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Re: [WorldTransport] About transport impacts over urban land

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  • Chris Bradshaw
    This is a very important topic to discuss here. I think it is a general rule that location costs more housing-wise, but the buyer gets benefits that, at
    Message 1 of 11 , Aug 31 10:54 AM
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      This is a very important topic to discuss here.

      I think it is a general rule that "location" costs more housing-wise,
      but the buyer gets benefits that, at least to him, appear to be equal to
      or better than the higher margin.

      "Location" refers to both being near that which is desirable, and NOT
      being near to that which is undesirable. Those marketing the suburbs
      have always emphasized the latter (crime, street traffic, noise, poor
      schools, lower-income neighbours), while treating the longer distances
      to desirable services as being very easy to overcome (owning/using one
      or more cars).

      Transit is one of the factors that are part of the positive side of
      "location," however, one does not want to have to use it for more than a
      narrow range of trips (e.g., commuting), while needing the full range of
      services within walking distance (clustered and along a fully walkable
      street).

      All of suburbia in our city has transit, but only for those residents
      limiting their use to commuting (and having regular 9-5 jobs located
      along the peak-hour routes, wanting to avoid transfers) rely on it.
      Only those living in these areas unwillingly (youth, live-in help,
      dependent seniors) will use the off-peak transit service for other kinds
      of trips.

      Most New Urbanism development is of this latter category, since they
      lack internal services and are located too far from where the true urban
      "fabric" of main streets and mixed uses ends. For that reason, they
      still have as much yard space given over to the owners' cars, but this
      space is at the rear, along a laneway, with the house pushed forward to
      the street.

      What our industry needs to do is to educate housing consumers (and
      government officials and developers) to the following:

      1. Walking is everyone's favourite mode, and the destinations which can
      be walked to is at the highest level of "location." There is growing
      awareness that, although driving is seen as superior to transit, it is
      significantly inferior to walking.

      2. Housing price is related to transportation costs; the two must be
      considered as a unit. "Location" reduces the amount of "fleet" the
      household needs, and the distance each vehicle is driven. The
      perception (and much of the reality) is that car-ownership is almost as
      high in high-location areas as poor-location areas (see also next).

      3. People facing low driving needs cannot, in today's market, buy a
      "fraction" of a car; they can only buy older cars (I have found,
      although I have seen no research, that the distance a vehicle is driven
      is in reverse proportion to its age; with age, it becomes less reliable
      and less "presentable"; also, with age, the driving costs shift from
      fixed to variable, gaining some of the costing advantages of
      carsharing). [One way to offer carsharing to those owning older cars is
      to ask, "What is better, owning all of a partial car, or owning part of
      a whole car?"]

      4. Living in high-location areas requires a smaller house and yard,
      since there are more nearby communal areas, e.g., parks, churches,
      schools, coffee shops, bars (cf.: Oldenberg, R. _The Great Good
      Place_). These provide not only out-of-house social spaces, but the
      higher density makes sharing things easier. A walkable area can also
      reduce expenses for health clubs and reduce the time adults spend
      driving other household members. With carsharing, the "fleet" can be
      reduced, further reducing the house's need to provide indoor and outdoor
      amenities and space for vehicles.

      Ironically, as consumers start getting this point, the first symptom
      will be that the location-sensitive price differential for housing will
      actually increase. The second one should be that those in low-location
      neighbourhoods will organize to "invite in" -- through a neighbourhood
      plan -- the services and employment they lack. They will need to "tame"
      their streets to attract the growing number of entrepreneurs who are
      interested in operating small-scale main-street businesses.

      Chris Bradshaw
      Vrtucar, Ottawa
    • Wetzel Dave
      Michael - Sorry it s taken me so long to come back to you. I agree with your observations. To summarise: the sale price of a site is dependent on three
      Message 2 of 11 , Sep 16, 2003
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        Michael -
        Sorry it's taken me so long to come back to you.

        I agree with your observations.

        To summarise: the sale price of a site is dependent on three factors:

        1. The optimum use that the new owner can make of the site.
        2. The permitted use allowed by the community/planning authority/restrictive
        covenant etc.
        3. Any hope value that the seller can add and the purchaser is willing to
        pay.

        Improved access (public transport or new roads) adds to 1 above.

        Thus, landowners are creaming off the location value of their sites which
        they do nothing to create.

        If Governments were to tax land values to pay for transport then a virtuous
        circle is created.
        The tax would need to be an annual levy on the rental value of each site.
        The value would be assessed on the optimum permitted use of the site
        ignoring the value of buildings or improvements.
        Thus, people receiving the financial benefit of a valuable location make a
        contribution to the rest of the community.
        Unlike other taxes, a land value tax is cheap to collect and difficult to
        avoid.
        Owners will make better use of their sites and society will avoid urban
        sprawl.
        The property cycle will be evened out.

        Therefor in your second example, the land tax on the owners of land occupied
        by the poorer people living out of town will be less.
        However, if a new motorway or mass transit is built, reducing their
        transport costs, then both the land value, and the land tax would increase.
        If this location benefit value is not taxed, then landowners will collect
        the benefit as they increase their rents to poor people after their
        transport costs have been reduced.

        Happy to supply more information if required.

