INCORPORATING HEALTH AND SOCIAL BENEFITS WITH USER

BENEFITS IN THE VALUATION OF URBAN REALM

IMPROVEMENTS

Rob Sheldon,
Sheldon, Shepley Orr - Accent
Paul Buchanan,
Buchanan, Chelsea Dosad - Colin Buchanan and Partners
David Ubaka - Transport for London

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 CONTENTS
1. INTRODUCTION ................................................................................................ 3
1.1 Background
Background ........................................................................................................ 3
1.2 The Case for Valuing the Benefits of Urban Realm Improvements.....................
Improvements 3

2. MEASUREMENT OF URBAN REALM QUALITY............................................... 4

2.1 Introduction......................................................................................................... 4
Introduction
2.2 Scope – Defining
Defining Urban
Urban Realm ........................................................................... 5
2.3 Pedestrian Environment Review System (PERS)...............................................
(PERS) 6
2.4 How Has PERS Been Applied? Applied? .......................................................................... 6

3. VALUATION OF URBAN REALM QUALITY ...................................................... 7

3.1 Introduction
Introduction.........................................................................................................
roduction 7
3.2 Estimating
Estimating User Benefits through Stated Preference ......................................... 8
3.3 Estimating Impact on Market Prices through Hedonic Pricing .......................... 10

4. QUALITATIVE FINDINGS ................................................................................ 11

4.1 Introduction....................................................................................................... 11
Introduction
4.2 Focus Groups ................................................................................................... 12
4.3 Qualitative Research Findings..........................................................................
Findings 12

5. THE VALUING URBAN REALM TOOLKIT....................................................... 13

5.1 Introduc
Introduction
troduction.......................................................................................................
tion 13
5.2 Why Do We Need a Toolkit? Toolkit? ............................................................................ 13
5.3 Defining Urban Realm for the Toolkit................................................................
Toolkit 14
5.4 Types of Schemes That Can Make Use of the Toolkit......................................
Toolkit 15
5.5 How the
the Toolkit Has Been Developed .............................................................. 16

6. CONCLUSIONS ............................................................................................... 17

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 1. INTRODUCTION
1.1 Background

Work for Transport for London (TfL) entitled ‘Valuing Urban Realm’ comprises
a set of studies designed to create a coherent evaluation methodology for
determining the economic values of improvements to urban public spaces
generally.

The first phase of research carried out by Accent and Colin Buchanan (CB)
established user willingness to pay for improvements to the urban realm.

This phase applied a stated preference based standard user benefit approach
to variations in the quality of public realm to help support potential investment
in public realm improvements. A version of this method was subsequently
incorporated into TfL’s Business Case Development Manual.

The second phase of research carried out by MVA used hedonic pricing to
establish a value from revealed price data (residential and commercial). The
method built upon that developed by CB in the ‘Paved with Gold’ study
undertaken for CABE in 2007. Whilst the user benefits approach of Phase 1
fits into a public sector appraisal framework and is therefore most useful for
securing public sector funding, Phase 2 is more concerned with private sector
investment.

Accent and CB have recently been commissioned to undertake a third phase

of research, which looks to assess the potential health and social benefits of
improvements to the urban realm, and make recommendations for a holistic
methodology and user guide for valuing urban realm improvements. This
paper describes this research and concludes with the status of the valuation
toolkit that is being developed.

1.2 The Case for Valuing the Benefits of Urban Realm

Improvements

A fundamental principle of economics is that it is important to appraise all

impacts, no matter that the outcomes are difficult to predict and/or to value. In
a scenario where investment in road, rail and bus is appraised using
sophisticated techniques reflecting their wider social and economic impacts as
well as the direct ones, it is important that investments in urban realm are
placed on an equal footing.

The user benefits approach in Phase 1 succeeded in valuing the benefits of

improved urban realm to users in the same way as time savings and
congestion relief are valued for road and rail schemes.

Phase 2 covered, and Phase 3 will cover, many of the wider impacts of urban
realm in terms of the financial and broader policy objectives. These are
important drivers of investment funding.

