Community Guide to Development Impact Analysis by Mary Edwards
|Introduction||Fiscal||Traffic||Socio-Economic||Environmental||Putting it Together||Cost of Community Services|
As Wisconsin communities continue to grow, local officials and community members are constantly challenged by the need to balance fiscal, social, economic, and environmental goals. One aspect of this challenge is deciding how much and what types of new development the community can accommodate without compromising the day-to-day quality of life for residents. Socio-economic impact assessment is designed to assist communities in making decisions that promote long-term sustain-ability, including economic prosperity, a healthy community, and social well-being.
Assessing socio-economic impacts requires both quantitative and qualitative measurements of the impact of a proposed development. For example, a proposed development may increase employment in the community and create demand for more affordable housing. Both effects are easily quantifiable. Also of importance, however, are the perceptions of community members about whether the proposed development is consistent with a commitment to preserving the rural character of the community. Assessing community perceptions about development requires the use of methods capable of revealing often complex and unpredictable community values.
This chapter provides an overview of socio-economic impact assessment, including what it is, why it is important and guidance on how to conduct a socio-economic impact assessment.
A socio-economic impact assessment examines how a proposed development will change the lives of current and future residents of a community. The indicators used to measure the potential socio-economic impacts of a development include the following:
Quantitative measurement of such factors is an important component of the socio-economic impact assessment. At the same time, the perceptions of community members about how a proposed development will affect their lives is a critical part of the assessment and should contribute to any decision to move ahead with a project. In fact, gaining an understanding of community values and concerns is an important first step in conducting a socio-economic impact assessment.
The socio-economic impacts of a proposed development on a community may actually begin the day the project is proposed. Changes in social structure and inter-actions among community members may occur once the new development is pro-posed to the community. In addition, real, measurable and often significant effects on the human environment can begin to take place as soon as there are changes in social or economic conditions. From the time of the earliest announcement of a pending policy change or development project, attitudes toward the project are formed, interest groups and other coalitions prepare strategies, speculators may lock up potentially important properties, and politicians can maneuver for position.
Because socio-economic impact assessment is designed to estimate the effects of a proposed development on a community’s social and economic welfare, the process should rely heavily on involving community members who may be affected by the development. Others who should be involved in the process include community leaders and others who represent diverse interests in the community such as community service organizations, development and real estate interests, minority and low income groups, and local environmental groups. In addition, local agencies or officials should provide input into the process of assessing changes in the social environment that may occur as a result of the proposed development (e.g., providing estimates and information demographics, employment and service needs).
Conducting a social impact assessment is important for several reasons. In general, it is used to alert the community, including residents and local officials, of the impact and magnitude of the proposed development on the community’s social and economic well-being. The assessment can help communities avoid creating inequities among community groups as well as encourage the positive impacts associated with the development.
The impact assessment provides estimates of expected changes in demographics, housing, public services, and even the aesthetic quality of the community that will result from the development. Equally important, the assessment provides an opportunity for diverse community values to be integrated into the decision-making process. Together, these components of the assessment provide a foundation on which decisions about whether to alter or change a proposed development can be made.
Development constitutes a significant change in the type and intensity of use on a parcel of land. In Wisconsin, development often means conversion of productive agricultural land. Development may occur in the form of a residential subdivision, industrial park, or commercial center. Depending on the location chosen for the new construction and the type of development, the social impact on the community may affect one group of residents more significantly than another (e.g., farmers, the elderly, low income or minority groups).
It is critically important to devote attention to the potential impacts of development on vulnerable segments of the human population. Hopefully, the proposed development will not require investigation into such possibilities, yet the staff con-ducting the socio-economic impact assessment should be aware of social equity concerns. Other demographic groups that may be disproportionately affected by a pro-posed development include adolescents, the unemployed, and women; members of groups that are racially, ethnically or culturally distinctive; or occupational, cultural, political or value based groups for whom a given community, region or use of the biophysical environment is particularly important. No category of persons, particularly those that might be considered more sensitive or vulnerable as a result of age, gender, ethnicity, race, occupation or other factors, should have to bear the cost of adverse social impacts. Socio-economic impact assessment can help avoid future inequities associated with new development by pre-emptively considering the potential impacts of a project.
