incorporating health and social benefits in the valuation of urban realm improvements

of 17 Incorporating Health and Social Benefits in the Valuation of Urban Realm Improvements_ETC Oct2010.DOC

INCORPORATING HEALTH AND SOCIAL BENEFITS INCORPORATING HEALTH AND SOCIAL BENEFITS INCORPORATING HEALTH AND SOCIAL BENEFITS INCORPORATING HEALTH AND SOCIAL BENEFITS WITH WITH WITH WITH USER USER USER USER BENEFITSBENEFITSBENEFITSBENEFITS IN THE VALUATION OF URBAN REALM IN THE VALUATION OF URBAN REALM IN THE VALUATION OF URBAN REALM IN THE VALUATION OF URBAN REALM

IMPROVEMENTSIMPROVEMENTSIMPROVEMENTSIMPROVEMENTS

Rob SheldonRob SheldonRob SheldonRob Sheldon, Shepley Orr, Shepley Orr, Shepley Orr, Shepley Orr ---- Accent Accent Accent Accent Paul BuchananPaul BuchananPaul BuchananPaul Buchanan, Chelsea Dosad, Chelsea Dosad, Chelsea Dosad, Chelsea Dosad ---- CCCColin olin olin olin BBBBuchanan and Partnersuchanan and Partnersuchanan and Partnersuchanan and Partners

David UbakaDavid UbakaDavid UbakaDavid Ubaka ---- Transport for LondonTransport for LondonTransport for LondonTransport for London


CONTENTSCONTENTSCONTENTSCONTENTS

1. INTRODUCTION................................................................................................ 3 1.11.11.11.1 BackgroBackgroBackgroBackgroundundundund ........................................................................................................ 3 1.21.21.21.2 The The The The Case Case Case Case for for for for Valuing Valuing Valuing Valuing the the the the Benefits Benefits Benefits Benefits of of of of Urban Realm ImprovementsUrban Realm ImprovementsUrban Realm ImprovementsUrban Realm Improvements..................... 3

2. MEASUREMENT OF URBAN REALM QUALITY............................................... 4 2.12.12.12.1 IntroductionIntroductionIntroductionIntroduction......................................................................................................... 4 2.22.22.22.2 Scope Scope Scope Scope –––– DefDefDefDefining Urbining Urbining Urbining Urban Realman Realman Realman Realm ........................................................................... 5 2.32.32.32.3 Pedestrian Environment Review System (PERS)Pedestrian Environment Review System (PERS)Pedestrian Environment Review System (PERS)Pedestrian Environment Review System (PERS)............................................... 6 2.42.42.42.4 How How How How HHHHas as as as PERS PERS PERS PERS BBBBeen Appliedeen Appliedeen Appliedeen Applied???? .......................................................................... 6

3. VALUATION OF URBAN REALM QUALITY ...................................................... 7 3.13.13.13.1 IntIntIntIntroductionroductionroductionroduction......................................................................................................... 7 3.23.23.23.2 EsEsEsEstimating timating timating timating User Benefits User Benefits User Benefits User Benefits throughthroughthroughthrough Stated PreferenceStated PreferenceStated PreferenceStated Preference ......................................... 8 3.33.33.33.3 Estimating Estimating Estimating Estimating Impact Impact Impact Impact on on on on Market Prices Market Prices Market Prices Market Prices throughthroughthroughthrough Hedonic PricingHedonic PricingHedonic PricingHedonic Pricing .......................... 10

4. QUALITATIVE FINDINGS ................................................................................ 11 4.14.14.14.1 IntroductionIntroductionIntroductionIntroduction....................................................................................................... 11 4.24.24.24.2 Focus GroupsFocus GroupsFocus GroupsFocus Groups ................................................................................................... 12 4.34.34.34.3 Qualitative ResearchQualitative ResearchQualitative ResearchQualitative Research Findings Findings Findings Findings.......................................................................... 12

5. THE VALUING URBAN REALM TOOLKIT....................................................... 13 5.15.15.15.1 InInInIntroductroductroductroductiontiontiontion....................................................................................................... 13 5.25.25.25.2 Why Do We Need a Why Do We Need a Why Do We Need a Why Do We Need a ToolkitToolkitToolkitToolkit???? ............................................................................ 13 5.35.35.35.3 Defining Urban Realm Defining Urban Realm Defining Urban Realm Defining Urban Realm for the Toolkitfor the Toolkitfor the Toolkitfor the Toolkit................................................................ 14 5.45.45.45.4 Types of Types of Types of Types of SchemesSchemesSchemesSchemes That Can Make Use ofThat Can Make Use ofThat Can Make Use ofThat Can Make Use of the Toolkit the Toolkit the Toolkit the Toolkit...................................... 15 5.55.55.55.5 How thHow thHow thHow the Toolkit Has Been Developede Toolkit Has Been Developede Toolkit Has Been Developede Toolkit Has Been Developed .............................................................. 16