Funding is key to this issue. The allocation of funding is to a significant extent,

although by no means entirely, affected by the ability to demonstrate real
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 economic returns. Related to this, economic appraisal identifies winners and
losers, in terms of financial impacts as well as monetised benefits. Economic
appraisal also allows prioritisation between competing urban design projects
meaning that investment is better spent.

Phase 2 concentrated on the impacts of urban realm on property values. In

short, economic appraisal should provide a better allocation of resources and,
if that suggests that there has been a historic under-investment in urban
realm, then it should result in increased funds being made available for those
schemes.

Phase 3, as will be evident from this paper, looks to broaden the scope further
by looking at the potential impact upon health and social outcomes.

2. MEASUREMENT OF URBAN REALM QUALITY

2.1 Introduction

The task of measuring and valuing urban realm quality is more complex than
simply identifying key aspects of the urban built environment. The value
placed upon this environment will depend not so much on any one attribute
but upon the relationship of these attributes to each other, i.e. the whole realm
of urban design.

Measurement of the quality of the urban realm should therefore recognise the
tension between the multiple uses of the urban environment; as a facility for
people to move around in as well as a space for activity.

In addition there is both the tangible and the perceptual quality of the urban
realm to be considered. The latter refers to subjective elements of the urban
realm that go beyond the direct experience of users, but will be significant in
their judgement of environmental quality, such as perceived personal security.

An important consideration for measuring quality is what is considered to be

‘good design’ and to whom and, in the presence of many intangible quality
factors, to determine to what extent this quality can be quantified for the
purposes of a holistic and uniform approach for valuing the benefits of the
urban realm.

The need to measure and value improvements to the urban realm has
become an increasingly topical issue.

Walking has increased as a transport policy objective, with improvement of the

urban realm seen to be essential in encouraging walking as a sustainable
mode of transport.

The Mayor’s Transport Strategy sets out the need to improve the quality and
provision of information and resources to facilitate more walking journeys and
improve the urban realm to create safer, more comfortable and attractive
conditions. Securing funding for urban realm schemes thus requires the
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 development of a robust business case to demonstrate that the benefits of
investment outweigh the costs.

The remainder of this chapter briefly details findings from the first two phases.

This is structured as follows:

• Scope – defining urban realm

• An introduction to PERS as a measure of urban realm quality
• How approach has been applied
• Advantages and limitations of PERS as a measure of urban realm quality,
and
• Alternative approaches for measuring urban realm quality.

2.2 Scope – Defining Urban

Urban Realm

Defining urban realm is made harder by the often confusing use of the terms
streetscape, public realm and urban realm in the UK. In principle, the terms
streetscape and public realm refer to issues about the design of public spaces
i.e. the network of streets and spaces between buildings. The term urban
realm is broader and should encompass the design of all components of the
built environment (including the style and characteristics of buildings, etc) and
their interaction.

The By Design document published by the DETR and CABE in 2000 is widely
recognised as a holistic source of guidance for design of the built
environment. This document defines seven key objectives of urban design:

• Character
• Continuity and enclosure
• Quality of the public realm
• Ease of movement
• Legibility
• Adaptability
• Diversity

From these seven objectives, it is clear that the definition of public realm
quality in much of the existing research – which has typically been PERS
based (as discussed later) – has been focussed on streetscape quality (i.e.
materials and finishes) and ease of movement and has disregarded some of
the wider issues.

Similarly, it is important to consider the types of project that TfL, for instance,
will typically seek to evaluate. Strategic master planning takes place to guide
large area-wide interventions (such as development of opportunity areas,
Olympic Park).These projects are likely to consider all of the objectives above.
Many streetscape improvement schemes, on the other hand, are much more
localised in their focus and relate mainly to quality of the public realm and
ease of movement elements of the By Design framework.

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 It can be expected, then, that the issue of scale will be decisive when
assessing the types of health and social benefits that are the subject of this
paper.

2.3 Pedestrian Environment Review System (PERS)

Phases 1 and 2 both used the Pedestrian Environment Review System

(PERS) to assess the pedestrian environment and generate quantitative
scores of quality.

