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DEVELOPING A METHODOLOGY TO CAPTURE LAND VALUE UPLIFT AROUND TRANSPORT FACILITIES
4. THE EVIDENCE FROM SCOTLAND
4.1 Introduction
This section reviews the available literature relating to changes in land value as a result of various transport projects in Scotland. Much of the evidence turns out to be anecdotal - a reflection of the emphasis on ex ante studies noted in the previous section - and since it is often from media sources it tends to concentrate on the socio-political dimension of the impact of these schemes.
The approach adopted in this section is therefore to examine the cases geographically and so sketch out a picture of not only the available evidence on the effects on land values of transport schemes in Scotland, but also the perceptions of these effects as expressed in and through the media. The structure comprises an overview of Scotland, with subsequent discussion on Edinburgh, Glasgow and regional projects, with a final summary section.
4.2 Overview of land value uplift in Scotland
There is a general supposition that transport improvements benefit local economic development. In the context of rural development, a recent report for the Scottish Executive puts it this way:
"[I]n most cases the development of business and economic activity, as well as the social and economic well-being and inclusion of rural populations, is grounded in good or improved mobility within and outside the rural area, with internal and external transport links being particularly favoured as a development tool." (Universities of Aberdeen and Cardiff, 2001)
However, while this may be held to be true of development in general, there is less evidence of the specific impact of transport investment on land values.
As Transport and the Scottish Economy: Key Issues (McQuaid and Grieg, 2003) makes clear, there is still much to be done in terms of land value studies in Scotland. The report seeks to identify those areas where academic research can contribute to "evidence-based" policy-making. On that particular question, the report finds no single answer, concluding that the local impacts of transport infrastructure will always be affected by contingent circumstances. In other words, impact depends upon context. They also found that the "main conclusion is that in many cases we know surprising little about the real links between transport and economic development, and much policy is supported by anecdote, ignoring displacement, and expectations of links rather than firm evidence", and call for post-hoc studies to provide a deeper empirical understanding of the issues at hand (McQuaid and Greig, 2003)
On the specific issue of land value, they have little to say. However, they do highlight potential effects of new transport infrastructure which might be expected to have a 'knock-on" effect on land values. For example, they note that increased accessibility by all modes of transport in San Francisco resulted in quantifiable economic gains - retail, property and land values (McQuaid and Greig, 2003).
4.3 Edinburgh
Edinburgh has received the most coverage by far, both in academic and consultancy research, and in media coverage. This may be related to the combination of development pressure and buoyant property market, and the extent of proposed new transport schemes. But even here, there is little empirical evidence of the effects of transport facilities on land values.
For example, land value is not referred to at all in the City of Edinburgh Local Transport Strategy (City of Edinburgh, 2003). Economic impacts are described only in the vague terms of "support for the local economy", and this in turn is viewed as a matter of reducing congestion.
However, the Integrated Transport Initiative of Edinburgh and South East Scotland (TIE, 2002: 66) makes explicit allowance for using increased land values: "A specific part of tie's remit is to raise funds for new transport schemes from the increase in land value arising from their construction." As is often the case, the assumption is that there is a certain inevitability in land value uplift of new transport schemes are put in place, but no Scottish evidence is offered to support this assumption.
Land Use and the Implications for Planning Policy (DTZ, 2002) also has little mention of the relationship between transport schemes and changes in land value. Rather, it points out that land values have tended to rise where demand is high, or supply is relatively low, but has not made an evidence-based link between land value uplift and transport facilities. It does, however, note that the Edinburgh South Loop (the 'South Sub') is predicated on the assumption that it will be possible to leverage increases in land values back to the community.
Elsewhere in the report, DTZ point out that other factors also come into play. Edinburgh and the surrounding districts, for example, are predicted to experience some of the most rapid growth in Scotland, and unless housing supply sees a concomitant increase, then land values can be expected to increase simply as a result of demand-led pressure (DTZ, 2002).
