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Infrastructure and Economic Developement (MetroPlan 2000) - A Summary of a Literature Search
Click HERE for graphic. About this Report The Metropolitan Area Planning Council is the officially designated regional planning agency for 101 cities and towns in the Boston metropolitan region. The Council helps its member communities plan in the areas of economic development, housing, demographics, transportation, water, solid waste and open space. Credits Author Steven R. Landau Research Assistance P. K Mohanty, Agnes Serenyi Review Edward Bates Cover/Layout/Graphics Ariane Oberling Copy Editor Sandra Lenzi Production Michele Morse, Brian Ronan 1990 - 1991 MAPC Officers Franklin G. Ching, Ph.D., President, Natick Marjorie A. Davis, Vice President, Wenham Martha K. Gjesteby, Secretary, Cohasset Jay J. Donovan, Treasurer, Wilmington MAPC Executive Director David C. Soule This report was funded by assessments from the member cities and towns of the MAPC region. This is the first of a series of MetroPlan 2000 Infrastructure Reports. The author wishes to thank colleagues at MAPC for assistance and encouragement during the research phase of the project. 1 Introduction As part of the MetroPlan 2000 goal to encourage efficiencies of compact development over suburban sprawl, MAPC is examining how infrastructure investment policies affect regionwide development. For the purpose of this analysis, infrastructure will include capital intensive water, sewer, highway and mass transportation systems as well as open space set asides. The basic products to emerge from this effort will be an analysis of existing public infrastructure and open space in the metropolitan area, a look at infrastructure development trends, and - in concluding the first phase of the planning effort for MetroPlan 2000 - a regional capital improvement program to support MetroPlan's objectives. To begin the analysis of public investments, Infrastructure and Economic Development is a literature survey that focuses on how public investments in water, sewer, highway or mass transportation lead to economic growth; which economic sectors rely on various infrastructure systems; and what other factors are needed to complement infrastructure in order to promote economic development. Other public facilities, including airports and railroads, open space set asides and private utilities are not discussed in this report1. While this overview looks at the relationship between infrastructure and economic growth, effects on residential development are highlighted when the affects of public investments are particularly striking. Evidence suggests that a single type of infrastructure is unlikely to induce widespread private investment without the others. Moreover, though public infrastructure clearly influences land use and development patterns, so do zoning policies, the general economic environment, labor markets and quality of life issues (including available open space). The locations and scales of proposed infrastructure investments need to be coordinated with these elements as well as with existing public capital in the metropolitan region. Strategies to develop public works in hope of capturing private investment carry risks associated with speculation. If private development does not materialize and produce anticipated tax 1 revenues, the debt burden for expensive infrastructure may overwhelm local tax bases. Therefore, costs for speculative public ventures need to spread out on a regional or statewide basis. Beyond relatively minor private bus routes and roadways, transportation infrastructure is out of reach for private investment and withholding transportation facilities or rolling stock where none exist may set areas off-limits to significant development. Withholding public investments for water and sewer may affect a mix of industries but will not prevent growth because these systems can be constructed and operated in the private sector. Development without public sewerage or water delivery will remain desirable given local zoning that permits development, available land, and access to appropriate labor. The latter depends on a viable transportation network encompassing highways, local roads and mass transportation. Some of the literature reviewed argues that inadequate infrastructure can deter investments when public works suffer from deferred maintenance or are used significantly over capacity. The prevalence of unsatisfactory public systems may contribute to disinvestment, discourage local expansions and lead to a general climate of economic decline. Ironically, a vibrant economy, as we have seen in this region over the past decade, places unexpected stress on infrastructure systems. If maintenance is deferred during "boom" years, costly investments to upgrade a deteriorating public capital plant may be required while the economy is stagnating in order to prevent a long term decline. 