US Department of Transportation

FHWA PlanWorks: Better Planning, Better Projects

US Department of Transportation

FHWA Planworks: Better Planning, Better Projects

Economic Development


Economic Development and the Decision Guide

Transportation systems connect workers, consumers, businesses and resources—key components of economic activity. Collaboration with economic development stakeholders can facilitate alignment of transportation decision making and economic development efforts, maximizing investments in both.

PlanWorks can help transportation practitioners understand when and how to consider economic development impacts of transportation choices, by presenting questions to consider, supporting data, and examples of success at Key Decisions.

Three areas of information support this integration:

  1. Economic Development and the Decision Guide (below). Each of the four planning phases provides opportunities to collaborate with economic development stakeholders to enhance transportation decision making. The Decision Guide describes when and how to include economic development considerations, including questions to consider, data, relationships to other topics, and examples from current practice.
  2. Economic Effects of Transportation Investments. Different analytical approaches are effective for each of the four planning phases. Access key questions and see the relationship between certain findings and the associated approach.
  3. Examples from Practice. Transportation planning efforts can effectively integrate economic development, in both small and large communities.

Hover over the highlighted Key Decisions to understand the specific relationship of economic development to the decision. Click on any highlighted Key Decision for more information about questions, data, and relationships that support this interface. Key Decisions that are greyed-out have no specific relevance to the individual application or topic area but are still accessible from this graphic.

LRP-1

Approve Scope of LRTP Process

https://fhwaapps.fhwa.dot.gov/planworks/DecisionGuide/Step/LRP-1

Identify the economic development related resources and stakeholders that should be considered as part of the LRTP process.
LRP-2

Approve Vision and Goals

https://fhwaapps.fhwa.dot.gov/planworks/DecisionGuide/Step/LRP-2

Incorporate goals and objectives that are consistent and locally and regionally adopted economic development and land use plans into the LRTP vision and goals.
LRP-3

Approve Evaluation Criteria, Methods and Measures

https://fhwaapps.fhwa.dot.gov/planworks/DecisionGuide/Step/LRP-3

Identify evaluation criteria and analytical methods related to economic development that can be implemented with existing or reasonably available data.
LRP-4

Approve Transportation Deficiencies

This Key Decision is not associated with application.
LRP-5

Approve Financial Assumptions

https://fhwaapps.fhwa.dot.gov/planworks/DecisionGuide/Step/LRP-5

Identify potential non-transportation revenue sources (public or private) that could be available to build transportation infrastructure that supports economic development.
LRP-6

Approve Strategies

https://fhwaapps.fhwa.dot.gov/planworks/DecisionGuide/Step/LRP-6

Consider how strategies to address transportation deficiencies can be supportive of the identified economic development visions and goals.
LRP-7

Approve Plan Scenarios

https://fhwaapps.fhwa.dot.gov/planworks/DecisionGuide/Step/LRP-7

Incorporate economic development strategies into scenarios. The identified evaluation criteria and methods related to economic development will be used to compare the full range of potential scenarios.
LRP-8

Adopt Preferred Plan Scenario

https://fhwaapps.fhwa.dot.gov/planworks/DecisionGuide/Step/LRP-8

Inform the selection of the preferred scenario with respect to potential economic impacts and opportunities, and identify mitigation needs for unavoidable negative impacts on specific populations and/or businesses.
LRP-9

Make Conformity Determination by MPO

This Key Decision is not associated with application.
LRP-10

Adopt LRTP by MPO

This Key Decision is not associated with application.
LRP-11

Make Conformity Determination

This Key Decision is not associated with application.

PRO-1

Approve Revenue Sources

https://fhwaapps.fhwa.dot.gov/planworks/DecisionGuide/Step/PRO-1

Identify potential non-transportation revenue sources (public and private) that could be available.
PRO-2

Approve Project Cost and Revenue Allocation Approach

https://fhwaapps.fhwa.dot.gov/planworks/DecisionGuide/Step/PRO-2

Ensure that the methodology for identifying projects costs and allocating revenue can be used to measure and evaluate the project’s impact on economic development.
PRO-3

Approve Project List from Adopted Plan

This Key Decision is not associated with application.
PRO-4

Approve Project Prioritization

https://fhwaapps.fhwa.dot.gov/planworks/DecisionGuide/Step/PRO-4

Compare the economic development impacts and opportunities of individual projects to consider in prioritization process.
PRO-5

Reach Consensus on Draft TIP

This Key Decision is not associated with application.
PRO-6

Adopt TIP by MPO

This Key Decision is not associated with application.
PRO-7

Approve TIP by Governor and Incorporate into Draft STIP

This Key Decision is not associated with application.
PRO-8

Reach Consensus on Draft STIP

This Key Decision is not associated with application.
PRO-9

Approve STIP with respect to Fiscal Constraint

This Key Decision is not associated with application.

