NSF Grant Funds UB Study on Economic Effects of Urban-Planning Strategies

BUFFALO, N.Y. -- A major problem faced by urban planners is the unpredictability of planning outcomes. Until recently, it has been virtually impossible to know how a land-use or infrastructure investment strategy would affect the development of a metropolitan area over time. It has not been possible even to reason about these things in a systematic, rational manner.

Things are looking up, however.

Alex Anas, Ph.D., Frank H. and Josephine L Goodyear Professor in the Department of Economics in the University at Buffalo College of Arts and Sciences, has developed a new strategic-planning model that will allow urban planners to examine alternative "what-if" scenarios in advance and predict their consequences.

Anas (pronounced an-ahs) and his interdisciplinary project team have received a $450,000 award from the National Science Foundation (NSF) to continue their three-year study of the effect of different infrastructure investment-and-financing strategies on the development of metropolitan areas.

Anas explains that previous urban-planning models have not incorporated economic theory and that this has led to great difficulty in understanding the consequences of decisions that would be made by individuals and businesses in different economic and policy environments. The new model, however, applies advanced microeconomic theory to these complex problems.

"It allows us to look at the development outcomes should one or another tax structure be applied, for instance, or if one highway expansion scheme or another is adopted," he says. "We can sketch the consequences of a specific land-use strategy or infrastructure plan 10 years out or 20 years out.

"This has not been possible before. If planners can begin to use such models systematically, they will be able to operate with a much clearer understanding of the costs and benefits of their actions."

An internationally known urban economist, Anas pioneered the use of such policy-oriented models of urban economies in the 1980s as a professor at Northwestern University.

One central question of his current study, he says, is whether combinations of infrastructure and land-use policies can be found that, over a period of time, can induce enough change in the market for land use to improve significantly economic efficiency and save resources.

"What policies would work best over time, for instance, to slow growth?" he asks. "Portland, Oregon, has done it by imposing a growth boundary around the region. What can be done to help Atlanta reduce traffic congestion and continue to grow? That city is having difficulty getting federal highway funds because of violations of air-quality standards.

"There has been a lot of guesswork involved in answering such questions," Anas says. "We can now answer them by taking into account how land markets operate, and with a much-higher probability of being accurate in predicting outcomes.

"Another question we hope to answer," he says, "is how different development strategies promote equity among various social groups and how these strategies rate according to indices of urban environmental quality, like vehicle miles traveled, accessibility to urban opportunities and open space, and affordable housing."

He notes, for instance, that the Portland growth boundary frequently is blamed for raising rents in the city and hurting low-income residents at the expense of landowners. Excessive traffic congestion in Atlanta may contribute to lower housing prices there, compared to metropolitan areas of similar size.

The new model can assess the effects on a region of applying different land-use regulations like urban growth boundaries, greenbelts and green corridors, or minimum-density limitations.

Anas started the interdisciplinary study in January 1999 with colleagues at the University of Illinois at Chicago and at Urbana-Champaign, who have expertise in transportation engineering and urban and regional planning, respectively.

The team is using Chicago regional data to produce the next generation of integrated transportation and land-use models -- in this case, a dynamic model of the Chicago metropolitan region that simulates development over time in yearly increments. The next phase of the project calls for evaluation of the net benefits of various strategies for the region.

Anas says that unlike previous models, this one can classify groups by income levels, can treat work vs. non-work travel in peak and off-peak periods, industrial sectors and service employment and linkages between the two. It also treats vacant land and several housing and commercial-building types.

Such differentiation is important, he says.

"In the case of highway planning, for instance, it is important to attend to the fact that individuals engage in increasingly complex non-work travel. Without paying attention to such travel, planners cannot accurately predict public-transit needs or plan highway-development strategies," he says.

Among the infrastructure strategies the team will assess are those for transportation -- public transit, arterial roads and freeways -- as well as sewers and water supply. Researchers also will look at the outcome for the area of alternative infrastructure-financing schemes, which combine federal and state subsidies, developer-incurred costs and property-tax financed costs.

Anas points out that developers frequently are blamed for creating excess urban sprawl when they are just responding to market incentives and that it is government actions with respect to infrastructure finance that often are directly responsible for the extent of excess sprawl.

Anas has published broadly in urban and regional economics. He has contributed to theories of urban structure, urban growth and urban spatial self-organization, and housing-market dynamics.

His interests include the regulation of housing markets in Europe, the structure of housing prices, transportation and its relationship to land use and residential location, and environmental economics.

Since 1975, he has been awarded eight NSF research grants and has received major grants from the federal departments of Transportation and Housing and Urban Development, and the Federal Transit Administration. He has held visiting appointments at major institutions, including Stanford University, the Royal Institute of Technology (Sweden), the Center for Regional Science Research, Umea University (Sweden), the National Center for Supercomputing Applications at the University of Illinois at Urbana-Champaign, and the University of Southern California.

Since the 1980s, his major studies in urban economics have guided urban-transportation investments in the Chicago area, housing-market regulation in Sweden, urban transportation-service improvements in New York City and improvements in the welfare of low-income housing consumers in Chicago, Houston, Pittsburgh and San Diego.

"The economics of urban development," he says, "are among the most fascinating, challenging and important of the problems economists could ever hope to study."