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Making the economic case for better streets and places

Making the economic case for better streets and places. Scene setting. UK population increased by 5.8% between 1998 and 2009, accompanied by £10 billion increase in spend over that period That spending is not reflected on the high street Shopping as a share of all trips is falling

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Making the economic case for better streets and places

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  1. Making the economic case for better streets and places

  2. Scene setting • UK population increased by 5.8% between 1998 and 2009, accompanied by £10 billion increase in spend over that period • That spending is not reflected on the high street • Shopping as a share of all trips is falling • On average there were 19% fewer shopping trips in 2011 compared to 1995-7 • High street spending only accounted for half of all retail spend in 2011

  3. Investment in the public realm • Generally held view that it’s good for retail and regeneration • Challenging area to measure; limited number of cost benefit analyses, mostly case study evidence • Focus on footfall, economic activity and consumer and business perceptions • Diversity of retail offer beyond the scope of this paper

  4. Methodological challenges • difficult to transfer the findings to formal economic forecasting and appraisal methods • Some information (e.g. prices, rents and attributes of buildings) is confidential • Hard to prove empirically that an improved pedestrian environment has had a direct impact on sales (to the exclusion of other factors) • How to measure indirect benefits • Boundaries are fuzzy

  5. Report structure The report reviews the evidence for: • Impacts on existing business • Urban regeneration • Improved consumer and business perceptions As a result of improvements to the public realm.

  6. Impacts on existing business • Well planned improvements to public spaces can improve retail sales by 30% and retail footfall by 10-25% • There is a general finding that pedestrians and cyclists are better customers and spend more than people arriving by motorised forms of transport - even when they buy smallerquantities

  7. Urban regeneration • The importance of improving public spaces is commonly acknowledged. This section looks at the evidence of benefits on: • Investment, tourism and business start-up rates • Effects on property and rent • Employment benefits, and • Social exclusion

  8. 1. Local economic development • Improving the public realm is an important part of urban regeneration • Limited evidence linked to start-ups (figures included in total turnover) • need to account for displacement and substitution effects • Some start-ups likely to benefit, tourism also seen to benefit

  9. 2. Effects on property and rent • Evidence that public realm improvements positively affect property prices • Hong Kong controlled study found 17% increase in rental value following pedestrianisation • Walking and non-motorised projects increase land values from 7-300% • Relationship to property values shows increases of 21.7% for retail rents and 24.2% for commercial rents

  10. 3. Employment benefits • More jobs are created through pedestrian and cycling construction projects than road construction projects • Higher employment can be inferred from higher turnover, but difficult to prove additionality • Sheffield reported the creation 321-385 net additional jobs, based on attribution rates of 20-90% depending on how close to the original investment

  11. 4. Social exclusion • Substantial urban regeneration projects often located in areas of deprivation • Few studies evaluate whether property or infrastructure improvements deliver for those communities • Perceptions of an area really matter – can reinforce feelings of social exclusion or raise self-esteem and persuade business to invest

  12. Consumer & business satisfaction • Broadly positive link between urban environment and commercial returns • Retailers over-estimate extent to which customers drive and importance of parking • Shoppers more concerned by range of shops and the attractiveness of the environment • A good street environment is so important, people are willing to pay for it • It’s about the experience

  13. Conclusions • Challenging to establish a causal link between public realm improvements and benefits to business • But there is a good body of case study evidence supporting the case • Some businesses appear out of step with their customers • People show a willingness to pay for better streets

  14. Conclusions policy recommendations • Suggestions: internet sales tax, restrictions on out of town developments and change of use […] and congestion charging – and reinvest funds raised in the high street • Investigate consumers’ willingness to pay for local environmental improvements • Businesses over-value the importance of parking and car access – communicate the importance customers place on quality public areas

  15. policy recommendations, continued • Ensure that public realm improvements are carefully designed to benefit the local population too – higher property prices and rental value can also have a negative impact on local access and business diversity. [how to link to community street audits?] • and • Better evaluation built into project design

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