In thinking about vulnerable populations, it is also useful to examine the consequences of a no-development option. For example, if the proposed development is a residential care facility for senior citizens, what are the consequences for the community if the facility is not built?
Socio-economic impact assessment also provides a foundation for assessing the cumulative impacts of development on a community’s social and economic resources. For example, a community may not recognize a change in their quality of life if a small strip mall goes up on the edge of town. In fact, their quality of life may improve if the businesses located in the strip mall provide services which would otherwise not be available to residents. However, if the construction of a small strip mall on the edge of town sets a precedent for constructing additional commercial establishments on the outskirts of town, the socio-economic impacts on a community may become significant indeed. Small, family-owned businesses located downtown may begin to close as competition lures consumers to the outskirts, where accessibility to more diverse commercial establishments is greater. The result may be a loss in the sense of community and cohesion among residents that existed prior to development because the focal point or “common meeting place” for residents has shifted to a new location. The change is subtle, yet may have a profound impact on the long-term sustainability of the community.
It is necessary to conduct the socio-economic impact assessment in the context of the other impact assessment components (i.e., fiscal, environmental, transportation). The relationship between the socio-economic impacts and other impacts of a pro-posed development is a close one. For example, changes in the physical environment or fiscal expenditures required of the community as a result of the development may directly influence community perceptions about whether to proceed with the project.
Unfortunately, socio-economic impact assessment often takes a backseat to other types of impact assessment such as fiscal and environmental impact analysis because the impacts are often more difficult to measure, and the social impacts associated with a development are generally more subtle than impacts on a community’s fiscal balance sheet or local natural resources. However, it is important to consider, as early in the planning process as possible, whether the proposed development will have a significant effect on the social and economic welfare of the community.
The following section provides a two-step process for conducting a socio-economic impact analysis. The process is designed to establish a framework for evaluating cur-rent and future proposed developments in a community.
Carefully defining the socio-economic assessment can save considerable and scarce resources (i.e., time and money). Since it is often impossible to assess every socio-economic impact associated with a proposed development, local officials are encouraged to refine the scope of the assessment based on the most important social and economic priorities of the community. The most reliable sources of information about community concerns and needs are residents and community leaders. Surveys and interviews are two excellent methods for identifying priority social and economic goals of the community. If time permits, a survey of community members can guide the design of an assessment for a single proposed development. Such surveys can also provide a foundation for local officials in designing and conducting future assessments, provided that the survey is representative of the diverse community values, concerns, and interests. Box 4.1 provides a sample of the types of survey questions that may be used to gauge community perceptions. Questions that are specific to community perceptions about a particular proposed development are provided later in this chapter. Interviews with community leaders (e.g., civic group representatives, religious leaders, citizen action groups) can also provide valuable information about what social, economic and other issues are important to community members.
The design of the impact assessment also needs to reflect the specific characteristics of the proposed project. The development impacts associated with a new development will vary depending on the proposed project’s type, size, location, socio-economic characteristics of the community. As such it is important to be familiar with both the project characteristics and the social and economic resources of the community. The better one understands the proposed project, the more accurate will be the assessment in estimating potential impacts. If you have the time to complete a general survey, you may use the answers to the above questions to define the scope of the assessment. What are the most significant issues facing the community? If you do not have the resources for such a comprehensive survey, you may refine the scope of the analysis based on the specifics of the project.
SAMPLE SURVEY QUESTIONS FOR USE IN DESIGNING A SOCIO-ECONOMIC ASSESSMENT
Explicit in the introductory sections of this chapter is the need to assess impacts both in terms of quantitative and qualitative measures of community socio-economic well-being. Measuring community perceptions about development is important just as is estimating the number of new jobs created by a proposed development.
Thus this section is divided into two sections: estimating quantitative changes in the socio-economic characteristics of the community and measuring community perceptions about a particular development. Each section describes the types of information that may be useful, available resources, and questions to facilitate the data collection process. Please note that this discussion is not exhaustive since methods for social impact assessment are plentiful. It does, however, provide a starting point for gathering information that will be useful in assessing the socio-economic impacts of a proposed development. Additional references are provided at the end of the chapter. Worksheets are provided in the Appendix to assist with the analysis.