PERS is defined as ‘a systematic process to assess the pedestrian

environment within a framework that promotes objectivity’. It is an audit tool
developed by the Transport Research Laboratory (TRL) to systematically
evaluate the level of service and quality provided for pedestrians across a
range of environments. This measurement relies on an objective scorecard
system undertaken by trained auditors.

PERS divides street networks into types of ‘facility’ - links, crossings, routes,
public transport waiting areas, interchange spaces and public spaces.

Each facility type is reviewed against a number of set attributes and

numerically scored on a seven point scale from -3 to +3 based on the degree
to which each attribute evaluated meets the needs of pedestrians.

2.4 How Has PERS Been Applied?

Applied?

In Phase 1, the benefit of linking the surveyed attributes to PERS was only
decided upon towards the end of the project in response to concerns about
the application of the values.

Prior to the stated preference work being undertaken qualitative research was
carried out through focus groups to help identify those attributes that could be
described and presented graphically in the stated preference surveys. This
required the more intangible concepts to be substituted with proxies that were
easier to represent through stated preference. There were fifteen attributes
included in the Phase 1 research for measuring the quality of the urban realm
and these are listed below:

• View of the street

• Kerbs
• Street lighting
• Vehicles on the pavement
• Cycles on the pavement
• Number of people in daylight
• Number of people after dark
• Pavement condition
• Signs to public transport and attractions
• Plants and public art
• Seating
• Crossing the road
• Physical intrusion
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 • Graffiti and fly-posting
• Litter

These elements were used to provide a cross-section of the walking

environment that could best act as a proxy for the attributes defined in PERS
for both links and public spaces.

Since some of the stated preference elements feature in more than one PERS
characteristic (for example ‘pavement condition’ in the stated preference
affects both ‘quality of the environment’ and ‘surface quality’ in PERS), and
others are not used as a proxy at all (for example ‘colour contrast’ has no
proxy among the SP elements) elements were split out into PERS attributes to
avoid the risk of double counting at the valuation stage.
In Phase 2, the hedonic pricing work was carried out only using the attributes
of links that are scored within a PERS assessment, as it was considered that
this type of PERS facility was the most pertinent means of measuring the
quality of the urban realm. All fourteen link attributes were considered but,
since not all of these would be expected to influence property values, each
attribute was tested for a relationship with property price resulting in a subset
being assessed.

The table below shows the attributes of links that were most highly valued in
Phases 1 and 2. The first column represents the PERS attributes that the
public value most in descending order, with ‘Quality of Environment’ being
most important. Phase 2 revealed the potential private benefits of urban realm
improvements (in no particular order).

Table 1: Link attributes valued in Phases 1 and 2

Phase 1 (Stated Preference: Phase 2 (Revealed Preference: Private
User/Public Benefits)
Benefits) Benefits)
Quality of Environment Personal Security
Personal Security Lighting
Permeability Quality of environment
User Conflict Maintenance

3. VALUATION OF URBAN REALM

REALM QUALITY
3.1 Introduction

This chapter sets out the different valuation methods that have been
developed and are being developed to quantify the benefits from public realm
investment.

To date, there have been distinct approaches which have been applied during
the course of Phases 1 and 2:

• Phase 1:
1 Stated preference work was used to estimate user benefits in a
research programme conducted for TfL during 2006; and

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 • Phase 2:
2 Revealed preference approaches were used to calculate the
impact of public realm improvements on property prices during a study
conducted by MVA for Design for London in 2008.

Each approach is briefly described in this chapter to help set the context for
the current broadening remit.

3.2 Estimating
Estimating User Benefits through Stated Preference

Stated preference is one of the most widely used methods for estimating non-
market values. It involves surveying a target population to assess willingness
to pay to obtain a certain good, or a willingness to accept to give up a certain
good.

The Phase 1 surveys were undertaken on two London high streets and
targeted a sample of respondents that comprised residents and non residents
and two trip purposes: leisure/shopping (where it is assumed that the trip is
less time constrained) and commuting.

Visual material was produced for each of the fifteen aspects tested.
Willingness to pay was tested using three alternative payment mechanisms:

• Council Tax
• Rent, and
• Public transport fares.

