C6. Public spending (and savings)
Economic benefits of accessible green spaces
Aims and method:
Investigates the economic benefits of changes to the provision of accessible greenspace through their impact on physical and mental health. This report is primarily a review of existing evidence but it combines this with case study materials.
Key findings:
· A permanent reduction of 1% in the UK sedentary population (from 23% to 22%) is estimated to deliver a social benefit of up to £1.44bn per year, not including the psychological benefits from greenspace.
· Accessible, attractive and well-cared for greenspace is associated with autonomous frequent physical activity and lower rates of obesity.
· Passive use of greenspace (e.g. visual), low-level physical use (e.g. picnicking and social activities) and intermittent or irregular use is unlikely to give significant physical benefits but is associated with psychological and quality of life benefits.
Reference:
Willis, K., & Osman, L. (2005) Economic Benefits of Accessible Green Spaces for Physical and Mental Health. CJC Consulting
https://www.forestry.gov.uk/pdf/FChealth10-2final.pdf/%24FILE/FChealth10-2final.pdf
Built environment attributes and health care costs
Aims and method:
Scenarios were derived from the literature regarding the association between built environment design and physical activity. A mathematical model was developed to translate improvements in physical activity to health-adjusted life years and health care costs. The authors modelled 28 scenarios representing a diverse range of built environment attributes including density, diversity of land use, availability of destinations, distance to transit, design and neighbourhood walkability
Key findings:
· The results indicate potential health gains in 24 of the 28 modelled built environment attributes, each relating to a particular physical attribute including density, land use mix, availability of destinations, distance to public transport, design and neighbourhood walkability, etc.
· Health care cost savings due to preventable physical activity-related diseases ranged between Aus$1,300 to Aus$105,355 per 100,000 adults per year for each attribute, with associated health adjusted life year benefits
· Although, additional health care costs of the prolonged life years attributable to improvements in physical activity need also to be considered.
Reference:
Zapata-Diomedi, B., Herrera, A. M. M., & Veerman, J. L. (2016). The effects of built environment attributes on physical activity-related health and health care costs outcomes in Australia. Health & Place, 42, 19-29.
The value of healthy places
Aims and method:
Explores the economic case for making healthy places. The research reviews case study evidence and the literature.
Key findings:
· Many expensive ‘lifestyle diseases’ are preventable, and are strongly influenced by the built environment. In the UK they account for £7 out of every £10 spent on health and social care
· The lost productivity is estimated to cost $84 billion annually in the USA alone
· Poor people are also more likely to live in neighbourhoods which are worse for health, with poorly maintained homes and public spaces, poor access to services, and higher exposure to air and noise pollution
Reference:
Pineo, H. (2016), The value of healthy places, for developers, occupants and society, Town and Country planning, 85 (11), 476-479
Economic value of walkability
Aims and method:
Describes ways to evaluate the value of walking (the activity) and walkability (the quality of walking conditions, including safety, comfort and convenience). Utilises an extensive and in-depth systematic review of the literature.
Key findings:
· Walkability increases the access (of people to goods) and decreases consumer costs.
· Shifting travel from driving to walking can help reduce various external costs, providing savings estimated to average approximately $0.25 per vehicle-mile reduced, and $0.5 per vehicle-mile reduced under urban-peak conditions
· Cycling delivers health benefits ranging from $0.1 to $0.38 per mile and walking from $0.24 to $0.96 per mile, with (in each case) half the benefits flowing to the individual and half to society
· For a hypothetical 5,000 person community, the health benefits from increasing the number of intersections (the permeability) within ½ mile would be in the order of $451 to $6,641 if the number of intersections within ½ mile increased by 0.3816 (lower value) to 1.1844 (higher value)
· Walking receives less than its appropriate share of transportation resources, but walkability improvements can provide a high economic return on investment
Reference:
Litman, T. (2004). Economic value of walkability. World Transport Policy & Practice, 10(1), 5-14.
