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DEVELOPING A METHODOLOGY TO CAPTURE LAND VALUE UPLIFT AROUND TRANSPORT FACILITIES

Footnotes

1. There is a debate about potential double-counting of the benefits of a proposed investment, however. Conventional transport cost benefit analysis already values the benefit of time savings as a result of transport improvements (especially for road schemes). This benefit can be used to feed through into property market changes, and so care is needed not to claim benefits from a scheme to be both travel time changes and land value enhancements. In fact, time savings relate only to changes in accessibility and can be valued appropriately in conventional cost benefit analysis and transport analysis. Here we are looking at additionality in the sense of other benefits and costs not included in conventional cost benefit analysis/transport analysis, which is a key issue in all this analysis.

2. A second issue relates to whether the changes are real increases or just movements from one area to another - has one area merely benefited at the expense of another - the more accessible at the expense of the less accessible. These are all key problems for transport analysis.

3. It is possible to use transaction or valuation data. The advantages of transaction data are that these are the actual prices paid in property transactions and they are available from official sources at the individual levels (although they would have to be aggregated for presentation purposes to avoid confidentiality issues). These reflect both residential and commercial property transactions. Valuation data is based on local expertise and the knowledge of the property market (e.g. from estate agents and valuation officers). The difficulty here is that often the valuations do not reflect the actual market, but their perceptions of the market - hence prices are "talked up". It is better to use the real data if at all possible, and only to rely on valuation data if the real data are not available. In discussions with property market experts in Croydon, it proved very difficult to get agents to give clear advice on the effects of the Tramlink on property values. (see Appendix 3 and 4.)
4. ACCMAP was used in the Croydon study. It is a GIS based software that combines OSCAR maps of the road network with public transport information on routes, stations, stops and frequencies. The software package produces isochrone maps to determine accessibility before and after any investment (or change in the public transport service characteristics) and to estimate the time savings. In Croydon, public transport accessibility was mapped to four destinations (Central Croydon, Central Wimbledon, Elmers End and New Addington) within a 30 minute journey time, subdivided into 5 minute segments.
5. Carstairs scores are a measure of deprivation based on 4 variables - male unemployment, car ownership levels, social class distribution and overcrowding in terms of persons per room. The data are derived from the 1991 Scottish Census.
6. RICS (2003) Funding London's Transport Needs and Advantage West Midlands (2004) Innovative Forms of Transport Funding
7. Kate Barker (2004) Review of Housing Supply. Delivering stability: securing our future housing needs
8. Accessibility benefits and potential development benefits can be added to produce total benefits from a transport capital investment. It has been argued that in the evaluation of transport capital projects, only direct travel time and costs savings should be regarded as benefits from the project, since all other alleged benefits, result from the capitalisation of these costs savings (Mohring, 1993). The inclusion of other effects, like potential economic development, as additional benefits, amounts to double counting of benefits. In the absence of positive externalities, the welfare gains (actually the change in consumer surplus) resulting from the primary transport benefits represent total benefits from this project.
9. BART is the Bay Area Rapid Transit
10. The classical argument is that transport can induce land use change (the cycle) and economic development through increased accessibility. This assumption has now been questioned as to whether transport investment on its own is a necessary and sufficient condition (Banister and Berechman, 2000). Other factors, such as availability of land, suitable labour force skills, finance and inward investment may all be more important than transport investment, or at least need to be part of the total package on investment.
11. Note that this could also be a diagram of DELTA+START/TRAM/STM.
12. The GIS analysis reported here has been carried out as part of a project for the RICS, ODPM and DfT in the UK to test the methodology. Mark Thurstain-Goodwin and his team from Geofutures have developed the software, assembled the data and carried out the model runs.
13. Inverse distance weighting is a statistical interpolation algorithm that assigns a value to a particular location on the basis of all the points in the vicinity. Sample points closer to the location are allocated more influence in determining its value than those further away.

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