Practitioners and scholars have traditionally held the view that building transportation infrastructure, such as highways that facilitate more driving, will improve economic development. Evidence for this view was derived from construction of new transportation networks such as the Interstate Highway System in the 1950s and 1960s that forged new regional connections and contributed to economic growth. But now, decades later, infrastructure improvements to a mature system have less-clear benefits and may simply shift economic activity around. More recently, as cities and regions have begun implementing policies to reduce vehicle miles traveled (VMT), the question of the economic role of less VMT has emerged. In many cases, higher economic performance is associated with walkable, pedestrian-oriented neighborhoods, designed in ways that reduce car travel.

Researchers at the University of Southern California reviewed the literature on property values, business sentiment, and productivity to understand how VMT-reducing place-making can help boost neighborhood economies. Placemaking refers to transportation projects that reduce driving and become neighborhood amenities such as complete streets, pedestrian malls, or bicycle sharing. The research showed neighborhoods that support alternatives to car travel are associated with higher—not lower—economic vitality. This policy brief summarizes the findings from that research.

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This paper analyzes evidence on the economic benefits of placemaking efforts that prioritize pedestrian and non-motorized access and that, at times, reduce vehicle miles traveled. The previous literature on the economic impacts of transportation has focused on theorizing and gathering evidence on ways that transportation infrastructure generates economic benefits at large geographic scales–often states or nations. That literature overlooks many of today’s transportation projects which are at the scale of a neighborhood and which typically include non-motorized transportation. The authors summarize evidence on how those more locally oriented placemaking efforts are associated with benefits that accrue to residents and firms. There is a high degree of evidence that there are economic benefits, on commercial property values, residential property values, business sentiment, and productivity, from density that are summarized as they relate to neighborhood oriented placemaking transportation policies. The authors conclude by suggesting a systems view of metropolitan transportation that has a hierarchy of networks, from high-throughput metropolitan arteries to local, multi-modal, neighborhood planning with connections between the different levels of the system.

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