The economics of walkability
Aims and method:
Provides an economic analysis of a sample of neighbourhoods in the Washington, D.C. metropolitan area using walkability measures. Combines primary data on the built environment with a variety of secondary real estate, fiscal, demographic, transportation, and business data to establish an operational definition of, and performance metrics for walkable urban places
Key findings:
· Walkability is a mechanism by which to increase a place’s triple bottom line: profit (economics), people (equity), and planet (environment).
· More walkable places perform better economically: a one-level (or approximately 20 points) increase in walkability (out of a range of 94 points) translates into a $8.88 value premium in office rents, a $6.92 premium in retail rents, an 80 percent increase in retail sales, a $301.76/square foot premium in residential rents, and a $81.54/square foot premium in residential housing values
· On average, before the recession (2000 to 2007), retail and office space in walkable urban places had a 23 percent premium per square foot valuation. During the recession (2008 to 2010) that premium nearly doubled to 44.3 percent.
· Walkable places benefit from being near other walkable places. On average, walkable neighbourhoods in metropolitan Washington that cluster and form walkable districts exhibit higher rents and home values than stand-alone walkable places
· Residents of more walkable places have lower transportation costs and better access to public transport, but also higher housing costs.
· Residents of places with poor walkability are generally less affluent and have lower educational attainment than places with good walkability
Reference:
Leinberger, C. B., & Alfonzo, M. (2012). Walk this way: The economic promise of walkable places in metropolitan Washington, DC. The Brookings Institution.
https://www.brookings.edu/wp-content/uploads/2016/06/25-walkable-places-leinberger.pdf
Valuing the urban realm
Aims and method:
Research into how users value improvements to the public realm and how they are willing to contribute towards it. Three mechanisms of payments were examined in two areas of London (Edgware Road and Holloway Road) utilising a stated preference technique.
Key findings:
· In both areas people were willing to pay annually in the scale of £15 to council tax, £100 to rent and £110 through public transport in order to enhance the quality of streets.
· The four stated preferences for improving the quality of streets were: good, bright, even lighting after dark; vehicles prohibited from parking on the pavement; direct green man crossings; and pavements with no cracks and which are even.
Reference:
Sheldon, R., Heywood, C., Buchanan, P., Ubaka, D., & Horrell, C. (2007). Valuing urban realm-business cases in public spaces. in Proceedings of the European Transport Conference (etc) 2007, Leiden, The Netherlands.
Valuing urban realm qualities
Aims and method:
Examines how various aspects of the urban realm add economic value. The study explored data, including business user interview responses, from 62 areas across London.
Key findings:
· The public realm elements that most clearly add (economic) value to private properties were: qualities leadign to a sense of personal security, good street lighting, the quality of environment generally, and good maintenance.
· For each measurable improvement in quality in any aspect of a street, the sale price of an apartment on that street increased by 1.6% and shop rental values increased by 1.22%.
· Other elements, including gradient, surface quality, obstruction, permeability, colour contrast, legibility, effective width, and user conflicts) had a weaker relationship with economic value
· This report shows that a high percentage of business users are willing to pay for improving quality. They are willing to pay 24.5% of their annual business rate as a one-off payment to see the street environment improve from a low quality pedestrian environment to high quality one.
Reference:
MVA Consultancy (2008) Seeing Issues Clearly; Valuing Urban realm, report for design for London September 2008
Compact city savings
Aims and method:
Provides evidence on and insights into how much transportation-related CO2 savings can be expected with compact development. Based on an exhaustive review of existing research on the relationship between urban development, travel, and the CO2 emitted by motor vehicles.
