Urban Design that Reduces Vehicle Miles Traveled Can Create Economic Benefits

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.