MetroScope RTP Base Case Run 2000 – 2030: How MetroScope Works

A Short Course about MetroScope Operation – What Goes Into MetroScope and What Comes Out

Metro DRC

August 2003

What MetroScope Is Not.

• MetroScope is not the way that Metro used to do the RTP allocation.

• Attempting to figure out MetroScope in terms of how we used to do things probably confuses far more than it helps.

• So first off we need review “what we are not doing this time and why?”

Years 1970 - 2015

Actual and Projected Growth – District 11

Actual

Projected

Zone Capacity

The Old AllocationMethod

Good Things About Old Method

• Intuitive, easy to understand.• Lends itself to graphic display that contains all the

information used in the allocation.• Corresponds to most people’s understanding about

the “science” of population allocation.• Gives a growth rate and capacity assumption for

each district.

Bad Things About the Old Method

• Provides no information on the policy, economic, demographic, land use and transportation decisions underpinning the growth trends.

• Locks in the “status quo” in the projections.

• Each zone is independent. We know nothing about how the zones interact.

• No information on demographics, housing, prices or real estate.

• Leaves RTP open to legal attack since land use does not reflect transportation and visa – versa.

MetroScope to the Rescue

• MetroScope corrects all the problems of the traditional trend approaches but…

• The real world has a lot of details, so MetroScope has a lot of details and takes some getting used to.

MetroScope Made Simpler-Residential Model

• Instead of trends MetroScope looks directly at demand and supply factors that matter most in location decision-making.

• Demand Factors : Travel time to work, type and price of desired housing, and neighborhood quality – MetroScope allows different demographic groups to value these factors differently.

• Supply Factors: Sales price of housing by type, land cost and construction cost, zoning and capacity of zone

Demand and Supply in MetroScope

• Demand considers the factors and gives each zone a “score”. Like this:

• Census Tract 6 = #units- travel time +nhood-price =200-50 +25-100=75

• Region score=750

• CT6 Share = 75/750=10%

• Ct6 SFD Demand = 10% X 5000 = 500

• Supply considers price, cost and capacity factors and decides to build or not build. Like this:

• Sales price = $200,000• Cost = $180,000• Zoning capacity=20 net

acres @ 4.7 per acre = build 94 units.

• Total units in CT6= 200 + 94 = 294

MetroScope Reconciles Demand and Supply

•Supply = 294; Demand = 500: Demand and supply do not match; what do we do?

•MetroScope changes prices so that finally …

•Price = $250,000

•Cost= $210,000

•Capacity= 20 net acres @ 5.0 = 100 units + 200 vintage =300 SFD units

•Demand = 290 SFD units

MetroScope Residential Factors – Number of Dwelling Units

• MetroScope considers housing by type, tenure & value.

MetroScope Residential Factors – Neighborhood Value Index

Travel Time from CBD

Travel Time From Hillsboro

Travel Time From Vancouver Mall

Travel Time to Work is Important,So Where You Work is Important.

Mode and Employment Weighted Access Utility by R Zone Year 2000

In MetroScope as in Life – Prices MatterSFD Location Prices – Year 2000 Calibration

SFD Average House Price – Year 2000 Census

More Prices Rental Location Prices – Year 2000 Calibration

Average Apartment Rent – Year 2000 Census

MetroScope Suppliers See CapacityTotal Residential Capacity by Census Tract Year 2000

MetroScope Allows For Very Detailed Demographic and Market Segmentation

MetroScope Demographics:

•8 income classes

•5 age classes

•5 household size classes

•2 classes children<18 present

•Total 400 classes in all

MetroScope Housing:

•2 tenure classes

•3 housing type classes

•8 price/rent categories

•Total 48 classes in all

MetroScope “fuses” the 2 data bases so that each of 400 demographic classes may choose among 48 housing classes for 19,200 choices. For 425 census tracts this yields 8,160,000 possible states for about 800,000 households to occupy.

MetroScope Suppliers See Production Costs SFD6 Lot Costs by Census Tract Year 2000

MetroScope Suppliers See Production Costs

MFR1 Lot Costs by Census Tract Year 2000

MetroScope Nonresidential Factors

Demand Factors:

•Total employment growth by SIC

•Access to households

•Access to all employment

•Access to similar employment

•Square footage and acreage requirements by SIC

•Real estate prices of different zones and real estate types

Supply Factors:

•Capacity of zone by zoning type and F.A.R category

•Building cost in zone by zoning type and F.A.R. category

•Demand price in zone by real estate type

Business wants to know:

Will revenues will cover costs plus profit?

Builders want to know:

Will rents will cover their building costs?

Demand Sees Access to All Employment by E Zone

Many Types of Businesses Like to be “Close”Weighted Access for “Durable Manufacturing” – BLS 2000

Example of More Close Businesses “Hi-Tech” Manufacturing BLS Year 2000

Retail Employment is Both Clustered and Dispersed

Wholesale Looks North - South

Health Has Both a Regional and a Dispersed Pattern

Suppliers Look at Production CostsBuilding Cost Per Sq. Ft. and FAR - Industrial and Retail

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50

100

150

200

250

300

0.25 0.5 0.75 1 1.5 2 3 4 5 6

Floor to Area Ratio

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Ft.

Industrial

Retail/Services

Suppliers Look at Land Costs as WellIndustrial Land Values from Assesssor - 1999

More Nonresidential PricesCommercial Land Values from Assessor - 1999

So What’s 170,000 Data Points Look Like?

MetroScope compared to year 2000 census 400 AIHK classes in 425 census tracts

How Many Data Points Are Here?Fig C: Actual Versus Estimated Employment 2000 - 72 Zone, 15 Classes Of BLS Jobs

y = 0.9228x + 71.097

R2 = 0.9593

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15000

20000

25000

- 5,000 10,000 15,000 20,000 25,000

Actual 2000 Estimated BLS Jobs

Mod

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Nonresidential model fit of 72 zones to 15 employment classes

MetroScope: Summary

• Detailed? Yes, but much less so than the real world.

• Advantages – Provides information on how real estate markets and demographic groups respond to land use regulation and transportation investment.

• Disadvantages – Not enough zonal detail; users want info at the TAZ level down even to the block level.