Business Impacts of Access Changes

About the report

Some types of geometric improvements that the Virginia Department of Transportation (VDOT) has begun to build in the past two decades, such as the reduction in the number of arterial access points, the replacement of a traditional four-way intersection with a roundabout, or a restricted crossing U-turn, or left-turn prohibitions, have elicited expressions of concern from businesses that operate on property adjoining the improvements. The business operators’ concern is that the improvement, by creating more circuitous access for motorists, will reduce customer traffic, with a consequent effect on the business’s revenue or on the value of the affected commercial parcel. VDOT has never compiled a quantitative, Virginia-specific dataset on how access changes have affected adjacent businesses.

This study sought to fill that deficit by estimating the effects of changes in access on assessed parcel values before and after a VDOT reconstruction that altered the geometrics of an intersection or a road segment. Although business impacts could ideally be measured as taxable sales, such data were not feasible to obtain, and thus, assessed parcel values were the study focus. The study compiled information on 91 commercial properties fronting VDOT reconstruction projects, and on 67 similar commercial properties nearby, not fronting the projects, at 30 VDOT projects in 16 counties and three independent cities. Information collected included two different measures of the change in motorized access—the number of additional turns and additional distance traveled—that resulted from construction and assessed real estate values during a nine-year window from four years before the year construction was completed to four years after the year of construction completion. This nine-year window was sampled to have a strong opportunity to capture the lagged effects of changes in access in case such changes were not immediately reflected in project assessments. The analysis found that, within the nine-year window, the changes in access that the investigators measured had no statistically distinguishable effect on the property value assessments of the commercial properties fronting the VDOT reconstruction projects.

The analysis found some evidence of a small negative correlation between VDOT reconstruction work and the growth of assessed property value, via a relationship that the model employed in the study did not capture. When the commercial parcels were split into three groups of businesses, based on their expected sensitivity to access changes, this correlation was detected only in the two groups believed less likely to be sensitive. This correlation was not detected in the group expected to be most sensitive, such as gas stations, convenience stores, and fast-food restaurants.

_{Disclaimer Statement:The contents of this report reflect the views of the author(s), who is responsible for the facts and the accuracy of the data presented herein. The contents do not necessarily reflect the official views or policies of the Virginia Department of Transportation, the Commonwealth Transportation Board, or the Federal Highway Administration. This report does not constitute a standard, specification, or regulation. Any inclusion of manufacturer names, trade names, or trademarks is for identification purposes only and is not to be considered an endorsement.}

Authors