The most significant difficulty encountered during the stated preference

exercise in Phase 1 was the variation in responses. This was attributed in part
to a number of respondents stating they were not willing to pay for an element
and in part to the common problems of SP as a valuation tool (e.g. presence
of potential response bias, risk that values are overestimated since people are
more likely to overstate what they would pay for an improvement than what
they would actually pay in reality).

Figure 1 shows the distribution of the willingness to pay deciles by payment

mechanism in Phase 1 of the programme. Between 15% and 30% of
respondents (depending on the payment mechanism) are not willing to pay
anything. Thereafter the values increase dramatically, meaning the average
values to be derived from the responses would be extremely sensitive to the
highest values.

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 Figure 1:
1: Phase1 Willingness to Pay by Payment Mechanism

£600

£500

£400

£300

£200

£100

£0
0 10 20 30 40 50 60 70 80 90 100
Council tax - annual Rent - annual Fares - annual

In order to explain the variation in response, a number of sensitivity tests were

conducted to determine what impact a variety of methods would have for each
payment mechanism:

• Removal of top/tail 1%, 2.5%, 5% and 10%

• Capping annual values at £100
• Applying 17% of zero valuations to the PT fare valuations

From these sensitivity tests, a single value was produced using an adjusted
value for public transport fares. This adjusted value was capped for
respondents stating extremely high and low values for willingness to pay.

From this analysis it was then possible to determine a single adjusted value
for the fifteen different urban realm attributes, each for varying levels of
improvement/quality. In order to produce a method that could be applied for
valuing public realm schemes, the results for the fifteen attributes were linked
to PERS attributes for links and public spaces across the seven-point quality
scale. Therefore, by assessing the change in the quality of the public realm
using PERS, a benefit in pence per minute spent in the environment could be
quantified and monetised, using the SP results.

Clearly it is essential that SP valuation mechanisms appear relevant and

realistic to respondents. This could imply that more than one valuation
mechanism is required to accommodate different groups of respondents.

In Phase 1, however, the different payment mechanisms used made it difficult

to compare results from the three methods: PT fares were determined on a
per trip basis, whilst Council Tax was based on an increase per annum, and
rents were derived on a weekly basis. As it may not be easy for respondents
to calculate the total annual amount from weekly rates, this means that the per
trip and per week figures are likely to produce much higher results than the
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 Council tax mechanisms. In order to combine a measure from different
payment mechanisms, it may in the future be more informative to ask for
annual amounts. This may also give more realistic total willingness to pay
amounts.

Also, in order to reconcile SP with RP findings, it may be that using

rent/council tax payment mechanisms will produce more comparable findings,
as they would tend to encompass the same sort of link between public realm
quality and property values.

Lastly, it is important to keep in mind when interpreting and applying the

results of this approach that SP is very good at measuring relative preferences
but can produce much less reliable data in terms of absolute willingness to
pay. People’s responses may not reflect the exact amount they would be
willing to pay for an improvement and, indeed, there is a risk that values stated
are not a true reflection of what respondents would actually pay in reality
though the inclusion of ‘Cheap talk’ approaches has helped to minimise this
risk.

3.3 Estimating Impact on Market Prices through Hedonic

Pricing

Revealed preference methods, specifically hedonic pricing, can be applied to

property prices and rents in order to reveal a buyer’s willingness to pay for a
property’s structure, location and environs.

Specifying a hedonic price function is possible by undertaking a multiple

regression analysis. Regression analysis looks to identify how much of the
variation in a dependent variable, e.g. property price, can be explained by
variation in a number of explanatory variables (e.g. a property’s different
attributes).

Hedonic pricing studies typically measure the effect of social and

environmental improvements on asset prices. The factors most frequently
assessed through the use of hedonic pricing/revealed preference are:

• environmental quality (air, noise, water pollution); and

• environmental amenities (aesthetic views, proximity to recreational sites
and green spaces etc).

Hedonic pricing is a robust and well researched tool; the theoretical advantage
as a valuation technique being that it is based on observed market data and
typically uses property sale prices which ultimately reflect a buyer’s true
willingness to pay.

However, the hedonic pricing technique has its drawbacks. Values are
determined based on the assumption that rents or property price capture all
the user benefits created by the urban realm (and this may not always be the
case).