The South Sub has also generated a considerable amount of newspaper coverage. The Scotsman (22nd October 2002) reported that the South Loop could be up and running in as little as three years, while the Scots'Land laid its emphasis on the fact that E-Rail, the business consortium behind the project, was intending to leverage the increase in land values to "bootstrap" the project. This idea is similar to that stated by Riley (2001). Riley, who crops up frequently at the more polemical end of the discussion, sets out a case against the current taxation system, arguing that taxation should be based on rent from uplift in land values. It is mainly about the means by which projects can be funded rather than the means to measure value uplift (or reduction). An article in the Economist makes the point that he overstates his case somewhat, although the Economist also acknowledges that the core message is an impressive one.
The proposed re-opening of the 'Waverley Line' running from Edinburgh to Galashiels, has also been seen as a potential driver of land value increases, according to the SRA submission to the Transport and Environment Committee (Strategic Rail Authority, 2001). The Strategic Rail Authority asserts that the opening of the line will radically increase land values in areas designated for housing, and so developers should be obliged to return some of the consequent profits to transport (Strategic Rail Authority, 2001). The Borders Council places high priority on the Waverley line in the belief that it would allow the area to "plug into the Edinburgh economy" (Universities of Aberdeen and Cardiff, 2001).
Despite these assertions and aspirations, the Waverley Line has nonetheless generated controversy. One example of this is correspondence in the Peebleshire News (April 10th 2003: "Benefits of Waverley Line"), which discusses the merits and benefits of the proposed railway line, but again, the arguments are based on anecdote and speculation rather than hard evidence.
Clearly, issues such as taxation have a strong socio-political dimension, and the Waverley Line is not the only instance of this. An example is the proposed tram scheme for the west of Edinburgh. Here, residents are concerned that their properties will decline in value due to their proximity to the proposed tramline (Evening News/news.scotsman.com, 27th September 2002). The lack of any clear evidence on the effects of such schemes, and the consequent reliance on anecdote and speculation, can only be expected to aggravate such debates. Scrutiny of the international literature demonstrates that there are differences between the effects of new stations, which clearly offer locally the benefits of accessibility, and the effects of new lines or services, which may only be perceived locally in terms of disbenefits of increased noise and disruption, and possibly a negative image perception, if a 'mass' transport infrastructure is penetrating an affluent or 'exclusive' area.
In an evaluation into the impact of two 'Greenways' (bus priority) corridors in Edinburgh, a study found that there were negative perceptions of the impact on retail properties on the A8 Glasgow Road and A900 Leith Walk corridors (Colin Buchanan and Partners, 2000). This was thought to be due associated with negative impact on turnover (sales and rentals), though this was in turn related to the loss of parking (which might accompany any traffic management measure). This finding is based on perceptions gathered from interviews with businesses and residents.
Compared with the scale of current proposals for new trams, railway line and station re-openings, previous public transport improvements in and around Edinburgh have been relatively modest. Individual station openings or re-openings, such as South Gyle or Musselburgh, or electrification of suburban lines to East Lothian, have perhaps not received or warranted the degree of political or academic scrutiny as the current proposals.
4.4 Glasgow
Glasgow represents a contrasting situation compared with Edinburgh on a number of fronts. Firstly, Glasgow is the centre of a much larger and industrialised conurbation, compared with Edinburgh, which is a more compact city surrounded by smaller towns. Glasgow has traditionally had a much stronger rail base, including the largest suburban rail system outside London and an Underground system, compared with Edinburgh, which lost most of its railway stations and suburban services by the 1970s. Glasgow had major motorway construction in the 1970s, including the M8 Inner Ring Road driven through the inner city, plus radial motorways or expressways (A814, M77, M80), whereas Edinburgh was almost untouched by modern road schemes, and whose major road investment was the City Bypass, which skirts the periphery of the city. Finally, the Edinburgh economy and property market have been particularly buoyant, compared with Glasgow and other parts of Scotland.
