SEPTA Economic Intelligence
SEPTA Economic Intelligence
Econsult Solutions, Inc. (ESI) has undertaken a series of studies for the Southeastern Pennsylvania Transportation Authority (SEPTA) on the economic value, development implications, and equitable benefits of its service. Collectively, these studies articulate the value proposition that SEPTA provides to the region’s residents and its economy. In this time of crisis, SEPTA’s direct and catalytic value is more essential than ever to Pennsylvania’s economic recovery.
SEPTA's Value Proposition: Economic Intelligence Compendium Presentation
The consolidated presentation includes information from five studies ESI has completed over a three- year period exploring different facets of SEPTA’s economic, catalytic and equity impacts.
SEPTA Economic Impact Report 2020
ESI used a range of economic and government data sources to demonstrate the importance of the southeast region and of SEPTA to Pennsylvania’s economy, its tax base and its growth patterns. The southeast region represents just 5% of Pennsylvania’s land area and 32% of its population, but generates 42% of statewide economic activity and 38% of Pennsylvania’s tax base. This outsized productivity is made possible in part by the region’s transportation network, which has helped fuel growth in the region’s share of state’s population and activity in recent years.
The report also reviews impacts from SEPTA’s economic footprint as a large-scale employer and source of significant capital investments. SEPTA’s operating and capital activities generate $3.4 billion in direct and spillover activity within the Pennsylvania economy each year, supporting 26,500 jobs and $1.9 billion in earnings.
SEPTA Impact of Future Projects Report
ESI has assessed the long-term catalytic impacts of SEPTA’s $6.5 billion package of four proposed capital projects. This analysis shows how SEPTA’s projects of regional significance will change the economic trajectory of the region by enhancing regional competitiveness and attractiveness. Through a unique application of standard urban economic frameworks, the study connects the proposed increases in transit service into key business districts to increased incentives for development and ongoing employment at those locations. These are translated into changes in the long-term level of expected regional activity.
These projects are anticipated to increase the employment growth path of the region by more than 50% over a 30-year time horizon, growing the base of regional jobs, earnings, and tax revenues. The growth in economic activity is projected to generate $17.1 billion (net present value) in additional state and local tax revenues, a return on investment of 2.6x the project cost. This equates to an annual return of more than 12%, exceeding private sector investment benchmarks.
SEPTA Congestion Report
ESI undertook an analysis of the magnitude and economic implications for all Philadelphians of traffic congestion in downtown Philadelphia’s street grid. Downtown congestion reduces the attractiveness of downtown Philadelphia as a business location, limiting job growth and opportunities for Philadelphia neighborhood residents and undermining a key competitive advantage of the city. Further, delays impact buses to a greater extent than cars, deepening existing equity challenges and setting into motion a vicious cycle by incentivizing riders with sufficient means to find alternatives, compromising the future competitiveness of the bus system while adding even more traffic to the roads.
Time value and transportation cost losses are estimated in the study at $152 million per year. In addition, congestion delays make the downtown a less attractive place to locate a business, decreasing incentives for commercial development. By combining transportation estimates with an analysis of the economics of development within this sub-market, ESI estimated the long-run loss attributable to congestion in commercial development, annual employment and associated earnings, and tax revenues.
SEPTA Value Proposition Report
ESI has developed market-based metrics of the amenity value of transit service throughout Philadelphia. This study used micro-level transit service data to create a measure of transit quality for every Philadelphia parcel. Using data on thousands of housing market transactions to ESI quantified the incremental housing value that access to transit service provides. In aggregate, proximity to SEPTA’s service increases residential property values by $17.5 billion within the City of Philadelphia, accounting for 17.4% of total residential property value in the city.
Within this study, ESI also undertook an analysis of the effects of SEPTA service on household budgets through the net effect of housing and transportation costs. While the housing value premium may increase housing costs, the average household in Philadelphia sees a more than offsetting decrease in transportation costs through reduced reliance on private cars. This results in a net savings of $830 per household per year, or $481 million across the city.
SEPTA Fare Equity Report
ESI examined the equity implications for Philadelphia residents of SEPTA’s proposed fare restructuring for its city transit division for FY 2021-2023. ESI undertook an analysis of the patterns in ridership and fare products utilized in order to understand changes in average costs for different communities and populations across the city. Equity measures were defined based on the share of income that riders pay for a roundtrip under the current and proposed fare structure, relative to changes in income.
Spatial analysis of ridership patterns found that the lowest income Philadelphians will spend less of their income on transportation under the proposal, with average fares as a share of daily household income falling by more than 1% for communities with incomes below the city median and falling in areas of the city with above average concentrations of residents in poverty, residents with lengthy commutes, children, and minority residents. In addition, SEPTA’s proposed fare policy will unlock long-term benefits to SEPTA and its riders by enabling more efficient system design and use.
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