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 Moreover, hedonic pricing is unlikely to fully isolate and control for the different
value created by a project as house prices, retail and office rents are the result
of many variables as every property is unique. That is to say that, through
revealed preference methods, it is difficult to determine how far the increase in
house prices is the direct result of the improved urban realm or, in fact, the
result of external factors.

In previous research, RP has been used to determine the private benefits of

the urban realm by incorporating PERS scores associated with the link or
public space on which a property is situated into a hedonic price function,
allowing the impact of urban realm quality on asset values to be isolated and
monetised.

This has been performed in Phase 2 using both flat sales and Zone A rental
values. The RP exercise included property, public realm quality and other
variables for 62 sites in Greater London. A longitudinal analysis was also
undertaken, looking at 14 schemes across London and the UK and assessing
the before and after impact of these schemes on property values.

The Phase 2 research ended up using four of the PERS attributes to explain
variations in property prices. Those attributes were: personal security, lighting,
quality of environment and maintenance.

In the valuation exercise an equal weight was applied to each of the four
PERS variables in determining variations in property prices and, effectively,
the other PERS variables were assumed to have zero explanatory power.

The Phase 2 cross-sectional analysis was statistically significant explaining

about half of the variation in residential prices (including a public realm quality
variable based on the unweighted sum of four PERS link attributes, which was
significant at the 95% level). The longitudinal analysis was a small sample and
produced a range of results, from a negative change in prices of 4.3% to a
28% increase.

In the application of RP in Phase 2, hedonic pricing was used to isolate the

impact of the quality of the urban realm on house prices. Yet it is also possible
to apply RP, and hence multiple regression analysis, to explain variation in
other quantitative data sources that will be particularly relevant to Phase 3,
such as health/physical activity, wellbeing or crime indicators. A consideration
here will be to set out exactly what the qualitative indicators measure and
represent in order to understand how the quality of the urban realm is linked to
health and social factors (e.g. perceived or actual benefits, what is
incorporated in that benefit etc).

4. QUALITATIVE FINDINGS

4.1 Introduction

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 In order to inform the design of the later quantitative research and to also gain
further insight into possible areas of interest in urban realm improvements
Accent undertook a programme of qualitative research. Although the
qualitative research is a means to an end in that it helps to inform the
quantitative research, it is also an end in itself. The focus groups help to bring
into view the perceptions, feelings and beliefs about the importance of urban
realm, bringing to light issues which the investigators themselves may not
have considered.

4.2 Focus Groups

The purpose of the focus groups was to examine the impact of improvements
to urban realm in terms of their health and social benefits. Therefore a location
was selected where there had recently been a substantial urban realm
improvement. The decision was taken that the Brixton area of London would
be a suitable location for this.

This is because a large and substantial improvement to the main square had
recently (one year previously) taken place there. This timescale meant that the
improvement was not so long ago that residents would be able to still provide
a “before and after” perception of the changes, while at the same time allowing
for the fact that the changes were not so recent that changes to perceptions
and behaviours could register in the minds of the respondents.

The groups were held on 29-30 March at Lambeth Town Hall in Brixton.
Subjects were recruited by a telephone sampling method. The sampling
method had two criteria: one concerned age representation and the other the
length of time that they had lived in the area. Accent therefore recruited 4
focus groups with the following make-up:

• Group One, recent residents (1 to 4 years): 6 participants

• Group Two, younger long term residents (5+ years): 8 participants
• Group Three, older long term residents (5+ years): 5 participants
• Group Four, recent residents (1 to 4 years): 7 participants

4.3 Qualitative Research Findings

In the qualitative research we examined the following topic areas:

• general perceptions
• social cohesion
• health
• fear of crime and actual crime
• sense of community
• disbenefits of regeneration

We can summarise the qualitative response to the changes in Brixton’s town

centre as follows:

• elements of the urban realm do not exist in isolation but are intertwined
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 • health is better expressed in terms of wellbeing and is positively affected
by space and community events.

• crime and fear of crime are positively affected by good lighting, space
and safe access to facilities.

• social cohesion is positively affected by space and maintenance

• a sense of community is positively affected by community events and

good maintenance.