6. CONCLUSIONS ............................................................................................... 17


1.1.1.1. INTRODUCTIONINTRODUCTIONINTRODUCTIONINTRODUCTION

1.11.11.11.1 BackgroundBackgroundBackgroundBackground

Work for Transport for London (TfL) entitled ‘Valuing Urban Realm’ comprises a set of studies designed to create a coherent evaluation methodology for determining the economic values of improvements to urban public spaces generally. The first phase of research carried out by Accent and Colin Buchanan (CB) established user user user user willingness to pay for improvements to the urban realm. This phase applied a stated preference based standard user benefit approach to variations in the quality of public realm to help support potential investment in public realm improvements. A version of this method was subsequently incorporated into TfL’s Business Case Development Manual. The second phase of research carried out by MVA used hedonic pricing to establish a value from revealed price data (residential and commercial). The method built upon that developed by CB in the ‘Paved with Gold’ study undertaken for CABE in 2007. Whilst the user benefits approach of Phase 1 fits into a public sector appraisal framework and is therefore most useful for securing public sector funding, Phase 2 is more concerned with private sector investment. Accent and CB have recently been commissioned to undertake a third phase of research, which looks to assess the potential health and social benefits of improvements to the urban realm, and make recommendations for a holistic methodology and user guide for valuing urban realm improvements. This paper describes this research and concludes with the status of the valuation toolkit that is being developed.

1.21.21.21.2 The The The The Case Case Case Case for for for for Valuing Valuing Valuing Valuing the the the the Benefits Benefits Benefits Benefits of of of of Urban Realm Urban Realm Urban Realm Urban Realm ImprovementsImprovementsImprovementsImprovements

A fundamental principle of economics is that it is important to appraise all impacts, no matter that the outcomes are difficult to predict and/or to value. In a scenario where investment in road, rail and bus is appraised using sophisticated techniques reflecting their wider social and economic impacts as well as the direct ones, it is important that investments in urban realm are placed on an equal footing. The user benefits approach in Phase 1 succeeded in valuing the benefits of improved urban realm to users in the same way as time savings and congestion relief are valued for road and rail schemes. Phase 2 covered, and Phase 3 will cover, many of the wider impacts of urban realm in terms of the financial and broader policy objectives. These are important drivers of investment funding. Funding is key to this issue. The allocation of funding is to a significant extent, although by no means entirely, affected by the ability to demonstrate real


economic returns. Related to this, economic appraisal identifies winners and losers, in terms of financial impacts as well as monetised benefits. Economic appraisal also allows prioritisation between competing urban design projects meaning that investment is better spent. Phase 2 concentrated on the impacts of urban realm on property values. In short, economic appraisal should provide a better allocation of resources and, if that suggests that there has been a historic under-investment in urban realm, then it should result in increased funds being made available for those schemes. Phase 3, as will be evident from this paper, looks to broaden the scope further by looking at the potential impact upon health and social outcomes.

2.2.2.2. MEASUREMENT OF URBANMEASUREMENT OF URBANMEASUREMENT OF URBANMEASUREMENT OF URBAN REALM QUALITY REALM QUALITY REALM QUALITY REALM QUALITY

2.12.12.12.1 Introduction Introduction Introduction Introduction

The task of measuring and valuing urban realm quality is more complex than simply identifying key aspects of the urban built environment. The value placed upon this environment will depend not so much on any one attribute but upon the relationship of these attributes to each other, i.e. the whole realm of urban design. Measurement of the quality of the urban realm should therefore recognise the tension between the multiple uses of the urban environment; as a facility for people to move around in as well as a space for activity. In addition there is both the tangible and the perceptual quality of the urban realm to be considered. The latter refers to subjective elements of the urban realm that go beyond the direct experience of users, but will be significant in their judgement of environmental quality, such as perceived personal security. An important consideration for measuring quality is what is considered to be ‘good design’ and to whom and, in the presence of many intangible quality factors, to determine to what extent this quality can be quantified for the purposes of a holistic and uniform approach for valuing the benefits of the urban realm. The need to measure and value improvements to the urban realm has become an increasingly topical issue. Walking has increased as a transport policy objective, with improvement of the urban realm seen to be essential in encouraging walking as a sustainable mode of transport. The Mayor’s Transport Strategy sets out the need to improve the quality and provision of information and resources to facilitate more walking journeys and improve the urban realm to create safer, more comfortable and attractive conditions. Securing funding for urban realm schemes thus requires the