Development can cause changes in several community characteristics including demo-graphics, housing, public services, markets, employment and income, and aesthetic quality. Methods for measuring each of these factors is discussed in the following section.
Demographic impacts include the number of new permanent residents or seasonal residents associated with the development, the density and distribution of people and any changes in the composition of the population, (e.g., age, gender, ethnicity, wealth, income, occupational characteristics, educational level, health status).
Development invites growth in new jobs in a community and draws new workers and their families into the community, either as permanent or temporary residents. When this occurs, the incoming population affects the social environment in various ways including increased demand for housing and social services (e.g., health care, day care, education, recreational facilities). Because residents’ needs depend on a wide range of variables (e.g., age, gender, employment status, income level and health status), the diversity of service needs are determined not only by the absolute size of the incoming population but also by the old and new populations’ demographic and employment profiles. As a result, a proposed development may have a significant impact on the community’s ability to accommodate new residents and adapt to changes in the social environment for existing residents. Assessing the magnitude and rate of population change has important implications for community infrastructure and service requirements and can play a major role in determining social impacts associated with the proposed development.
ASSESSING THE DEMOGRAPHIC IMPACTS
There are numerous modeling techniques available to aid in assessing population impacts. The models range in complexity and depending on the resources available for your assessment, a particular model may be more appropriate than another. Specific models are not described in this guide, but are referred to at the end of the chapter as part of the various social impact assessment guidance documents reviewed during development of this guide. The questions listed below are designed to help you begin the impact assessment process for a proposed development. Data collected during the Fiscal analysis (i.e., estimation of the number of new residents) will help answer the questions. For each of the questions listed above, estimate and analyze the significance of how the population change will impact the social environment of the community (e.g., will the number of new school-aged children require additional public education facilities?, will an increase in the number of elderly residents require additional health care facilities?)
HOUSING MARKET IMPACTS
A housing market analysis helps determine whether the proposed development will be beneficial to your community in terms of its effect on your housing market needs. In the case of a residential development, the market study assists in ascertaining whether there is sufficient demand for the type of housing proposed and whether a sufficient number of households in the area can afford to purchase or rent the pro-posed type of housing. The analysis also assists in the examination of the connections between the housing market and employment. For example, if the proposed development is a manufacturing plant expected to generate a specified number of low-wage jobs, can the community’s current housing market absorb the new workers or is there a need for more affordable housing?
To understand the impact of a new residential development or a new employment center on your housing market (or on the regional market), the initial step of the analysis is to complete an inventory and analysis of existing and projected housing needs—a supply and demand analysis. To better understand whether your community is meeting the needs of residents and workers in terms of affordability, an analysis of housing affordability which includes an examination of typical rents and mortgage payments compared to what households at various income levels can afford is necessary.
Once these analyses are complete, the proposed development can be placed in a context in which a number of important questions specific to the development can be addressed. The Guidebook does not provide the steps for the housing market needs and affordability analysis, as it is provided in another recent publication, “Housing Wisconsin: A Guide to preparing the Housing Element of a Comprehensive Plan,” available soon from UW–Extension. This publication provides a practical guide on how to organize and analyze the data necessary for a housing needs assessment. Having conducted this analysis, you can examine the proposed development within a broader framework, using the questions provided below as a guide.
ASSESSING LOCAL HOUSING MARKET AFFECTS
Beyond consideration of the need for new housing, it is also important to consider the location of the proposed housing development and the impacts of that particular choice of location on the community. Housing is strongly linked to a community’s employment centers, land use and transportation system. The location of housing affects commuting patterns. Separation and segregation of residential areas from other areas, including retail, service and office centers, generates more com-muting trips and eventually requires more investment in roads and other transportation- related facilities. The location of housing in relation to other public facilities also affects overall energy use, lifestyles and personal costs for transportation. Further-more, if there is a lack of affordable housing in the area, people may be forced to commute longer distances to work, because the affordable homes are far away from employment centers. The location of housing is also important if historical development patterns in the community have resulted in large areas of all one type of housing or housing that serves a majority of one income group. When one type of housing is over-concentrated in an area, the impacts on land utilization, infrastructure and public service needs may become distorted. Over-concentrations of single-family housing, for example, becomes an issue in terms of the infrastructure needs of education services. The housing needs assessment will also assist in the identification of concentrations of housing and diversity of housing patterns.