There has been little evidence or substance found on the effects of transport investment on land value on development in and around the Glasgow area. The dearth of evidence or research scrutiny could perhaps be explained by the particular character of the transport investments in and around the Glasgow area:
- The last really major rail-based infrastructure projects, the Argyle Line and Underground refurbishment, were mainly improving through services or providing new connections (e.g. Partick, Central Low Level), rather than opening up accessibility to new locations. Perhaps only Finnieston/Exhibition Centre could be considered as generating a 'step change' in accessibility, associated with new development (i.e., the Exhibition and Conference Centre), but this is perhaps a unique case rather than one that might offer easily generalisable conclusions for the study of land values generally;
- New (re-opened) rail services and stations to Maryhill and Whifflet (and to a lesser extent Paisley Canal) serve relatively depressed areas where regeneration and accessibility are perhaps the main issues rather than the property market;
- Other new connections, such as direct services from Queen Street to Cumbernauld, and the service from Motherwell to Cumbernauld via Coatbridge improve network connectivity without providing a significant 'step change' in accessibility for those locations concerned;
- The Euro freight terminal at Mossend (Lanarkshire) in a sense is the Channel Tunnel railhead for all Scotland, and no substantial evidence has been found on its impact on local land values and demand for industrial property;
- Those areas where new rail investment might bring significant changes in accessibility locally are as yet unbuilt (e.g. reinstated line to Larkhall, Glasgow Airport rail link; Glasgow 'Crossrail'); and
- Areas with high property values or development prospects may be relatively insensitive to rail service provision (e.g. Kilmalcolm, which lost its rail service; Newton Mearns, which never had one).
One area where there could potentially be a conjunction of tangible accessibility benefits of new infrastructure with a significant private housing location is that of the M77 extension, serving Newton Mearns. Newton Mearns, an affluent suburban area to the south west of Glasgow, has benefited from improved road access and journey times to central Glasgow. However, no evidence of increases in land values attributable to the M77 has been found in the literature.
4.5 Other parts of Scotland
The pattern of lack of substantial evidence found in Edinburgh and Glasgow has been replicated in other parts of Scotland. Part of the problem is perhaps that where there have been major transport infrastructure investments in rural areas (e.g. improvements to the A9), the impact is likely to be general and diffuse, and perhaps inextricable with the general relative economic buoyancy of those areas served (e.g. Perth, Inverness) which would have driven the need for the road improvements in the first place. In other words, transport investment and economic development may be seen as part of a feedback cycle (section 2.4), rather than a simple case of cause and effect.
Another factor in the Scottish context is that in some particular cases where there is a specific substantial improvement in accessibility, the case may be rather specialised or unique. For example, instances where significant changes in accessibility or network connectivity have occurred would include: new bridges or causeways (e.g. Skye Bridge; A9 bridges north of Inverness; fixed links to Scalpay, Eriskay, Berneray); new ferry services or new Ro-Ro operation (e.g. Troon, Rosyth, Sound of Harris, links to and within Orkney Islands); local impacts of significant new air connections (e.g. Prestwick to Stansted). Although in either the cases of the A9 bridges or inter-island links there may be some reasonable comparability between cases, in the other cases the kinds of accessibility change are quite distinct in character.
As with Edinburgh and Glasgow, evidence on the ground is thin, and much of the debate centres on mooted schemes, much of it of a political or campaigning nature. To take just one example, the re-opening of Laurencekirk railway station has been petitioned for by the local community. According to a report in the Aberdeen Press & Journal, the petitioners argue that such a move would boost the local economy, particularly if a new station at Laurencekirk is added to the Aberdeen cross-rail project to connect Stonehaven with Inverurie. This illustrates the way in which "received knowledge" suggests that land values will automatically increase as a consequence of improved transport facilities, but again, there is a frustrating lack of hard evidence that this is the case.
New rail stations or re-openings or service improvements have been mostly of a local nature, e.g. Portlethen, serving a 'commuter village' near Aberdeen, or Dalgety Bay in Fife, or Bridge of Allan near Stirling. The new Prestwick Airport station is an exception, being part of a much wider economy linking the west of Scotland to London and continental Europe; however, no evidence of the marginal benefits of this station opening on land values locally or elsewhere have been found in the literature.
The possible re-opening of the lines to Alloa, Grangemouth or St Andrews (as with the case of the Borders rail link) would be expected to spur a significant change in accessibility, putting whole towns on to the railway map - but again these are future prospects. The Bathgate line and new stations at Livingston (North and South) and (rather marginally) Glenrothes perhaps represent the closest cases to significant changes in rail accessibility for whole towns of any size, but no information on land value or development impacts were found in the literature.