development of a robust business case to demonstrate that the benefits of investment outweigh the costs. The remainder of this chapter briefly details findings from the first two phases. This is structured as follows:

• Scope – defining urban realm

• An introduction to PERS as a measure of urban realm quality

• How approach has been applied

• Advantages and limitations of PERS as a measure of urban realm quality, and

• Alternative approaches for measuring urban realm quality.

2.22.22.22.2 Scope Scope Scope Scope –––– Defining UrbDefining UrbDefining UrbDefining Urban Realman Realman Realman Realm

Defining urban realm is made harder by the often confusing use of the terms streetscape, public realm and urban realm in the UK. In principle, the terms streetscape and public realm refer to issues about the design of public spaces i.e. the network of streets and spaces between buildings. The term urban realm is broader and should encompass the design of all components of the built environment (including the style and characteristics of buildings, etc) and their interaction. The By Design document published by the DETR and CABE in 2000 is widely recognised as a holistic source of guidance for design of the built environment. This document defines seven key objectives of urban design:

• Character

• Continuity and enclosure

• Quality of the public realm

• Ease of movement

• Legibility

• Adaptability

• Diversity From these seven objectives, it is clear that the definition of public realm quality in much of the existing research – which has typically been PERS based (as discussed later) – has been focussed on streetscape quality (i.e. materials and finishes) and ease of movement and has disregarded some of the wider issues. Similarly, it is important to consider the types of project that TfL, for instance, will typically seek to evaluate. Strategic master planning takes place to guide large area-wide interventions (such as development of opportunity areas, Olympic Park).These projects are likely to consider all of the objectives above. Many streetscape improvement schemes, on the other hand, are much more localised in their focus and relate mainly to quality of the public realm and ease of movement elements of the By Design framework.


It can be expected, then, that the issue of scale will be decisive when assessing the types of health and social benefits that are the subject of this paper.

2.32.32.32.3 Pedestrian Environment Review System (PERS)Pedestrian Environment Review System (PERS)Pedestrian Environment Review System (PERS)Pedestrian Environment Review System (PERS)

Phases 1 and 2 both used the Pedestrian Environment Review System (PERS) to assess the pedestrian environment and generate quantitative scores of quality. PERS is defined as ‘a systematic process to assess the pedestrian environment within a framework that promotes objectivity’. It is an audit tool developed by the Transport Research Laboratory (TRL) to systematically evaluate the level of service and quality provided for pedestrians across a range of environments. This measurement relies on an objective scorecard system undertaken by trained auditors. PERS divides street networks into types of ‘facility’ - links, crossings, routes, public transport waiting areas, interchange spaces and public spaces. Each facility type is reviewed against a number of set attributes and numerically scored on a seven point scale from -3 to +3 based on the degree to which each attribute evaluated meets the needs of pedestrians.

2.42.42.42.4 How How How How HHHHas as as as PERS PERS PERS PERS BBBBeen Appliedeen Appliedeen Appliedeen Applied????

In Phase 1, the benefit of linking the surveyed attributes to PERS was only decided upon towards the end of the project in response to concerns about the application of the values. Prior to the stated preference work being undertaken qualitative research was carried out through focus groups to help identify those attributes that could be described and presented graphically in the stated preference surveys. This required the more intangible concepts to be substituted with proxies that were easier to represent through stated preference. There were fifteen attributes included in the Phase 1 research for measuring the quality of the urban realm and these are listed below:

• View of the street

• Kerbs

• Street lighting

• Vehicles on the pavement

• Cycles on the pavement

• Number of people in daylight

• Number of people after dark

• Pavement condition

• Signs to public transport and attractions

• Plants and public art

• Seating

• Crossing the road

• Physical intrusion


• Graffiti and fly-posting

• Litter These elements were used to provide a cross-section of the walking environment that could best act as a proxy for the attributes defined in PERS for both links and public spaces. Since some of the stated preference elements feature in more than one PERS characteristic (for example ‘pavement condition’ in the stated preference affects both ‘quality of the environment’ and ‘surface quality’ in PERS), and others are not used as a proxy at all (for example ‘colour contrast’ has no proxy among the SP elements) elements were split out into PERS attributes to avoid the risk of double counting at the valuation stage. In Phase 2, the hedonic pricing work was carried out only using the attributes of links that are scored within a PERS assessment, as it was considered that this type of PERS facility was the most pertinent means of measuring the quality of the urban realm. All fourteen link attributes were considered but, since not all of these would be expected to influence property values, each attribute was tested for a relationship with property price resulting in a subset being assessed. The table below shows the attributes of links that were most highly valued in Phases 1 and 2. The first column represents the PERS attributes that the public value most in descending order, with ‘Quality of Environment’ being most important. Phase 2 revealed the potential private benefits of urban realm improvements (in no particular order). Table Table Table Table 1111:::: Link attributes valued in Phases 1 and 2Link attributes valued in Phases 1 and 2Link attributes valued in Phases 1 and 2Link attributes valued in Phases 1 and 2

Phase 1 (Stated Preference: Phase 1 (Stated Preference: Phase 1 (Stated Preference: Phase 1 (Stated Preference: User/Public BenefUser/Public BenefUser/Public BenefUser/Public Benefits)its)its)its)

Phase 2 (Revealed Preference: Private Phase 2 (Revealed Preference: Private Phase 2 (Revealed Preference: Private Phase 2 (Revealed Preference: Private Benefits)Benefits)Benefits)Benefits)

Quality of Environment Personal Security Personal Security Lighting Permeability Quality of environment User Conflict Maintenance

3.3.3.3. VALUATION OF URBAN RVALUATION OF URBAN RVALUATION OF URBAN RVALUATION OF URBAN REALM QUALITYEALM QUALITYEALM QUALITYEALM QUALITY

3.13.13.13.1 IntroductionIntroductionIntroductionIntroduction

This chapter sets out the different valuation methods that have been developed and are being developed to quantify the benefits from public realm investment. To date, there have been distinct approaches which have been applied during the course of Phases 1 and 2:

• Phase 1Phase 1Phase 1Phase 1: Stated preference work was used to estimate user benefits in a research programme conducted for TfL during 2006; and


• Phase 2Phase 2Phase 2Phase 2: Revealed preference approaches were used to calculate the impact of public realm improvements on property prices during a study conducted by MVA for Design for London in 2008.

Each approach is briefly described in this chapter to help set the context for the current broadening remit.

3.23.23.23.2 EsEsEsEstimating timating timating timating User Benefits User Benefits User Benefits User Benefits throughthroughthroughthrough Stated Preference Stated Preference Stated Preference Stated Preference

Stated preference is one of the most widely used methods for estimating non-market values. It involves surveying a target population to assess willingness to pay to obtain a certain good, or a willingness to accept to give up a certain good. The Phase 1 surveys were undertaken on two London high streets and targeted a sample of respondents that comprised residents and non residents and two trip purposes: leisure/shopping (where it is assumed that the trip is less time constrained) and commuting. Visual material was produced for each of the fifteen aspects tested. Willingness to pay was tested using three alternative payment mechanisms:

• Council Tax

• Rent, and

• Public transport fares. The most significant difficulty encountered during the stated preference exercise in Phase 1 was the variation in responses. This was attributed in part to a number of respondents stating they were not willing to pay for an element and in part to the common problems of SP as a valuation tool (e.g. presence of potential response bias, risk that values are overestimated since people are more likely to overstate what they would pay for an improvement than what they would actually pay in reality). Figure 1 shows the distribution of the willingness to pay deciles by payment mechanism in Phase 1 of the programme. Between 15% and 30% of respondents (depending on the payment mechanism) are not willing to pay anything. Thereafter the values increase dramatically, meaning the average values to be derived from the responses would be extremely sensitive to the highest values.


