Dynamic forces act on transportation infrastructure, and transportation itself acts on other elements within the Twin Cities’ system, to directly affect regional economic vitality and form the conditions for stable, livable neighborhoods.

These forces serve as the background for analyses in Synthesizing Highway Transportation, Land Development, Municipal and School Finance in the Greater Twin Cities Area, 1970–1997, by John S. Adams, Julie L. Cidell, Laura J. Hansen, and Barbara J. VanDrasek of the University’s Department of Geography. The recently published report, fourth in a series of the Transportation and Regional Growth Study, examines relationships in the metropolitan region between land development, school finance, local government finance, and transportation infrastructure investment.

The report’s authors focused on changes in the built environment and transportation infrastructure of the greater Twin Cities region since 1970. The researchers’ approach considered the social and economic incentives that guide the behaviors of individuals, households, businesses, institutions, public agencies, and local governments; land use patterns and transportation activity that come about as a result of those behaviors; and the way land use arrangements and transportation systems influence subsequent behavior in a continuing process of circular and cumulative causation.

One facet of the study involved examining residential, commercial, industrial, and office development in the 24-county study area since 1970. The researchers’ analysis showed how extensive office and industrial development brings employees and businesses into a local area, providing customers for retail trade and services. Local government is attentive to the needs of commercial-industrial interests, who in turn pay a significant share of local property taxes. As a result, house prices eventually advance beyond rates of general inflation in certain parts of the region, creating household "wealth effects" that stimulate and support vigorous retail trade and service activity in and near those parts.

The researchers also studied the changes in revenues and expenditures during the development process for a sample of 28 local units of government from 1970 to 1996. This sample represented six development eras during that time period and diversity within respective housing stocks. Analysis found that while residential development on greenfield sites initially pays low local property taxes, newly arriving households soon demand a full range of urban services that must be supplied and paid for. Those costs are either passed on to the newcomers themselves or are shifted to existing residents, which can lead to political tension.

Next, the researchers analyzed school enrollments, revenues, and expenditures for a sample of five school districts at different stages in the development process. Resources available to school districts from local tax sources depend on the tax capacity supplied by local development -- a process that is out of the hands of the school districts, and instead is regulated by the municipalities that the school districts serve. The difference between local needs and available tax revenues is shifted largely onto state general revenues, the efficiency of which is hard to assess, the researchers noted.

Finally, the researchers considered the question of whether land development or highway transportation comes first in a locality, and found it a far more complex issue than it initially appeared to be. The researchers presented a statistical analysis of how major highway infrastructure and improvements have both led and lagged the development process within the 24-county study area since 1970. Statistical relationships differed by decade as well as by type of development. For example, industrial development appeared to be closely tied to transportation routes in the earlier periods, but in later years the close correlation faded. Further analysis tested the correlation between development and minor civil division (a local unit of government) land area, population density, size, and change. Results revealed little relationship between development and land area or location, and a changing relationship over time with population density, size, and change. Residential development and highway improvements showed the strongest relationship over the entire study period.

The researchers contend that although the current system has created many livable communities in the metropolitan area for a majority of households and businesses, this current livability is unlikely to continue if present development paths are not redirected because the efficiency of the system appears to be declining. Conversely, more efficient patterns of land development could lead to better use of highways, reduced impacts on fragile environments, more manageable travel demand, a reduced need for new infrastructure investment, lower costs for maintaining existing facilities, less dispersal of population, and stronger, more stable communities.

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