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To cite this Article Stull, Mark A.(2008)'Design Considerations for a 21st Century Ground Transportation System Based on Value-
Capture Financing',Transportation Planning and Technology,31:3,249 275
To link to this Article: DOI: 10.1080/03081060802086330
URL: http://dx.doi.org/10.1080/03081060802086330
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Transportation Planning and Technology, June 2008
Vol. 31, No. 3, pp. 249275
ARTICLE
MARK A. STULL
The Law Office of Mark A. Stull, Manchester, New Hampshire, USA
Correspondence Address: The Law Office of Mark A. Stull, 63 High Street, Manchester, NH
03104, USA. Email: mastulllaw@comcast.net
ISSN 0308-1060 print: ISSN 1029-0354 online # 2008 Taylor & Francis
DOI: 10.1080/03081060802086330
250 Mark A. Stull
Introduction
The beneficial effect of transportation systems on property values and
economic growth has been well documented. For example, completion
of New York Citys first subway line, the IRT, in 1904, caused property
values to rise on the west side of upper Manhattan; in the area between
72nd and 96th Streets, assessed values rose 34% from 1905 to 1913 for
taxable land west of Amsterdam Avenue serviced by the new line, while
in more distant areas to the east of Amsterdam Avenue, values rose by
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only 11% during the same period of time (Hood, 1978, p. 185). As a
second example, it has been estimated that $3.734 billion in added land
value was generated along just a 9-mile stretch of Interstate 87 near
Albany, New York, since the highway opened in the late 1950s (Batt,
2001). Many other examples exist (Smith & Gihring, 2006).
The development of new transportation systems has resulted in
windfall gains to those fortunate enough to own nearby property
(Hood, 1978, pp. 192194), while the operating and capital costs of
transportation systems have rendered it difficult to operate them
profitably on the basis of revenues generated by fares. Therefore, it
has been suggested that the economic gains realized by the beneficiaries
of transportation systems should be taxed to help finance their
construction and/or operation. For example, it has been estimated
that the cost of construction of Interstate 87 could have been paid by
capture of less than 10% of the value added to adjacent land (excluding
improvements) by the highway (Batt, 2001). While such value-capture
financing is an attractive concept, its viability necessarily depends upon
the ability of a particular transportation system to replicate the effects
of systems such as the IRT and I-87.
Some transportation systems appear not to do so. For example, a
comprehensive study of recently constructed urban rail systems in
California concluded that, although urban rail transit systems do affect
property values and land use, they do not do so consistently or by very
much (Landis et al., 1995). Another study found that the opening of the
Manchester, England Metrolink had no discernible impact on property
values, and that, in general, the railway corridors of the greater
Manchester area were regions where the value of property had a
negative premium (Forrest et al., 1996). However, as will be shown
below, there is no discrepancy between these studies and those referred
to above. The transportation systems such as the IRT in 1904 and I-87
in the late 1950s represented quantum technological leaps over the
previously existing transportation network, while the more recent
construction of urban rail systems in California and Britain did not.
This paper will attempt to identify characteristics of ground transpor-
tation systems that are relevant to their economic impact, and to
A 21st Century Ground Transportation System 251
correction factor equal to one or the ratio of the area within the n-mile
radius to the area of the ZCTA, whichever was less.
The populations within the 75 different distances of each ZCTA
were then compared to the economic data for the central ZCTA. Three
indices were used: median house value, per capita income and house-
hold income. For each index the correlation coefficient between the
index and the population within each 2-mile increment of distance was
found; in this manner a relationship was obtained between the
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0.6
0.5
Correlation Coefficient
0.4
0.3
0.2
0.1
0
84
90
0
42
60
72
0
6
8
0
18
30
36
66
78
4
12
6
54
96
24
48
4
13
15
10
12
12
13
10
11
14
R (miles)
per capita income household income median house value
Figure 1. Correlation coefficient for economic indices and population within distance,
R, of central ZCTA
A 21st Century Ground Transportation System 253
(80 km) for per capita income, 58 miles (93 km) for household income,
and 46 miles (74 km) for median house value. The peak correlation
coefficient for each index was 0.42 for per capita income, 0.49 for
household income, and 0.53 for median house value. If the correction
factor for small distances had not been applied, the same relationship
would have been observed, except that, going from larger distances to
smaller, the correlation would have a minimum at 2 miles (3 km) and a
second maximum at zero distance. It is believed that this second, zero-
distance maximum is not real, and, indeed, the use of the rough
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P
g g r(r; u)F(r; u)r dr du
0 0
(1)
where r(r, u) is the local population density and 05F(r, u)51 is the
fraction of the population at (r, u) that is willing and able to use the
transportation system to travel between the location and the point (r,
u). The fraction of potential riders, F, depends upon the numerous
characteristics of the transportation system that affect peoples will-
ingness and ability to use it; F is a function that describes the ability of a
system to provide access from one point to another.