RETAIL MARKET IMPACTS
Growing communities often attract a variety of new commercial developments including both free-standing stores and neighborhood or community shopping centers. These developments provide a community with products, services and conveniences important to the quality of life of local residents. The challenge to accommodating these types of new developments becomes one of minimizing losses to existing retailers in the area, such as those downtown, while allowing the market to respond to the wishes of the increasingly demanding consumer.
To respond to this challenge, community leaders can conduct an assessment of the retail market with a focus on anticipated market supply and demand by retail category. The intent is to anticipate how well the market will respond to changes in the number, type and location of retail businesses and to provide community leaders with information to guide future business expansion and recruitment efforts. This section provides guidelines on how to conduct such an analysis. The Appendix includes several worksheets to facilitate the retail analysis in your community.
Worksheet 4.1: Analysis of Your Community's Retail Mix
Table 4.2: Wisconsin Retail Demand in Square Feet (SF) Per Household (HH)
ASSESSING MARKET FOR RETAIL DEVELOPMENT
Before an analysis of a particular development can be conducted, the economic health of the local retail community must be assessed. This requires a close look at retail activity, particularly in the central business district. Key indicators of economic health in the retail sector include vacancy levels, property values, store turnover, retail mix, employment, tax revenues, new business incubation, critical mass/concentration of retail, and the availability of goods and services demanded by the community. See the following web address for more information: http://www.uwex.edu/ces/cced/lets/lets798.html
Second, changes in trade area demographics should be estimated. The trade area is generally defined as the geographic area in which three-fourths of current customers reside. A significant increase in population could signal new opportunities for retail expansion or development. The profile of these new or anticipated residents can help you assess future market demand for various types of products or services. See the following web address for more information. http://www.uwex.edu/ces/cced/lets/0599ltb.pdf
Third, regional retail competition must be assessed. New retail concepts are threatening traditional retail stores. These concepts include large non-mall stores offering assortment and low prices for selected types of goods like electronics, off-price apparel stores, food/drug stores and neighborhood drug stores that offer convenience, outlet centers, warehouse clubs and the internet. By recognizing the changes in competition, both locally and regionally, your assessment of proposed retail developments can offer valuable insight into the changing market and risk facing the traditional retailers in the community. See the following web address for more information. http://www.uwex.edu/ces/cced/lets/letsrt.html/
Finally, with an understanding of general retail trends, changes in trade area demographics, and regional competition you can use secondary data to measure market gaps in the community and assess the impacts of the proposed development. Two techniques can be used: retail mix analysis and retail space analysis.
Retail Mix Analysis—The retail mix in “comparison” communities can be used to measure how many and what type of retail stores might be supported in your community. Comparison communities might include those with similar population, household incomes and distances from major metropolitan areas. If your community is growing in population, comparison communities with a larger population can be used.
Once the comparison communities are identified, the retail mix in each community is inventoried by specific retail category. The average numbers of stores by retail category in the comparison communities is then compared with the number in your community to identify any significant differences that might suggest business expansion or development opportunities. See the Appendix for data and a retail mix work-sheet that can be used in your community.
Retail Space Analysis-The amount of additional retail space that can be sup-ported by a growing community can be projected using two types of data: Household Consumer Expenditure Estimates and Sales per Square Foot of Existing Retailers.
Table 4.2 in the Appendix provides a rough approximation of how many square feet of retail space can be supported per additional household in a “typical” Wisconsin community (last column). These estimates were based on state and national data and do not reflect local supply and demand conditions. Nevertheless, they provide a starting point in determining potential market opportunities.