Key findings:
· The shift from sprawl to compact development has many quantifiable economic, environmental, and quality-of-life benefits to off-set any costs
· A 20-40% reduction in vehicle miles travelled (VMT) is possible in the United States with compact development rather than continuing urban sprawl
· A 7-10% reduction in total transportation CO2 emissions will accompany such a reduction in VMT
· Nationally, compact development is estimated to be 11% cheaper to serve with basic infrastructure than sprawl development
· Providing infrastructure for sprawl developments costs $20,000 more per unit than for compact growth
Reference:
Ewing, R., Bartholomew, K., Winkelman, S., Walters, J., & Chen, D. (2009) Growing Cooler: The Evidence on Urban Development and Climate Change. Urban Land Institute (ULI)
Compactness and negative amenities
Aims and method:
Explores, through an examination of agglomeration economies across the USA, how and where public investments in urban economies deliver positive impacts and where they do not. The paper uses standard regression methodology and amongst many factors explores the impact of compactness and population amenities.
Key findings:
· The authors find little evidence that the negative impact of population due to urban disamenities (e.g. higher crime, pollution and congestion) differs across types of cities.
· If anything, there seems to be a more positive link between population and amenities in more compact urban areas.
· But there is little evidence to suggest that agglomeration economies are larger for smaller than for bigger cities, or for more compact than for less compact cities.
Reference:
Glaeser, E. L., & Gottlieb, J. D. (2008). The economics of place-making policies (No. w14373). National Bureau of Economic Research.
The economic benefits of green infrastructure
Aims and method:
Summarises and evaluates how installing green infrastructure in a combined sewer system (CSS) can reduce grey infrastructure capital investments and associated wastewater pumping and treatment costs; as well as delivering a range of environmental benefits. A single case study of Lancaster, Pennsylvania (USA), is used with a cost benefits analysis.
Key findings:
· Green infrastructure can be a cost-effective solution to storm water management that also provides multiple environmental benefits.
· The combined sewer system (CSS) area of Lancaster was estimated to provide approximately $2.8 million in energy, air quality, and climate-related benefits annually and a reduction in grey infrastructure capital costs of $120 million and wastewater pumping and treatment costs by $661,000 per year.
· The benefits exceed the costs of implementing green infrastructure in the CSS area, which were estimated to range from $51.6 million if green infrastructure projects were integrated into planned improvement projects to $94.5 million if green infrastructure projects were implemented as stand-alone projects.
· Across the entire city, the green infrastructure plan was estimated to provide approximately $4.2 million in energy, air quality, and climate related benefits annually
Reference:
Mittman, T., & Kloss, C. (2014). The Economic Benefits of Green Infrastructure: A Case Study of Lancaster, PA.
The real value of park assets
Aims and method:
Identifies a method to record the economic value provided by public green space in the UK. In doing so it takes a new method of calculating the value of an asset that is based on the cost of replacing the asset with a similar asset in a similar condition.
Key findings:
· Most councils systematically undervalue their green infrastructure, typically valuing public parks at just £1 each on the books
· Using an asset management approach, Highbury Fields (in London) was valued at £53 million and Sefton Park (in Liverpool) was valued at £108 million (including park buildings)
· The approach helps to make their worth more explicit, whilst excluding land value, and social and environmental value
Reference:
CABE Space (2009). Making the invisible visible: The real value of park assets. London: Commission for Architecture and the Built Environment.
Housebuilders and landscape investment
Aims and method:
Explores the economic relationship between housebuilding and landscape in England. It explores the literature and highlights five ways in which landscape professionals can add value through five case studies.
Key findings:
· Developers are willing, on average, to pay at least 3% more for land in close proximity to open space, with some putting the premium as high as 15-20%
· Capital costs of traditional drainage are more than double the capital costs of soft, green, sustainable drainage systems (SuDS), and annual maintenance costs are 20-25% cheaper.