The form of the dependence of F on travel time is suggested by census
data, specifically, the data on travel time to work. The Census Bureau
has published the number of workers over 16 whose travel time to and
from work falls within each five-minute time interval up to 44 minutes,
as well as for the time intervals from 45 to 59 minutes, 60 to 89
254 Mark A. Stull
at(r;u)
F(r; u) Ae (2)
where the exponential gives the travel time dependence and the
proportionality factor A includes the dependencies on all other factors
such as fares.
Equations (1) and (2) imply a relationship between indicators of
wealth such as income and real estate values, which appear to depend
on transportation-accessible population, and speed of travel, v. If travel
time, t, is replaced by r/v, and it is assumed, for the sake of simplicity,
that A, v and the population density, r, are constant over the region of
integration; evaluation of the integral gives the following result:
2pArv 2
P (3)
a2
This suggests that, all other factors being equal, transportation-accessible
population, and the resulting economic effects, depend strongly on
the average speed of travel, increasing as its square. This result will be
0
0 20 40 60 80 100 120
-0.2
Log of Population Fraction
-0.4
-0.6
-0.8
actual
best fit
-1
-1.2
-1.4
-1.6
-1.8
Time Interval
where the values were summed for each 2-mile shell around the central
ZCTA using the average population density for that shell, the appro-
priate value of r, and the value of a determined from the travel time to
work data, 0.005690.0025 min1. The latter was found by
excluding the data point for the shortest time interval, which has the
highest deviation from the best-fit line (including that data point would
have changed the result to 0.005090.0029 min1). The population
calculation was repeated for all values of v from 2 to 90 mph (3145 km/
h), in 2 mph increments, and the resulting values for transportation-
accessible population were then correlated with the three economic
indices for the central ZCTAs. The correlation coefficients were thereby
found as a function of velocity. The results are plotted in Figure 3. It can
be seen that as speed increased, the correlation coefficient increased to a
maximum and then declined. The observed maxima occurred at 12 mph
(19 km/h) for per capita income (0.41), 16 mph (26 km/h) for household
income (0.47) and 10 mph (16 km/h) for median house value (0.52).
These are the speeds for which estimated transportation-accessible
population, calculated on the basis of the travel time to work data, is
most highly correlated with income and property values.
At first glance, these speeds seem a little slow for typical automobile
and rail travel. However, the calculation is subject to significant
uncertainty because the value of a is not well determined by the data.
More negative values within one or two standard deviations would give
higher speeds; for example, a two-sigma change to a 0.011 would
give 26 mph (42 km/h) for per capita income, 30 mph (48 km/h) for
household income and 18 mph (29 km/h) for median house value.
More importantly, according to the Census Bureaus description of the
travel time data, the times include time spent waiting for public
transportation, picking up passengers in car pools and time spent in
other activities related to getting to work. Therefore the calculated
speeds do not represent actual vehicle speeds, but average speed from
departure to arrival, which, the data suggest, is the relevant speed that
determines economic effects. The existence of the maxima at speeds
that can plausibly be associated with common ground transportation
modes supports the thesis that transportation-accessible population is
256 Mark A. Stull
0.6
0.5
Correlation Coefficient
0.4
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0.3
per capita income
household income
median house value
0.2
0.1
0
4
8
12
16
20
24
28
32
36
40
44
48
52
56
60
64
68
72
76
80
84
88
92
96
Velocity (mph)
0.9
0.8
0.7
Correlation Coefficient
0.6
0.5
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0.4
0.3
0.2
0.1
4
0
6
2
8
4
0
6
14
20
26
32
38
44
50
56
62
68
74
80
86
92
98
2
8
10
11
11
12
12
13
14
14
R (miles)
Figure 4. Correlation coefficient for traffic counts and population within distance, R, of
Arizona highway segments
ds ds
f scv 0
df df
Solving for f,
1
f cv (5)
d ln S=df
We expect d ln s=df to be negative, since ridership should decline as
fares are raised, all other things being equal. Thus, in a purely fare-
based system, the fare which maximizes profitability (or minimizes
losses, if, in this model, fixed costs are too high), is a multiple of total
cost per passenger mile, bcv, where b 1(cv (d ln s =df ))1 : For ex-
ample, if, for mathematical simplicity, we assume that ridership
declines exponentially with increasing fares, such that sAeaf then
the optimum fare becomes fcv(1(acv)1).
For the value-capture model, profitability also depends upon value-
capture revenue, v, which is expected to increase with ridership or
transportation-accessible population, depending on the manner in
which the revenue is raised. The model used here assumes that there
is a system owner or operator, which could be either a private entity or
a government agency, that is paid money raised by a value-capture
mechanism that taps economic activity stimulated by ridership.