2 2 Demand for Infrastructure When the Erie Canal opened, the cost of transporting wheat between New York and Buffalo fell from $100/ton to $10/ton, providing the northeast with an early example of the benefits of infrastructure. Today, however, consensus does not exist among economists, planners or public officials regarding the role of infrastructure in regional economic development. In a paradigm for economic development, establishing a basic transportation system allows private industry to locate in previously remote areas at competitive or advantageous costs for access to markets and suppliers. Sewer and water systems are then needed to augment the transportation network. Although, this theory is easy to understand, the effect of infrastructure on realworld business location decisions is much more complex.2 Each infrastructure system, whether water, sewerage, transportation or waste management facilities is but one element on a list of determinants for business location. Others are variables such as weather, the available labor pool, prevailing wages, taxes, and the general (though always ill-defined) "business climate." Moreover, differing land-uses require varied levels of infrastructure support. For example, shopping centers demand heavy vehicle traffic to transport retail customers but require relatively little water and sewerage services. However, office buildings and certain manufacturing operations such as food processing, require substantial water and sewerage for operation. High-tech, with a high value:weight ratio imbedded in its products, requires access to sophisticated air transportation services. Technology oriented firms often divide operations into distinct segments, thus also requiring convenient roadways for shipping and business travel between sites. Lastly, high-tech provides a vivid example of how an industry's need affects the use of infrastructure. The phenomenon of the congested "Tech Highway," such as Route 128, is due to labor demands and institutional growth of the industry. Firms intensely compete for engineering labor and benefit from concentrating talent in a limited area. 3 Studies conducted by economists Rita Bamberger, Roger Schmenner and Randall Eberts agree that poor infrastructure is more likely to drive a firm away from a region than a superior capital plant is to attract significant new business3. The prevalence of deep potholes on roadways and backed-up sewers may relay an image of economic decline, lead to private sector disinvestment, and discourage new business locations as well as residential development. Bamberger notes that 60%-80% of added manufacturing capacity each year comes from local plant expansions, while the remainder comes from new locations. She argues that firms look for assurances of sufficient future capacities from public facilities when planning local expansions. Eberts states that regional differences in infrastructure appear to influence migration decisions. Schmenner's survey on why manufacturers open new plants rather than expand, lists lower transportation costs as a key determinant.. Nevertheless, land availability, labor issues and the desire to diversify locations as a hedge against natural disasters or a one-plant strike are considered more influential. Rates of growth greatly influence the intensity of infrastructure use and may hasten deterioration of facilities. For example, unexpectedly heavy volumes of trucking shorten the predicted useful lives of local roadways and highways. When Congress raised the permissible load limits for interstate trucking, an unintended result was to significantly reduce the useful lives of local roads and bridges designed to the former limits. In addition, expansions or new locations of certain industries which rely on water/sewerage may severely tax the capacities of those systems. Similarly, increased levels of infrastructure investment is at times generated by demand for services. Rapid population growth may lead to political pressure to expand certain systems. Moreover, as growth generates income, municipal governments of more affluent communities may show less tolerance for poorly maintained infrastructure. A small, non-affluent community seeking to expand a modest tax base by developing infrastructure on speculation - that is, channeling public investments in hopes that the presence of roadways, transit or waterworks will entice development - is gambling. Overestimating future 4 demands will burden initial users, as a relatively small community will be forced to pay for a capital plant far beyond its needs. Moreover, excess capacities may promote sprawling development, with costs for new services exceeding generated growth of local revenues. Sprawl combined with excess tax burdens has been known to trigger out- migration, leading to long-term reductions in property tax bases and further increasing burdens on remaining residents5. 