· Over a 60-year lifespan, SuDS are around half the cost of traditional drainage solutions
· 82% of councillors in England and Wales identify green space benefits as amongst the factors most likely to make new housing development acceptable to local communities
Reference:
Landscape Institute (2014) Profitable Places; Why housebuilders invest in landscape, September 2014
https://www.landscapeinstitute.org/news/li-launches-profitable-places/
Safer cities and the cost of burglary
Aims and method:
Evaluates the impact of the Safer Cities programme funded by the Home Office (England) between 1988 and 1995. The programme included over 500 schemes across the country with a focus on domestic burglary, most of which implemented physical ‘target hardening’ security measures. The analysis draws from over 300 schemes with GIS was used to collate and analyse the data.
Key findings:
· Under most conditions, but particularly in areas of high crime risk, the cost of preventing a burglary through Safer Cities action was less than the financial cost of that burglary to victims and the state.
· Overall, the cost of preventing burglary diminished in areas where it was more common
· More intensive measures to reduce crime seemed to prevent displacement to neighbouring areas and improved residents’ perceptions of their area
Reference:
Ekblom, P., Law, H., Sutton, M., Crisp, P., & Wiggins, R. (1996). Safer cities and domestic burglary. Home Office, Research and Statistics Directorate.
http://www.popcenter.org/library/scp/pdf/66-Ekblom_el_al.pdf
Life cycle net benefits of low impact development
Aims and method:
Develops a quantitative framework to determine the monetary values of the economic, environmental and social benefits and the life cycle net benefit of low impact development (LID) practices for a city which have significant liveability and climate change benefits. Using green roofs, bioretention systems and porous pavements, the authors estimate the area of each impervious cover type based on an analysis of potential locations for each LID practice. The study quantifies life cycle costs and benefits using Hong Kong as a case study.
Key Findings:
· Applying the proposed framework to Hong Kong, the 30-year economic and environmental benefits are 5.3 billion USD and 1.2 billion USD, respectively.
· The mean and median social benefits are 35.1 billion USD and 49.6 billion USD, respectively.
· Subtracting the 30-year LID implementation cost (55.8 billion USD) produces a median positive net benefit of 2.3 billion USD with an annual unit value of 1.05 USD/m2yr, and a mean negative net benefit of 12.2 billion USD with an annual unit value of −5.58USD/m2yr.
Reference:
Zhan, W., & Chui, T. F. M. (2016). Evaluating the life cycle net benefit of low impact development in a city. Urban Forestry & Urban Greening, 20, 295-304.
http://www.sciencedirect.com/science/article/pii/S1618866715300376
The cost of poor housing
Aims and method:
In 2010 the Building Research Establishment published a report on the cost of poor quality housing to the UK’s National Health Service. This report updated and corrected the original report by using the Housing Health and Safety Rating System (HHSRS) which incorporates a wide range of hazards inside the home.
Key findings:
· The 2015 estimate for the cost of poor housing was £1.4bn per annum
· When expanding the definition to include all homes which have a significant HHSRS hazard, this figure rises to £2bn per annum, for England (£2.5bn for the UK).
· The total cost of poor quality housing on health is similar to that of smoking or alcohol.
Reference:
Nicol, S., Roys, M., & Garrett, H. (2015). The cost of poor housing to the NHS. Building and Research Establishment.
https://www.bre.co.uk/filelibrary/pdf/87741-Cost-of-Poor-Housing-Briefing-Paper-v3.pdf
Failed design
Aims and method:
Provide a better understanding of the costs of bad design through gathering the evidence. Based on analysis of case studies and a review of the literature.
Key findings:
· Calculating the cost of bad design is complicated yet it is evident that bad design carries a cost.
· Those who pay for bad design are typically the community in general.
· A 1970s housing estate at Holly Street in Dalston, east London, was so badly designed that it had to be demolished and rebuilt only 20 years into its intended 60-year design life, at a cost of £92 million.
· George’s Park in Lozells, Birmingham was laid out in the 1970s in a design that encouraged crime and anti-social behaviour and made it into a place actively avoided by local residents. It was redeveloped at a cost of £1.2 million
Reference:
Simmons, R., Desyllas, J., & Nicholson, R. (2006). The cost of bad design. CABE.