Economic Development

Author: Chengri Ding, Yi Niu, and Gerrit-Jan Knaap

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Synopsis: Previous research provides evidence that jobs and firms in U.S. metropolitan areas are concentrated in economic centers, creating a polycentric urban form. Previous research also suggests that firms realize localization economies when they locate near other firms in the same industry and urbanization economies when they locate near firms in other industries. In this article, we tie these concepts together in an exploration of the spatial distribution of employment in the Baltimore-Washington metropolitan area. Our analysis suggests that the spatial distribution of employment in Maryland is characterized by the existence of concentrated employment centers that create a polycentric urban form. What is more, we find these centers provide both urbanization and localization economies as well as unspecified locational advantages.

Author: Elijah Knaap, Chengri Ding, Yi Niu, Sabyasachee Mishra

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Synopsis: We present in this paper an analysis of economic centers and their role in shaping employment development patterns and travel behavior in the state of Maryland. We begin by identifying 23 economic centers in the Baltimore-Washington region. We then examine these centers first in their role as centers of economic activity then in their role as nodes in the state‚Äôs transportation system. Finally, we identify the commute sheds of each center, for multiple modes of travel and travel times, and examine jobs-housing balance within these various commute sheds. We find that Maryland‚Äôs economic centers not only promote agglomerative economies and thus facilitate economic growth; they also generate a disproportionate number of trips and promote transit ridership. These results provide empirical support for policies that promote polycentric urban development, and especially policies that promote polycentric employment development. Further, they suggest that polycentrism as a sustainable development strategy requires careful coordination of regional transportation systems designed to balance jobs and housing within a center‚Äôs transit commute shed. Based on these findings we recommend that the Maryland state development plan and regional sustainable communities‚Äô plans across the nation should encourage the concentration of employment within economic centers and encourage housing development within the transit commute sheds of those centers.

Author: Iseki, Hiroyuki and Robert P. Jones

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Synopsis: Transit Oriented Development (TOD) is commonly adopted in regional transit plans as a tool toachieve economic growth, sustainable land use patterns, and pedestrian-friendly communities.Some critics, however, have questioned TOD as an agent for net job creation. While someresearch¬†has used case studies and agglomerated regional datasets to examine changes inemployment near transit with positive results, there is a paucity of literature examining therelationship between rail stations and employment by industry at the transit station level.This is a descriptive study that seeks to address three key questions about the effects ofstation proximity: 1) What is the overall distribution of firms in relation to metro stationlocations? 2) What industries, if any, are more likely to locate near transit stations? 3) Does anew transit station result in a net gain of firms within the station proximity and for the region ordoes it merely redistribute existing firms? This study applies GISs to examine the NationalEstablishment Time Series (NETS) dataset within the region comprising Washington DC,Montgomery, and Prince George‚Äôs Counties in Maryland. The NETS dataset contains longitudinal and cross-sectional firm-level data for the years 1990 - 2010, which allow us to lookat changes in the number of firms within relatively small geographic areas around Metro stations, several of which were constructed during the 21-year period. The NETS dataset also provides firm-level relocation information for the same time period to assess firm movement within and outside of the study area as they relate to transit stations.First, we identify firms within station buffers and conduct a location quotient analysis.Second, we conduct a spatial analysis of firm locations over time, applying choropleth maps, descriptive spatial statistics, and hot spots analysis. Third, we plan to apply a space-time cluster analysis that visualizes the distribution of spatial- temporal data, taking into account the time dimension, and enables us to identify clusters of events constrained by both space and time.Finally, using NETS firm relocation data for the period of 1990 to 2010, we conduct an analysis of firm locations before and after each relocation. The analysis is conducted for all industries asa group and a few specific industries that show a strong presence in the region, including finance, insurance, and real estate (FIRE) industries, which have been found to predominate in dense economic centers.This study contributes to the literature on the effect of transit investment and TOD on economic development, particularly addressing the question of net effects for locations beyond the immediate station area, which is an important implication from a regional planning perspective.