2.1 Infrastructure as Inputs for Private Investment and Economic Development A study conducted in the 1970s by the Port Authority of New York and New Jersey concluded that adequate infrastructure - water, sewers, bridges, streets and mass transit - are vital to the economic health of urban centers. The study concluded that comprehensive public capital plants are one of the major competitive advantages held by large, older cities6. In general, Eberts' findings indicate that public investments lead private investments in the northern United States and induce development but are used to "catch-up" to private development in less developed - or growing - southern cities. These findings are supported by significant correlations between public and private investments in 33 of the 40 cities he studied for the years 1904 - 1978. Schmenner's study of Fortune 500 business location decisions in the 1970s reveals that large firms take advantage of public infrastructure more than any other public assistance (e.g., zoning, job training, financing assistance) when opening new production facilities7. The economist Randall Eberts explores the effect of infrastructure investment on regional economies through his own research as well citing other studies8. One study he cites hypothesizes that the growth of public infrastructure is the primary determinant of economic growth in developed regions9. Other studies estimate that productivity is increased in large metropolitan areas in part due to economies of scale in transportation and communication; and that public expenditures for highways, local schools and higher education cause a statistically significant and positive affect on personal income growth. 5 Eberts' examination of public capital stock (roads, highways, water and water treatment) as an initiating factor for private development argues that public infrastructure has a positive affect on manufacturing output. He also argues that the public contribution to manufacturing production is much less than that received from private investment and labor, confirming the generally held assumption that public capital significantly "leverages" private investments. These findings complement the Schmenner study on location from the perspective of attracting investment to a general area. When firms were queried as to which factors are musts when selecting a state or region while making location decisions, labor considerations were by far the most important, followed by proximity to markets, and residential amenities for managers and engineers. The only infrastructure mentioned was "better transportation." Two percent of respondents gave transportation as a must for plant openings, but no firm considered transportation as a cause for choosing a site when relocating. In agreement, a study conducted by the Port Authority of New York and New Jersey listed five competitive factors in manufacturers' regional location decisions: single story space, labor, taxes, security and cost-effective freight (i.e., access to a network of transportation facilities)10. When choosing a specific development location within a state or region, however, the availability of infrastructure grows in importance. Documenting private investments that are induced by public infrastructure investment is easiest in scattered locations away from already developed areas11." As infrastructure is available in almost every city, it becomes especially enticing when key systems are found complemented by adequate land priced lower than acreage near a regional economic core, without problems associated with urban congestion. Schmenner's survey discloses that rail services and the availability of expressways and utilities (gas, water and sewerage) are in order the three most important factors in final site selection. A case study of Clay, New York, a low-density suburb of Syracuse with ample highway access, showed that parcels with access to sewerage facilities will sell from 1.8 to three times the price of similar parcels without access. This study also showed sewer systems as far more important than centralized water in determining land values in the community12. 6 The reason for the apparent contradiction in the importance of infrastructure in regional versus specific sites, according to Bamberger, is that most larger areas such as regions or states possess sufficient infrastructure somewhere, so it is not a major corporate consideration until after the general location is picked13. As evidence, Bamberger cites the fierce 1985 interstate competition for production of the General Motors' Saturn car. The "must" list for GM included: 600-1000 acres sited on a rail line and near two interstate highways, capacity for 3-4 million gallons of water per day and sewerage capacity capable of handling 2.5-3 million gallons of discharge daily. This shows both the importance of infrastructure and its widespread availability when competition exists among large geographic areas. 