This analysis can be refined by using “household consumer expenditure data” or “median store sales per square foot” that more accurately reflect the socio-economic conditions of your community. Data can be purchased through private data firms that describe spending of consumers or store sales in your particular community or other representative areas. By using more reflective data, your calculations will more accurately determine the additional retail space necessary to serve the market area.
These steps can help you to anticipate how well the market will respond to changes in the number and type of retail businesses. Assessing the impact of community growth in the retail sector is important to ensure a successful and sustainable business community. In addition, it helps ensure that necessary goods and services will be available to a growing population. A guidebook on how to conduct a comprehensive Business District Market Analysis is available through the University of Wisconsin, Center for Community Economic Development. The Center provides information through their web address http://www.uwex.edu/ces/cced/. They also offer educational programs and technical assistance to business districts in Wisconsin interested in analyzing their local economy, including market opportunities.
ASSESSING THE IMPACTS ON EMPLOYMENT AND INCOME
EMPLOYMENT AND INCOME
Development directly influences changes in employment and income opportunities in communities. Such changes may be more or less temporary (e.g., construction projects, or seasonal employment) or may constitute a permanent change in the employment and income profile of the community should the development project bring long-term job opportunities for community residents (e.g., establishment of a light industrial, manufacturing, or commercial establishment). Assessing these types of changes is an important component of social impact analysis because growth in employment places additional demands on community services and resources. For example, a development that brings lower-wage jobs to a community may generate the need for different types of housing in the area. Changes in income also influence the social environment in a number of ways such as raising or lowering the average standard of living for residents.
Data sources for analysis of the local economy, employment and income trends include the University of Wisconsin’s Center for Community Economic Development, which provides information and data sources for local economic analysis. The U.S. Census Bureau also provides information on employment and income. To retrieve community data from the 1990 Census, go to http://venus.census.gov/cdrom/lookup/. The Bureau of Labor Statistics provides information on employment and wages. To view Metropolitan Area Occupational Employment and Wage Estimates, go to http://www.bls.gov/oes/msa/oessrch1.htm.
The new residents and their associated activities will require a variety of services pro-vided by the areas public and private institutions. A social impact assessment must determine the quantity and variety of anticipated needs. The goods and services most commonly included in a social evaluation are open space and parks; cultural and recreation facilities; education; health care; special care for the elderly, the disabled, the indigent and preschool-age children; police and fire protection; and a variety of administrative support functions. The optimum amount of resources that would be required for the satisfaction of needs is based on either planning standards, which are guidelines established by professional organizations and government agencies, or service levels, which are observed national (or regional) average amounts of resources expended per capita or some unit of size.
Service resources are objective indicators of the level of resources available for the satisfaction of society’s needs. For example, the number of physicians, dentists, acute-care hospital beds, and psychiatric care hospital beds are indicators of the level of health care resources. Square feet of parkland, picnic areas, tot lots, etc., are indicators of facilities for recreation needs.
The Appendix includes worksheets designed to assist you in assessing the specific current and future needs of a variety of public services based on commonly applied planning standards. Once the tables are complete with information about the community’s current service level and current and future needs, you can begin to deter-mine the feasibility of the proposed development and how it may affect the quality of services provided to residents.
Worksheet 4.4: Public Safety
Worksheet 4.5: Education and Libraries
Worksheet 4.6: Health and Recreation
ASSESSING THE CURRENT ACCESSIBILITY OF PUBLIC SERVICES
Impacts on the aesthetic quality of a community are often the most obvious sign of development; yet, are too often not included in the development impact assessment. Shopping malls and subdivisions in the rural landscape are one example of the impact development has on the aesthetic quality of a community. In many cases, community members perceive themselves as powerless in guiding “the way development looks” in their community and thus do not participate in making decisions that protect the visual and aesthetic qualities of the natural and built environment. While aesthetic impacts are often associated with environmental impacts, they also have a significant impact on the social well-being of the community and resident perceptions about the quality of life in the community.
There are several methods available to local communities for assessing the potential impact of a proposed development on the aesthetic quality of a community. These include: design review, geographical information technology, image processing technology, multi-media technology, and communications technology.