        Dave

        Dave Wetzel
        Vice-Chair
        Transport for London
        42-50 Victoria Street. London.
        SW1H 0TL. UK

        Tel: 020 7941 4200


        -----Original Message-----
        From: Michael Yeates [mailto:michaelm@...]
        Sent: 25 August 2003 14:07
        To: WorldTransport@yahoogroups.com
        Subject: Re: [WorldTransport] About transport impacts over urban land


        There is also more to this ... using some Australian info.

        1. Often the price of a site per se reflects not only the current but also
        any potential development rights so people may be buying both a current
        utility as well as a future redevelopment option ... ie in the second case,
        gaining a speculative windfall on the greater cost achieveable from the land
        value only without any betterment tax ... incidentally in doing so, the
        complete "cost" of the existing building changes from being an asset to a
        liability or cost simply on that decision whether to redevelop or not.

        2. The other issue is the view that good public transport and walking and
        cycling is not necessarily linked to housing and population density ie that
        good other-than-car alternatives can be provided at suburban densities ... I
        would suggest that the reason that these facilities seem expensive is that
        roads and the real full costs thereof are grossly underpriced eg one is the
        cost impacts of children no longer able or allowed to walk or cycle to
        school but how do we price the social and educational disbenefits? It does
        however require a different type of suburban road network to that
        traditionally designed buy Oz and US traffic and subdivision engineers. So
        what also tends to happen here in some areas is an inverse relationship
        where in some parts of Australia, poorer people pay less for houses at the
        outer edges of the older areas but then pay much more per dollar income per
        household member for car use and have a much poorer or almost useless public
        transport service.

        Cities and urbanising areas are very complex ... and very diverse ... almost
        defying generalised rules... but the "trends" are pretty clear...!

        Paul Mees' book "A Very Public Solution" is worth a read on this topic...

        Michael Yeates
        Brisbane Oz

        ----- Original Message -----
        From: "Lee Schipper" <SCHIPPER@...>
        To: <WorldTransport@yahoogroups.com>
        Sent: Sunday, August 10, 2003 4:57 AM
        Subject: Re: [WorldTransport] About transport impacts over urban land


        > I think the issue is the other way around: How much does a given size
        > home cost in a dense neighborhood, in a sprawling neighborhood, in an
        > older development, in a newer development, as a function of the location
        > of that neighborhood, its local population density, its jobs to housing
        > ratio etc? Then, if good transit service is establish, how much do
        > housing costs rise (if at all); conversely, how do housing costs vary as
        > a function of distance from a good transit line.
        > On a very practical basis, 150 sq meters in Georgetown, Washington DC
        > costs about twice to three times what it costs i Cleveland Park (two
        > long metro stops away) and four times what it costs in Tenley town. The
        > latter two actually have metro stops, Georgetown is 300 to 2000 meters
        > from the nearest Metro station (buses in DC are a slow burning
        > disaster). Housing close in to the suburb of Bethesda, which has good
        > Metro and bus service, costs more than housing farther from the main
        > metro stop, but how much more.
        > Could it simply be that consumers figured out that the farther out you
        > go, the more land and home you get for a unit of investment, and, aided
        > by US policies that encourage borrowing for home ownership, make a
        > tradeoff of a little more in cheap fuel and insurance in exchange for a
        > lot more land? Could it also be that car insurance is cheaper in the
        > low-density suburbs than it is in the higher density city core (it is)?
        >
        > In the end I think we paid $50K extra to be two blocks from Cleveland
        > Park Metro; lots of options 500-2000 meters farther away offerred more
        > house for less money. Since I cycle to work those extra 2000 meters,
        > which would have been a long uphill grind, would have been a real ordeal
        > day after day. But the hill I do have to climb is worth it, since I
        > could not afford to live in Georgetown (where I rented) and pay around
        > $1mn for a large three bedroom home rather than $780K for a much larger
        > 5bdr home (yes, with the study etc all the home is filled up already). I
        > could have lived i the farther burbs for half as much, had a larger lot,
        > driven or taken public transport 45 minutes each way, paid to go to a
        > gym rather than cycled.. You all get my drift.
        >
        > That may be the trade off. Why do the various reports on sprawl in the
        > US focus only on transport costs and fuel, but consistently omit all the
        > other characteristics AND COSTS of residential location? Life is more
        > than one-dimensional, is it not?
        >
        > >>> john.holtzclaw@... 08/01/03 05:08PM >>>
        >
        > Hi Javier,
        >
        > We have information on that in the U.S. on our website,
        > http://www.SierraClub.org/sprawl
        > Go to Transportation; then Articles and Research; then Smart Growth --
        > As
        > Seen From the Air
        > or How Compact Neighborhoods Affect Modal Choice
        >
        >
        >
        >
        >
        >
        >
        > John Holtzclaw
        > 415-977-5534
        > John.Holtzclaw@...
        > sprawl and transportation action -- http://www.SierraClub.org/sprawl
        > This View of Density -- www.sflcv.org/density
        >
        >
        > "Javier Pacheco Raguz" <jpraguz@...>
        >
        > 06/12/2003 01:33 AM
        >
        >
        >
        > Hello everybody, I am glad to meet you all. I would like to make a
        > request for information about the impacts of transportation (with
        > special focus on mass transit systems) over urban land in terms of
        > value, density, pollution, etc. I am doing research about it and I
        > will be thankful if somebody can provide me some tips about related
        > literature. Thanks in advance for your kind help.
        >
        > Javier Pacheco
        > ITC UPLA.2 Student
        > Enschede, The Netherland
        >
        >
        >
        >
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