2.2 Planning for Infrastructure Within a single community's economic development or public works office, infrastructure planning is largely conducted to fill-in the missing pieces of an otherwise comprehensive public capital plant in order to court new development or persuade local firms to stay. Project negotiations include provisions for specialized infrastructure, such as roadway access or sewerage lines for new development sites or as a promise to prevent an expanding local firm from leaving. From the late 1970s through the mid-1980s, many communities have used Urban Development Action Grants (UDAGS) to provide the final infrastructure "piece" for economic development projects. Planners are increasingly called upon to stretch existing public facilities and to estimate the potential return of new public investments against criteria such as leveraged private (dis)investments, and new (or retained) jobs or tax revenues. Bamberger argues, for example, that traffic congestion should be allowed to fester ff the demonstrated cost of highway congestion is less than the cost of widening the road or building new freeways. The potential infrastructure bill "to do or fix everything" is staggering in almost every community, region or state. In some respects, the projected costs are derived from the working assumptions and "rules of thumb" used by planners. Analyses of capacities, need for public investments 7 and cost estimates may change significantly when planners vary these assumptions even slightly when surveying the infrastructure needs of a community or larger area. Compartmentalization of functions within cities, regions and states also affects the quality of infrastructure planning. As discussed earlier, the link between economic development and infra- structure is not the exclusive determinant of growth. However, institutional divisions in many planning departments encourage staff to consider only one side of the development climate. Often infrastructure planners, land use and zoning staff, finance officials and labor market analysts work in isolation from each other, operate with different assumptions, and treat problems in their fields its separate entities. This lack of integration often extends to the planning processes for different infrastructure systems as well, such as transportation and waterworks14. 8 3 Major Planning Issues Water, sewer, highways and mass transit each contribute to economic development with their relative importance varying by industry. The next section reviews key planning issues for each system. 3.1 Water From local and regional planning perspectives, water is a natural resource and, requires an intricate and expensive public distribution system to serve population and growth centers. Each aspect affects the development future of an area. For example, fears abound that water scarcity in the western United States may stifle future economic growth and that an allocation policy based on rationing or steep pricing may be in order. In contrast, metropolitan Boston appears blessed with an adequate supply to meet foreseeable demands, but has an antiquated water supply system that may require significant investment to assure that the resource is not squandered through leakage. According to a 1987 study commissioned by the National Council of Public Works Improvements, water supply and distribution systems fill a similar and more enduring role of providing preconditions for development as did the federal highway programs of the 1950s - 1970s. The initial growth of many communities has been based on private sector assessment of local water supply. In the 19th century, urban water systems were seen as engines of growth and early efforts to entice private investments often advertised centralized local water systems. Across the nation today, in communities with populations greater than 25,000, 43% of water use is for residential purposes, 25% industrial, 19% commercial and 13% public/other15. By contrast MAPC estimates regional water to be 53% residential, 22% commercial/industrial and 25% public/other. The large "other" category may be explained by excessive leakage as the Boston area water system ranks among the oldest in the country. According to the Wade Miller report, the most significant reasons for creating central water systems are fire protection and public health. These considerations imply that residential development and projected population are key planning variables for water supply and distribution 9 systems. The causal effect, however, is two-way. Population growth depends on the availability of water, but the economies of scale to support public fire protection and safeguard public health emerge from concentrated growth. A second source of significant water demand is manufacturing use, mainly concentrated in humid regions. According to the 1982 Census of Manufacturing, Massachusetts ranked 23rd among states in water intake at 142.9 billion gallons per year. Trends in regional employment growth, however, clearly are moving away from water-dependent industries to less significant users of water, including office work, retailing and services. Nationally, approximately 91 % of water used in manufacturing is consumed by five industrial sectors. In metropolitan Boston, these sectors provide high wage jobs, paying on average 11 % above the regional mean income, but accounted for just 1.7% of the region's employment in 1988, down from 2.4% in the 1980 (see Table 1). At the same time, non- manufacturing sectors have grown nearly 26%. Table 1 Regional Employment in Water-Intensive Industries SIC# Title Water Consumed %Employment/ as % of all Region Manufacturing Nationally _____________________________________________________________________ 20 Food & Kindred Products 06% 0.6% 29 Petroleum & Coal Products 08% - 26 Paper & Allied Products 19% 0.4% 30 Primary Metal Industries 24% 0.2% 28 Chemicals & Allied Products 34% 0.5% Sources: Wade Miller Associates; Massachusetts Department of Employment and Training, May, 1989. Employment data are for the Boston PSMA, approximately 104% of the MAPC region. 