COR-1

Approve Scope of Corridor Planning Process

https://fhwaapps.fhwa.dot.gov/planworks/DecisionGuide/Step/COR-1

Identify the economic development related resources and stakeholders that should be considered as a part of the corridor planning process.
COR-2

Approve Problem Statements and Opportunities

https://fhwaapps.fhwa.dot.gov/planworks/DecisionGuide/Step/COR-2

Identify challenges and priorities related to land use and economic development along and in close proximity to the corridor. Define the potential opportunities for economic development arising from corridor improvement.
COR-3

Approve Goals for the Corridor

https://fhwaapps.fhwa.dot.gov/planworks/DecisionGuide/Step/COR-3

Incorporate goals and objectives into corridor planning that are consistent with locally and regionally adopted economic development and land use plans, priorities and goals.
COR-4

Reach Consensus on Scope of Environmental Analysis

https://fhwaapps.fhwa.dot.gov/planworks/DecisionGuide/Step/COR-4

Inform the scope of environmental review based on potential economic impacts and opportunities as well as types of information needed for economic analysis.
COR-5

Approve Evaluation Criteria, Methods and Measures

https://fhwaapps.fhwa.dot.gov/planworks/DecisionGuide/Step/COR-5

Identify evaluation criteria, performance measures, and analytical methods related to economic development that can be applied at the corridor level with existing or reasonably available data.
COR-6

Approve Range of Solution Sets

https://fhwaapps.fhwa.dot.gov/planworks/DecisionGuide/Step/COR-6

Incorporate economic development strategies into solution sets. The identified evaluation criteria and methods related to economic development will be used to compare the full range of potential solutions.
COR-7

Adopt Preferred Solution Set

https://fhwaapps.fhwa.dot.gov/planworks/DecisionGuide/Step/COR-7

Inform the selection of the preferred solution set with respect to potential economic impacts and opportunities. Agree on corridor mitigation strategy for any unavoidable negative economic impacts on specific populations for businesses.
COR-8

Approve Implementation Criteria for Prioritizing Projects

https://fhwaapps.fhwa.dot.gov/planworks/DecisionGuide/Step/COR-8

Incorporate economic development criteria and performance measures into the corridor project priorities and sequencing. Establish process for project prioritization which includes expected economic outcomes resulting for improved mobility, connectivity, and access.
COR-9

Adopt Priorities for Implementation

https://fhwaapps.fhwa.dot.gov/planworks/DecisionGuide/Step/COR-9

Consider economic development impacts of the various projects or strategies in the corridor plan during prioritization.

ENV-1

Reach Consensus on Scope of Environmental Review

https://fhwaapps.fhwa.dot.gov/planworks/DecisionGuide/Step/ENV-1

Determine the scope of the analysis of economic development impacts and opportunities for the environmental review process. Identify the economic development related resources and stakeholders that should be considered.
ENV-2

Approve Notice of Intent

This Key Decision is not associated with application.
ENV-3

Approve Purpose and Need/Reach Consensus on Project Purpose

https://fhwaapps.fhwa.dot.gov/planworks/DecisionGuide/Step/ENV-3

Identify existing future economic development challenges and the potential opportunities created by the project to inform the development of purpose and need. Ensure consistency with economic development goals identified during long range planning and corridor planning.
ENV-4

Reach Consensus on Study Area

https://fhwaapps.fhwa.dot.gov/planworks/DecisionGuide/Step/ENV-4

Include considerations related to local and regional economic development impacts when deciding on the boundaries of the study area.
ENV-5

Approve Evaluation Criteria, Methods and Measures

https://fhwaapps.fhwa.dot.gov/planworks/DecisionGuide/Step/ENV-5

Identify evaluation criteria and analytical methods related to economic development that can be used to determine the economic impacts and benefits of project alternatives.
ENV-6

Approve Full Range of Alternatives

https://fhwaapps.fhwa.dot.gov/planworks/DecisionGuide/Step/ENV-6

Identify alternatives that will support economic development objectives consistent with the adopted purpose and need.
ENV-7

Approve Alternatives to be Carried Forward

https://fhwaapps.fhwa.dot.gov/planworks/DecisionGuide/Step/ENV-7

Use the result of the comparison of the full range of alternatives using economic development criteria and methods to identify fatally flawed alternatives.
ENV-8

Approve Draft EIS with Conceptual Mitigation

https://fhwaapps.fhwa.dot.gov/planworks/DecisionGuide/Step/ENV-8

Compare the economic development impacts of various alternatives carried forward, and account for mitigation actions that will need to be taken for negative economic impacts.
ENV-9

Approve Resource Agency Public Notice

This Key Decision is not associated with application.
ENV-10

Approve Preferred Alternative / LEDPA

This Key Decision is not associated with application.
ENV-11

Approve Final Jurisdictional Determination

This Key Decision is not associated with application.
ENV-12

Reach Consensus on Avoidance and Minimization for the LEDPA

This Key Decision is not associated with application.
ENV-13

Approve Final EIS and Record of Decision

This Key Decision is not associated with application.
ENV-14

Render Permit Decision and Approve Avoidance and Minimization

This Key Decision is not associated with application.

