appendix a economic analysis

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  • 1. ECONOMIC ANALYSIS SECTION I INTRODUCTION Background Broward County is evaluating various options for expansion of the Fort Lauderdale-Hollywood International Airport to accommodate a forecasted increase in air traffic. The County is examining expanding one of the two east- west runways; either the north runway or the south runway. The areas affected by these potential expansions would realize an increase in the extent of the +65 Day-Night Average Noise Level (DNL); a noise level that the U.S. Federal Aviation Administration (FAA) established under the Aviation Safety and Noise Act of 1979 as the maximum threshold for, in effect, compatibility with residential uses.1 Note that while the FAA has determined that +65 DNL is the critical threshold, other research stated that the World Health Organization and the Environmental Protection Agency have found that +65 DNL is unacceptably high.2 Information referenced as having been published by the FAA and contained in the literature that was reviewed for this analysis showed objectives for noise control, as follows:3 Table 1: Human Effects Criteria Human Effects Criteria for Noise Control Objectives Noise Levels at Which Harmful Effects Begin to Occur A-weighting Decibels (dB(A)) Prevention of hearing loss 75-85 Prevention of extra-auditory 65-75 physiological effects Prevention of speech interference 50-60 Prevention of interruption of sleep 45-50 satisfying subjective preferences 45-50 The north runway expansion would affect land in the area generally known as Marina Mile. The +65 DNL noise contour resulting from the north runway expansion would affect all land within the City of Dania Beach west of the airport, from approximately Collins Road on the south to Interstate 595 on the north. Map 1, depicts the noise contour resulting from a north runway expansion. 1 Jon P. Nelson, Hedonic Property Value Studies of Transportation Noise: Aircraft and Road Traffic (University Park, PA: Pennsylvania State University, October 2007), 3. 2 Jeffrey P. Cohen, and Cletus C. Coughlin, Changing Noise Levels and Housing Prices near the Atlanta Airport (St. Louis: Research Division, Federal Reserve Bank of St. Louis, August 2005, Revised 2008), 5. 3 Randall Bell, MAI, The Impact of Airport Noise on Residential Real Estate, The Appraiser Journal LXIX, no. 3(2001): 312-321.
  • 2. Map 1 North Runway Expansion Noise Contours The land use designations for property affected by the north runway expansion are all non-residential; primarily industrial land uses with some commercial and a small portion of utility land use designation. Noise levels that are 65 DNL or higher are considered by the FAA to be incompatible only with residential uses.4 Since the land uses affected by the north runway expansion within the City of Dania Beach are all non-residential, the existing land uses can be considered to be compatible with the north runway expansion and, therefore, no economic impact is anticipated. The south runway expansion would affect land south and west of the airport. Map 2 depicts the +65 DNL resulting from the south runway expansion utilizing the FAAs preferred B1b alternative. The property affected by this expansion alternative is almost all residential; a use not compatible with a +65 DNL 4Aircraft Noise and Noise Monitoring, Federal Aviation Administration, http://www.faa.gov/airports/airport_development/omp/FAQ/Noise_Monitoring/ (accessed August 12, 2009). Note that DNL is a day-night average of aircraft noise and does not reflect noise levels of an actual event.
  • 3. according to the FAA. South of the airport, two residential communities are affected. These are Melaleuca Gardens, a waterfront community containing 375 parcels of mostly single family detached homes, and Ocean Waterway Mobile Home Park, which contains approximately 271 mobile homes.5 In addition, the majority of residential properties due west of the south runway will be within the +65 DNL noise contour and, therefore, affected by the expansion. While some residential uses north of Griffin Road do not fall within the +65 DNL, virtually all properties will be significantly affected by the noise increase since the DNL is only a 24-hour average and does not directly reflect single noise events. Map 2 South Runway Expansion Noise Contours The FAA has determined that, to the extent feasible, it would attempt to achieve community cohesion when mitigation strategies are applied.6 The FAA stated that in some cases, this may require a mitigation area to extend beyond the 5 For Melaleuca Gardens, the Broward County Property Appraisers data shows 334 single family homes, 35 multi-family parcels, 3 vacant single family lots, 2 parks and 1 utility. 6 Federal Aviation Administration, FAA Record of Decision: The Development and Expansion of Runway 9R/27L and Other Associated Airport Projects at Fort Lauderdale- Hollywood International Airport, December 2008.
  • 4. boundary of the 65 DNL noise contour to follow natural geographic boundaries, street patterns, and contiguous neighborhood boundaries.7 The Record of Decision produced by the FAA noted that an estimated 1,051 dwelling units will be affected by the +65 DNL noise contour that would result from a south runway expansion. However, if the noise contours are extended to include logical boundaries of the residential areas, which would include all of Melaleuca Gardens, Ocean Waterway Mobile Home Park and all affected residential areas north of Griffin Road, then 1,696 residential parcels will be affected by a south runway expansion.8 Significance of Analysis and Focus The impact of the south runway expansion utilizing the FAAs preferred B1b alternative will have a significant impact on the two residential communities immediately south of the airport and the residential areas west of the airport and north of Griffin Road within the City. Residential properties will likely suffer a diminution of value compared to comparable properties not affected by noise and, as a result, it is anticipated that the City will experience a decrease in ad valorem revenues because of the anticipated decline in property value. The economic impact of the south runway expansion should be quantified to determine the potential effect to both property owners and the City, and a strategy developed to assist in offsetting any negative economic impacts. Methodology The exact dollar amount of the economic impact to property owners and, therefore, the City will directly depend on the appraised values of the residential properties after the runway expansion has occurred. It is not feasible to determine that dollar value at this juncture, nor is it financially realistic to appraise all 1,696 properties. However, a survey of available literature can provide an indication of the range of the percentage of value diminution. This information can be applied to data from the Broward County Property Appraisers office to establish an estimate of economic impact. Scope and Organization of Analysis This analysis is limited to an identification of the range of residential property devaluation that can be anticipated as a result of increased noise levels associated with a south runway expansion, and a calculation of the resulting revenue loss to the City of Dania Beach. The analysis does not examine the potential impact to the Citys detailed budget, nor does it identify and examine the possible secondary and tertiary effects of reduced revenues. It focuses on a 7Ibid. 8The Mellgren Planning Group GIS analysis, September 15, 2009. This GIS analysis is based upon the noise contour shape file provided by the FAA and Broward County Property Appraiser 2009 parcel and tax roll data.
  • 5. range of potential loss of value to residents and ad valorem revenues to the City, and suggests an offsetting program and options for the City to consider. This analysis is organized in four sections. Following this introduction is Section II, which provides a review and discussion of existing information, as well as formulation of a methodology to estimate impact. Section III provides the application of the methodology. The final section presents a summary of findings, conclusions and recommendations.
  • 6. SECTION II REVIEW OF INFORMATION AND METHODOLOGY Property Devaluation A review of available information and data concerning the diminution of housing values due to aircraft noise showed a broad range of findings. The subject has been studied over the past several decades and the actual methodology to predict economic impact has been the focus of discussion. The results of actual case studies of individual airports vary. Additionally, many of the studies undertaken were done prior to January 1, 2000; the year when federal law mandated Stage 3, or quieter, aircraft. The common finding in both older and more recent analyses, however, is that the value of residential properties significantly affected by aircraft noise is markedly less than a home with similar attributes that is not affected by noise. A 2008 working paper prepared by the Research Division of the Federal Reserve Bank of St. Louis examined the economic impact of airport related noise on housing values in neighborhoods proximate to the Hartsfield-Jackson Atlanta International Airport. That study stated that after accounting for proximity, housing characteristics and

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