Modifying Eq. (4) accordingly, and finding the optimum fare, as
before,
dv
f bcV (6)
ds
If, for example, value-capture revenue is linearly related to ridership,
then f bcv v0.
Thus, in the value-capture model, profitability is enhanced by
reducing fares, possibly to zero (or less, as by offering riders some type
of reward), to increase ridership (or accessibility), subject to the caveat
that the model used here implicitly assumes that the system has adequate
or excess capacity. For a capacity-limited system, higher fares could
provide a means to restrain demand. In addition, the actual profit earned
260 Mark A. Stull
with value-capture at the optimum fare, according to Eq. (6), will always
be higher than the profit earned solely from fares at the optimum fare
according to Eq. (5). Thus, higher system capital costs are justified by
value capture where the resulting higher profitability improves return on
investment. In other words, expensive investments in new transportation
systems or technology may be justified if they sufficiently boost
accessibility and ridership, and may not be justified if they dont.
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Capacity
The passenger stream on a transportation system can be regarded as a
current measured by the number of passengers per unit time. For any
ground-based (one-dimensional) transportation system the flux, or flow
rate, can be defined as rv, where r represents the passenger density
(number of passengers per unit length) of the system, and v the speed at
which they move. The capacity of a system is the maximum flux it can
carry by operating at the highest passenger density and velocity safely
achievable, provided r and v are independent of each other. However,
passenger density may depend upon velocity, in which case higher
speeds can actually reduce capacity. Value-capture-based systems need
to be designed to have high passenger density at high speeds.
If, for simplicity, all vehicles on a system are of the same length, L,
and are separated by a headway distance, H, passenger density is
m
r (7)
(L H)
v22
Hbw v2 tr (8a)
2a
(v22 v21 )
Hsa v2 tr (8b)
2a
where a is the deceleration rate, v1 and v2 are the speeds of the (slower)
preceding and (faster) following vehicles, respectively, and tr is the
reaction time required for the following vehicle to begin deceleration.
The safe-approach criterion can be further relaxed for systems where
the following vehicle can switch to another lane or track to avoid a
decelerating preceding vehicle.
These simple formulas have important consequences for the design of
transportation systems. For a system in which high and low speed
vehicles, such as passenger and freight trains, operate in the same lane,
the safe-approach criterion requires headways nearly as large as the
brick-wall criterion, which is really a special case of the safe-approach
criterion for v1 0. On the other hand, in a system in which all vehicles
are operated at identical or nearly identical speeds, the safe-approach
criterion permits very short headways, approaching zero if reaction
time can be minimized. To maximize capacity, the system must be
designed to permit the use of the safe-approach criterion; this, in turn,
requires dedicated, congestion-free guideways, where all vehicles
operate at nearly identical speeds, preferably under central control.
To understand this, consider first what happens when speed
differences between vehicles are large, that is, v2v1. In that case, the
safe-approach headway can be approximated by the brick-wall head-
way, with the result that, for reasonably expected reaction times, H
v2/2a. Substituting this into Eq. (7), system capacity (maximum flow
rate), K, becomes
262 Mark A. Stull
mv
K rv
L v 2 =2a
In the limit of high velocity, this reduces to
2am
K (9a)
v
Thus, we have the perverse result that increasing system velocity
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mv
K (9d)
L
d
v
fnt s (2n 2)vm =a [d (2n 2)v2m =2a]=vm g
d
(10)
[nt s (2n 2)vm =2a d=vm ]
Load Factor
Load factor considerations are less susceptible to mathematical
analysis. Load factor depends upon the willingness and ability of
passengers to use a particular type of transportation. This is subjective,
and, obviously, differs from one person to another. However,
numerous studies have documented the effect of a variety of factors;
for example, a recent study of 28 transit systems found that ridership
was increased by service adjustments, including increases in the
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Stations
The number and character of stations is an important determinant of
economic-growth potential. The greatest value enhancement occurs
near stations (Brinkerhoff, 2001), and station characteristics strongly
influence both capacity and load factor. The derivation of Eq. (3)
implicitly assumed that all elements of the population have equal access
to the transportation network. Accessibility is increased by a system
with numerous, closely spaced points of access and egress rather than
one which services only a handful of widely separated locations,
provided stations do not decrease capacity and load factor by impeding
traffic flow and increasing travel time.
Modern transportation systems use both on-line and off-line stations.
Most rail systems use on-line stations, where the station is located on
the main guideway, upon which vehicles stop while in the station.
