9. USDA. Cited on Surface Transportation Policy Project website(www.transact.org). Note: Slightly smaller figure in February 20,2003 issue of Environmental Defense newsletter, p.5: "more than 25 million acres of rural land" were been developed between 1982 and 2003 (= 1.2 million acres/yr). EDF did not reference the statistic. 10. Calthorpe Associates. October 2002. Smart growth Twin Cities: regional development options. Berkeley, CA. Prepared for Metropolitan Council, Minneapolis, MN. 11. Gibbons, J. 1999. Parking lots. Technical Paper No. 5. Nonpoint education for municipal officials. University of Connecticut. Haddam, CT. 12. Shoup, Donald C. 1999a. The Trouble with Minimum Parking Requirements. Transportation Research Record, Part A, Vol. 33:549-574. 13. Holtzclaw, J., R. Clear, H. Dittmar, D. Goldstein, and P. Haas. March 2002. Location efficiency: neighborhood and socio-economic characteristics determine auto ownership and use --studies in Chicago, Los Angeles and San Francisco. Transportation and Planning Technology 25(1):1-27 ( http://www.tandf.co.uk/journals/online/0308-1060.html ) 14. Holtzclaw, J. January 15, 1991. Explaining urban density andtrasity impacts on auto use. Natural Resources Defense Council, San Francisco, CA. in California Energy Commission, Docket No. 89-CR-90. Citations -3 15. Holtzclaw, J. 1994. Using residential patterns and transit to decrease auto dependence and costs. Natural Resources Defense Council, San Francisco, CA and California Home Energy Efficiency Rating Systems, Costa Mesa, CA. 16. Dunphy, R. and K. Fisher. November 1996. Transportation, congestion and density: new insights. Pages 89-96 in Transportation Research Record No. 1552, Transportation Research Board, Washington, D.C. .