10 Nationally, roughly 87% of the water used by industry is from private sources and 13% from public sources. Of the private water consumed, approximately 82% (of the 87%, or about 71 % of all water used by industry) is used to generate electrical power16. Food & Kindred Products, the largest of the five significant water users in the region, is the only sector which consumes public water in far larger proportion than the overall average, using water from approximately 66% private and 34% public sources. "High tech" manufacturing sectors of the regional economy accounted for more than 8% of direct employment in 1988. These industries are low-volume water users, though production processes require water at far greater purity than mandated for public health reasons. The price of public water is not an important cost for "high tech" industries, and processing to purify water is a private concern. 3.2 Sewerage and Wastewater Treatment Proper sewerage and wastewater management are costly, but carry considerable benefits. Richard Tabors believes sewerage is far more significant to property values and development patterns than water primarily because developers have easier access to water. He argues that sewerage facilities and land development influence the level of investment in each other. Generally, sewerage facilities are considered a necessary precondition for significant development densities and are required when growth threatens to contaminate the public water supply and affect other natural resources. Traditionally, when a wastewater treatment system operates above 80% of capacity, a community can not sustain additions to its industrial load consistent with environmentally quality. Tabors cites a metropolitan Atlanta survey of residential developers, two-thirds of whom said that utilities - particularly sewerage - were important factors in their location decisions. The Clay, NY, study complements the Atlanta survey, by revealing that sewerage systems may increase land values up to three times that of similar but unsewered parcels. 11 3.2.1 Moratoria As indicated by the Clay, NY study, access to sewerage systems permits dense development and increases land values. Sewer development moratoria, originally a tool to protect water quality and public health, are growing in prominence as means for land use control to address problems of over-congestion and suburban sprawl. Moratoria generally steer growth to fill-in already sewered areas, leading to more compact urban development. The downside, according to the Apogee study, is that an enforced sewer district will inflate lot prices and may displace low-to-moderate income households and small businesses. Moreover, a sewerage moratorium may increase transportation congestion within the confined district if new development brings more traffic into the district, which will also increase air and noise pollution. A blanket moratorium could inhibit construction outside a designated sewered area, including desirable projects such as affordable housing or regionally significant economic development. In turn, moratoria may also create hardships for local construction industries and bring negative ripples to local economies. Tabors argues that temporary sewer moratoria are effective policy tools for protecting water quality, but agrees that moratoria should not be used as anti-development weapons to promote exclusionary zoning. The Apogee Report asserts that large scale developers are able to circumvent moratoria by installing sewerage facilities at their own expense. When such private development of infrastructure is allowed outside a designated district, the initial capital expenses and operating costs discourages small business formation or development of small lots/multifamily housing. To encourage diversity of development over the long term, moratoria may be replaced by programs combining incentives, restrictions and pricing policies. For example, connection fees may be on a steep sliding scale, depending on proposed land use or development site, or user charges across a region may vary given the priority areas where development is desired. 12 Recent anectodal evidence suggest that large developers may build considerably larger sewer facilities than they require and sell excess capacity to smaller projects. Through this tactic, private sewer facilities may be self supporting or profit making operations, and opportunities will exist for nearby smaller scale growth. 