Design review is an effective tool for identifying urban and rural community aesthetic preferences and integrating such preferences into comprehensive plans and zoning ordinances. In fact, many Wisconsin communities have adopted design review processes which involve the review of individual development proposals by a special body such as the planning commission, an architectural review board, design review committee or a historic preservation commission (Ohm 1999). Citizen surveys and photographs depicting desirable as well as non-desirable types of development are often used to formulate and document community preferences which can then be translated into a formal zoning ordinance or integrated into the comprehensive plan. In particular, design review provides an opportunity for community members to influence the layout and appearance of buildings or express preference for open space preservation as an area is developed. The elements for conducting a design review for a proposed development are outlined below. Other technologies for assessing aesthetic impacts include:
ELEMENTS OF DESIGN REVIEW
Socio-economic impact assessment is also important for assessing changes in a community’s social well-being that result from development. This type of social change is more difficult to quantify than changes in the social environment because the assessment relies on the perceptions of current and new residents about how a proposed development may affect their quality of life. Social impact assessment of this nature is important because it can help local officials, planners, developers and the public identify and address potential conflicts of interest that may accompany development. In addition to quality of life issues, it is important to assess how a proposed development may influence neighborhood cohesion or cultural differences among members of the community.
QUALITY OF LIFE
The attitudes community residents have toward development and the specific actions being proposed as well as their perceptions of community and personal well-being are important determinants of the social effects of a proposed action. Such attitudes are a reflection of the quality of life residents seek to enjoy and preserve, whether it be limiting growth in order to maintain the rural image of a small community; expanding the boundaries of the village; or providing a variety of housing choices to new, diverse residents and businesses. Changes in a community’s social well-being can be determined by asking the individuals and representatives of groups or neighborhoods in the area to make explicit their perceptions and attitudes about the anticipated changes in the social environment.
ASSESSING ATTITUDES TOWARD DEVELOPMENT
Information about attitudes and perceptions should be gathered from community leaders because their attitudes are important and may lend insight into the overall attitudes of residents if community leaders are perceptive and sensitive to community concerns and interests. However, it is perhaps more important, though generally more time-consuming and costly, to profile the attitudes of the residents living and working in the community and each of the distinguishable social groups because they represent the population in the community most affected by changes in social well-being. In assessing resident attitudes, consider the questions on page 46. The responses may provide an indication of what additional information is necessary and in what detail it should be gathered for a particular proposed development.
Some of the methodologies and techniques for assessing changes to the social environment are quantitative in nature and existing sources of data such as the Census Bureau provide a useful starting point for estimating social impacts. Other techniques such as surveys, focus groups, charrettes, public hearings and meetings with community residents may be appropriate for collecting data that is both more qualitative in nature and useful for assessing the perceptions of community members. A summary of techniques that may be used to elicit community perceptions about development, including features of the technique, advantages, and disadvantages to their use is provided page 50.
As should be evident from the preceding discussion, socio-economic impact assessment is a complex, yet important aspect of development impact analysis. The various changes in the social environment and social well-being of a community that result from development may be significant, yet they are often subtle and not easy to quantify. However, this does not mean that socio-economic impact assessment should not be considered an essential component of the development impact assessment process.
It is important to bear in mind that while certain individuals or community groups may be active and forthcoming with input into the planning process, other community groups (e.g., low income or minority groups) that may be equally or even disproportionately affected by the proposed development may be less vocal in expressing concerns and interests. In situations where traditionally disempowered groups may be impacted by a development, it is important to make a concerted effort to involve them in the social impact assessment process.
Depending on the resources available to conduct the socio-economic impact assessment and the specific objectives of the analysis, some methods may be more appropriate than others. At any rate, a list of references is provided at the end of this chapter to guide further efforts in conducting a socio-economic impact assessment.
Finally, it is important to note that a socio-economic impact assessment not only forecasts impacts, but should also identify means to mitigate adverse impacts. Mitigation should include efforts to avoid an impact by not taking or modifying an action; minimizing, rectifying or reducing the impacts through the design or operation of the project or policy; or compensating for the impact by providing substitute facilities, resources or opportunities.
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