FigureFigureFigureFigure 1 1 1 1:::: PPPPhase1hase1hase1hase1 Willingness to Pay by Payment MechanismWillingness to Pay by Payment MechanismWillingness to Pay by Payment MechanismWillingness to Pay by Payment Mechanism

£0

£100

£200

£300

£400

£500

£600

0 10 20 30 40 50 60 70 80 90 100

Council tax - annual Rent - annual Fares - annual

In order to explain the variation in response, a number of sensitivity tests were conducted to determine what impact a variety of methods would have for each payment mechanism:

• Removal of top/tail 1%, 2.5%, 5% and 10%

• Capping annual values at £100

• Applying 17% of zero valuations to the PT fare valuations From these sensitivity tests, a single value was produced using an adjusted value for public transport fares. This adjusted value was capped for respondents stating extremely high and low values for willingness to pay. From this analysis it was then possible to determine a single adjusted value for the fifteen different urban realm attributes, each for varying levels of improvement/quality. In order to produce a method that could be applied for valuing public realm schemes, the results for the fifteen attributes were linked to PERS attributes for links and public spaces across the seven-point quality scale. Therefore, by assessing the change in the quality of the public realm using PERS, a benefit in pence per minute spent in the environment could be quantified and monetised, using the SP results. Clearly it is essential that SP valuation mechanisms appear relevant and realistic to respondents. This could imply that more than one valuation mechanism is required to accommodate different groups of respondents. In Phase 1, however, the different payment mechanisms used made it difficult to compare results from the three methods: PT fares were determined on a per trip basis, whilst Council Tax was based on an increase per annum, and rents were derived on a weekly basis. As it may not be easy for respondents to calculate the total annual amount from weekly rates, this means that the per trip and per week figures are likely to produce much higher results than the


Council tax mechanisms. In order to combine a measure from different payment mechanisms, it may in the future be more informative to ask for annual amounts. This may also give more realistic total willingness to pay amounts. Also, in order to reconcile SP with RP findings, it may be that using rent/council tax payment mechanisms will produce more comparable findings, as they would tend to encompass the same sort of link between public realm quality and property values. Lastly, it is important to keep in mind when interpreting and applying the results of this approach that SP is very good at measuring relative preferences but can produce much less reliable data in terms of absolute willingness to pay. People’s responses may not reflect the exact amount they would be willing to pay for an improvement and, indeed, there is a risk that values stated are not a true reflection of what respondents would actually pay in reality though the inclusion of ‘Cheap talk’ approaches has helped to minimise this risk.

3.33.33.33.3 Estimating Estimating Estimating Estimating Impact Impact Impact Impact on on on on Market Prices Market Prices Market Prices Market Prices throughthroughthroughthrough Hedonic Hedonic Hedonic Hedonic PricingPricingPricingPricing

Revealed preference methods, specifically hedonic pricing, can be applied to property prices and rents in order to reveal a buyer’s willingness to pay for a property’s structure, location and environs. Specifying a hedonic price function is possible by undertaking a multiple regression analysis. Regression analysis looks to identify how much of the variation in a dependent variable, e.g. property price, can be explained by variation in a number of explanatory variables (e.g. a property’s different attributes). Hedonic pricing studies typically measure the effect of social and environmental improvements on asset prices. The factors most frequently assessed through the use of hedonic pricing/revealed preference are:

• environmental quality (air, noise, water pollution); and

• environmental amenities (aesthetic views, proximity to recreational sites and green spaces etc).

Hedonic pricing is a robust and well researched tool; the theoretical advantage as a valuation technique being that it is based on observed market data and typically uses property sale prices which ultimately reflect a buyer’s true willingness to pay. However, the hedonic pricing technique has its drawbacks. Values are determined based on the assumption that rents or property price capture all the user benefits created by the urban realm (and this may not always be the case).


Moreover, hedonic pricing is unlikely to fully isolate and control for the different value created by a project as house prices, retail and office rents are the result of many variables as every property is unique. That is to say that, through revealed preference methods, it is difficult to determine how far the increase in house prices is the direct result of the improved urban realm or, in fact, the result of external factors. In previous research, RP has been used to determine the private benefits of the urban realm by incorporating PERS scores associated with the link or public space on which a property is situated into a hedonic price function, allowing the impact of urban realm quality on asset values to be isolated and monetised. This has been performed in Phase 2 using both flat sales and Zone A rental values. The RP exercise included property, public realm quality and other variables for 62 sites in Greater London. A longitudinal analysis was also undertaken, looking at 14 schemes across London and the UK and assessing the before and after impact of these schemes on property values. The Phase 2 research ended up using four of the PERS attributes to explain variations in property prices. Those attributes were: personal security, lighting, quality of environment and maintenance. In the valuation exercise an equal weight was applied to each of the four PERS variables in determining variations in property prices and, effectively, the other PERS variables were assumed to have zero explanatory power. The Phase 2 cross-sectional analysis was statistically significant explaining about half of the variation in residential prices (including a public realm quality variable based on the unweighted sum of four PERS link attributes, which was significant at the 95% level). The longitudinal analysis was a small sample and produced a range of results, from a negative change in prices of 4.3% to a 28% increase. In the application of RP in Phase 2, hedonic pricing was used to isolate the impact of the quality of the urban realm on house prices. Yet it is also possible to apply RP, and hence multiple regression analysis, to explain variation in other quantitative data sources that will be particularly relevant to Phase 3, such as health/physical activity, wellbeing or crime indicators. A consideration here will be to set out exactly what the qualitative indicators measure and represent in order to understand how the quality of the urban realm is linked to health and social factors (e.g. perceived or actual benefits, what is incorporated in that benefit etc).