3.3 Highway Suburban land values are greatly affected by highway investments, which increase access for large scale commercial and residential development. Other factors which complement highway development are the overall growth potential, existing land use of parcels near the new roadway and land use controls. Growth potential embodies the availability of other infrastructure types, including water and sewer. Most of the literature surveyed for highways is concerned with the considerable commercial impacts that follow roadway development. Commercial effects of highway capacities include trucking efficiencies (and therefore manufacturing location), retail locations based on drive-by traffic, and the journeys to and from work by commuters. According to analyst Leonard Ortolano, a significant impact of highway construction is the demand for more roadway construction. New highways are designed to relieve congestion and make adjacent parcels attractive for development. The induced growth, in turn, creates more pressure on transportation networks, causing demands for new capacity18. Ortolano cites an analysis of federal efforts to use highway construction to stimulate the economy of 35 rural growth centers. The study concluded that highways are one of many elements required for economic development and development and must be complemented with land use policies, a labor market and other infrastructure. 3.3.1 Commercial and Industrial Impacts The federal interstate highway program and the subsequent decline of freight rail service has made trucking access a fundamental consideration when choosing specific sites for manufacturing plants (although the Schmenner study shows that rail service is still most desirable when available). A study conducted by the Port Authority of New York and New Jersey reveals that 90% of the manufacturers in its service area use trucks for at least part of inbound/outbound freight. This widespread use includes transporting goods to and from airports, waterports, warehouses, rail lines, markets and suppliers ("Intermodalism" is responsible for the rising volume of rail freight seen since 1980). In addition to proximity to highways and degrees of highway congestion, access includes factors of local street congestion and off-street loading/unloading. The last factor has caused traffic tickets to emerge as a significant overhead factor for urban manufacturers19. Recent economic changes have increased the importance of trucking, and thus highways. Two new and still evolving practices are placing an emphasis on more frequent, and shorter trucking trips. The first, Just-In-Time delivery, uses transportation costs - including frequent deliveries of goods and truck trips - in lieu of inventory and Storage costs. The second factor is the growth of transportation brokerage firms that move goods from points of origin through their warehouses and on to points of delivery. These brokers build warehouses on major highways with access to other interstate or international transportation facilities. For offices, especially retail establishments, highway development may lead to a shift of commercial development from local main streets to locations near new interchanges. Moreover, the shopping center by the high volume highway has become an American institution as have modem office complexes20. The large retail centers rely on highway visibility and convenient access, supported by ample parking. Desired traffic volume straddles a hypothetical line between providing a steady flow of customers and congestion which discourages shopping trips. Office development by highways, particularly at intersections, are heavily influenced by labor markets -largely by providing easy access to commuters from nearby suburbs whose only practical transportation option is an automobile - and land/development costs less expensive than prestigious urban locations. 14 3.4 Mass Transit A group of professional transportation analysts and planners in Santa Clara County, California (home of Silicon Valley and the city of San Jose) found that transportation development around rail improvements and high density zoning near stations would stimulate the economy more than two other programs examined: highway system improvements or bus system improvements with incentives for car and van pooling21. Detailed studies on the economic development impacts of mass transit rail systems have been mixed, largely depending on factors unique to the study areas as well as the emphasis of each analysis22. Robert Paaswell of SUNY-Buffalo, echoing other analyses of public capital investment, concluded that rapid transit is one element of a coordinated package of efforts to revive declining metropolitan areas and should not be considered as the single or even the primary tool for success. It appears that transit development is well-matched to recent economic changes of declining manufacturing, increasing proportion of women in the workforce, and large "back office" clerical operations located outside of center cities. Paaswell argues that since more than 70% of transit riders are women (based on 1975 data), industries that employ women will prosper by transit station locations. In part, this finding is supported by Sherret who concluded that white collar commuters are the heaviest users of the Bay Area Rapid Transit System (BART). These findings may be factors of two-income, one car families, and/or a large proportion of women in low paying clerical jobs who are unable to afford reliable automobiles. Studies of BART share the conclusion that the system's effect on land use has been relatively small, although land sales near new stations were induced by transit development. In explaining the minor