• however, improvements to a town centre may adversely affect side

areas, as crime and traffic, for example, are simply displaced.

As stated earlier, the benefits of the qualitative research is to inform the

quantitative research, which will ultimately feed into our valuation toolkit. It is
to the latter topic that we now turn.

5. THE VALUING URBAN REALM

REALM TOOLKIT
5.1 Introduction
Introduction

This section describes the toolkit that is being developed to bring together the
findings from the three research phases.

5.2 Why Do We Need a Toolkit?

Toolkit?

The quality of our urban streets and spaces is vitally important to our cities
and the quality of life of their residents. Yet for too long urban spaces were
compartmentalised and treated in a mono-functional manner. Roads and
streets were treated only as traffic conduits with the movement of people and
goods as their sole aim, whilst other spaces served specific functions (e.g.
market square, children’s play area) with little consideration for the wider
social, economic and environmental roles these spaces play.

More recently, increased awareness of the urban realm has started to

influence the way in which urban spaces are planned, designed and
managed. For example, the publication of the Manual for Streets finally laid to
rest the argument that all streets needed to be designed to a set of standards
that, while appropriate for motorway design, are not necessarily suitable for
the spaces we live in.

This increased awareness has also transcended professional boundaries,

stimulating debate about the role of the urban realm and breaking down
institutional silos. For example, the work undertaken by the National Institute
of Clinical Excellence on Physical Activity and the Environment identifies how
the nature and quality of the urban realm can impact upon people’s health and
wellbeing.

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 If we accept that urban spaces serve a multitude of purposes, we need to be
able appraise and evaluate urban realm improvements against these multi-
dimensional criteria.

In an environment where funding is dominated by economic and financial

appraisals it is vitally important that urban realm “plays the same game”. For
too long urban realm schemes have been seen as “nice to have” but without
any economic justification.

Generally, public sector intervention and investment in the urban realm

happens for the following reasons:
• Opportunity:
Opportunity to promote an improved quality of place and meet policy
objectives e.g. regeneration / social cohesion / sustainable
communities;
• Urban realm is a public good:
good it is impossible to charge users of the
public realm, which is both non-rivalry and non-excludable; and
• Mechanism for public-
public-private
private sector funding:
funding to allocate the cost of
public realm activities, such as between multiple land owners and
multiple beneficiaries.

The toolkit provides a simple, structured guide to assessing the benefits of

improvements to the urban realm. Therefore five policy goals underpin its
structure:
• Tackling climate change
• Supporting economic growth
• Promoting equality of opportunity
• Improving quality of life & promoting a healthy natural environment
• Delivering better safety, security and health

The main objectives of the toolkit are:

• Provide a consistent framework for the appraisal and evaluation of all
interventions in the urban realm
• Present the most up-to-date research on the quantification and
valuation of the benefits of urban realm improvements
• Encourage practitioners to consider the full range of impacts of their
interventions in the urban realm
• Promote consistency in the measurement of impacts and outcomes
• Identify gaps in the valuation tools that are worthy of further
investigation
• provide a clearer mechanism for apportioning public/private funding

5.3 Defining Urban Realm for the Toolkit

Most of us will intuitively understand the term urban realm to encompass all
elements of the town and city environments in which we live and work. In
practice, however, definitions of the term urban realm become confused by
institutional responsibilities and geographic boundaries.

For the purpose of the toolkit, the following would be included within the
definition of urban realm:

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 • The provision of all publicly accessible streets and spaces, and the
design and maintenance thereof;
• The provision of all public accessible urban parks and green spaces,
and the design and maintenance thereof;
• The layout and structure of links and places within the urban network,
and the resulting access to all local facilities;
• The detailed design of all of these spaces (materials, furniture, etc);and
• All features of the built environment that affect the experience of people
in the public realm, including the relationship between public and
private space, massing of adjacent buildings and frontages.

5.4 Types of Schemes That Can Make Use of the Toolkit

The urban realm can be improved at a variety of scales and through a variety
of interventions. In the toolkit three scales of intervention are identified and an
example of each is provided to illustrate the types of improvements evaluated.

Strategic urban realm improvements

This scale of improvement is relevant, for example, to an area-wide
masterplan and/or public realm and movement strategy.