Economic Effects of Transportation Investments

Assessing economic impacts at various stages of transportation decision making ensures that proposed plans and projects serve transportation needs as well as support economic development objectives. The extent of analysis needed is largely dependent on the phase of decision making.

There are typically four levels of analysis used to assess potential economic development impacts- ranging from cost savings for travelers and businesses to measuring the broader economic effects experienced beyond the immediate area. These levels of analysis build on each other, but not all levels are needed for every stage of transportation decision making.

Click on each of the analysis levels to understand which factors are considered.

Measure Impact Factors

This lowest level of analysis measures the quantitative and qualitative impacts on travel costs, the business market within the study area, job access and quality of life. Some questions to consider are:

  • What are the significant changes to travel costs for travelers and businesses, including travel time, safety impacts, and vehicle operating costs?
  • How many jobs could be created or lost as a direct result of the transportation investment?
  • How might businesses' access to suppliers or customers change?
  • How might people's accessibility to jobs and other amenities such as schools, hospitals, and commercial establishments change?
  • What impact will the project have on congestion, safety, and the quality of life in general?

Estimate Ability to Compete

Findings related to the transportation impacts help inform the analysis of the effect on business competitiveness. This level of analysis examines the impact of a transportation improvement on different types of businesses. Some questions to consider are:

  • How will the relative costs of doing business change in the study area?
  • Will businesses become more or less competitive with businesses in other parts of the state, region or beyond?
  • What types of businesses gain and lose from the transportation investment, and why?
  • Could the project stimulate new development (residential, commercial, etc.) and attract new businesses to the region?

Estimate Growth or Decline

Findings related to business competitiveness help inform the analysis of how the transportation improvement will impact the character of business activity in the area. Some questions to consider are:

  • Will there be a growth or decline in business activity as a result of the transportation investment?
  • How will business sales and income change?
  • What types of jobs will be created or lost? At what wages?
  • Are the jobs and businesses being lost or created simply a transfer from other locations within the region? How might this transfer be accounted for in deciding the study area?

Estimate Broader Effects

Findings related to the effects on business growth or decline help inform the analysis of the broader impacts of the transportation improvement, beyond the immediate study area. Some questions to consider are:

  • How might sales change for businesses that provide supplies and services to the businesses that are impacted by the transportation project?
  • How will changes in jobs and wages affect consumer spending?
  • Will the project impact property values in the region?
  • Will the project have an effect on tax revenues?
  • Will the project make the area more attractive to new businesses and workers in the long term?

For more about analyzing the economic development impacts of transportation decision making read, NCHRP 456: Guidebook for Assessing the Social and Economic Effects of Transportation Projects (see Chapter 8).

Examples from Practice

Collaborating with economic development stakeholders by sharing data and information about economic development plans and goals provides mutual support for transportation planning and economic development efforts. These collaborators include local chambers of commerce, economic development agencies and private firms as well as local, regional, and state entities.

Below are examples where economic development stakeholders were involved in the four phases of transportation decision making.

  • Economic development was a key focus in Binghamton's long-range transportation plan, Transportation Tomorrow 2030: Placemaking for Prosperity. Having experienced decades of population loss and economic decline, local planners and decision makers vowed that future transportation investments would support economic development goals. Business leaders, representatives from major employers, and economic development professionals contributed to the planning process. The outcome was a long range transportation plan that supports economic revitalization by focusing investments in the region's urban centers.

  • The 2035 Long Range Transportation Plan for North Central Pennsylvania envisions a transportation system that aligns with other regional priorities, one of which is economic development. In 2008, the North Central Pennsylvania Regional Planning and Development Commission convened a group of partners and stakeholders, including members from the Comprehensive Economic Development Strategy Committee. The group developed selection criteria for evaluating transportation projects for inclusion in the TIP and STIP. One of the criteria related to economic development is job creation.North Central Pennsylvania's Project Prioritization Process

  • Economic development was a critical factor in the corridor study on improvements to I-170, an important thoroughfare in Los Angeles County and in the national freight distribution network. The planning process involved representatives from two local ports and local business owners. During the planning process, safety and travel time criteria were used to evaluate project alternatives. The outcome was a locally-preferred project alternative that addressed both travel costs and regional economic development.

  • The Kelly Parkway Project was proposed to catalyze the redevelopment of the former Kelly Air Force Base. The NEPA study and corridor plan were conducted simultaneously - and both engaged local partners and stakeholders to address potential economic opportunities, as well safety and mobility improvements. This ensured that the NEPA study addressed residents' interests in reducing personal travel costs along with economic development objectives for redeveloping the base property.