impacts, one study reported that travel by automobile is faster than transit in the BART service area23. In addition, BART's consumption of land for transit lines, stations and yards was far less than comparable freeway miles24. Another analyst contends that BART generated negligible gains in property values. Increases were most prevalent in the speculative phase during planning and construction and then tapered off. This study concludes that office rents were affected more consistently than residential, and that residential increases were pronounced only within 500 feet of a station and then fell25. A third study shows that BART has had an undetectable effect on Bay bridge traffic volumes and area wide travel patterns as new trips fill road space freed by transit riders. An analysis of new rapid transit systems in Atlanta, Washington and San Diego reveals equivalent findings, that rail ridership is drawn primarily from former bus riders and does not ease traffic congestion significantly26. The metropolitan regional Central Transportation Planning Staff's study of the three-station Red Line extension from Harvard Square to Alewife concluded that two-thirds of the extension's riders previously rode public transit. The MAPC land use study of the same project could not prove that large percentage change in property values were caused by the MBTA project. The study shows considerable commercial activity and property value increases, though in the context of general economic activities and housing competition that bid up property values. Property values in the new station areas were beneath the medians in Cambridge and Somerville at the start of the real estate boom, and the station areas saw the largest percentage increases in these cities. More interestingly, reflecting Paaswell's conclusion, the Red Line extension was one part of a revitalization of Alewife that has included considerable highway planning and investment, a major transit/parking facility matched with an upscale development climate, and available land on the fringe of the urban core27. Similarly, when the Atlanta Regional Commission (ARC) measured land use impacts of a construction program for 39 new MARTA* station areas, the ARC observed that rail service has not significantly influenced new office construction, and that local zoning has a greater influence on economic development than does transit access. Though the study concluded that speculation was not evident, areas near at least five MARTA stations saw increased sales, price bid-ups or unusually active parcel assembly. *Metropolitan Atlanta Rapid Transit Authority 16 In the Bay area, the Metropolitan Transportation Commission similarly found that speculation around BART stations focused on smaller commercial and residential properties. Indications of unusually high volumes of property sales were found in five of the eight areas studied, but did not include large scale purchases. BART, according to the Metropolitan Transit Commission, has been a positive factor in locating federal and state office buildings although it has had little impact for retailing and new business location. In part, San Francisco's comprehensive bus system is preferred as a locational factor by local retailers. 17 4 Summary The major findings from the literature review are summarized below. 4.1 Water Needs for central water systems and expanding water sources stem from residential development densities, expanding population and the need to protect public health and safety (e.g., firefighting). Infrastructure also encourages development for certain water dependent manufacturing industries. Trends in the regional economy are moving away from such industries, which today comprise less than two percent of local employment, and towards office and retail sectors that are not water dependent. 4.2 Sewerage/Wastewater Management Sewer systems are less available than water systems, and therefore appear to be much more significant in enhancing property values and inducing development at a given site. Sewerage facilities are necessary to safeguard against growth (primarily in residential densities) contaminating public water supplies and other natural resources. Wastewater management directly affects levels of pollution in oceans and lakes and therefore is important to the economies of coastal areas, including fishing and recreation industries as well as "beachside" commerce. Privatization of Sewer/wastewater treatment favors large developments and discourages smaller, spawl-type commercial patterns. From a residential outlook, privatization encourages large lot sub-divisions and inhibits smaller lot or multifamily housing. 4.3 Highway The interstate highway program and the subsequent decline of freight rail has made access for trucking a major consideration when choosing a manufacturing site. Recent emergence of "trans- 18 portation brokers" and "Just-In -Time" delivery practices in lieu of maintaining inventories are placing growing emphasis on frequent truck trips and docking facilities as significant cost considerations. For commercial development, highways tend to move viable retail and office industries from downtown centers to interchanges which seem to offer high visibility to more people and easy accessibility. 