Author: Eli Knaap, Gerrit-Jan Knaap, and Chao Liu

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Synopsis: A renewed interest has emerged on spatial opportunity structures and their role in shapinghousing policy, community development, and equity planning. To this end, many have triedto quantify the geography of opportunity and quite literally plot it in a map. In this paperwe explore the conceptual foundations and analytical methods that underlie the currentpractice of opportunity mapping. We find that opportunity maps can inform housing policyand metropolitan planning but that greater consideration should be given to the variablesincluded, the methods in which variables are geographically articulated and combined, andthe extent to which the public is engaged in opportunity mapping exercises.

Author: Ting Ma, Eli Knaap, and Gerrit-Jan Knaap

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Synopsis: Transit oriented development (TOD) is a widely accepted policy objective of many jurisdictions in the United States. There is both anecdotal and empirical evidence to suggest that the vitality of TODs and the transit boardings from any TOD depends significantly on the extent of retail development in the transit station area. We focus in this paper, on the determinants of retail location in two counties, MontgomeryCounty and Prince George‚Äôs County, Maryland, with a particular focus on the influence of proximity to rail transit stations. We used data from two counties in the Washington DC suburbs to construct measures of transit and retail accessibility and constructed an econometric model to estimate the relationship between urban contextual factors and retail firm locations. The results from our analysis provide empirical support for the notion that retail firms are attracted to locations with high levels of transit accessibility. By extension, these findings suggest that investments in transit‚ particularly fixed rail transit‚Äîmay be an effective method for stimulating retail development in metropolitan areas.

Author: Ding, Chengri

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Synopsis: Beijing has a unique spatial pattern that is characterized by an inverted U-shape building height curve and geometrically developed transportation network (rings of highways and axial roads). The inverted U-shape curve of building heights is mainly the outcome of building height restrictions in inner city for historical preservation. This paper estimates the economic costs of the building height restrictions by using land development data. Through comparing land development without building height restrictions and simulations, we show that the economic costs are substantial. The impacts of the building height restrictions include land price decrease by up to 60%, housing output decrease by up to 70%, and land investment decrease by 85%. To accommodate the loss of housing output, the city edge has to expand, causing urban sprawl (given all other things equal). In order to offset building space reduction, housing prices rise by 20% and the city edge expands by 12%. Finally, induced travel costs resulting from urban sprawl and low density caused by building height restrictions may not be trivial.

Author: Sohn, Jungyul, Songhyun Choi, Rebecca Lewis, and Gerrit Knaap

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Synopsis: Although measuring sprawl based on morphology is conceptually simple and easy to implement, it is of limited use for deriving implications for urban planning. However, measuring sprawl based on accessibility enables us to observe the impact of development and establish a customized place-based policy by examining the spatial variation within the region. This study aims to develop and operationalize accessibility-based sprawl indicators. For this purpose, it employs two accessibility based sprawl indicator categories and develops their measures: accessibilities to urban functions and open space. From the case study, the findings reveal that the accessibility-based sprawl index shows a clear difference from the morphology-based ones, suggesting that the judgment on sprawl may be wrong if it is purely based on morphology.

Author: Jason Sartori, Terry Moore, and Gerrit Knaap (2011)

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Synopsis: Maryland is often referred to as the birthplace of smart growth, a movement in land use planning that contributed to what is now referred to as sustainability planning, sustainable development, and sustainable communities. Maryland adopted a Smart Growth Program in 1997 with the primary purposes being to use incentives to (1) direct growth into areas already developed and having public facilities, and (2) reduce the conversion of farm, forest, and resource land to urban uses.