4.4.4.4. QUALITATIVEQUALITATIVEQUALITATIVEQUALITATIVE FINDINGSFINDINGSFINDINGSFINDINGS

4.14.14.14.1 IntroductionIntroductionIntroductionIntroduction


In order to inform the design of the later quantitative research and to also gain further insight into possible areas of interest in urban realm improvements Accent undertook a programme of qualitative research. Although the qualitative research is a means to an end in that it helps to inform the quantitative research, it is also an end in itself. The focus groups help to bring into view the perceptions, feelings and beliefs about the importance of urban realm, bringing to light issues which the investigators themselves may not have considered.

4.24.24.24.2 Focus GroupsFocus GroupsFocus GroupsFocus Groups

The purpose of the focus groups was to examine the impact of improvements to urban realm in terms of their health and social benefits. Therefore a location was selected where there had recently been a substantial urban realm improvement. The decision was taken that the Brixton area of London would be a suitable location for this. This is because a large and substantial improvement to the main square had recently (one year previously) taken place there. This timescale meant that the improvement was not so long ago that residents would be able to still provide a “before and after” perception of the changes, while at the same time allowing for the fact that the changes were not so recent that changes to perceptions and behaviours could register in the minds of the respondents. The groups were held on 29-30 March at Lambeth Town Hall in Brixton. Subjects were recruited by a telephone sampling method. The sampling method had two criteria: one concerned age representation and the other the length of time that they had lived in the area. Accent therefore recruited 4 focus groups with the following make-up:

• Group One, recent residents (1 to 4 years): 6 participants

• Group Two, younger long term residents (5+ years): 8 participants

• Group Three, older long term residents (5+ years): 5 participants

• Group Four, recent residents (1 to 4 years): 7 participants

4.34.34.34.3 Qualitative ResearchQualitative ResearchQualitative ResearchQualitative Research Findings Findings Findings Findings

In the qualitative research we examined the following topic areas:

• general perceptions • social cohesion

• health

• fear of crime and actual crime

• sense of community

• disbenefits of regeneration

We can summarise the qualitative response to the changes in Brixton’s town centre as follows:

• elements of the urban realm do not exist in isolation but are intertwined


• health is better expressed in terms of wellbeing and is positively affected by space and community events.

• crime and fear of crime are positively affected by good lighting, space and safe access to facilities.

• social cohesion is positively affected by space and maintenance

• a sense of community is positively affected by community events and good maintenance.

• however, improvements to a town centre may adversely affect side areas, as crime and traffic, for example, are simply displaced.

As stated earlier, the benefits of the qualitative research is to inform the quantitative research, which will ultimately feed into our valuation toolkit. It is to the latter topic that we now turn.

5.5.5.5. THE VALUING URBAN RETHE VALUING URBAN RETHE VALUING URBAN RETHE VALUING URBAN REALM TOOLKITALM TOOLKITALM TOOLKITALM TOOLKIT

5.15.15.15.1 InInInIntroductiontroductiontroductiontroduction

This section describes the toolkit that is being developed to bring together the findings from the three research phases.

5.25.25.25.2 Why Do We Need a Why Do We Need a Why Do We Need a Why Do We Need a ToolkitToolkitToolkitToolkit????

The quality of our urban streets and spaces is vitally important to our cities and the quality of life of their residents. Yet for too long urban spaces were compartmentalised and treated in a mono-functional manner. Roads and streets were treated only as traffic conduits with the movement of people and goods as their sole aim, whilst other spaces served specific functions (e.g. market square, children’s play area) with little consideration for the wider social, economic and environmental roles these spaces play. More recently, increased awareness of the urban realm has started to influence the way in which urban spaces are planned, designed and managed. For example, the publication of the Manual for Streets finally laid to rest the argument that all streets needed to be designed to a set of standards that, while appropriate for motorway design, are not necessarily suitable for the spaces we live in. This increased awareness has also transcended professional boundaries, stimulating debate about the role of the urban realm and breaking down institutional silos. For example, the work undertaken by the National Institute of Clinical Excellence on Physical Activity and the Environment identifies how the nature and quality of the urban realm can impact upon people’s health and wellbeing.