It could be conjectured that improvements to the Glasgow-Falkirk-Edinburgh trunk service may spur the attractiveness of intermediate locations for commuters, and hence boost property prices. Anecdotal evidence suggests that locations between Glasgow and Edinburgh (e.g. Polmont and Linlithgow) are attractive residential locations for households where one member works in Edinburgh and the other in Glasgow. A recent report on city regions notes that the Falkirk and North Lanarkshire areas both fall within the sphere of influence of both Glasgow and Edinburgh, estimated from modelled trip matrices of non-work car travel (Derek Halden Consultancy, 2002). Although the report discusses both housing market and transport links relating to the four cities of Glasgow, Edinburgh, Aberdeen and Dundee, the report's focus is not directed towards land value or development prospects per se, and does not make an explicit link between changes in city spheres of influence and specific transport improvements.
Another major railway investment of recent years was the electrification of the East Coast Main Line including electrification through to Glasgow via Carstairs. However, while this cut journey times from Edinburgh to England, and offered Glasgow new direct services to the East of England, the new services were not associated with any new stations, nor any particularly significant increases in local accessibility (e.g. the Inter City services do not stop at Carstairs, etc.).
The Skye Bridge has drawn a sufficient volume of media attention, but this has primarily been to do with the costs of tolls and the debates over whether or not Skye is still an island. However, an article in the Economist (Economist, Jan 5th 2002) notes that English immigrants to Skye are boosting the economy, and that property prices may have risen as a result. But again, there is no explicit link made between the rise in property values, land values, and the building of the bridge. All of the links are circumstantial.
The opening of the Kessock Bridge, taking the A9 dual carriageway across to the Black Isle would be one example of a significant local 'step change' in accessibility, immediately expanding Inverness' commuting hinterland. A report on factors affecting land supply refers to population growth and commuting in the Black Isle, and alludes to an association between expanded market activity in the Black Isle and the opening of the Kessock Bridge (Satsangi et al., 2001). The report also makes reference to the Cupar/ Howe of Fife area, where house price increases are attributed inter alia to increased commuting to other towns and cities - including Edinburgh - but specifically attributes this to increased car ownership rather than any particular transport improvements. The report also alludes to the housing market in the Stewartry area being distorted by incomers, where in-migration is facilitated by improvements to the A75.
A local press report has suggested that the latest M77 extension south of Fenwick could generate property price increases in North Ayrshire (e.g. Kilmarnock). However, no further research evidence on the basis of this claim was found.
4.6 Summary and discussion
The conclusion from a thorough search of the literature, including academic and consultancy reports, national news media and local news media is that while there has been research on land values and research on the effects of transport policy, separately, there is precious little by way of hard evidence on the effects of one on the other, in the Scottish context.
The reasons for this might be summarised as follows:
- Major urban transport investments of past decades were not made in areas or times of significant economic growth (e.g. M8 around Glasgow, Argyle Line), and were made in the pre-privatisation era, when the private housing and private industrial sectors were relatively less significant in the Scottish economy, than they are today;
- Areas of current major growth in the property market or development pressure have not yet had their major transport investments installed, and hence effects are as yet unavailable for evaluation (e.g. Edinburgh suburban tram/rail, Edinburgh Park);
- Other significant transport investments perhaps have rather diffuse impact (e.g. Euro freight terminal or M74/M6 completion serving 'all Scotland'), or rather specific local impacts (e.g. individual stations), or are unique cases.
At present, our conclusion from what literature exists is that the Scottish debate on transport and land value uplift is somewhat reliant upon anecdote and speculation, or tangential inferences, rather than on substantial direct research evidence.
What is clear, however, is that:
- There is a genuine belief that new transport schemes will indeed result in land value uplift. This may in itself fuel land speculation, and indeed promotion of new transport schemes. The precise nature and extent of this mechanism is not currently known.
- There are certain cases where it may be fruitful to (re) examine currently installed transport schemes, to seek more substantial evidence of the impact of transport investment on land value (or, at least, on stimulating development in general). A variety of schemes, urban and rural, and relating to road, rail, sea and air transport, could be worthy of closer investigation.
The conclusion from the Scotland review is that there are suitable case studies here for further use in the study and that a selection of two or three most interesting ones should be made as part of the Stage 2 study. These could include both rail and road schemes, either in urban areas or in rural areas, but they should be of a sufficient scale to have measurable effects.
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