Interstate highways, on the other hand, use the equivalent of off-line
A 21st Century Ground Transportation System 267
Guideways
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Switching
Switching capability is an important determinant of capacity. If a
vehicle has to slow significantly in order to switch, or if slow speed of
the switch constrains minimum headways because the switch must be
reset, capacity drops. Rubber-tire vehicles on flat roadbeds have
continuous switching capability at peak speed; this capability is
difficult or impossible to replicate in steel-wheel on rail systems. It
should also be possible to design maglev systems to have continuous
A 21st Century Ground Transportation System 269
Acceleration/Deceleration
Equations (8) and (9) demonstrate that capability for rapid vehicle
acceleration and deceleration decreases headway and increases the
average speed. Harder to quantify, but probably more important,
acceleration capability increases load factor by enabling frequent, high-
speed express service on lines with closely spaced stations. For example,
a vehicle which is capable of operating at a peak speed of 100 m/s, but
can accelerate at only 0.25 m/s2, values typical of some high-speed
trains, requires a distance of 20 km to reach peak velocity, and, if it
decelerates at approximately the same rate, a like distance to stop.
From Eq. (9), such a vehicle requires that stations be separated by at
least 120 km if it is to achieve an average speed between them equal to
270 Mark A. Stull
Control Systems
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Technology Comparison
Three competing transportation technologies are considered here: steel-
wheel-on-rail, rubber-wheel-on-pavement, and electromagnetic. Sys-
tems based on each of these can be designed to use off-line stations,
dedicated guideways and relatively small vehicles. Differences impor-
tant to ridership and accessibility include speed, rate of acceleration
and deceleration, amenability to central control, and switching
capability.
The capacities of the three competing modes have been compared by
assuming approximate, representative values for peak velocity, accel-
eration and deceleration; these are shown in Table 1. In addition,
Table 1 includes corresponding values for a high-speed train similar to
the French TGV. The parameters chosen for the self-propelled railcar
are based on the DMU manufactured by Colorado Railcar, Inc. The
values for maglev are somewhat arbitrary. Electromagnetically pro-
pelled systems can be designed to operate at widely ranging velocities
and accelerations. Furthermore, they need not be levitated; linear
peak operating speed, are well within the capabilities of linear motors,
and there is no reason why transportation systems should not be
designed to take advantage of them.
Capacity was evaluated in two ways. First, Eq. (9) was used to
calculate the average velocity between adjacent stations as a function of
station separation in kilometers; the equation was appropriately
modified to use a deceleration rate higher than the acceleration rate,
and to allow use when the distance between stations is too short to
permit acceleration to peak speed. These system velocities also
represent the relative capacities of the systems if it is assumed that all
can provide the maximum passenger density achievable with the
smallest permissible safe-approach headways, with all vehicles operated
at identical speeds under central control. Although this proposition is
doubtful, it represents a limiting case. The other limiting case, that all
systems use brick-wall headways, was chosen as the other method for
evaluating capacity. Relative capacities were calculated from Eq. (9a),
assuming m1 for each system. The system velocities and brick-wall
relative capacities are shown in Figures 5 and 6, respectively, each as a
function of distance between adjacent station stops. The brick-wall
headways used are shown in Table 2. For the maglev system, system
velocities were calculated using the same deceleration rate as the
acceleration rate, while the brick-wall headways were calculated using
the extremely high emergency deceleration rate.
It is clear from Figures 5 and 6 that high-speed trains are poorly
suited for value-capture financing. Because high-speed trains cannot
accelerate or decelerate sufficiently rapidly, their ability to operate
between closely spaced stations is limited. Indeed, for station separa-
tions smaller than about 10 km, high-speed trains may actually be
slower than buses and self-propelled railcars, while they are substan-
tially faster only when stations are separated by more than 25 km, and
require still larger station separations before they can achieve an
average speed higher than 75% of their peak operating speed.
Even worse, brick-wall headways are much larger for high-speed trains
than for any other system. At all station separations brick-wall relative
capacities are much higher for buses, while self-propelled railcars have
substantially higher brick-wall relative capacities than high-speed
272 Mark A. Stull
160
140
120
100
HST
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Railcar
80
Bus
Maglev
60
40
20
0
1 2 5 10 25 50 100 250 500
2.5
HST
Railcar
1.5 Bus
Maglev
0.5
0
1 2 5 10 25 50 100 250 500
sensitive to snow, ice and wind. Provided design criteria are met, both
modes are viable, if not ideal, for value capture. The choice between
them depends upon the specific system under consideration, especially
as the values used here for relevant parameters may not apply to
specific makes or models of buses or railcars, which may be capable of
superior performance.
Conclusion
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Acknowledgements
The author wishes to express his appreciation to Professor Henry Kolm, retired,
Downloaded By: [2008-2009 LungHwa University of Science and Technology] At: 10:44 25 February 2009
formerly of the Massachusetts Institute of Technology and one of the visionaries who
pioneered maglev as a viable transportation technology, for stimulating some of the
ideas developed in this paper, and to Thomas Johnson, who assisted in some of the data
analysis.
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