Author: Chengri Ding and Erik Lichtenburg

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Synopsis: Land to accommodate urban development in China is provided through requisitions by government officials, suggesting that land availability may be a constraint on urban economic growth. ¬†An econometric model of urban GDP growth suggests that land has constrained economic growth in coastal areas but not elsewhere. ¬†Elasticities calculated from the estimated coefficients indicate that land availability has a larger proportional impact on economic growth than domestic and foreign investment, labor supply, and government spending. ¬†The estimated parameters provide evidence about arbitrage opportunities created by discrepancies between urban land value and compensation for requisitioned rural land, suggesting rural unrest associated with conversion of farmland to urban uses may have some economic roots.

Author: Nikhil Kaza, Gerrit Knaap, and Kelly Clifton (2009)

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Synopsis: This paper illustrates the use of scenarios in land use, environmental and transportation planning in and around the State of Maryland. Different assumptions about futures result in different patterns of growth with differential impacts on particular sectors of the economy. Such different patterns require formulation of contingent plans as well as robust plans. In this paper, we illustrate the quantitative modelling methodology of loosely linked economic demographic, transportation and other impact assessment models in constructing two scenarios; one of which represented the best possible guess about the continuation of the future and other involving rapid changes to energy prices and Federal spending. We illustrate the spatial development outcomes and the transportation and environmental plans that are necessary to deal with these different outcomes. Further, we illustrate that different planned actions have different efficacies in different futures and thus multiple futures should be carefully considered. Finally, we illustrate the notions of contingent plans and robust plans.

Author: Erik Lichtenburg and Chengri Ding

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Synopsis: We investigate conceptually and empirically the role of economic incentives in the primary land allocation in China in recent years. ¬†A theoretical analysis demonstrates how recent fiscal and governance reforms give rise to land conversion decisions and long run urban spatial sizes that respond to economic incentives even though the allocation of land between urban and rural uses is determined administratively. ¬†An econometric investigation of China‚Äôs coastal provinces finds that changes in urban area are increasing in the value of urban land and budgetary government revenues and decreasing in the value of agricultural land, results consistent with the theoretical analysis.

Author: Nikhil Kaza, Gerrit Knaap, and Douglas Meade (2008)

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Synopsis: This paper illustrates the application of various forecasting methodologies in constructing multiple scenarios for the state of Maryland using Long term Inter Industry Forecasting Tool that tracks inter-industry outputs at a macro scale, and State Employment Model that disaggregates these outputs to the states. We then use accessibility, land availability and observed relationships of employment categories to distribute employment at a county level. In this paper, we identify the possible advantages and pitfalls of using large scale economic models to drive employment forecasts at the county level. This framework allows for simulating the implications of macroeconomic scenarios such as changes in exchange rates and unemployment levels, as well as local land use and transportation policies on local employment and demographics. In particular, we focus on two scenarios as test cases both of which involve very different ideas about how future might unfold and their effects on land use and transportation policy prescriptions. One of the scenarios involves, among others, rises in health care spending over the next few years and the other involves increases in energy prices. As will be shown, they have different spatial effects and suggest different policy actions on the part of various governments.

Author: John Frece, Jason Sartori, and Rebecca Lewis (2008)

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Synopsis: The Community Legacy program was established in 2001 through a bill introduced by the administration of former Maryland Governor Parris N. Glendening as part of the larger Smart Growth and Neighborhood Conservation Initiative.¬† The Community Legacy program and its companion effort, the Neighborhood BusinessWorks program, were specifically created to direct state resources to existing community-scale neighborhoods as part of the state‚Äôs broader effort to reverse a decades-long trend of urban disinvestment and abandonment. Considered somewhat unorthodox when they were started, these programs have since become readily accepted by local governments as mainstays of their revitalization strategies.

Author: The National Center for Smart Growth (2007)

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Synopsis: At the request of the Prince George's County Economic Development Corporation, the National Center for Smart Growth Research and Education and the University of Maryland's Real Estate Development Program have undertaken an analysis of the federal government's leasing presence in the greater Washington metropolitan region.