At this scale, improvements to the urban realm could include changes to:
• The urban layout and structure of a neighbourhood
• Provision for the movement of different modes of transport
• Provision of local facilities (community, education, health, retail)
• Provision of green space
• Definition of the character of public spaces and their roles
• Scale, character and function/usage of the buildings

Area-
Area-wide urban realm improvements
This scale of improvement applies to interventions in one area (e.g. a town
centre or transport interchange) that are expected to have an impact on
perceptions and behaviour in a wider area.

At this scale, improvements to the urban realm could include changes to:
• The balance between the link and place functions of streets and spaces
• The quality of the pedestrian environment on key walking routes
• Provision for interchange between different modes of transport
• Streetscape design and character
• Design of green spaces
• Wayfinding

Local urban realm improvements

Many urban improvements will be focussed on improving the experience of a
very localised area.

At this scale, improvements to the urban realm could include changes to:
• The interaction between vehicular traffic, cyclists and pedestrians
• The detailed design of streets and spaces
• Lighting and personal security
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 • Wayfinding

Any appraisal should bear in mind the objectives of the scheme and focus on
methods of evaluation that capture those objectives. Only by doing this can
the success of investment be appropriately measured. It is crucial that this
toolkit is not treated as a ‘one-
‘one-size-
size-fits-
fits-all’ approach to valuing urban realm
improvements schemes,
schemes, but that each scheme is appraised
appraised against its
result..
intended objectives and ultimately the impacts that result

Regardless of the specific objective, however, the economic appraisal of

urban realm improvements employs a similar logic and works through the
same sort of mechanism. For each of the objectives, the chapters of the toolkit
ask the same three fundamental questions:

1. Qualitative justification: What is the relationship to improved urban

realm?
2. Quantitative measurement: How can we measure the benefit?
3. Monetary valuation: How can we value the benefit in monetary terms?

5.5 How the Toolkit Has Been Developed

There is a considerable body of research, undertaken both in the UK and

internationally, into the impacts of improvements to the urban realm. The
toolkit brings together a variety of approaches to the valuation of these
improvements. In broad terms, all of the valuation methods can be grouped
into one of the following categories:

1. User benefits: Benefits can be calculated on the basis of the value that
accrues to individual users through an improvement. Essentially this
involves estimating the value that people are willing to pay for an
improvement, and represents an approach that is consistent with that
applied to many other public goods.
2. Societal benefits: Benefits can be calculated by estimating the value
accruing to society as a whole as a result of an improvement. Hence
valuation is not limited to individual users of part of the urban realm, but
the resulting outcomes are calculated to be beneficial as a whole to the
UK, e.g. improved health and community outcomes.
3. Financial impacts: Improvements to the public realm can have financial
impacts affecting the distribution of wealth between public and private
individuals and bodies. Unless there is an over-riding wider societal
gain, these impacts are not generally considered to be ‘benefits’. But
their calculation is useful to understand the winners and losers of any
intervention. It provides the potential to generate private sector funding
by predicting the likely changes in property values, rental and land
values and thereby provide a clearer mechanism to negotiate
contributions to improvements.

This toolkit brings together these methods to set out a logical and practical
approach to the economic appraisal of urban realm improvement schemes. It
is important to note that the three approaches have significant overlaps
between them and hence cannot be simply added together. We return to this
point in a detailed chapter on application of the toolkit.
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 6. CONCLUSIONS
The Valuing Urban Realm project is a truly unique achievement in transport
appraisal. In the history of business case formation for transport projects the
focus on narrow transport benefits has usually been the case, often through
travel time savings. However, transport projects have myriad benefits which
are not captured through these more narrow forms of evaluation. This has the
benefit of not “crowding out” those projects which would otherwise have great
overall social impact outside of narrowly defined transport benefits. Valuing
Urban Realm presents a step change in transport project appraisal, putting
overall societal benefits (in health, community, etc.) on an equal footing with
transport objectives. With the move towards greater cross-sector collaboration
and joined-up government initiatives to increase efficiency, this project
presents an opportunity to be at the forefront of such cross-sector project
appraisal.

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