4.4 Transit Several studies indicate that mass rapid rail transportation is one element of potentially successful economic development strategies for station areas, but must be supported by proper zoning and other infrastructure systems. Overall, new transit has minor effects on property values or land use patterns, and directly competes for riders - and therefore as development inducements - with other public transportation, such as highways and urban bus systems. The most significant effects of transit stations appear to be on new office development. Transit development outside of downtown Boston appears well suited for the trends toward developing "back-offices" and growing white-collar sectors of the regional economy. In future publications, the state of infrastructure in our region, past expenditures, and projected investments will be examined against expected population and employment changes. In conclusion, a capital investment strategy will be proposed consistent with MetroPlan 2000. 19 Notes 1. For a detailed discussion on airports and rail services, see Landau, Steven, "Flight to Tomorrow" papers, prepared for an MAPC conference of the same name. 2. Municipal Finance Officers Association, Building Prosperity: Financing Public Infrastructure for Economic Development. 3. Bamberger along with William Blazer and George Peterson are development policy and finance experts whose 1985 study, Infrastructure Support for Economic Development, was published by the American Planning Association. Eberts is an economist with the Federal Reserve Bank of Cleveland and Schmenner is an analyst of business location decisions. 4. Transportation's Role in Manufacturing Location Decisions, Planning and Development Department, Port Authority of New York and New Jersey. 5. Wade Miller Associates, Inc., Water Supply; The National Council on Public Works Improvements; May, 1987. 6. Advisory Committee on Intergovernmental Relations, Financing Public Infrastructure; June, 1984. 7. Schmenner, Roger W., Making Business Location Decisions; Prentice-Hall, 1982; Englewood Cliffs, NJ. 8. Eberts, Randall W. & Fogarty, Michael S., Estimating the Relationship Between Local Public and Private Investment; May 1987; Federal Reserve Bank of Cleveland. Eberts, Randall W., Estimating the Contribution of Urban Public Infrastructure to Regional Growth, December, 1986; Federal Reserve Bank of Cleveland. 9. Based on a study by Mera, 1975, which used 1947-1963 data for nine U.S. Census regions. 10. Planning and Development Department, Port Authority of New York and New Jersey. 11. Urban Systems Research & Engineering, The Growth Shapers: The Land Use Impacts of Infrastructure. 12. Tabors, Richard D., et. al., Land Use and the Pipe; Lexington Books; Lexington, MA; 1977. 13. Bamberger, Rita J., et. al., Infrastructure Support for Economic Development; APA, 1985. 14. Orlotano, Leonard, Predicting Impacts of Infrastructure on Land Use. 15. Wade Miller Associates, Inc. and Bramberger. 16. This is a 1980 estimate of the United States Geological Service reported by Wade Miller Associates. Although the sizes of water dependent industries are small, the chronic energy shortage in the northeast may stimulate additional local private water demands for energy. Conceivably, this demand could lead to price increases for the new water supply required to serve an "extended trends" projections. 17. Apogee Research, Inc., Wastewater Management, May, 1987. A publication of the National Council on Public Works Improvement. 18. Ortolano 19. Planning and Development Department, Port Authority of New York and New Jersey. 20. A regional shopping center by a major highway or a neighborhood shopping center by a local roadway. 21. Ortolano. 22. Most of the information presented in this section is from: Catalog of Transit Station Impact Studies; United States Department of Transportation; August, 1983. Studies were conducted for the BART system in the San Francisco-Oakland Bay area, MARTA in greater-Atlanta and Metrorail in the Washington D.C. area. Other systems examined include San Diego and Boston (the Red Line Extension study by MAPC). 23. Dyett, Michael, et. al., Land Use and Urban Development Impacts of BART: Final Report; U.S. DOT/U.S. HUD, 1979. 24. Sherret, Alestair, BART's First 5 Years: Transportation and Travel Impacts, Peat Marwick Mitchell & Co., U.S. DOT, 1979. 25. BART in the San Francisco Bay Area - The Final Report of the BART Impact Program, Metropolitan Transportation Commission, 1979. 26. Donnelly, Paget, Rail Transit Impact Studies: Atlanta, Washington, San Diego; Price, Williams and Associates; Office of Planning Assistance, U.M.T.A.; Washington, DC, March, 1982. 27. Red Line Extension Land Use Study MAPC and Red Line Extension to Alewife: Before/After Study, CTPS. These studies were conducted in 1987, approximately a year after the new Red Line stations opened. Through the Red Line findings agree with studies of other urban rapid transit systems, it is possible that a similar study conducted today, or after the 1990 census data become available, may show different findings.