Author: Gerrit Knaap and John Frece (2007)

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Synopsis: Spring of 2007 will mark the 10th anniversary of the passage of Maryland‚Äôs Smart Growth and Neighborhood Conservation Initiative; an effort designed to discourage sprawl development, foster more compact communities, protect the best remaining farms and open space in the state, and save taxpayers from the growing cost of providing services and infrastructure to serve far-flung development. Almost before its various provisions took effect in 1997 and 1998, the Maryland initiative generated interest and acclaim across the country. It received numerous awards and became the principal legacy of the program‚Äôs primary architect, former Governor Parris N. Glen- dening. Governors in other states, such as New Jersey, Colorado and Massachusetts, instituted their own ‚Äúsmart growth‚Äù proposals, often modeled after portions of the Maryland program. Even the popularity and wide usage of the now omnipresent phrase ‚Äúsmart growth‚Äù can be attributed in large part to the Maryland program.But, what has been the effect of Maryland‚Äôs Smart Growth pro- gram? Looking at it some ten years later, has it worked? Did it accomplish what it was designed to do? What have been the strengths and weaknesses of the Maryland approach, and how can lessons from the Maryland experience be used to offer a new set of policymakers in Maryland, as well as elsewhere in the nation, practical suggestions on how to make smart growth smarter?

Author: The National Center for Smart Growth (2007)

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Synopsis: At the request of the Prince George's County Economic Development Corporation, the National Center for Smart Growth Research and Education and the University of Maryland's Real Estate Development Program have undertaken an analysis of the federal government's leasing presence in the greater Washington metropolitan region.

Author: Anna Alberini (2005)

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Synopsis: State Voluntary Cleanup Programs (VCPs) were established starting in the 1990s to encourage the environmental remediation and redevelopment of contaminated properties. These programs typically offer liability relief, subsidies and other regulatory incentives in exchange for site cleanup. This paper asks three questions: First, what type of properties are attracted to voluntary cleanup programs? Second, what is the interaction between these state programs and other incentives for remediation and economic development, such as Enterprise Zone and Brownfield Zone designations? Third, what is the effect of participation in the VCP on property values?We use data from Colorado‚Äôs VCP to answer these questions. We find that most of the properties enrolled in this program were not previously listed on EPA‚Äôs contaminated site registries, and that most applicants seek to obtain directly a ‚Äúno further action‚Äù determination without undergoing remediation. The main determinants of participation are the size of the parcel and whether the surrounding land use is primarily residential, while other incentives have little effect. Properties with confirmed contamination sell at a 47% discount relative to comparable uncontaminated parcels, and participation tends to raise the property price, but this latter effect is not statistically significant.Taken together, these findings suggest that the participating properties are those with high development potential, and hint at the possibility that owners or developers may be seeking to obtain a clean bill of health from the State with only minimal or no cleanup efforts. Were these findings confirmed with data from other states, they would raise doubts about the effectiveness of voluntary programs in encouraging remediation and their usefulness in reversing some of the undesired effects of the Superfund legislation.

Author: Alberto Longo and Anna Alberini (2005)

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Synopsis: Using the hedonic pricing approach, we investigate how the information released on public registries of contaminated and potentially contaminated sites affects nearby commercial and industrial properties in Baltimore, Maryland. We find that commercial and industrial properties are virtually unaffected by proximity to a site with a history of contamination. Knowing that the site is no longer considered contaminated does not have a rebound effect on property prices either.We also find that urban economic development policies, such as Empowerment Zones and Enterprise Zones, have little effect on property values. In sum, brownfield properties in Baltimore are not particularly attractive investments for developers, and there is little potential for self-sustaining cleanup based on appropriate fiscal incentives, such as Tax Increment Financing. It is doubtful that ‚Äúone size fits all‚Äù measures to encourage the cleanup of contaminated sites can be successful in this context.