If we accept that urban spaces serve a multitude of purposes, we need to be able appraise and evaluate urban realm improvements against these multi-dimensional criteria. In an environment where funding is dominated by economic and financial appraisals it is vitally important that urban realm “plays the same game”. For too long urban realm schemes have been seen as “nice to have” but without any economic justification. Generally, public sector intervention and investment in the urban realm happens for the following reasons:

• OpportunityOpportunityOpportunityOpportunity: to promote an improved quality of place and meet policy objectives e.g. regeneration / social cohesion / sustainable communities;

• Urban realm is a public goodUrban realm is a public goodUrban realm is a public goodUrban realm is a public good: it is impossible to charge users of the public realm, which is both non-rivalry and non-excludable; and

• Mechanism for publicMechanism for publicMechanism for publicMechanism for public----privprivprivprivate sector fundingate sector fundingate sector fundingate sector funding: to allocate the cost of public realm activities, such as between multiple land owners and multiple beneficiaries.

The toolkit provides a simple, structured guide to assessing the benefits of improvements to the urban realm. Therefore five policy goals underpin its structure:

• Tackling climate change

• Supporting economic growth

• Promoting equality of opportunity

• Improving quality of life & promoting a healthy natural environment

• Delivering better safety, security and health The main objectives of the toolkit are:

• Provide a consistent framework for the appraisal and evaluation of all interventions in the urban realm

• Present the most up-to-date research on the quantification and valuation of the benefits of urban realm improvements

• Encourage practitioners to consider the full range of impacts of their interventions in the urban realm

• Promote consistency in the measurement of impacts and outcomes

• Identify gaps in the valuation tools that are worthy of further investigation

• provide a clearer mechanism for apportioning public/private funding

5.35.35.35.3 Defining Urban Realm Defining Urban Realm Defining Urban Realm Defining Urban Realm for the Toolkitfor the Toolkitfor the Toolkitfor the Toolkit

Most of us will intuitively understand the term urban realm to encompass all elements of the town and city environments in which we live and work. In practice, however, definitions of the term urban realm become confused by institutional responsibilities and geographic boundaries. For the purpose of the toolkit, the following would be included within the definition of urban realm:


• The provision of all publicly accessible streets and spaces, and the design and maintenance thereof;

• The provision of all public accessible urban parks and green spaces, and the design and maintenance thereof;

• The layout and structure of links and places within the urban network, and the resulting access to all local facilities;

• The detailed design of all of these spaces (materials, furniture, etc);and

• All features of the built environment that affect the experience of people in the public realm, including the relationship between public and private space, massing of adjacent buildings and frontages.

5.45.45.45.4 Types of Types of Types of Types of SchemesSchemesSchemesSchemes That Can Make Use ofThat Can Make Use ofThat Can Make Use ofThat Can Make Use of the Toolkit the Toolkit the Toolkit the Toolkit

The urban realm can be improved at a variety of scales and through a variety of interventions. In the toolkit three scales of intervention are identified and an example of each is provided to illustrate the types of improvements evaluated. Strategic urban realmStrategic urban realmStrategic urban realmStrategic urban realm improvements improvements improvements improvements This scale of improvement is relevant, for example, to an area-wide masterplan and/or public realm and movement strategy. At this scale, improvements to the urban realm could include changes to:

• The urban layout and structure of a neighbourhood

• Provision for the movement of different modes of transport

• Provision of local facilities (community, education, health, retail)

• Provision of green space

• Definition of the character of public spaces and their roles

• Scale, character and function/usage of the buildings AreaAreaAreaArea----wide urban realm improvements wide urban realm improvements wide urban realm improvements wide urban realm improvements This scale of improvement applies to interventions in one area (e.g. a town centre or transport interchange) that are expected to have an impact on perceptions and behaviour in a wider area. At this scale, improvements to the urban realm could include changes to:

• The balance between the link and place functions of streets and spaces

• The quality of the pedestrian environment on key walking routes

• Provision for interchange between different modes of transport

• Streetscape design and character

• Design of green spaces

• Wayfinding Local urban realm improvementsLocal urban realm improvementsLocal urban realm improvementsLocal urban realm improvements Many urban improvements will be focussed on improving the experience of a very localised area. At this scale, improvements to the urban realm could include changes to:

• The interaction between vehicular traffic, cyclists and pedestrians

• The detailed design of streets and spaces

• Lighting and personal security


• Wayfinding Any appraisal should bear in mind the objectives of the scheme and focus on methods of evaluation that capture those objectives. Only by doing this can the success of investment be appropriately measured. It is crucial that this It is crucial that this It is crucial that this It is crucial that this toolkit is not treated as a ‘onetoolkit is not treated as a ‘onetoolkit is not treated as a ‘onetoolkit is not treated as a ‘one----sizesizesizesize----fitsfitsfitsfits----all’ approach to valuing urban realm all’ approach to valuing urban realm all’ approach to valuing urban realm all’ approach to valuing urban realm improvementsimprovementsimprovementsimprovements schemesschemesschemesschemes, but that each scheme is ap, but that each scheme is ap, but that each scheme is ap, but that each scheme is appraised against its praised against its praised against its praised against its intended objectives and ultimately the impacts that resultintended objectives and ultimately the impacts that resultintended objectives and ultimately the impacts that resultintended objectives and ultimately the impacts that result. . . . Regardless of the specific objective, however, the economic appraisal of urban realm improvements employs a similar logic and works through the same sort of mechanism. For each of the objectives, the chapters of the toolkit ask the same three fundamental questions:

1. Qualitative justification: What is the relationship to improved urban realm?

2. Quantitative measurement: How can we measure the benefit? 3. Monetary valuation: How can we value the benefit in monetary terms?

5.55.55.55.5 How the Toolkit Has Been DevelopedHow the Toolkit Has Been DevelopedHow the Toolkit Has Been DevelopedHow the Toolkit Has Been Developed

There is a considerable body of research, undertaken both in the UK and internationally, into the impacts of improvements to the urban realm. The toolkit brings together a variety of approaches to the valuation of these improvements. In broad terms, all of the valuation methods can be grouped into one of the following categories:

1. User benefits:User benefits:User benefits:User benefits: Benefits can be calculated on the basis of the value that accrues to individual users through an improvement. Essentially this involves estimating the value that people are willing to pay for an improvement, and represents an approach that is consistent with that applied to many other public goods.

2.2.2.2. Societal benefits: Societal benefits: Societal benefits: Societal benefits: Benefits can be calculated by estimating the value accruing to society as a whole as a result of an improvement. Hence valuation is not limited to individual users of part of the urban realm, but the resulting outcomes are calculated to be beneficial as a whole to the UK, e.g. improved health and community outcomes.

3. Financial impacts: Financial impacts: Financial impacts: Financial impacts: Improvements to the public realm can have financial impacts affecting the distribution of wealth between public and private individuals and bodies. Unless there is an over-riding wider societal gain, these impacts are not generally considered to be ‘benefits’. But their calculation is useful to understand the winners and losers of any intervention. It provides the potential to generate private sector funding by predicting the likely changes in property values, rental and land values and thereby provide a clearer mechanism to negotiate contributions to improvements.

This toolkit brings together these methods to set out a logical and practical approach to the economic appraisal of urban realm improvement schemes. It is important to note that the three approaches have significant overlaps between them and hence cannot be simply added together. We return to this point in a detailed chapter on application of the toolkit.


6.6.6.6. CONCLUSIONSCONCLUSIONSCONCLUSIONSCONCLUSIONS The Valuing Urban Realm project is a truly unique achievement in transport appraisal. In the history of business case formation for transport projects the focus on narrow transport benefits has usually been the case, often through travel time savings. However, transport projects have myriad benefits which are not captured through these more narrow forms of evaluation. This has the benefit of not “crowding out” those projects which would otherwise have great overall social impact outside of narrowly defined transport benefits. Valuing Urban Realm presents a step change in transport project appraisal, putting overall societal benefits (in health, community, etc.) on an equal footing with transport objectives. With the move towards greater cross-sector collaboration and joined-up government initiatives to increase efficiency, this project presents an opportunity to be at the forefront of such cross-sector project appraisal.

incorporating health and social benefits in the valuation of urban realm improvements

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