Author: Jungyul Sohn and Gerrit Knaap (2002)

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Synopsis: The Job Creation Tax Credit (JCTC) program is one of the five major Smart Growth Programs initiated by the State of Maryland in 1996 and amended in 1997. Like other tax credit programs it is intended to create jobs, but it is also a place-based policy in the sense that eligibility is limited to jobs created in Priority Funding Areas (PFAs). This paper examines whether the JCTC program has furthered the goals of smart growth by concentrating job growth within well defined regions of the state. Towards this end, both the number and the relative share of employment inside and outside of the PFAs are compared using three econometric models. The empirical analysis examines employment in five economic sectors ((1) primary, (2) manufacturing, (3) transportation, communication and utilities (T.C.U.), (4) finance, insurance and real estate (F.I.R.E.) and (5) services) over the years (1994 to 1998) using ZIP Code data. The result shows that jobs in the T.C.U. and services industries have responded to the state incentive program while three other sectors have not; the distribution of jobs in the primary sector have grown counter to the state incentive policy and jobs in manufacturing and F.I.R.E. have been unaffected by the program.

Author: Jungyul Sohn (2002)

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Synopsis: This paper examines if information technology has worked towards dispersion or concentration of economic activities in two steps of analysis. The first analysis using locational Gini coefficient and Moran‚Äôs I focuses on distribution of the urban area as a whole and finds that dispersion was prominent over the years. The second analysis using Gi* statistic as the dependent variable in the regression model, however, shows that the technology has induced more concentration rather than dispersion at an intrametropolitan scale, reflecting that there is a discrepancy in the results of the two analyses depending on the spatial scale of the analysis.

Author: Marie Howland (2002)

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Synopsis: This study examines the role that land contamination plays in hindering central city redevelopment. We tracked all sales, the selling price, existence of contamination, location, and length of time on the market in one industrial area of approximately 5,580 acres in Southwest Baltimore. The results indicate that after the mid 1990s, contaminated parcels are selling and the market has adjusted to contamination by lowering sales prices. Over the decade 45 parcels with either confirmed or historical reasons to suspect contamination sold. Interviews with owners and brokers of the parcels on the market for two years or more indicate that outdated parcel sizes, inadequate roads for modern truck access, outdated and aging infrastructure, incompatible land uses, and high asking prices are the most significant barriers to the redevelopment of industrial central city districts.

Author: Marie Howland (2002)

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Synopsis: This study tracks the remediation history and redevelopment on three brownfield sites in Baltimore, Maryland. The sites are Camden Crossing, Highland Marine Terminal, and Crown, Cork, and Seal. The first project, Camden Crossing, promises to turn previously industrial property into a town house development. Highland Marine Terminal and Crown, Cork, and Seal were industrial sites transformed into warehouse space. The proposed residential, Camden Crossing, project has met with continuous impediments and delays, and is now running more than eight years behind schedule. The two industry to warehouse sites can be characterized as successful, with profitable enterprises now operating on both. The factors that appear to compress risk and contribute to successful brownfield redevelopments are continuous industrial use, a strong market for the final use, and quick movement through the Phase I and Phase II testing, Maryland Department of the Environment approvals, and reuse. The continuous industrial use means that cleanup standards are not as stringent as for residential use, thereby speeding cleanup and lowering remdiation costs. Moreover, an uncertain market for the final product increases risk. For example, the warehouse market in Baltimore is much stronger than the residential market. The weak residential market in combination with stringent cleanup standards undermines the profitability of Camden Crossing. Finally, the delays in Camden Crossing have both resulted in and been further aggravated by changes in the Maryland Department of the Environment staff. Over the eight years the project has been under discussion, the Maryland Department of the Environment has revised and made cleanup standards more strict.

Author: Gerrit Knaap (2002)

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Synopsis: As in many countries around the world, concerns about contemporary urban development patterns and their effects on the natural and social environment are high and rising in the United States. Though these concerns are not new, the recent period of sustained economic growth has led to both rapid urban expansion and falling relative concerns about other problems like crime, unemployment, and government deficits. Urban sprawl is now a major public policy issue (U.S. Office of Technology Assessment 1995, U.S. General Accounting Office (GAO) 1999, GAO 2000).